Planned Parenthoods received $80 million in PPP loans. Now, the SBA wants it back.
Stephanie Fraim, the chief executive of Planned Parenthood of Southwest and Central Florida, said being approved for a $2,082,400 Paycheck Protection Program loan in April was a "Hallelujah" moment. Now, it's the center of the latest battle between the healthcare giant and anti-abortion rights Republican leaders.
As part of the Paycheck Protection Program (PPP), the federally-funded relief effort designed to assist small businesses, 38 Planned Parenthood affiliates across the country, including Fraim's, received more than $80 million. The women's healthcare group claims its corporate structure, which separates its affiliates from its national office, makes their independent clinics eligible for the funds.
The Small Business Association (SBA), the U.S. government agency tasked with approving and distributing PPP loans, appears to disagree. According to a letter sent to one Planned Parenthood affiliate in Delaware earlier this week and reviewed by CBS News, the SBA "preliminarily concluded" that the clinic was "a local affiliate of Planned Parenthood Federation of America," and therefore "ineligible for a PPP loan under the applicable affiliation rules and size standards, consistent with Congressional intent." The loan should be returned, the letter says. If Planned Parenthood disagrees with the preliminary conclusion, SBA writes that it "will conduct an investigation."
As of Friday morning, it wasn't immediately clear whether all affiliates, including Planned Parenthood of Southwest and Central Florida, will be asked to return their loans. Carol Wilkerson, an SBA spokesperson, declined to provide additional information via email on Thursday.
While Planned Parenthood Delaware figures out the next steps, Fraim — who hasn't seen whether she's received a letter yet because she's been working from home since March, but assumes she will — said she plans to fight back: She won't be giving back the funds.
"It's an attack on our patients and continually trying to shame our patients… at a time when really we should be united to care for our community," Fraim said during a telephone interview with CBS News on Thursday. "That's what we should be focused on, not this kind of political shenanigans."
Fraim referred to her PPP loan as a lifeline. In accordance with social distancing measures, Fraim's clinics adjusted their operations in mid-March, only seeing patients for time-sensitive appointments, like birth control refills, and pushing back other requests or conducting them over the phone when possible. The reduction in patients meant a dip in revenue, and potential lay-offs, Fraim said. That's when her banker suggested she look into a PPP loan.
"Because we're Planned Parenthood we looked at it really carefully, because we knew that our federal government wasn't always supportive of us," Fraim said. "So we looked at it and looked at it and looked at it. Our bankers did the same thing. We both came to the same conclusion: We unequivocally qualified for this."
Because of the funds, all 187 of Fraim's staff members have remained fully employed.
According to SBA's letter, Planned Parenthood's governance structure makes the healthcare organization's 49 affiliates ineligible for the loans. Because Planned Parenthood Federation of America "is known to have to exercise control over its local affiliates," the SBA contends, clinics like Fraim's don't qualify. Planned Parenthood has defended the loans, pointing to separate finances, leadership and governance among its affiliate network.
A group of 26 Republican Senators, including Majority Leader Mitch McConnell, have taken SBA's request a step further, claiming that Planned Parenthood's independent affiliates applied for the loans fraudulently, an accusation that could carry civil and criminal penalties if found to be true.
In a letter requesting Attorney General William Barr to investigate, the Senators wrote, "The Paycheck Protection Program… was designed by Congress to help struggling small businesses and nonprofit organizations by giving them access to low-cost loans for expenses like keeping their employees on payroll during this pandemic. It was not designed to give government funds to politicized, partisan abortion providers like Planned Parenthood."
Planned Parenthood has rejected the accusation.
"This is a clear political attack on Planned Parenthood health centers and access to reproductive health care," said Jacqueline Ayers, Planned Parenthood Federation of America's vice president of government relations and public policy. "It has nothing to do with Planned Parenthood health care organizations' eligibility for COVID-19 relief efforts, and everything to do with the Trump administration using a public health crisis to advance a political agenda."
