U.S. Treasury Secretary Steven Mnuchin said he never “in a million years” expected that the Los Angeles Lakers would take a multi-million-dollar federal loan intended to help small businesses stay afloat amid the COVID-19 pandemic.
“I’m a big fan of the team, but I’m not a big fan of the fact that they took a $4.6 million loan,” Mnuchin told CNBC’s “Squawk Box” on Tuesday (April 28). “I think that’s outrageous and I’m glad they returned it, or they would have liability.”
Mnuchin said that any Small Business Administration (SBA) Paycheck Protection Program (PPP) loan over $2 million will be audited by the agency before it is forgiven.
“We will make sure that what was the intent for taxpayers is fulfilled,” he added.
He told the network that while it was inappropriate for some large companies to take these loans, he was pleased some have returned the money. “We don’t think they ever should have been allowed to,” he said. “I’m encouraged by the number of people who have paid them back.”
Still, the Treasury secretary said the PPP has been an “incredible success.”
“It has impacted over 30 million workers so far, and by the time we get through this funding, I think it will have impacted over 60 million workers, which is about half the private workforce supporting small businesses,” Mnuchin noted. “That was the intent of the president and Congress.”
On Monday (April 27), ESPN reported that the Lakers, the second most valuable team in the National Basketball Association (NBA) at $4.4 billion, returned the $4.6 million they received from the PPP.
Following reports of several large corporations that got money from the first round of the program, many small businesses cried foul. The Lakers then issued a public statement.
“The Lakers qualified for and received a loan under the Payroll Protection Program,” the organization told ESPN. “Once we found out the funds from the program had been depleted, we repaid the loan so that financial support would be directed to those most in need. The Lakers remain completely committed to supporting both our employees and our community.”
The Lakers were not the only business to face scrutiny. Ruth’s Hospitality Group, the owner of Ruth’s Chris Steak House, received a $20 million PPP loan; AutoNation took a $77 million loan; and Manning & Napier received more than $6 million from the program, CNBC reported.
The PPP exhausted its original $349 billion under the $2.2 trillion CARES Act. Last week, Congress added another $310 billion into the program.