Japan-Based Company With U.S. Employees Got Millions In Covid Relief For Exclusive LA Country Club Where Steve Mnuchin Was A Member
The Riviera Country Club, an exclusive Los Angeles golf course that Treasury Secretary Steven Mnuchin has patronized, received $2 million-to-$5 million in covid relief funds through the U.S. Small Business Administration’s Paycheck Protection Program.
The club’s website identifies its owner and CEO as Noboru Watanabe, a real estate magnate based in Tokyo, The Daily Beast reported. A LinkedIn page apparently belonging to Noboru Watanabe describes his business as “a Japan-based lifestyle company with more than 2,000 employees in Japan, the United States, and China.”
PPP was designed as an incentive for companies with up to 500 workers to keep their employees on the payroll amid the coronavirus pandemic. However, a number of large and publicly traded companies got the federal PPP funding while Black-owned small businesses found that the money had run out. A few public companies returned the money thanks to the public outcry.
The SBA connected business owners with lenders. The banks processed the applications, disbursed the funds and received hefty fees for doing so.
Using banks – which have a historic record of discrimination against Black people – to process PPP loans has been problematic.
“There is a structural flaw in this program. It uses banks as middlemen,” University of California law professor Mehrsa Baradaran told NBC News. “Any time you create a big program and give banks the ability to choose which customers it prioritizes, you’re going to have disparities. Credit disparities are where past injustices lead to present disparities.”
The Daily Beast and other media outlets identified for-profit and nonprofit operations tied to lobbyists associated with members of both parties, members of Congress, current and former White House aides and political vendors. Millions more went to the Church of Scientology and other religious institutions.
The Riviera Country Club reported that the federal aid had saved 159 jobs. Its caddies got a bailout even before the federal funds arrived thanks to a GoFundMe started in March by club member and Hollywood celebrity Larry David to help workers who rely on tips.
The Department of the Treasury, headed by Mnuchin, helped operate the program. He disclosed his membership in the country club to the U.S. Senate during his confirmation in 2017. The Small Business Administration released PPP recipient data on Monday after growing pressure for transparency.
The U.S. government has given out two rounds of PPP loans totaling $659 billion for coronavirus relief through the Small Business Administration. The loans are fully forgivable if at least 60 percent is used for payroll. They can also be used to pay rent, utilities and interest on mortgages.
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More than 650,000 businesses received PPP loans. Of the 14 percent of businesses that chose to identify race in their loan application, Black-owned businesses received 1.9 percent of loans while White-owned businesses received 83 percent.
Funding did not reach the most vulnerable business owners, according to an NBC News report. The money ran out after many big businesses received funding from banks they had pre-existing relationships with, while mom-and-pop businesses were left in the dust. The problem was magnified for Black-owned small businesses.
“I hear a lot about making America great again. In order to have a great America, there has to be a great Black America,” Ron Busby, president of U.S. Black Chambers, told NBC News. “In order to have that, we need great Black businesses. We need access to capital.”
Access the full PPP list here.