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Lunchtime Photo

2 years 9 months ago
The is the Place de la Phallus in Paris. It is more widely known as the Place de la Concorde, but I think this picture speaks for itself. POSTSCRIPT: La Phallus? There's no use asking for logical explanations when it comes to the gender of words in languages that use gender. Phallus is a masculine ...continue reading "Lunchtime Photo"
Kevin Drum

Fintechs Made “Massive Profits” on PPP Loans and Sometimes Engaged in Fraud, House Committee Report Finds

2 years 9 months ago

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.

Financial technology firms at the front lines of approving loans through the Paycheck Protection Program — intended to help small businesses survive during the pandemic — lacked fraud controls, chased high fees to the detriment of some borrowers and sometimes exploited their business relationships to arrange suspect loans for the companies’ own executives. One such executive falsely claimed in loan documents to be a Black veteran and received loans through multiple business entities.

These are among the findings in a report released Thursday by the House Select Subcommittee on the Coronavirus Crisis, which investigated the role financial technology firms, known as fintech companies, played in propagating PPP loan fraud. The committee referred its findings to the Department of Justice and to the Small Business Administration’s Office of Inspector General.

“Even as these companies failed in their administration of the program, they nonetheless accrued massive profits from program administration fees, much of which was pocketed by the companies’ owners and executives,” said Rep. James Clyburn, D-S.C., the subcommittee’s chairman, in a statement released with the new report. “On top of the windfall obtained by enabling others to engage in PPP fraud, some of these individuals may have augmented their ill-gotten gains by engaging in PPP fraud themselves.”

Fintechs were often the front door to the PPP program: They processed huge quantities of loan applications and were hired in part to vet the documents for obvious signs of fraud before sending them on to lenders. But the vetting was often lacking. The investigation kicked off shortly after ProPublica reported that one fintech, Kabbage, approved hundreds of loans for fake farms, including what claimed to be a potato farm in Palm Beach, Florida, an orange grove in Minnesota and a cattle farm on a sandbar in New Jersey. “The illegitimacy of these purported farms,” Clyburn wrote in a letter to Kabbage at the time, “would have been obvious if even the bare minimum of due diligence had been conducted on the loan applications.”

The report found that Kabbage at one point had only one full-time anti-fraud employee and considered the risk of approving fraudulent loans minimal. “A fundamental difference is the risk here is not ours — it is SBAs,” said one risk manager to his team when asked about identifying fraudulent loans, according to a company email cited in the committee’s report. Kabbage’s then- head of policy wrote that “at the end of the day, it’s the SBA’s shitty rules that created fraud, not [Kabbage].”

In a statement, the company said it was proud of the role it played in supporting businesses during the pandemic. “Kabbage’s existing online lending platform was able to process the sudden flood of loan applications, in a timely manner, in the midst of a national crisis and in light of ever-changing federal lending rules,” it said. “Kabbage adhered to the applicable rules and regulations in good faith.” The statement accused the committee of reaching a predetermined conclusion and asserted that the report does a “disservice” to the American people.

The House report heavily cites ProPublica’s reporting and its public database of PPP loans, as well as reporting from the Miami Herald, Bloomberg, the Project on Government Oversight and others.

According to the report, fintech firms acted as “paths of least resistance” for fraudsters looking to get taxpayer-funded loans, all the while lining owners’ pockets with lucrative fees for doing so. The companies were paid for every loan paid out and were incentivized to process loans quickly without doing much due diligence.

One such lender singled out in the report, Blueacorn, instructed staff to push through high-dollar loans that the company called “VIPPP” loans internally. The original fee structure for PPP loans meant that small loans netted Blueacorn and other services a few hundred dollars, while large loans would yield tens of thousands of dollars.

In Slack messages obtained by the committee, Stephanie Hockridge Reis, one of the company’s founders, made clear what the priorities should be. In one message, she said “closing these monster loans will get everyone paid.” In another, referring to a $1.9 million loan as a “deal,” she wrote, “I don’t need to tell you how much Blueacorn makes off that loan alone.” She said of lower-dollar loans, “delete them, who fucking cares.”

Slack messages obtained by the committee show a founder of Blueacorn directing employees to ignore smaller loans in favor of larger ones.

For the second round of PPP loans, the government changed the fee structure, making small loans much more lucrative to incentivize getting money to small businesses and the self-employed. But ProPublica’s reporting from January showed that those most in need were sometimes left in a lurch by companies like Blueacorn. The companies lured customers with promises of quick approval of PPP loans, and once would-be borrowers were approved, they were locked in: Federal rules prohibited them from applying for a PPP loan elsewhere. Even if the loans were approved, though, the money didn’t always make it to borrowers. A ProPublica analysis showed that hundreds of thousands of loans were likely canceled because of quick approvals that fell apart after additional screening.

Blueacorn did not immediately respond to a request for comment. Its current CEO, Barry Calhoun, told ProPublica in response to questions for a past article that the SBA should have helped by allowing lenders to access more documents that would ensure the borrower was legitimate. “A few adjustments would’ve gotten rid of a lot of the lazy fraud,” Calhoun said. “Because there was so much ambiguity, it encouraged a lot of people.”

Scores of people wrote to ProPublica, perplexed that they showed up in our database of PPP recipients despite never having received money. They reported receiving quick approvals in spring 2021, followed by various snafus and then a monthslong runaround from companies like Blueacorn. Eventually, the lenders working with Blueacorn and other servicers would withdraw their initial approval and no funds were paid.

Terry Kilcrease contacted ProPublica after applying for a loan through Blueacorn in May 2021. After going back and forth with the company for months, he said, Blueacorn formally canceled his loan, telling him that his documentation made inconsistent claims. Kilcrease told us the application took just a few clicks to fill out, and he doesn’t remember the exact documents that were requested.

“The big companies made out like fat cats, the lenders made out like fat cats, all these companies that already had plenty of money,” Kilcrease told ProPublica in a previous article. “The people like me who are struggling to get there were just completely forgotten about.”

Not only did Blueacorn collect millions in PPP fees, the House report uncovered that top Blueacorn executives and close associates received more than $650,000 in PPP loans of their own. Hockridge Reis and her husband, Nathan Reis, received nearly $300,000 — in part through separate companies, much of it processed through Blueacorn or its business partners.

Capital Plus, a lender that worked with Blueacorn, discovered some of these loans and requested Reis and Hockridge Reis repay over $100,000, according to the report. But the committee found that at least six more loans were listed as forgiven.

Loan applications reviewed by the House committee likely would not have passed muster if more stringent controls had been in place. Reis falsely listed himself as an African American military veteran in one, according to the report. In another application, he claimed to be an independent contractor in his wife’s business, but documentation obtained by the committee shows he was never paid by that company. Finally, both Reis and Hockridge Reis answered “no” to a question about whether they owned other businesses on multiple PPP loan applications for multiple businesses. The report cites these inconsistencies and indicators of potential fraud as meriting further investigation by the SBA’s Office of Inspector General, as well as the DOJ.

A lawyer for Reis and Hockridge, who have both left Blueacorn, did not reply to a request for comment. According to public records, Reis relocated to San Juan, Puerto Rico, following his work at Blueacorn. In a video obtained by the subcommittee and viewed by ProPublica, he shows off a thick roll of cash in a bar last year, and in another video he and his wife are shown on a balcony of a luxury beachfront apartment. According to corporate records, Reis started a new company, a lending service consultancy named Lender Service Consultants LLC. The address for the company is a different three-story luxury apartment. It sold for $2.3 million in 2020 and features a plunge pool and two koi ponds.

by Ken Schwencke

Star Running Back Jordan Bush Ends Career With TD, Is An iCAN Clinic Male Athlete of Month For Tigers

2 years 9 months ago
EDWARDSVILLE - Senior running back Jordan Bush played well in what turned out to be his final game as a Tiger, running for a touchdown in the fourth quarter of the Tigers' 49-21 loss to Wilmette Loyola Academy in their IHSA Class 8A second-round playoff football game Nov. 5 at Tiger Stadium. Bush is recognized today as an iCAN Clinic Male Athlete of the Month for the Tigers for his efforts on the gridiron this past season. Although the Ramblers dominated play, especially in the first half in building a 35-0 lead at halftime, the Tigers displayed their trademark determination and never gave up until the end, a characteristic of Edwardsville football teams. In his postgame interview, Bush had many mixed emotions following the game. "Honestly, it's kind of heartbreaking that our season's over," Bush said that day, "but gotta stay positive, honestly, because we did what we could to get here. And honestly, it's a good feeling knowing I had my brothers behind my back. That's mainly what

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JCHS Workforce Development Program Seeking Paid Internships For Students

2 years 9 months ago
(Pictured above: JCHS students in the school’s Career and Technical Education program, including Welding, Auto, Machines, and Drafting courses. The JCHS Workforce Development Program is looking to connect skilled/talented students such as these with local businesses/stakeholders for internships that will help them prepare for after graduation). JERSEYVILLE - If you’re a local business owner or stakeholder in need of some interns, the JCHS Workforce Development program has you covered. Their program aims to help students plan for their future after graduation by giving them real-world experience, and they are seeking paid internships for their students to help achieve this goal. “We are aiming to be able to have meaningful internship opportunities available to any qualifying senior who wants field experience while earning high school credit - and ideally, a paycheck too,” Workforce Development Coordinator Erica Heitzig said. “We have talented kids,

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Shootout at Arnold Taco Bell Started as Drive-Thru Argument

2 years 9 months ago
More details have come to light regarding the shootout that occurred over the weekend at an Arnold Taco Bell involving a drive-thru customer and an employee. A probable cause statement from the Arnold Police Department says that 24-year-old Herbert Harris got into an argument with a customer, identified only as SW, over the drive-thru speaker after SW, 46, grew angry over not being served food. [content-1]
Ryan Krull

Milestone Reached Toward Old Courthouse Renovation

2 years 9 months ago
The National Park Service (NPS) and Gateway Arch Park Foundation are one step closer to kicking off the $24.5 million renovation of the Old Courthouse at Gateway Arch National Park. In recent days, the NPS selected St. Louis-based Tarlton Corporation to lead the renovation, which focuses on increasing accessibility for all visitors, structural improvements to […]
Dede Hance

Congress Trying To Sneak Through Internet Link Tax To Funnel Cash To Private Equity Firms That Are Destroying Local Journalism

2 years 9 months ago
Congress has a bad habit. They have stopped passing substantive legislation through normal procedure, debate and votes. The legislative process as designed by our Founders is not happening. Instead, Congress is saving most of its actual policy-making legislation for large end-of-the-year bills that can combine hundreds of separate pieces of legislation. And if reports are […]
Mike Masnick

Revolution at the UAW

2 years 9 months ago
Today on TAP: And that’s hardly the only labor news in a tumultuous week.
Harold Meyerson

ProPublica Is Seeking New Applicants for Our Local Reporting Network

2 years 9 months ago

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.

Applications are now open for three spots in ProPublica’s Local Reporting Network. We’re seeking local journalists who are interested in investigating wrongdoing and abuses of power in their communities.

Our new partnerships will begin on April 1, 2023, and continue for one year. This group of projects is made possible by a grant from The John S. and James L. Knight Foundation.

The following categories of newsrooms are eligible to apply:

  • Public media organizations.
  • Local nonprofit journalism outlets that are members of the Institute for Nonprofit News.
  • News organizations (nonprofit or for-profit) in communities supported by Knight Foundation programs: Aberdeen, South Dakota; Akron, Ohio; Biloxi, Mississippi; Boulder, Colorado; Bradenton, Florida; Charlotte, North Carolina; Columbia, South Carolina; Columbus, Georgia; Detroit; Duluth, Minnesota; Fort Wayne, Indiana; Gary, Indiana; Grand Forks, North Dakota; Lexington, Kentucky; Long Beach, California; Macon, Georgia; Miami; Milledgeville, Georgia; Myrtle Beach, South Carolina; Palm Beach County, Florida; Philadelphia; San Jose, California; St. Paul, Minnesota; State College, Pennsylvania; Tallahassee, Florida; and Wichita, Kansas.

ProPublica will pay the salary (up to $75,000), plus an allowance for benefits, for each full-time reporter. Local reporters work from and report to their home newsrooms, while receiving extensive support and guidance for their work from ProPublica, including collaboration with a senior editor and access to ProPublica’s expertise with data, research, engagement, video and design. The work will be published or broadcast by your newsroom and simultaneously by ProPublica.

Applications are due Feb. 1, 2023, at 11:59 p.m. Pacific time. Here are the details for those interested in applying.

ProPublica launched the Local Reporting Network at the beginning of 2018 to boost investigative journalism in local newsrooms. It has since worked with more than 50 news organizations. The network is part of ProPublica’s local initiative, which includes offices in the Midwest, South and Southwest, plus an investigative unit in partnership with The Texas Tribune.

The Local Reporting Network has had a significant impact in the communities where it has partnered with newsrooms.

MLK50, a nonprofit news organization in Memphis, Tennessee, reported on how the area’s largest hospital system sued and garnished the wages of thousands of poor patients, including its own employees, for unpaid medical debts. The hospital subsequently curtailed its lawsuits against patients, erased $11.9 million in unpaid medical debts, dramatically expanded its financial assistance policy for hospital care and raised the minimum wage it pays employees. The stories won the Selden Ring Award for Investigative Reporting.

Our partnership with the Miami Herald looked at the deeply troubled Florida program intended to provide services and a financial cushion for the families of children born with devastating brain injuries. The series found that the program protected doctors at the expense of suffering families and that it had amassed $1.5 billion in assets while families waited for help. The reporting pushed the state Legislature to quickly enact long-needed reforms and spurred the program’s executive director to roll out further benefits for the families and subsequently resign.

And our collaboration with Nashville Public Radio (WPLN) went deep into one county in Tennessee that was arresting and locking up children at extraordinary rates. The series about Rutherford County was read more than 3.5 million times and spurred demands for reform. Eleven members of Congress called for the U.S. Department of Justice to open a civil rights investigation. Tennessee’s governor called for a review of Rutherford County’s juvenile court judge. In January 2022, legislators introduced a bill to remove the judge, citing an “appalling abuse of power.” An hour after ProPublica wrote about that bill, the judge announced that she would retire this year rather than run for reelection.

Applications to join the Local Reporting Network should be submitted by newsroom leaders proposing a particular project and a specific reporter. If you lead a newsroom and are interested in working with us, we’d like to hear from you about:

  • An investigative project. The proposed coverage can take any number of forms: a few long stories, an ongoing series of shorter stories, text, audio, video or something else. Please tell us why this coverage will be crucial to your community, lay out any similar coverage that has been done before it, say why this project has particular urgency now and offer a plan for executing the work. Please also explain why your region and your newsroom are right to tell this particular story.
  • The reporter whom you ideally envision spearheading the work and the market salary you would need to pay them from April 1, 2023, through March 31, 2024. This could be someone already on staff or someone else — for example, a freelancer with whom you hope to work. Please include a personal statement by the reporter explaining their interest, at least three clips and, of course, a resume.

Freelancers are also welcome to apply but must submit a joint application with an eligible news organization willing to publish their work.

We will be holding a Q&A webinar about this opportunity on Jan. 3, 2023, at 1 p.m. Eastern time. Please sign up to receive an email invitation to join us over Zoom.

Please submit your proposal using this form by Feb. 1, 2023, at 11:59 p.m. Pacific time. We have a detailed list of frequently asked questions available on our site. If you have questions that aren’t answered there, please email us at Local.Reporting@propublica.org.

ProPublica reporters and editors are also available to give feedback on your application before you submit it. Please send your proposals to Local.Reporting@propublica.org no later than Jan. 13 and someone will get back to you within a few days. Entries will be judged principally by ProPublica editors. Selected proposals will be announced in March.

by ProPublica

School shootings spur legislation for stricter gun safety regulations

2 years 9 months ago

After the tragic St. Louis school shooting on Oct. 24 where a shooter killed a 15-year-old student and a health teacher, Missouri Democrats vowed to push legislation establishing stricter gun safety regulations. On Thursday — the first day legislators could pre-file bills — state  Rep. David Smith, D-Columbia, filed legislation to prohibit anyone under 20 […]

The post School shootings spur legislation for stricter gun safety regulations appeared first on Missouri Independent.

Rebecca Rivas

IMPACT Strategies Completes Renovations for Proper Cannabis – Bridgeton

2 years 9 months ago
IMPACT Strategies has completed work as Construction Manager on renovations for a new medical marijuana dispensary for Proper Cannabis. The project converted a former Bank of America building in Bridgeton, MO to a new, 2,500 square foot retail location. The new space features design details in a modern apothecary feel, with high end millwork finishes, […]
Dede Hance