More questions emerge over Florida Democrats’ Paycheck Protection Program loan

Even as the Florida Democratic Party promised late Wednesday night to return at least $780,000 in federal coronavirus crisis bailout money, more questions emerged Thursday, including over which party officials signed off on the loan, whether the Democratic National Committee knew about it, and how much the loan was for in the first place.

Those questions are added to the inquiry pile, which already includes: how a political party wound up with federal CARES Act Paycheck Protection Program money when political parties are supposed to be ineligible for it; how the Florida Democratic Party’s Building Fund, an entity created last year to support a new headquarters in Tallahassee, could claim 100 employees in its Federal PPP loan application; and how the money wound up being transferred from the building fund to the party’s campaign accounts.

The Florida Democratic Party has not yet responded to inquiries from Florida Politics, except with a couple of brief written statements. The first, Monday, defended the acquisition of the loan. The second, provided shortly after midnight Thursday, blamed the bank loan processor and the Small Business Administration for approving the loan and pledged to return the money.

Filings with the Federal Election Commission show that in April the Democratic Executive Committee of Florida, the federal entity for the Florida Democratic Party, received transfers of $815,641 in loan money obtained through the CARES Act. That is more than the at least $780,000 the Florida Democratic Party vowed late Wednesday night it would return to the PPP program.

A Wednesday afternoon email exchange obtained Thursday by Florida Politics, purportedly between FDP Executive Director Juan Peñalosa and Vice-Chair Judy Mount, shows Peñalosa stating, “We applied for the funding after consulting our lawyers and informing folks at the DNC,” indicating that the national party also was made aware.

The party has not confirmed the authenticity of the email exchange provided to Florida Politics.

The national party had advised state and local parties to not apply for PPP.

“The DNC did not authorize this, and we agree with the decision to return the money,” said David Bergstein, the DNC’s director of battleground state communications.

The same email exchange has Mount, who also is vice-chair of the FDP Building Fund, complaining, “I have been completely left out of the discussion related to these articles.”

She then pleads, “Can you PLEASE immediately advise me on what the situation and facts are on this situation? What has been done and what can be done to remedy this?”

According to the U.S. Small Business Administration’s database of PPP recipients released earlier this week, the Florida Democratic Party Building Fund sought and received the loan to save the jobs of 100 people.

Peñalosa is the executive director of the building fund. FDP Chair Terrie Rizzo is chair, and Mount is vice-chair, the same positions the three hold within the party.

FEC filings reveal that between April 24 and April 29 a total of $815,641, was transferred into the account of the Democratic Executive Committee of Florida, in five transactions ranging in size from $65,641 to $200,000. The paperwork indicates the source of the money as “Cares,” presumably for the CARES Act, which authorized the PPP program.

On Wednesday, questions arose over whether the building fund had been used as a pass-through company to provide money to the Florida Democratic Party, and whether the building fund’s PPP application had referenced the party’s staff as its own in the loan application. Neither would be permissible under federal law.

In the email exchange purportedly between Peñalosa and Mount, Peñalosa admits the money was used to support party staff.

Meanwhile, pressure from both Democrats and Republicans in Florida is building elsewhere for the party to investigate or audit what went down, or at least to provide more answers. On Wednesday, several Democrats, including Sen. Jason Pizzo of Miami-Dade County and Rep. Nicholas Duran of Miami-Dade and Democratic Rep. Anna Eskamani of Orlando, raised questions about whether the loan should be repaid, whether it is permissible under the law, and whether the building fund is the wrong type of entity to raise money for the party.

“They returned it. My question is, did they return it because they realized it was inappropriate, or did they return it because they also realized they weren’t supposed to, they weren’t authorized to have it, whether it was permitted under the law,” Pizzo said on Thursday. “And if they weren’t permitted under the law, I’m obviously curious to know who initiated it, who negotiated it, and based on what legal opinion, if any, did they think they were entitled to it?”

Republican Party of Florida Chair Joe Gruters was incredulous in a statement issued Thursday.

“Who are these employees? And why does a building fund even have employees? And if these employees are political staffers, the FDP now has an even bigger problem and a lot of explaining to do,” Gruters wrote.

“This certainly raises many questions and it is becoming very clear that the FDP should never have attempted to apply for the PPP funds in the first place,” Gruters continued. “I don’t believe this was a mistake. They knew what they were doing from the onset — but the one thing they never contemplated was that the data would be made public, shining a light on their actions.”

“The PPP eligibility language is very clear — that political organizations are not eligible for PPP loans,” Gruters contended. “Like the rest of the public, we will be waiting for answers.”

Peñalosa’s answers to Mount were summed up in this portion of his email:

“Yep, it’s pretty straight forward. The government made emergency funding available for employers to keep staff employed. We applied for the funding after consulting our lawyers and informing folks at the DNC. We filled out all the paperwork with the support of our bank, lawyers and the funding officers that the Federal Government assigned to help applicants. And after submitting the application we were eligible by the agents the Federal government and SBA chose to administer the payments — and they gave us the funding to be used to pay staff,” he wrote.

“We spent the monies on keeping our staff employed during the shutdown — so they could continue to work,” Peñalosa added.

Did Democratic Chair Rizzo know about the PPP money?

On May 21, more than three weeks after the Federal PPP money was transferred into the Democratic Party’s account, Rizzo blasted the PPP program as a disaster for President Donald Trump, in a tweet she posted on Twitter.

On Thursday, Republican National Committee Florida Trump Victory spokesperson Emma Vaughn declared, “It is embarrassing that after all of their hypocritical cheap shots at the Paycheck Protection Program they got caught with their hands in the cookie jar. Simply put, Democrats cannot be trusted to lead.”