Takeaways: Paycheck Protection loans and the Catholic Church

NEW YORK (AP) — When the coronavirus pandemic caused a broad economic downturn and Depression-era unemployment rates, Washington responded with trillions of dollars in federal relief.

One centerpiece was the $659 billion Paycheck Protection Program. Congress created the program to help smaller businesses and nonprofit groups — generally those with fewer than 500 employees — keep their workers on the payroll.

An Associated Press analysis has found that a special exemption to the 500-employee cap set the stage for approval of at least $1.4 billion for groups affiliated with the Roman Catholic Church, making it one of the program’s big winners. Many of those millions are going to pay salaries and other expenses in dioceses that recently paid huge financial settlements to victims of clergy sexual abuse.

Key takeaways from The AP’s analysis:

SPECIAL TREATMENT FOR RELIGION

The Small Business Administration, which manages the Paycheck Protection Program, typically makes or oversees loans backed by taxpayer money to for-profit companies with fewer than 500 employees. When the pandemic hit, Congress gave nonprofit groups access as well.

Lobbied by religious leaders, the Trump administration went one step further by granting all faith groups a special waiver to the 500-employee cap. For the Catholic Church, that meant instead of all churches, schools, and other organizations in a diocese grouping their employees into a single total — making many ineligible due to their size — each could apply as an independent, “small” entity.

As a result, AP found, at least 3,500 Catholic organizations qualified for loans that the government will forgive if recipients spend the money on payroll, rent, and utilities. Loans to Catholic entities that AP identified were worth at least $1.4 billion — and as much as $3.5 billion.

That is certainly an undercount: A Catholic financial officers’ organization says a survey of its members tallied approximately 9,000 Catholic-affiliated recipients.

A LOBBYING CAMPAIGN

Initially, faith groups had limited eligibility under the law Congress passed. They were still subject to the “affiliation rule,” which meant only dioceses or other Catholic organizations with fewer than 500 people employed across often-vast territories could apply.

That rule was changed after lobbying by religious groups including the United States Conference of Catholic Bishops and the Archdiocese of Los Angeles, whose leader is the president of the conference. The Catholic News Service reported that the bishops’ conference and several major Catholic nonprofit agencies worked the week of March 30 to ensure that religious groups would not be limited.

In a written statement, bishops’ conference spokesperson Chieko Noguchi said including faith groups was a matter of fairness. She also acknowledged lobbying by the conference, which she said,…