I-TEAM: Wealthy Bay Area private schools receive millions in PPP funding

ByStephanie Sierra and Lindsey Feingold KGO logo

Thursday, July 9, 2020

I-TEAM: Wealthy Bay Area private schools receive millions in PPP funding

According to our I-Team' analysis, there are at least 27 high schools in the Bay Area that received PPP funding - several of which are highly esteemed private schools.

SAN FRANCISCO (KGO) -- Bay Area companies received more than 100,000 loans worth billions of dollars through the Paycheck Protection Program, but as the ABC7 I-Team discovered many already had access to millions in funding.

According to our analysis there are at least 27 high schools in the Bay Area that received PPP funding - several of which are highly esteemed private schools.

I-TEAM ANALYSIS: 22 Bay Area public companies received $69 million in PPP funding intended for small businesses

The Nueva School along the Peninsula is one example. The institution describes its "modest endowment" is valued at $9 million, yet was able to qualify to receive at least $2 million in federal funding. The private school that has campuses in both Hillsborough and San Mateo charges $37,000 for kindergarten tuition and $53,000 for high school tuition. According to sources close to ABC7 the school is continuing virtual classes, but did not waive tuition amid the pandemic.

"The purpose of it was to keep people employed, keep people on payroll," said SBA District Director Julie Clowes.

The Nueva Associate Head of School Terry Lee sent the following statement:

"During this challenging time, our primary goal was to protect and preserve jobs for more than 260 employees and contractors. Also, so many of our students' families have been greatly impacted by the coronavirus in some way, including family job losses, health challenges, and childcare issues."

According to the SBA, in order to qualify for a loan the recipient needs to certify they are eligible for the funding.

"They need to prove they have a financial need," said Clowes.

Yet, those qualifications didn't seem to apply to the Roman Catholic Welfare Corporation of Oakland. The religious secondary school business managed to receive 22 PPP loans, despite reports indicating the organization make more than $125 million in annual revenue.

The organization received at least $5.7 million in funding and retained 753 jobs. But, according to an ABC7 I-Team analysis, one of their loans worth at least $150,000 went to a trust and failed to retain any jobs.

ABC7 received the following statement as to why the organization received the funding.

"When local governments required the suspension of public worship and in-class education, we lost a primary source of funding for our various ministries - the weekend collections. We were also faced with the challenge of retaining our employees and ensuring their paychecks and benefits continued.

Even though the campuses of our schools were closed, teachers continued instructing their students on line. Other employees maintained the essential day-to-day operation of our church entities."

Treasury Secretary Steven Mnuchin announced in May wealthy private schools should not accept loans through the program.

Yet, several other notable private schools in the Bay Area, along with charter schools, also applied and received funding.

The list includes:

Sacred Heart Cathedral Preparatory in San Francisco (private school) received at least $2 million
Mercy High School in Burlingame (private school) received at least $1 million
Saint Joseph Notre Dame High School in Alameda (private school) received at least $1 million
Jewish Community High School of the Bay in San Francisco (private school) received at least $1 million
University Preparatory Academy in San Jose (charter school) received at least $350,000
Design Tech High School in Redwood City (charter school) received at least $350,000
Sacred Heart Nativity School in San Jose (private school) received at least $150,000

Sierra: "As District Director, how are you going to ensure there's accountability for these organizations that clearly have access to other funding?"

Clowes: "At the district level we're not going to be a part of the review process. That will be the banks and the SBA's headquarters... If I hear of any outright fraud we will report that to the inspector general."

Meanwhile, California is suing the Trump Administration over the allocation of PPP funding going to private schools and not public schools.

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