RALEIGH, N.C. (WBTV) – The State of North Carolina handed out more than $5 million in October to businesses who applied for the state’s Job Retention Grant program.
The program was funded with money from the federal CARES Act and was intended to help businesses that had been impacted by COVID-19 but had retained most of their employees.
By law, companies could not receive state grant dollars if they had received a PPP loan or money from the federal Main Street Lending or Rapid Recovery loan programs.
The statute creating the grant allowed a company that met the requirements to receive two months of payroll plus 25%, up to $250,000.
A review of the job grant recipients reveals an airline that received millions of dollars in federal funds; at least two national corporations that received multiple grants—each for the maximum $250,000 amount—by applying under different subsidiaries; and dozens of country, golf and yacht clubs.
State Senator Paul Newton (R-Cabarrus) helped write the bill that created the grant program. He said the need for the program became apparent to him while he was participating at a Black business round-table hosted by the Fredrick Douglas Foundation.
“As I listened to these Black business owners describe their frustration with getting PPP loans, essentially what they said to me was, ‘some of us don’t have the traditional banking relationships, so those who did jumped ahead of us. So, they were already at the starting blocks and we’re still putting together our starting blocks.’ So they missed out on the PPP,” Newton explained.
“You’ll see one of the criteria in this particular program, this state program is that it is for those who did not qualify for, whatever reason, for any other loan or grant programs.”
But Allegiant Airlines was able to receive a $250,000 state job retention grant, despite having taken $171 million in federal relief funds earlier this year.
Newton was unaware of Allegiant’s grant when asked by a WBTV reporter in an interview last week.
“So, that’s news to me,” he said, when asked how the airline qualified for a grant under the statute.
“That’s a great question to as (the Department of) Commerce because the criteria is in the statute and the question for them is, how did this satisfy the criteria contained in the statute?”
A spokesman for the Department of Commerce did not respond to questions for this story outside of providing the list of grant recipients, despite multiple follow-up email to both him and the communications staff at the Governor’s Office.
In a statement, a spokeswoman for Allegiant pointed out that the airline accepted federal funds separate from any of the three programs listed in the bill creating North Carolina’s grant.
“The criteria for eligibility did not preclude us from applying for the grant. Allegiant did not participate in the federal Paycheck Protection Program. You may be confusing that with the CARES Act/Payroll Support Program,” airline spokeswoman Sonya Padgett said.
“In March, when the pandemic was first declared, demand dropped so sharply that it had an immediate and negative impact on business,” Padgett’s statement also said. “In an effort to save aviation jobs and protect our employees, we applied for assistance from multiple sources that were available to us, including the North Carolina Commerce Job Retention grant. Asheville is an important base for Allegiant.”
Another company, XPO Logistics, which has ties to Greensboro resident and current Postmaster General Louis DeJoy, received four grants totaling nearly three times the amount allowed by law.
XPO Logistics applied for the grants under different subsidiaries. Business records filed with the N.C. Secretary of State show the subsidiaries are all registered at the same address with the same corporate officers.
A spokesman for the company declined to answer questions or respond to questions for this story but pointed out that each subsidiary has its own payroll.
Newton defended the logistics giant’s ability to apply for multiple grants.
“If they’re separate entities—and at least to some degree they are, if they’re LLC’s or Inc.’s—then, on prima fascia, it is legitimate,” Newton said.
He also defended the two dozen private recreation clubs that received state job grants.
“This money’s not going to rich people. This money is going to retain North Carolinians,” he said.
“Think about those clubs you just described. You’ve got landscapers, you’ve got food service professionals, you’ve got janitors, that’s who were helping through this legislation. It’s not going into the coffers of the yacht club. It is going to pay employees and retain employees through the midst of this COVID epidemic.”