Michigan’s largest teachers union and its health insurance affiliate must pay the Biden administration after taking millions in federal loans the organizations were not eligible for, according to settlement documents.
The Mackinac Center for Public Policy sued the Michigan Education Association (MEA) and the Michigan Education Special Services Association (MESSA) in 2022 for taking $12.5 million in loans Paycheck Protection Program (PPP) loans, which were intended for small businesses who were unable to pay their staff during the COVID-19 pandemic. In a Monday settlement, the MEA and MESSA must pay $215,000 in reimbursements to the federal government and $77,000 to the think tank. (RELATED: Teachers Union Asks Community To Help Pay For Strike Fines After Cancelling Classes)
“This issue actually expands beyond Michigan,” Holly Wetzel, director of public relations for the Mackinac Center for Public Policy, told the Daily Caller News Foundation. “The Mackinac Center was the whistleblower on behalf of taxpayers across the country by ensuring that taxpayer dollars were reimbursed after $12.5 million in federal PPP loans were unjustifiably taken by the MEA and MESSA. PPP funds ran out within weeks, and by taking loans they were clearly ineligible for, the union and its health insurance arm stood in the way of businesses that were struggling from the effects of draconian shutdowns from getting the help they needed.”
The funds the Mackinac Center for Public Policy received will go toward advancing school choice initiatives within the state and informing Michigan teachers about their union rights, Wetzel told the DCNF.
The MEA claims that they were eligible for PPP loans “Based on the rules published by the federal government at the time (…)”
Strange, because the rules seemed pretty clear to the AFL-CIO and members of Congress at the time 🤔https://t.co/20WdjglZ2L pic.twitter.com/XbnjluXLQk
— Mackinac Center (@MackinacCenter) March 6, 2023
After individually confirming they were eligible for the PPP loan program, the MEA received $6.4 million and MESSA got $6.1 million at the beginning of the COVID-19 pandemic, the think tank’s press release stated. The organizations paid the loans back in full in December 2020.
“Based on the rules at the time, we believed we were eligible and our bank agreed,” MEA spokesman Doug Pratt told The Associated Press. “Thousands of businesses were taking out loans because of financial uncertainties. Once the uncertainties disappeared, we paid back the money with interest.”
The MEA and MESSA did not immediately respond to the DCNF’s request for comment.
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