Trump demands Harvard pay back $8.6M it received for Covid-19 relief, threatens action if college refuses
The US government recently passed a massive economic stimulus package to help the distressed people of the country in the wake of the coronavirus outbreak. But it has been reported that well-off bodies, be in the education or restaurant industry, are also taking advantage by pocketing big chunks of the relief money.
President Donald Trump has now spoken on the issue.
On Tuesday, April 21, the president asked the prestigious Harvard University to return the grant of $8.6 million it has received as part of the package meant to support a crumbling economy. Trump spoke out following the outrage that institutions and companies that have their own reserves are also claiming share on the government package that was passed in March after a political standoff between the two major parties, Republican and Democratic.
Harvard, however, refused to comply saying the money would help the students facing financial hardships because of the crisis. In fact, the university said it has not received any money through the Paycheck Program for small businesses. “I want them to pay back,” Trump said while addressing the press at the White House on Tuesday. He said the relief package is meant for small businesses and not a wealthy institute that has an endowment of (over) $40 billion. “If they won't do that, then we won't do something else,” he cautioned.
Later, he tweeted on the subject again. Retweeting a story on Harvard’s bagging the share, he reiterated, "Harvard should give back the money now. Their whole “endowment” system should be looked at!”
Harvard is not the only one. According to a report in Daily Mail, there are a number of elite educational institutes that have taken advantage of the $14 billion that have been given to higher education institutions to overcome the economic hardships created by the COVID-19 pandemic.
Treasury Secretary Steven Mnuchin, who was also present when Trump was speaking on Tuesday, said he would request for the money's return, also from other big businesses. He said the taxpayer fund is meant for struggling enterprises and not big public firms that have access to capital.
A spokesperson for Harvard has said the institute did not apply to receive the paycheck protection funds meant to protect small businesses and called the reports claiming so as “inaccurate”.
“Like most colleges and universities, Harvard has been allocated funds as part of the CARES Act Higher Education Emergency Relief Fund. Harvard has committed that 100% of these emergency higher education funds will be used to provide direct assistance to students facing urgent financial needs due to the COVID-19 pandemic.” The spokesperson even supported Trump saying, “President Trump is right that it would not have been appropriate for our institution to receive funds that were designated for struggling small businesses.”
Texas Senator Ted Cruz, who had contested against Trump in the 2016 presidential primaries, also criticized Harvard for taking the money despite having a deep reserve. In a tweet, he said, “This is ridiculous. Taxpayer relief funds should go to those in real need.”
Big restaurant chains also have received money from the relief fund
Besides the educational institutes, thriving businesses employing thousands of workers have also received huge money under the paycheck program. The program is supposed to infuse small businesses with $349 billion in emergency loans that could save the employees’ jobs but at least 75 companies that got the money were publicly traded, Associated Press found, and some of them have market values well over $100 million
The program is designed for firms having less than 500 staff members but restaurants were exempted from the limit if they had less than 500 employees at one location. Large restaurant chains like Potbelly, Taco Cabana and others qualified for the money despite employing thousands and got $10 million in loans at most.
Shake Shack announced on Sunday, April 19, that it would return the money after facing a backlash and Mnuchin praised it for its decision.