February 25th 2025.
The Small Business Administration (SBA) has made a decision that has caught the attention of many. Recent reports have revealed that the SBA will not be reclaiming over $155 million in COVID relief grants that were given to successful artists and entertainers. This news has raised eyebrows and sparked questions about the use of taxpayer dollars.
According to public records obtained by Business Insider, the federal government has not found any evidence of wrongdoing in the way these celebrities spent the funds they received. This includes big names such as Lil Wayne, Marshmello, Chris Brown, and Alice in Chains. These artists were among the recipients of the $14 billion that Congress set aside to support struggling arts groups during the pandemic. However, instead of using the money for its intended purpose, these celebrities reportedly used it for extravagant purchases like private jets, parties, luxury clothing, and multi-million dollar bonuses. Unfortunately, very little of the funds went towards supporting staff salaries or benefits.
Despite these findings, Congress has stated that the grants could legally be used for "ordinary and necessary" expenses and has chosen not to hold the wealthy recipients accountable. Interestingly, it has been revealed that some of the largest recipients of the grants were clients of NKSFB, a business management firm based in Los Angeles that claims to help "the world's leading entertainers succeed financially." In fact, an email sent in December 2024 to an SBA employee stated that over 70% of the $216.6 million in grants allocated to NKSFB clients had already been "closed" after being thoroughly reviewed. However, there is still $61 million across 22 grants that are still under review.
It is worth noting that once the closeout process is complete, many grant recipients may not receive any further communication from the SBA. However, the agency's FAQ materials suggest that a post-closure "monitoring" process, similar to an audit, may still take place. Senator Joni Ernst, who chairs the Senate Committee on Small Business and Entrepreneurship, has also expressed her plans to continue investigating any misuse of pandemic-related funds.
In a statement, Ernst said, "Pandemic relief programs were designed to help small businesses keep their doors open and their employees afloat during an incredibly challenging time. Unfortunately, the more we learn, the more it is clear that taxpayers footed the bill for the extravagant lifestyles of the rich and famous."
Despite this news, there is still some uncertainty surrounding which specific NKSFB clients' grants have been closed out and which are still under review. The firm has stated that they are unable to disclose any details about their clients' finances. This lack of transparency has only added to the controversy surrounding this issue.
This recent development has highlighted the importance of ensuring that pandemic relief funds are used responsibly and for their intended purpose. The SBA's decision to not reclaim the funds may have sparked criticism, but it has also brought attention to the need for stricter regulations and monitoring of how these funds are distributed and utilized.
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