The following headline first appeared in the NandO on August 31st -- last Thursday -- but I didn't clap my eyes on it until yesterday: "How US allowed pandemic relief to go to NC companies involved in politics and lobbying." Whoa, Nelly! How did that get past me?
And it was well worth reading, too! Danielle Battaglia reports on a number of political consulting "shops" in North Carolina, both Republican and Democrat, that on-the-face-of-it violated longstanding Federal Small Business Admin rules to get their hands on sizable chunks of what turned out to be "free money" -- big loans under the COVID-inspired Paycheck Protection Program (PPP), loans that got forgiven:
When Congress authorized the PPP loans through the U.S. Small Business Administration to help companies harmed by shutdowns as COVID-19 spread, a longstanding Small Business Administration rule still applied that excluded those primarily engaged in lobbying or political activities from applying for agency loans. It was believed that federal tax money should not be invested into those activities.
The rules allowed some firms in those industries to apply, but only if lobbying or political activity were not their “primary” lines of work. [Italics added]
A good part of Battaglia's long article includes quotes from various high-ranking political operatives arguing that their loans were perfectly legal and aboveboard because only 49.5% of their paid work is actual politics -- something like that. Something hilarious. But I'm less interested in that argument -- because the underlying SBA rule against political activity seems arbitrary -- than I am in the professional details of someone who looms large in my world.
On April 27, 2020, Nexus Strategies received an $82,747 PPP loan, later forgiven with interest. Scott Falmlen and Morgan Jackson, partners at Nexus Strategies, that year worked with campaigns in North Carolina for Democratic candidates such as Joe Biden, Gov. Roy Cooper and failed U.S. Senate candidate Cal Cunningham.
Jackson said most of their business is based in public affairs, not politics.
“I’m not sure how you differentiate from advising a sitting governor, and politics,” said Jane Pinsky, director of the North Carolina Coalition for Lobbying and Government Reform.
Hall added that Nexus does a lot of compliance work for Democratic campaigns.
In 2019, Nexus Strategies was registered with the North Carolina secretary of state’s office as doing “Political/Government Affairs Consulting.” After 2019, the company registered as “Political/Public Affairs Consulting.”
The firm received its PPP loan after listing the company under the category of “all other professional, scientific, and technical.” Nexus Strategies said in its application that it employed four people. Three of the four employee profiles on its website highlight their work in politics.
On the Nexus website, Falmlen’s profile states he is active in public service and advising elected officials and policy makers at the federal, state and local levels.
Jackson’s profile lists him as “a veteran of a number of high profile political and public policy efforts” and that he has served in senior roles for presidential, gubernatorial and congressional candidates. It also states that he advises government officials from the governor to legislative leaders and everyone in between. He stresses that he’s a longtime adviser to Cooper.
Jackson said his organization was within its rights to apply. “We qualified due to the fact that the majority of our business is derived from public affairs and communications and not from political consulting,” Jackson told McClatchy.
Jackson had told The Charlotte Observer for a story in May 2020 that the company would not be applying for the loan.