Should Americans know which churches received COVID-19 stimulus loans?

Carol Wood, director of First Baptist Child Development Center, and the Rev. Curtis Price play with children at First Baptist Church in Salt Lake City on Wednesday, June 24, 2020. The Trump administration sparked an outcry this spring by allowing churches to apply for COVID-19 relief funds set aside for small businesses. The Rev. Price, who applied for and received between $150,000 and $200,000 in small-business stimulus funds for his church, said the program accomplished its goal, at least in his case. Thanks to the paycheck protection loan, First Baptist Church avoided laying off any of its 40 employees. | Laura Seitz, Deseret News

The Trump administration has so far resisted calls to release a full list of paycheck protection loan recipients

SALT LAKE CITY — The Rev. Curtis Price knew his church was in trouble soon after pandemic-related restrictions shut down its daycare center this spring. First Baptist Church had around 40 people on its payroll and little new money coming in.

“We were wringing our hands wondering whether we needed to lay everyone off,” he said.

In the midst of the Rev. Price’s agony, an offer of help arrived from an unlikely source: the U.S. Small Business Administration.

Federal officials announced at the beginning of April that they were waiving traditional loan restrictions and allowing churches to compete for COVID-19 relief funds.

“That was incredibly significant for us,” said the Rev. Price, who applied for and then received around $200,000 in paycheck protection loan money for his church. “We were able to hang on to all of our staff ... and, when we reopened this month, they were still in our employ and ready to go.”

Many other houses of worship have a similar story to tell, and, for the time being, most can decide for themselves whether or not to share it. The Trump administration has so far rejected calls to release a full list of recipients of coronavirus-related small business loans.

But advocacy groups who objected to aspects of church participation in the stimulus program say they have no plans to stop pushing for transparency.

It’s not likely that churches will have to return their loan money at this point, but there’s still time to determine if the government privileged certain religious applicants or used taxpayer money in inappropriate ways, said Alison Gill, the vice president of policy for American Atheists, an organization fighting for more separation between church and state.

“We’re talking about a very large outlay of taxpayer dollars,” she said.

Coronavirus relief and religious freedom

The current funding drama stems from the Small Business Administration’s paycheck protection program, which was launched in response to the coronavirus pandemic. It offers forgivable loans of up to $10 million to businesses with fewer than 500 employees.

Nonprofits of all kinds are typically ineligible for government-backed small business loans, but the Trump administration made an exception in its COVID-19 relief efforts. Nonprofits, including churches, employ plenty of workers, and they deserve help, too, officials said.

Although sympathetic to the plight of religious institutions, some law and religion experts were disturbed by this policy move. By sending taxpayer money directly to churches, officials violated a generally accepted ban on funding religious activities, said Micah Schwartzman, who is a law professor at the University of Virginia.

“This kind of direct funding is something that we hadn’t seen before. It raises some constitutional questions,” he said.

Other religious freedom scholars argued that the COVID-19 pandemic warranted unprecedented solutions. It made sense for the government to try to mitigate issues created by its own social distancing rules, said Stanley Carlson-Thies, founder and senior director of the Institutional Religious Freedom Alliance, to the Deseret News this spring.

“What the (paycheck protection) program tries to do is keep everybody, including houses of worship, from being harmed by these things (like bans on group gatherings) we had to do on behalf of the whole society,” he said.

The Rev. Price said the program accomplished this goal, at least in his case. Thanks to its paycheck protection loan, First Baptist Church avoided layoffs.

“We were able to weather the storm,” he said.

Those frustrated by the Trump administration’s faith-related actions aren’t calling for officials to take stimulus money back from people like the Rev. Price. At this point, what they want is more information about loan recipients, which they’d use to raise awareness of religious involvement in the stimulus program.

“I think people don’t have a good perspective right now about where the money is going. They mostly think the money is going to (secular) businesses,” Gill said.

Calls for transparency

Religion-related policy experts aren’t the only people calling for government transparency right now. Several organizations, as well as some lawmakers, criticized the Trump administration earlier this month when officials said they had no plans to name recipients of the more than $500 billion in paycheck protection funds released so far.

“This is the taxpayer’s money. They have a right to know where this money went,” said Sean Moulton, senior policy analyst for the Project on Government Oversight, noting that officials freely release information about most other types of public funds.

Pushback against the government’s initial announcement has already yielded some results. The Trump administration said Friday that it would identify companies who received more than $150,000 in stimulus funds, but not share exact loan amounts.

“We are striking the appropriate balance of providing public transparency, while protecting the payroll and personal income information of small businesses, sole proprietors and independent contractors,” Treasury secretary Steven Mnuchin said in a statement.

Moulton and others argue the government’s plan doesn’t go far enough. Without a complete list of participating small businesses and loan amounts, it will be impossible to get a clear picture of how COVID-19 stimulus funds were used, they said.

“People want to look (at the data) and find the pieces that don’t make sense, the pieces we should be asking question about,” Moulton said.

Administration officials worry that what people really want is to use the information to dig into organizations’ private affairs. Mnuchin has expressed concern about enabling people to use stimulus fund data to determine how much businesses pay their employees.

“The secretary’s point is that loan level data with identifying information would risk disclosing proprietary data of small businesses and the salaries of independent contractors. We are fully committed to transparency while protecting sensitive information,” said Brian Morgenstern, a Treasury Department spokesman, in a statement provided to The Washington Post.

Gill said her organization and others are more interested in studying the government’s actions than deducing how much the average church employee is paid. She’d like to try to determine whether certain faith groups were favored over others and get a sense of what share of the funds supported religious activities.

“We’d have to look at who is funded and then go from there,” Gill said.

Even a government-focused approach could land some religious organizations in hot water.

Several churches have already been criticized for relying on taxpayer support instead of drawing on their denomination’s savings. More houses of worship would be vulnerable to these attacks if in-depth government data was released.

“I would be frustrated if a church with deep resources and a lot of assets was drawing off of this money designed to help people with no other options,” the Rev. Price said.

Admittedly, it will be difficult to say anything definitive about church involvement in the paycheck protection program even if the government is completely transparent, Schwartzman said. A list of loan recipients won’t tell you which houses of worship were turned down by their banks, whether churches used the funds for pastor salaries or child care centers, or how many community service programs were saved.

However, the data would give you a better sense of how many houses of worship received direct funding from the government, which should matter to anyone who cares about the separation of church and state, Schwartzman said.

“It’s important to understand the magnitude of what has happened here,” he said.

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