Judge Keeps Virus-Relief Funds Out of Reach of Lobbyists

Lobbyists and political consultants have had to deal with layoffs and other business interruptions from the pandemic, but U.S. District Judge Royce Lamberth said the Small Business Administration can’t be their lifeline.

Shown is a portion of a loan application to participate in the Paycheck Protection Program run by the Small Business Administration. (AP Photo/Wayne Partlow)

WASHINGTON (CN) — Political lobbyists may have been hit as hard as other sectors by the virus pandemic, but that doesn’t justify giving them a slice of the government aid pie, a federal judge ruled.

“These are trying times. Businesses and individuals of all trades are suffering from the detrimental effects of this pandemic,” U.S. District Judge Royce Lamberth wrote. “But the court is bound by existing precedent and cannot enjoin a constitutionally valid regulation on account of financial hardship.”

Released late Tuesday, the ruling came just a day after the Washington court heard arguments via teleconference that the multibillion-dollar CARES Act, short for Coronavirus Aid, Relief, and Economic Security, unconstitutionally excludes lobbyists and political consultants.

Claiming that they are in dire need of the congressional funds to keep business afloat, a trade group for the industry and the firm Ridder/Braden claimed in a federal complaint last week that the program infringes their free-speech rights.

The Reagan-appointed Lamberth made clear he had no desire to involve the courts in the widely bipartisan Paycheck Protection Program, a subset of the $2.2 trillion CARES Act that included some $350 billion for small businesses.

“The executive and legislative branches quickly responded to the COVID-19 crisis with this virtually unanimous legislation,” Lamberth wrote. “For the judicial branch to intervene now and issue the requested injunction under these circumstances would not be in the public interest.”

Beset from the beginning with technical and systemic problems, the loan program overseen by the Small Business Association ran out of money just two weeks in. Another $250 billion funding package for the program just cleared the Senate on Tuesday, but a date for passage by the House remains unclear.

Lamberth said that lobbyists failed to show that their financial hardship is irreparable, saying that the inability of firms to access federal loans does not directly translate into the Small Business Association putting a curb on political speech.

During Monday’s hearing, Lamberth quickly cut through the challengers’ argument that loans, by their very definition, should not be considered a subsidy.

“Well that’s not totally accurate because they’re also saying that most if not all of the loans are going to be forgiven, right,” the judge had said. 

As explained at the hearing by Justice Department attorney David Morrell, the loans can be forgiven if companies use the money to cover certain expenses like payroll, rent and utilities.

Arguing for the lobbyists and consultants, attorney Jason Torchinsky emphasized: “There’s no guarantee of forgiveness for anybody.”

A partner at Holtzman Vogel, Torchinsky said the loans would help his clients make payroll, not run political ads.

“The whole reason we are in this situation is the near shutdown of economic activity caused by the government,” he said.

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