June, 17 2020, 12:00am EDT
ACLU, Civil Rights Organizations Sue the Small Business Administration for Excluding Business Owners with Criminal Records from COVID-19 Relief Loans
Today, the American Civil Liberties Union (ACLU), the Public Interest Law Center, and Washington Lawyers' Committee for Civil Rights and Urban Affairs filed a lawsuit in federal court to stop the Small Business Administration (SBA) from denying federal Paycheck Protection Program (PPP) loans to small business owners with criminal records. Congress has made hundreds of billions of dollars in PPP loans available to small businesses to keep them and their employees financially afloat in the wake of COVID-19's massive economic impact.
BALTIMORE
Today, the American Civil Liberties Union (ACLU), the Public Interest Law Center, and Washington Lawyers' Committee for Civil Rights and Urban Affairs filed a lawsuit in federal court to stop the Small Business Administration (SBA) from denying federal Paycheck Protection Program (PPP) loans to small business owners with criminal records. Congress has made hundreds of billions of dollars in PPP loans available to small businesses to keep them and their employees financially afloat in the wake of COVID-19's massive economic impact. However, the SBA's exclusionary rules shut out many tax-paying small business owners with past criminal records, a group that is disproportionately Black and Latinx.
The lawsuit was filed on behalf of the following plaintiffs: Defy Ventures, a nonprofit organization that works with formerly incarcerated people to provide them entrepreneurial training and support; John Garland, a Black majority owner of graphic design business FastsignsBethpage, Inc. and advocate for the formerly incarcerated; and Sekwan Merritt, a Black small business owner who owns and operates a small electrical contracting business, Lightning Electric. Garland was unable to apply for a PPP loan due to a pending misdemeanor charge for which he has not been convicted and that he denies. Merritt was denied a PPP loan because he is still on parole for a 2012 drug conviction. Law firms Jenner & Block and Weil, Gotshal & Manges also represent the plaintiffs.
"The SBA's discrimination against formerly incarcerated individuals hurts not just those of us who have worked hard to create our own businesses after returning home, but also impacts our families, the people who work for us, and our communities," said plaintiff Sekwan Merritt. "Through my electrical contracting business, Lightning Electric, I want to provide hope and opportunity for folks who were formerly incarcerated. However, as it stands, the SBA blocks the path to economic equality and progress for people who come from underserved communities and who are disproportionately affected by mass incarceration."
The lawsuit challenges the Small Business Administration's interim final rule and application form barring individuals with certain criminal histories -- such as those with pending charges, those serving parole, probation, or those who have been convicted of a felony within the last year -- from applying for PPP loans. The civil rights organizations argue that the rule violates the Administrative Procedure Act by adding exclusions to the PPP that were not authorized by the CARES Act and are arbitrary and capricious under the Administrative Procedures Act.
Given that PPP loan applications are due by June 30, the lawsuit seeks a preliminary injunction to immediately halt the rule requiring a criminal background screen, and an extension of the PPP application deadline for those applicants unlawfully excluded under the challenged criminal-record exclusions.
"Formerly incarcerated individuals who have paid their debt to society deserve a fair chance to succeed," said plaintiff Andrew Glazier, CEO of Defy Ventures. "The criminal justice system already disproportionately impacts people of color, and destructive policies that create unnecessary barriers to much-needed resources -- such as the PPP -- serve only to amplify the structural racism in our justice system. The SBA's role is to support the success of small businesses, not to impose rules based on uninformed and discriminatory value judgements on their worthiness to receive support. It is long past time to eliminate rules like these."
The SBA's rules have a disparate impact on people of color, who are more likely to have a criminal record due to the systemic overcriminalization of Black and Brown communities. In addition, due to widespread barriers to employment, people with past criminal records often turn to entrepreneurship as a way to support their families and contribute to their communities. The SBA's exclusion has the potential to impact both small business owners with past criminal records, a population that is already disadvantaged in the workplace, and the economies of the communities they serve.
"I am the owner of a growing small business, which not only provides a livelihood for myself and our employees, but provides necessary services to the community and other businesses," said plaintiff John Garland. "There is no reason that our business should be denied the chance to survive this crisis and continue to grow into the future or that my employees should not be able to be paid because I have pending misdemeanor charges for which I strenuously maintain my innocence."
Individuals involved in the case commented:
ReNika Moore, director of the ACLU's Racial Justice Program: "The SBA's misguided rule excluding small business owners from federal aid based on their contact with the criminal legal system ignores the job opportunities, products, and services they provide to their communities. The excluded small business owners are more likely to be Black and Latinx because of bias in our criminal legal system, and their communities are hardest hit by COVID-19. We won't stop fighting until this economic lifeline is afforded to all."
Claudia De Palma, staff attorney at the Public Interest Law Center: "Even in the best of times, the millions of Americans with arrest and conviction records face widespread bias and discrimination in the job market. By arbitrarily denying emergency aid to small businesses owned by Americans with records--businesses like Lightning Electric, which often hires returning citizens--the SBA is dragging down the recovery of entire communities and exacerbating the outsized impact the pandemic has had on communities of color, which are also disproportionately affected by the criminal legal system. An economic crisis is not the time to create additional barriers to desperately needed support, particularly to small businesses that are part of the fabric of neighborhoods across America."
Joanna Wasik, counsel at Washington Lawyers' Committee for Civil Rights and Urban Affairs: "Formerly incarcerated business owners deserve the right to apply for SBA's forgivable loans.We should celebrate the accomplishments of formerly incarcerated individuals who are contributing to their communities, not shut them out from aid at a time of acute financial crisis. The SBA's exclusion compounds the already devastating impacts that communities of color are facing from the COVID-19 pandemic Congress did not provide any exclusions when it passed the CARES Act, and the SBA has provided no good reason for them."
Kali N. Bracey, partner, Jenner & Block: "Small businesses provide an important opportunity for people of color, who are disproportionately criminalized and incarcerated, to rebuild their lives following contact with the criminal justice system. The SBA's implementation of the CARES Act unlawfully prevents small business owners who have had felony convictions from receiving funds. These restrictions undermine the entire purpose of the CARES Act and PPP loan program -- which Congress designed to get loans to those who need it most. This lawsuit seeks to make good on Congress's promise: That PPP funds reach all eligible small businesses to help their employees and to end the discrimination against small business owners of color."
Zachary D. Tripp, partner, Weil, Gotshal & Manges: "Congress created the PPP program to provide emergency relief to all small businesses and the millions of Americans who work for them. But the SBA's categorical disqualification of small businesses based on their owners' past interactions with the criminal-justice system unlawfully denies that aid to American entrepreneurs who, despite barriers and stigma associated with their criminal history, have started businesses that contribute to the economic vitality of their communities. The SBA's actions particularly hurt communities of color, which are already disproportionately harmed by the pandemic. Our lawsuit seeks to prevent the SBA from denying promised relief to many of those who need it the most."
The final complaint can be found here: https://www.aclu.org/legal-document/defy-ventures-et-al-v-united-states-small-business-administration
A video on the filing can be found here: https://www.youtube.com/watch?v=dwnqEv7__mc&feature=youtu.be
This case was filed in the United States District Court, District of Maryland.
The American Civil Liberties Union was founded in 1920 and is our nation's guardian of liberty. The ACLU works in the courts, legislatures and communities to defend and preserve the individual rights and liberties guaranteed to all people in this country by the Constitution and laws of the United States.
(212) 549-2666LATEST NEWS
Report Sounds Alarm Over Growing Role of Big Tech in US Military-Industrial Complex
The paper's author found that the five largest military contracts to major tech firms between 2018 and 2022 "had contract ceilings totaling at least $53 billion combined."
Apr 17, 2024
The center of the U.S. military-industrial complex has been shifting over the past decade from the Washington, D.C. metropolitan area to Northern California—a shift that is accelerating with the rise of artificial intelligence-based systems, according to a report published Wednesday.
The report—entitledHow Big Tech and Silicon Valley Are Transforming the Military-Industrial Complex—was authored by Roberto J. González, a professor of cultural anthropology at San José State University, for the Costs of War Project at Brown University's Watson Institute for International & Public Affairs.
The new paper comes amid the contentious rise of AI-powered lethal autonomous weapons systems, or killer robots; increasing reliance upon AI on battlefields from Gaza to Ukraine; and growing backlash from tech workers opposed to their companies' products and services being used to commit or enable war crimes.
"Although much of the Pentagon's $886 billion budget is spent on conventional weapon systems and goes to well-established
defense giants such as Lockheed Martin, RTX, Northrop Grumman, General Dynamics, Boeing, and BAE Systems, a new political economy is emerging, driven by the imperatives of big tech companies, venture capital (VC), and private equity firms," González wrote.
"As Defense Department officials have sought to adopt AI-enabled systems and secure cloud computing services, they have awarded large multibillion-dollar contracts to Microsoft, Amazon, Google, and Oracle," he added. "At the same time, the Pentagon has increased funding for smaller defense tech startups seeking to 'disrupt' existing markets and 'move fast and break things.'"
The report highlights the rise of a new class of billion-dollar military contractors, "a combination of gargantuan tech firms like Microsoft, Amazon, and Google, and hundreds of smaller, pre-IPO startup companies supported by VC firms."
"The use of drones and AI-enabled weapons systems in Ukraine and Gaza, and a feared AI arms race with China, have fueled the
Pentagon's heavy investment in advanced digital tech," González wrote.
A lack of transparency is obscuring the true value of some of the largest military contracts to tech companies.
"One estimate indicates that U.S. military and intelligence agencies awarded at least $28 billion to Microsoft, Amazon, and Alphabet (Google's parent company) between 2018 and 2022," the report states. "The actual value of these contracts is likely much higher, because many of the largest known contracts with U.S. tech companies are classified and withheld from public procurement databases."
González found that the five largest military contracts to major tech firms between 2018 and 2022 "had contract ceilings totaling at least $53 billion combined."
"Major tech firms are also awarded large subcontracts from relatively obscure intermediaries or 'passthrough' companies that are granted primary contracts from the Pentagon—evading scrutiny and analysis," the paper adds.
González said that multi-year software-as-a-service contracts "could make the Pentagon and CIA more dependent than ever on the expertise of technical experts from the private sector."
The risk of conflicts of interest increases as military-dependent tech companies go public.
"As just one example, since going public, more than half of Palantir Technologies' revenue has come from the federal government," the report states. "Recent Palantir contracts with the U.S. Army Special Operations Command and the Air Force are worth more than $900 million. Palantir stock rose more than 170% in 2023."
There's also the danger of a "revolving door" between Silicon Valley and the Pentagon as many senior government officials "are now gravitating towards defense-related VC or private equity firms as executives or advisers after they retire from public service."
"The traditional 'revolving door' meant that a former defense official might accept an executive position with traditional weapons manufacturers; there are more lucrative options now," González wrote. "At least 50 former defense officials are working in VC and private equity, leveraging their connections with current officials or members of Congress to advance beneficial legislation for defense tech firms in their firms' investment portfolios."
"The implications are significant: The new 'revolving door' will accelerate military and intelligence agency funding for early-stage defense tech startups," the report states.
González details how "overblown, inaccurate, ideological talking points are driving defense funding for Big Tech," including "grandiose claims about the effectiveness of artificial intelligence; the overestimation of China's military and technological capabilities; the idea that America has the ability and duty to protect the world's democratic societies; and a steadfast belief that the best way to preserve U.S. dominance is through a free market that prioritizes corporate needs."
"These perspectives boost demand for military AI, and are promoted by a network of tech executives, venture capitalists, think tank analysts, academic researchers, journalists, and Pentagon leaders," he wrote.
Finally, the report warns that "aggressive Big Tech business models" can rush the development of weapons, endangering both combatants and civilians.
"Members of the armed services and civilians are in danger of being harmed by inadequately tested—or algorithmically flawed—AI-enabled technologies," the paper states. "By nature, VC firms seek rapid returns on investment by quickly bringing a product to market, and then 'cashing out' by either selling the startup or going public. This means that VC-funded defense tech companies are under pressure to produce prototypes quickly and then move to production before adequate testing has occurred."
Keep ReadingShow Less
'A Big, Big Deal': Chattanooga Volkswagen Workers Begin Voting in Key Union Election
"Looking back, you could see this being the first domino in something that changes the entire South," said one labor journalist.
Apr 17, 2024
Volkswagen workers in Chattanooga, Tennessee began voting Wednesday on whether to join the United Auto Workers, a closely watched election seen as a critical test for the emboldened union's ability to organize in the U.S. South.
The election kicked off a month after workers at the Chattanooga plant filed a petition with the National Labor Relations Board (NLRB) formally requesting an election to join the UAW, which secured record-breaking contracts at the Big Three U.S. automakers last year after a historic six-week strike.
Following the hard-fought contract victories, the UAW launched what's been described as the largest union organizing drive in modern U.S. history, targeting nonunion car manufacturers such as Tesla, Toyota, and Volkswagen.
The Chattanooga election marks the third time in a decade that the UAW has tried to organize the Volkswagen plant, which currently has around 4,300 workers. Voting concludes on Friday.
"This election is a big, big deal—probably the most important union election that this country has seen in years," labor journalist Hamilton Nolan said in a Democracy Now! appearance on Wednesday. "Looking back, you could see this being the first domino in something that changes the entire South."
About 4,000 Volkswagen workers in Tennessee are voting on whether to unionize with the United Auto Workers. Labor journalist @hamiltonnolan says it's the most important union vote in years and could be the "first domino" in a wider push to organize the auto industry in the South. pic.twitter.com/RWFnO5KznI
— Democracy Now! (@democracynow) April 17, 2024
Chattanooga workers voiced confidence that this election will be different than 2014 and 2019, when Volkswagen employees voted against joining the UAW by narrow margins.
"We're going to win," Lisa Elliott, a quality control worker at Volkswagen, toldThe Guardian's Steven Greenhouse. "We have the momentum. I know this will be a historic event."
In addition to the Chattanooga effort, the UAW is trying to organize Mercedes-Benz workers in Vance, Alabama. Earlier this month, a supermajority of Mercedes workers in Vance submitted a petition to the NLRB requesting an election to join the UAW.
UAW's organizing efforts have drawn national attention—and ire from anti-union politicians, including the Republican governors of Tennessee, Alabama, Mississippi, and other states in the U.S. South.
Joseph McCartin, a labor historian at Georgetown University, told Greenhouse that "a victory at Volkswagen would make a victory at Mercedes much more likely."
"Victories at both Volkswagen and Mercedes would be nothing less than an earthquake," McCartin added. "This would be the biggest breakthrough in private-sector organizing in decades. It would mean that the anti-union citadel [in the South] that has repulsed effort after organizing effort has been breached."
University of California, Berkeley professor Harley Shaiken echoed that assessment in an interview with The New York Times.
"It would be a revolution for the UAW and for the auto industry," Shaiken said of a UAW win. "It would break the glass ceiling for unions in the South, and would mean more purchasing power for working-class people in that region."
Keep ReadingShow Less
Montanans Launch Push to Get Abortion Rights on November Ballot
"With 2024 shaping up to be the biggest year ever for abortion on the ballot, it is critical that Montanans can make their voices heard on this issue."
Apr 17, 2024
As abortion continues to dominate this year's state and federal political contests, Montanans Securing Reproductive Rights on Tuesday launched a signature collection drive to get a citizen-initiated state constitutional amendment on the November ballot.
Since the right-wing U.S. Supreme Court reversedRoe v. Wade with Dobbs v. Jackson Women's Health Organization nearly two years ago, Republican state lawmakers have ramped up efforts to further restrict abortion care—and voters, including residents of red states, have responded by protecting reproductive freedom when weighing in on related ballot measures.
With little hope that the divided Congress will restore nationwide abortion rights, ballot initiatives for the 2024 cycle are ongoing in various states, from Arizona and Florida to Montana, where "a yes vote on Ballot Issue #14 will keep the government out of our personal lives," as the Montanans Securing Reproductive Rights website states.
"This is an exciting opportunity to secure our rights for generations to come. Now is the time to ensure power remains in the hands of the people of Montana, so everyone has the freedom to prevent, continue, or end a pregnancy should they choose," the site adds. "Politicians have no business controlling our bodies and our futures."
After a legal battle with Republican state Attorney General Austin Knudsen, the ballot language is:
CI-128 would amend the Montana Constitution to expressly provide a right to make and carry out decisions about one's own pregnancy, including the right to abortion. It would prohibit the government from denying or burdening the right to abortion before fetal viability. It would also prohibit the government from denying or burdening access to an abortion when a treating healthcare professional determines it is medically indicated to protect the pregnant patient's life or health. CI-128 prevents the government from penalizing patients, healthcare providers, or anyone who assists someone in exercising their right to make and carry out voluntary decisions about their pregnancy.
Montana currently allows abortion care up until fetal viability. In response to a legal challenge from Planned Parenthood of Montana (PPMT), a trial judge in February struck down three laws passed by the Republican-controlled state Legislature in 2021: a 20-week ban, restrictions on medication abortions, and a rule that providers must offer patients an ultrasound.
"We are relieved that Montanans will no longer live with the threat of these harmful restrictions taking effect. But make no mistake, our fight continues," PPMT president and CEO Martha Fuller said at the time. "For years anti-abortion politicians at all levels of government have made banning abortion their number one priority, despite the current protection held in our state constitution."
"During the 2023 Montana legislative session, an onslaught of anti-abortion bills was introduced, passed, and signed into law, and PPMT is working hard to beat back these attacks and more," Fuller continued. "We will never stop working to ensure that all Montanans and those who are forced to travel here for care can access the care they need."
In addition to Planned Parenthood, Montanans Securing Reproductive Rights is a campaign by the ACLU of Montana, the Fairness Project, and Forward Montana. The coalition now needs to collect 60,000 signatures by June 21.
"Anti-abortion extremists have tried to interfere in Montanans' personal healthcare choices again and again. That's totally unacceptable—Montanans deserve to make their own decisions about reproductive care, not have politicians decide for them," the Fairness Project executive director Kelly Hall said Tuesday.
"The Fairness Project is proud and excited to be supporting Montanans Securing Reproductive Rights in their campaign to pass CI-128, especially at a time when abortion rights are under attack," Hall added. "With 2024 shaping up to be the biggest year ever for abortion on the ballot, it is critical that Montanans can make their voices heard on this issue."
Keep ReadingShow Less
Most Popular