Feds flout church-state separation with millions in pandemic aid

Church of all nations
Grace Fellowship Church of West Palm Beach received a loan of $5 million to $10 million from the Paycheck Protection Program to preserve 182 jobs, according to Small Business Administration data.

By Noreen Marcus,

The federal government’s Paycheck Protection Program (PPP) is subsidizing religious institutions in South Florida and elsewhere–despite the rule about separating church and state in a democracy.

Thirty Judeo-Christian organizations in Miami-Dade, Broward and Palm Beach counties were approved for loans in the range of $1 million to $5 million, according to the Small Business Administration’s PPP database. The 30 possibly forgivable loans are supposed to save a total of 5,453 jobs threatened by the pandemic.

This kind of financial support isn’t unprecedented. It’s just the latest example of a trend to assist tax-free religious entities through government aid, as with school vouchers.

Legal experts trace the shift away from religions relying solely on private funding sources to recent opinions by the conservative U.S. Supreme Court.

Marci Hamilton

The rulings interpret the First Amendment’s Establishment Clause: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.”

“The rationale for giving them the money is the newly identified rule at the Supreme Court that government can’t discriminate against religious groups, that if everybody is getting a benefit, they should get it, too,” said Marci Hamilton, a University of Pennsylvania professor and founder of CHILD USA, a nonprofit think tank that addresses child abuse and medical neglect.

‘End’ of church-state separation

“That’s essentially the end of the separation of church and state as it’s been traditionally understood,” she said. Accepting the argument that religion should be treated like a commercial activity turns the doctrine into “a benefit program for religious organizations rather than any kind of limitation.”

The PPP was part of the $2.2 trillion CARES Act that Congress passed in March in response to the coronavirus pandemic. Most of the loans were awarded in April. Now the program is back in the news.

Treasury Secretary Steven Mnuchin recently suggested that the government forgive the PPP loans without verifying the money was spent properly on wages, rent and utilities, the Washington Post reported.

U.S. Treasury Secretary Steven Mnuchin

Also, Congress is considering reviving the program in the next economic stimulus bill, just as the money runs out from the first round of loans.

At least 3,500 PPP loans were granted as of July 10, the Associated Press reported. Most are for sums nowhere near $1 million. Many businesses and religious groups secured much smaller bailouts. (Full disclosure: the nonprofit Florida Bulldog got a $13,000 loan.)

The SBA amended its rules to legalize direct financial aid to religious institutions, but critics say it’s still an inappropriate taxpayer expenditure. They wonder why so little is known about where the money goes.

“I don’t think that government funding should be going to organizations that aren’t required to disclose their finances to the public,” Hamilton said. “It’s either separation of church and state and they don’t get direct funding, or, there should be more transparency about their finances and how they spend the money.”

Questions about who gets what and why

The PPP has been criticized for favoring billionaires and companies associated with celebrities and politicians over the legions of average Americans who’ve had to close small businesses since the pandemic began surging in March.

President Donald Trump’s personal spiritual adviser Paula White’s City of Destiny Inc. in Apopka FL, near Orlando, got a loan in the $150,000 to $350,000 range to preserve 30 jobs, the PPP database shows.

Politics seemed to give at least one large organization a major boost. The U.S. Roman Catholic Church lobbied for and got a minimum of $1.4 billion and possibly up to $3.5 billion in PPP loans, the AP reported.

South Florida Catholic churchesand schools received nine of the 30 loans in the $1 million to $5 million range.

Samir Kakli

In contrast, none of the big loans went to South Florida Muslim mosques or schools. A handful of them have major financial needs, according to Samir Kakli, president of the South Florida Muslim Federation.

Those that applied to the program may have received sums under $1 million, Kakli said. He estimates about 100,000 of his co-religionists live in South Florida.

Kakli reported a spike in recent requests for help from Muslims “losing jobs, in need of food, in need of rent assistance, with family members getting COVID.” The community meets these needs internally by doing things like setting up food distribution points for Muslims and non-Muslims alike, he said.

10 in S. Fla. who got $2 million or more

According to the PPP database, one South Florida religious institution, Grace Fellowship Church of West Palm Beach, received a loan in the top range, $5 million to $10 million, to preserve 182 jobs.

But Grace Fellowship’s executive pastor, Tim Flowers, said the church and its 650-student Berean Christian School actually got $1.2 million. “The PPP loan enabled the rehiring of school employees that had been laid off due to the COVID-19 school shutdown,” he wrote in response to emailed questions.

Tim Flowers

Ten South Florida religious organizations and schools were approved for loans in the $2 million to $5 million range, the PPP database shows. None responded to Florida Bulldog emailed questions. Here are their listings, including numbers of jobs saved: 

  • Christ Fellowship, Palm Beach County, 448
  • Ministerio Internacional El Rey, Miami, 287
  • Scheck Hillel Community School, Miami, 263
  • Convent of the Sacred Heart/ Carrollton School, Miami, 222
  • Belen Jesuit Preparatory School, Miami, 217
  • St. Thomas Aquinas High School, Fort Lauderdale, 213
  • Westchester Christian Private School, Miami, 193
  • Hebrew Day School of Broward County/ David Posnack, Plantation, 175
  • Christopher Columbus High School, Miami, 171
  • Jewish Federation of South Palm Beach County, 109

Sympathy for religion workers

Given a pandemic that’s straining the resources of millions of Americans, whether they work in the religion industry or not, even Americans United for Separation of Church and State (AU) calibrated its criticism to the times.

Because “taxpayers should not be forced to fund religious activities,” AU opposes the PPP’s “loan forgiveness — essentially taxpayer-funded grants — for religious activities, including clergy salaries…which we believe the First Amendment clearly forbids,” AU senior adviser Rob Boston wrote in an emailed statement.

Rob Boston

“But we also understand that this pandemic is a watershed event for American society. We sympathize with clergy, other religious employees and congregants, especially those who work for and belong to small houses of worship serving struggling communities, and understand why many have applied for the money made available to them,” Boston wrote.

“We caution that this emergency funding will come with strings attached, including reporting and potential audits. With government funding comes government oversight; distorting the relationship between religious institutions and government serves neither,” he wrote.

Florida Bulldog sought to ask Boston or somebody at AU what they thought about Mnuchin calling for an end to PPP loan regulation. But a follow-up interview request went unanswered.

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