By Andrea Shalal
WASHINGTON (Reuters) – The U.S. government said on Friday it would not provide approved pandemic relief funds to more than 2,900 small businesses owned by women, veterans and disadvantaged people to comply with a injunction issued by a federal court in Texas.
The program, which is part of President Joe Biden’s US bailout, has provided more than $ 27 billion in COVID-19 relief funds to more than 100,000 restaurants, but some of the aid has been frozen at the following lawsuits by white restaurateurs in Tennessee and Texas. who alleged discrimination.
Administration officials said they would continue to fight to keep the program going.
The Department of Justice filed notices in the United States District Court for the North District of Texas and the East District of Tennessee on behalf of the Small Business Administration regarding 2,965 small businesses that had been approved for funds in under the Restaurant Revitalization Fund.
A conservative legal group founded by Stephen Miller and Mark Meadows, close associates of former President Donald Trump, had filed a lawsuit in Texas on behalf of the owners of the Blessed Cajuns restaurant, arguing that the Biden administration’s efforts to prioritize candidates on the basis of race and gender are unconstitutional.
Biden administration officials said the SBA was trying to prioritize helping minority-owned and female-owned businesses, many of whom had found it difficult to seek and receive help under the rescue plans from the Trump administration.
Under a preliminary injunction issued by the Texas court, the SBA must continue to approve funds for non-priority applicants, but cannot distribute money to applicants designated as “priority” until the matter be settled.
Biden in February launched changes https://www.reuters.com/article/us-usa-biden-smallbusiness/biden-to-revise-small-business-ppp-loans-to-reach-smaller-minority-firms -idUSKBN2AM0UP to try to reach small minority owned businesses.
The SBA will direct these applicants to other resources, while continuing to “do everything in our power to help disadvantaged businesses get the help they need to recover from this historic pandemic,” said a responsible for administration.
The dossier submitted Friday made it clear that the 2,965 applicants had been fully approved for funds from May 26 to 28, shortly before the injunction was put on the roll.
The SBA has said it will not pay the claims, given the injunction.
(Reporting by Andrea Shalal; Editing by Leslie Adler)