Millions in PPP loans went to Somerset-area companies. A look at who received tax dollars.

Led by Corsa Coal Corp. subsidiary Wilson Creek Energy, Somerset County businesses have received approximately $135 million in taxpayer-funded loans in recent years.

In the wake of the COVID-19 pandemic shutdowns, the federal government doled out nearly $800 billion in Payment Protection Program loans to businesses across the country. A total of 1,660 of these loans came to Somerset County.

Of those 1,660 loans, more than 1,500 worth about $118 million were forgiven, according to the federal Pandemic Response Accountability Committee.

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The industries that received the most loan funding were manufacturing ($26.2 million); health care ($13.7 million); construction ($13.3 million); transportation ($12.1 million); retail ($11.1 million), and mining ($10.2 million). Top recipients in Somerset County were Wilson Creek Energy ($8.2 million), Highland Tank ($6.154 million) and Chan Soon-Shiong Medical Center at Windber ($4.943 million).

Each of these three top recipients had their loans forgiven.

Other local loans of more than $1 million went to Legacy Truck Centers ($2.2 million); Maak Family LLC ($1.7 million); Allegheny Christian Ministries ($1.7 million); Community Healthcare Operator ($1.2 million); Keystone Lime Co. ($1.2 million); Beeghley Treet LLC ($1.1 million); Somerset Care ($1.1 million), and Guy Chemical ($1 million).

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How to get a PPP loan forgiven

To qualify for PPP loan forgiveness, the borrower was to use at least 60% of the loan for payroll, according to the Small Business Administration. Borrowers were also required to submit various forms and apply for forgiveness.

Eligible non-payroll expenses could include utilities, rent, property damage and more.

Wilson Creek Energy

Corsa Coal interim CFO Dan Bonacci said the Paycheck Protection Program loans to Wilson Creek Energy were critical in sustaining employment during a downturn in 2020.

The Paycheck Protection Program was designed to help businesses retain their workforces amid the COVID-19 pandemic by offering loans backed by the U.S. Small Business Administration. These loans became forgiven in full for business that met criteria such as maintaining employee and compensation levels and using at least 60% of the funding to make payroll.

In the first quarter of 2020, Wilson Creek Energy had approximately 420 employees, according to Bonacci. They are down to 340 employees, but are now hiring.

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"Initially we did (shut down)," Bonacci said. "The governor's orders to shut down did not include us as an approved, necessary business.

"After a few days, they worked it out and re-evaluated the list, adding coal mining to that. The supply chains depend on that. ... That (PPP loan) was critical for us. It was necessary for us to survive and keep as many miners employed as we could."

In addition to payroll expenses, Wilson Creek also used the PPP funds for rents, leases and other things.

"We received full forgiveness last summer on both loans," Bonacci said. "It was also a great thing for us, demonstrating we received the funds and used them appropriately."

The loans came to Wilson Creek at a time when executives with its parent company, Corsa, were under a United States Department of Justice investigation.

Federal prosecutors say two former executives violated the U.S. Foreign Corrupt Practices Act of 1977 by paying a co-conspirator millions of dollars to bribe officials at Al Nasr for Coke and Chemicals, an arm of the Egyptian state. One of those ex-Corsa executives is also accused of taking kickbacks for himself through this conspiracy.

Carol R. Wilkerson, press director for the U.S. Small Business Administration, declined to comment on Wilson Creek's use of taxpayer dollars, citing policy against discussing specific individual loans.

“If a PPP loan has been forgiven, the loan is paid in full, canceled by the lender and there is no further obligation. The (Small Business Administration) has the authority to review a PPP loan at any time, and in cases of suspected fraud, the SBA and the Biden-Harris administration work closely with the inspector general to identify and address instances of fraud, waste, and abuse, including referrals to law enforcement where appropriate," Wilkerson said.

"(Our) work to enhance fraud controls in pandemic programs has been recognized by federal accountability agencies and watchdogs."

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Highland Tank

Highland Tank and Manufacturing, a steel tank fabrication company with eight locations, received at least $6.1 million in taxpayer funds.

John Jacob, vice president of the business, declined to comment on the subject.

"As a privately held company, Highland Tank does not publicly comment on financial matters," he said in an email.

According to a Forbes article from 2019, Highland Tank had approximately 400 employees in 2019. Its revenues were listed at approximately $60 million between 2009 and 2011.

In January, Highland Tank acquired Boyne Corp. to manufacture specialty control panels in Friedens.

Federalpay.org, a public information website for calculating government pay, reports that more than 400 jobs were retained with the PPP loan to Highland Tank.

"In order to qualify for the PPP loan amount received, Highland Tank LLC's 2019 payroll expenses are estimated to be at least $29.2 (million)," the website says. "Based on their reported 438 jobs retained, this equals an estimated average yearly compensation of $66,662 per employee."

The average yearly compensation estimate is based on the standard PPP calculation of 2½ times the average 2019 monthly payroll costs.

Chan Soon-Shiong Medical Center at Windber

Chan Soon-Shiong Medical Center at Windber received the third-highest PPP loan amount in the county, obtaining at least $4.9 million.

Multiple calls and emails to medical center staff were not returned. According to its website, the hospital is the fourth-largest employer in Somerset County with 450 employees.

The 54-bed hospital was founded in 1905 by Berwind-White Coal Mining Co. President Edward Berwind. In 2016, billionaire Patrick Soon-Shiong bought the hospital and renamed it for his wife and himself.

According to federalpay.org, 490 jobs were retained, with a salary estimate of $47,789 per employee, based on application formulas.

On its PPP application, the hospital reported that approximately $4.8 million in PPP funds would be used for payroll.

"In order to qualify for the PPP loan amount received, Chan Soon-Shiong Medical Center's 2019 payroll expenses are estimated to be at least $23.42 (million)," Federal Pay says.

Nationwide, hospitals received more than $3.5 billion in PPP loans, or less than 1% of the total amount distributed, according to Federal Pay.

Other Somerset County PPP loans

The top loans to franchises were Tri-Star Ford (two loans totaling $761,000); Memorial Highway Chevrolet ($514,600); Bittner North Restaurant ($350,200); Laurel Ford Inc. (two loans totaling ($667,400); Bittner PH LLC ($312,200); BJ Maurer Motor Co. (two loans totaling $523,000); Tri-Star Chrysler Somerset ($196,500); Stoner Quality Water Inc. ($140,400); R&W Motel of Somerset (two loans totaling $171,100); Somerset Donuts ($95,100); and Woy Brothers ($71,400).

Across Pennsylvania, there were 342,490 loans given out to the tune of $30.5 billion. So far, 275,200 have been forgiven, amounting to $26 billion.

And across the nation, there were 11.47 million loans given out, amounting to $792.6 billion. According to the Pandemic Response Accountability Committee, 3.3 million jobs were retained with the help of these loans.

The committee stated that, in Somerset County, 17,700 jobs were retained. Approximately $134.4 million in loans were used for payroll, $614,454 for utilities, $210,956 for rent, $107,519 for health care and $82,219 for mortgage interest.

This article originally appeared on The Daily American: Somerset County businesses received millions in COVID PPP loans