Oklahoma AG candidate’s businesses received pandemic relief funds from his bank

Gentner Drummond, a wealthy Tulsa businessman who said he plans to spend millions on his campaign for state attorney general, received $3.6 million in pandemic relief funds for several of his businesses, using his own bank to review some of the applications and to administer the money.

As the COVID-19 pandemic shut down businesses, the federal government issued Paycheck Protection Program loans in an effort to keep employees paid, especially at companies where access to capital was difficult.

In 2020, three of Drummond's businesses — a cattle ranch, a chain of cellphone retailers and a law firm —  received a combined $1.9 million in Paycheck Protection Program loans that were later forgiven by the federal government, according to data from the Small Business Administration and ProPublica.

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The next year, during another round of PPP funding, Drummond's three businesses received another $1.7 million, this time administered through Blue Sky Bank, where Drummond is the majority owner.

Blue Sky Bank was eligible for $62,337 for processing fees to administer the three loans, according to lender compensation information from the Treasury Department.

It made another $8,161 in interest from the loans, which were paid off by the federal government.

How the Paycheck Protection Program worked

Rules on Paycheck Protection Program loans were not always clear, but the federal government said businesses applying for the funds “must certify in good faith that their PPP loan request is necessary,” according to the Treasury Department.

Borrowers also were instructed to "take into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business."

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PPP loans were administered by banks, which were responsible for reviewing applications and determining if the level of need warranted the money.

In 2018, Drummond spent nearly $2.36 million of his own money on a race for attorney general that he narrowly lost. When he announced his second campaign for attorney general last year, Drummond said he was prepared to spend another $2 million.

Drummond's campaign said he did not personally receive any of the pandemic relief funds as an employee and that before any federal funds were provided, "Mr. Drummond's companies paid employees even though the businesses experienced rolling shutdowns due to local regulations and/or COVID outbreaks among employees."

Drummond used his own bank for PPP funds

When Drummond's businesses applied for the first round of PPP funds, they used First Bank of Oklahoma. Their second application went through Drummond’s bank.

Drummond's campaign said Blue Sky Bank followed the same application and loan forgiveness process for Drummond's companies as it did all other customers.

His campaign also said the loans were necessary to keep his businesses operating during the height of the pandemic.

"The loans were absolutely vital to keeping his workforce employed, which would not have been possible otherwise," his campaign said. "Like countless businesses across the country, Mr. Drummond's companies experienced tremendous hardship and financial difficulties during the pandemic."

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On his 2021 application, Drummond reported 298 employees, which was a 50% increase from the previous year.

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A spokesperson for his campaign said there was no growth in employees, but the increase reflected a requirement to count the number of employees at the company and other affiliates.

Attorney General John O'Connor, whom Drummond is challenging in the Republican primary, was a shareholder at Hall Estill from 2018 to 2021, which received $3.4 million in PPP funds. However, O'Connor was not on the board and did not have a controlling interest in the company.

Primary  is less than six weeks away

With the Republican primary less than six weeks away, the race is shaping up to be one of the most expensive primary elections in the state as both candidates have been trading attack ads through their own campaigns or separate political groups.

Despite being the challenger, Drummond is well known after his 2018 campaign when he lost by 271 votes.

Multiple polls have shown Drummond with a sizable lead over O'Connor. In an April poll of Republican primary voters, Drummond led by 40 percentage points, but nearly half of all voters were still undecided.

This month, another poll from a different firm showed Drummond with 41% support compared to O'Connor's 23%.

However, that poll showed 36% of likely primary voters were still undecided.

With no Democrat running for attorney general, the Republican primary likely will decide the ultimate winner. Libertarian Lynda Steele also will be on the ballot in November.

This article originally appeared on Oklahoman: Gentner Drummond's businesses got millions in pandemic relief funds