Strand Book Store, Inc. agreed Nov. 3 to pay $1,482,560 to resolve U.S. claims tied to a 2021 loan it sought while Sen. Ron Wyden’s wife controlled the New York bookstore.
The U.S. Department of Justice (DOJ) said the store applied in February 2021 for a $932,350 second-draw loan through the Paycheck Protection Program (PPP), a federal pandemic relief program. Nancy Bass Wyden was the bookstore’s controlling owner at the time, the department said.
The department alleges Bass Wyden certified that no spouse of a member of Congress held a direct or indirect controlling interest in the applicant. DOJ says she knew the representation misstated the store’s eligibility, but the settlement makes no finding on whether the company is liable.
Congress authorized the second round in December 2020 after the CARES Act authorized the forgivable loan program in March of that year. A Small Business Administration (SBA) rule effective Jan. 12, 2021, excluded second-draw applicants if a member of Congress or a spouse directly or indirectly held a controlling interest. The rule defined control as at least 20% of any equity class, measured by voting rights or value.
Strand told CNBC its accountant and the bank processing the loan did not know the eligibility rule had changed when the application was handled, and the store described the mistake as unintentional. CNBC also quoted Strand as saying the circumstances arose during an “unprecedented and rapidly changing public health emergency.”
CNBC reported that a spokesperson for Wyden’s office said the senator had no role in the loan or settlement. The spokesperson also said Wyden and his wife do not discuss her business.
The settlement resolves a whistleblower case filed by Blockquote Inc. under the False Claims Act, the Justice Department said. The law allows a private party to bring a lawsuit on the U.S. government’s behalf and seek a share of any recovery. The DOJ said Blockquote will receive approximately $148,256 from the settlement.
