Back in January we wrote about the Army West Point Athletic Association’s (AWPAA) finances and business model. In this we noted that the AWPAA, while receiving massive government grants and other various subsidies and advantages of being at West Point, got a Paycheck Protection Program (PPP) loan by July, 2020. The auditor reported that AWPAA expected the loan to be forgiven.
Paycheck Protection Act and Loan
The AWPAA got a loan of $2,795,400. The Small Business Administration forgave that loan in July, 2021. https://data.sba.gov/dataset/ppp-foia .
Download “public_150k_plus_220703.csv” and search for loan number 3402907109. Items of interest include:
- the loan amount: $2,795,400 (this is a large PPP loan, in the 98th percentile of loans in the file).
- The forgiveness amount: $2,829,251
- Jobs reported: 431
The Paycheck Protection Program was meant for small businesses to cover payroll during the COVID shutdown. The AWPAA in 2019 and 2020 had revenues of $47M and $49M, and expenses of $45M and $47M. It gets $9M to $11M dollars per year in federal grants and upwards of $6M per year in contributions (separate from ticket sales) and West Point Association of Graduates (WPAOG) support. It gets free cadet labor to put on games, mandatory enthusiastic audiences, and West Point campus beauty. It is no main-street Mom-and-Pop store!
AWPAA stopped publicly posting its audits (presumably to avoid disclosure) after the 2020 audit, so we don’t know how or whether COVID affected the income and expenses. But did Army stop athletics or playing football?
No. They played 38 games in the three COVID years 2019-2021.
Maybe AWPAA needed it to pay its 260 employees and its $19M payroll. That’s another thing – the publicly available staff directory shows 260 employees, not 431 as claimed on the PPP loan record. We would welcome explanation of the difference.
Loan Forgiveness
Why is AWPAA not paying the loan back?
There could be good reasons AWPAA took the loan. We can think of a lot of ways that having cash-on-hand during COVID in 2020-21 would be helpful. But we can think of no reasons for not repaying, other than “it was money we didn’t *have* to repay.”
We emailed and asked AWPAA for comment on the loan (for example the number or types of jobs saved) or forgiveness. They responded “We do not have any comment on our PPP loan and/or the forgiveness granted.”
Seeing no effort to repay the loan and getting no explanations, we conclude that this was rent-seeking activity. Rent-seeking is “an economic concept that occurs when an entity seeks to gain wealth without any reciprocal contribution of productivity.”
Army West Point Athletics Represents West Point
AWPAA trades on its association with West Point and West Point’s reputation. It is a steward of West Point’s brand and is the most common contact the general public has with West Point.
It is morally wrong for such an organization, a non-profit which already receives considerable public and graduate largesse, to take out such a loan, intended for tax-payer businesses, as free money.
USMA claims to yearn to “live above the common level of life.” So why is Army Athletics acting like just another opportunistic pig at the government trough?
West Point grads including Corps Squad athletes “owe” the American people five years active duty after graduation. Many die trying to back that debt. Should Army Athletics graduate players henceforth “pull a PPP” on their five-year active duty obligation?
As always factual corrections and thoughtful criticism are welcome.
Special thanks to John T Reed for his thoughts and input on this article. Any mistakes or issues are ours.
As I recall, there will not be any tax returns filed after June 30, 2020 because the AWPAA’s results of operations are consolidated with its “parent” company, the WPAOG. The audit report issued on the financial results of the WPAOG barely mentions this fact, and there are no further tables or narrative to advise the readers of the AWPAA’s financial results or position.
It would appear that the AWPAA is joining the “celebrity” list of people and businesses not repaying their PPP loans. Jared Kushner is one name that comes to mind.
A journalist is born.
methinks the level of transparency here deserves some degree of credit even as we conclude that perhaps a call of ‘gross lack of judgment’ might fit the execution of a policy …
in this modern era of technology uber ‘tradition’, especially that expected at our Rockbound Highland home, should we expect any personnel at the esteemed AWPAA to perhaps walk the area to atone for their unprofessional behavior ?