“Behind the Scenes: How Musicians Turned COVID Relief into Lavish Living”

SCOTT DETROW, HOST:

At the outset of COVID, music halls were truly facing significant challenges. While many businesses were affected, retail stores could rely on online sales, and eateries could shift to outdoor service or delivery. However, it was quite challenging to adapt if your primary income relied on cramming hundreds of individuals into a dimly lit venue to sing, dance, and generally share the same atmosphere. Enter the Shuttered Venue Operators Grant. This program was enacted by President Trump in December 2020, designed to assist in keeping music venues and theaters in business. It also benefited affluent and well-known musicians – as highlighted by a fresh investigative report from correspondent Katherine Long and her team at Business Insider. She discussed her findings with NPR culture reporter Andrew Limbong, starting with an explanation of how the grant functioned.

KATHERINE LONG: This initiative was designed to allocate federal grant funds to smaller venues, arts organizations, and cinemas – entities that encountered severe difficulties during the pandemic lockdowns due to the struggles in gathering audiences in one location. They couldn’t host live performances or screen films, and they required grant funds since many were ineligible for the Paycheck Protection Program. A majority of these venues and arts organizations operate with contractors rather than staff. This means they lacked a substantial payroll base that would make them eligible for the PPP. Thus, Congress approved this bill with the expectation that some of these funds would ultimately reach the contractors involved in these performances. In several instances, that did not transpire as intended.

ANDREW LIMBONG, BYLINE: Yes. But let’s examine how it did function – right? – for example, if I owned a club with a capacity of 500, how would I go about acquiring funds?

LONG: Absolutely. Organizations that experienced a loss in revenue from 2019 to 2020 qualified for this funding, with a cap on grant amounts set at $10 million. However, the majority of organizations that obtained funds, over 13,000, received significantly less. The median grant amount hovered around $300,000. Therefore, you would apply via the Small Business Administration, outlining a budget. You would define how much you would allocate for transportation, how much for compensating our contractors, and how much for rent. The SBA would sanction that funding, and you would essentially receive a check. By the conclusion of the grant period, you would demonstrate to the SBA how the funds were utilized.

LIMBONG: Yet, it didn’t always proceed seamlessly, correct?

(LAUGHTER)

LIMBONG: You began your piece with Lil Wayne, the renowned rapper. What did you uncover?

LONG: Indeed. What we discovered was that Lil Wayne – who, around the pandemic onset, profited approximately $100 million from selling the rights to the catalogs of artists associated with his label – applied for and received an $8.9 million grant from the Shuttered Venue Operators Grant program. Of that, he allocated $1.3 million on private jets. He spent over $460,000 on apparel, primarily upscale brands like Gucci and Balenciaga. He also expended $88,000 on a concert that he did not attend. Instead, he celebrated with the rapper 2 Chainz at a club located three hours away that same evening. Additionally, he used nearly $15,000 on flights and accommodations for women whose affiliations with his touring enterprise were rather ambiguous, including a waitress from a wings restaurant and an adult film star.

LIMBONG: Again, this is all federal taxpayer funds, right? I just want to clarify that.

LONG: That’s correct. The records we analyzed were notable for the level of detail they displayed regarding musicians utilizing these funds. This wasn’t merely us connecting the dots. The extensive accounting records we examined detailed specific line item expenses attributed to the grant. Therefore, when we state that Lil Wayne billed taxpayers nearly $15,000 for flights and lodging for women, including an adult film star and a wings restaurant waitress, it’s because these explicit expenses were charged directly to taxpayers. That’s likely not how Congress envisioned these funds being utilized.

LIMBONG: How did you come across all of this information?

LONG: We have been covering this program for over a year now. We initially delved into it last year after receiving a tip about the Shuttered Venue Operators Grant. We published a report primarily based on publicly accessible documents, including the SBA’s database of all SVOG grant recipients, along with a lawsuit. Subsequently, my colleague, Jack Newsham, continued reporting on this initiative. He remained informed about it, producing a story about how artists needed to sign drug-free workplace certificates to secure their funding. He also wrote about the powerful Los Angeles accounting firm that identified a loophole vast enough to exploit, allowing them to obtain nearly $200 million of this funding for their high-profile musician clients, although they initially had concerns about the eligibility of their clients for the program.

LIMBONG: Let’s explore another instance. Tell me about Alice In Chains.

LONG: Yes, Alice In Chains is a narrative that truly resonates with me. They applied for and secured a $6.3 million grant through their loan-out company, essentially a corporate entity they established to manage their touring operations. From the records we scrutinized, it became evident they did not apply any of the grant funds toward benefits like health care for their touring staff, which is not unusual in the entertainment business. However, in 2022, one of the band’s guitar technicians, a man named Scotty Dach, received a cancer diagnosis. We found a GoFundMe page set up for him indicating that he lacked health insurance and was unable to afford medical care. Sadly, just a few weeks later, he passed away. Now, Alice In Chains had to affirm to the government that their loan-out company necessitated the grant for survival amid the pandemic, yet a mere month before the grant money was deposited into their account, they had made $48 million from selling the rights to their music catalog.

LIMBONG: Has the Small Business Administration responded to any of your findings?

LONG: The SBA informed us that it adhered to the law when managing this grant program. It also claimed that it instituted top-tier fraud prevention measures. They didn’t reply to many specific inquiries we posed concerning our findings. Several musicians mentioned in this article also did not respond to requests for feedback.

LIMBONG: In the broader context, this program did help preserve numerous small enterprises, correct?

LONG: Indeed, it did. Over 13,000 organizations benefitted from this initiative, which allocated more than $14.5 billion in funds. In the overall picture, when compared to programs like the PPP, Economic Impact Disaster Loan, and unemployment benefits, the Shuttered Venue Operators Grant maintained relatively stringent regulations. The FBI estimates that the amount of fraud arising from the PPP, EIDL, and unemployment insurance represents the largest fraud in history. With the Shuttered Venue Operators Grant, we focused on around $200 million of questionable expenditures from that total of $14.5 billion disbursed through the grant.

LIMBONG: How does the utilization of funds in this manner create skepticism regarding financial assistance for the arts moving forward?

LONG: One thing we’ve heard is that when well-known musicians and celebrities exploit these programs, it starts becoming more socially acceptable for others to do likewise. Thus, the involvement of famous individuals like Lil Wayne, Chris Brown, Alice In Chains, and DJ Marshmello in accessing these funds can shift public perception regarding who might qualify for such assistance in the future.

LIMBONG: That was Katherine Long. Her investigative reporting at Business Insider is titled, “How Wealthy Musicians Billed American Taxpayers For Luxury Hotels, Shopping Sprees, And Million-Dollar Bonuses.” Thank you, Katherine.

LONG: Thank you for having me.

(SOUNDBITE OF PHARRELL WILLIAMS’ “NUMBER ONE (INSTRUMENTAL)”)

DETROW: NPR reached out to musicians Lil Wayne and Alice In Chains for feedback. We have not yet received a response as of this broadcast. Transcript provided by NPR, Copyright NPR.

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