A company whose largest shareholder is Trump campaign manager Brad Parscale received nearly $800,000 from the federal coronavirus relief fund for small businesses, according to a filing with the U.S. Securities and Exchange Commission.
The company, CloudCommerce, was eligible for the low-interest loan through the Paycheck Protection Program, which is aimed at businesses with fewer than 500 workers. The program provides 1% loans that can be forgiven entirely if companies use 75% of the money to retain and pay workers.
Companies can borrow 2.5 times their monthly payroll, up to $100,000 per employee. CloudCommerce had 49 employees at the end of 2019, according to another filing with the SEC.
There is no allegation of illegality associated with the PPP loan.
Parscale has been CloudCommerce's largest beneficial shareholder since 2017, when CloudCommerce bought two of his companies — now called Parscale Digital and Parscale Media — and added him to its Board of Directors. He currently owns 35% of the company, according to a recent SEC filing. The filing indicates he resigned from the Board on December 10, 2019.
Trump campaign communications director Tim Murtaugh told CBS News: "Brad has absolutely no role with the company. He only has preferred stock. He has no voting rights."
"He has no idea whatsoever what the company is doing. He doesn't talk to them, they have no business with the campaign or any other company Brad is connected to," Murtaugh said.
Brad Parscale CloudCommerce CEO Andrew Van Noy said in an email that Parscale "no longer has any involvement in decision making for the company, including the PPP loan."
"Luckily, because we received this PPP loan, we have not had to let go of any employees," Van Noy said.
CloudCommerce received the $780,680 loan from Utah's Cache Valley Bank on May 5. That's more than six times the average PPP loan size of $125,000. CloudCommerce acknowledged the loan in an SEC filing and said it is "forgivable after eight weeks if the Company uses the PPP Loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and otherwise complies with PPP requirements."
In late December, the digital marketing company began soliciting new investors through a stock offering that promises a high annual dividend payment of 10%. Dozens of ads for the stock offering were removed from Facebook in February and March, because they violated the platform's policy against "get-rich-quick" schemes and made "exaggerated promises."
Facebook said in a statement to CBS News at the time that CloudCommerce's ads violated policies that "prohibit the kinds of tactics that mislead people through exaggerated promises of guaranteed financial success."