Hi! We’re the Business Insider reporters who revealed how Lil Wayne, Chris Brown, Alice in Chains, Marshmello, and other celebrity musicians spent federal funds meant for struggling arts groups on their luxury lifestyles. AMA!

thisisinsider · 2024-12-23T20:16:56+00:00

You never really know how your reporting is going to land. All you can do is your best. At least one sitting US senator cared enough about what we found to give us a statement for the story. But whether that leads to anything more is anyone’s guess.

It’s possible that there is a lot happening behind the scenes we don’t know about it. Lawyers could be doing things, businesspeople in the entertainment industry could be doing things… we just don’t know. In Congress this past week, everyone’s attention was focused on the possibility of a government shutdown.

In some ways, the story is simple: there was all this money and it got spent in these ways. But in some ways it’s a complex story, which can make it hard to get traction. This program had bipartisan appeal and a lot of people at the SBA tried really hard to make it work. And as we’ve tried to underscore, the program did a lot of good. But there’s a lot of factors at play, including probably some we don’t know about.

If you know about something, get in touch! Our information is linked in another reply, but you can also just Google our names. -Jack

thisisinsider · 2024-12-23T20:05:02+00:00

We started getting curious about the Shuttered Venue Operators Grant over a year ago after receiving a tip from a source. Speaking for myself (Katherine), that was the first time I had ever heard of the program.

When I saw in the Small Business Administration database that Post Malone — technically, one of his companies, Posty Touring Inc. — had received a $10 million SVOG grant, my eyes bugged out. We used public records to dig into his spending around the time he received the grant and found he’d bought a ski chalet and opened a personal sword forge. That was my “rabbit hole” moment.

From that point on, Jack kept his finger on the pulse of the program, publishing stories about how Lil Wayne signed a drug-free workplace certification in order to receive his $8.9 million SVOG grant (even though he is well-known for his use of weed, which while legal in many states, is still federally illegal) and how even the accountants who helped big-name musicians get multimillion-dollar grants were initially skeptical that their clients were eligible.

-Katherine

thisisinsider · 2024-12-23T19:58:49+00:00

We had access to extremely detailed accounting records for some of these artists, is basically the answer. We’re not gonna say how we got the access except to say we didn’t break any laws. We didn’t hack anyone or break into an office, or something like that. -Jack

thisisinsider · 2024-12-23T19:54:39+00:00

I (Katherine) feel confident that Business Insider has my back on safety issues. Earlier this year, I faced some online harassment related to an article I wrote. Newsroom leadership took it very seriously, and BI worked with a consultant to monitor potential threats to my safety. Our union contract also guarantees us access to online safety tools like DeleteMe; anyone who’s worried about how much info data brokers have on them should look into DeleteMe and similar services. Jack and I also have each other’s backs when it comes to safety: We’ve red-teamed each other’s online footprints to make sure we’re both extremely aware of what information exists about us online.

But I’d be lying if I didn’t say it’s something I think about on at least a weekly basis.

-Katherine

thisisinsider · 2024-12-23T19:53:39+00:00

I've witnessed how the large-scale fraud that accompanied COVID relief efforts shifted some people's perceptions of government spending. The scale of the fraud was truly massive: The FBI estimates that PPP, EIDL, and unemployment insurance fraud together make up the biggest amount of fraud in history. From that perspective, I understand why calls for renewed government efficiency are increasingly attractive to many voters.

If I cast my mind back to 2020, at the height of pandemic lockdowns, I recall how calamitous COVID was for the U.S. economy. I remember fears of "hard landings" and interviews I did with workers who had been laid off at the start of the pandemic and waited months for their unemployment checks to start coming. There was a genuine desire on the part of lawmakers to get money flowing to people who needed it. The Shuttered Venue Operators Grant program was devised as one way to help workers whose employers were likely ineligible for a large amount of PPP money due to the nature of work in the performing arts, where most workers are independent contractors, not employees. (PPP funds were allocated based on historical payroll.)

The way the program was designed simultaneously allowed money to start flowing to affected arts groups more rapidly and also enabled wealthy artists to qualify for grants. The law establishing SVOG mandated that the Small Business Administration examine only applicants' revenues, not their assets. Applicants whose corporate alter egos' revenues fell were eligible, even if they were personally sitting on substantial assets. This isn't a perfect way to dole out money, but it is a more rapid way to do so: Assets are very difficult to value, and they can be hidden. So it's understandable that's how lawmakers chose to do it at a time when they wanted money to get out the door fast.

Ultimately, this program was temporary, so it’s not like Congress can slash spending going forward. And in overall budgetary terms, a lot of the flashy examples of wasteful spending that dominate public conversation aren’t the ones that are pushing the needle on our national deficit.

Still, I hope policymakers and members of Congress read our reporting! I think there's some food for thought there about administering emergency relief programs.

-Katherine

thisisinsider · 2024-12-23T19:43:32+00:00

Hey! Sorry for the delay, we are answering questions over in r/popculturechat ! We’ll answer a few here but please, go to the main AMA!

There’s two basic reasons. One, the Shuttered Venue Operators Grants at the core of our story were technically made to “loan-out companies” — often wholly owned by the artist — and not by the artist themselves. So an artist might own a huge house, or have an LLC or a trust that owns the place where they live, while their loan-out company’s balance sheet shows losses and very few assets.

The second reason is because SVOG was based on a recipient’s income, not their assets. As we noted in our story:

In a statement, the SBA said it followed the law. But the law directed the SBA to examine revenue, not assets. Musicians with huge bank accounts and multiple mansions were still eligible for the awards as long as their loan-out company’s revenue had declined [by at least 25% between one quarter of 2019 and the same quarter of 2020].

[Edited to fix link to correct subreddit. -Jack]

thisisinsider · 2024-12-23T19:38:56+00:00

We’re always working on a few stories at the same time, and I think we’d both love to continue publishing about the Shuttered Venue Operators Grant to the extent that more stories, sources, and documents cross our paths. If you know more, get in touch with us using the information in our bios:

Taylor Swift didn’t take any Shuttered Venue Operators grant funding. She wasn’t the only one -- Jack previously reported that Paul Anka turned down the grant after his accountants communicated the view that “he could be committing perjury by filing for the government grant when he wasn’t entitled to the funds.”
- Katherine

thisisinsider · 2024-12-23T19:02:05+00:00

Agree re: wildest thing. A lot of the names we saw in the accounting documents we reviewed were pretty easy to trace back and understand why they were being paid or being expensed to the grant: Person X says on LinkedIn they were a member of the crew, Person Y is tagged in Person X’s Instagram photo of the party to close out this tour they did in 2022. Not so with the women. -Jack

thisisinsider · 2024-12-23T18:58:44+00:00

There’s an artist we mentioned that I sometimes listen to, and Katherine told me she was a fan of a couple artists who got grants, but weren’t mentioned in our article. We didn’t let our tastes shape our reporting. But yes, it is sometimes weird when I’m making dinner and an artist comes up on Spotify or Pandora and I know exactly what they did with millions of dollars in taxpayer money.

Furthermore, I’m going to be a little vague here, deliberately so: we also learned a lot about how artists earn, move, and spend money in ways that aren’t related to the SVOG program. So my enjoyment of music is sometimes interrupted by thoughts of music-industry accounting. Recently, when I was watching a music video that was filmed by an singer across a number of countries, I’m thinking, “did she just do this so she could write off her vacation?” I’m not an accountant or tax lawyer, but I can’t help but wonder. -Jack Newsham

thisisinsider · 2024-12-23T18:49:15+00:00

From my perspective, there were a couple bright spots to emerge in the course of our reporting.

For one, the grants helped a lot of small arts groups. We quoted one of them in our story -- Brandy Hotchner, the founder of Arizona Actors Academy, an acting school in Phoenix. Her organization received less than $120,000 through the grant and it enabled them to survive the pandemic. We spoke with several other small arts groups who told us this public funding was essential. Zooming out, we focused on questionable spending in grants worth around $200 million out of more than $14 billion in total grants disbursed. In other words, our reporting focused on a relatively small group of celebrities who accessed these funds.

The other thing that became clear is that congresspeople on both sides of the aisle care about this. Sen. Gary Peters, the chair of the Committee on Homeland Security and Governmental Affairs, spoke to us for this article, saying celebrity musicians' use of Shuttered Venue grants was "an abuse of federal resources." Pandemic relief was intended to help businesses and workers in need, he said — "not super wealthy celebrities." Our previous reporting was highlighted by Sen. Rand Paul in his annual "Festivus" report on government spending he deems wasteful.
- Katherine

thisisinsider · 2024-12-23T18:38:00+00:00

I’m actually really glad someone asked about this, because I’ve seen a lot of theories about this. Initially, we thought we might do a few stories, one for each artist, or one for each category of spending that we scrutinized (like payments to artists themselves, etc.). But we eventually decided to pack as much as we could into one story.

The biggest factors in who we focused on were how well-known the celebrities or artists were, and what information we were able to learn about them. Lil Wayne and Chris Brown are simply a lot more popular than Alice in Chains or Shinedown; with Marshmello, we didn’t have any information about private jets, clothes, etc. because his loan-out company simply paid the entire grant to Marshmello, and we didn’t have visibility into where the money went after that point. It's possible our sources did, but we didn't. -Jack Newsham

thisisinsider · 2024-12-23T18:33:08+00:00

We'd both read a lot of excellent reporting on pandemic relief fraud focusing on PPP, EIDL, and unemployment insurance. When we were considering whether to pursue this story, three things stood out to us: First, the program -- the Shuttered Venue Operators Grant Program -- was not particularly well-known. Unlike those other programs, it hadn't received much media attention.

Second, it was immediately evident from our review of publicly available information that big-name stars were receiving multimillion-dollar grants through the program. (The Small Business Administration, which administers the grants, put a database of every recipient on its website.)

And third -- this gets to your last question -- that same publicly available information painted a clear picture of how a powerful Los Angeles business management firm, NKSFB, was extraordinarily successful in applying for grants on behalf of their clients. All those factors, in conjunction, made us interested in pursuing this story.

The wildest thing I (Katherine) think artists spent money on was Lil Wayne using taxpayer money to purchase flights and hotel rooms for what we termed in a graphic "mystery women," including a waitress at a Hooters-style restaurant and a porn actress. (We didn't call them that because we're major prudes but because we weren't able to pin down conclusively whether they had a relationship to his business.) Jack may have a different opinion!
- Katherine (edited to fix a grammar error)

thisisinsider · 2024-12-23T18:18:23+00:00

<image>

You're not the only person to zero in on that sentence! Here's a screenshot of the message he sent. And here's the backstory:
We spent weeks seeking comment on this story to make sure the musicians we named were aware of what we found. We sent multiple emails to publicists, managers, and attorneys. We called, texted, and left voicemails. We even mailed our list of questions to Chris Brown's house.
We didn't do this to harass people, but because celebrities are protected by a thicket of support staff. We needed to be sure (to the extent possible) the celebrities at the core of our story knew what we planned to publish.
In exhibits to a lawsuit, we'd found an email address for Lil Wayne that the star's former manager used to communicate with him. We sent our findings to that email address, in addition to Lil Wayne's publicists, but didn't hear back.
A couple of weeks before we published our article, we conducted another round of phone calls to confirm that the musicians we'd named were aware of our reporting.
I realized the email address we'd found for Lil Wayne was connected to iMessage, so I texted it.
He responded initially by saying, "Did u see my dick?" and then said that I had reached the "wrong Dwayne." (Remember, we found this email address in exhibits to a lawsuit, showing his manager had been using it to send him business documents.)
I sent this exchange to Lil Wayne's publicists. They didn't respond.
- Katherine

thisisinsider · 2024-12-23T18:17:43+00:00

To be brief: no, by a mix of data and journalistic instinct, and not at all.

To write a little more at length: We were first tipped off to the existence of the Shuttered Venue Operators Grant — and the use of it by some big names in the music industry — in the summer of 2023. Our first story, which came out that August, was mostly based on public information about the corporate entities that got the grants, the people behind those corporate entities, and court records.

We generally juggle a few projects at any given time. Some stories take a day, some take months. So we kept SVOG on the back burner, and we wrote a couple more pieces about it in 2024 based on records that took a while for us to get our hands on. And then the pieces started falling into place for our most recent story. We started working with confidential sources, asking more detailed questions and getting more detailed answers, and got access to thousands of nonpublic documents that are at the center of our piece.

This whole time, our editors had our backs 100%. While Business Insider is part of a larger “media house,” Axel Springer, our parent company isn’t really involved in day-to-day news judgment discussions like this. -Jack Newsham

thisisinsider · 2024-06-13T16:26:50+00:00

TL;DR:

Disney is once again donating to politicians — just months after ending its feud with Ron DeSantis.
The Florida theme park is even donating to Republicans who voted for the state's so-called "Don't Say Gay" bill.
Disney executives' opposition of the bill sparked a yearslong conflict with DeSantis.

thisisinsider · 2024-05-10T16:46:14+00:00

TL;DR:

Sen. Bernie Sanders is running for reelection in 2024.
The 82-year-old is the last senator to announce his reelection plans this year.
His 2016 and 2020 presidential campaigns helped ignite the contemporary progressive movement.

thisisinsider · 2024-05-10T16:45:24+00:00

TL;DR:

Target plans to dramatically scale back its Pride celebration this year.
LGBTQ-themed merchandise will only be in select stores, rather than nationwide, the company said.
Last year's Pride range faced massive backlash from conservatives, contributing to a fall in sales.

thisisinsider · 2024-05-10T16:30:16+00:00

TL;DR:

Twice this week, Trump's hush-money judge has warned him about misbehaving in and out of court.
If the judge makes good on his threats of incarceration, Trump probably won't be carted to jail.
A quick stint locked up behind the courtroom may be all it takes to put the fear of jail in him.

thisisinsider · 2024-04-08T14:10:53+00:00

TLDR:

Sen. Elizabeth Warren invited MOHELA's CEO to testify before Congress on April 10.
The CEO declined the invitation, with the company instead requesting private briefings.
Warren pushed back on the request, urging the student-loan company for a public testimony.

thisisinsider

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