A pandemic program for indie music venues ended up paying millions to rich musicians.
Artists had to certify that they ran "drug-free workplaces." We sued to get the docs.
Post Malone is open about using 'shrooms. Lil Wayne loves weed. But they told the feds otherwise
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Lil Wayne is a big fan of marijuana. He often smokes joints on podcasts and onstage, and the word "BAKED" is tattooed on his forehead. In 2019, he launched a marijuana brand, and a few years before that, he told an interviewer that weed was one of the most important things in his life.
But in 2021, Lil Wayne — whose real name Dwayne Carter — told the government that his touring company was a "drug-free" workplace. The "dangers" of drugs like weed were communicated to employees, he said, and they were told that they could be punished or be forced to go to rehab.
No one at the Small Business Administration appeared to question it, and the government cut a $8.9 million check to Lil Wayne's company Young Money Touring Inc.
Similarly, Austin Post, a singer better known as Post Malone, told the SBA that his company Posty Touring Inc. warned employees against using drugs. But in 2020, Post said on Joe Rogan's podcast that he made music while on hallucinogenic mushrooms, whose active compound psilocybin has been a Schedule 1 drug since 1970.
Again last year, Post told an interviewer, "Yeah, I take 'shrooms.'" While he differentiated them from "hard drugs," and alluded to the potential medical benefits of the fungi, they're still banned.
The documents signed by Carter and Post, whose company got $10 million in free government money, were among dozens that Business Insider received after filing a Freedom of Information Act lawsuit against the SBA. There's no sign that the SBA investigated them at all in its rush to cut checks; the agency's inspector general said last year that employees had just four hours to review applications, with little time to conduct due diligence.
The office of the inspector general declined a request for comment on Business Insider's reporting, as its policy prevents from commenting on specific documents or confirming or denying investigative activity. The SBA did not respond to a request for comment.
While it may seem like a stretch for the SBA to tie Lil Wayne or Post Malone's pandemic payouts to their drug-law compliance, similar requirements have been in place for recipients of federal funds for decades. States and cities also sometimes demand to know what's in people's bloodstreams before cutting checks; several states have tried to require drug tests for welfare recipients, and San Francisco just voted to require recipients of cash grants pass a drug screening.
"When you have social status, your substance use is treated in a different way," Harold Pollack, a public-health expert at the University of Chicago, said. "They don't brutalize a lot of celebrities for behaviors that we would very harshly treat in people with less prestige."
'Too much MDMA'
Companies led by Carter and Post were among the recipients of aid under the Shuttered Venue Operators Grant program, which was meant to help struggling music venues avoid bankruptcy. In 2023, BI spotlighted $200 million in payments from the initiative to big-name artists, many of them already rich and most of them clients of the Los Angeles accounting and asset-management firm NKSFB.
As with many federal programs, recipients had to certify that they followed federal laws. In other words, freewheeling musicians who sometimes got by with a little help from their friends had to commit themselves to the kinds of standards more often applied to defense contractors such as Elon Musk's SpaceX.
"The fact that touring artists have a different lifestyle doesn't mean that they weren't impacted in a substantial way by the pandemic," Josh Schiller, a lawyer who has represented clients in the entertainment industry and sued to legalize marijuana, said. "Was there a better use of those grants?" Schiller said. "I think that's really a good question."
Some of the artists who claimed to be drug-free have posted pics on Instagram of working in weed-smoke-filled recording studios. The touring company for the dream-pop duo Beach House, who NME reported blamed a festival snafu on "too much MDMA," duly professed to be drug-free, but in 2022, the band's official Twitter account cheered the "huge cloud of weed smoke" that blew over the stage when they performed.
"Hell yeah," the post said.
Representatives for Beach House didn't respond to a request for comment, nor did press contacts for Lil Wayne or Post Malone.
The feds could claw the money back
The SBA told grant applicants that they could be sued or even prosecuted for lying.
If "an entity is found to have made material misrepresentations on its application as part of a fraudulent effort to obtain SVOG funding, it will have committed an act of perjury and could be subject to various civil and criminal penalties," the agency's FAQ page said.
But so far, no one has been. And especially in the case of artists using weed, it's likely they won't be because of changing norms around marijuana.
"Federal attorneys are so jammed up with cases now, they're going to look at something like that and say, 'Oh, that's a nightmare. I decline,'" Dan Meyer, an attorney who advises federal employees on security-clearance issues, said.
The Shuttered Venue Operators Grant program was well funded enough to cut a second round of checks to recipients. But some businesses that weren't very different from venues and stages didn't qualify for assistance at all. Andrew Preble, who runs a New Orleans escape-room business, said he was frustrated to hear from an SBA official that he should've lobbied Congress.
"I'm not necessarily against everyone getting money," he said. But "then everybody should've gotten money, versus only a few," he added.
Nenette Day, a retired federal agent who worked on pandemic-related cases, said lying to the government to get pandemic-relief funds was outrageous. But she said agencies were trying to stimulate the economy and realized that some of what they were shoveling out the door would be wasted.
"They said, 'We will accept a certain amount of loss because we don't have the luxury of designing a foolproof program,'" Day said.
But the threat of prosecution can spur settlements. Day said that some people who wrongly received Paycheck Protection Program funds gave the money back once confronted
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