Struggling electric van startup Canoo has placed its remaining employees on what itβs calling a βmandatory unpaid breakβ through at least the end of the year, according to an email obtained by TechCrunch. The company told employees they are being locked out of Canooβs systems at the end of the day Friday, according to the [β¦]
Sam Bankman-Fried, Luigi Mangione, and Sean "Diddy" Combs.
Fatih Aktas/Anadolu Agency, XNY/Star Max, Shareif Ziyadat/Getty Images
Luigi Mangione is under monitoring in a 9-by-7-foot federal solitary-confinement cell in Brooklyn.
On Monday, he may be moved to the same protective unit as Diddy and SBF, who are in the same jail.
A prison consultant called his conditions "miserable."
Luigi Mangione is being held in a 9-by-7-foot solitary-confinement cell at the federal jail in Brooklyn that also houses the rap mogul Sean "Diddy" Combs and the cryptocurrency fraudster Sam Bankman-Fried, Business Insider has learned.
The trio could be living together in the same 15-man protective-custody unit as early as Monday, Sam Mangel, a prison consultant who has knowledge of Mangione's housing, said.
Federal prison records confirmed Friday morning that Mangione, Combs, and Bankman-Fried were at Brooklyn's Metropolitan Detention Center.
Mangione is set to remain in solitary until at least Monday in one of MDC's small cinderblock Special Housing Unit cells β in a unit also known as "the SHU" and "the hole," Mangel said.
He'll eat meals in his cell, and inmates in his situation are typically allowed out for one hour of recreation or showering a day. Guards are supposed to check on him every 15 minutes.
"Miserable, just miserable," Mangel said when asked to describe conditions in federal solitary-confinement cells.
"SHUs are notoriously loud. You have people in there for psychiatric issues, for disciplinary reasons, and for withdrawal" from drugs, he said, adding: "So it is the loudest place in the jail β people are banging on their doors at all hours of the night."
Mangione is being held without bail on death-penalty-eligible federal charges in the December 4 ambush fatal shooting of UnitedHealthcare CEO Brian Thompson. He has yet to be arraigned on New York charges of murder as an act of terror, which carries a top sentence of life without parole.
Mangione is being held in Brooklyn's notorious federal jail.
AP Photo/Pamela Smith
New, high-profile inmates are often monitored in solitary cells in the days before their units are assigned, said Mangel, who said he had been in communication with the defense team through Craig Rothfeld, a prison consultant.
Rothfeld, who was in the audience for Mangione's first federal court appearance on Thursday, declined to comment.
"It's a standard protocol," Mangel said. "This is especially true for a young man that, you know, might have some psychiatric concerns or his legal team or the BOP has concerns," he added, referring to the Federal Bureau of Prisons.
"Even though it's called the 'SHU,' it's not for disciplinary reasons. It's strictly for administrative reasons," Mangel said.
A Bureau of Prisons spokesperson declined to comment, saying: "For privacy, safety, and security reasons, we do not discuss the conditions of confinement for any individual including their housing assignments."
Karen Friedman Agnifilo told BI that neither she nor Marc Agnifilo, her cocounsel, had spoken to Mandel. They did not immediately comment on Mangione's jail conditions.
The husband-and-wife team's Manhattan firm, Agnifilo Intrater, also represents Combs, who is being held without bail while awaiting a trial scheduled for May 5 on federal sex-trafficking charges.
He has pleaded not guilty to the charges against him.
In representing Combs, the firm complained about conditions at MDC throughout three unsuccessful bail applications, arguing that there were frequent random lockdowns and that inmates were deprived of basic trial-preparation materials, such as folders and notebooks. Combs' attorney Marc Agnifilo called the conditions "horrific" in one court filing.
One former prosecutor described the federal jail as frequently too cold or too hot and crawling with cockroaches β basically, "hell on earth."
The Metropolitan Detention Center in Brooklyn holds people before and after they go to trial.
REUTERS/Mike Segar
Mangione's solitary-confinement cell would be equipped with a metal bunk-style bed and a steel one-piece combination toilet and sink. If he's lucky, the cell has a small built-in writing desk.
"You're usually only allowed out for one hour a day, but it could be more restrictive due to staffing issues, where you're only allowed out three times a week to take a shower or walk in a small, enclosed area," Mangel said.
Mangione would also be allowed out of his cell for attorney calls and visits, Mangel said.
"The defendant is actually sitting in a cage during the call," he said. "It's like a fenced-in area that has a monitor, and it's behind plexiglass, and the defendant is able to talk and have an unmonitored legal call during that time, usually for one-hour blocks."
Defendants can find these calls canceled at the last minute "because there's lockdowns and staffing issues," Mangel said, adding: "You get everything arranged, and then we're on the call, waiting, and the defendant never shows up."
He said he expected Mangione would have better access to phones and visitors after he's moved to the jail's protective custody early next week.
Mangel said he had been a prison consultant for Bankman-Fried, who is serving a 25-year sentence for stealing $8 billion from customers of his FTX crypto exchange. Bankman-Fried has remained at MDC's protective custody unit since his arrest last year.
Mangione's next federal court date was set for January 18. As of Friday morning, a date had not been set for his Manhattan arraignment on state murder charges.
This story has been updated to include responses from the BOP and Mangione's attorney.
There is a new venture fund in town. Swizzle Ventures, founded by Jessica Kamada, former COO of the marketing agency Bamboo, has raised just over $5 million for its Fund I, according to an SEC filing. There was no target raise amount.Β The firm, which quietly opened in 2023, is an early-stage firm looking to [β¦]
Four employees have sued Rivian in separate lawsuits this year over allegations they were harassed, in some cases by top executives, and that the companyβs leadership did little to address their concerns, according to a TechCrunch review of court records. Rivian has also reached settlements in three other harassment and discrimination cases, TechCrunch has learned.Β [β¦]
Google's CEO said it had cut managers, directors, and VPs by 10% as part of its efficiency drive.
The company has been boosting efficiency by reducing layers and reorganizing teams.
Google has been facing down threats from OpenAI and other AI rivals.
Google had cut the number of top management roles by 10% in its push for efficiency, CEO Sundar Pichai told employees in an all-hands meeting on Wednesday.
Pichai said that Google had made changes over the past couple of years to simplify the company and be more efficient, according to two people who heard the remarks, who asked to remain anonymous because they're not authorized to speak to the press.
Pichai said this had included a 10% reduction in managers, directors, and vice presidents, one source said.
A Google spokesperson said that some of the roles in that 10% figure were transitioned to individual contributor roles and that some were role eliminations.
The efficiency push has coincided with AI rivals such as OpenAI unleashing new products that threaten Google's search business.
Google has responded by injecting generative AI features into its core businesses and launching a flurry of new AI features, such as a new AI video generator beating OpenAI's in early testing and a new set of Gemini models, including a "reasoning" model that shows its thought process.
In Wednesday's all-hands meeting, Pichai also clarified the meaning of the word "Googleyness," telling staff that it needed updating for a modern Google.
Are you a current or former Google employee with something to share? You can reach the reporter Hugh Langley via the encrypted messaging app Signal (+1-628-228-1836) or email ([email protected]).
Google CEO Sundar Pichai speaks at a Google I/O event in Mountain View, California.
Jeff Chiu / AP Photo
In an all-hands, Google CEO Sundar Pichai said the word 'Googleyness' had become too broad.
Pichai clarified what the word means for the company.
Now it's about being "Mission First" and being "Bold and Responsible."
"Googleyness" has long been a vague word for the search giant. Once used to determine if a candidate is a good fit forΒ hiring, it has evolved in definition over the years.
Google CEO Sundar Pichai just attempted to clarify what the word means for Googlers now.
In a company all-hands meeting on Wednesday, Pichai told staff the definition of "Googleyness" had become too broad and that he felt obliged to clarify it, according to two employees who heard the remarks, who asked to remain anonymous because they're not authorized to speak to the press.
Pichai defined "Googleyness" as the following, per one of those sources:
"Mission First"
"Make Helpful Things"
"Be Bold & Responsible"
"Stay Scrappy"
"Hustle & Have Fun"
"Team Google"
A Google spokesperson declined to comment.
The term "Googleyness" has always been amorphous. In his 2015 book Work Rules,Β Google's former head of people operations, Laszlo Block,Β listed certain attributes that he considered "Googleyness," such as "intellectual humility," "enjoying fun," andΒ "comfort with ambiguity."
The company previously changed its hiring guidelines to "avoid confusing Googleyness with culture fit,"Β The InformationΒ reported in 2019. The change came after the company had been criticized for its lack of diversity in its workplace.
Are you a current or former Google employee with something to share? You can reach the reporter Hugh Langley via the encrypted messaging app Signal (+1-628-228-1836) or email ([email protected]).
Emmett Shear, the former CEO of Twitch, is launching a new AI startup, TechCrunch has learned. The startup, called Stem AI, is currently in stealth. But public documents show it was incorporated in June 2023, and filed for a trademark in August 2023. Shear is listed as CEO on an incorporation document filed with the [β¦]
Anysphere, the developer of AI-powered coding assistant Cursor, raised $100 million Series B at a post-money valuation of $2.6 billion, according to sources with knowledge of the deal. The round is being led by returning investor Thrive Capital, the person said.Β This new funding comes just four months after Anysphere raised its $60 million Series [β¦]
AT&T's chief technology officer, Jeremy Legg, sent a memo to US AT&T Technology Services employees with more details on the planned full-office-return policy and timeline for the new year.
Kena Betancur/VIEWpress/Getty Images
AT&T's CTO told his US team there wouldn't be "one-for-one" seating upon the full office return.
He added that AT&T would stagger its five-day-a-week mandate as more office space was constructed.
Some teams may see their full office return delayed if construction doesn't finish in time, he said.
AT&T Technology Services employees in the US won't have "one-for-one" seating when they begin returning to the office five days a week in the new year, the company's chief technology officer wrote in a new memo.
The telecom giant's CTO, Jeremy Legg, detailed how the new in-office policy would be implemented across his USteam in a Wednesday memo obtained by Business Insider.
The new in-office requirement for US AT&T Technology Services employees will begin a phased rollout on January 6 and is expected to be fully implemented for most teams by March 3, the memo said.
"Our purpose at AT&T is connecting people to greater possibility," Legg wrote. "We firmly believe that working together, in person and in proximity to our peers, is the best way for ATS employees to fulfill that purpose."
Legg oversees AT&T's technology organizations for business, consumer, IT and cloud, data and analytics, security, network architecture and AT&T Labs, and new product development. The AT&T Technology Services team has roughly 10,000 workers in the US.
AT&T told BI that organizations within the company have the flexibility to determine the right approach for their teams based on business needs and that many were staggering the return of employees.
The memo came after BI first reported that AT&T was tightening its return-to-office mandate from three days a week to five full workdays.
Legg said in the email that the company understood that not every employee could be on-site every single day because of "travel, vacations, or other reasons" and that "leaders will work with employees to provide the needed occasional flexibility."
While several expansion projects are underway in Atlanta and Dallas, Legg said AT&T "will not offer one-for-one seating per employee" and the company "will observe capacity vs. demand and make adjustments" as needed.
Legg's memo said that teams assigned to AT&T's Atlanta-area locations would be notified if their full-return-to-office date was delayed as construction on additional space progressed.
Several employees have told BI that workspace capacity has been a challenge, even with the prior hybrid arrangement.
Employees told BI it's common for workers to end up sitting in the hallways or working in the cafeteria to avoid running afoul of the company's attendance-tracking system.
One employee said their office had more than 1,200 people assigned to it but only about 150 desks available.
"I know returning to the office 5 days a week is a significant change for some," Legg said in his memo. "By coming together in person, we can strengthen our connections, foster a vibrant culture, and achieve our shared goals."
Read the full memo
Dear ATS U.S.-Based Management Employees,Our purpose at AT&T is connecting people to greater possibility. We firmly believe that working together, in person and in proximity to our peers, is the best way for ATS employees to fulfill that purpose. By fostering in-person interactions, we can form stronger relationships, build trust and enhance our collaboration, innovation, and overall effectiveness as a team.Full-Time Office Presence in 2025That's why l'm asking all employees with Full Time Office designations (NFTO, MFTO CFTO) to return to the office full time, with staggered starts based on management level and office space availability. FTO employees in ATS will work in the office full-time, 5 days a week according to this schedule:
ο»Ώο»ΏJanuary 6, 2025: All U.S.-based supervising level 4s and above
ο»Ώο»ΏFebruary 3, 2025: All U.S.-based supervising level 3s and above in all locations except Atlanta and Alpharetta1
ο»Ώο»ΏMarch 3, 20252: All other U.S.-based management employees in all locations except Atlanta and Alpharetta1
1Construction of additional space is underway at Lenox, with an expected readiness date between April and June. As construction progresses, employees in Atlanta and Alpharetta will be notified when it's time to work in the office 5 days a week.2Construction of additional space for ATS teams is underway at Dallas Headquarters and at 2900 West Plano Pkwy. Employees in these locations will return to the office March 3 if the space is ready. If completion is delayed, we will communicate further instructions to affected teams.
As we stagger the return to 5 days per week per the timeline above, FTO employees should continue to be present in the office 3 to 5 days per week. There is no change in expectations for Future Office Workers or virtual workers. We periodically review the needs of the business and may occasionally change an employee's office designation based on those needs.Fostering CollaborationBetween now and early first quarter 2025, we will be working with Global Workplace Services to align teams to neighborhoods on each of our campuses.Even with employees working full time in the office, we know that not all employees will be in every day due to travel, vacations, or other reasons. We will not offer one-for-one seating per employee. We will observe capacity vs. demand and make adjustments working with Workplace Services as needed.Flexibility and AccountabilityWe know employees occasionally need to work remotely for various reasons. Leaders will work with employees to provide the needed occasional flexibility. This balance between flexibility and accountability is essential to maintaining our high standards of performance and collaboration. Senior leadership will review overall presence trends via How and Where We Work presence dashboards. With this data, we will work toward improving things like seating, availability of amenities, and parking options.Next StepsThe How and Where ATS Works SharePoint site is your definitive source of information on returning to the office full-time, including campus and neighborhood information as it becomes available. It is currently being updated to reflect the changing expectations for our organization. Supervisors can also answer questions. We are committed to making this transition as smooth as possible for everyone involved.Additional ThoughtsI know returning to the office 5 days a week is a significant change for some. As we outlined during Analyst and Investor Day, we have tremendous momentum in growing this company the right way. That momentum will accelerate when we reap the benefits of faster collaboration and innovation. By coming together in person, we can strengthen our connections, foster a vibrant culture, and achieve our shared goals.Your dedication and commitment to excellence are the driving forces behind our success.Thank you for your continued hard work and support. I look forward to seeing you all in the office and working together to create an even brighter future for ATS.Jeremy
If you are an AT&T worker who wants to share your perspective, please contact Dominick via email or text/call/Signal at 646-768-4750. Responses will be kept confidential, and Business Insider strongly recommends using a personal email and a nonwork device when reaching out.
A young startup that emerged from stealth less than two months ago with big-name backers and bigger ambitions is returning to the spotlight.Β Decart is building what its CEO and co-founder Dean Leitersdorf (pictured above, right) describes as βa fully vertically integrated AI research lab,β alongside enterprise and consumer products based on the labβs work. [β¦]
Thereβs an ocean of meme coins beyond Dogecoin, and a new startup called Neverless wants to make it easier to get started with trading crypto, with a particular focus on providing access to small-cap tokens. This is an interesting new crypto startup, founded by three former executives at Revolut, the London-based fintech juggernaut. Phuc To [β¦]
Jimmy Donaldson, known online as MrBeast, has a new competition show on Amazon Prime Video.
AaronP/Bauer-Griffin/GC Images
YouTube star MrBeast has a new competition show that will debut Thursday on Amazon Prime Video.
BI viewed a copy of a contestant release form and other documents for the preliminary "Beast Games" round.
An entertainment attorney said the documents were fairly standard but expansive in their terms.
Documents obtained by Business Insider reveal the terms that contestants of MrBeast's competition show, "Beast Games," were asked to agree to during a preliminary round.
The terms prohibit contestants from disclosing information about the show, which debuts Thursday on Amazon Prime Video. Contestants who break the agreement prior to the last episode airing must pay the producer and network $500,000 for each breach. After the last episode airs, each breach would cost contestants $100,000, the documents said.
The documents also ask contestants to agree that their portrayal in the program may be "disparaging, defamatory, embarrassing, or of an otherwise unfavorable nature," and may expose them to "public ridicule, humiliation, or condemnation."
Daniel J. Ain, an entertainment attorney at RPJ Law, said the terms are largely standard for a competition show, but some β like the threat of a $500,000 charge for each breach β are particularly expansive.
"The producers use every available tool to give them ultimate flexibility to make the show and protect themselves from liability," Ain told BI, calling the documents a "contestant agreement on steroids."
"Beast Games" is a 10-episode physical competition show in which contestants compete for a $5 million prize. YouTube's top star β whose real name is Jimmy Donaldson β is the host.
The show has attracted some controversy ahead of its release. A New York Times report in August cited "over a dozen" participants who said they didn't receive enough food or medical care during the preliminary round of competition in Las Vegas.
The documents obtained by Business Insider relate to the Las Vegas taping, where over 2,000 contestants participated in physical challenges designed to see who would make the show's official production round in Toronto.
The documents include information about the show, a contestant questionnaire form, and an outline of the show's official rules and protocols. By signing the form, contestants gave full consent to the use of hidden cameras and recording devices, gave producers full discretion to edit footage, and agreed to participate for no money. Potential prizes were the only form of compensation.
A person close to the production characterized the Las Vegas production as a "promo shoot" for the show and said Amazon wasn't involved. Amazon did not respond to a request for comment from BI.
Read 24 pages of the documents below:
Note: BI omitted some pages from the document that included the contestant's personal information and a few pages with minimal or repeated information.
After nearly four years of working in sales at tradesperson software company ServiceTitan, Mark Hoadley (pictured above) was looking for a change and to potentially start something of his own in a similar industry. Hoadleyβs brother-in-law and now co-founder, Ben Sikma, was working on M&A in the waste-management space at the time. Sikma discovered how [β¦]
Photo by Ethan Miller/Getty Images; Prince Williams/Wireimage; Photo by PATRICK T. FALLON/AFP via Getty Images; (Photo by Ethan Miller/Getty Images; Celina Pereira for BI
Many musicians struggled during the pandemic. Lil Wayne wasn't one of them. He sold master recordings from his record label's artists for more than $100 million. He was pardoned for felony gun possession in a last-minute action by then-President Donald Trump. He purchased a $15.4 million mansion in the mountains of Los Angeles.
And, as a Business Insider investigation found, he received an $8.9 million grant from a little-known pandemic-relief program that he used to cover more than two years' worth of spending on luxury hotel stays, designer clothes, and travel to and from nightclub appearances around the country.
The rapper, whose real name is Dwayne Carter Jr., spent more than $1.3 million from the grant on private-jet flights and over $460,000 on clothes and accessories, many of them from high-end brands like Gucci and Balenciaga. He billed taxpayers more than $175,000 for expenses related to a music festival promoting his marijuana brand, GKUA, including clothing for artists associated with his record label.
He also used grant money to cover nearly $15,000 worth of flights and luxury hotel rooms for women whose connection to Lil Wayne's touring operation was unclear, including a waitress at a Hooters-type restaurant and a porn actress.
On New Year's Eve 2021, he was scheduled to perform at a concert in Coachella, California.
But shortly before his set was scheduled to start, a concert employee announced that the rapper would be unable to perform "because of the wind and the flights." The crowd booed. (Wind gusts of 20 to 30 mph were reported in Southern California that night, but data from Flightradar24 indicates four other private jets flew the exact route Lil Wayne was scheduled to fly.)
Instead, posts on Instagram suggest he partied that night at a club on Sunset Boulevard with the rapper 2 Chainz.
For expenses related to the concert he never performed, Lil Wayne billed taxpayers nearly $88,000.
Lil Wayne's publicists didn't respond to numerous requests for comment on detailed questions. Reached by text, Lil Wayne made a sexually explicit overture to a reporter and did not respond to questions.
'An abuse of federal resources'
The money came from a program called the Shuttered Venue Operators Grant. Signed into law by Trump in 2020 and championed by lawmakers including Sen. Chuck Schumer, it was established as a lifeline for struggling independent venues and arts groups during the pandemic.
But pop stars used the program as a piggy bank to keep the party going, reporting by Business Insider shows.
The stars' spending took place against a backdrop of massive pandemic-relief fraud. The Paycheck Protection Program and Economic Injury Disaster Loans gave out as much as $200 billion in suspected false claims, losses that combined with false unemployment-benefit claims amount to what the FBI has called the largest fraud in history. Compared with those better-known programs, the Shuttered Venue Operators Grant had relatively strict eligibility requirements.
Still, accounting firms and money managers soon realized their stadium-filling musician clients might be eligible for grant money via their loan-out companies β corporate entities used to handle the business of touring. Grants awarded to clients of one high-powered entertainment-business-management firm, NKSFB, totaled at least $207 million, BI previously reported. NKSFB itself collected more than $7 million by helping its clients obtain the grants.
NKSFB's managing partner, Mickey Segal, didn't respond to requests for comment. The firm's lawyer Bryan Freedman said NKSFB doesn't comment on its clients' finances.
Grantees received up to $10 million that they could spend on certain "ordinary and necessary" expenses for their entertainment businesses. They had to make a good-faith statement to the Small Business Administration, which oversaw the program, that the grant was necessary to support the loan-out company's "ongoing operations" and show that the company's revenue had fallen by at least 25% between one quarter of 2019 and the same quarter of 2020.
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.
Thousands of pages of accounting documents reviewed by Business Insider reveal, for the first time, how some wealthy musicians β including Chris Brown, the DJ Marshmello, and members of Alice in Chains β spent grants they received through the program.
The documents include detailed records explaining how celebrity musicians spent their grants, as well as correspondence between their accountants and the SBA. Business Insider has verified the authenticity of the documents.
They reveal how artists directed millions in taxpayer funds not toward touring crew members, but instead toward their own bank accounts, luxury purchases, and entertainment expenses β often while sitting on substantial wealth from other business ventures.
One top government-accountability expert said some of the spending Business Insider identified was questionable β but stopped short of saying it was fraudulent.
"At a minimum, it smells," said David Walker, a former comptroller general of the United States. "Whether it's legal or not is up to a lawyer or ultimately to a court. But it sure smells."
The SBA said it "implemented industry-leading fraud controls."
Sen. Gary Peters, the chair of the Committee on Homeland Security and Governmental Affairs, said celebrity musicians' use of Shuttered Venue grants was "an abuse of federal resources." Business Insider's findings, he added, demonstrate "the need for continued oversight of pandemic-relief programs."
Pandemic relief was intended to help businesses and workers in need, the senator said β "not super wealthy celebrities."
An $80,000 birthday party
Lil Wayne wasn't the only one to engage in questionable grant spending. Chris Brown spent his grant on a big paycheck β and a big party. Of the $10 million grant Brown's company CBE Touring received, $5.1 million went to Brown personally. He also billed taxpayers nearly $80,000 for his 33rd birthday party.
The blowout, held in a luxe Los Angeles event space, featured a $3,650 LED dance floor and "atmosphere models" β nude women in body paint β who cost $2,100, according to expense reports and a blog post by the party planner. The bill included more than $29,000 for hookahs, bottle service, "nitrogen ice cream," and damages involving burn holes to rented couches.
While the grant was meant to support live entertainment, Brown also charged $24,000 to the grant for the cost of driving his tour bus from the US to Tulum, Mexico, and back in fall 2020 during a monthlong stay for him and his entourage in the resort town, where he did not perform. He spent several days in Tulum filming a video with Jack Harlow for a joint track, but it's not clear if the rest of the trip was for business or pleasure. And more than $179,000 of the grant went toward a celebrity basketball tournament broadcast on YouTube, including a $20,000 payment to the Indianapolis Colts tight end Mo Alie-Cox, who played on Brown's basketball team.
Brown, his attorneys, and managers did not respond to requests for comment. Representatives for Harlow and Alie-Cox also didn't respond to requests for comment.
Others also paid themselves, taking advantage of an SVOG spending category that Business Insider drew attention to last year: "owner compensation."
The SBA's guidance said artists could use grants paid to their loan-out company to pay themselves as long as the check was no bigger than it was in 2019.
Marshmello, whose real name is Christopher Comstock, received a $9.9 million grant. More than a year later, when the SBA asked for proof of where it went, his business manager Steven Macauley, of NKSFB, responded by saying all the money went into Comstock's pocket.
"Because the beneficiary received 2019 Officer Draws/Salary from 365 Touring International, Inc. in excess of the SVOG Grant Award, we therefore, expensed the entire Grant balance to Payroll," Macauley wrote in an April 2023 letter seen by Business Insider.
In other words, because Comstock made more than $9.9 million from touring in 2019, he was able to award himself the entire grant. In doing so, Comstock paid himself more than any other musician who received grant money.
Comstock's publicists and his manager didn't reply to requests for comment, nor did Macauley.
Artists often paid themselves far more than they paid anyone else involved in putting on their live shows.
Steve Aoki's loan-out company, DJ Kid Millionaire Touring, used $2.4 million in grant money on payroll costs, of which $1.9 million was officer pay. Aoki is the company's only officer. Aoki's publicists didn't respond to requests for comment.
Three of the four members of the rock band Shinedown split at least $2.5 million of their $8.3 million grant. On top of those distributions, Shinedown's four members paid themselves more than $100,000 each out of the roughly $1.2 million of the grant that was allocated to payroll.
The band's 15 touring-production workers, meanwhile, received a combined $650,000 of the grant money β less than a single member of the band got. Publicists for the band didn't respond to requests for comment.
Records seen by BI show that a good chunk of the $7.7 million grant to Sremm Touring, the loan-out company for the hip-hop duo Rae Sremmurd, was paid to the rappers Slim Jxmmi and Swae Lee, whose real names are Aaquil Brown and Khalif Brown. The duo's manager, lawyer, and publicists didn't respond to requests for comment.
On March 23, 2022, records show, the Alice in Chains singer and guitarist Jerry Cantrell took in $1.4 million as an "SVOG distribution." The band's drummer, Sean Kinney, received the same amount, and its bassist, Mike Inez, booked half that sum, about $682,000.
In all, $3.4 million of the $4.1 million the grant allotted for payroll went to the three musicians at the top.
Like other grant applicants, AIC Entertainment β the three band members' touring business β had to tell the government only that the money was "necessary." But the month before they took their grant payments, the band members recorded about $48 million in income from selling the copyrights on their catalog. They made hundreds of thousands of dollars more from merchandise sales and other profit distributions in 2022.
The band spent some money to pay its staff. It paid hundreds of thousands of dollars to sound-equipment-rental firms, videographers, and managers. But the precarious nature of working in the live-entertainment business didn't change for some of its employees. Scott Dachroeden, a guitar tech and tour photographer who had worked with the band for years, received a cancer diagnosis in late 2022. The band, which records show did not spend grant money on benefits like health insurance, circulated a GoFundMe page on Twitter.
"He has no health insurance and now cannot work to pay his bills," the page said. The band's lead singer said on Facebook that Alice in Chains helped out behind the scenes, but a person familiar with the situation said that Dachroeden didn't get much, if any, money from the band during the pandemic and that after his diagnosis, the band connected Dachroeden with a charity that helps with medical bills. Dachroeden died soon after his diagnosis.
Alice in Chain's publicists and manager didn't respond to requests for comment.
Supporting 'middle-class people'
The Shuttered Venue Operators Grant program was pitched to Americans as a way to ensure that arts groups would still exist after the pandemic.
In an interview with James Corden on "The Late Late Show," Chuck Schumer cast it as a way to protect "middle-class people" and "young artists" while pandemic restrictions forced closures.
Grant money would "keep these folks going" so that "these live venues will be out there bigger and better than ever" after the restrictions lift, Schumer said. Schumer's press office and chief of staff didn't respond to comment requests.
In 2023, Sen. Chuck Schumer received a Grammy on the Hill for his work on the Shuttered Venue Operators Grant. "I believe in the power of the music industry," he said at the awards event. "I will always, always fight, tooth and nail, Brooklyn style, for you."
Paul Morigi/Getty Images
Ultimately, more than 13,000 arts groups received grants, including some who say they wouldn't still exist otherwise.
"When the shutdowns happened, it was existential. Immediate crisis," said Brandy Hotchner, the founder of Arizona Actors Academy, an acting school in Phoenix. The grant of less than $120,000 the group received, she said, "utterly saved us."
Musicians weren't explicitly categorized as eligible β and initially, the SBA interpreted the law to mean that artists' loan-out companies couldn't qualify for the grant either.
By mid-December 2021, for reasons BI was unable to determine, the agency had reversed that decision, according to an internal memo seen by Business Insider, which cleared the way for federal funding to flow to wealthy artists. The SBA didn't respond to a question about why it reversed itself.
The business-management firm NKSFB also made millions from the program.
Partners at the firm initially believed that their celebrity clients didn't qualify for the grants. At least one partner feared that applying could be perjury, and another, Rob Salzman, thought the whole thing was "bullshit," a court document said.
Later, in an interview with Billboard magazine as part of its list of "Top Business Managers," Salzman said that applying for the grants was an example of the firm's "outside-the-box" thinking.
The change of heart led to a big payday. Court documents show the firm made at least $7.5 million in fees on the grants.Salzman didn't respond to requests for comment.
"NKSFB, one of the most respected business management firms in the world, does not comment on its clients' financial information," said Freedman, the firm's lawyer. "Based on the uninformed questions that BI has asked, it is clear it has little to no understanding on this subject."
Other white-collar professionals also outearned techs and roadies. Lawyers at the celebrity-favorite firms Greenberg Traurig and Grubman Shire Meiselas & Sacks received up to 5% of their clients' grants. Brown's manager took 7% of his grant, and Shinedown's managers received 20% of theirs. A spokesperson for Greenberg Traurig didn't answer questions about the firm's actions. Partners at Grubman Shire didn't respond to emails or phone calls.
Over $2.1 million of Lil Wayne's grant paid off a debt to a former manager, Cortez Bryant. Another $300,000 went to a former accountant, and his manager at the time, Mack Maine, whose real name is Jermaine Preyan, took $1.7 million. All told, roughly $5.3 million went to managers, accountants, and attorneys as fees and commissions β more than 13 times the amount Lil Wayne paid the drummer, sound techs, and other contractors who helped put on his live shows.
Bryant and Preyan didn't respond to requests for comment.
Lil Wayne used federal funds to buy clothes for himself and several of his associates to wear at a music festival promoting his marijuana brand, GKUA. Business Insider reported in March that the SBA didn't question his claim that he ran a drug-free workplace, even though he often smokes weed onstage.
Rich Fury/Getty Images
A music-industry insider who learned from Business Insider about NKSFB's wave of grant applications said he was stunned the Small Business Administration approved them.
"It never crossed my mind that we should be trying to get this money for my artists," said the insider, an artist manager who was involved in lobbying lawmakers to pass the legislation and who asked not to be named because of the issue's sensitivity.
"I was in countless conversations," he said. "No one ever discussed artists collecting this money. It never came up."
Hotchner, the acting-school founder, said she was "speechless" upon learning about Business Insider's reporting on how celebrity musicians spent their grants. Though the amount of money sent to pop stars is small relative to the overall amount of money disbursed through the grant program, she said she worried it would taint the public's perception of government support for the arts β support that's still needed.
"I will never forget how hard-fought-for this funding was," she said. "It's such a disappointment."
'Shut up, sit down. Process the file.'
Soon after Congress created the program, lawmakers began pressing the Small Business Administration to get money out the door. By mid-June 2021, more than 200 members of Congress had signed two separate letters demanding the agency disburse the funds expeditiously, saying arts organizations could go out of business without immediate relief.
The SBA said congressional pressure "was not the driving factor" behind changes that sped up the grant process and merely "coincided" with changes it was already making.
The agency hoped to balance a quick release of funds with a desire to protect against large-scale fraud that had plagued other pandemic programs. Its compromise was to relax some anti-fraud controls on the front end of the grant process, a report from the SBA's inspector general said. Instead, it planned to verify whether the grantees were actually eligible and how the money was spent after distributing the grants. In its response to the inspector general's report, the agency said it disagreed with the conclusion that changes to how it evaluated applications amounted to "weakened" fraud controls.
The approach had mixed results. The Government Accountability Office said that it submitted three phony applications to the program and that all three were rejected. But some of the eight current and former SBA workers who spoke to Business Insider said they felt the agency was too permissive and ignored or misinterpreted relevant rules β for example, allowing grantees to spend federal funds on thousands of dollars' worth of alcohol.
"They were just trying to get money out. If it was fraudulent, if it was not eligible β whatever," a person who worked on the grants said. They asked not to be named because they feared retaliation, but their identity is known to Business Insider.
The SBA's inspector general criticized the agency's decision to spot problems after the recipients already spent the money, saying it "does not provide sufficient fraud prevention and comes at a point when funds are potentially unrecoverable." Some SBA employees said that as the program began to wind down, they were pressured to certify recipients' compliance with program rules rather than dig through detailed records of their spending.
The SBA said in September it had recouped $43 million worth of the grants β an amount that hadn't increased since July. It's not clear how the agency recovered that money. While the SBA has a team to recover wrongfully awarded grants, an organizational chart suggests that as of late September it hadn't assigned any staff to it. Documents obtained in a public-records request said $6 billion worth of grants remain under review for compliance with program rules.
The SBA said "some" of the grants Business Insider mentioned in its reporting "remain open due to ongoing third-party audits that the Agency is resolving." The agency spokesperson didn't respond to questions about recoupment and didn't respond to a follow-up question asking which grants remain unresolved.
Four people who worked on the program said they tried to raise concerns about grantees' eligibility and spending to supervisors, to no avail. "I was never so disappointed in my fellow man than in that program," one of the people said. "The graft was unbelievable."
Two of those people said they were frustrated the agency wasn't doing more to investigate possible misspending and recover funds.
"Everybody kept saying shut up, sit down. Process the file," said a current SBA employee who asked not to be named because they're not authorized to speak to the press.
This person said that while some issues stemmed from the dwindling number of SVOG employees drowning in documentation, other problems arose because of the way the program was administered. "It was our fault because we threw this thing together in five seconds," they said.
An SBA spokesperson defended its processes. "By design, the vast majority of processing staff did not have access to the complete results of fraud checks and, therefore, are not positioned to comment on the internal review process or its outcomes," the spokesperson said in an email.
"Where credible evidence suggests funds were misspent or a grantee misrepresented their expenditures to SBA, the agency's robust fraud and waste oversight structure reviewed such allegations," the spokesperson said. "When substantiated, SBA and its law enforcement partners vigorously prosecute suspected wrongdoing. As a matter of policy, the SBA cannot comment on specific investigations or law enforcement action, whether planned or ongoing."
Meanwhile, the government has recovered at least some money from one musician.
As pandemic restrictions faded, Chris Brown returned to performing. In early 2022, he announced a 27-stop nationwide tour and launched a variety of side projects, including a novelty cereal called Breezy's Cosmic Crunch and an NFT collection.
While the Small Business Administration was disbursing money to Brown's touring company, federal and state tax authorities were becoming very interested in his finances.
In early 2021, the IRS notified Brown that he owed $3.2 million in unpaid taxes. In 2022, the IRS determined that Brown owed an additional $2.2 million, while California's Franchise Tax Board found that Brown hadn't paid $1.3 million in state taxes.
He settled these debts in April last year β but not before American taxpayers had unwittingly paid $80,000 for his birthday party.
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