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Pa. officials revoked business waivers the night before publishing list of recipients

The Department of Community and Economic Development, which oversees the process, said it was part of ongoing 'quality control.'

  • Angela Couloumbis/Spotlight PA
  • Charlotte Keith/Spotlight PA
In March, Gov. Tom Wolf announced that all but “life-sustaining” businesses had to close because of the coronavirus unless they received an exemption.

 HEATHER KHALIFA / Philadelphia Inquirer

In March, Gov. Tom Wolf announced that all but “life-sustaining” businesses had to close because of the coronavirus unless they received an exemption.

Spotlight PA is an independent, nonpartisan newsroom powered by The Philadelphia Inquirer in partnership with the Pittsburgh Post-Gazette and PennLive/Patriot-News.

HARRISBURG — Late in the evening last Thursday, Tiffany Kuhn was at her home outside Harrisburg reading an e-book on her cell phone when a notification popped up that she had an email from Gov. Tom Wolf’s administration.

When she opened her inbox, Kuhn said her blood pressure “went through the roof.” The letter from the administration, sent at 9:30 p.m., informed her that the waiver she had received six weeks earlier to operate her mobile notary business during the pandemic had suddenly, and without explanation, been rescinded.

“Imagine my surprise,” said Kuhn, who had taken special precautions, including wearing gloves and a mask when meeting with clients, since she received a waiver on March 23. That was four days after Wolf announced that all but “life-sustaining” businesses had to close because of the coronavirus unless they received an exemption.

“My first thought was, someone turned on me,” said Kuhn, who suspected a competitor may have complained.

Kuhn’s waiver was revoked by the state Department of Community and Economic Development, which has overseen the much-criticized process of awarding exemptions to thousands of companies across Pennsylvania that applied for the right to remain open despite Wolf’s business shutdown order.

The timing has raised suspicions among business owners and some GOP lawmakers. Just hours before the administration disclosed the first details about which businesses received waivers, state officials were still revoking exemptions without explanation, according to several interviews with business owners.

As a result, the names of those businesses weren’t on a list of recipients that the administration eventually made public late Friday afternoon, just after the deadline set by Republican lawmakers who had subpoenaed the information. Other businesses said the state revoked their waivers after the list was published, and also without explanation.

In yet another case, a trucking company that had been denied a waiver weeks earlier was notified just after 9:30 p.m. Thursday that it was suddenly allowed to operate.

“I was like huh, backpedal a little bit? … Fixing what went wrong?” said Stacy White, who together with her husband owns a trucking company north of Scranton that transports logs.

Officials with the Department of Community and Economic Development said the revocations were part of “a quality control review process” that began several weeks ago. In all, 69 businesses have had their waivers revoked, spokesperson Casey Smith said, although she was unable to immediately say when they were notified.

“During that process, which is ongoing, we are rescinding waivers that were issued in error or do not meet the appropriate criteria,” Smith said.

The administration’s handling of the waiver process has been fraught from the start. The Department of Community and Economic Development has never detailed the exact criteria used to consider applications, nor has it made those applications public. It also hasn’t identified which businesses were denied, or those that were approved and then had their waiver revoked.

Businesses have criticized the waiver process, saying the decisions were made in secret and applied unfairly, causing some in the same industry to operate while competitors were forced to remain closed. In some cases, a waiver could mean the difference between a business surviving the shutdown or going bankrupt.

An email obtained by Spotlight PA showed that a Central Pennsylvania garden store, like Kuhn, received an email at 9:30 Thursday night informing it that its waiver was being yanked. Others were notified after Wolf’s list was published Friday evening.

That includes Micah Durling, who thought his photography business was in the clear after receiving a waiver on March 25.

The Lancaster County company, which he owns with his wife, specializes in pictures for real estate listings. The couple had adjusted to a new way of working: wearing gloves and masks, wiping down their equipment after shoots, and only taking pictures when no one was home.

Then, on Monday afternoon, they received an email from the state, abruptly revoking the waiver without explanation. The reversal came a few days after a competitor who had not received a waiver began asking about the discrepancy, Durling said.

“It was crushing,” he said. “This frankly blindsided us.”

Given the high stakes, news organizations across the state — including Spotlight PA, The Philadelphia Inquirer, and many others — have for weeks requested documents related to the waiver process, arguing that immediate transparency was necessary given the potential harm that could be caused by a process that was unequal or unfair.

But the Wolf administration put the requests on ice, saying it would make information available eventually but without giving a timeline. Late last month, Republicans in the Senate — some of the loudest critics of the administration’s handling of the pandemic — subpoenaed Wolf for thousands of pages of records related to the waiver process, and set a 4 p.m. deadline last Friday for the governor to respond.

The administration rebuffed the subpoena request and refused to comply, but at the same time published a list of companies that had been approved for exemptions. Officials said they had granted just over 6,100 waivers, though that tally was inconsistent with previous statements about how many exemptions were granted.

In a press release on Friday, the Department of Community and Economic Development said it had approved 6,066 waivers. On its website, it said it had approved 6,104, and within an hour, that number had been updated to 6,123.

But all are fewer than what was reported by the administration at the end of April. At that time, they said they had approved 6,171 exemptions.

Smith, the DCED spokesperson, said the department’s review process is not static, and that if “issues are brought to our attention” they will be reviewed and addressed.

Sharon Hollabaugh, who owns a small dog-grooming business outside Pittsburgh, applied for a waiver in March, but was told by the state she didn’t need one. After receiving an email on Thursday evening reversing that determination, she had to cancel dozens of appointments.

The change will be short-lived: She’ll be able to open again on Friday, once Allegheny County moves to the “yellow” phase of Wolf’s tiered reopening plan.

Hollabaugh said she’s not sure why the state told her she could stay open, when other dog groomers she knows were not. But she wonders about the timing of the reversal, just a day before the state first made public the list of businesses that had received waivers.

“They knew they were dumping people off that list,” she said.

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