SBA should not be the sex police: Chicago strip club Paycheck Protection loan application in limbo

The Admiral Theatre on the Northwest Side has 42 employees and is seeking a $406,565 Paycheck Protection Program loan. The theater has been closed since March 15.

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The Admiral Theatre on Lawrence Avenue in Chicago. | Michael Schmidt/Sun-Times

Sun-Times Media

In these dismal economic times, the Admiral Theatre on the Northwest Side should be allowed to get a Paycheck Protection Program loan and not be disqualified because it is in the business of erotic entertainment.

As the coronavirus pandemic destroys the U.S. economy and unemployment is soaring, we don’t need the Small Business Administration to be the sex police, guarding us from a lawfully operating strip club getting a loan.

Really, if that is the only public policy we need to worry about these days, it would be a very good problem to have.

An SBA regulation about how “financing lawful activities of a prurient sexual nature is not in the public interest,” is why the Admiral Theatre, 3940 W. Lawrence Ave., so far can’t get a Paycheck loan.

It’s the Paycheck Protection Program, not the Prurient Interest Protection Program.  

As Admiral puts it in a federal lawsuit filed Friday, what happens in the theater is “designed to appeal to a healthy interest in basic human sexuality.”

In this emergency, let’s deal with the workers first and spare us arguments over strip clubs and the public interest for another day.

Admiral has 42 employees, according to the loan application it submitted to the Belmont Bank & Trust Company, seeking a $406,565 Paycheck loan. The theater has been closed since March 15.

Admiral Theatre attorney Joseph Obenberger filed the lawsuit against SBA Administrator Jovita Carranza — who is from Skokie — and Treasury Secretary Steven Mnuchin.

The lawsuit alleges the SBA regulations “unconstitutionally deprive businesses and workers who are engaged in First Amendment protected expression from receiving benefits.”

You may have heard of the Admiral Theatre. It was in the news two years ago when porn star Stormy Daniels — who alleged she had an affair with President Donald Trump — appeared there as part of her “Make America Horny Again” tour.

The Paycheck program is a bipartisan creation of Congress, part of the Coronavirus Aid, Relief, and Economic Security Act. The program was designed to give qualifying small business and nonprofit employers financial lifelines as the economy tanks because of COVID-19 shutdown orders.

There is sky-high demand for the Paycheck loans because if used as intended, to meet payrolls and pay some operating expenses, it does not have to be repaid.

Obenberger is taking aim at an SBA rule already in place for other loans and applied to Paycheck loan applicants: A business is not eligible for SBA funding if “it presents live or recorded performances of a prurient sexual nature” because the “SBA has determined that financing lawful activities of a prurient sexual nature is not in the public interest.”

“Prurient interest,” the Admiral lawsuit argues, “means an appeal to a shameful or morbid interest rather than a normal or healthy interest in sex.”

At Admiral, the lawsuit said, female dancers provide “healthy erotic” performances for its patrons.

Admiral “is an establishment that is open to the consenting adult public, and has both a restaurant facility and has been licensed by the City of Chicago, in which it is located, to operate a restaurant and a Gentlemen’s Club which features non-obscene erotic dance entertainment.

“All of the entertainment provided by the Admiral is non-obscene (and thus cannot be deemed prurient), and is designed to appeal to a healthy interest in basic human sexuality.”

The loan money actually comes from the bank. Belmont won’t do anything without a guarantee the SBA will pay them back.

Admiral’s application is in limbo. The lawsuit said the bank asked the SBA to review the matter of Admiral’s eligibility for the loan. As of last week, the bank was still waiting for a ruling.

Admiral needs to get this resolved right away, because the Paycheck loan money will soon run out, making their effort to get the loan moot.

With the economic meltdown, the SBA should err on the side of giving working people a break and reserve judgments about erotic performances for another day.

As of May 1, just in Illinois, the SBA has approved $22.5 billion in loans for 159,628 Illinois employers, with more in the pipeline.

The theater is in Rep. Jesus “Chuy” Garcia’s district. The Illinois Democrat told me Sunday, “I am a big supporter of the First Amendment and free speech and association and the like. I think they have a point.”

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