Recipients were also required to promise to use federal money “exclusively for the continuation” of those costs and “refrain from conducting involuntary layoffs or furloughs or reducing pay rates and benefits,” according to the department.

But Clay Lacy Aviation’s participation in the PPP program, which also gives out money on the condition that recipients keep their workforces intact, wasn’t publicly known until now. Some industry competitors with different business models have taken the stance that federal money isn’t supposed to support high fliers.

“We have observed others in our industry badly bruised by the pandemic as the recipients of CARES Act monies have become public,” Patrick Gallagher, CEO of NetJets, wrote in a recent email blasting other players in the aviation industry for taking federal money. “The names on the list and amounts received have been eye-popping.”

Why CLA was eligible for two bailout programs

CLA is unusual both because it’s a major player in the aviation industry and because its executives say it qualifies as a small business for the purposes of the new lending program. The CARES Act created its own matrix of eligibility standards for small businesses, which include companies with fewer than 500 U.S.-based employees, caps on revenue and a variety of metrics.

While PPP funds are legally limited to companies that don’t have other debts to the SBA, Congress didn’t prohibit a company’s taking both a PPP loan and grant money from Treasury’s aviation fund.

“There’s no question there were beneficiaries who lawmakers did not intend to have access to these funds,” said Caroline Bruckner, a former chief counsel to the Senate Small Business Committee who is the managing director of American University’s Kogod Tax Policy Center. “Mistakes are always made when legislation is drafted so quickly to respond to an emergency — that’s inevitable — but this also means, and this could be a prime example why oversight post-CARES Act is critically important.”

The planes managed by the company are all owned by its clients. CLA stores and maintains the aircraft for the owners, and it charters flights and acts as a “pass-through” for the owners to pay flight crews. The company and its clients share revenue generated from renting planes when the owners aren’t using them.

So when the CARES Act was enacted, CLA had three obvious options: forgo the loan, take all the money for itself, even though its revenue is supported by jet-owning clients, or devise a way for the clients to share the bounty. The account credits allow for the latter.

On April 29, the company advised its clients that they had until May 11 to decide whether they wanted to take the credits. The only requirement was to sign a statement-making a good-faith representation that “1) the current economic uncertainty makes receipt of these credits necessary in order to support the ongoing operations of the owner’s aircraft and 2) aircraft owner has neither separately applied for nor received relief under the SBA-PPP or another SBA program.”

CLA has signaled that it may be worried that its loan might not be forgiven — or that it could get yanked altogether.

In the letter to jet owners, Wright, the company’s CFO, wrote that the credits won’t be awarded until after the loan is forgiven and that owners would have to repay CLA if the company is “subsequently deemed ineligible” for the program “upon audit.”

Fliers who are hard to track

Many private jet owners have no interest in publicity about their planes.

To find the owners of jets managed by Clay Lacy Aviation, NBC News obtained a list of identifying numbers for each of the planes registered under the company’s flag and matched it against Federal Aviation Administration records, Securities and Exchange Commission disclosures and filings with state business compliance offices. The planes tend to be owned by limited liability partnerships with names that have little obvious connection to the people or parent companies that own them.

Jon Croasmun, senior vice president, and corporate trust manager for the Bank of Utah, which is the registered owner of more than a half-dozen aircraft managed by Clay Lacy Aviation, said the company holds titles to planes in trust but isn’t part of financial arrangements with management companies.

The bank generally represents both U.S. citizens and foreign nationals who own airplanes. He declined to say whether any of the clients it shares with Clay Lacy Aviation aren’t Americans.

“The only time we divulge ultimate ownership is if the FAA asks,” he said, adding that the agency hasn’t sought that information. That means it is unlikely that the Treasury Department or the SBA know whether bailout money is being turned into credits for foreign nationals.

In part because of the confidentiality offered by the Bank of Utah and a Delaware company that offers similar services to management firms, NBC News was able to identify only about two-thirds of Clay Lacy’s 50-plus clients. In addition to Henley, Blackstone, Bonfigli and Freeman Spogli, the list includes:

  • Brian Fitterer, owner of a chain of trailer parks.
  • Shlomo Rechnitz, owner of a chain of nursing homes.
  • Aby Rosen, a real estate tycoon, and art collector.
  • Edward Roski Jr., a co-owner of the Los Angeles Lakers.
  • Ernie Moody, a video poker magnate.

Rosen “was not in receipt of such an offer and he would have never taken it if he had received it,” a representative from his office said.

NBC News’ attempts to obtain comments from Fitterer, Rechnitz, Roski, and Moody were unsuccessful. It is unclear whether they opted in or out of the credits.

But Bonfigli said he doesn’t recommend buying a plane unless “you win a really large lottery” and can afford not to rent it out.

“I don’t know about other owners and how they operate their planes, but I can tell you this: When a plane sits like that, you’re paying a fortune for it to sit,” he said. “From a business perspective, honestly, it couldn’t get any worse than owning a plane. It’s been terrible.”

Cloobeck has little sympathy for jet owners who get taxpayer-subsidized benefits.

“No government program is perfect, especially given the need and urgency it is designed to serve,” Cloobeck said. “But this company and these owners all know the money was not designed for them, and they have a moral, if not legal, duty to treat the country that enabled them to become so wealthy a whole lot better than this.”