The US Congress created the scheme in March 2020, as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, to provide emergency financial support to the millions of Americans suffering economic hardship due to the COVID-19 pandemic. The CARES Act authorised thousands of millions of dollars in forgivable loans to certain small businesses and other entities struggling to pay employees and other business expenses. Under the rules applicable at the time of the loans covered by this agreement, certain charities were not eligible to receive a PPP loan.

The Michigan Education Association (MEA) and the Michigan Education Special Services Association (MESSA) were not eligible. But they both applied anyway. The "loans" were in fact grants described as "forgivable loans" but the charities repaid them in December last year. The case was brought under the False Claims Act under which a whistleblower can sue on behalf of the government and share in any amount recovered. The government may take over it if it chooses. In this case, it did. The original case is Mackinac Center for Public Policy and is captioned U.S. ex rel. Mackinac Center for Public Policy v. Michigan Education Association, et al. The Mackinac Center for Public Policy’s share of the settlement has not been determined.