WASHINGTON (AP / Daily Advertiser) – A Democrat-led subcommittee overseeing federal coronavirus aid is demanding five companies repay loans that the panel said should have gone to small businesses.
The subcommittee headed by Representative James Clyburn, DS.C., sent letters to the companies on Friday as the first official action. The House voted last month to create the panel over objections from Republicans who say it is partisan and duplicates other surveillance efforts around the federal government.
The panel said the companies contacted have received loans of $ 10 million or more, are all public, have more than 600 employees, and have a market value of over $ 25 million.
Gulf Island Fabrication, a Houston-based company that is one of Houma’s largest employers, said in tax returns this week that it got the $ 10 million maximum from the federal check protection program. payroll, a stimulus effort designed to support small businesses crippled by closures during the coronavirus.
Democratic members of a House committee overseeing federal spending during the coronavirus pandemic on Friday sent letters to Gulf Island Manufacturing and four other publicly traded companies demanding they immediately return the millions of dollars in loans funded by the taxpayers they received under the stimulus loan program.
“Since your company is a public entity with a substantial investor base and access to capital markets, we ask that you return these funds immediately,” the letter to Gulf Island CEO Richard Heo reads. “The return of these funds will allow genuine small businesses – which do not have access to other sources of capital – to get the emergency loans they need to avoid layoffs, stay in business and weather disruption.” economic effects caused by the coronavirus crisis. “
The letters ask companies to respond by Monday and let the committee know if and when they are refunding the money. They say the law providing the aid was passed by Congress to be a lifeline for small businesses that may be forced to lay off employees or shut down altogether.
“It is scandalous and telling that the first action committee the Democrats have taken is to blindly send letters of harassment to individual companies that have followed the law to keep their workers on the payroll,” said the Louisiana Representative Steve Scalise, the leading GOP member on the panel and House Republican No. 2.
Scalise said the panel should work “on a bipartisan basis to help families return to work safely and begin to hold China accountable for the devastation it has wrought on the American people.”
Nearly 50 state-owned companies have already pledged money to the government’s more than $ 600 billion emergency loan program, with Treasury Secretary Steven Mnuchin threatening criminal charges for breaking the rules. The administration has given companies until May 14 to return the money without penalty.
The Small Business Administration also said it would verify every loan over $ 2 million and, if any issues were found, would withhold the program’s offer to cancel the loan.
The SBA watchdog, meanwhile, found in a report released Friday that the agency’s rules for the program are mostly in line with the mandate of humanitarian aid legislation, but not in all cases. areas. Those who failed to meet targets prioritize underserved and rural markets, under what conditions loans can be canceled, advice on loan deferrals and loan registration, according to the office’s report. SBA Inspector General, Hannibal “Mike”. Articles.
In one example, the report said: “Because the SBA has failed to provide advice to lenders on prioritizing borrowers in rural and underserved markets, these borrowers – including rural, minority, and privately owned businesses. women – may not have received the loans as expected. “
Several Democratic senators had called for the report to help ensure that “small businesses get the money they need and are treated fairly” by lenders.
A recent Associated Press investigation found that at least 147 state-owned enterprises received $ 555 million in potentially repayable loans. Some had market values well over $ 100 million, and many had executives making millions each year.
The five companies the Democrats contacted have received $ 10 million in loans, and most have stock values well above $ 25 million. EVO Transportation & Energy Services, for example, has a market cap of $ 161 million and its shares are up 180% in 2020.
Meanwhile, members of a separate, bipartisan congressional oversight committee said on Friday they had started reviewing actions by the Treasury and Federal Reserve to lend money to businesses under the economic bailout law – even though the panel does not yet have a chair.
The Rescue Assistance Act dictates that House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell appoint the group’s leader, but they have yet to do so.
The statement came as the commission was required to issue a report 30 days after the first money was paid under the law.
“While we will not be releasing a report today, we are working to meet our responsibilities even in the absence of a staff, budget and chair, and intend to release one. soon, “said the four commissioners.
The four members who have been appointed so far are Sen. Pat Toomey, R-Pa., And Representatives Donna Shalala, D-Fla., And French Hill, R-Ark., As well as the former Democratic aide to the Bharat Ramamurti Senate.