Washington, DC – Congresswoman Jackie Speier (CA-14) and 27 Members of the U.S. House of Representatives sent a letter to Comptroller General Gene Dodaro today requesting the U.S. Government Accountability Office (GAO) investigate the allocation of loans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s Paycheck Protection Program (PPP) to large, publicly traded companies.

The Paycheck Protection Program (PPP) was created to help small businesses that have suffered financially as a result of the coronavirus outbreak because of stay-at-home orders. There is no doubt that the many larger industries, including the hotel and restaurant industries, have taken a hard hit as a result of the coronavirus; however, larger companies often have greater access to cash and lines of credit. Nonetheless, nearly 300 publicly traded companies, some with market values well over $100 million, received more than $1 billion in PPP loans.[1]

Rep. Speier’s letter states in part, “we are still largely unaware of which businesses are receiving aid under the program. It was only thanks to Securities and Exchange Commission reporting requirements that we learned these large, publicly traded firms received funds under the program.[2] Without this information readily available, it makes it even more difficult to know whether the additional funding will avoid the same problems experienced with the first round of funding. And, in the meantime, even local chains that are likely to have strong relationships with banks have been unable to get loans. For example, Stacks, a popular restaurant that employees just over 100 employees with locations in San Francisco, Burlingame, and Menlo Park, California, has been denied a loan under the program.”

 The letter requests GAO answer the following questions as part of its review of the Paycheck Protection Program:

  1. How many loans and what amount of funding was approved for publicly traded companies through PPP?
  2. Given the high volume of requests, how does SBA prioritize lenders’ requests for funding?
  3. Some financial institutions decided to use their own version of the PPP application. Does that slow down SBA’s review of their request or have any other adverse effects?
  4. Given the number of large, publicly traded companies that received loans in the first round of funding, did the SBA implement any changes to its eligibility requirements to ensure these types of companies were excluded from receiving funding provided by the Paycheck Protection Program and Health Care Enhancement Act? For example, are companies with a certain market level value excluded from receiving aid?
  5. Does the SBA have a full accounting of every business that has received funding through PPP and do they have plans to make that information publicly available?
  6. What changes can be made to the PPP in the future to ensure funds reach small businesses hard-hit by the pandemic instead of large publicly traded companies that can access credit elsewhere?

 A copy of the letter is attached to this release.

 

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[1] Jonathan O’Connell, Steven Rich, and Peter Whoriskey, Public Companies Received $1Billion in Stimulus Funds Meant for Small Businesses, Wash. Post (May 1, 2020), https://www.washingtonpost.com/business/2020/05/01/sba-ppp-public-companies/.

[2] Ben Popken, Which Companies are Returning their PPP Loans? Here’s the List, NBC News (Apr. 28, 2020), https://www.nbcnews.com/business/business-news/which-companies-are-returning-their-ppp-loan-here-s-list-n1194566.