Sen. Tammy Baldwin photo by ljlphoto.com ”>CC BY-NC-ND 2.0
Responding to reports of “unjust enrichment” of wealthy CEOs and hedge-fund managers through the initial $350 billion in paycheck protection funding Congress allocated in the federal COVID-19 relief package, Sen. Tammy Baldwin (D-Wis.) and 20 of her Senate colleagues, led by Sen. Amy Klobuchar (D-Minn.), sent a letter to Treasury Secretary Steven Mnuchin and Small Business Administrator Jovita Carranza, demanding oversight and calling on the Trump administration to ensure that federal relief reaches struggling small businesses.
“[I]t is critical that the funding provided by Congress be used to provide loans to the businesses whose owners and employees’ livelihoods are truly at risk as a result of the pandemic,” the senators wrote.
Instead, businesses that do not need the funds have been taking advantage of the program and draining resources meant for those who are truly in need. CNBC reports that huge, publicly traded companies worth more than $100 million, which have access to vast public markets, have successfully applied for relief, depleting the initial $349 billion so that the program now requires new funding to continue making loans.
The Milwaukee-based Marcus Corp, an $800 million business, received $11 million, the Milwaukee Journal Sentinel reports, which it says it needs to keep 1,400 to 1,500 employees on the company payroll.
“During the initial weeks that the program was in place, loan recipients included several hedge funds whose headcount falls well under the 500 employee limit set by the Small Business Administration—but whose annual revenues and incomes render them the opposite of ‘small,’” the senators wrote. “For these applicants and others who did not meet the criteria of financial need, the funding provided by PPP is simply a windfall—yet their participation in this program crowds out truly deserving applicants whose lack of sophistication and relationships with lenders may have delayed their ability to submit PPP applications.”
In the letter, the senators point to weak enforcement and a voluntary program of self-policing that has proved inadequate. Among the questions they pose are:
- “[W]hat measures are your agencies taking to identify indicators of unjust enrichment that suggest an Applicant does not meet the criteria for economic need?”
- “Will you commit to transparency measures that provide the public with information to assess the propriety of funding distributed under the Paycheck Protection Program?”
- If your agencies identify evidence that Applicants have secured funding in connection with economic conditions that render the loan truly unnecessary, resulting in unjust enrichment of the Applicant, will you commit to taking immediate action in response?
Along with Baldwin and Klobuchar, the letter was signed by Sens. Richard Blumenthal (D-Conn.), Catherine Cortez Masto (D-Nev.), Dick Durbin (D-Ill.), Tammy Duckworth (D-Ill.), Dianne Feinstein (D-Calif.), Kirsten Gillibrand (D-N.Y.), Kamala Harris (D-Calif.), Mazie Hirono (D-HI), Angus King (I-ME), Patrick Leahy (D-VT), Ed Markey (D-MA), Jeff Merkley (D-Ore.), Chris Murphy (D-Conn.), Jack Reed (D-R.I.), Bernie Sanders (I-Vt.), Tina Smith (D-Minn.), Tom Udall (D-N.M.), Chris Van Hollen (D-Md.), Elizabeth Warren (D-Mass.) and Ron Wyden (D-Ore.).
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