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House coronavirus panel demands large corporations return stimulus funds meant for small businesses

House coronavirus panel demands large corporations return stimulus funds meant for small businesses
© Greg Nash

The House committee charged with overseeing coronavirus relief spending took its first official action Friday when it sent letters to large corporations demanding they return any stimulus funds they had received that had been allocated for small businesses.

The Select Subcommittee on the Coronavirus Crisis, led by Rep. James Clyburn (D-S.C.), said it sent the letters to firms that are public, are estimated to be worth more than $25 million, have more than 600 employees and received small-business loans of $10 million or more.

“Since your company is a public entity with a substantial investor base and access to the capital markets, we ask that you return these funds immediately,” the panel wrote in the letters. 

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“Returning these funds will allow truly small businesses — which do not have access to alternative sources of capital— to obtain the emergency loans they need to avoid layoffs, stay in business, and weather the economic disruption caused by the coronavirus crisis.” 

The March stimulus package included $350 billion for the Small Business Administration’s Paycheck Protection Program (PPP) in an effort to prop up small businesses that had taken a financial hit during the coronavirus pandemic. That fund was quickly depleted and replenished last month with another $320 billion.

The program came under intense scrutiny after it was revealed that wealthy organizations like Shake Shack and the Los Angeles Lakers received money under the plan. Though some firms have returned the money, the committee said not enough companies have followed suit.

“Unfortunately, many large companies were able to utilize this program and obtained PPP loans that were intended for small businesses. Some of the companies returned these funds amid widespread public outrage. However, other companies—including yours—still have not returned these funds,” the panel wrote in a letter to EVO Transportation & Energy Services Inc.

The lawmakers requested that firms inform the panel by May 11 if they intend to return the funds. If they decide to not give the government back the money, the committee asked that the companies provide them with a range of documents by May 15, including any communications between them and the Small Business Administration and the Treasury Department relating to the PPP loan and any discussions with any financial institution regarding the PPP loan.

The issue of the funds going to large companies has garnered bipartisan attention on Capitol Hill, with House Minority Leader Kevin McCarthyKevin Owen McCarthyMcCarthy urges networks not to call presidential race until 'every polling center has closed' House Republicans slated to hold leadership election on Nov. 17 Rocky Mountain National Park closed due to expanding Colorado wildfire MORE (R-Calif.) vowing last month to “go after those big companies that cheat the system.”