Senator Collins refused to close loopholes that have allowed publicly traded companies to access funds that were supposed to go to small businesses

 

Last week, Senator Susan Collins came under fire when it was uncovered that big banks were raking in billions in fees while giving preferential treatment to large corporate clients in the distribution of Paycheck Protection Program funds. When Congress passed a second round of funding for the program, Collins had the opportunity to close loopholes that have allowed big corporations to take advantage of the program. Instead, she insisted on allowing publicly traded companies to continue cashing in on the program she co-authored.

 

Now, new reporting in The Washington Post has revealed that publicly traded companies received $1 billion through the Paycheck Protection Program so far, even as many small businesses in Maine have lost out on support through the program. 

 

The program that Senator Collins promised would bring much needed support for Maine’s small businesses has instead too often turned out to be a “cash cow for big business.” While the LA Lakers received nearly $5 million through the program, cash-strapped hospitals in Maine have been forced to sue to try to get the support they need.

 

The Washington Post: Public companies received $1 billion in stimulus funds meant for small businesses

 

By Jonathan O’Connell, Steven Rich and Peter Whoriskey

May 1, 2020

 

Key Points:

 

  • Publicly traded companies have received more than $1 billion in funds meant for small businesses from the federal government’s economic stimulus package, according to data from securities filings compiled by The Washington Post.

 

  • Nearly 300 public companies have reported receiving money from the fund, called the Paycheck Protection Program, according to the data compiled by The Post. Recipients include 43 companies with more than 500 workers, the maximum typically allowed by the program. Several other recipients were prosperous enough to pay executives $2 million or more.

 

  • After the first pool of $349 billion ran dry, leaving more than 80 percent of applicants without funding, outrage over the millions of dollars that went to larger firms prompted some companies to return the money. As of Thursday, public companies had reported returning more than $125 million, according to a Post analysis of filings.

 

  • The Small Business Administration has refused to release the names of companies that have received the loans, despite having released such information on its loan programs for years.

 

  • Some of the companies that received the loans were large in another way: Their CEOs have been making millions.

 

  • Veritone, a company based in Costa Mesa, Calif., that provides artificial intelligence technology, paid chief executive Chad Steelberg $18.7 million in total compensation in 2018, the last year for which data is available. His brother, Ryan Steelberg, the company’s president, made $13.9 million. The company received $6.5 million in funding from the program. The company did not respond to a request for comment.

 

  • Chain restaurants and hotels were able to obtain tens of millions of dollars from the first pool of $349 billion in forgivable loans because Congress and the administration allowed multiple subsidiaries of large owners to each apply separately.

 

  • Those recipients include a group of hotel companies chaired by Monty Bennett, a Dallas executive and Republican donor, including Ashford Hospitality Trust and Braemar Hotels & Resorts. The companies used more than 100 filings to seek $126 million total and received $76 million.

 

  • While much of the program’s criticism has focused on the relatively large companies that received the money intended for small businesses, there is some evidence that the program missed its target in other ways, too.

 

  • “The loans were disproportionately allocated to areas least affected by the crisis,” according to authors Joao Granja, Christos Makridis, Constantine Yannelis and Eric Zwick.

 

###