AP investigation: At least 94 publicly traded companies or their subsidiaries have received $365M from a coronavirus relief program meant for small businesses.
walloped the economy were among those receiving millions of dollars from a relief fund that Congress created to help small businesses through the crisis, an Associated Press investigation found.
Nine of the loans were for the maximum $10 million possible, including one to a California software company that settled a Securities and Exchange Commission investigation late last year into accounting errors that overstated its revenue. The department has said in written materials that that 74% of the loans were for less than $150,000, demonstrating “the accessibility of this program to even the smallest of small businesses.”that would replenish the Paycheck Protection Program with more than $300 billion. The Senate approved the deal Tuesday and the House was scheduled to vote Thursday.
“If we let the applications for the largest entities consume those one and two person operations, we have failed our constituents and paved the way for national economic decline,” the leaders of the Congressional Asian Pacific American Caucus, the Congressional Black Caucus and the Congressional Hispanic Caucus said in a written statement.
In an emailed statement, the company said: “The livelihood of our U.S. employees and their families would be severely disrupted if they were to lose their jobs or be furloughed. We are doing everything we can to support them.” By design, the Paycheck Protection Program was meant to get money out quickly to as many small businesses as possible, using a formula based in part on workforce and payroll size. Some of the eligibility criteria was expanded, making it possible for some businesses with more than 500 employees to qualify if, for example, they met certain size standards for their industries or other conditions.
Five of the companies that the AP identified were previously under investigation by financial and other regulators, including firms that paid penalties to resolve allegations, records show. Pam Marrone, the chief executive, said the company “shouldn’t be punished” for what happened with the SEC because it has had clean audits for years now. She described the investigation as a “body blow” that cost it investors and drove its stock price under $1. She said it has had to take on $40 million in debt and is still digging itself out of the financial hole.
In an interview, president and chief executive Phil Deschamps said the company was able to raise enough capital earlier this year that, when paired with the loan, it can survive to early summer — when it expects to have filed for U.S. Food and Drug Administration approval for its device. Without the federal money, he said, the company would have lost scientists and attorneys who help prepare regulatory submissions.
Chief executive Ian Dickinson said he welcomed the $1.9 million loan because he would’ve had to let go more employees than he has without it. Enservco currently has 95 employees, he said.
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