Time to Fix What’s Broken: Senate Leaders Seek Oversight of PPP Loans

Time to Fix What’s Broken: Senate Leaders Seek Oversight of PPP Loans
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WASHINGTON, D.C. – Since the launch of the Paycheck Protection Program (PPP), small business owners have been left behind by their banks and the government while larger and better-connected companies have been shown the red carpet. Congress has now passed two relief bills to allocate funds for small businesses, neither of which included proper oversight or transparency measures to disclose loan recipients. Weeks later, Senate Minority Leader Chuck Schumer and Sen. Ben Cardin will now introduce legislation to mandate disclosure requirements for PPP loans.

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PPP Loans: The Push For Transparency

“When it comes to spending taxpayer money, transparency and accountability are not optional. Senator Schumer is right to push for much-needed transparency. He can’t let up. Congress must fix what was broken in previous bills and ensure that every taxpayer dollar is accounted for with adequate oversight of all relief programs,” said Kyle Herrig, president of Accountable.US. 

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“We’ve all seen in recent weeks that money intended to help struggling mom-and-pop businesses has too often gone to help Trump allies, big businesses, and the well-connected. It is only because of the dogged work of government watchdogs, the media, and individual members of Congress that these improprieties have come to light.

“While several companies have been shamed into returning ill-gotten funds, it’s not enough. Millions have lost their jobs, and an unknown number of small businesses have shuttered, perhaps never to reopen. Every step forward should be brimming with increased oversight and transparency.”

Big Corporations Taking Advantage

While the program was supposed to provide relief to small businesses, the Trump administration has provided billions to the well-connected or big corporations. Without proper accountability measures in the CARES Act, multi-million dollar corporations were given a free pass to suck the program’s funding dry as many small businesses walked away with little to nothing. This lack of oversight resulted in the following:

  • Multi-million dollar companies like Ruth’s Chris Steak House, which received $20 million in funding, and Potbelly, which received $10 million in funding while it simultaneously promised to provide one of its executives up $100,000 in bonuses this year, were able to take the money and run. After public pressure, they announced that they planned to return the funds.
  • Trump donor, and largest PPP recipient, Monty Bennett’s hotel conglomerate received $58 million in PPP funds after he hired Trump fundraisers to lobby the Treasury Department. Bennett later said he would return all the funds.
  • SBA PPP loan requests for more than $1 million to initially made up nearly 45 percent of the approved spending despite accounting for just four percent of applications overall.
  • At least 94 publicly-traded firms, some worth more than $100 million, received $365 million in taxpayer money.

Accountable.US is a nonpartisan watchdog group that exposes corruption across all levels of government.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)www.valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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