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Uncle Sam wants you!
To report fraud and abuse of government bailout funds, that is.
In a video released Thursday, Rep. James Clyburn (D-S.C.), the chairman of the House Select Subcommittee on the Coronavirus Crisis, urged Americans to “please inform us” of any “information that taxpayer dollars intended to help Americans during this crisis have instead been subjected to waste, fraud, or abuse.”
Rep. Clyburn said in the video that the committee was charged with ensuring the more than $3 trillion in federal funds “are spent efficiently, effectively, and equitably.”
The open call for whistleblowers comes after a deluge of data was released Monday from the Small Business Administration and Treasury about loans for the $670 billion Paycheck Protection Program—a key piece of the multitrillion-dollar coronavirus stimulus package. The data included the names and addresses (as well as loan amounts in ranges for loans above $150,000) of businesses that received the emergency taxpayer funds. But based on early analyses of the data, it appears many entities receiving the funds raised eyebrows.
According to a Coins2Day analysis of the data, at least 38 publicly traded companies kept PPP loans, despite earlier guidance from the SBA and Treasury that it was “unlikely” public companies “with substantial market value and access to capital markets will be able to make the required certification in good faith,” and therefore be eligible for such funds. Meanwhile, reports of private equity and venture capital firms receiving aid were rampant early this week, but some firms, at least, were mistakenly listed as recipients. (Indeed, many companies that were listed in the SBA data denied receiving loans.)
The PPP has long drawn the ire of government watchdogs, outside groups, and members of Congress alike for the lack of transparency from the start about who received loans. It’s unclear what the repercussions will be for businesses that took loans they didn’t need. Previous guidance issued by the SBA and Treasury suggested such loans would not be forgiven and would need to be returned, but the Justice Department has already mounted several cases, alleging brazen fraud.
So far, the PPP has provided nearly 4.9 million small businesses with forgivable loans of up to $10 million each.
Now we’ll see what, if anything, whistleblowers have to say about any of them.
More must-read finance coverage from Coins2Day:
- If Ernst & Young auditors had done this one thing, they might have uncovered Wirecard’s $2 billion fraud years earlier
- After overbooking flights in a pandemic, American Airlines is now paying passengers to get off
- Should Facebook investors ride out the ad boycott—or cash out?
- Safelite’s CEO on steering the company through crisis—and getting sales back to pre-pandemic levels
- Former Honeywell CEO David Cote just wrote one of the best guides ever on how to lead a company
