September, 28 2020, 12:00am EDT
Report:: Publicly Traded Companies Used PPP Money to Enrich Their Shareholders
A new analysis from government watchdog Accountable.US and previewed
WASHINGTON
A new analysis from government watchdog Accountable.US and previewed by the Washington Post looked back at publicly traded companies that took SBA Paycheck Protection Program (PPP) loans -- and found that at least five companies spent or had planned to spend roughly $5.9 million on dividends or stock buybacks after receiving their PPP money.
Accountable.US called the findings -- which followed a review of earnings calls and reports for publicly traded PPP recipients during Q2 2020 -- an insult to the over 110,000 small businesses that have shuttered during the health crisis, especially in communities of color -- many because they were shut out of the program.
"The Trump administration wrote the PPP rules and sent billions of dollars to the well-resourced and well-connected rather than actual small businesses struggling during this public health and economic crisis," said Accountable.US President Kyle Herrig.
"The fact that there was little transparency or accountability under this program amounted to an invitation for large companies to misuse tax dollars to their benefit. This is why Congress must ensure the next round of relief is transparent and prioritized for small businesses that actually need help."
The PPP was billed as a lifeline for struggling mom-and-pop businesses but quickly ran into controversy when the Trump administration approved PPP loans for wealthy corporations including major restaurant and luxury hotel chains, and even the L.A. Lakers. The idea that some of these companies apparently used these funds meant for hurting small businesses to engage in moves that amount to just handing cash to shareholders is an especially troubling affront to the spirit of the program.
Accountable.US's COVIDBailoutTracker.com project has identified a total of 944 publicly traded companies that benefited from the program to the tune of $1.6 billion.
KEY FINDINGS FROM THE ANALYSIS:
- RCI Hospitality Holdings, Inc. took $4.2 million while giving shareholders $273,000.
- Whitestone REIT took over $1.7 million as it planned to pay shareholders almost $4.5 million in dividends.
- CRH Medical Corporation bought back over $200,000 worth of its own company stock.
WHAT NOW: To create a more equitable and effective program helping small businesses in the future, the next relief package Congress passes must include relief for the businesses that need it most, stronger transparency measures on loans distributed, and additional clarity on loans already given out.
Accountable.US is a nonpartisan watchdog that exposes corruption in public life and holds government officials and corporate special interests accountable by bringing their influence and misconduct to light. In doing so, we make way for policies that advance the interests of all Americans, not just the rich and powerful.
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