WASHINGTON–Funds from the Paycheck Protection Program (PPP), which were supposed to provide support to mom-and-pop companies that otherwise didn’t have any easily available financial lifelines during the first year of the pandemic, also went to publicly traded companies that had access to other funds and in many cases didn’t need the money, according to a new analysis.
The analysis, performed by ProPublica, an independent, nonprofit newsroom that produces investigative journalism with moral force, noted that at the time the PPP was announced, House Minority Kevin McCarthy (R-CA) told Fox News, “We will go after those big companies that cheat the system.”
“But the tough talk hasn’t translated into action,” ProPublica said its review has found, concluding the government “gave out generous loans to companies that may not have needed them. And it has often forgiven the loans, despite having said that publicly traded companies would be unlikely to merit such generous treatment.”
As an example, ProPublica pointed to Lazydays Holdings, a publicly traded collection of RV dealerships that got a nearly $9 million loan.
“The company had $31 million in cash on hand at the end of 2019, and then prospered as Americans turned to RVs for socially distanced vacations. Lazydays’ stock price has shot up more than 500% during the pandemic,” ProPublica stated. “The government has forgiven nearly all of it, allowing Lazydays to keep the money.
Keeping the Money
ProPublica said its analysis of Securities and Exchange Commission filings found at least 120 publicly traded companies that received loans of more than $500,000, grew their revenues last year and have been allowed to keep the money.
In addition, at least 30 companies announced plans to go public after receiving their loans, “bringing in truckloads of investor cash that they often used to pay off other debts — but not the ones they owed to the federal government, all of which were forgiven,” ProPublica said.
Overall, ProPublica said its investigation found at least $250 million that went to publicly traded companies with growing revenues and that has already been forgiven by the government.
‘Significant Undercount’
“That’s just a sliver of the $800 billion PPP program. But it’s also almost certainly a significant undercount of the amount of taxpayer dollars that went to well-heeled companies,” ProPublica stated. “The count, for instance, doesn’t include any of the billions of dollars that went to firms backed by giant private equity funds. Their finances are not publicly disclosed.”
ProPublica added the government had no rules requiring companies to pay back loans if it turned out they didn’t need the money.
The full report can be found here.