Big business has already taken over $350 million from small business relief funds
Companies that pay their CEOs more than $1 million annually have so far taken millions in taxpayer money intended to save small businesses.
Tens of thousands of small businesses were unable to access forgivable federal loans intended to help them make payroll amid the COVID-19 pandemic — but big companies with wealthy CEOs have so far received millions.
When Senate Republicans unveiled the CARES Act last month, they said its Paycheck Protection Program would provide “rapid relief for small businesses and their employees.” But much of that money went to companies that would hardly qualify as small.
On Wednesday, Popular Information reported that it had identified 33 “publicly-traded companies that pay their CEOs $1 million or more and have scooped up [Paycheck Protection Program] funds intended for struggling small businesses.”
These include the parent company of Ruth’s Chris Steak House, which received $20 million from the program and pays its CEO $6.1 million.
The company laid off ‘virtually all of its hourly restaurant staff’ last month due to the COVID-19 pandemic, Popular Information noted.
Artificial intelligence company Veritone, which compensated its CEO more than $18 million in 2018, also received $6.5 million worth of forgivable loans last week.
Potbelly, a sandwich shop chain, received $10 million.
At least 94 publicly traded companies have disclosed Paycheck Protection Program loans, the Associated Press reported Tuesday, totaling at least $365 million. Some that money went to companies “with market values well over $100 million.”
Shake Shack received a $10 million loan from the fund. After public outcry, the company said it would return the cash.
“Our people would benefit from a $10 million PPP loan, but we’re fortunate to now have access to capital that others do not,” the company’s leadership wrote. “Until every restaurant that needs it has had the same opportunity to receive assistance, we’re returning ours.”
Big banks also made out well. According to an NPR report on Wednesday, they received $10 billion in fees for the small business loans, in some cases up to 5% of the amount.
While the CARES Act passed with bipartisan support, the bill was the brainchild of Senate Majority Leader Mitch McConnell and his GOP caucus.
“As our nation confronts this health crisis and the economic crisis it is spawning, Senate Republicans have prepared a bold legislative proposal,” McConnell announced on March 19. “And we need to help protect American workers, families, and small businesses from this unique economic crisis that threatens to worsen with every day.”
“We need to have the American people’s backs,” he added. “This legislation is a significant next step.”
The funds in the initial appropriation ran out after just two weeks. On Tuesday, the Senate approved a bipartisan bill to add another $310 billion to the Paycheck Protection Program.
A House vote is expected on Thursday.
Published with permission of The American Independent Foundation.
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