Speaker Nancy Pelosi’s select committee overseeing the federal coronavirus response has settled on its first course of action: name and shame.
The 12-member committee, which Republicans reluctantly joined Thursday after musing about a boycott, has identified five large public companies that nevertheless applied for and accepted small-business loans meant to aid those struggling to survive amid the pandemic. And the lawmakers are asking them to return the funds by next week or face a long list of document demands.
“Since your company is a public entity with a substantial investor base and access to the capital markets, we ask that you return these funds immediately,” according to letters sent to each of the companies. “Returning these funds will allow truly small businesses — which do not have access to alternative sources of capital — to obtain the emergency loans they need to avoid layoffs, stay in business, and weather the economic disruption caused by the coronavirus crisis.”
Republicans quickly indicated they opposed the move and expressed concern it would have a chilling effect on struggling companies.
“This action by Democrats represents dangerous government intimidation that could cause more widespread layoffs at a time when we should be trying to keep American workers on the payroll,” said House Minority Whip Steve Scalise (R-La.), the top Republican on the committee.
Still, the panel’s announcement leans heavily on recent statements that Republicans made expressing concerns about large companies accessing small business loans. For example, House GOP leader Kevin McCarthy (R-Calif.) recently said he and Treasury Secretary Steven Mnuchin agreed that “we will go after those big companies that cheat the system.”
The committee, chaired by House Majority Whip Jim Clyburn (D-S.C.), targeted publicly traded companies with more than $25 million in capitalization and more than 600 employees — and that obtained loans worth about $10 million. The panel has asked the companies to notify them by Monday if they will return the funds or else face a demand to produce records of their contacts with the federal Small Business Administration, the Treasury Department and any financial institution that approved their loan.
Within hours, one of the five companies — MiMedx Group, a biologics company based in Georgia — announced it would be repaying its loan.
In a statement, the company didn’t explain why it was repaying the loan but said it benefited from the assistance.
“As announced previously, the funds enabled the Company to maintain full employment during a time of widespread uncertainty, producing skin-graft products for patients with serious wounds and burns,” the company said. “Similar to other companies, including those operating in the health care sector, the Company’s business has been negatively impacted by the COVID-19 pandemic.”
Other companies targeted by the panel include EVO Transportation & Energy Services, Gulf Island Fabrication, Quantum Corporation, and Universal Stainless & Alloy Products.