Post has been updated.
As large, publicly-traded companies face a deadline Thursday to return money intended to serve as a lifeline for small businesses during the coronavirus crisis, a group of news outlets is joining forces to compel the Small Business Administration to reveal the names of all the companies approved to receive that money and how much they were granted.
The deadline for publicly traded companies to return their Paycheck Protection Program (PPP) loans to the IRS without penalty is Thursday.
Under the PPP, companies with fewer than 500 employees are eligible to receive forgivable loans. But the CARES Act, which created the program, does not rule out large publicly-traded companies with fewer than 500 employees per location. Days after the funding for small business loans became available, many larger companies such as Shake Shack and Ruth’s Chris Steak House were quick to secure hundreds of millions of dollars from the fund.
At least 407 publicly-traded companies applied for at least $1.3 billion in coronavirus relief loans under the Paycheck Protection Program, according to data analytics firm FactSquared.
Lawmakers and watchdog groups cried foul, saying the aid was intended for truly small businesses.
“Now is not the time for our nation’s companies to profit at others’ expense. We are all in this together,” said Sen. Marco Rubio, R-Fla., chairman of the Senate Small Business Committee, in a statement. The backlash prompted many companies to publicly announce the return of their loans.
The Treasury Department eventually followed suit to encourage such businesses to return their loans, saying, “it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith” attesting to its need for the loan. Treasury set an initial “safe harbor” deadline of May 7 for the return of funds but would later extend the deadline to May 14.
FactSquared has found 61 publicly-traded companies have returned roughly $411 million in loans to the SBA. Officials with the SBA say that returned loans will be available to businesses applying for relief in the second round of funding that is still currently available.
As the deadline to return the loans arrives, five news organizations have announced they are suing the SBA for access to information on loan recipients. The New York Times, the Washington Post, the Wall Street Journal’s parent company Dow Jones, Bloomberg LP and ProPublica have filed a joint lawsuit in federal court in Washington, asking the SBA to “disclose who is receiving the funds and in what amounts,” according to a statement from the Washington Post’s vice president for communications, Kris Coratti Kelly.
The news organizations are suing for access to the information in order to serve “the public interest in contemporaneously monitoring the disbursement of billions of taxpayer dollars through expansive federal initiatives — most notably the new Paycheck Protection Program — during this period of unprecedented financial and social disruption,” according to the complaint.
ABC News has also unsuccessfully attempted to obtain information on the disbursement of PPP funding from the SBA. The SBA had no comment on the lawsuit.
President Donald Trump has indicated a willingness to release a full list of businesses that have received PPP loans.
“I wouldn’t mind doing that,” Trump said on April 28 in response to a question from ABC’s Jon Karl. “I don’t know what the legal status of something like that — I would like to do that, as far as I’m concerned. I’m not involved in the process, but I would certainly like to have it listed. I would have to find out if there is a legal problem. But if there isn’t, I would do it gladly.”
In the past, the SBA has published information on loan recipients, including the names of businesses, the sizes of loans and which banks processed them. The PPP loan application says applicant information is “subject to disclosure under the Freedom of Information Act.”
But the SBA has never publicly released information about PPP loan recipients, despite repeated requests for information from the press, and despite multiple requests under the Freedom of Information Act (FOIA).
Advocates say demographic information about PPP recipients can help taxpayers and lawmakers understand if the funds made it to the intended recipients. The SBA Inspector General, Hannibal “Mike” Ware, has already stated in a report that the PPP did not prioritize “concerns owned and controlled by socially and economically disadvantaged individuals, women, and businesses in operation for under two years.”
Tune into ABC at 1 p.m. ET and ABC News Live at 4 p.m. ET every weekday for special coverage of the novel coronavirus with the full ABC News team, including the latest news, context and analysis.
“Because SBA did not provide guidance to lenders about prioritizing borrowers in underserved and rural markets, these borrowers, including rural, minority and women-owned businesses may not have received the loans as intended,” Ware wrote in an oversight report. The report also criticizes the SBA for not requiring applicants to provide demographic information, which could have made it easier to track and avoid any racial, gender or geographic disparity.
The PPP program began with an initial $350 billion available in loans, and has since been replenished by Congress with an additional $310 billion. The initial round of funding was depleted in 13 days, while the second round was made available April 24. Nearly $120 billion was still available as of May 13.
The SBA has previously said the agency would be reviewing all loans in excess of $2 million once business owners submit their forgiveness paperwork to ensure their need meets the good faith certification. The IRS confirmed on Wednesday that loans under $2 million would not be subject to audit. Business owners are required to use at least 75% of their loan for payroll costs, and the remainder on costs like rent and utility bills.
The SBA indicated last week that it would release more guidance on what thresholds businesses should meet to ensure their loans are forgiven, but so far that guidance has not been made public.
“Before we forgive these loans, we will check every single one over $2 million,” Treasury Secretary Steven Mnuchin said in a Fox Business interview. “So anybody that took the money that shouldn’t have taken the money, one, it won’t be forgiven and two, they may be subject to criminal liability, which is a big deal. I encourage everybody to look at this and pay back these loans so we can recycle the money if you made a mistake.”
ABC News’s Ben Siegel and Liz Alesse contributed to this report.