CARES Act Monies Go to Companies that Have Defrauded Uncle Sam, Stolen Wages, Broken Health & Safety Rules

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Sep 08, 2020, 09:50 ET

WASHINGTON, Sept. 8, 2020 /PRNewswire/ -- A new report from Good Jobs First finds that more than 43,000 businesses and non-profit organizations receiving CARES Act funds have a history of misconduct, collectively paying $13 billion to settle civil and criminal penalties over the last decade.

Together, the same companies received $57 billion in grants and $91 billion in loans through the economic stimulus bill passed by Congress to mitigate the economic fallout from the pandemic. Among the violations are workplace safety issues, flouting of environmental standards, wage theft and defrauding the federal government.

These are among the findings in "The Corporate Culprits Receiving COVID Bailouts," published today and available at www.goodjobsfirst.org.

"The revelation that tens of thousands of CARES Act recipients have records of misconduct—including some cases of a criminal nature—raises the question of whether the eligibility criteria for the grant and loan programs were strict enough," said Good Jobs First Research Director Philip Mattera, who co-authored the report with Mellissa Chang.

Key findings:

6,087 healthcare providers received $85 billion in grants and loans despite having paid $9 billion in penalties, most related to accusations of defrauding Medicare and Medicaid programs.

38,362 small businesses received $37 billion in loans though they have paid penalties of $3 billion, mostly for wage theft and jeopardizing worker health and safety.

147 colleges and universities received $503 million in grants and paid $900 million in penalties, mostly for-profit institutions that have used deceptive marketing practices to attract students and then saddling them with sky-high debt.

32 aviation-sector companies received $25 billion in grants and loans despite having paid $600 million in penalties related to issues such as worker safety and discrimination.

The data for the study was collected from two Good Jobs First databases: COVID Stimulus Watch, which covers 20 CARES Act programs, and Violation Tracker, which combines enforcement data from 50 federal and 200 state and local agencies. Companies appearing in both databases were identified through an extensive matching process.

The Good Jobs First findings are consistent with those in a recent analysis of the PPP published by the Select Subcommittee on the Coronavirus Crisis. Additionally, our data show the conclusions apply to healthcare providers and other categories of CARES Act recipients.

Contact: Arlene Martinez - [email protected] - 202-302-4301

SOURCE Good Jobs First