Scalise blasts Democrats for calling on certain companies to return PPP loans

House Minority Whip Steve Scalise (La.), the top Republican on a newly formed coronavirus committee, blasted Democrats on Tuesday for demanding a handful of companies return federal loans received through the Paycheck Protection Program (PPP).

The first action taken by Democrats after establishing the committee was to demand five companies return funding they received last month under the PPP, arguing the federal assistance was meant to help businesses with fewer than 500 employees stay afloat during the pandemic.

GOP lawmakers on the panel argued Tuesday that the move by Democrats was partisan and could potentially risk the further loss of jobs.

In a letter sent to Majority Whip James Clyburn (D-S.C.), the chairman of the panel, Scalise said the companies that received funding  —  EVO Transportation & Energy Services, Gulf Island Fabrication, MiMedx Group, Quantum Corporation and Universal Stainless & Alloy Products — should be eligible for the loans due to the “unique circumstances” they present.

Of the five companies, Gulf Island Fabrication is headquartered in Scalise’s congressional district.

“After examining the unique circumstances of the five companies — and understanding the communities and American workers they support — we write to urge you to exercise some basic level of due diligence before publicly attacking hardworking taxpayers whose jobs you are placing in jeopardy,” Scalise wrote in the letter, which was also signed by GOP Reps. Blaine Luetkemeyer (Mo.) Jackie Walorski (Ind.) and Mark Green (Tenn.).

“Demanding repayment from these companies seeking to cope with serious economic challenges will only put jobs at risk,” the lawmakers added.

The Select Subcommittee on the Coronavirus Crisis, led by Clyburn, said last week that it sent the letters to firms that are public, are estimated to be worth more than $25 million, have more than 600 employees and received small-business loans of $10 million or more.

“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,” the panel wrote in the letters.

Scalise accused members across the aisle of failing to include Republicans in the discussion before taking action, alleging they didn’t take key information into account before calling for the funds to be returned.

“After your hasty transmittal of these letters — one day after Republican members were appointed to the Select Subcommittee and without substantive bipartisan consultation — we contacted the companies to better understand their particular cases and the merits of their receipt of federal aid,” Scalise wrote.

“It is now clear that your letters to these businesses were misinformed, irresponsible, and reliant on deeply flawed factual and legal assumptions. We can only assume that you sent these letters — without careful examination of these particular companies and the situations they face — to bully and shame the companies into returning the loan money.”

He argued that under the Small Business Administration’s guidelines, businesses with more than 500 employees can be eligible if they “satisfy the existing statutory and regulatory definition of a ‘small business concern.’”

“We learned that due to current market conditions, at least four of these companies would be unable to operate or make payroll without the assistance from” the CARES Act signed into law on March 27.

“As you may be aware, Louisiana has one of the highest unemployment rates in the country following the onset of the pandemic and knock-on-effect of the crude oil price. We would like to continue to use the PPP loan proceeds for the exclusive purpose of saving our employees from layoff and to be a positive force and economic multiplier in the community,” the letter said. 

Scalise called on Clyburn to withdraw the demand for the companies to return the funds.

“To date, the PPP has saved millions of jobs by awarding nearly four million loans in record time,” he said.