Sen. Amy Klobuchar and 21 other senators on Monday urged the Trump administration to take more steps to ensure the small businesses devastated most during the coronavirus pandemic do not get shut out of a key government lifeline.
In a letter to Treasury Secretary Steven Mnuchin and Small Business Administrator Jovita Carranza, the lawmakers urged the administration to publicly disclose the measures it will put in place to make sure loans are not "unjustly enriching" companies in less dire financial need.
The senators' outreach follows reports that some loans from the first round of $350 billion in funding for the Paycheck Protection Program, designed to keep employees on small business payrolls while the firms are shuttered, went to hedge funds and public companies.
"Every loan that provides a windfall for an applicant who does not truly need it results in one fewer loan made to a struggling small business owner whose employees could be truly helped by this funding," the senators wrote.
The lawmakers pressured the Trump administration on the day it planned to start accepting applications for small business relief after a pause when funding lapsed. Last week, Congress passed a law with $310 billion in new money for the program, including $60 billion set aside specifically for small lenders.
The group who signed on to the letter includes five former 2020 Democratic presidential hopefuls: Klobuchar of Minnesota and Sens. Kirsten Gillibrand of New York, Kamala Harris of California, Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts. Klobuchar, Harris and Warren's names have circulated in rumors about who apparent Democratic nominee Joe Biden could choose as his running mate in November's election.
All the senators who signed the letter are Democrats except for Sanders and Angus King of Maine, two independents who caucus with Democrats.
Last week, the SBA issued new guidance that aims to make it harder for publicly traded companies to get loans under the small business program. It also said hedge funds and private equity firms would be ineligible for relief.
In their letter Monday, the senators noted that the rules would still rely on the "good faith" of applicants. The lawmakers asked the Trump administration which criteria it would look at — other than an applicant being a large public company, hedge fund or private equity firm — to determine if companies are unfairly taking advantage of the program.
They also questioned whether the administration would commit to transparency regarding who gets money, and take immediate action if it finds out a company not in dire need of help gets a loan.
Spokespeople for the Treasury Department and Small Business Administration did not immediately respond to requests to comment on the letter.