Treasury Secretary Steven Mnuchin. (Photo: AP)
Treasury Secretary Steven Mnuchin told the House Select Subcommittee on the Coronavirus Crisis Tuesday that the administration remains committed to working with the House and Senate on a "bipartisan basis" for a "Phase 4 relief package," including more funds for the Paycheck Protection Program (PPP).
In testimony before the coronavirus subcommittee Tuesday afternoon, Mnuchin said certain areas of the economy "need additional relief."
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Mnuchin said he believes a "deal should be reached, and would provide substantial funds" for other areas also, including schools, testing, vaccines, and continued enhanced unemployment insurance.
"We need support quickly," Mnuchin said, "and if we need more, we'll come back. We've been working hard to get a negotiated agreement on a bipartisan basis."
He also said there was PPP funding left over and that the money should be targeted at the hardest-hit industries. The deadline to apply for the loans was August 8.
House Panel Report Highlights PPP Fraud, Waste, and Abuse
Meanwhile, at the hearing, the subcommittee released a preliminary analysis which found that over $1 billion in PPP loans were given to companies that received multiple loans, which violated PPP rules.
On June 15, the Select Subcommittee launched an investigation into the Trump administration's implementation of the PPP, following reports that the program favored large, well-funded companies.
In response, Treasury and the Small Business Administration (SBA) produced detailed data on all 5.2 million loans approved by SBA as of August 8, the subcommittee states.
The analysis released Tuesday shows "PPP helped millions of small businesses and nonprofit organizations stay afloat during the coronavirus crisis, but a lack of oversight and accountability from the Treasury Department and Small Business Administration may have led to billions of dollars being diverted to fraud, waste, and abuse, rather than reaching small businesses truly in need," according to the lawmakers.
The subcommittee report cites the following areas as pointing to a high risk for fraud, waste, and abuse in the PPP program:
- More than 600 loans totaling over $96 million went to companies excluded from doing business with the government.
- More than 350 loans worth $195 million went to government contractors with significant performance and integrity issues.
- Federal databases raised red flags for $2.98 billion in loans to more than 11,000 PPP borrowers.
- SBA and Treasury approved hundreds of loan applications missing key identifying information about the borrower.
The administration, according to the analysis, "appears to lack the appropriate oversight mechanisms to identify and root out these problems."
Rep. James Clyburn, chairman of the subcommittee, sent a letter to Treasury and the SBA on Tuesday requesting that they conduct a review of the management of the PPP in light of the subcommittee's report.
Clyburn asked PPP and SBA to "examine the categories of loans" identified in the analysis and any other loans that contain "indicia of fraud, as well as the program's oversight and accountability mechanisms."
From: ThinkAdvisor
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Melanie Waddell
Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2024. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.
