On Monday, April 20, 2020, Senator Marco Rubio (R-FL) announced, in his role as Chairman of the Committee on Small Business and Entrepreneurship, that “the Committee would conduct aggressive oversight” of loans already made pursuant to the Paycheck Protection Program (PPP).
Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the PPP authorizes qualified banks to offer forgivable loans to small businesses to help them cover their payroll costs during the COVID-19 public health emergency.
As previously covered by Norton Rose Fulbright attorneys in this client alert, Senator Rubio’s announcement on Monday is relatively “unsurprising” since “it came in the wake of press reports that PPP loans were awarded to a significant number of public companies” and that many of these loans were wasted on companies that were not negatively impacted by the coronavirus pandemic. In Senator Rubio’s announcement, he reminded U.S. businesses of the provision in the CARES Act that requires that applicants certify that they have “been harmed by the coronavirus crisis and that the PPP is necessary to maintain operations.”
In addition, Senator Rubio commented that the Committee is prepared to compel cooperation with their investigation if necessary by using their subpoena power. Continued congressional oversight and public skepticism will likely continue in the coming weeks and months ahead, and PPP loan recipients should be prepared to justify that they qualify for the loan they have already received.
Norton Rose Fulbright attorneys will continue to provide relevant updates for the healthcare industry on the Health Law Pulse during the COVID-19 outbreak.