Government To Audit PPP Loans Above $2 Million, Which Could Include Cicero Energy Company That Got $9.5 Million
By Chris Tye, Samah Assad
CHICAGO (CBS) -- Large public companies who received a government loan for COVID-19 relief continue to receive backlash for getting money meant for small businesses.
Some of those big companies who received millions via the Paycheck Protection Program (PPP) loan returned the money, including Potbelly – which is headquartered in Chicago – Shake Shack, Ruth's Chris Steakhouse, and even the Los Angeles Lakers, ESPN reported.
In an interview with CNBC and also reported by the Wall Street Journal, U.S. Secretary of the Treasury Steven Mnuchin said the government will conduct a full audit of every PPP loan over $2 million.
"This was a program designed for small businesses," Mnuchin said, "not designed for public companies that had liquidity."
CBS 2 found one of those loans, worth $9.5 million, was secured by Broadwind Energy, Inc., a publicly-traded energy company based in west suburban Cicero.
The turbine maker is valued at $26.51 million and has 521 employees as of December 2019, according to filings with the U.S. Securities and Exchange Commission (SEC). Filings also show as of April 15, 2020, the company had approximately $23.5 million of liquidity, including $11 million of cash on hand.
The company received the loan despite acknowledging in an SEC filing that it "did not experience significant impacts" from COVID-19 in the first quarter of 2020. However, it said it anticipated a potential impact.
"We did not experience significant impacts from the novel coronavirus disease (known as COVID-19) in the first quarter of 2020, in part, because our facilities currently operate as essential businesses based on the customers and markets served," the company said in the filing. "However, due to the breadth and severity of the pandemic, our operations, suppliers and customers have been and may continue to be affected by varying degrees by COVID-19, which could result in a material adverse effect on our business."
CBS 2 attempted to contact the company five different times via phone and email over the last week. We have not yet received a response.
A search for information in SEC filings, news reports and the company's website reveal no indication it has returned the loan at this time.
Rob Scott, regional administrator for the SBA's Great Lakes Region, said although Broadwind Energy qualified under the program's eligibility rules, he said of the loan, "Probably, this should not have went to them."
"They're going to be looked at under [the audit]," Scott said. "They better think twice before using the funds over whether or not they truly have been affected."
More than 1.6 million loans worth $342 billion were given across the country at the time of the U.S. Small Business Administration (SBA)'s latest report through April 16.
For Illinois businesses specifically, nearly $16 billion in PPP loans were approved -- the fifth most for any state. CBS 2 previously reported on some of the publicly-traded companies who received the loan. The SBA has not released the names of all public and private companies who secured the money.
The first round of $349 billion in funds ran out less than two weeks into the program. Last week, President Donald Trump signed a bill that authorized an additional $310 billion in funds for the program, CBS News reported.
CBS 2 is committing to Working For Chicago, connecting you every day with the information you or a loved one might need about the jobs market, and helping you remove roadblocks to getting back to work.
We'll keep uncovering information every day to help this community get back to work, until the job crisis passes. CBS 2 has several helpful items right here on our website, including a look at specific companies that are hiring, and information from the state about the best way to get through to file for unemployment benefits in the meantime.
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