As stimulus talks again broke down in early September, Sen. Marco Rubio, R-Fla., chairman of the Senate Committee on Small Business and Entrepreneurship, pressed JPMorgan Chase CEO Jamie Dimon to answer several questions by Sept. 23 about reports that bank employees have been involved in potentially illegal conduct involving Paycheck Protection Program and Economic Injury Disaster Loans (EIDL) funds.
Published reports stated that JPMorgan Chase is investigating alleged misuse by employees of PPP and EIDL funds.
JPMorgan said it has seen “instances of customers misusing Paycheck Protection Program Loans, unemployment benefits and other government programs” and that some “employees have fallen short, too,” according to a memo to staff from the bank’s senior leaders, as reported by Bloomberg News.
The firm said the conduct doesn’t meet its principles “and may even be illegal.” “We are doing all we can to identify those instances and cooperating with law enforcement where appropriate,” Bloomberg reported the memo as stating.
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Rubio told Dimon that he’s “alarmed” by the reports.
“Both the PPP and expanded EIDL programs were intended to provide critical economic assistance to small businesses during this time of enormous need,” Rubio wrote. “Financial institutions, like yours, are on the frontlines of providing PPP assistance. Allegations that employees of financial institutions have exploited either the PPP or EIDL programs for their own gain must be investigated fully.”
The PPP has provided “over $525 billion in critical relief to more than 5.2 million businesses, and saved an estimated 50 million jobs,” the senator wrote.
While Rubio told Dimon that he appreciated his previous response in May that JPMorgan “did not prioritize certain [PPP] loan applicants over others,” the senator wanted answers on:
• The specific allegations JPMorgan is investigating;
• Any actions JPMorgan has taken to mitigate potential fraud or misuse of PPP and/or EIDL funding;
• Any actions JPMorgan has taken to notify SBA and/or federal law enforcement of potential fraud or misuse of PPP and/or EIDL funding; and
• Any internal controls distributed to the bank’s employees regarding the PPP and/or EIDL program.
More than 50 people who allegedly committed fraud to obtain money from the PPP have been criminally charged by the Department of Justice Criminal Division’s Fraud Section, Acting Assistant Attorney General Brian Rabbitt said in a Sept. 10 speech at the PPP Criminal Fraud Enforcement Action press conference in Washington.
Stimulus Talks Falter
The Senate GOP’s new “targeted” COVID-19 relief bill, which Senate Democrats blocked on Sept. 10, included a “second round” of PPP funds.
Senate Majority Leader Mitch McConnell, R-Ky., said in introducing the bill on Sept. 8 that it focused on “some of the very most urgent health care, education and economic issues.”
After the Sept. 10 vote, McConnell tweeted: “Every Senate Democrat just voted against hundreds of billions of dollars of COVID-19 relief. They blocked money for schools, testing, vaccines, unemployment insurance, and the Paycheck Protection Program. Their goal is clear: No help for American families before the election.”
In comments before the vote, Senate Minority Leader Chuck Schumer, D-N.Y., said that the Senate “will take a rather pointless vote on the latest, highly partisan Republican, emaciated COVID-relief bill.”
McConnell “claims that his bill is an attempt at a bipartisan solution,” Schumer continued. “But, of course, the bill was drafted solely by Republicans — no input from Democrats — and rushed to the floor.”