Houston oil equipment builder told to return coronavirus funds
James Osborne May 11, 2020 Updated: May 12, 2020 6:48 a.m.
The absence of traffic during the coronavirus shutdown reduced pollution in Houston. With the economy reopening, both traffic and pollution are making a comeback.
Photo: Steve Gonzales, Houston Chronicle / Staff photographer
WASHINGTON — A Houston company that makes ships and other heavy equipment for offshore oil and gas drilling has been asked by House Democrats to return federal funding designated for small businesses during the coronavirus pandemic.
Gulf Island Fabrication, a publicly traded company with a market value of $44 million, received a $10 million loan through Congress's Paycheck Protection Program, which is designed to offer forgivable loans to small businesses on the agreement they do not lay off their employees.
"We did not intend for these funds to be used by large corporations that have a substantial investor base and access to capital markets," read a letter to Gulf Island from members of the House Select Subcommittee on the Coronavirus Crisis Friday. "Unfortunately, many large companies were able to utilize this program and obtained PPP loans that were intended for small businesses. Some of the companies returned these funds amid widespread public outrage. However, other companies — including yours — still have not returned these funds."
GOVERNMENT TAKE: Public companies in Texas taking public money from Washington
Gulf Island, which has more than 900 employees, did not immediately return a phone call seeking comment Monday.
A number of large, publicly traded companies have received funding through the program, resulting in the Small Business Administration last month cautioning it was unlikely to provide funding to companies, "with substantial market value and access to capital markets."
Since then more than 48 loans worth more than $350 million have been returned, according to the Washington nonprofit Fact Squared.
Gulf Island received its loan April 16 through Hancock Whitney Bank, according to a filing with the U.S. Securities and Exchange Commission, seven days before the SBA issued its revised guidance.
The House Select Committee gave Gulf and four other publicly traded companies until today to return the money, or else turn over all documents and communications concerning the federal loan. The other companies were Evo Transportation & Energy Services in Phoenix, MiMedx Group in Marietta, Ga., Quantum Corp. in San Jose, Calif., and Universal Stainless & Alloy Products in Bridgeville, Pa.
Follow James on:
osborneja
James Osborne covers the intersection of energy and politics from the Houston Chronicle's bureau in Washington D.C.
API president criticizes energy transition as moving too fast
Mark Gurman, Bloomberg
Apple closing stores in Texas, other states
Why CenterPoint's hedge fund problem could cost consumers
Oil companies face pressure on political giving after Capitol riot
Renewables face pivotal time after 'breakout year'