Who Is Hogging Covid Stimulus Funds?

The main cause for the stalemate in Congress over a new round of covid stimulus funding is a belief by numerous Republicans that the federal government has been too generous to the unemployed. The enhanced jobless benefits created by the CARES Act need to be curtailed, they argue, to push people to return to work.

Those worrying about disincentives to work do not express similar concerns when it comes to assistance for businesses. Yet there are glaring examples of corporations that have exploited a variety of covid programs to the hilt.

Take the example of the aviation sector. As shown in Covid Stimulus Watch, the Payroll Support Program (PSP) has provided about $20 billion in grants and $7 billion in loans not only to the major airlines but also to smaller passenger carriers, air cargo companies, airport service providers and others.

Despite the generosity of this program, about 170 recipients also turned up on the list released in early July of companies that received awards under the Paycheck Protection Program. The PPP provided these firms more than $200 million in potentially forgivable loans on top of the $500 million in grants they got from the PSP. (The $200 million is calculated by using the midpoint of the ranges in which the PPP awards were disclosed.)

That double-dipping is not the end of the story. The Small Business Administration recently disclosed the names of companies that have gotten Economic Injury Disaster Loans (EIDL), a program that has been greatly expanded to provide another form of covid aid.

More than 70 of the companies that got PSP and PPP awards also show up among the EIDL recipients, making them triple-dippers. The largest total haul, $33 million, went to Ohio-based Champlain Enterprises, which operates CommutAir. The group as a whole received $130 million in grants and loans.

The use of multiple programs by the aviation sector is more troubling in light of evidence that some of the companies have engaged in large-scale layoffs at the same time they were receiving federal assistance. Recently, Rep. James Clyburn, who chairs the Select Committee on the Coronavirus Crisis, Rep. Peter DeFazio, chair of the House Committee on Transportation and Infrastructure, and Rep. Maxine Waters, chair of the House Committee on Financial Services, sent a letter to Treasury Secretary Steven Mnuchin about this situation.

The letter cited a dozen aviation contractors that had accepted PSP aid after engaging in layoffs. One of the firms was Constant Aviation, which in addition to a PSP grant of $23 million, received a PPP loan worth between $5 million and $10 million.

Another sector that is making use of multiple covid programs is healthcare. Hospitals, nursing homes and other medical practices have received tens of billions of dollars under the Provider Relief Fund and the Medicare Accelerated and Advance Payment Program. This assistance was certainly needed, yet dozens of the providers also got assistance from the PPP.

For example, Bronxcare Health System in New York, got more than $100 million from the Provider Relief Fund and then received two PPP loans worth between $4 million and $10 million. MidMichigan Health got $60 million from the Provider Relief Fund and then between $1 million and $2 million from PPP.

The nursing home chain SavaSeniorCare received a total of $35 million from more than 50 separate grants through the Provider Relief Fund as well as PPP loans worth $9.5 million to $21 million. This is on top of $24 million in accelerated Medicare payments.

Where is the hand-wringing over the possibility that all these payments are creating a disincentive for corporations to operate efficiently? These companies may argue that the funds are necessary for their survival, but so is expanded unemployment pay for the millions of people still left jobless by the pandemic.

Big Business and the PPP

By now it is clear that the recipients of Paycheck Protection Program loans were often companies larger than the mom-and-pop operations we were led to believe would be the main beneficiaries. A closer examination of the data shows assistance going not just to mid-sized companies but also to portions of Big Business.

This finding comes from a comparison of the PPP data released in early July to the 1.1 million entries my colleagues and I at Good Jobs First have assembled in our Violation Tracker and Subsidy Tracker databases. The Trackers link the individual penalty or subsidy records to a universe of nearly 4,000 parent companies.

We have now been looking for matches between Tracker data and the more than 1 million entries we have assembled in our newer database Covid Stimulus Watch, which contains data on loans and grants to companies and large non-profits from 19 programs created by the CARES Act.

So far, we have found 775 Tracker parents that have also received covid-related financial assistance, either directly or through a subsidiary. Not all of these are surprises. Some CARES Act programs were designed to help larger companies. For example, the Payroll Support Program is providing massive grants and loans to the major airlines (as well as smaller carriers, air cargo companies and others).

The healthcare systems receiving assistance from the Provider Relief Fund include the large for-profit hospital chains HCA and Tenet as well as both large and small non-profits. The Federal Reserve’s Secondary Market Corporate Credit Facility has been buying the bonds of Fortune 500 companies.

The larger corporations participating in those programs account for about two-thirds of the Tracker-Covid Stimulus Watch parent overlaps. That leaves about 220 that show up in connection with the PPP. Of these, about 150 are privately held. That means, of course, that precise information on their size is not readily available.

We chose to include these firms in the Tracker universe because of indications they are sizeable businesses. Some, in fact, are sizeable enough to be included in the Forbes list of the largest privately held companies in the United Sates.

One example is Ashley Furniture Industries, a manufacturer and retailer that Forbes estimated has $5.8 billion in revenue and 31,000 employees. Two of Ashley’s stores received PPP loans worth between $500,000 and $1.4 million (the loan amounts were disclosed in ranges).

Ma Labs, a computer components producer which Forbes puts at $2.1 billion in revenue and 1,200 employees, received a PPP loan worth between $2 million and $5 million. A more complicated example is Tauber Oil, which Forbes says has revenue of $7.4 billion but only 168 employees. It received a PPP loan of at least $2 million.

Some very large publicly traded companies can also be linked to PPP loan awards. Garden Fresh Gourmet, a salsa company in Michigan owned by Campbell Soup, got a PPP loan in the $2 million-$5 million range. Campbell Soup, with revenues of $9.9 billion, is No. 322 on the Fortune 500.

Marion Resource Recovery Facility LLC, which operates a waste management facility in Oregon, got a PPP loan of up to $250,000. The company is owned by Republic Services, No. 305 on the Fortune 500 with $10.2 billion in revenue.

Large foreign corporations also have PPP connections. For example: Hanwha Advanced Materials America LLC, which received a PPP loan in the $2 million-$5 million range, is owned by South Korea’s Hanwha Group, which ranks No. 261 on the Fortune Global 500 with revenue of $44 billion.

Welspun Pipes, a subsidiary of India’s large Welspun Group conglomerate, received a PPP loan between $5 and $10 million.

These are but a few examples of how some of the world’s largest corporations have managed to benefit from a program advertised as a lifeline for small business.

CORRECTION: I have been told by Campbell Soup that it has sold Garden Fresh Gourmet, even though the latter’s website still refers to an ownership relationship.

Foreign-Owned Regulatory Violators Found Among PPP Recipients

The massive Paycheck Protection Program was depicted as a necessary measure to save American small businesses, yet the list of recipients of the forgivable loans released by the Treasury Department contains numerous companies that are neither small nor American.

These include firms such as Jindal Saw USA LLC and JSW Steel (US) Inc., two affiliates of the Jindal Group, a multi-billion-dollar conglomerate owned by one of India’s wealthiest families. JSW Steel’s investments in the United States have been touted by Donald Trump, though the company later sued the U.S. Commerce Department when it was denied permission to import steel from India without paying a steep tariff.

Continental Carbon Company, owned by Taiwan’s International CSRC Investment Holdings Company (formerly China Synthetic Rubber Corporation), received a PPP loan worth between $5 million and $10 million.

These are two examples that have emerged from an examination of the PPP recipient list my colleagues and I have been doing as part of the integration of the data into our Covid Stimulus Watch website. Here are some others:

Giti Tire Manufacturing (USA) Ltd and Giti Tire (USA) Ltd, subsidiaries of Singapore’s Giti Tire.

Sekisui Voltek, LLC, a subsidiary of Japan’s Sekisui Chemical.

The U.S. subsidiary of Korean Air Lines (owned by the Hanjin Group).

Asahi Forge of America Corporation, a subsidiary of Japan’s Asahi Forge.

It does not come as a complete surprise that foreign-owned companies appeared on the PPP list. There was discussion of this possibility at the time the program was debated and enacted.

The issue then was whether such entities would be eligible for the loans if they were part of foreign companies with a workforce that surpassed the PPP employee limits. The muddled guidance provided by the Trump Administration has apparently allowed funds to go to firms linked to foreign corporations that are far from small businesses.

Another concern has come to light as we match PPP recipients to the data my colleagues and I have assembled for our other database, Violation Tracker: some of these foreign companies getting PPP loans have a history of misconduct.

The U.S. operations of Jindal Group have paid more than $1.4 million in penalties, mostly resulting from workplace safety and health violations.

Continental Carbon has paid over $2 million in penalties, nearly all of which involved Clean Air Act violations. Giti Tire, Sekisui, and Asahi Forge have also paid penalties to OSHA and/or the EPA.

In 2007 Korean Air Lines had to pay a $300 million criminal fine to the U.S. Justice Department after pleading guilty to conspiring to fix the prices of passenger and cargo flights. In 2018 Hanjin Transportation Co. Ltd., also part of the Hanjin Group, paid more than $6 million to the Justice Department to resolve allegations relating to a bid-rigging conspiracy that targeted contracts to supply fuel to United States Army, Navy, Marine Corps, and Air Force bases in South Korea.

In creating the Paycheck Protection Program, Congress probably did not intend to provide assistance to entities that are owned by large foreign companies and that had a track record of repeated regulatory violations and other serious misconduct.

Now that there is consideration of extending and expanding PPP, the question is whether such companies will continue to benefit from the largesse of American taxpayers.

Double-Dipping by PPP Healthcare Loan Recipients

Healthcare providers have faced significant challenges during the pandemic, but it was still surprising to see that sector show up as the largest recipient of assistance under the Paycheck Protection Program. That’s because hospitals and other providers were already receiving tens of billions of dollars in federal aid from other CARES Act programs.

To the growing list of PPP defects we can add: double-dipping by healthcare recipients.

Take the case of Bronxcare, which operates a number of health facilities in New York City. Two of its units were revealed to have gotten PPP loans worth $2 to $5 million each (the amounts were disclosed as ranges). Previously, it received more than $100 million from the HHS Provider Relief Fund.

The Great Plains Health Alliance, a health system headquartered in Kansas, received seven PPP loans worth up to $11 million. Previously, it received more than $24 million in grants under the Provider Relief Fund as well as $16 million in expedited funds through the Medicare Accelerated and Advance Payment Program.  

The Erie County Medical Center in Buffalo, New York received a PPP loan worth between $5 million and $10 million after having received more than $40 million from the Provider Relief Fund and over $35 million in accelerated Medicare payments.

Bronxcare, Great Plains and Erie County Medical are all non-profits, but double-dipping can also be found among for-profit healthcare providers. Vibra Healthcare, which operates hospitals in 18 states, received at least 16 PPP loans worth between $24 million and $56 million. As ProPublica pointed out in its investigation of the company, Vibra applied for the loans in the names of numerous subsidiary LLCs rather than the parent company.

Zwanger-Pesiri Radiology, which operates imaging facilities in New York City and Long Island and received a PPP loan worth $2-$5 million, also received $4 million from the Provider Relief Fund and $9 million in accelerated Medicare payments.

Altogether, Covid Stimulus Watch contains data on more than 40 healthcare companies that got PPP loans as well as assistance from other CARES Act programs.

These overlaps are made more controversial by the fact that some of the double-dippers have checkered records when it comes to regulatory compliance, including issues relating to billing irregularities. For example, in 2016 Vibra Healthcare had to pay $32.7 million to resolve a federal False Claims Act case alleging that it billed Medicare for medically unnecessary services. In 2019 it paid $6.2 million to settle a Medicare fraud case.

In 2016 Zwanger-Pesiri paid $10.5 million to settle allegations that it billed Medicare and Medicaid for procedures that had not been ordered by physicians. Along with the usual civil allegations, the company pled guilty to two counts of criminal fraud.

In 2013 Erie County Medical Center paid $268,000 to the New York State Attorney General to resolve allegations of excessive Medicaid billing, and it paid $335,000 to the U.S. Labor Department for wage and hour violations.

The healthcare providers may have broken no rules in applying for PPP loans while also receiving assistance from other covid-related programs, but their ability to do so points to the need for the federal government to take a more coordinated approach to CARES Act assistance.

The fact that some of the double-dippers also have a history of misconduct—including cheating the same federal government now awarding them grants and loans—highlights the need for even greater scrutiny of recipients.

The Paycheck Protection Program and Wage Theft

The Trump Administration’s reluctant disclosure of the names of more than 600,000 recipients of Paycheck Protection Program aid has shown that many of the loans went to firms that are well-connected and that otherwise don’t fit the image of mom-and-pop businesses we were led to believe would be the main beneficiaries.

There is another problem: many of the recipients previously engaged in behavior that amounts to paycheck endangerment. They failed to comply with minimum wage and/or overtime requirements and thus paid their workers less than what they were owed. In other words, they engaged in wage theft.

This comes from an analysis of data my colleagues and I have collected for the Covid Stimulus Watch and Violation Tracker databases. That includes the big PPP dataset and information on penalties imposed by the Labor Department’s Wage and Hour Division, one of the many agencies whose enforcement data can be found in Violation Tracker.

We are in the process of determining which PPP recipients are on the list of wage and hour violators, so we can highlight that in Covid Stimulus Watch along with other corporate accountability data.

As a first step, I looked at the 4,800 companies identified as receiving the largest PPP loans–$5 million to $10 million. So far, I have found 88 of those recipients that paid wage theft penalties since 2010. Their penalties averaged about $100,000—which is roughly double the amount paid in back pay and fines in a typical wage and hour case.

The largest wage theft penalty I’ve found for a PPP recipient is the $1.9 million paid by Hutco Inc., a marine and shipyard staffing agency based in Louisiana. In announcing the penalty, the U.S. Department of Labor said the company had utilized improper pay and record-keeping practices, resulting in “systemic overtime violations” affecting more than 2,000 workers.

PPP recipient National Food Corporation, a major egg producer, paid $435,000 in penalties for wage and hour violations at its operations in Washington State. The company also paid $650,000 to settle a sexual harassment lawsuit filed by the Equal Employment Opportunity Commission.

Hearth Management, a PPP recipient that manages assisted living facilities in four states, paid a total of $383,000 in wage theft penalties at several locations. At a facility in Tennessee, the Labor Department reported that the company made deductions from timecards for meal breaks even when employees worked through those breaks, and it failed to include on-call and other non-discretionary supplements when calculating overtime rates.

Other PPP recipients with substantial wage theft penalties include the publisher O’Reilly Media, the electronics company Sierra Circuits, the restaurant chain Legal Sea Foods, and Erie County Medical Center in Buffalo, New York, which has also been penalized for overbilling Medicaid.  Apart from the PPP money, the Erie County Medical Center has received more than $75 million in grants and loans from other federal programs related to covid relief.

We will undoubtedly find many more companies with similar track records as we analyze the other hundreds of thousands of PPP recipients.

It was not illegal for employers with a history of wage theft penalties to apply for and receive PPP assistance, yet the presence of these companies in the recipient list points to dual risks.

First, there is the possibility that these firms will “cook the books” when it comes to reporting on their use of PPP funds and submitting their requests to have the loans forgiven. Second, these firms may feel that the current economic crisis will give them cover for returning to their old practices of wage theft. At a time of massive unemployment, these firms may assume that workers will not dare to complain about being shortchanged on their pay.

For these reasons, PPP employers with a history of wage theft penalties should be subject to additional scrutiny both by the Wage and Hour Division and the Small Business Administration. Paycheck protection must mean not only the preservation of jobs but also the defense of fair labor standards.

The Other Regulators

When it comes to business regulation, we tend to focus on federal agencies, which for the financial sector means the SEC, the CFPB, the Federal Reserve and the like. Yet there is another world of financial regulation at the state level, which at a time of weakening enforcement is more important than ever.

My colleagues and I at the Corporate Research Project have just completed a deep dive in this world for a major expansion of Violation Tracker. We collected enforcement data dating back to the beginning of 2000 for each state’s regulatory agencies dealing with banking, consumer finance, insurance and securities. In all, we created 15,000 entries with total penalties of more than $17 billion.

The number of cases and penalty amounts vary greatly from state to state. Among the more than 150 agencies we looked at, some disclosed hundreds of successful enforcement actions while others reported a few dozen. Some states are active in one of the areas we examined and weak in others.

The state that has by far collected the most in overall penalties is New York, whose total is more than $11 billion. Its Department of Financial Services has gone after the world’s biggest financial institutions and has won major settlements such as the $2.2 billion paid by the French bank BNP Paribas for violating international economic sanctions and the $715 million paid by the Swiss bank Credit Suisse for facilitating tax evasion.

California is second in penalties at just over $1 billion but far ahead in the number of cases. Its financial regulatory agencies have carried out more than 2,000 successful actions. Their biggest settlement was the $225 million paid in 2017 by Ocwen Loan Servicing for mortgage abuses.

Three other states have collected more than $100 million in penalties: Arizona ($665 million in 488 cases), Texas ($632 million in 1,097 cases) and New Jersey ($339 million in 398 cases).

If we focus on the area of insurance, in which the states have pretty much exclusive jurisdiction, the largest number of penalties of $5,000 or more were found in California (1,475), Texas (950) and Virginia (633). Yet in terms of total penalty dollars, New York was first with $808 million, followed by Texas ($617 million) and California ($541 million).

We also identified more than 100 cases in which regulators from different states brought cases jointly. These actions are similar to the multi-state attorneys general cases we analyzed in our Bipartisan Crime Fighting by the States report published in September 2019.

The cases brought by groups of state insurance and securities regulators have yielded about $2 billion in penalties since 2000. The companies that have paid the most in penalties in these cases are: Citigroup ($251 million), American International Group ($204 million), Bank of America ($201 million) and the Swiss bank UBS ($179 million). 

Looking at both single-state and multi-state actions in banking, insurance and securities combined, the companies that have paid the most in total penalties turn out to be the big foreign banks, which account for every spot in the top ten. That New York sanctions case puts BNP Paribas on top with more than $2 billion, followed by Deutsche Bank and Credit Suisse.

The U.S. companies with the largest overall penalty totals are State Farm Insurance ($368 million), UnitedHealth Group ($354 million), Citigroup ($295 million), American International Group ($275 million) and MetLife ($263 million).  

With the addition of the state financial cases, Violation Tracker now contains 437,000 cases with total penalties of $627 billion imposed by more than 50 federal and 200 state and local agencies.

Crime Without Real Punishment

The absurdity of the corporate system of justice was on full view this week when the chief executive of Pacific Gas & Electric stood in a California courtroom and pled guilty to 84 counts of manslaughter in connection with a 2018 forest fire blamed on the utility’s faulty maintenance of transmission lines.

The CEO, Bill Johnson, was not personally pleading guilty to the crimes. He was appearing as a representative of the corporation, which was charged with the offenses and which agreed to pay the statutory maximum monetary penalty of $3.48 million—or around $40,000 per victim.

Since no executive of the company was charged and since a corporation cannot be put behind bars, no one is paying a real penalty in this case. That, unfortunately, is the norm for almost all matters of corporate misconduct.

Usually, however, a hefty monetary penalty takes the place of imprisonment. PG&E is not even facing that limited form of punishment to a meaningful degree in the immediate case, though it was separately pressured to create a $13 billion fund to compensate victims of the Camp Fire.

It is difficult to see the PG&E case as anything more than a symbolic gesture. It leaves open the question of what would be an appropriate way to deal with egregious corporate misconduct.

For a while it appeared that the utility might face serious consequences after Gov. Gavin Newsom raised the possibility of a state takeover. It now appears Newsom was simply using that threat as leverage to get PG&E to make some changes to its operations. Those changes are unlikely to be adequate for a company with such a poor track record.

Converting PG&E from an investor-owned utility into a customer-owned cooperative, as some California officials suggested, would accomplish much more. Skimping on maintenance to bolster quarterly profits would likely become a thing of the past under such an arrangement.

Such a conversion would in effect be a “death penalty” sentence for the existing PG&E. But instead of putting the company out of business, it would resurrect it in a new, more accountable form.

This is actually not a very radical idea. There are already many community-owned utilities across the United States. They even have their own trade association, the American Public Power Association. There are also many cooperative utilities. Even the federal government is involved through entities such as the Tennessee Valley Authority.

Yet these forms of public power have never represented more than a slice of the industry, which instead has been dominated by large investor-owned utilities whose clout was supposed to be kept in check by strict regulatory oversight, especially at the state level.

PG&E is a prime example of the failure of that oversight. Perhaps it is now time to return to the idea of regarding access to energy, like healthcare, as a right rather than a product.

The Real Law and Order Problem

Donald Trump’s bombastic campaign to restore law and order is focusing on minor crimes like vandalism while allowing much more serious corporate offenses to go unaddressed. Federal agencies such as OSHA are failing to fulfill their regulatory responsibilities, putting lives at risk.

Not only is the government failing to crack down on business miscreants — in some cases it is using tax dollars to give them grants and loans to weather the pandemic-generated economic crisis.

These are not just companies involved in civil infractions but also some that have faced actual criminal charges, which are rarely used against corporations.

So far, the limited information released by the Administration on the recipients of CARES Act assistance has involved two main groups: hospitals and other healthcare providers, and airlines and air cargo companies. Even within this limited universe we can find firms that have been embroiled in criminal cases.

One example is National Air Cargo Group, which recently received a grant of more than $15 million through the Payroll Support Program.  In 2008 the company had to pay $28 million to resolve criminal and civil allegations that it defrauded the Defense Department when billing for air freight services. As part of the resolution, National Air Cargo pled guilty to one count of making a material misstatement to the federal government and paid more than $16 million in criminal fines and restitution (the rest of the penalty total involved the civil portion of the case).

Among the healthcare providers there is the case of WakeMed Health & Hospitals, which is receiving more than $22 million from the CARES Act Provider Relief Fund. In 2012 it had to pay $8 million to settle criminal and civil allegations that it used more costly in-patient rates when billing Medicare for services that were actually performed on an out-patient basis. The non-profit health system was offered a deferred prosecution agreement but it had to admit to the wrongdoing.

Criminal cases can also be found among the larger corporations receiving covid-related aid. Take the case of the for-profit hospital chain Tenet Healthcare, which is getting more than $300 million from the Provider Relief Fund. In 2016 Tenet and two of its subsidiaries had to pay more than half a billion dollars to resolve criminal charges and civil claims relating to a scheme to defraud the federal government and to pay kickbacks in exchange for patient referrals. Tenet got a non-prosecution agreement while the subsidiaries pled guilty to conspiracy to defraud the United States and paying health care kickbacks and bribes in violation of the Anti-Kickback Statute.

In other words, the federal government is currently paying out hundreds of millions of dollars in aid to companies that have been implicated in criminal schemes to cheat that very same government.

The most odious abuses in the American justice system involve disparate treatment based on race, but there are also serious flaws in the way corporate offenders can so easily buy their way out of serious legal jeopardy. Allowing those offenders to receive federal aid is compounding the abuse.

The Battle Over Covid Safety on the Job

As the country reaches the sorrowful milestone of 100,000 dead from covid-19, there is much discussion of the unequal distribution of fatalities around the country. Instead of focusing only on which cities lost the most lives, we should also be analyzing what portion of the deaths occurred in the workplace. The latter is part of one of the biggest scandals of the pandemic: the extent to which employers are being allowed to put workers in high-risk situations, with little or no intervention from health and safety regulators.

Since the coronavirus crisis began, we have seen contradictory tendencies when it comes to at-risk workers. There has been an enormous amount of justified praise for front-line nurses, doctors, EMTs and others who have been helping covid patients. The nightly applause and other demonstrations of appreciation are important affirmations of the vital role these workers play.

Their efforts are all the more heroic in that most of these workers readily accepted the risk, seeing it as part of their professional responsibility to help those in need, despite the circumstances.

Potentially fatal workplace risk becomes a trickier matter for other occupations not usually regarded as hazardous. Prior to the pandemic, no one ever took a job in a supermarket expecting to put his or her life on the line. Warehouse and factory jobs have had higher accident rates, but in most cases they were still not viewed as deadly environments.

Now the calculus of workplace safety has become a lot more complicated, and the situation is being exacerbated by the Occupational Safety and Health Administration’s abdication of its watchdog role. OSHA is performing very few covid-related inspections and reportedly has not proposed a single penalty against an employer.

The agency has claimed it plans to increase inspections, and it put out a statement affirming that employers are responsible for recording coronavirus illnesses among its workers. Yet it is unclear whether that data collection will have any enforcement consequences. The agency’s announcement states: “Recording a coronavirus illness does not mean that the employer has violated any OSHA standard. Following existing regulations, employers with 10 or fewer employees and certain employers in low hazard industries have no recording obligations; they need only report work-related coronavirus illnesses that result in a fatality or an employee’s in-patient hospitalization, amputation, or loss of an eye.”

Perhaps the most disturbing workplace safety situation involves the country’s meatpacking plants, which have seen some of the worst clusters of covid-19. The Trump Administration, after resisting calls to make full use of the Defense Production Act to address the crisis regarding masks and ventilators, chose to invoke the law to compel meat plants to open even before the outbreaks were brought under control.  

Rarely has a President made it so clear that the he was giving the well-being of workers lower priority than the desire to stimulate economic activity. What made things worse in this case was that the stimulus took the form of increasing the nation’s supply of ground beef and bacon strips.

In the decades following the creation of OSHA, annual workplace deaths sharply declined from around 17 per 100,000 employees to around 4 per 100,000. The Trump Administration’s two-pronged attack on safety threatens to reverse that trend.

There are already signs that people are resisting. We’ve seen increased militancy over safety at places such as Amazon.com distribution centers, and we’ve seen the filing of a class action lawsuit against McDonald’s. Widespread work stoppages are possible. One way or another, workers will defend their right to safety on the job.

Corporate America Wants Its Own Immunity Passport

It is unclear at the moment whether Mitch McConnell and other Congressional Republicans are backing off their demand that corporations be given protection from covid-19 lawsuits — or if they are maneuvering behind the scenes in favor of the proposal.

What I find amazing is that business lobbyists and their GOP supporters think they can sell the country on the idea, which would be a brazen giveaway to corporate interests.

There are numerous compelling arguments against immunity, but I want to focus on one: the track records of corporations themselves. Proponents of a liability shield imply that large companies normally act in good faith and that any coronavirus-related litigation would be penalizing them for conditions outside their control. These lawsuits, they suggest, would be frivolous or unfair.

This depiction of large companies as innocent victims of unscrupulous trial lawyers is a long-standing fiction that business lobbyists have used in promoting “tort reform,” the polite term for the effort to limit the ability of victims of corporate misconduct to seek redress through the civil justice system. That campaign has not been more successful because most people realize that corporate negligence is a real thing.

In fact, some of the industries that are pushing the hardest for immunity are ones that have terrible records when it comes to regulatory compliance. Take nursing homes, which have already received a form of covid immunity from New York State.

That business includes the likes of Kindred Healthcare, which has had to pay out more than $350 million in fines and settlements.  The bulk of that amount has come from cases in which Kindred and its subsidiaries were accused of violating the False Claims Act by submitting inaccurate or improper bills to Medicare and Medicaid. Another $40 million has come from wage and hour fines and settlements.

Kindred has also been fined more than $4 million for deficiencies in its operations. This includes more than $3 million it paid to settle a case brought by the Kentucky Attorney General over issues such as “untreated or delayed treatment of infections leading to sepsis.”

Or consider the meatpacking industry, which has experienced severe outbreaks yet is keeping many facilities open. This sector includes companies such as WH Group, the Chinese firm that has acquired well-known businesses such as Smithfield. WH Group’s operations have paid a total of $137 million in penalties from large environmental settlements as well as dozens of workplace safety violations.

Similar examples can be found throughout the economy. Every large corporation is, to at least some extent, a scofflaw when it comes to employment, environmental and consumer protection issues. There is no reason to think this will change during the pandemic. In fact, companies may respond to a difficult business climate by cutting even more corners.

The two ways such misconduct can be kept in check are regulatory enforcement and litigation. We have an administration that believes regulation is an evil to be eradicated.

This makes the civil justice system all the more important, yet business lobbyists and their Congressional allies are trying to move the country in exactly the opposite direction. They want to liberate big business from any form of accountability, giving it what amounts to an immunity passport. Heaven help us if they succeed.