Dirt Diggers Digest

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.

Rescuing the Cheaters

The federal government has been sending tens of billions of dollars in aid to the country’s hospitals under the Provider Relief Fund created by the CARES Act. That’s all well and good. Yet there is an awkward aspect to this: quite a few of the recipients have been accused of cheating the federal government in the past.

I’ve been working closely with the relief fund data in recent days, in order to prepare it for uploading to Covid Stimulus Watch. I’ve noticed that numerous recipients are hospital chains that have been involved in cases brought under the False Claims Act (FCA), the law that is widely used by the federal government to go after healthcare providers and contractors for billing irregularities or other improprieties in their dealings with Uncle Sam.

Matching the Provider Relief Fund recipients to the FCA data my colleagues and I have collected for Violation Tracker, I found more than 100 overlaps for the period extending back to 2010. These include both for-profit and non-profit hospital systems.

The company that has received the most from the basic Provider Relief Fund (there is a separate set of awards to hospitals that have treated large numbers of covid patients) is also the hospital chain that has paid the most in FCA penalties over the past decade: Tenet Healthcare.

In 2016 Tenet and two of its subsidiaries had to pay over $513 million to resolve criminal charges and civil claims relating to a scheme to defraud the United States and to pay kickbacks in exchange for patient referrals. The subsidiaries pled guilty to conspiracy charges.

Community Health Systems, another big for-profit hospital chain participating in the relief fund, has been involved in ten different FCA controversies over the past decade. In 2018 one of its subsidiaries had to pay $260 million to resolve criminal charges and civil claims that it knowingly billed government health care programs for inpatient services that should have been billed as outpatient or observation services; paid remuneration to physicians in return for patient referrals; and submitted inflated claims for emergency department facility fees.

Among the non-profit relief fund recipients with FCA problems is Michigan-based Beaumont Health, one of whose hospitals had to pay $84 million in 2018 to resolve allegations that it made payments to referring physicians that violated the Anti-Kickback Act as well as the FCA.

CommonSpirit Health, the large Catholic health system, has numerous affiliates receiving relief funds that have faced FCA allegations. For example, in 2014 Dignity Health had to pay $37 million to resolve allegations that 13 of its hospitals in California, Nevada and Arizona knowingly submitted false claims to Medicare and TRICARE by admitting patients who could have been treated on a less costly, outpatient basis.

Altogether, at least 103 health systems whose facilities are participating in the relief fund have paid more than $4 billion in False Claims Act settlements and fines over the past decade.

Given the magnitude of the covid crisis, it would be difficult to argue that these providers should be denied assistance. Yet there should at least be additional safeguards put in place to make sure that they do not engage in similar transgressions when it comes to CARES Act funds.

Note: A list of companies receiving $500,000 or more from the Provider Relief Fund can be found here. A list of recipients of the high-impact awards can be found here.

Should Taxpayers Aid Corporate Bad Actors?

The uproar over the participation of larger companies in the Paycheck Protection Program is a sign that the country will increasingly confront a broader issue about the massive Covid-19 relief effort: does every company deserve assistance during a crisis that affects all parts of the economy?

Apart from the issue of size, there is the question of behavior—that is, should a company with a track record of bad conduct be eligible for large amounts of taxpayer-funded aid?

This issue is behind the decision my colleagues and I made to create Covid Stimulus Watch, a website that combines available company recipient data with information on the accountability records of the corporations getting the aid. Much of the latter consists of penalty data we have previously collected for our Violation Tracker database. We also added data on issues such and tax avoidance and CEO pay.

So far, we know the recipients of only about 400 grant and loans, mostly PPP awards that publicly traded firms have disclosed in SEC filings. Yet there are already signs that corporate bad actors are getting assistance.

I took a close look at the executive compensation data we collected. In their documents known as proxy statements, firms are required to disclose how much their chief executive is paid and calculate the ratio of that compensation to the median pay of the company’s workforce, which is also disclosed. Smaller companies can opt out of the requirement to reveal median worker pay and the ratio.

Among the publicly traded firms that have disclosed PPP awards, five reported paying their typical worker an amount below the federal poverty level for a family of four ($26,200). These included three with active loans: Drive Shack ($13,902), Applied Opto-Electronics ($15,620) and Trans World Entertainment Corporation ($17,346). The two others are among the larger firms that are returning their loans in response to public pressure: Fiesta Restaurant Group ($14,241) and Shake Shack ($17,032).

The restaurant employers tend to complain in their proxies that they have to include part-timers in their calculations, while Applied Opto-Electronics tries to downplay its low figure by noting that it includes employees in China and Taiwan. The company provides a separate figure for U.S. workers only — $43,427 — which is still below the national median income level.

Many of the low-wage employers are much more generous when it comes to CEO pay. Drive Shack, for instance, paid its CEO more than $7 million, which is more than 500 times what the median employee received.

Problematic corporate recipients can be found in other covid stimulus program. Take the Higher Education Emergency Relief Fund. There was a great deal of criticism among Republicans, including Trump, over the fact that Harvard University, with its immense endowment, was participating in the program.

Yet, it turns out that for-profit colleges are also among those institutions getting aid. Looking through the list published by the Department of Education, I found 11 awards going to the likes of the University of Phoenix, owned by the Apollo Education Group, and Chamberlain University, owned by Adtalem Global Education. The largest amount I found (looking only at the maximum portion schools are allowed to use for institutional costs) was $11.2 million going to Grand Canyon Education Inc.

This industry has been embroiled in numerous scandals based on allegations of unfair and deceptive practices, especially that of luring students with deceptive claims about the value of the degrees they offered. For example, Perdoceo Education Corporation, the parent of two schools receiving the stimulus aid, used to be known as Career Education Corp., which in 2019 had to pay $493 million to resolve fraud allegations by state attorneys general.

Or consider the Provider Relief Fund set up by the Department of Health and Human Services. Those providers include for-profit hospital chains such as Tenet Healthcare, which has reported receiving $370 million so far from the fund. Tenet has had to pay out hundreds of millions of dollars to resolve regulatory violations and False Claims Act cases brought by the Justice Department, including a 2016 settlement in which the company paid $513 million and two of its subsidiaries pleaded guilty to criminal charges relating to bribes and kickbacks.

We are thus left with the question of whether companies that pay poverty-level wages, have excessive CEO compensation levels, routinely cheat their customers or plead guilty to criminal bribery charges should qualify for aid amid a pandemic. There is no easy answer.

The executives of those firms may not deserve help, but lower-level employees should not suffer because of the sins of their bosses. The solution might be to attach some strings to the aid they receive, requiring them, for example, to pay a living wage and to deal honestly with their customers and the government. Failure to adhere to those provisions should trigger an obligation to refund all the aid and other serious consequences.

Getting such a system enacted would be a longshot, and even if it happened, an administration like the current one could undermine it with weak enforcement. Yet it is worth imaging how well-structured covid stimulus programs might not only provide relief from the effects of the pandemic but also promote better corporate behavior now and in the future.

Introducing Covid Stimulus Watch

The furor over some of the companies receiving federal financial assistance through the Paycheck Protection Program represents one of the most remarkable outbursts of anti-corporate sentiment seen for quite some time. A corporation such as Shake Shack, which used to have a cult following, found itself vilified for getting a $10 million loan from a program the public assumed would be used to help mom-and-pop businesses rather than a fast casual chain that last year had revenues of more than half a billion dollars.

I’s not just a matter of big versus small. Journalists have pounced on the disclosures of the PPP loans—which have come from SEC filings rather than the federal government—to look for examples of problem companies on the list. One of the best examples, by the New York Times, found all kinds of corporate bad actors getting the loans.

A new website my colleagues and I at Good Jobs First have just launched will make it even easier to pursue this kind of research. Covid Stimulus Watch combines available recipient data for the PPP — as well as the Payroll Support Program, which has doled out billions to the airlines – with accountability data about the companies.

The accountability data comes in six categories. Four of those are derived from data in Violation Tracker: employment-related penalties (such as wage theft and workplace discrimination); government-contracting related penalties (mainly False Claims Act cases); environmental, healthcare and safety penalties; and consumer protection, financial misconduct and unfair competition penalties.

The fifth category, relating to taxes and subsidies, shows which large companies have paid very low federal income tax rates and which have received large amounts of pre-pandemic financial assistance from federal, state and local programs, such as those shown in Subsidy Tracker. The final category shows which recipient companies have high levels of executive compensation, especially in comparison to what they pay a typical worker.

The limited set of recipients currently listed in Covid Stimulus Watch already illustrate the accountability issues at stake. For example, the major airlines that are receiving billions of dollars in aid raise concerns in multiple categories. United has paid out over $40 million to settle employment discrimination lawsuits. American Airlines has paid over $70 million in safety violations. JetBlue and Delta had negative federal income tax rates in 2018. The ratio of the pay of American’s CEO to that of its median employee was 195 to 1.

Concerning data can also be seen about some of the smaller recipients. One PPP recipient, Veritone Inc., paid its CEO $18 million in compensation. Another PPP company, FuelCell Energy, received more than $170 million in federal grants prior to the pandemic.

The data in Covid Stimulus Watch will hopefully fuel even more debate over which corporations deserve to be rescued by taxpayers.

Corporate-Owned Nursing Homes and Covid-19

It was only a few days ago that the Centers for Medicare and Medicaid Services announced that nursing homes will be required to notify residents and their families when coronavirus cases have been discovered in a facility. This comes many weeks after the Life Care Center in Kirkland, Washington became an early Covid-19 hotspot and deaths started mounting at other nursing homes across the country.

Even before the pandemic began, conditions in the nation’s roughly 15,000 nursing homes, which house some 1.5 million residents, were far from ideal. As a Washington Post investigation recently found, about 40 percent of nursing homes with publicly reported cases of coronavirus — the list of which is far from complete, given varying transparency practices among the states — had been previously cited by government inspectors for violating regulations meant to control the spread of infections. This made them all the more susceptible to coronavirus.

The blame for that poor track record rests to a significant degree with the large corporations, including private equity firms, that control a substantial portion of the country’s nursing homes. While the Washington Post story did not identify the parent companies of the facilities with reported Covid-19 cases, the data in Violation Tracker shows the compliance problems at those corporations.

The nursing home chain with the largest amount of total penalties is 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.

Golden Living Centers, a large chain owned by the private equity firm Fillmore Capital Partners, accounts for more than $200 million in fines and settlements. Golden Living is the current incarnation of Beverly Enterprises, which in the 1990s was the poster child of nursing home misconduct. In 2000 it paid $170 million to settle allegations that it defrauded Medicare by fabricating records to make it appear that staff members were devoting much more time to residents than they actually were.

Golden Living and Beverly have also paid more than $6 million in fines arising out of inspections of their facilities, including $1.5 million paid to the Arkansas Attorney General to resolve allegations of patient neglect.

Another chain with a problematic track record is Life Care Centers of America, operator of the ill-fated facility in Kirkland. The company has paid more than $147 million in fines and settlements, most of which came from a False Claims Act case in which it was accused of improperly billing Medicare for rehabilitation services.

The company has also paid more than $2 million in fines stemming from inspections, including $467,985 for nursing homes in Washington State. Life Care facilities appear numerous times on the Washington Post list of facilities with reported coronavirus cases.

Other chains with substantial penalty totals include Genesis HealthCare ($57 million), Ensign Group ($48 million) and National Healthcare Corp. ($28 million).

Among the many problems that have been brought into sharp relief by Covid-19 — and that will have to be addressed once we have gotten through the pandemic – is the sorry state of our nursing homes, too many of which seem to put profit ahead of safety for one of the most vulnerable parts of our population.

Relying on Drug Companies With Flawed Safety Records to Save Us from Covid-19

Among the many things that have changed drastically in the past few months is the public perception of the pharmaceutical industry. At the beginning of the year, the main news about Big Pharma was the possibility of a multi-billion-dollar opioid settlement with the states.

Now, rather than being held accountable for tens of thousands of overdose deaths, the industry is being hailed as our savior from Covid-19. The news is filled with laudatory stories about the efforts of the drug companies to come up with a treatment for those currently suffering from the virus and a vaccine that may be the only way for society to return to something approximating normal.

Of course, everyone wants these efforts to succeed, but we shouldn’t ignore the very checkered track record of the industry. The safety portion of that record suggests that pushing for extremely rapid results may be risky.

The pharmaceutical industry’s safety problems date back at least to the 1930s, when a company called S.E. Massengill introduced a liquid antibiotic without testing and the drug turned out to cause fatal kidney damage. In the 1950s Parke-Davis heavily promoted a typhoid drug for less serious ailments until it emerged that users were developing severe and irreversible anemia. During the same period, thousands of children around the world were born with birth defects after their mothers took the morning-sickness drug thalidomide during pregnancy.

Sometimes these scandals involved vaccines. In the mid-1950s a California company called Cutter Laboratories produced large stocks of the new polio vaccine that mistakenly contained the live virus. Scores of children who received the vaccine developed polio.

Defenders of the pharmaceutical industry will claim that safety practices are much more stringent these days. But consider the recent history of Johnson & Johnson, which is one of the companies actively pursuing a coronavirus vaccine.

J&J, whose baby products long enjoyed a reputation for purity, has in the past two decades been implicated in a seemingly endless series of controversies about product safety and the illegal marketing of drugs for uses not approved as safe by the Food and Drug Administration.

Some of the company’s problems stemmed from faulty production practices. During 2009 and 2010 J&J had to announce around a dozen recalls of medications, contact lenses and hip implants. The most serious of these was the massive recall of liquid Tylenol and Motrin for infants and children after batches of the medications were found to be contaminated with metal particles.

in 2013 Advanced Sterilization Products, a division of J&J subsidiary Ethicon Inc., had to pay $1.2 million to settle FDA allegations that it had produced and distributed adulterated and misbranded sterilization monitoring products.

Other major companies in the coronavirus vaccine race have been involved in their own controversies. In 2012 GlaxoSmithKline, which is partnering with Sanofi in its vaccine effort, had to pay $3 billion to settle various criminal and civil charges, among which were allegations that the company withheld data on safety problems with its diabetes drug Avandia from the FDA.

Pfizer, which is working with a smaller company called BioNTech, has had safety problems dating back to the 1980s, when defective heart valves made by its Shiley division caused the death of more than 100 people. An FDA task force concluded that the company had withheld crucial safety information.

We are all desperate for drugs to treat and prevent coronavirus, but we should make sure that the urgency of the situation does not lead to safety shortcuts that can have disastrous consequences.

Trump’s Risky Covid-19 Infomercials

Donald Trump has declared himself a wartime president, but in many of his briefings these days he comes across more as one of those hucksters of late-night television touting miracle cures. He relentlessly promotes the anti-malaria drug hydroxychloroquine as a treatment for Covid-19, even though it has not been proven safe or effective for that purpose. “What do you have to lose?” Trump keeps saying, ignoring evidence that the drug can have serious cardiac side effects.

It is understandable that those suffering from coronavirus disease may be willing to try anything to survive, and some doctors are treating seriously ill patients with hydroxychloroquine as a last-ditch measure. There are also clinical trials under way to see if the drug really does work against Covid-19. But all that is entirely different from the president’s using the White House podium to suggest that everyone should try the medication as if it were a new brand of mouthwash.

Not only is that dangerous – Trump’s comments have caused a run on the drug that has affected those who need it to treat diseases such as lupus and rheumatoid arthritis – but it also stands in contradiction to several decades of efforts to discourage widespread promotion of prescription drugs for uses not approved by the Food and Drug Administration.

Data in Violation Tracker show that over the past two decades pharmaceutical companies have paid out more than $20 billion in fines and settlements to resolve Justice Department, FDA and state attorneys general cases involving the improper marketing of drugs. These include three dozen cases in which the penalty amount exceeded $100 million and five in which the amount was more than $1 billion.

The largest single penalty of this kind was the $3 billion paid by GlaxoSmithKline in 2012 for off-label promotion of drugs such as the anti-depressant Paxil as well as its failure to report certain safety data. In 2009 Pfizer and its subsidiary Pharmacia & Upjohn agreed to pay $2.3 billion to resolve allegations that they illegally promoted drugs such as the anti-inflammatory Bextra.

In 2013 Johnson & Johnson and several subsidiaries paid $2.2 billion in criminal fines and civil settlements to resolve allegations they had marketed the anti-psychotic medication Risperdal and other drugs for unapproved uses as well as allegations that they had paid kickbacks to physicians and pharmacists to encourage off-label usage. At a press conference announcing the resolution of the case, U.S. Attorney General Eric Holder said the company’s practices ”recklessly put at risk the health of some of the most vulnerable members of our society — including young children, the elderly and the disabled.”

In the current situation, it is an elected leader rather than a drug maker doing the improper promotion, but a corporation — the French firm Sanofi, which produces hydroxychloroquine under the brand name Plaquenil – stands to benefit. As a result of Trump’s hype, a sleepy product dating back to the 1950s, is now the most sought-after pharmaceutical on the planet.

Sanofi is being cautious, stating on its website that Plaquenil “can cause serious adverse reactions and should not be taken without medical prescription or advice,” adding that it has not been approved for use in Covid-19 patients. Yet the site goes right on to state: “According to some preliminary results from independent pilot studies, hydroxychloroquine was reported as having a potential anti-viral effect on the virus that causes COVID-19.”

Other companies such as Amneal Pharmaceuticals, which produces a generic version of hydroxychloroquine, may have their own pot of gold. The company has ramped up production of the drug and has generated good p.r. by donating a quantity of the medication to the state of Texas.

The risk here is that Trump’s unbridled advocacy for the drug will steamroll the FDA into opening the floodgates and making it available not just to the desperately ill, but also to millions of others who have a mild form of the disease or are not infected at all. And we may never know for sure if those millions benefited from the medication or were needlessly exposed to cardiac and other risks.

The Rap Sheets of the Big Ventilator Producers

Earlier this year, the U.S. Attorney’s Office in South Carolina announced that a company called ResMed had agreed to pay more than $37 million to settle allegations under the False Claims Act that it illegally paid kickbacks to promote sales of equipment used to treat sleep apnea.

The case did not receive much attention at the time, but ResMed, which also produces ventilators, is now one of the companies involved in the controversy over the distribution of equipment that hospitals desperately need to save lives during the coronavirus pandemic.

New York Gov. Andrew Cuomo and other state chief executives have been complaining about price-gouging and shipments that fail to materialize, as health systems across the country compete for a woefully inadequate supply of ventilators, some of which have reportedly been exported.

This apparent profiteering should come as no surprise, given the track record of the ventilator industry, in which ResMed is not the only producer with a history of alleged misconduct. In fact, all the big publicly traded companies in the industry have paid millions of dollars in penalties in False Claims Act, kickback and bribery cases. Along with ResMed, they are Philips, General Electric, Hill-Rom, and Medtronic.

In 2016 a Philips subsidiary called Respironics agreed to pay $34.8 million to settle allegations similar to those faced by ResMed involving the payment of kickbacks to suppliers for the purchase of sleep apnea equipment. In 2013 the Securities and Exchange Commission ordered Philips to pay $4.5 million for violations of the Foreign Corrupt Practices Act stemming from improper payments to healthcare officials in Poland.

In 2011 GE Healthcare agreed to pay $30 million to settle False Claims Act allegations that a subsidiary caused Medicare to overpay for a radiopharmaceutical used in certain cardiac diagnostic imaging procedures by giving the federal government false or misleading information about doses.

Also in 2011 Hill-Rom agreed to pay $41.8 million to settle allegations that for years it knowingly submitted numerous and repeated false claims to the Medicare program for certain specialized medical equipment – bed support surfaces for treatment of pressure ulcers or bed sores – for patients for whom the equipment was not medically necessary.

Since 2006 Medtronic and its subsidiaries have paid more than $160 million in penalties in eight False Claims Act cases. The largest of these was a $75 million settlement agreed to by Medtronic Spine to resolve allegations that its marketing activities caused hospitals to submit false claims for kyphoplasty procedures, minimally-invasive surgeries used to treat compression fractures of the spine caused by osteoporosis, cancer or benign lesions.

Along with the False Claims Act cases, which are civil matters, a Medtronic subsidiary agreed to plead guilty and pay more than $17 million in 2018 to resolve a criminal charge that it promoted a neurovascular device for uses that were not approved by the FDA and were potentially dangerous.

It is true that none of these cases involved mechanical ventilators, but they do suggest something about ethical practices at the five companies. These are corporations accused of putting their own financial interests ahead of those of the federal government and thus the taxpayers. One of them has a subsidiary that is literally a corporate criminal.

The coronavirus crisis is exposing many vulnerabilities of U.S. society. Among them is that the survival of many thousands of people now depends in large part on the behavior of a group of companies that have been something less than model corporate citizens.

This makes it all the more scandalous that the Trump Administration refuses to make full use of the Defense Production Act to end profiteering in the ventilator industry and force it to serve the needs of the country during this national emergency.

Bailouts and Bad Actors

The $500 billion business rescue provision of the coronavirus relief bill will be less of a slush fund than originally envisioned, thanks to the addition of some significant safeguards such as the creation of a special inspector general and a Congressional oversight commission.

There has also been a welcome move toward transparency through a requirement that the Treasury Secretary post details on each loan, loan guarantee or other form of assistance soon after the award is made.

Yet there is one risk the bill does not address: the possibility that among the companies sharing in the federal government’s largesse will be regulatory scofflaws and other corporate bad actors.

There are some notable precedents for such an outcome. The Troubled Asset Relief Program, in fact, was largely an effort to bail out the financial institutions whose misconduct to a great extent caused the meltdown of 2008. The biggest TARP recipient, with $67 billion in support from the Treasury Department, was American International Group, which had sold large quantities of risky credit default swaps. Other giant banks that helped generate toxic securities were also high on the TARP loan list, including Bank of America and Citigroup ($45 billion each) as well as JPMorgan Chase and Wells Fargo ($25 billion each).

Along with the TARP loans, these banks also benefitted from massive liquidity programs implemented by the Federal Reserve and the Federal Deposit Insurance Corporation. The data available on these programs, which include lots of short-term loans that were frequently rolled over, add up to more than $3 trillion for Bank of America and $2 billion each for Citigroup and Morgan Stanley.

On top of all this, banks received what amounted to subsidies — $435 million in the case of JPMorgan Chase – through incentives provided to mortgage servicers under the Home Affordable Modification Program.

It was unavoidable that the TARP program, designed to rescue the whole financial system, would end up assisting bad actors. The problem is that those corporations continued to exhibit anti-social behavior after being bailed out.

Consulting the data in Violation Tracker, we see that since 2010, Bank of America has paid more than $63 billion in penalties. Much of this stems from lawsuits linked to the period leading up to the financial crisis, including those brought against companies purchased by BofA, especially Merrill Lynch and the predatory home lender Countrywide Financial.

Yet BofA also got in new trouble of its own. For instance, in 2014 it was ordered by the Consumer Financial Protection Bureau to provide $727 million in relief to credit card customers who had been charged for services they were not receiving.

Since 2010 Citigroup has paid more than $16 billion in penalties. Here, too, much of that total relates to cases stemming from the crisis – but not all. In 2015 it, along with other major U.S. and European banks, pled guilty to conspiring to manipulate the foreign exchange market. Citi’s penalty was $925 million.

And then there’s the case of Wells Fargo, which in the years after getting bailed out, has become a poster child for corporate irresponsibility as a result of its brazen sham-account scandal and other controversies.

Some of the bank misconduct of recent years could have been prevented if the federal government retained the equity stakes it took in TARP recipients while the loans were in effect. In the case of AIG the government had taken control of about 80 percent of the company. Smaller stakes were taken in other recipients.

The government used those stakes mainly to make sure that the loans were repaid, and in the end the feds made a profit on TARP. Yet those ownership interests could also have been used to retain a measure of influence over corporate governance and decision-making on issues relating to regulatory compliance and overall good behavior.

This approach could also apply to the coronavirus relief package, which seems to allow for the possibility that the federal government will take equity stakes in corporations that receive large amounts of financial assistance.

Now as in 2008, Congress cannot avoid providing assistance to bad actors, since doing so would harm employees at those firms. Yet it could use equity holdings to discourage corporations from resuming their bad behavior after we get through the pandemic.

Note: Data on the companies that received TARP bailout loans and liquidity assistance from the Fed and the FDIC can be found on this new Subsidy Tracker page, which also contains a list of corporate recipients of Recovery Act grants, loans and tax credits. Data on the misconduct of these and other companies can be found in Violation Tracker.

A Pandemic Is No Time to Dismantle Regulatory Safeguards

As much of the economy melts down amid the coronavirus pandemic, many large corporations are lining up for financial bailouts from the federal government. Assuming the right safeguards are put in place, these payments may be justified. Yet there is a risk that big business may also seek another kind of assistance whose benefit is more dubious: relief from regulations.

Some loosening of restrictions make sense in a crisis, and federal regulators are already taking steps to address immediate needs. The FDA is changing rules so that private labs and state health departments can more readily use covid-19 tests developed outside of the agency. HHS is allowing healthcare providers to bill Medicare for telemedicine sessions.

Those are the no-brainers. But what about the decision by the Federal Motor Carrier Safety Administration to relax restrictions on truck driver hours for those making emergency deliveries? Do we want sleepy drivers on the road, even if they are doing essential work?

And then there are the calls from big banks for lower capital requirements and the easing of periodic stress tests. The point of those requirements is to make sure banks are in a position to weather a downturn. Relaxing the rules is something the big banks were urging well before the pandemic, and their push now may be little more than an effort to exploit the crisis.

We are likely to see more calls for regulatory easing both from corporations and from Trump Administration agencies such as the EPA that have already been trying to undermine existing safeguards.

There is also a debate on whether regulatory rulemaking should continue at a time when many regulators are working from home and many advocates may have a harder time monitoring current proceedings.

Since many of those proceedings involve efforts by industry and the Trump Administration to roll back or eliminate current rules, delays would provide a welcome obstacle to the deregulatory juggernaut. On the other hand, agencies may use the pandemic as an excuse to reduce the opportunities for public interest groups to intervene in the process.

Another gnarly question is how to handle bailouts for corporations that have less than stellar records when it comes to regulatory compliance. We don’t want to ignore the needs of employees of those companies who might otherwise lose their jobs, but it also doesn’t feel right to be handing over large sums to firms that have flouted the law.

If those payments are going to happen, among the strings that need to be attached could be provisions requiring companies to strictly adhere to all applicable laws and regulations. Scofflaws would be compelled to repay the money and face other serious consequences.

Big business should not be allowed to use the covid-19 pandemic as cover for undermining safeguards that protect us from the many other dangers in the world.

Note: Violation Tracker has just been updated. It now contains more than 412,000 entries representing more than $616 billion in penalties. The corporation with the biggest jump in its penalty total is Wells Fargo, due to its recent $3 billion sham-account settlement with the federal government.