Hey, have you heard the story about MiMedx Group, a pharmaceutical company in Marietta, Georgia, which makes and sells human tissue grafts. Back in April it agreed to pay the Justice Department $6.5 million to resolve allegations it had been overcharging the Veterans Administration.
And MiMedx Group was also charged by the Securities and Exchange Commission with overselling the value of the company to prospective investors for years.
But, just two weeks after it settled its overcharging the VA case with the Feds, Medx got a $10 million federal Payroll Protection Program loan to tide it over though the Covid-19 emergency. Did the pandemic have anything to do with MiMedx’ financial needs? No one asked, or cared, because the $349 billion law Congress passed requires no such qualification.
With its checkered past, is MiMedx Group worth saving? Another question Congress chose to moot when deciding who get cheap credit, subsidized at taxpayer expense.
What about the story of the little insert in the CARES Act tax-relief law, again meant to mitigate economic damage from the pandemic, that allows investors in real estate to use often fictional paper losses to shelter more real income from stock sales from taxation. What’s that got to do with the pandemic?
Or the more recent story of HCA, one of the biggest healthcare companies in the world, and the number one recipient of federal coronavirus emergency aid – an estimated $1 billion worth – even though HCA hardly seems to need the help. HCA made more than $7 Billion in profits over the last two years and is valued at more than $36 billion? And talk about welfare kings or queens, the CEO of HCA made $26 million last year, but his company is on the Covid-19 emergency dole.
These stories have two things in common: first, they describe a pattern in which billions of dollars of federal aid is rushed, ostensibly to save jobs and endangered small and mid-sized businesses, to the biggest corporations and richest people, who are in no danger at all and who have been minimally affected by the pandemic shutdown. And second, these stories were all broken by a team of investigative reporters from the Business section of the New York Times: David Enrich, Jessica Silver-Greenberg and our guest today Jesse Drucker. Jesse, welcome to Here & There.
Even pockets as deep as Uncle Sam’s have their limits… so when it comes to giving financial aid to help out in the coronavirus crisis, you can’t help everyone…so, one obvious criterion for help, you would think, would be need. Is that an issue built into the federal coronavirus aid program? Not so much.
Jesse Drucker is an investigative reporter for the New York Times Business desk. He previously worked for The Wall Street Journal and Bloomberg News where he won a pair of awards in 2011 for investigative and explanatory reporting from the Society of American Business Editors and Writers for a series on how U.S. multinationals shift profits into tax havens.