Senator Elizabeth Warren on Tuesday pressed Treasury Secretary Steven Mnuchin to commit to requiring medium and large companies receiving loans from the CARES Act to retain their employees, and called on him to hold corporate executives personally liable if they fail to meet certain certification requirements during a testy exchange in a Senate hearing.
“What the law specifically does is gives you the specific authority to determine the terms on which these loans are made,” Warren said. “You say the economy’s going to recover, it’s going to take jobs in order for that to happen, so what I want to know is, are you going to require companies that receive money from this half a trillion dollar slush fund to have to keep people on payroll?”
“Our number one object is keeping people employed,” Mnuchin responded, adding that he expected companies to use their “best efforts to support jobs."
In a letter to the Federal Reserve Board ahead of the hearing, Warren also called for executives to be subject “to civil and criminal penalties, including disgorgement, if they provide fraudulent or misleading information or misuse funds, and should be required to immediately repurchase their bonds for the full amount when eligibility criteria are breached.”
Warren pressed the issue with Mnuchin via video conference during the oversight hearing before the Senate Banking Committee on Tuesday morning.
“There are some rules on the term sheets that you identified earlier,” Warren said. "And by law companies are going to have to sign agreements certifying that they’re in compliance. So Secretary Mnuchin, here’s what I want to know: Will you create a certification process that ensures that executives are held personally liable and are subject to criminal penalties if they provide false information or misuse bailout funds?”
“We’ll review that,” Mnuchin responded.
Material from Bloomberg News was used in this report.