Below please find League Business Leaders Network member Saul Ewing Arnstein & Lehr’s COVID-19 alert.
As the country struggles with COVID-19, many companies have applied for and received funds under the CARES Act and its Payment Protection Program (“PPP”). Those companies must understand there are significant risks tied to their receipt of federal money. Indeed, in June the United States Senate confirmed Brian D. Miller as the Special Inspector General of Pandemic Recovery (the “SIGPR”). As Saul Ewing Arnstein & Lehr attorneys have previously explained, the SIGPR’s primary duty is to audit and investigate the distribution of funds under the CARES Act. Although the SIGPR is new, recipients of PPP funds can look to the past actions of a similar entity—the Special Inspector General for the Troubled Asset Relief Program, or “SIGTARP”—to better understand what to expect from the SIGPR’s audits and investigations. This alert addresses the potential liability that arises from the receipt of CARES Act funds, analyzes key takeaways from the SIGTARP’s history of enforcement in connection with the 2008 financial crisis, and draws out lessons from current enforcement actions so that companies can best prepare for and respond to any government investigations of their receipt of CARES Act funds.