Lawmakers say airline contractors lay off more than 9,000 despite federal aid

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Three House Democrats on Wednesday criticized airline contractors who laid off more than 9,000 employees despite accepting millions of federal coronavirus aid.Lawmakers have called on Treasury Secretary Steven Mnuchin to stop helping businesses or requesting the return of part of the funds.

Congress set aside $ 32 billion in wage assistance to the struggling airline industry in the $ 2.2 trillion CARES bill in March. Of this amount, $ 3 billion has been set aside for entrepreneurs such as caterers. The conditions of the aid, which consisted mainly of subsidies, prohibited recipients from firing workers until September 30.

“We urge the Treasury to stop providing taxpayer-funded payroll assistance for laid-off workers and recover any funds that have been inappropriately allocated,” wrote Representative James Clyburn, DS.C., chairman. from a subcommittee on the coronavirus crisis, Representative Peter DeFazio, Chairman of the House of Representatives Transport and Infrastructure Committee and Representative Maxine Waters, Chairman of the Financial Services Committee, in a letter to Mnuchin .

The Treasury Department did not immediately respond to a request for comment.

Lawmakers said they opened an investigation into helping entrepreneurs and said they found at least 12 accepting more than $ 720 million in government aid after laying off around 9,300 people.

Among the companies identified by lawmakers, airline caterer Gate Gourmet, whose Zurich-based owner control group, did not immediately respond to a request for comment. Lawmakers said the company was receiving $ 171 million and laid off more than 3,500 workers in California, Georgia, Illinois and New York.

“Supporting the payroll of companies engaged in mass layoffs is not only contrary to Congress intent, but also wastes taxpayer dollars by covering the cost of the payroll of already laid-off employees,” said lawmakers in a letter to the company.

Unite Here, the union representing workers at Gate Gourmet and Flying Food, another entrepreneur who also did not immediately comment, called accepting the aid despite the cuts “reprehensible”.

“These catering companies should be ashamed of pocketing tens of millions of dollars and then leaving the workers the money was supposed to support to fend for themselves by claiming federal and state unemployment benefits,” Meghan Cohorst said , Unite Here press officer.

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