News Release: Companies Backed by Giant Private Equity Firms Received $5.3bn in COVID-19 Stimulus Funds

Companies backed by giant private equity firms received $5.3bn in COVID-19 stimulus funds

New investigation reveals how major private equity firms’ portfolio companies benefited from the CARES Act while parent firms continued predatory practices 

Washington D.C, September 15, 2021 – Hundreds of companies owned or backed by some of the most well financed private equity firms in the US secured an estimated $5.3 billion in public funds under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), reveals a new investigation published today. The organisations behind the report, Americans for Financial Reform Education Fund, Anti-Corruption Data Collective and Public Citizen, said the 2020 COVID-19 financial relief legislation placed few restrictions on recipients and failed to prohibit them from using public money to enrich investors. This led to the federal government essentially subsidizing mergers and acquisitions, dividends and management fees for private equity firms that held almost a trillion dollars in cash reserves at the time. 

The report, Public Money for Private Equity: Pandemic Relief Went to Companies Backed by Private Equity Titans, also found that private equity-backed companies captured $1.2 billion alone in public funds earmarked for independent small businesses.

Report co-author Patrick Woodall, senior researcher at Americans for Financial Reform Education Fund, said:

“The private equity lobby likes to boast about its deep pockets as an advantage for companies the industry controls, but private equity-backed firms lined up like hogs at the trough to gorge on taxpayer money during the crisis. The $5.3 billion their portfolio companies received effectively allowed private equity firms to continue their predatory practices during an economic and public health emergency essentially cross-subsidized by the public funding that went to their portfolio firms.”

Some private-equity backed healthcare firms furloughed workers, reduced hours or benefits, and even fired medical workers during the pandemic. Airlines backed by private equity also laid off workers, in apparent violation of aviation payroll protection requirements – the only industry subject to such conditions in the CARES Act. 

The CARES Act contained no rules to prevent firms that received public money from acquiring other businesses during the pandemic. The ten private equity firms whose portfolio firms received the most public funds executed 230 leveraged buyouts with a disclosed value of over $45.1 billion from March to December 2020.

Report co-author Taylor Lincoln, of Public Citizen said: “While small businesses failed and families across the country struggled, taxpayer dollars essentially fuelled private equity takeovers, which will inevitably result in job cuts and layoffs down the line.” 

The report authors recommend that any economic stimulus contain strong guardrails that direct public money to workers and their safety rather than being diverted to enrich investors, as well as require the public disclosure of recipients’ investors and parent companies. 

Report co-author David Szakonyi, co-founder of Anti-Corruption Data Collective, said:

“The near total opacity of the private equity industry means we rely on media reports and civil society monitoring to assess how much public money private equity-backed companies received from the CARES Act. This same opacity makes the industry a major risk for money laundering and an area of pressing concern for anti-corruption campaigners and, reportedly, for law enforcement.” 


The authors of the study relied heavily on data from the COVID-19 Relief Spending Tracker by the the Project on Government Oversight.

Download the full report: Public Money for Private Equity: Pandemic Relief for Companies Backed by Private Equity Titans


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