Houston firm asked to return fed loan

WASHINGTON — A Houston company that makes ships and other heavy equipment for offshore oil and gas drilling has been asked by House Democrats to return federal funding designated for small businesses during the coronavirus pandemic.

Gulf Island Fabrication, a publicly traded company with a stock market value of $44 million, received a $10 million loan through Congress’s Paycheck Protection Program, which is designed to offer forgivable loans to small businesses on the agreement they do not lay off their employees.

“We did not intend for these

funds to be used by large corporations that have a substantial investor base and access to capital markets,” read a letter to Gulf Island from members of the House Select Subcommittee on the Coronavirus Crisis Friday. “Unfortunately, many large companies were able to utilize this program and obtained PPP loans that were intended for small businesses.

“Some of the companies returned these funds amid widespread public outrage. However, other companies — including yours — still have not returned these funds.”

Gulf Island, which has more than 900 employees, did not immediately return a phone call seeking comment Monday. The PPP is generally limited to companies with less than 500 employees, but exceptions are made for some industries, including oil and gas.

A number of large, publicly traded companies have received funding through the program, resulting in the Small Business Administration last month cautioning it was unlikely to provide funding to companies, “with substantial market value and access to capital markets.”

Since then more than 48 loans worth more than $350 million have been returned, according to the Washington nonprofit Fact Squared.

Gulf Island received its loan April 16 through Hancock Whitney Bank, according to a filing with the U.S. Securities and Exchange Commission, seven days before the SBA issued its revised guidance.

The House Select Committee gave Gulf and four other publicly traded companies until today to return the money, or else turn over all documents and communications concerning the federal loan.