United States:
COVID-19: Weekly Oversight And Enforcement Report—Week Of October 1, 2020
02 October 2020
WilmerHale
To print this article, all you need is to be registered or login on Mondaq.com.
A. Congress |
- The chairs of the House Select
Subcommittee on the Coronavirus Crisis, Financial Services
Committee, and Oversight and Reform Committee sent letters to the outside directors of Eastman
Kodak seeking documents tied to the Trump administration's $765
million government loan to the company to produce ingredients for
generic drugs, including those to help treat COVID-19.
- Energy and Commerce Chair Frank
Pallone, Jr. (D-NJ), Health Subcommittee Chair Anna G. Eshoo
(D-CA), and Oversight and Investigations Subcommittee Chair Diana
DeGette (D-CO) requested the HHS Office of Inspector General
to investigate potential political interference by the White House
and Trump Administration political appointees into the scientific
work of employees at the CDC responding to the COVID-19
pandemic.
- The House Small Business Subcommittee
on Innovation and Workforce Development held a hearing examining how the Small Business
Administration's legacy technology systems faired throughout
the implementation of the PPP. The hearing also covered recent
issues surrounding the SBA's release of PPP loan data and their
new system for PPP forgiveness. The House Small Business
Subcommittee on Economic Growth, Tax, and Capital Access also held
a hearing related to the PPP loan forgiveness
process. Small business owners and lenders testified on problems
they have encountered while navigating the loan forgiveness
process.
- Ranking Member of the Special
Committee on Aging Bob Casey (D-PA) and Ranking Member of the
Finance Committee Ron Wyden (D-OR) released a report that analyzed data reported to the
Centers for Medicare & Medicaid Services (CMS) and the CDC by
nursing homes for July and August. The data show persistent
shortages of PPE, testing, and staffing in nursing homes and that
on average, more than one resident was infected every minute and 11
residents died every hour.
|
B. Executive Agencies |
- OSHA announced it was no longer releasing detailed
citations upon request or as part of its press releases. Instead,
the agency now requires requests for those documents to go through
the FOIA process, a procedure that allows the agency to take weeks
or months to provide documents.
- DOJ announced Tuesday that it has indicted a North
Carolina man on allegations that he submitted 14 fraudulent loan
applications seeking over $6 million in PPP funds. He received $1.7
million in PPP funds on behalf of false companies named Pan
Insurance Agency, White Walker, Khaleesi, and The Night's
Watch.
- The SEC told a federal court in California last week
that Arrayit Corp.'s president and chief science officer made
misleading statements about the development status of the
company's coronavirus blood test. The misleading statements
caused Arrayit's closing share price to spike 55% and its
trading volume to increase 99%, the agency said. Prosecutors made
similar allegations in a parallel criminal case unveiled in
June.
- California Governor Newsom signed Assembly Bill No. 685 (AB 685). The law, which
goes into effect January 1, 2021,implements requirements for
employers statewide during the COVID-19 pandemic, including
employee exposure notification and local health department
reporting. The new legislation also increases Cal/OSHA's
authority in overseeing worker safety. Cal/OSHA may issue citations
for serious violations related to COVID-19 without giving employers
15-day notice before issuance, and Cal/OSHA is authorized to shut
down an entire worksite or specific worksite area that exposes
employees to an "imminent hazard" related to
COVID-19.
|
C. State Attorneys General |
- Illinois AG Kwame Raoul, leading a
coalition of 18 AGs, wrote a letter to the SBA opposing the SBA's
proposed rule concerning PPP loan appeals, arguing that processes
established by the rule fail to give the borrower due process, are
confusing, and violate the Administrative Procedure Act.
- After Kentucky AG Daniel Cameron
announced price gouging investigations concerning online sales of
pandemic-related essential products, the Online Merchants Guild
sued, alleging the AG unconstitutionally gave his state's law
extraterritorial effect. The court granted the plaintiff's
request for a preliminary injunction. AG Cameron appealed to
the Sixth Circuit, and a coalition of 31 AGs filed an amicus brief arguing that the district court
misapplied the extraterritoriality doctrine, and that state AGs
play a critical role in enforcing price gouging laws during
emergencies as a lawful exercise of state police power.
- In other price-gouging news,
Minnesota AG Keith Ellison reached a settlement with an online reseller offering 3M
N95 masks on EBay at prices 1744% higher than 3M's retail
price. Meanwhile, a court dismissed New York AG Letitia James'
price-gouging allegations against Quality King and its CEO. In a
brief order, the court found that Quality King's
prices were neither unfair nor abusive, nor did they represent a
gross disparity from their pre-pandemic prices.
- AG James filed a lawsuit against the parent companies of New
York Sports Club and Lucille Roberts, alleging they unlawfully
continued to charge consumers dues and fees despite the fact that
health clubs and gyms have been closed since March. The suit
alleges that, after temporarily suspending dues earlier in the
pandemic, the parent companies resumed charging members in
September, ignoring previous admonitions by the AG not to do so
and in violation of state law.
|
D. Special Inspector General for Pandemic Recovery (SIGPR) |
No updates this week.
|
E. Pandemic Recovery Accountability Committee (PRAC) |
- PRAC deputy executive director Linda
Miller said that there has "never been a bigger
challenge" in regard to government spending. "The
investigations are ongoing, so we won't know the scope of the
fraud for years," she said. "My guess is when we're
all said and done, it's going to be significantly higher than
5% in the case of the CARES Act." Similarly, Michael Horowitz,
PRAC's acting chairman, said current indicators suggest the level of
misspent funds is higher than 1% of the CARES Act, and that the
committee's work continues to lead to arrests and fraud
charges.
|
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
POPULAR ARTICLES ON: Coronavirus (COVID-19) from United States
Are Your NDAs Up To Date?
Wolf, Greenfield & Sacks, P.C.
Nondisclosure agreements (NDAs) can be used to protect companies' confi dential and trade secret information. But you should resist the urge to have a vendor...
Legal Implications Of New York Times vs. OpenAI
BoyarMiller
The New York Times recently filed a landmark lawsuit against OpenAI and Microsoft, accusing them of copyright infringement in the training of the chatbot ChatGPT which launched just over a year ago.