It has now been four months since I last wrote about the H1B Bodyshop Bailout in August 2020. At the time I was working off of only partial data that included recipients of $150,000 and above loans. Myself and others have been calling for the SBA to release the full list, which the SBA has resisted, ostensibly because of privacy issues.
After the Dow Jones Co. and others sued, on November 5th a judge ordered the SBA to release the full list, and news articles started appearing a couple of weeks ago that were using this new data. I headed over to the Treasury department website expecting to see a complete set of data. Unfortunately the SBA did not update the Treasury.gov webpage to make it easy to find this data, so the only way to access it is apparently if you know the Box.com link. Since I was not in possession of this link I opted to use the excellent website COVID Bailout Tracker to fill in the gaps in my data.
Using the new data now we know the exact amounts of each loan, whereas previously all we had was a range of values. So now we can state with better granularity that the size of the bodyshop bailout was $1.8 billion, unlike before when all we could say was it was somewhere between $1.1 and $2.7 billion. Notice how $1.8 is right in the middle of those values. The average bailout was $830k.
I was thinking the updated tab for total cost of bailouts would top $2 billion with the additional sub $150k loans thrown in, but there ended up being not as many of those (391) as I was expecting, so the resulting $25 million extra did not move the needle much. What does this tell us? Well, if we assume $150,000 is the cost of one or two employees, that means not many bodyshops claimed two or fewer employees, and in fact the average bodyshop claimed 55 jobs were retained.
The better granularity also lets us get a good handle on the size of the bailout received by Edison, NJ and surrounding towns, which together got just over $100 million, or about the same amount as Dallas and Houston together, or all of Silicon Valley.
Perhaps most shockingly, a few of the bodyshops received $10 million bailouts which is the maximum amount. These companies also claimed the maximum number of employees (500) which is suspicious and has likewise been flagged in the media as a fraud indicator, i.e. big businesses attempting to pass themselves off as small businesses so they can grab their share of bailout cash. Two of these companies are located in New Jersey which is no surprise.
Sadly, the omnibus spending bill includes provisions to extend PPP with $300 billion in additional funds and a measure to make the forgivable loans non taxable, which was opposed by the Treasury (Steven Mnuchin). So we will need to keep an eye open for more bodyshop bailouts assuming the President signs this bill, or something close to it that includes PPP.
That’s it for this bodyshop bailout update. The updated list of bailouts is below or you can see it in Google Sheets here.
White-Collar Workers of America 