By David Shepardson
WASHINGTON (Reuters) - Three key U.S. House of Representatives Democrats on Wednesday asked the Treasury Department to halt government assistance to a dozen airport contractors that have laid off more than 9,000 workers.
The lawmakers found that more than $728 million in federal funds went to these companies even though the assistance was meant to keep workers on the payroll. The U.S. Treasury did not immediately comment.
Representatives Peter DeFazio, who chairs the Transportation Committee, Maxine Waters (NYSE:WAT), chair of the Financial Services Committee, and James Clyburn, chair of the select subcommittee on the Coronavirus Crisis, wrote Treasury Secretary Steven Mnuchin and four companies receiving assistance.
Congress in March approved $32 billion in payroll support for the aviation industry, including $3 billion for contractors like caterers and airplane cleaners. The lawmakers noted that under the law, companies receiving funds are not to conduct involuntary furloughs or reduce pay rates through September.
One company, Gate Gourmet, is expected to receive $171 million in Treasury funds but has laid off more than 3,500 workers since March, the letter said.
A spokeswoman for Gategroup, Gate Gourmet's parent company, said that to "ensure the long-term sustainability of our business in the U.S., layoffs and furloughs were necessary during these unprecedented times." She said the company is committed to meeting its obligations under the law.
Swissport USA, slated to receive $170.4 million in Payroll Support Program funds, announced layoffs of over 2,800 workers before finalizing its Treasury agreement, the lawmakers said.
Swissport said in a statement it "believes it is currently fully-compliant with the terms" of its support, adding: "We look forward to working cooperatively with the relevant committees."
Major aviation unions have sought a new round of payroll assistance from Congress to keep workers on the payroll through March 31 because of the significant downturn in travel demand.