She’s supposed to protect Americans from toxic chemicals. first, she just has to fix Trump’s mess and decades of neglect.

by Lydia DePillis

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A few days after the inauguration of President Joe Biden, Michal Freedhoff settled into her cramped home office in a suburb of Washington, D.C., to get to work as the nation’s new top chemical regulator.

It was a key role, charged with protecting Americans from toxic substances used in agriculture and manufacturing. But going back decades, the office had gained a reputation for being captured by the companies it regulated. Under the Trump administration, the Office of Chemical Safety and Pollution Prevention, like many federal agencies, had taken a hard turn away from science. Important new rules, years in the making, had been delayed or diluted.

In Freedhoff, Biden had found a public servant steeped in the risks of chemicals and what it takes to police them. Testaments to her drive surround her desk. On one wall hangs a framed front page of The Washington Post from the day that automakers struck a deal she helped broker with California on vehicle emissions standards; on another is an original copy of a 2016 law that gave the Environmental Protection Agency sweeping new authority to protect people from toxic substances. Seven senators had signed it, thanking her personally.

Freedhoff has long kept up a frenetic pace. The mother of four would stay out late for work events and then send emails at 4 a.m. before heading out on a pre-dawn bike ride. And she knew her new job would require a massive cleanup effort, working with a traumatized staff to rework decisions the Trump administration had pushed through based on skewed science. She was guaranteed just four years, and she had a list of critical to-dos that ranged from finally banning asbestos to fixing the process for authorizing new chemicals. A clock was ticking.

When Freedhoff dug in, what she found was often just … weird. Like a pile of simple, low-level tasks that had ended up on her desk: two hundred perfunctory notices that hadn’t been sent to the federal register, the daily log of official government actions. Fifteen months worth of new chemical rules that had been approved but not publicly announced. They weren’t controversial. It’s just that nobody but the office head had been allowed to click a button.

Gradually, Freedhoff, a hyperlogical fast talker who occasionally flashes a big smile when something amuses her, realized that her predecessor under then-President Donald Trump simply hadn’t delegated routine duties — a symptom of the distrust within the office between career employees and political appointees.

In those first strange weeks, Freedhoff would gaze out on a sea of staffers’ faces filling a Microsoft Teams grid on her screen and ask why something happened the way it did. No one would respond. Later, she’d learn that there was no thoughtful answer to “why”; the person responsible was simply following orders. Often, Freedhoff found, staff had been detailed to trivial projects to help companies that had relationships with Trump appointees.

“We thought we knew which rules were messed with, we thought we knew which policies and which offices were shrunk,” Freedhoff mused last fall, sitting on a bench in the courtyard outside the EPA’s imposing headquarters in Washington. “But I found the damage to be a lot more pervasive than that.”

There’s a saying in Washington that “personnel is policy”: Political appointees in federal agencies are essential to carrying out the president’s plans. With Biden’s legislative agenda stalled, progressives are pushing people like Freedhoff to make good on the president’s promise that government can tackle big problems again.

Biden’s own campaign slogan had been to “build back better.” But Freedhoff’s first year has been a process of learning just how much she’d need to build just to get back to the way things were before Trump arrived. She told me about it in a series of interviews that provide a window into the Biden administration’s struggles to deliver on the president’s promises.

“We all just assumed that everything would sort of snap back to normal,” said Freedhoff, who has been sleeping even less than usual these days. “There was this initial burst of, ‘Thank God, we made it,’ and there were expectations that things would change more quickly than they have.”

Her budget only recently got a small boost, after years of starvation. Her staff remains overstretched. Unexpected roadblocks have cropped up, both inside and outside the agency, hampering her ability to execute decisions. And now, while they acknowledge the positive steps taken so far, the environmentalists she once worked alongside are increasingly voicing frustration that Freedhoff isn’t doing enough.

“I’m concerned,” said Daniel Rosenberg, director of federal toxics policy at the Natural Resources Defense Council. “I firmly believe that she is committed to protecting public health and the environment. I think the jury’s still out as to where they’re going, and there’s been enough things that are worrisome.”

Freedhoff got her political education in an era when environmental protections were in retreat, and she quickly learned how to operate in a world where a hold-your-nose compromise was often the best-case scenario.

She had grown up in Toronto as a theater kid, attending a high school for the performing arts. Freedhoff took up science in college, taking a cue from her mother, who was a professor of theoretical physics. After Michal Freedhoff received a doctorate in chemistry in 1995, she moved to Washington and landed a job at the American Institute of Physics. There, she translated science into language that policymakers could understand, trying to protect basic research funding from a Republican drive to slice budgets.

Freedhoff soon jumped to Congress to handle science policy for then-Rep. Ed Markey, a Massachusetts Democrat, dealing with everything from nuclear waste to vehicle emissions standards. She followed Markey to the Senate in 2013 and worked her way up to become director of oversight on the powerful Environment and Public Works committee.

By then, the limits of the nation’s main chemical safety law were all too obvious. The 1976 Toxic Substances Control Act, or TSCA, was never as strong as its older siblings, the Clean Water Act and Clean Air Act. What power it did have had been largely gutted in 1991, when an appeals court voided the EPA’s attempt to ban asbestos.

Freedhoff was haunted by stories about workers who’d died from exposure to chemicals that the EPA had never managed to take off the market, driving her to act.

“I remember meeting with families of young adults, who were trained, properly equipped, wore respirators and nevertheless dropped dead while refinishing someone’s bathtub from methylene chloride poisoning,” Freedhoff recalled. “The law was broken for so long.”

Even chemical manufacturers were looking to strengthen safety laws to bolster public confidence in their products. So Freedhoff began working with a close-knit, bipartisan group of staffers to craft an overhaul of the TSCA, relentlessly pushing both sides until they found something they could all live with.

“Trying to solve problems is at her core,” said Dimitri Karakitsos, who was formerly a counselor for Republican Sen. Jim Inhofe and now lobbies for industry. “Because it’s not ideological, it’s like, ‘How do we fix this.’” (Freedhoff also remains friends with Ryan Jackson, the committee’s Republican staff director who became the EPA’s chief of staff under Trump and now works for the National Mining Association.)

The amended law wasn’t perfect, but it was a step forward. It mandated new risk evaluations of chemicals already in use to decide if they should be restricted. It also made it easier for the EPA to order companies to test their chemicals to prove they are safe. In exchange, the chemical industry got a uniform federal regime that could preempt state governments from imposing their own rules — which Freedhoff called the “price tag” for passage.

After the bill was signed in June 2016, Freedhoff recalled talking to a lobbyist at one of the many parties that the group of staffers and interest groups threw to celebrate. He asked if she’d thought of running the toxics office in a prospective Hillary Clinton administration, which would implement the law she helped write. “It didn’t even occur to me,” Freedhoff told me later. But she warmed to the idea.

Instead, after Clinton lost, Freedhoff sat in her Senate office, working furiously to thwart the new administration’s efforts to weaken chemical regulations. When Trump picked a notoriously industry-friendly toxicologist to lead the chemicals office, she made sure enough Republican senators opposed the nomination to force the White House to withdraw the name. After that rare defeat, Trump subbed in a widely respected environmental lawyer.

But the office still finalized chemical risk evaluations that ignored harms to vulnerable populations. Another division, led by an official hired straight from DuPont, sped new chemicals through the vetting process.

Freedhoff wrote letters and issued warnings as key tasks prescribed by the new law were carried out very differently from how she had intended. “This is where I’m going to become the skunk at the garden party again,” she said on a panel with consultants and agency officials in the summer of 2020, predicting that many actions the agency had undertaken would have to be redone because they didn’t comply with the law.

One of the many fronts on which Freedhoff fought the Trump administration — and that she would later inherit responsibility for when she went to work for Biden — is the spread of a class of toxics known as “forever chemicals.”

So named because they don’t break down in the environment over time, these per- and polyfluoroalkyl substances (or PFAS) have been used for decades to repel liquids in products such as food packaging and nonstick pans. The chemicals have also found their way into most Americans’ blood. In higher concentrations, they’ve been associated with an array of health problems, including several cancers, autoimmune disorders and fertility challenges.

As a Senate staffer, Freedhoff chastised the Trump EPA for dragging its feet on regulating PFAS and helped draft legislation that would force the agency to take action. Freedhoff had also already strengthened another tool that could help address PFAS: The 2016 TSCA amendments bolstered the agency’s authority to order chemical manufacturers to pay for testing regarding the effects of their products.

It seemed like the perfect tool for one community that was facing a PFAS disaster.

In 2016, researchers determined that North Carolina’s Cape Fear River contained alarming levels of several PFAS, potentially affecting 300,000 people. Many of the substances came from Fayetteville Works, a chemical manufacturing plant owned by Chemours, which spun out of DuPont in 2015. Critically, the local public utilities weren’t able to filter the chemicals out.

The discovery prompted a flurry of activism as residents mobilized to secure safe drinking water. In 2019, the state brokered a consent order that required the company to essentially stop releasing the chemicals. But it did nothing to help Cape Fear residents understand what decades of exposure to Chemours’ emissions meant for their health.

The last time Chemours’ corporate predecessor DuPont poisoned a drinking water supply with a type of PFAS, in the early 2000s, residents of Parkersburg, West Virginia, were able to use litigation to force the company to fund large-scale tests. Ultimately, 69,000 victims participated in a study that cost DuPont $33 million. The flood of data linked the chemical to health issues including ulcerative colitis, pregnancy-induced hypertension, thyroid disease and testicular cancer.

While Cape Fear residents and the state of North Carolina have also sued Chemours and DuPont, the companies have opposed the lawsuits, and any settlement would likely take years.

But Emily Donovan, a Christian youth group leader turned local community activist, found a potential shortcut.

In traveling the country talking about what was happening in Cape Fear, she learned that the TSCA has long allowed anyone to petition the EPA to compel polluters to pay for testing. Doing so got slightly easier in 2016, thanks to the amendments Freedhoff helped craft.

“Every time I go to conferences and talk to scientists, they say, ‘You need the statistical power to prove it. Who’s going to fund it? How about the manufacturer,’” Donovan told me. “And guess what, TSCA allows that.”

So starting in 2019, Donovan worked with a nonprofit advocacy group and scientific experts to draft a 42-page petition for testing and build a coalition to campaign for it. Along with lab and animal studies on the mixtures of PFAS in the river, they wanted tests of at least 100,000 people who had been exposed to the company’s waste.

Such tests could help answer crucial questions for people like Marianne Ashworth, a freelance translator who lives on the outskirts of Fayetteville and started receiving dozens of jugs of water from Chemours after her well tested positive for PFAS. Ashworth had discovered a fibroid in her uterus, which a recent study suggested could be linked to PFAS exposure, although Chemours says that the types of PFAS examined in the study are not among those associated with its plant. She wonders if it might have to do with showering in, washing dishes in, jumping in a swimming pool full of the contaminated well water for the past seven years.

She has two young kids and wants to know what conditions she should be on the lookout for in them. “As a parent, you blame yourself,” Ashworth said. “There’s all this extra exposure that they didn’t need. You don’t think that there’s something in my water that’s going to slowly kill us.”

Donovan’s coalition filed its petition in October of 2020. Two weeks before Trump left office, his administration denied the request. The groups responded by suing the EPA last March. But then they paused the case, hoping that Freedhoff — who had just taken over the chemical safety office — would use her authority to grant the petition after all.

In January of last year, then-acting assistant administrator Freedhoff got to work in a room off the kitchen, within shouting distance of four middle and high schoolers doing remote classes and a wriggly black puppy. Freedhoff is short — barely peeking over the wheel of her sunshine-yellow Honda Fit — with frizzy blond hair; she favors chunky necklaces, wide-leg pants and practical shoes. A copy of Barack Obama’s “The Audacity of Hope” props up her laptop.

At Freedhoff’s confirmation hearing in May, her former colleagues in the Senate hailed her nomination. Inhofe, an arch climate skeptic, addressed her two daughters sitting behind her. “Your mama probably is the only person in America that will have equal praise from Sen. Markey and me,” Inhofe pronounced. She sailed through on a voice vote.

For Freedhoff, it was a chance to finish what she started.

“That’s what I came to do,” she told me. “It wasn’t just, ‘Write a rule for this chemical or that chemical.’ It was, ‘Implement a law that I had the opportunity to help write.’”

But before she could make progress, she almost immediately had to make a big concession to corporations.

In 2016, Congress directed the EPA to prioritize regulating one class of hazardous chemicals. The Trump administration finalized rules limiting how the substances can be used and handled just before the end of Trump’s term in January 2021. Many industries apparently didn’t realize the implications. Out of nowhere, businesses that make everything from farm equipment to semiconductors began calling and sending letters to top EPA officials warning of dire consequences if the agency didn’t delay a compliance deadline.

“My initial reaction was, ‘Are you kidding me? The first thing I have to do under TSCA is weaken a rule?’” Freedhoff said. But if they didn’t, whole product lines would have to be taken off the market until supply chains could be re-engineered. Freedhoff held up her iPhone cable. “Do you really want another charge cable? It was really that ubiquitous.” The rule was pushed back for years.

Next, Freedhoff had to figure out what to do with the Trump administration’s reviews of the first 10 chemicals that the agency had decided to take on under the overhauled TSCA. They were a rogue’s gallery of mostly still-available toxics, including asbestos, which the agency had failed to ban back in 1991. She would have to balance redoing Trump-era risk evaluations that had narrowly defined hazards and downplayed exposure with the need to get the rules finalized before the end of Biden’s term.

Freedhoff had nowhere near enough resources to get it all done.

The EPA’s funding has been sliding downward since soon after the agency was founded. The decline began in the 1980s, when the EPA spent more than double (in inflation-adjusted dollars) what it did in 2020. As a result, its staff has contracted by more than 20% since the end of Bill Clinton’s administration.

Congress conferred heavy new responsibilities on the chemical safety office in 2016, fully anticipating that it would need more funding — but the Trump administration never asked for it. The law even allowed the EPA to assess higher fees on companies for their chemical reviews, but the Trump administration delayed doing so and then pursued less than it could have.

That put significant strain on the staff who remained. Freedhoff learned that under Trump, the staff routinely had 4:30 p.m. meetings involving tricky scientific questions and were asked to report back with answers the next morning at 8 a.m. Still, important duties had been neglected. Part of the office, the pollution prevention division, was raided to do more pressing work that was required under the revised TSCA.

Biden’s budget proposal for 2022 promised enough money to hire 87 new people, but it was tied up with one stopgap funding measure after another, while Biden’s $1.75 trillion climate and social spending bill floundered. As time dragged on with no reinforcements, Freedhoff started to go public with her appeals.

Last October, she was called to testify before her old colleagues at the House Energy and Commerce Committee, in a room with sky-high ceilings and huge portraits of the committee’s former chairs on the walls. With a severe case of nerves, she prepared for hours, thinking about how best to convey her key message: In order to do anything that representatives might ask for — whether it was reducing the backlog of applications to approve new chemicals or finally dealing with asbestos — she needed more money.

She sat alone before the panel of politicians, facing antagonistic questions from Republicans — a startling departure from the bipartisan spirit in which the new law had passed five years earlier — and also impatience from Democrats, who wanted rules to be made faster. Each time, she answered calmly.

“It’s a series of compounding resource errors that prevent us from hiring the kinds of scientific experts we need,” she told them, measuring her words. “Everybody’s been working on a shoestring for a long time now. And that’s going to take time to get back on track.”

Within the chemicals office, Freedhoff has encouraged staff to take time off, saying that deadlines weren’t everything. Yet one deadline is critical: the 2024 election.

In previous eras, a change in party control, while certainly shifting priorities, wouldn’t necessarily derail an entire regulatory process. But if another administration like Trump’s came to power, anything not finalized before Inauguration Day could wind up being tossed.

And the delays are mounting, pushing the regulatory agenda deep into 2024. Freedhoff learned that during the Trump years, the chemicals office had clashed with others within the EPA, creating rifts that took time to smooth over. While in the Senate, she had admonished the agency to follow certain consultation procedures, which she has now realized would slow her own progress.

“This is one of those karmic things,” she said ruefully. Isn’t that how it should be? I asked. She sighed. “It is how it should be.”

David Fischer spent 10 years at the American Chemistry Council before serving as deputy chemicals chief under Trump’s EPA and then rotating back out to the law firm Keller & Heckman. He points out that his team was poised to regulate several chemicals more quickly than Freedhoff will, even though they would have done so less comprehensively. “That effort will now have to wait for years to happen,” he said.

Fischer is just one of many former EPA officials who now circle Freedhoff’s office, watching for missteps. The crowd includes Freedhoff’s predecessor and another Trump appointee who has penned severalop-edscritical of Freedhoff’s decisions. One lobbying shop that focuses exclusively on chemical regulation has at least eight ex-EPA staffers who now help represent clients before their former colleagues.

Freedhoff figures that litigation is inevitable. Winning cases quickly requires a certain amount of dotting i’s and crossing t’s. That takes time, which is in short supply, especially since new funding took so long to arrive. When it finally came through earlier this month, the 2022 budget included less than a third of the $15 million increase she’d asked for.

“There’s a stars-aligning thing that has to happen, and I am worried about that,” Freedhoff said.

“It all just kind of adds up. You have one government shutdown that goes for a month, or you have one legitimate scientific thing that takes a while to work through, and you’ve got problems.”

Environmental advocates are sympathetic to Freedhoff’s constraints, but they’re starting to lose patience.

Some decisions, they argue, wouldn’t take much time or money. For example, Freedhoff’s office decided to improve the Trump administration’s methodology for evaluating existing chemicals, which an independent panel had found to be flawed. But rather than simply switching to an already peer-reviewed playbook, as the panel recommended, the agency instead adapted the Trump version, saying the other options didn’t suit the requirements of the law. Public health experts have panned the revised method.

“It just is perplexing that they’re saying they’re following the best available science when they’re not,” said Tracey Woodruff, director of the Program on Reproductive Health and the Environment at the University of California, San Francisco. “She has the potential to make very important structural changes that she is not taking advantage of.”

When faced with this kind of criticism, Freedhoff gets a little exasperated. She sees a “disconnect” between academic experts and regulators who have to map science onto statutes that are fundamentally political documents.

“It doesn’t do anyone any good to ignore the words in the law,” she said. “Science is one driver in every law, but it’s not the only driver.”

Donovan and her fellow Cape Fear advocates were among those who had high expectations for Freedhoff, hoping that she would instill a new sense of corporate accountability and reverse the Trump administration’s rejection of their petition.

A June meeting with Freedhoff and her deputies, however, turned out to be a surprisingly chilly affair. Donovan recalled that the officials seemed reluctant to order Chemours to pay for health studies. Alarmingly, a high-level manager named Tala Henry reiterated some of the company’s original arguments about how it wasn’t necessarily responsible for all 54 PFAS listed in the petition. (The company said that its manufacturing process involved all but seven, and acknowledged that some of the rest may have arisen when its chemicals reacted with the environment.)

Henry referred questions to EPA’s press office. “Comments made by EPA’s Dr. Henry during various meetings with Ms. Donovan sought to provide relevant, factual information on the specifics of stakeholder requests, informed by career EPA staff, and legal counsel, and not based on personal feelings or beliefs,” a spokesperson said.

Donovan’s concerns grew when she saw a story in The Intercept soon after the meeting about EPA scientists who alleged that during the Trump years, Henry and other managers had warped their work in ways that favored industry. Since Henry seemed to be overseeing the response to their petition, it didn’t bode well. (The EPA told The Intercept that the complaints were being investigated and that the agency was taking steps to shore up scientific integrity.)

Nevertheless, in September, Donovan and others finally got a bit of good news: The EPA told them that it would formally reconsider their petition and respond within 90 days.

A few weeks later, Biden’s new EPA chief, Michael Regan, came to North Carolina to announce a nationwide plan for dealing with the types of chemicals that Cape Fear residents had been begging them to study. It was a homecoming: Regan had previously been North Carolina’s chief environmental regulator and had brokered the deal that got Chemours to stop dumping PFAS.

Standing outside on a podium, with the EPA logo in front of them and Lake Raleigh sparkling behind them, the governor and his top environmental official welcomed Regan, describing how their state had been sickened by PFAS emissions. Cape Fear had become a national symbol of the dangerous chemicals’ spread.

To cap the event, Regan laid out what he called the PFAS Strategic Roadmap, a timeline for research, regulation and cleanup. He promised to finally prioritize people over polluters. A forthcoming assessment of one of Chemours’ PFAS compounds, he said, would “ensure that no other community has to go through what the Cape Fear River communities had to endure.”

Donovan was in the audience, welling up with tears, wanting to believe him.

The EPA’s response to her petition was due on Dec. 28. Three days before Christmas, Donovan sat down at her desk to write a last-ditch appeal to Freedhoff and other top EPA officials. In her email, Donovan noted that the petition had been endorsed by the city of Wilmington, its county, and the local water utility (along with half of North Carolina’s congressional delegation and dozens of academic scientists).

In closing, she described two friends suffering from cancer, wanting to know whether the possibly carcinogenic chemicals in their water played a role.

“You have the power to protect and heal these communities,” Donovan wrote. “I pray you use your authority to lift up human health over corporate wealth.”

Freedhoff responded the next day. “I wanted to thank you for your continued advocacy on behalf of your family, friends and community,” she emailed. “I also wanted to convey my hopes that the members of your community who are faced with the grave health challenges you described below are able to find peace and recovery in the new year.” She didn’t, however, betray what she was planning to do.

When the response came, in the form of a letter to the coalition’s legal counsel, Robert Sussman, the agency’s response at first sounded like a win. “EPA is granting the petition,” it began.

But while touting the agency’s PFAS Strategic Roadmap as a partial solution, the 29-page document promised to deliver little of what the petition had specifically asked for. Most importantly, it didn’t order Chemours to fund a human health study. The EPA argued that designing another study would consume scarce staff time, and that similar studies were underway elsewhere — a rationale also offered by the Trump administration in its initial rejection of the petition.

In a statement at the time, Chemours said it “supports national, industry-wide PFAS-related regulatory and testing requirements that are data-driven and based on the best available science.” (A spokesperson declined to comment further for this story.)

The petitioners were irate. Even Cape Fear River Watch, which wanted to stay on the EPA’s good side so it could get help with other campaigns, reacted angrily. “Their response was so unethical in its dishonesty,” said the group’s executive director, Dana Sargent. “If they had come out and said, like the Trump administration, ‘No we’re not going to grant it,’ I would have been less likely to come out so strongly.”

Freedhoff said she’d pushed as far as she legally could. In overhauling the TSCA, Congress had made it easier for the EPA to order companies to pay for testing — and in exchange, the agency had to prove the current data was insufficient before ordering new tests. Enough information is already either available or in progress that, she said, that if they’d ordered everything the petitioners asked for, Chemours could sue and might win.

“You can’t ask companies to spend a bunch of money producing data that already exists,” Freedhoff said, noting that her office also has some confidential company data on PFAS. “If you go in knowing that what you’re doing isn’t supported by science or the law, that’s not a good place to start. It’s not where anyone in this administration would start.”

That’s perplexing to Sussman, who served as deputy EPA administrator in the Clinton administration and as a senior agency adviser under Obama. The petitioners had done a comprehensive literature search and found that none of the chemicals had been studied enough to help residents understand the potential health consequences of Chemours’ pollution.

“These are weak arguments and EPA should not be afraid of taking them on,” Sussman said.

The decision is also perplexing to scientists who study PFAS contamination in the Cape Fear River watershed, like Jamie DeWitt, a toxicology professor at Eastern Carolina University who signed a letter endorsing the petition. The state has provided a few million dollars for PFAS research, including DeWitt’s, but it’s halting and infrequent. When I visited her lab in Greenville, she was scrambling to submit a National Institutes of Health grant for more PFAS work. Without Chemours bankrolling a large study, it’s not clear how it could happen.

“I do think people have the right to know what is getting into their bodies from the food they eat, the water they drink, the products they use. It should be free,” DeWitt said. “The question is, who’s gonna pay for it?”

Around the midpoint of the Obama administration, when Republicans hardened their resistance to the Democratic leader’s legislative efforts, the president turned to executive action to try to advance issues ranging from immigration to power plant emissions.

This time around, progressive activists don’t want Biden to wait that long. They’re pushing him to use the executive branch in as muscular a fashion as possible, as the Trump administration did, using bold legal means — like granting a petition asking a polluter to pay for tests — to crack down on corporate malfeasance.

“We’re frustrated, throughout the administration, with a lack of creativity and willingness to just throw up their hands when they get to the first barrier,” said Dorothy Slater, a senior researcher with the Revolving Door Project, which focuses on agency appointments.

The EPA scientists who blew the whistle on managers who allegedly manipulated their work in favor of industry also wanted Freedhoff to take more aggressive action. Optimistic about her appointment, they originally filed their complaints soon after the 2020 election.

A couple months into the job, Freedhoff sent out an all-staff memo recognizing several examples of political interference and affirming her commitment to scientific integrity. Later, she announced new advisory councils and recordkeeping requirements. But none of it did what the whistleblowers really wanted: remove the accused managers, most of whom remain in their positions, engendering distrust both within the agency and outside it.

The EPA’s inspector general is investigating the complaints, and Freedhoff has said that she can’t simply move people around without due process, as the Trump administration did. Moreover, it bothers her when people accuse civil servants of acting in bad faith — she thinks the staffers just implemented policies from political appointees who were higher up the chain.

“You’re supposed to do what they tell you to do,” Freedhoff said. “You can complain, but I don’t think you should expect everyone to be Paul Revere. Only Paul Revere is Paul Revere.”

Emily Donovan doesn’t buy that explanation, and she finds it confounding that officials who facilitated Trump’s orders would now hold sway over her community’s fate.

In early February, Donovan and I walked out on a beach near the mouth of the Cape Fear River to see foam that she said looked unusually frothy. She’d gotten it tested last fall and found it contained several types of PFAS. She doesn’t let her kids swim there anymore, but people were fishing while standing on the sand, seemingly unaware of the dangerous chemicals in the water.

When I told Donovan about Freedhoff’s rationale for leaving someone who had been accused of manipulating science in charge of the chemicals office’s response to her petition, she thought about it for a second.

“We lose in that. We lose,” she said, coldly, the wind whipping her hair. “I actually think it does a disservice to the American people, because we didn’t elect Biden to maintain the status quo.”

In late January, the Cape Fear coalition restarted the lawsuit it had originally filed after the Trump administration rejected its petition. Donovan finds it ironic that the agency seems more willing to be sued by citizens than by the corporation that had contaminated her drinking water.

Freedhoff hears Donovan’s frustration everywhere. There was a time when she might have felt the same. While on the Hill, she pushed for regulators to move faster and accomplish more. Now that she’s on the inside, she’s come to fully understand the handicaps the agency has faced for decades.

“When you’re sitting in Congress saying, ‘Hey, do a rule in a year,’ you keep getting told by the agency, ‘That is not possible,’” she told me, over lunch in January at a taco place near her house. “And you get to the agency and you’re like, ‘Oh yeah, that’s right, it kind of is impossible.’”

She’s been thinking a lot lately about the parents she met years ago as they grieved children who died from exposure to toxic chemicals. Those kids would have been Freedhoff’s age now, and the EPA still hasn’t banned the chemicals that killed them. But she can’t make amends for the past.

“There’s all these examples where for generations, communities were exposed to chemicals, never told about it, and suddenly realized what happened to them, and want answers and want justice,” Freedhoff said. “And it is extremely hard to feel like I can’t do all the things they want.”

Trump administration gave at least 120 publicly traded companies PPP loans -- despite warning them not to apply

As Congress launched a historic bailout to keep businesses afloat at the outset of the pandemic, government officials stressed that the loans were for mom-and-pop operations that didn't have another easily available lifeline.

"This was a program designed for small businesses," then-Treasury Secretary Steven Mnuchin said, as companies like Shake Shack and Potbelly made headlines for grabbing millions from the newly created Paycheck Protection Program. "It was not a program that was designed for public companies that had liquidity."

House Minority Leader Kevin McCarthy was even clearer. "We will go after those big companies that cheat the system," he told Fox News that spring.

But the tough talk hasn't translated into action. Instead, a ProPublica review has found, the government gave out generous loans to companies that may not have needed them. And it has often forgiven the loans, despite having said that publicly traded companies would be unlikely to merit such generous treatment.

Take Lazydays Holdings, a publicly traded collection of RV dealerships that got a nearly $9 million loan. The company had $31 million in cash on hand at the end of 2019, and then prospered as Americans turned to RVs for socially distanced vacations. Lazydays' stock price has shot up more than 500% during the pandemic. (Lazydays did not respond to requests for comment.) The government has forgiven nearly all of it, allowing Lazydays to keep the money.

The ProPublica analysis of Securities and Exchange Commission filings found at least 120 publicly traded companies that received loans of more than $500,000, grew their revenues last year and have been allowed to keep the money.

In addition, at least 30 companies announced plans to go public after receiving their loans, bringing in truckloads of investor cash that they often used to pay off other debts — but not the ones they owed to the federal government, all of which were forgiven.

Overall, ProPublica found at least $250 million that went to publicly traded companies with growing revenues and that has already been forgiven by the government. That's just a sliver of the $800 billion PPP program. But it's also almost certainly a significant undercount of the amount of taxpayer dollars that went to well-heeled companies. The count, for instance, doesn't include any of the billions of dollars that went to firms backed by giant private equity funds. Their finances are not publicly disclosed.

The government had no rules requiring companies to pay back loans if it turned out they didn't need the money.

Instead, the government had one modest requirement particularly relevant to publicly traded companies: It made all applicants for loans attest that pandemic-related uncertainty made the loan "necessary." And it warned in a follow-up advisory that having access to cash elsewhere — as public companies usually do via investors — would make it difficult to take that pledge in good faith.

But the government has rarely followed up. The Small Business Administration, which oversees the PPP, discarded a questionnaire it had begun sending companies to quiz them on their financial situations.

In response to questions from ProPublica, the SBA said that it is examining all forgiveness applications to make sure they comply with the rules. "We are continuously aware of our role in the stewardship of federal funds to ensure the integrity of our programs, and we have rigorous processes in place to ensure appropriate oversight of loans of all sizes," spokesperson Christalyn Solomon said.

But the SBA declined to provide evidence of how it is evaluating whether public applicants were honest when they said their loans were "necessary." Experts say that's because lawmakers offered no specifics on what they meant by "necessary" from the outset, leaving the program's administrators with no objective basis on which to demand repayment.

"Congress needed to say to the SBA, 'This is what constitutes need,'" said Liz Hempowicz, director of public policy at the nonprofit Project on Government Oversight. "If you have access to excess capital in any form, that absolutely should've been baked into the program from the beginning."

By many metrics, the federal government's response to the pandemic succeeded in alleviating the worst effects of the most abrupt pause in economic activity America has ever experienced. Unlike most safety net programs, it did so by erring on the side of generosity. The government's supplemental unemployment insurance and stimulus checks were enough to actually lower poverty last year.

The same philosophy applied to relief for businesses. The government kept the PPP application simple to encourage companies to participate, and banks were paid to move the loans along without asking many questions. While the program was built on the chassis of the SBA's standard loan program, it dispensed with many of its rules, such as a requirement that applicants demonstrate they couldn't obtain reasonably priced credit elsewhere.

In the first round of the bailout, which was quickly depleted, companies did not have to prove that they had actually been impacted by COVID-19.

Instead, the application required them to certify that "current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant." Facing confusion from corporate lawyers who said the language was vague, the SBA released further guidance in late April 2020.

The clarification specifically warned public companies that they probably wouldn't meet the threshold. "Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity," the agency wrote. "It is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith."

That admonition had some effect. According to a study forthcoming in the Review of Corporate Finance Studies, half of all public companies qualified for the loans, but only 42% of those eligible chose to take them. That compared to 87% of all eligible private companies. (The PPP generally excluded companies with more than 500 employees.) On average, the 812 public firms that took loans had less cash and more debt than those that didn't borrow. The public companies collectively borrowed $2.2 billion, but 13.5% of them repaid their loans, mostly soon after the SBA's April guidance.

But because Congress didn't impose any actual requirements to return the money, many companies didn't. Some even shrugged off congressional pressure to do so.

In May 2020, a House oversight subcommittee sent letters asking five large public companies to return their $10 million loans. One of them did. The other four refused, and they eventually all received forgiveness (with one asking for slightly less than the whole amount).

They included a contractor for the U.S. Postal Service called EVO Transportation and Energy Services, which hasn't filed financial reports for all of 2020 after discovering problems with its 2019 disclosures.

The company didn't respond to a request for comment.

The SBA began processing forgiveness applications after the first round of PPP loans was exhausted in August 2020. It decided that all borrowers of less than $2 million would automatically be "deemed" truthful in their pledges that their loans were necessary.

For those who borrowed more, it issued a nine-page "loan necessity questionnaire" that asked about the recipient's ownership structure, cash on hand pre-pandemic, revenues during the time when the loan was supposed to be used and access to other capital.

That didn't go over well.

Last December, a construction industry trade group sued, saying the SBA questionnaire violated the original guidance that implied forgiveness would be determined by what companies knew at the time they applied, without regard to what happened later. In July, the agency stopped using the questionnaire, saying that the form was burdensome for borrowers and a drain on auditing resources.

Without companies' answers, the SBA has developed a machine-learning algorithm that flags loans for signs of potential fraud, such as payroll numbers that don't add up. As of last month, agency data showed, investigators had reviewed 65,000 loans, 8,000 of which, totaling $2.7 billion, were referred for further analysis. Of those, only 300 loans were for more than $2 million.

The agency declined to say how many forgiveness applications have been rejected after going through this process, or how, without using the discontinued questionnaire, it has evaluated whether the loans were necessary.

The Securities and Exchange Commission also issued inquiries to some companies about their representations to investors, but a spokesperson declined to say whether any enforcement actions had been taken as a result.

A former finance manager at one company that received millions in PPP money and hasn't paid it back said that he'd hoped the government would more closely examine his employer's finances.

"I remember that questionnaire coming out, and we were thinking, 'This might not get forgiven,' because our cash position was a lot better at the end of the year," the employee said. Since the questionnaire has been thrown out, he figures, companies that didn't need the cash will end up keeping it. "The only reason to give it back is public sentiment. At that point, it's free money."

Waste is inevitable in any economic rescue mission. But some of it is avoidable. Experts say Congress could have created a threshold of financial health at which PPP loans would have to be repaid — without denying the lifeline many firms needed.

"We're talking about a ridiculously low interest rate," Hempowicz said. "There is a benefit either way, especially for bigger companies, to have received these loans, even if they aren't then converted into grants."

All PPP loans were forgivable if the cash was mostly spent on payroll. If a company was still seeing steady business, it could use that freed-up income for other priorities, like paying off debt and buying other companies.

That's the happy outcome for many companies that performed well in 2020, often profiting from the very pandemic that they said put them in the position of needing a taxpayer bailout.

A chain of powersports dealers called RideNow collectively received $19 million, despite nearly tripling its net income from 2019 to 2020 as interest in motorbikes and all-terrain vehicles skyrocketed. In March 2021, the publicly traded online motorcycle sales platform RumbleOn announced it would acquire RideNow to create what it called the "only omnichannel customer experience in powersports and the largest publicly traded powersports dealership platform." RideNow's loans were fully forgiven in June, and RumbleOn's forgiveness application for its original $5.1 million loan is pending.

Other examples abound. Acme United Corporation saw its sales increase 15% in 2020 because of strong demand for first-aid supplies. Its $3.5 million loan was fully forgiven. So was the $2.7 million borrowed by Conifer Holdings, an insurance company that attributed revenue growth to lower claims by businesses that were temporarily shuttered but maintained their policies — which explicitly did not cover business interruption due to infectious diseases. And the ammunition manufacturer Ammo Inc. kept $1 million after seeing its revenues triple to $62.5 million in 2020, fueled by increased consumer demand for bullets. None of those companies returned requests for comment.

Public companies aren't the only borrowers that took more than they likely needed. Securities and Exchange Commission filings are also a window into privately held companies that have raised money in the public markets or later listed themselves on an exchange.

The venture-capital-backed person-to-person lending marketplace Prosper files earnings statements because it sells its loans to investors. The company had $64 million in unrestricted cash on hand at the end of 2019, but it still suspended its 401(k) match and cut salaries above $100,000 across the board in early 2020 — a collective reduction in compensation almost equal to the $8.4 million PPP loan it received. The pay cut also applied to the C-suite, but they had already received up to 10% base salary bumps in March 2020, so it hurt less.

In November, the company instituted a retroactive two-year bonus plan for executives — potentially totaling $3 million for five people.

Prosper did not respond to a request for comment, and its forgiveness request is still pending.

Some companies did pay the money back. At least 27 companies decided to do so while in the process of going public, since the sale of stock often generates large amounts of cash.

Luminar Technologies, an autonomous driving technology startup, gave back its $7.8 million before its Nasdaq debut.

"We decided to return the PPP loan as soon as we realized we didn't need it anymore," said Anthony Cooke, Luminar's vice president for policy and regulation. "We decided to apply for a PPP loan because it gave us the flexibility to withstand uncertain times while protecting our employees. We were able to protect employees, grow our business and take it public in 2020, and we repaid our PPP loan as soon as it was feasible."

Other companies kept the taxpayer money, even while paying off other debts.

That's what another company in the autonomous driving business did. A Ford-backed designer of sensors called Velodyne Lidar got $10 million in government money, which a spokesperson said was "used to support our employees during a time of uncertainty."

The company went public in September of last year, giving it $222 million in cash. The government forgave Velodyne's loan this June.

Battery-powered bus maker Proterra got $10 million. Its revenues increased last year, and it went public this year. The company decided to keep the money, which spokesperson Shane Levy said "supported our ability to maintain a full workforce as we've navigated the uncertainty caused by the COVID-19 pandemic." A Volkswagen- and UPS-backed self-driving truck company called TuSimple kept its $4.1 million after going public in a deal that generated about $1 billion; a spokesperson didn't respond to a request for comment.

Several companies hadn't yet had any income at all — they had been funded by investors through their entire existence, suggesting that they probably had access to other credit.

A pre-revenue electric vehicle maker called Faraday Future got $9.2 million. This past July, it launched a public offering that generated $1 billion; its loan forgiveness request is still pending. A spokesperson told ProPublica that the investor proceeds will be "budgeted to produce vehicles," not to pay back taxpayers. Space launch services company Astra took $4.9 million in government money. As it applied for forgiveness in June, it told investors that COVID-19 "has not materially affected our future growth outlook" and that it had seen "some signs of positive effects for its long-term business prospects and partnerships as a result of the pandemic." Astra's Nasdaq debut in July generated $463 million, and its PPP loan was forgiven last month. A spokesperson didn't respond to a request for comment.

Another category of large PPP recipients consisted of clinical and early commercial-stage medical device and pharmaceutical companies, which are heavily investor-backed and which sometimes profited from COVID-related activity. A biotech company called PolarityTE, which makes regenerative tissue products, cut staff by 47% in 2020 and raised revenues by 79% by serving as a COVID-19 testing lab. It received $3.6 million, which was forgiven; the company didn't respond to a request for comment.

Anything having to do with residential real estate also did well.

Fast-growing homebuilder Dream Finders Homes saw 52% earnings growth in 2020, which it attributed in part to pandemic-induced migration to suburban developments. It went public in January 2021, generating $134 million, and was granted full forgiveness on its $7.2 million loan. The company didn't respond to a request for comment.

The home improvement services platform Porch told investors that spiking home sales in late 2020 helped it rebound from a spring business dip. It applied for forgiveness for its $8.1 million PPP loan in December, the same month it debuted on Nasdaq. With $122 million of the proceeds from its IPO, it bought four other companies; it hasn't paid back the PPP loan, which was forgiven in June. A spokesperson declined to comment.

Finally, the type of companies that arranged the capital for all these public offerings and funding rounds — investment advisory firms — also dipped into the PPP.

Cohen & Company, a financial services firm with $2.8 billion under management, got $2.2 million. The firm saw dramatically higher income last year. Nearly all of its loan was forgiven. Another asset manager and investment banking firm, JMP Group, had $3.8 million forgiven despite having $50 million in cash at the end of 2019 and 15% revenue growth in 2020. Neither firm responded to a request for comment.

Some investment advisory firms may have used inflated claims. One study found that at least 6% of the $590 million granted to those firms was more than they could have justified given their payroll, which has to be reported to the SEC.

Writing laws is often a balancing act. One approach draws bright lines that lay out exactly what's required, which companies often figure out a way to game. The other leaves rules more vague, relying on the regulated party to abide by the program's intent. That eases the process for beneficiaries who really need help, but runs the risk the others will also benefit.

The PPP leaned toward the latter approach. It told companies that they probably shouldn't apply if they had other resources at their disposal, but gave them a window to do so if they wanted. In order to make that work, there would need to be a credible threat of enforcement, or at least public shaming if they took advantage of funds meant for the truly disadvantaged.

Erik Gordon, a professor at the University of Michigan's Ross School of Business, said the SBA should have held public companies to a higher standard of need and then audited them to ensure they'd been truthful.

"If I ran the SBA, I would say, 'You certified that this loan request was necessary — walk us through that. You had this much cash, or you had this much loan facility open or you had no trouble raising this money,'" Gordon said.

Of course, if you don't want public companies to apply, you could just bar them from applying. That's what Congress did when it created a second round of the PPP in December 2020. That time around, companies were also required to demonstrate that their revenues had declined substantially in at least one quarter in order to qualify.

Sam Rosen, a finance professor at Temple University who co-authored the study on public firm participation in the PPP, said it isn't that complicated. "If we were in a similar situation in the future, do we want public firms to have access to this?" he said. "I think it's just about being clear up front."

This company laid off hundreds of workers and moved operations to Mexico after obtaining a massive PPP loan

Late last summer, after churning along through the pandemic with only a two-week pause, managers at FreightCar America called hundreds of workers into the break area at the company's factory near Muscle Shoals, Alabama, to tell them that the plant was closing for good.

For some employees, the news wasn't a shock: They'd been hearing rumors that management would move the work elsewhere for years. The timing, however, seemed odd. Only a few months earlier, the publicly traded company had received a $10 million Paycheck Protection Program Loan — the maximum amount available under a pandemic relief program designed to keep workers employed. Some had believed the funds would keep the doors open for a little while longer.

Nevertheless, the plant's managers announced that all production would move to FreightCar's new facility in Mexico, which meant most of the assembled workers would lose their jobs.

Jim Meyer, FreightCar America's CEO, told ProPublica in an email that he had not intended to shutter the plant when he received the PPP money, and that it had allowed the company to keep workers on the job through most of 2020 despite a sharp dropoff in new orders.

Robert Bulman, however, thinks the $10 million just helped FreightCar's Shoals plant keep producing while company officials got ready to shut it down.

“When the Mexican plant opened, we were told at the beginning they would just be helping Shoals and making parts for the trains," said Bulman, who worked at the Alabama plant for seven years before getting laid off last year. “But the whole time, it was a setup, we were gone."

FreightCar America isn't the only large company to have taken out a multimillion-dollar Paycheck Protection Program loan and then laid off a substantial chunk of its workforce. An analysis of applications for trade adjustment assistance, which the federal government provides to workers whose jobs have disappeared due to imports, shows that at least half a dozen companies that applied for more than a million dollars apiece in PPP loans terminated more than 50 workers in 2020 after their aid was approved.

To be clear, the companies may have complied with program rules, which put a premium on getting money out fast. The regulations changed frequently in the months after the Congress established the PPP as part of the CARES Act in March 2020, and the law was later amended to allow more of the money to be used for non-payroll expenses. The law also contained many exemptions that stretched the definition of what qualifies as a small business.

A paper mill in northeast Washington state called Ponderay Newsprint, for example, went bankrupt and laid off 150 workers, two months after being approved for a $3.46 million loan. Its bankruptcy trustee John Munding said the money was used to pay workers and the government forgave the loan, while the company's assets were acquired by a private equity firm.

A Nebraska aircraft parts manufacturer called Royal Engineered Composites was approved for $2.74 million in April 2020 in order to support 250 jobs, but laid off 99 workers by mid-May. The company declined to comment.

Canadian-owned Supreme Steel took $1.69 million in May 2020 for its plant in Portland, Oregon, which it closed five months later, terminating 112 employees. Spokesperson Rhandi Berndt said that “the closure was the result of market forces" and declined to answer further questions.

In order for PPP loans to be forgiven, the federal Small Business Administration initially required borrowers to spend 75% of the funds on payroll over eight weeks. Since the maximum PPP loan amount was for 2.5 times companies' average monthly payroll in 2019, that should have guaranteed that wages and hours could be maintained, as required by the CARES Act.

In the case of FreightCar and some other borrowers, the original eight-week “covered period" of the PPP loan passed before layoffs occurred, allowing the companies to have their loans fully forgiven. But the other cases may have easily qualified as well, because Congress changed the rules.

Last June, after businesses protested that they couldn't spend their PPP money fast enough in a stalled economy, the legislation was amended to require only that 60% of a loan go toward workers' pay, and the covered period was extended to 24 weeks. Since borrowers had to spend less of the loan on payroll over a longer period to keep the money, they had wide leeway to let people go as they saw fit.

“It wouldn't be difficult to lay off 50% of your workforce and still get full forgiveness," said Eric Kodesch, an attorney at Lane Powell who has helped many clients with their PPP applications.

The SBA has not publicly released data on forgiveness of specific loans, but aggregate statistics show that so far, out of all applications processed, more than 99% of the total dollar value has been forgiven. The SBA declined to comment on individual borrowers or identify loans that have been forgiven.

There's another reason why a casual reader of the CARES Act might think companies would not qualify for PPP money: Many are actually very large businesses.

In general, the CARES Act set an upper size limit of 500 employees. With a few exceptions, the law required SBA to count all “affiliate" companies toward that total. That would include companies owned by private equity firms as well as subsidiaries contained within holding companies. It exempted hotels, restaurants and franchises, but no other industries. (That's why Shake Shack and Ruth's Chris Steak House qualified for loans, though each returned the money after a barrage of negative press coverage.)

However, a number of program nuances allowed large companies to obtain PPP loans.

FreightCar laid off 550 people with the Shoals plant shutdown, according to a notice filed with the state of Alabama. Along with its headquarters employees, that alone would exceed the PPP's ostensible 500-employee cap. But FreightCar availed itself of a loophole baked into the PPP. The SBA's alternative size standards, a complex set of industry-by-industry thresholds that have been debated for decades, allowed it to qualify with up to 1,500 workers.

Originally, the SBA allowed foreign-owned applicants to count only their U.S.-based employees under the 500-person cap. That guidance changed last May, requiring foreign-owned applicants to count their entire global workforce. But plenty of companies had already gotten PPP loans, and were allowed to keep them.

For example, Ledvance LLC, a Chinese-owned global lightbulb manufacturer operating in the U.S. under the brand name Sylvania, was approved for a $9.36 million PPP loan in April 2020. Then, between May and July, it laid off 50 people while closing down a distribution center near Bethlehem, Pennsylvania. Ledvance spokesperson Glen Gracia said in an email that the layoffs were “unrelated to the pandemic and in full compliance with LEDVANCE's participation in the Paycheck Protection Program."

Then there's Chick Master Incubator Company, which took $1.34 million in April 2020. In June, its corporate parent — a Zurich-based private office that invests the fortune of a long-established industrialist family — announced it would combine Chick Master with its other hatchery holdings and close the plant, laying off 68 people in Medina, Ohio, by year's end. Chick Master didn't reply to a request for comment.

One type of applicant, however, still likely should not have qualified: companies controlled by private equity firms whose total holdings exceed the SBA's size standard for the borrowers' specific industries. Cadence Aerospace, a supplier of aerospace and defense parts that itself has bought three companies in the last three years, is majority-owned by Arlington Capital, a private equity firm managing billions of dollars. Cadence was approved for a $10 million PPP loan in April 2020, and later that month laid off 72 people at its Giddens Industries subsidiary in Washington state, according to a notice filed with the state. Arlington Capital did not respond to a request for comment.

The Shoals plant was the last remaining U.S. manufacturing facility for FreightCar, a 120-year-old company headquartered in Chicago that had been shrinking its U.S. footprint for years. In 2008, it shuttered its plant in Johnstown, Pennsylvania. In 2017, it shut down its factory in Danville, Illinois. In 2019, it closed its plant in Roanoke, Virginia and announced it would open a new facility under a joint venture in Castaños, Mexico. When executives informed investors in September that the Shoals facility would also close and manufacturing would shift to Mexico, they projected $25 million in overall savings, including a 60% reduction in labor costs.

“Our manufacturing transformation is now largely complete, and we have taken control of our own destiny," Meyer said on an earnings call in March. “We have dramatically repositioned our competitive profile and in so doing created a new company, one that is able to win."

In 2013, the future looked different. When the Shoals plant opened, it offered about $12 an hour to start and a chance at advancement. One worker, who asked not to be named in order to protect her future employment prospects, left a tile-making job to become a welder, constructing a variety of rail cars, from hoppers to gondolas. Soon, she moved up to air brake tester, sliding underneath the massive steel vehicles to fix pipes.

“I went to FreightCar to retire," said the worker. “I wasn't planning on leaving when I got there."

In the following years, safety, pay and management concerns led to a union drive. During the campaign, anti-union employees circulated flyers warning that the plant would shut down if workers voted to organize, and in 2018 they voted decisively against it.

As it turned out, the Shoals facility wouldn't last long anyway.

Leading up to 2020, FreightCar touted the Shoals plant's competitiveness. A marketing video showed production lines run by industrial robots and skilled workers. “This is the largest, newest, most purpose-built factory in North America," boasted Meyer. “A modern, state-of-the-art factory in every sense of the word."

But the company was still losing money, to the tune of $75.2 million in 2019. When the pandemic further slowed down orders, executives started talking up the new facility in Mexico instead.

“The Mexico labor rate is approximately 20% of that in the U.S.," Meyer said on an earnings call in August 2020. “And the new plant provides other sources of savings beyond just labor."

Also on the August earnings call, executives explained that loan proceeds had made up for some of the cost of the company's move to Mexico. Chris Eppel, then the company's chief financial officer, said that the money also “partially offset" operating losses and inventory purchases. Meyer still got his $500,000 base salary in 2020, plus stock options worth nearly that and a $1 million bonus for securing a $40 million loan from a private investment company.

FreightCar did not take out a second-draw PPP loan; updated rules excluded publicly traded companies.

After the plant closure announcement, the air brake tester found a job making dashboards and bumpers for Toyota. It takes three times as long for her to get to her new job as the 20-minute drive she had to FreightCar, and she's paid six dollars less per hour. Although FreightCar gave employees a few thousand dollars in severance payments, she said all of hers went towards bills.

“It's like starting all over again," she said. “If they did right by us like they did their supervisors, maybe we'd be in more decent shape than what we're in now."

The Federal Government will now give PPP loans to borrowers in bankruptcy

The federal government has quietly reversed course on a policy that had kept thousands of businesses from applying for pandemic economic aid, with only weeks to go before funds are expected to run out.

In late March, ProPublica reported on a Small Business Administration rule that disqualified individuals or businesses currently in bankruptcy from getting relief through the Paycheck Protection Program, an $813 billion pot of funds distributed to small businesses in the form of loans that are forgiven if the money is mostly spent on payroll. The agency had battled in court against several bankrupt companies attempting to apply for PPP loans, and did not change course even after Congress explicitly passed legislation in December allowing it to do so.

Referencing ProPublica's story, the National Association of Consumer Bankruptcy Attorneys wrote a letter to newly installed SBA Administrator Isabella Guzman urging her to follow Congress' suggestion and tell the Executive Office for U.S. Trustees — a division of the Justice Department that oversees most American bankruptcy courts — to allow debtors to receive PPP loans.

The agency has not yet contacted the Justice Department. But on April 6, the SBA released new guidance as part of its frequently asked questions for the program, redefining what it means to be "presently involved in any bankruptcy." Under the new interpretation, debtors who filed under Chapter 11, 12 and 13 — which cover businesses, family farms and individual consumers, respectively — are eligible for PPP loans once a judge has approved their reorganization plan. A spokesperson for the SBA said the explanation had been added for "clarity."

A reorganization plan specifies the debtor's path to paying off obligations to creditors, and is monitored by a trustee. In simple cases, a judge can confirm it within a few months of filing. This is what often happens in consumer Chapter 13 cases, about 279,000 of which were filed in 2019, as well as in relatively straightforward Chapter 11 cases that don't require extensive litigation. About 5,500 companies filed for Chapter 11 in 2019.

The Administrative Office of the U.S. Courts doesn't track how many of those companies have confirmed reorganization plans in place, but it's estimated to be in the thousands. Now, companies on the road out of bankruptcy — which usually takes years to complete — can apply for PPP loans before the program's May 31 deadline. With $50 billion left after several extensions, PPP funds are likely to run out before then.

Ed Boltz, a bankruptcy attorney on NACBA's board who circulated the organization's letter, said he believes the SBA changed its position after becoming "aware of the foolishness of the prior administration's position."

The change would not have helped all the companies that sued the SBA over its policy. Florida-based Gateway Radiology Consultants, for example, didn't have a confirmed reorganization plan before it applied for a PPP loan last year, prompting a lawsuit. But the bankruptcy lawyer in that case, Joel Aresty, said plenty of his current clients could benefit.

"If they were lucky enough to already be confirmed, they could freely qualify for a PPP loan — the fact that you were in bankruptcy is no longer a deterrent," Aresty said. "It's amazing how difficult they made such a simple proposition, really."

The new definition may now help Mark Shriner, a coffee shop owner in Lincoln, Nebraska, who filed for Chapter 13 bankruptcy in 2018 following a divorce. His plan was confirmed the same year. The SBA's exclusion of debtors from the PPP originally prevented him from applying, forcing him to take on higher-interest loans to keep his doors open.

His cafe likely would have qualified for up to $25,000, and Shriner said he could have used some of the money to improve his online ordering or devise a takeout-friendly menu. Even now, he said, getting PPP money would help him plan for the future and bring back more staff.

Informed of the change last week, Shriner sent an application to his bank, which said it would hear back from the SBA within a couple weeks.

"Wow," Shriner said. "That would be great."

How a federal agency excluded thousands of viable businesses from Biden relief plan

Like every other storefront in downtown Lincoln, Nebraska, the Coffee House — a cavernous student hangout slinging espresso and decadent pastries since 1987 — saw its revenue dry up almost overnight last spring when the coronavirus pandemic made dining indoors a deadly risk. Unlike most, however, the business wouldn't have access to the massive loan fund that Congress made available for small enterprises in late March.

The reason had nothing to do with the business itself, which had been having one of its best years ever, according to its owner, Mark Shriner. Rather, it all came down to one box on the application for the Paycheck Protection Program money, which asked whether the company or any of its owners were "presently involved in any bankruptcy." Shriner had filed for Chapter 13 in 2018 after a divorce and was still making court-ordered debt payments, so he checked "yes." He was automatically rejected and lost about $25,000 in payroll and other costs that the program would have covered.

"My money is my store's money. When I got divorced and she was entitled to half, it's not like a company can raise money real quick," Shriner said, noting the way in which many small businesses are structured as pass-through entities that pay taxes on any profits as individual income. "All these businesses that had a tough time and are trying to make payments at the same time are getting kind of hosed."

Thousands of people file for Chapter 13 bankruptcy every year — 282,628 did so in 2019 alone. Although it's not clear how many of them own businesses, all of those individuals were barred from the PPP program, along with the thousands of businesses currently working through a reorganization plan under Chapter 11 and the family farms that file under the lesser-known Chapter 12.

In December, Congress allowed the Small Business Administration to give exceptions to some debtors. But so far the SBA has stuck to its position that debtors in bankruptcy aren't entitled to government aid. "Currently, the SBA is administering the law as written," SBA spokeswoman Shannon Giles emailed in response to questions.

Although Shriner did receive the $10,000 Economic Injury Disaster Loan advance payment, which doesn't have to be repaid, the SBA turned him down for a larger Economic Injury Disaster Loan because of his personal credit. Instead, he took out two loans worth $107,000 from Square — with total fees of nearly $12,000 — to keep the lights on and the staff paid as they operated on a drastically limited basis, still down by more than half since before the pandemic.

"The biggest consequences are that we haven't had the time to take a week and shut down and plot our way forward, come up with a to-go menu or some new things, because we're busy working the counter trying to save money," Shriner said. "A lot of other businesses that got PPP have been able to hire people to help them head in a different direction, get apps made, fix their websites, that kind of thing."

The prohibition on PPP loans going to debtors began with the SBA's original concept for the program: It extended its 7(a) loan program, its most common credit offering for small businesses, which already bars bankrupt companies. New pandemic relief measures were basically grafted on to those rules, which reflect an agency position dating back to its beginnings in the 1950s that bankrupt companies were more likely to default.

"SBA has an institutional prejudice against people who file bankruptcy," said Ed Boltz, a North Carolina bankruptcy lawyer who serves on the board of the National Association of Consumer Bankruptcy Attorneys. "The attitude of government in a lot of things is, 'Bankruptcy is hard and confusing and these people are probably bad people.'"

Almost immediately, this position was challenged in courts across the country. In Hidalgo County, Texas, for example, an emergency medical transportation company in bankruptcy sued after it was denied a PPP loan. A bankruptcy judge issued a temporary injunction against the SBA, saying it was in the public interest during the pandemic to make sure the company's trucks and helicopters could keep ferrying patients to hospitals. In June, the 5th U.S. Circuit Court of Appeals vacated that decision, saying the judge had exceeded his authority.

Meanwhile, the SBA hastily published a rule explicitly barring companies in bankruptcy from participating in its pandemic relief program. "The Administrator, in consultation with the Secretary, determined that providing PPP loans to debtors in bankruptcy would present an unacceptably high risk of an unauthorized use of funds or non-repayment of unforgiven loans," the rule read. "In addition, the Bankruptcy Code does not require any person to make a loan or a financial accommodation to a debtor in bankruptcy."

Around the same time, a Florida radiology center also serving COVID-19 patients received a PPP loan, even though it was reorganizing under Chapter 11 bankruptcy. When it filed for approval with its bankruptcy court to take on the additional debt, the SBA objected again. The bankruptcy court found in favor of the radiologists in June, writing that "it is plain Congress did not intend to exclude chapter 11 debtors from the Paycheck Protection Program." In December, however, the 11th Circuit overturned the lower court and sided with the government.

Maury Udell, the radiology company's lawyer, said he plans to appeal to the Supreme Court. The PPP is more of a grant than a loan, he argues, since all companies had to do in order for the money to be forgiven is spend most of it on payroll. Bankrupt companies are arguably more likely to do so, given that they're on court-ordered plans for how they must manage their expenses. Besides, the program did not require that companies demonstrate their ability to repay — plenty of businesses on very shaky footing applied for and received funding, sometimes filing for bankruptcy later.

"The SBA's argument for not allowing Chapter 11 debtors is that the risk of nonpayment is high," Udell said. "That's not a factor in whether you were approved. It's just as high as anyone else, because there's no other underwriting guidelines."

Frustration with the SBA's position mounted through the fall until December, when Congress passed a fresh round of $900 billion in pandemic-related relief, along with the regular budget. It included $285 billion for a second draw of PPP loans, and a bit of potential relief for debtors: an amendment to the U.S. Bankruptcy Code that allows PPP loans to businesses that have filed for bankruptcy under Chapters 12, 13 and Subchapter V, a new category for small businesses established in 2019. (Chapter 11 debtors were left out.)

However, there was a catch: In order to trigger the exemption, the SBA would have to write a letter to the Executive Office of the U.S. Trustee, an division of the Justice Department that oversees U.S. bankruptcy courts, alerting it to the change. So far it has not done so, even as Congress has extended the deadline for PPP applications to May 31, with $103 billion in authorized funds yet to be expended.

President Joe Biden's choice to run the SBA, Isabella Guzman, was confirmed on March 16. The SBA would give no indication of whether she plans to change course. Spokespeople for senators on the committees of jurisdiction either had no comment or said they were looking into the issue.

Last week, as his hope of getting a PPP loan waned, Mark Shriner set up a GoFundMe page to try to keep his doors open. More than $21,000 has flowed in. Meanwhile, he also learned about the Restaurant Revitalization Program established by the $1.9 trillion American Rescue Plan. So far, since it's a straightforward grant rather than a loan, it doesn't seem to prohibit applications from companies — or company owners like him — who've filed for bankruptcy. But he's not counting on anything, since aid programs have been so disappointing.

It's a difficult contrast, he said, when he looks around town and sees all the federal money that helped people who didn't always need it.

"I'm not a wealthy person at all, but I have many millionaire friends who own businesses, insurance firms, architecture firms," Shriner said. "These millionaires got money and money and money and money from the government, and they're all driving on the golf course. It is tough when I think about it."

Twitter and YouTube banned Steve Bannon -- but Apple still gives him millions of listeners

Late at night on Jan. 5, the day before President Donald Trump was scheduled to deliver a defiant speech before thousands of his most dedicated supporters, his former adviser Steve Bannon was podcasting from his studio near Capitol Hill. He had been on the air several times a day for weeks, hyping the narrative that this was the moment that patriots could stand up and pull out a Trump win.

"It's all converging, and now we're on the point of attack tomorrow. It's going to kick off, it's going to be very dramatic," Bannon said in his fluent patter, on a day that would see four of his "War Room" shows posted online, up from his usual two or three. "It's going to be quite extraordinarily different. And all I can say is strap in. You have made this happen and tomorrow it's game day."

The next morning Bannon was back. "We're right on the cusp of victory," Bannon said, as protesters massed at the Ellipse to hear from Trump.

"This is not a day for fantasy, this is a day for maniacal focus. Focus, focus, focus," Bannon went on. "It's them against us. Who can impose their will on the other side."

To the protesters massing in Washington, Bannon's message was clear: They could force the outcome by pressuring Vice President Mike Pence and Congress not to certify the electoral vote.

Ultimately, the day resulted in a bloody brawl that took the lives of both police and protesters, in a security breach unlike any America has seen in decades. It was planned in explicit detail across websites that were taken offline, like Parler, or censored, as Twitter did with thousands of QAnon-affiliated accounts and even the president's.

But Bannon, who himself was banned from YouTube and Twitter after saying in November that Dr. Anthony Fauci and FBI Director Christopher Wray should be beheaded, continues to reach an enormous audience via Apple's podcast app, which is installed by default on every iPhone. Although the app doesn't show the number of times the show has been streamed, Bannon gives updates every few days on its popularity. As of last week, he claimed total downloads of 29 million.

Bannon did not respond to a request for comment.

It's not just Bannon. Several podcasts that spread baseless claims of election fraud, including shows by former Trump strategist Sebastian Gorka and Judicial Watch's Tom Fitton, continue to be broadly available on major platforms. The fact that such beliefs were the battle cry of a violent mob that threatened congressional leaders has brought podcasting platforms face to face with a difficult question: What are their responsibilities when it comes to stifling what otherwise could be seen as protected speech?

In the weeks since Nov. 3, Bannon has spent several hours a day exploring the minutiae of baselessly disputed elections in several states, giving ample airtime to Trump defenders like Rudy Giuliani, Sidney Powell and presidential adviser Peter Navarro. Using a mix of football, military and religious analogies, Bannon speaks often in apocalyptic terms about the risk of losing.

"It's the children of light and the children of darkness," he said on Jan. 3, after interviewing the right-wing Archbishop Carlo Maria Viga, whom Pope Francis fired as the Vatican's ambassador to the United States after he sided with anti-gay culture warriors. "One side's going to win and one side's going to lose. Everything that the Judeo-Christian West represents is at stake. That's what this battle is about. That's what Wednesday is about."

While social media companies have become more willing over the past few months to censor accounts that engage in hate speech, podcasts are still largely unmoderated. Part of that has to do with the industry's structure: The main podcast portals merely index the shows, like Google indexes websites. Despite canceling Bannon's YouTube channel, Google Podcasts still indexes "War Room." (Apple accounts for more than half of the number of podcast streams, with Spotify a distant second.)

"Online platforms know that rhetoric promoting violence and disinformation absolutely matters. That is why most of them ban such activities in their own terms of service," said Megan Squire, a computer science professor at Elon University who has studied the right-wing podcasting ecosystem.

"However, in the case of podcasts, Apple usually explains that they are just cataloging the show and not actually distributing it," Squire said. "For example when they banned Alex Jones, they just stopped listing him, but what guidelines they used were a bit unclear. Contrast this to their app store guidelines, which are very clear."

Apple declined to comment on how it evaluates whether to de-list a podcast. Its terms of service prohibit "content that is illegal or promotes illegal activity, self-harm, violence, or illegal drugs, or content depicting graphic sex, gore, or is otherwise considered obscene, objectionable, or in poor taste."

Audio files themselves are supported by a much more fragmented network of hosting services — which costs money, unlike simply being catalogued by a portal like Apple's. "War Room" is hosted by Podbean, which did not return a request for comment. Its terms of service forbid content that is "malicious, false, or inaccurate."

To be clear: Since his "heads on pikes" episode, Bannon has shied away from advocating violence. He sometimes caveats his calls to arms by cautioning that he's talking about political protest or "coloring inside the lines." He has downplayed allegations against Dominion Voting Systems, which threatened to sue other Trump allies and news outlets for spreading baseless claims of fraud. In the wake of Jan. 6, like many in the right-wing media ecosphere, he has praised peaceful protest and claimed the riot was instigated by liberal agents provocateurs rather than Trump supporters.

However, extremism experts say the rhetoric still feeds into an alternative reality that breeds anger and cynicism, which may ultimately lead to violence. Julia DeCook, an assistant professor at Loyola University Chicago's school of communications, notes that listeners who are convinced about one conspiracy theory are more likely to accept others, which is what makes more mainstream commentators like Bannon "dangerous."

"It's not like they hit you with the crazy stuff all at once. It's the little things that sow distrust and skepticism," DeCook said. "Steve Bannon goes right up to the line of what is acceptable and what is hate speech. But platforms are really bad at understanding borderline content."

Bannon seems to understand very well how the information he's putting out in the world influences his audience. On the eve of the Capitol riot, one of his co-hosts interviewed a young man at a pregame rally in downtown Washington who said his whole family had been dejected after the election. After discovering "War Room," they were increasingly encouraged and listened to every episode, resulting in his presence at Freedom Plaza that night. The "War Room" crew celebrated this exchange as evidence of its impact.

"As soon as you're able to create the structure or the context, and let them come to their own conclusions, they're going to be able to have their own mental map, they can then start making their own decisions, and then become disciples or force multipliers," Bannon said. "We've helped provide the information to people who are jacked up."

(Of course, Bannon also has an interest in helping Trump, who could still use his pardon powers to dismiss a federal charge concerning Bannon's alleged misuse of funds donated to a charity that said it was helping to build a wall on the border with Mexico.)

De-platforming Bannon, however, would be tricky.

Podcast directories and hosting services are loath to open the Pandora's box of content moderation. Todd Cochrane runs one of the largest, called Blubrry, which hosts 85,000 shows and indexes 1.3 million of them. Since Jan. 6, he said that many of his customers — especially Christian shows — are worried about being de-listed from other podcast directories. As long as they aren't using hate speech or inciting violence, which Blubrry's terms of service forbid, he said they're safe on his platform.

"This is a fine line for us," Cochrane said. Blubrry has a formal process for submitting complaints about shows with objectionable content and has only ever removed a handful. "Let's say I respond to a social justice campaign saying this show is ultimately resulting in violence. It's an internal decision of whether or not we want to host that content, but I wouldn't want to be in Podbean's position today."

Even if "War Room" were kicked out of Apple's directory or dumped by Podbean, that might fuel the argument — which Bannon has already exploited after being booted by Twitter and YouTube — that Big Tech has it out for conservatives. Plenty of liberal-leaning shows aren't paragons of truth either, but they haven't been banned.

"The inconsistency is a huge catalyst for these folks, because it gives them an endless supply of pretty accurate grievances to raise about 'why are we being shut down in this way,'" said Peter Simi, an associate professor of sociology at Chapman University. "It amplifies their sense that there's this left-wing conspiracy that's hell-bent on preventing them from even expressing their views."

Though Apple offers access to an enormous audience, it may only be a matter of time before Bannon and others are able to build up an alternative streaming universe that doesn't depend on the grace of Silicon Valley tech giants. On Jan. 13, Bannon talked on his show with Andrew Torba, the founder of Gab.com, which has become a haven for conspiracy theorists. Torba boasted of having built up enough of his own data-center capacity to support all of the traffic from people leaving Twitter and Facebook, but service is still groaning under the weight of new traffic. In emails to Gab members, Torba has been soliciting donations to support the expansion. "No one is coming to save us," he wrote on Jan. 8. "We must save ourselves."

"It's a conundrum, because now you have the right wing moving into their own silos," said Adele Stan, the editor of Right Wing Watch, a project of the left-leaning People for the American Way. "The thing we know about the right is that they're good at building infrastructure, in the way that the left has never gotten their act together on. We're just at this moment of chaos where it's hard to know if there's a base that's radicalized enough to be there for the long haul, when things start to not look very good for their side."

In the meantime, Bannon seems to know exactly how far he can go before his remaining platforms have an excuse to yank his access.

Also on Jan. 13, having just been booted off YouTube after the site banned videos that spread false election fraud statements, Bannon again had Giuliani as a guest. The leader of Trump's legal team said he had acquired videos showing "Antifa" agitators leading the Capitol violence, and at one point he suggested that one of them had actually shot Ashli Babbitt, the Air Force veteran who was, in fact, killed by a Capitol Police officer.

Bannon tried to rein in Giuliani and finally cut him off. "I don't mind being shut down for my craziness, but I'm not going to be shut down for yours," he told the former New York City mayor, who seemed offended. "I don't say crazy things," Giuliani responded, after Bannon had directed listeners to Giuliani's website to view the videos.

"I know, I'm teasing you," Bannon said.

Jack Gillum, Derek Willis, and Logan Jaffe contributed reporting.

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