The airline bailout loophole: Three companies received $338 million in relief money for workers — and laid workers off anyway

Three airline industry companies slated to receive $338 million in public money designed to preserve jobs in the hard-hit industry have laid off thousands of workers anyway, according to Treasury disclosure filings and public layoff data.

The largest company, Gate Gourmet, is a global preparer of airline meals and part of a Swiss conglomerate owned by the private equity firm of wealthy Malaysian businessman Richard Ong. Gate Gourmet is scheduled to get $171 million from the federal program to bail out the airline industry even after it reported laying off thousands of workers at airports in half a dozen states, including California, Georgia, New York and Illinois, in recent months, according to public filings. The exact number of workers who lost their jobs is not clear.

“These grants are meant to save jobs and only to save jobs,” said Rep. Katie Porter, D-CA, who has supported the aid program for aviation workers. Every payment Treasury makes “despite clear indications that the recipient company is firing workers or cutting hours is an abuse of the program and taxpayer money.” Continue reading.