Mid-April 2020, when Covid was destroying the U.S. economy and coal producer Ramaco Resources from Lexington, Ky. turned to taxpayers to help. According to a company filing, it received $8.44 Million under the Paycheck Protection Program. This is one of the largest loans authorized by the CARES Act legislation.

PPP loans were made to companies who didn't have other funding options, such as money that could be found in the stock and bond markets or money from wealthy backers. Ramaco appears to have both. Its shares are listed on Nasdaq, and it has the backing of two wealthy private equity firms, Yorktown Partners in New York City, and Energy Capital Partners in Summit, N.J. According to Ramaco's most recent proxy filing, these firms together hold 57 percent stock.

During spring 2020, the federal government moved quickly to provide financial aid to individuals and businesses hammered by Covid-related shutdowns. The CARES Act programs were passed by Congress in March 2020. They provided $2 trillion in loans and direct payments. Targeted business recipients included hospitals, airlines, and companies in the hospitality industry that are struggling financially.

Click Here to Read the Report

Tracking where all this money went is a challenge. The CARES Act funded funding report is comprehensive and estimates that Ramaco was backed by private-equity firms. This means that the company received at least $5Billion. According to the report $900 Billion in uninvested cash was owned by large private equity owners at the time these companies received funding from the government. These include Apollo Global Management, Energy Capital Partners, and Ares Management Corp.

According to data analysis done by the left-leaning nonprofit Americans for Financial Reform with the Anti-Corruption Data Collective (Public Citizen) and others, nearly $1.2 Billion of the PPP and Economic Injury Death Loan pandemic money for small businesses went to these well-funded, large-funded private-equity companies.

Some private-equity-backed companies that took federal CARES Act funding are now yielding significant profits for their investors. DuPage Medical Group was a Chicago-based physician practice that paid $209 million to its investors in March after it received $80million in non-PPP funding. And a recent sale of LifePoint Health, an Apollo-backed hospital system that netted more than $500 million in non-PPP funding, generated $1.6 billion in profits to Apollo and its investors.

PPP was designed to aid companies in paying employees. Low-interest loans that were not subject to certain conditions could be forgiven completely if the borrowers used 60 percent of their loan funds for payroll. About 11.5 million different loans worth nearly $800 billion were distributed, and as of Sunday, the Small Business Administration said it had forgiven $530 billion, or "67 percent of the total PPP loan value, in full or in part."

The first introduction of PPP at the outbreak of the pandemic was in April 2020. Companies with access to capital could borrow as much as they wanted. After the outcry about large companies borrowing loans, the Treasury Department on April 23, 2020 stated that "PPP Borrowers should consider their ability of accessing alternative liquidity sufficient to support ongoing operations" when certifying they need for a loan.

Compliance with that guideline, however, was effectively an honor system. Treasury and Small Business Administration asked companies that had received loans to examine their applications to make sure that they met the criteria and, if not repay the money before May 7, 2020. Ramaco took out its loan in April 20. It didn't pay the money back. The loan was cancelled in July.

Much of the non-PPP CARES Act money had few such restrictions about access to alternative funding. Because so much of the assistance was intended for health-care firms (an industry in which private capital has significant investments), it is not surprising, therefore, that large amounts of taxpayer money ended up in the coffers companies backed with very high net worth individuals.

Yet, the well-funded entities tapping federal money may have overpowered needier companies, says Patrick Woodall (research director at Americans for Financial Reform).

Woodall stated, "Private-equity giants are emblematic a well–funded investor class should be in a position to support their own businesses in times of crisis." Their companies enlisted willing hands to borrow money from the government that could have been made available to more vulnerable firms.

Rep. Bill Pascrell Jr., the New Jersey Democrat who heads the Oversight Subcommittee of the House Ways and Means Committee, agrees. In a statement, he stated that "private equity leaders may need more government aid than any other individuals." Many private-equity head make their living buying up companies. As Oversight Subcommittee Chairman, we have repeatedly demonstrated how unfair this system is."

Ramaco had 381 employees when Ramaco applied to its PPP loan. Ramaco filed a regulatory file stating that the proceeds were used for eligible payroll expenses, lease interest, and utility payment.

Ramaco had 340 employees, including top executives, as per a regulatory filing. A total of $6.35million was paid to these three executives last year. That is 75 percent of Ramaco's tax money.

Ramaco's general attorney declined to comment on the record regarding the loan or executive pay. Yorktown Partners or Energy Capital Partners did no respond to requests of comment.

Ramaco had losses in 2020. However, it has returned to profitability for this year. Its stock has increased more than threefold.

'Dry powder'

In recent years, private-equity firms have taken over broad swaths of American industry -- health care, retailing and energy to name just a few. Private equity firms buy companies in order to increase their profits. Then they try to resell them several years later for a higher price than they paid. Outside investors, such as public pension funds and endowments, commit big money to these deals in the hopes of generating high returns.

Many of these executives have seen their wealth rise during the pandemic. Forbes claims that Leon Black, cofounder and former head at Apollo, is now worth close to $10 billion. That's an increase of $8.7 trillion last year. Black recently took early retirement from Apollo after the company determined he had paid Jeffrey Epstein, the deceased sex offender, $158 million for financial and tax advice. Black said he retired for health reasons.

Although executives at private equity firms have enjoyed a lot from their operations, there are also costs for workers involved in debt-fueled takeovers. This is evident according to academic research. They include a greater likelihood of bankruptcy -- one study showed such failures occurred at 10 times the rate of other companies. Another study concluded that those acquisitions result in lower employment at private-equity companies.

Private-equity companies have a shorter time horizon for their investments so they are more likely than other companies to continue operating environmentally dangerous operations. Since investor criticism led some public companies in recent years to dump fossil fuel assets because of investor concerns, private-equity buyers have been available.

Yorktown Partners and Energy Capital Partners were the first to invest in Ramaco, a coalminer. Yorktown Partners also oversaw Ramaco's public offering of stock as the coal-friendly Trump Administration was about to take power.

A 2021 regulatory filing by Ramaco shows its operations received 126 citations under the Mine Safety and Health Act of 1977 last year for alleged violations of mandatory health or safety standards that "could significantly and substantially contribute to a coal mine health and safety hazard." Ramaco faced $276,000 in assessments under those citations, the company's filing said, noting that "violations, orders and citations can be contested and appealed, and in that process, are often reduced in severity and amount, and are sometimes dismissed."

Ramaco declined further information and comment on these citations.

The American Investment Council represents the largest lobbying group in private-equity. It believes private equity makes society better. Drew Maloney said that the Council's chief executive, Drew Maloney stated that private equity is making an "overwhelmingly positive impact" in all 50 states and is helping to fuel America's economic recovery. Private-equity investing has been a major factor in the recovery of thousands of small business, millions of employees, and progress in medical research since the Covid-19 pandemic.

A spokeswoman for Council stated that AFR does not consider the billions worth of uninvested cash held in private-equity funds, which is known as "dry flour", and is therefore wrong. This money can be used to rescue troubled companies. Private equity's "investment capital largely comes from pension funds and college endowments," the spokeswoman said. Dry powder refers to money from college endowments and retiree pensions that has not been invested.

Private equity firms asked for government support early on in the Covid crises. Executives from Apollo, which had $455 billion in assets at the end of last year, were among those arguing in March 2020 that the economic fallout from the shutdowns could be disastrous and that federal assistance was needed.

Apollo Holdings includes LifePoint Health, which is a hospital system that has around 80 facilities in small cities across the country. LifePoint received loans and federal payments totaling over $1.4B through the CARES Act between 2020 and now, according to documents and the latest report.

AFR disclosed that LifePoint received federal assistance totaling $5.3 million to cover Covid Testing for Uninsured Patients, $557,000,000 in Provider Relief funds (Health Resources and Services Administration) and $884,000,000 in advanced Medicare payments. These are supposed to be repaid. A spokeswoman for LifePoint stated that it has fully repaid all Medicare advances received. She also said that grant money was used to offset $1.1 million in expenses and revenue loss due to COVID.

The spokeswoman provided a statement saying the federal assistance "allowed us to continue operating our business, keeping the doors open for health-care providers in more than 80 communities across the country and protecting the jobs of nearly 55,000 employees, many of whom are on the frontlines fighting this pandemic, which continues to strain our hospitals and caregivers as the Delta variant surges."

Apollo, which received these taxpayer funds after LifePoint was acquired, recorded a $1.6billion gain on its majority stake. This year Apollo sold the holding in an unusual deal.

Apollo Investment Fund was established in 2013. It held the LifePoint stake. Bloomberg News reported that the Apollo fund sold the stake in July at a profit to another Apollo fund. Transactions involving similar buyers and sellers can raise questions about the fairness or honesty of the agreed-upon price.

An Apollo spokeswoman declined comment. The Apollo spokeswoman stated earlier this year that existing investors, independent advisors, and new investors all worked together to "reach fair and attractive transactions for both funds."

Investors in another private-equity-backed company also reaped returns after it received CARES Act help in 2020, the AFR report noted. Private-equity firm Ares Management Corp. owns DuPage Medical Group in Chicago. It is a large doctor's practice. The report stated that DuPage didn't receive a PPP loan but received almost $80 million from the Department of Health and Human Services Provider Relief Fund and Medicare Advance Payments.

DuPage refinanced some loans in March and distributed $209 millions to investors.

Moody's Investors Service's analyst stated that the transaction was indicative of DuPage's aggressive financial policies. He also characterized it negatively for the company's credit outlook.

DuPage spokesperson said that the refinance was "a product of positive market conditions, an improved performance outlook" and that the deal "enabled me to further strengthen my balance sheet and lower our interest expense."

An Ares spokesman said in a statement, "During the Covid-19 pandemic, the Department of Health and Human Services made funds available for all health-care companies as they sought to protect their patients and caregivers while they continued to provide health care to their communities. DuPage took part with a loan or grant in the HHS program. However, the company has fully met the original purpose of the funding. DuPage is repaying the required amounts, he added.

Woodall, the author, noted that the analysis may have missed some of the taxpayer funding that was given to private-equity funds because they are secretive and hard to track.

He stated, "This is a snapshot, an estimate," that showed private-equity-backed businesses were able to access public assistance when many other companies were really, really in trouble.