Sen. Warren to Raimondo: Don’t Use Semiconductor Funds to Subsidize Corporate Stock Buybacks
Tuesday, February 14, 2023
U.S. Senator Elizabeth Warren (D-Mass.) has joined a group of lawmakers calling on the United States Department of Commerce -- and Commerce Secretary Gina Raimondo -- to "use its full authority to prevent funds from the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act of 2022 from being used to directly or indirectly subsidize corporate stock buybacks."
“Secretary Raimondo assured the public that the Department of Commerce intends to be vigilant and aggressive in protecting taxpayers’ and that it would ‘look after every nickel of taxpayer money.’ Meeting this commitment and realizing the economic and national security objectives of the CHIPS Act will require the Department to use its authority to ensure that CHIPS funds are not used to subsidize stock buybacks and shareholder distributions, whether directly or indirectly,” wrote the lawmakers.
The elected officials joining Warren in sending a letter to Michael Schmidt, Director of the CHIPS Program Office at the U.S. Department of Commerce (Commerce), include Tammy Baldwin (D-Wis.), Bernie Sanders (I-Vt.), Ed Markey (D-Mass.), and U.S. Representatives Sean Casten (D-Ill.), Bill Foster (D-Ill.), Pramila Jayapal (D-Wash.), and Jamaal Bowman (D-N.Y.).
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST
The letter notes that America’s largest semiconductor companies have spent hundreds of billions on stock buybacks in recent years.
Five of the largest semiconductor companies (Intel, IBM, Qualcomm, Texas Instruments and Broadcom) spent nearly $250 billion, or 71% of their net income, on buybacks between 2011 and 2020.
Buybacks by CHIPS recipients threaten to undermine the critical economic and national security goals of the CHIPS Act and enrich corporate executives and shareholders at taxpayers’ expense, say the lawmakers.
The aforementioned group of elected officials is urging the CHIPS Program Office to consider the following provisions when finalizing its Notice of Funding Opportunity and implementing the CHIPS program:
- Ensure CHIPS fund recipients do not engage in stock buybacks.
- Restrict CHIPS awardees from engaging in stock buybacks for at least 10 years.
- Implement additional restrictions on buybacks.
- Require CHIPS awardees to certify that they will not conduct stock buybacks by checking a box on the application form.
- Ensure Commerce uses all its tools against firms that misuse taxpayer dollars.
Warren in Focus
According to her office, Warren has "led the call for ensuring that strong guardrails are in place to protect taxpayers’ investment in strengthening our domestic semiconductor and technology manufacturing and that these funds are not used enrich corporations and their executives:"
In October 2022, Senators Warren, Baldwin, Chris Van Hollen (D-Md.) and Representatives Casten, Bowman, Jayapal, and Foster sent a letter to Secretary Raimondo, urging the Commerce Department to strengthen and enforce critical protections against the abuse of funds provided CHIPS Act for stock buybacks and promising continued Congressional oversight over the Department’s implementation of its commitments.
In September 2022, at a hearing of the Senate Banking, Housing, and Urban Affairs Committee, Senator Warren raised concerns about the need to protect CHIPS Act funds from being used by semiconductor companies to line the pockets of corporate executives instead of investing in strengthening supply chains, creating good union jobs, and bringing down prices for consumers.
In June 2022, Senators Warren and Sanders and Representative Sean Casten sent a letter to congressional conferees stressing the importance of strong guardrails to ensure that funding for the CHIPS Act is invested in workers and communities as intended, instead of enriching corporate executives.
Related Articles
- EDITORIAL: Raimondo’s Final Grades Just Came in From CNBC - See the Teacher’s Notes
- Raimondo: U.S. Commerce Adds Foreign Companies to “Entity List” for Malicious Cyber Activities
- East Coast Faces Gas Price Spike Due to Ransomware on Pipeline, Raimondo Says Attacks More Often
- “Rising Star” Raimondo Dubbed Likely Successor to Yellen by New York Times — Here’s What They Report
- GOP Lawmaker Calls for Raimondo to Testify Before Senate Committee on Supply Chain Crisis
- U.S. Senators Warren and Whitehouse Urge DOJ to Investigate FTX Collapse
- Warren, Sanders Urge FTC to Oppose Kroger-Albertsons Deal, Owners of Shaw’s and Star Markets
- Sen. Warren Blasts Federal Reserve’s “Culture of Corruption,” Criticizes Inspector General
- UPDATED: Raimondo Being Eyed to Replace Yellen as Treasury Secretary, According to Report
- VIDEO: Watch Biden’s State of the Union Address - Raimondo “Designated Survivor”
- Here’s the Woman That’s Going to Paint Gina Raimondo’s Portrait and She’s a New Yorker
- U.S. Sec. of Commerce Raimondo Pushes to Advance Offshore Wind, Signs MOU with Ørsted
- McKee’s Campaign Announces It Has Hired One of Raimondo’s Consulting Firms
- Raimondo Reportedly Took Advantage of “Little-Known” Federal Law to Avoid Tax Hit
- Raimondo’s Truck Toll Program Ruled Unconstitutional by Federal Court Judge
- Raimondo Admits Biden’s Executive Order on Reproductive Health Has Little Impact
- Raimondo Tells Nation: “There Isn’t Very Much More to be Done” to Control Gas Prices
- Foulkes Campaign Taps Raimondo Consultants, Staffers, and Advisers
- Raimondo Announces New National Strategy to “Reenergize U.S. Travel and Tourism”
- Raimondo Sells East Side Home UPDATED