Congress Steps Up Pressure as Trump Administration Evades Bailout Oversight - The New York Times

WASHINGTON — House Democrats opened an investigation on Monday into the distribution of more than $500 billion in small-business loans under a pandemic relief program, escalating a clash with the Trump administration as it resists oversight of trillions of dollars in coronavirus assistance funds.

The announcement from the seven Democrats on a committee created to scrutinize how the administration is spending pandemic relief money came as Steven Mnuchin, the Treasury secretary, abruptly pivoted under pressure from lawmakers and said he would work to disclose more about where government-backed money was going through the lending initiative, the Paycheck Protection Program.

It was the latest indication that, despite attempts by lawmakers to build layers of oversight into the largest stimulus program of its kind in modern history, an administration that has been hostile to congressional scrutiny continues to resist. In a letter to four congressional committees last week, the heads of an independent accountability panel created by the law alerted lawmakers that lawyers for the Treasury Department were interpreting the statute in a way to exempt more than $1 trillion from scrutiny.

“The administration should release the names of all P.P.P. borrowers — as the S.B.A. routinely does for similar loan programs,” the lawmakers wrote in a letter to the heads of the Treasury Department and the Small Business Administration, which jointly administer the program. It came days after Mr. Mnuchin told a Senate committee that information was “proprietary” and not public.

“Contrary to Secretary Mnuchin’s recent testimony, there is nothing ‘proprietary’ or ‘confidential’ about a business receiving millions of dollars appropriated by Congress, and taxpayers deserve to know how their money is being spent,” the Democrats wrote.

Since the $2.2 trillion economic stabilization package became law in March, lawmakers have struggled to establish oversight. With some funds yet to be spent, including about $100 billion in the Paycheck Protection Program, and with lawmakers contemplating negotiations over another relief package, the scope of the task will only expand in the coming months.

Lawmakers have pointed to the creation of multiple oversight panels and positions as evidence that there is relentless scrutiny of the trillions of dollars doled out across the country. In recent weeks, lawmakers have intensified demands for information about which businesses have benefited from the Paycheck Protection Program and what kind of loans they have received.

But implementing oversight has proved challenging, particularly as Congress adjusts to working during a pandemic. The five-person Congressional Oversight Commission does not yet have a leader. (Speaker Nancy Pelosi of California said on Thursday that she hoped that a pick jointly agreed to with Senator Mitch McConnell of Kentucky, the majority leader, “will be imminent.”)

And President Trump has scoffed at oversight, suggesting as he signed the stimulus law that he had the ability to decide what information a new inspector general named to oversee a separate corporate bailout fund could share with Congress. Mr. Trump also in effect ousted the head of a committee of inspectors general responsible for pandemic oversight, known as the Pandemic Response Accountability Committee, through a demotion.

Although Mr. Mnuchin promised on Twitter on Monday to work with lawmakers to “strike the appropriate balance for proper oversight of #ppploans and appropriate protection of small business information,” Treasury Department lawyers issued an opinion that would further curtail oversight of more than $1 trillion in aid, according to the letter sent to lawmakers last week, whose contents were first reported by The Washington Post.

Michael E. Horowitz, the acting chairman of the Pandemic Response Accountability Committee, and Robert A. Westbrooks, the committee’s executive director, warned that the Treasury lawyers’ interpretation would “present potentially significant transparency and oversight issues.” The section singled out included funds for tribal governments already embroiled in a series of lawsuits, aid for states, nearly $500 billion for corporations, funds for aviation companies and the Paycheck Protection Program.

The Paycheck Protection Program and its beneficiaries have received particular scrutiny from lawmakers amid reports that wealthier corporations and businesses benefited from the program, with several restaurant chains, some private schools and at least one professional basketball team returning the money they received.

Mr. Mnuchin’s declaration that the names and amounts of the Paycheck Protection Program loans were proprietary and confidential sparked further backlash from lawmakers, particularly after his March vow of “full transparency.” Instead, during Senate testimony, he suggested that some of that information could be made available to the Government Accountability Office for oversight purposes.

Mr. Mnuchin and Senator Marco Rubio, Republican of Florida, discussed on Monday how to make the information public and whether to implement a threshold loan amount for disclosure.

Mr. Rubio argued that some loans should be exempt from full disclosure. “There’s a lot of smaller-end businesses that are concerned about what that might reveal about their business model,” he said.

“There will be disclosure — it’s just a question of what is the differentiation between a $100,000 loan and a $5 million loan,” he said, adding: “If you have a big loan, there’s no avoiding it. We’re going to need to know who you are.”

An adviser to Mr. Trump suggested that the administration was mindful of the public’s need to know how taxpayer money was being spent, but was wary of divulging the financial information of private companies. Through the end of May, the Small Business Administration had approved about 4.5 million loans totaling $510 billion.

Earlier this month, Mr. Rubio and Senator Benjamin L. Cardin, Democrat of Maryland, sent a letter to Mr. Mnuchin and Jovita Carranza, the head of the Small Business Administration, calling on them to release detailed information about borrowers and their loans.

The Coronavirus Outbreak

• Frequently Asked Questions and Advice

  Updated June 12, 2020

  • Does asymptomatic transmission of Covid-19 happen?

    So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.

  • What’s the risk of catching coronavirus from a surface?

    Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.

  • How does blood type influence coronavirus?

    A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.

  • How many people have lost their jobs due to coronavirus in the U.S.?

    The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.

  • Will protests set off a second viral wave of coronavirus?

    Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission.

  • How do we start exercising again without hurting ourselves after months of lockdown?

    Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.

  • My state is reopening. Is it safe to go out?

    States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.

  • What are the symptoms of coronavirus?

    Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.

  • How can I protect myself while flying?

    If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)

  • How do I take my temperature?

    Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications.

  • Should I wear a mask?

    The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.

  • What should I do if I feel sick?

    If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.

  • How do I get tested?

    If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.

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In letters on Monday to administration officials and eight national banks, including JPMorgan Chase & Company, Bank of America, Wells Fargo, and Citibank, House Democrats demanded details about the distribution of loan money, airing concerns that a “two-tiered system” for processing applications “may have diverted P.P.P. funds intended for vulnerable small-business owners in underserved and rural markets.”

Bank industry groups believed that the loan information would eventually be made public because most of the Small Business Administration’s small-business loans are subject to public records requests. The loan application form also indicates that the loans could be subject to such disclosures.

Monica Crowley, a spokeswoman for the Treasury Department, said on Monday that the department “is fully complying with all of the substantial oversight, transparency and reporting requirements” of the stimulus law.

Top officials at the department and the Office of Management and Budget had expressed “commitment to ensuring transparency, accountability and adherence to all statutory requirements,” Mr. Horowitz and Mr. Westbrooks of the Pandemic Response Accountability Committee wrote in their letter to lawmakers. But the two men also said they were writing in part to alert lawmakers to what they described as “possible ambiguity” that could be modified through future legislation.

At least one top Senate Republican signaled openness to including stronger language in another relief measure.

“I believe that American taxpayers ought to know where the money is spent, who gets money, and the oversight of all that is very important,” said Senator Richard C. Shelby of Alabama, the Republican who leads the Senate Appropriations Committee, signaling that he would support legislation if needed to clarify the scope of oversight. “We will follow up on that, no matter who it is, or what administration.”

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