Treasury Secretary Steven Mnuchin said on Monday he would talk to Congress about oversight of the government’s $660 billion small business relief Paycheck Protection Program (PPP), after earlier resisting calls to disclose the names of recipients and loan amounts.
Mnuchin wrote in a tweet he would engage with lawmakers “on a bipartisan basis” to discuss oversight arrangements that would balance disclosure with “appropriate protection of small business information.”
I will be having discussions with the Senate @SmallBizCmte and others on a bipartisan basis to strike the appropriate balance for proper oversight of #ppploans and appropriate protection of small business information. @SBAgov
— Steven Mnuchin (@stevenmnuchin1) June 15, 2020
The treasury secretary sparked controversy when he told Congress last week that he would not disclose the names of PPP loan recipients or the amounts disbursed on grounds of it being “confidential” and “proprietary” information, in part because data about employee pay is used to calculate loan eligibility.
He told the Senate Small Business Committee on June 19 that “while we absolutely believe in transparency” in regards to the variety of economic relief programs launched to help businesses weather the COVID-19 crisis, “as it relates to the names and amounts of specific PPP loans, we believe that’s proprietary information, and in many cases for sole proprietors and small businesses, is confidential information.”
Mnuchin was responding to a question by Sen. Chris Coons (D-Del.) about why the data of businesses receiving the PPP funds was not disclosed on the website of the Small Business Administration (SBA), which administers the program, while comparable information of businesses seeking loans under a similar “7A” program is disclosed. Coons said the SBA said it plans to make loan-specific information available for the PPP funds “at a future date,” but pressed Mnuchin on clarification as to why such data hasn’t yet been disclosed. He also sought assurances that the Government Accountability Office (GAO) would get access to the data it needs to do its oversight job.
“So the reason why we’re not disclosing the names and individual amounts, unlike in the 7A program, is because of that issue,” Mnuchin said, referring to the problem of disclosing proprietary information of small businesses, sole proprietors, and independent contractors, including data about salaries.
“But we are working with the GAO, from an oversight … to make sure they’re comfortable and they do have access to information,” Mnuchin said.
Mnuchin’s resistance was met with blowback from both Republicans and Democrats, who said it is difficult to appropriately guide government aid during the pandemic without knowing where the money is going. Furthermore, they added the public has a right to see where taxpayer dollars are spent.
“Given the many problems with the PPP program, it is imperative American taxpayers know if the money is going where Congress intended—to the truly small and unbanked small business. The administration’s resistance to transparency is outrageous and only serves to raise further suspicions about how the funds are being distributed and who is actually benefiting,” said Senate Minority Leader Chuck Schumer (D-N.Y.) in a statement Friday.
According to the Washington Post, nearly a dozen news organizations have sued the SBA in federal court for the release of PPP loan records.
Coons on Monday announced that Democrats have officially introduced the Coronavirus Oversight and Recovery Ethics (CORE) Act (S. 3855), which a news release described as “legislation that would ensure stronger oversight, accountability, and transparency in the federal government’s response to the COVID-19 crisis.”
“We have to ensure that aid is going to workers and businesses who need it most, not just the businesses with the most political connections. This important legislation will ensure that inspectors general can do their jobs and provide real accountability for the trillions in taxpayer dollars we’re investing to keep our economy afloat,” Coons said in the release.
The official introduction of the CORE Act comes as Democrats said they are not receiving enough information about the loan disbursements and fear the Treasury Department has favored large, well-funded companies over smaller businesses in underserved communities.
Now 10 weeks after the PPP was launched, the SBA says it has processed 4.5 million loans worth $511 billion.
The loans can be forgiven if businesses use the money to keep employees on payroll or rehire workers who have been laid off.