Chief among the omissions is the $349 billion expected to be doled out to small companies in chunks as large as $10 million. The rescue legislation does not compel the Small Business Administration to disclose the recipients. So far, the agency said, it has received about 487,000 applications seeking a total of $125 billion.
A potentially even larger gap involves the trillions going out to businesses under the auspices of the Federal Reserve.
The Cares Act and other legislation generally require the Fed to disclose the loan recipients and the amounts they receive, but there is a significant exemption: The Fed chairman, Jerome H. Powell, may request that the information be kept confidential, meaning only congressional leaders would be given access.
Congress rushed to pass the Cares Act in March while the economy rapidly deteriorated, but policymakers are only now beginning to understand some of the implications of the law. And lawmakers do not appear close to making any changes, as Democrats and Republicans are at odds over whether to approve $250 billion in additional funding for a small-business program or add even more funding for states, cities and hospitals.
Proponents of withholding the information argue that identifying coronavirus aid recipients could make firms hesitant to apply because of privacy concerns, especially if the businesses are small. Other needy companies may fear that an aid application, once made public, could be construed as a sign of financial frailty. Restarting the economy requires getting money to businesses quickly, these proponents say, so programs should avoid requirements that discourage applications.
On the other hand, if the names of the aid beneficiaries are withheld, it will be difficult to gauge how much of the relief money is being wasted, fraudulently obtained or not reaching places it was intended to go, experts and watchdog groups say.
“You can only truly measure the success or failure of programs if you know where the money is going,” said Neil Barofsky, the former inspector general of the bailout in the last financial crisis. “As a matter of basic governance, there should be disclosure of recipients of government bailout money.”
Though most of the $2 trillion in spending has yet to begin, disputes already have arisen about who will be responsible for making sure it is done ethically.
The Cares Act requires several layers of oversight: It calls for a special inspector general; a congressional review commission; and a Pandemic Response Accountability Committee, a group that will be composed of inspectors general armed with enhanced powers to subpoena documents and testimony.
But Trump has taken steps that undermine these reviewers. In signing the Cares Act into law, Trump angered some Democrats, who had insisted on oversight measures, by declaring that the special inspector general cannot issue reports to Congress without “presidential supervision,” a constraint that could compromise the watchdog’s independence.
Then last week, Trump removed the chairman of the federal panel Congress created to oversee his administration’s handling of the Cares Act. Glenn Fine, who had been the acting Pentagon inspector general, was informed that he was being replaced at the Defense Department by Sean W. O’Donnell, currently the inspector general at the Environmental Protection Agency.
Regardless of what happens to the oversight panels, the public disclosure of who receives the trillions in emergency money could play a critical role in the public debate over the programs.
Publishing the recipient information would enable outside groups — not just government-appointed bodies — to check into the spending, said Jordan Libowitz of Citizens for Responsibility and Ethics in Washington, a nonprofit watchdog group.
“We are always going to be in favor of as much transparency as possible in government spending,” he said.
But under the $2 trillion bill, the requirements for disclosure vary by the type of spending.
For example, one of the best-known elements in the bill, which allows the Treasury Department to spend $46 billion to help airlines, air cargo companies and “businesses critical to national security,” requires the department to promptly publish the name of the company getting money, the amount of the loan and the contract.
The Cares Act similarly sets out requirements for the Federal Reserve to disclose information about the loans it offers.
The Fed is required to turn over to Congress — and ultimately put up on its website — the basics of the loans issued: the identity of the business, how much money was loaned and the interest rate. Later it will disclose how much of the loan has been repaid.
Powell has stressed repeatedly in recent months that he believes the Fed must be transparent and accountable to the public in all its actions. In a speech Thursday, he also emphasized that the Fed is making loans that it expects will be repaid, not outright financial grants.
“I would stress that these are lending powers, not spending powers,” Powell said. The Fed’s expectation is “the loans will be fully repaid."
As the Fed chair, Powell has the discretion to keep the company name and amount borrowed confidential, sharing the information only with certain congressional leaders who oversee Fed activities. That information “shall be kept confidential, upon the written request of the Chairman,” according to a portion of the Federal Reserve Act cited by the bailout legislation.
During the global financial crisis, the Federal Reserve refused to turn over to reporters the records of some of its emergency bank lending. Bloomberg, the media company, sued for their release and, in a case that went to the Supreme Court, won three years later.
Sarah Bloom Raskin, a lawyer and former Fed official, said the oversight appears “weak” at a time when the Fed has been given substantial new powers to lend money.
Critics also noted that while the central bank has to share some basic information about the loans, other details, such as how many employees the company has retained or the compensation for its chief executive, might never be shared publicly.
“We should ask for the actual deal documents. Why wouldn’t you make those public?” said Marcus Stanley, policy director at Americans for Financial Reform.
Finally, other significant portions of the Cares Act impose no disclosure requirements on the agencies disbursing the money.
There are no such mandates, for example, for the $100 billion destined for health-care providers; the $3.5 billion for companies developing diagnostics, medications and vaccines; or the $10 billion supposed to go to airports.
Those agencies could still release the information, however, and some are planning to do so.
The Federal Aviation Administration, which is doling out $10 billion in coronavirus aid to airports, said that the agency would provide a list of the recipients once the deals are arranged, said spokeswoman Marcia Alexander-Adams.
The Department of Health and Human Services, which is supposed to roll out the money to health care providers and companies providing medications, did not respond to a request for comment about whether it would release information on recipients of $100 billion the agency is doling out to health care providers.
The identities of the recipients of the money in the Cares Act might also become public if the information is requested under the Freedom of Information Act, and already, some newspapers and watchdog groups have indicated that they will file requests.
The names of borrowers who apply to the small business loan program could be released under the Freedom of Information Act, “subject to certain exceptions,” according to the fine print on the loan application form. But large requests under the Freedom of Information Act often can be hampered by months or years of bureaucratic delays and litigation.
There is at least one other way the information could come out: One of the oversight bodies created by the bill, the Pandemic Response Accountability Committee, is supposed to publish information on the money spent, too, but it does not compel the publication of information beyond what is required by the Freedom of Information Act.
One of the most divisive of the disclosure debates could arise over the $349 billion promised to small businesses, a figure that could rise to almost $600 billion if a follow-up relief bill is approved. The Small Business Administration hasn’t yet said how much has been disbursed, and Christopher Hatch, an SBA spokesman, said Monday that the agency itself might not know until June, when it hears back from thousands of banks.
Larry Kudlow, Trump’s chief economic adviser, recently said that his wife, a painter, has applied for a loan and found the process to be easy.
Advocates for small businesses said disclosing the identities of the recipients and the amounts they received could raise privacy concerns. The size of the loan, they say, could give the public clues about how much a small business makes.
“There are inferences that can be made. … It’s similar to saying, ‘Hey, how much do you make every year?’” said Molly Day, a vice president of the National Small Business Association, which counts 65,000 members. “It’s private information that you wouldn’t want to share.”
Moreover, she said, “Advertising to the world that you’re having a hard time — even if everyone else in the whole world is — is something a small business might not want to do.”
But Libowitz and other advocates of government transparency point out that ignorance of the recipients’ identities might make it hard to ask key questions.
“Did they have connections? Did they lobby? Knowing who’s getting the money allows outside parties to do their oversight — and that’s something you can’t do without this information,” Libowitz said.
Aaron Gregg and Renae Merle contributed to this report.