Taxpayers Have a Right to Know Who Is Getting Their Stimulus Money
Sunlight is said to be the best of disinfectants, as Louis D. Brandeis—the future Supreme Court Justice—remarked, in his 1913 essay “What Publicity Can Do.” Seldom has this dictum been more apposite than it is now, when American taxpayers are handing out gobs of money to businesses affected by the coronavirus pandemic, the vast majority of which remain anonymous. On Sunday, the Treasury Department and the Small Business Administration published an update on the Paycheck Protection Program, which was designed to keep Americans employed during the shutdowns by providing financial support to businesses with fewer than five hundred workers. As of June 12th, the S.B.A., which is administrating the P.P.P., had approved about 4.6 million loans. The average size of the loans was about a hundred and twelve thousand dollars. The total amount committed was $512.3 billion, equivalent to about 2.4 per cent of G.D.P.
That’s a large sum to spend on what are effectively grants. (As long as a business participating in the P.P.P. maintains its payroll, most or all of its loan will be eligible to be forgiven.) And yet, with a few exceptions, taxpayers don’t know who has received all this money. Despite pressure from Congress and the filing of a Freedom of Information lawsuit by a number of media companies, Treasury Secretary Steven Mnuchin has refused to publish a list of P.P.P.-loan recipients and the sizes of their loans. The Trump Administration has not yet provided such data to the Government Accountability Office.
Appearing before the Senate Small Business Committee last week, Mnuchin said the secrecy was necessary to protect the “proprietary information” of loan recipients. The Administration’s argument is that if it publishes how much a certain business has received its competitors will be able to figure out its revenues, because the size of a P.P.P. loan is linked to a firm’s total outlays on payroll. But this argument flies in the face of at least two realities. In April, the S.B.A., which has routinely published the names of the businesses it has lent to, indicated that it would do the same for loans issued under the P.P.P. Moreover, the application form that borrowers have to fill out for a P.P.P. loan says that, under the Freedom of Information Act, “subject to certain exceptions,” the S.B.A. is obliged to supply information including “the names of the borrowers (and their officers, directors, stockholders or partners), the collateral pledged to secure the loan, the amount of the loan, its purpose in general terms and the maturity.” It’s all there in black and white.
The Administration’s hard-line stance has inevitably generated suspicions that it is trying to hide something. Shortly after the P.P.P. was rolled out, in April, it was revealed that three firms controlled by a prominent Trump donor, the Texas hotelier Monty Bennett, had received close to sixty million dollars in loans. (In early May, Bennett’s businesses said that they would return the money.) NBC News reported that at least three other businesses “with ties to the Trump administration received a total of $18.3 million under the program.” None of these firms was connected to the Trump family, however. And, at a press conference on April 21st, Trump insisted that none of his businesses had received money under the P.P.P. program. “Well, I know one thing—I didn’t get any, that’s for sure,” he said.
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