Fed agency not forthcoming on small-business relief details
WASHINGTON — A small, overlooked federal agency is shouldering a massive relief effort for the nation’s small businesses and their workers left reeling by the pandemic.
The Small Business Administration has committed to auditing every sizable emergency loan it approves.
But six weeks after the $600 billion-plus program was launched, the agency has yet to make public the recipients of taxpayer aid.
A signature piece of Congress’ multitrillion-dollar pandemic rescue, the unprecedented lending program is targeted to help small employers stay afloat and preserve jobs in a cratering economy losing tens of millions of them.
“Our swift action supported or saved 30 million American jobs at least,” President Donald Trump said at a White House event on small business in April with Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza.
Managing the program fell to the SBA, an agency with some 3,200 employees and an $819 million annual budget — one-tenth the size of the Commerce Department’s. On at least two occasions last month, the SBA’s computer system slowed under the crush of loan applications, creating a bottleneck. The agency says it has already processed 4.2 million loans for some $530 billion in awards.
The need for a detailed public accounting of the small-business relief program is amplified by controversy over how it has unfolded since early April. It’s important as a way for the public to know whether the program is working as Congress intended.
Several hundred publicly traded companies received hundreds of millions of the low-interest, potentially forgivable loans. They tapped the federal aid despite their likely ability to get the money from private financial sources. Some had market values well over $100 million, and many had executives earning millions annually.
On its website, the SBA says it “is becoming more transparent, participatory and collaborative through open government.” It cites, among other things, its Freedom of Information Act program and improvements to online services.
So far, the agency has only provided general information, such as the total amounts of loans awarded in a given time period.
With huge amounts of money flying out the government’s door in a crisis, full public disclosure can help prevent fraud and improper spending, says Kathleen Clark, a law professor at Washington University in St. Louis and expert in government ethics.
Otherwise, “the risks to taxpayers are greater,” Clark said. “I would think the SBA would be proactive in making information public.”
Asked by news organizations for information on the companies receiving loans and when it might be provided, the SBA has said it’s too consumed now by the urgent effort of helping small businesses through the economic downturn. It says specific loan data may be released sometime “in the near future.”
“At this time, the agency is focusing its efforts on assisting small businesses during this unprecedented disruption to the economy,“the SBA says. “The agency recognizes the need to balance the interests of transparency with the privacy and confidentiality issues release of loan information raises.”
The loans made to big deep-pocketed companies in the Paycheck Protection Program meant that less money was available for smaller businesses. Publicly shamed, big corporations, including national restaurant chains Shake Shack, Ruth’s Chris Steakhouse and Potbelly Sandwich Shop, said they would return their loans.
It was news reports of big companies receiving loans that sparked the public outcry. The Associated Press and several other news organizations combed through voluminous filings with the Securities and Exchange Commission to unearth public companies that had received PPP loans. The SBA did not make the information public.