Blumenthal, Warren, Jayapal, and Sarbanes Lay Out Oversight, Accountability, and Anti-Corruption Provisions for Next Congressional COVID-19 Response Package

[WASHINGTON, DC] – U.S. Senators Richard Blumenthal (D-CT) and Elizabeth Warren (D-MA) and U.S. Representative Pramila Jayapal (D-WA) and John Sarbanes (D-MD), Chair of the House Democracy Reform Task Force, laid out strong oversight, accountability, and anti-corruption provisions to be included in the next Congressional COVID-19 response package. They sent a letter to Congressional leadership urging their proposals be included.

“Real accountability demands a watchdog, not a lapdog, to stop the waste, fraud and favoritism pervading this administration. An effective enforcement hammer is essential to deter wrongdoing, preserve resources, and conserve credibility. Strong scrutiny is required to make sure aid reaches the right hands. Getting relief to those who need it – small businesses, struggling families, the working poor and middle class – means keeping an eye on the corporate fat cats who are trying to cut them in line,” Blumenthal said. “The only people threatened by oversight are the ones are the ones trying to game the system, or hide something.”

“President Donald Trump has made clear that he is putting himself and his buddies first during this global pandemic – and he will actively undermine independent oversight,” said Warren. “The next relief package must include our provisions to empower inspectors general, prohibit conflicts of interest, and strengthen oversight and enforcement, and to stop any government-sanctioned profiteering and corruption. The American people need to trust their government is on their side, especially now.”

“Donald Trump has a long and established record of disregarding ethics, integrity, and transparency, and his latest attempts to sideline and dismiss independent inspectors general have raised the stakes during this crisis. It’s unfortunate that we cannot trust the President of the United States and his appointees to properly and ethically distribute billions of dollars in economic relief, but this is the reality we must confront. We must pass aggressive oversight measures in future relief packages to ensure economic aid is delivered to struggling families and businesses in need, keep this President accountable and prevent him and his Administration from misusing and misallocating taxpayer dollars,” said Jayapal.

“We must ensure that federal COVID-19 economic relief goes directly to American families and small businesses who need it most – not to President Trump’s business buddies, corporations or Mitch McConnell’s wealthy donors,” said Sarbanes. “The robust anti-corruption, oversight and accountability standards that we have presented today will prevent the Trump Administration and Congressional Republicans from hijacking vital support for hardworking Americans and sending it instead to wealthy and well-connected special interests.”

Last month, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES Act), which provided critical aid to hospitals, small businesses, families, unemployed Americans, and other parts of our economy and society hit hard by this global pandemic. The Act also established a $500 billion bailout for giant corporations, which—without stronger oversight and anti-corruption provisions—could be wasted and misused by the Trump Administration to enrich giant corporations and senior executives, make monopolies worse at the expense of workers and taxpayers, and reward political allies and punish foes.

Other provisions in the CARES Act, including support for small businesses, also lack critical oversight and conflicts of interest protections and are alarmingly vulnerable to exploitation for personal, financial, and political gain. The CARES Act imposes some oversight of these programs, but President Trump began undermining these provisions the moment the bill became law.

President Trump also fired the Inspector General independently designated to chair the Pandemic Response Accountability Committee (PRAC), which Congress established to conduct and coordinate oversight and provide transparency over the federal government’s coronavirus response and management of pandemic response spending.

The President’s actions send a clear signal to Congress that stronger oversight, accountability, and anti-corruption provisions are urgently necessary.

“The gravity of our current crisis demands a responsible allocation of bailout funds. The process must be free from conflicts that favor special interests, and that requires robust oversight. CARES Act implementation to-date has been fraught, with loopholes that have allowed large companies to get cash meant for smaller businesses. We must course-correct, and ensure that taxpayer dollars help the public, workers, and protect our health. Public Citizen strongly supports the reforms proposed by Senators Warren and Blumenthal and Representatives Jayapal and Sarbanes for the next relief package to make sure that this happens,” said Lisa Gilbert, Vice President of Legislative Affairs for Public Citizen.

“Senators Warren and Blumenthal and Representatives Jayapal and Sarbanes have outlined a set of proposals that would address many long standing issues affecting oversight and would drastically improve accountability and transparency around the federal government's actions in response to COVID-19. We urge Congress to take these issues up quickly,” said Liz Hempowicz, POGO’s Director of Public Policy.

“The funds provided in the CARES Act are critical to an effective pandemic response, which can mean the difference between life and death, but with such massive amounts of money involved, they will be a natural target for fraud and influence. So ensuring these funds go where Congress intended is equally critical. All members of Congress should want immediate and thorough oversight into whether taxpayer funds are being spent fairly and without fraud or influence; these provisions would be a crucial step toward that needed oversight,” said Noah Bookbinder, Executive Director, Citizens for Responsibility and Ethics in Washington (CREW).

Read the full details of the proposal here. Summaries of the provisions are below:

• Prohibit Conflicts of Interest: Strong rules are necessary to prohibit conflicts of interest that may arise in connection with the administration of the CARES Act and any future COVID-19 relief packages. Such rules must address conflicts arising in the selection or hiring of contractors or advisors; the distribution of grants and loans; and revolving door restrictions on government employees and officials involved in the administration of relief funds and programs. All government officials (including members of any White House task force) who advise or work on the pandemic response must file public reports detailing their financial interests. And while the CARES Act already prohibits assistance from the $500 billion bailout fund from going to certain companies affiliated with senior government officials, the scope of those restrictions should be expanded to include all CARES Act funds, additional senior staff and their family members to ensure that relief funds are not funneled to well-connected businesses.

• Empower Inspectors General: Inspectors general (IGs) should be fired only for good cause. The President should be required to inform Congress when any IG, including an acting IG, is removed from their post. When an IG position becomes vacant, it should be filled automatically by the first assistant to the last IG. Acting IGs must be selected from officials who enjoy civil service protections, ensuring that they have some recourse if they face retaliation. Any member of the staff of an unlawfully fired IG should be allowed to file suit to challenge the firing, as should any member of the public who has been harmed as the result of such action. The President’s decision to fire or otherwise discipline an IG or acting IG should trigger an automatic review by the Council of the Inspectors General on Integrity and Efficiency Integrity Committee, and the findings of that review should be made public. Read more about this proposal here.

• Strengthen the Congressional Oversight Commission: The Congressional Oversight Commission which sits beyond the President’s reach, must be granted subpoena authority for testimony and documents, and Congress should expand its jurisdiction to include all COVID-19 relief funding, including the Small Business Administration’s Paycheck Protection Program. Read more about this proposal here.

• Strengthen CARES Act Executive Branch Accountability & Oversight Entities: Congress should require the Treasury Secretary to submit a weekly list of any instances in which the Special Inspector General for Pandemic Relief (SIGPR) or the PRAC believe they have been unreasonably denied information from the executive branch. If the Treasury Secretary omits or misrepresents instances of wrongdoing to Congress, he should be liable for perjury and prosecuted by the Department of Justice. If the Treasury Secretary fails to provide a required filing, Congress should use its power of the purse to ensure that neither he nor any other senior political appointee in the Department of Treasury be paid. Read more about this proposal here.

• Protect Whistleblowers: Strong whistleblower protections must apply to government employees, government contractors, and private sector workers (including essential workers) who may witness waste, fraud, or abuse or be victims of misconduct. These provisions must protect all Americans who call out wrongdoing and protect against all retaliation (including criminal or civil prosecution and workplace harassment). These protections must also include contractors, companies, and nonprofits facing improper political pressure or retaliation, and protect such entities when they challenge demands to cover up wrongdoing. Congress should establish a direct channel for whistleblowers to submit complaints directly to the SIGPR, PRAC, and the Congressional Oversight Commission.

• Restrict and Disclose Lobbying & Political Spending: Congress should require the Department of Treasury to make monthly disclosures on all lobbying related to COVID-19 relief spending or lending. These disclosures must include meetings between companies receiving federal funding and Treasury officials or White House staff, as well as any documents provided by those companies to government officials. Additionally, any company that receives bailout money should not be permitted to engage in political spending or lobbying expenditures for a least a year after any loan is fully repaid.

• Improve Transparency & Disclosure around Bailout Funds: Congress should require more transparency about where bailout funds are going. Any recipient of emergency funding or support, including contractors and grantees, must provide regular, public reporting about how that money is being used. While the Federal Reserve Board recently took an important step in announcing they will disclose the names and amounts borrowed for each participant in their lending facilities backstopped with CARES Act money, this does not go far enough. Congress should require these disclosures by law and require recipients to provide a detailed description of how the assistance was used. If we want companies to use bailout funds to maintain their payrolls and pay their workers well, we should require relevant data: recipients should be required to disclose compensation and workforce data, including the mean, median, and minimum wages of all non-executive employees; the number of workers before and after the receipt of assistance; and the salaries of executives, including bonuses and capital distributions. Congress should also require recipients to disclose whether they have been charged with violations of federal law and the nature of those alleged violations. Finally, Congress must ensure the Paycheck Protection Program truly helps small businesses rather than giant or well-connected companies by requiring the Small Business Administration to publicly disclose on its website, on a weekly basis, basic information about lenders and recipients, including loan amounts.

• Strengthen Enforcement: Anyone harmed by misuse of bailout funds should be allowed to seek recourse through the courts. This will ensure that harmed parties, like workers fired after a company committed not to fire anyone, have the ability to bring private lawsuits against bailout recipients who do not adhere to bailout terms. Senior executives of companies that violate bailout terms should be held personally liable, including by having their executive compensation seized, if necessary.

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