Watchdog Groups Call for More Transparency on Coronavirus Relief

In The News, Covid19Watchdog Groups Call for More Transparency on Coronavirus Relief

Budget & Tax, In The News,  | Quick Take
Jul 8, 2020  | 3 min read | Print Article

This article by Eva McKend first appeared in Spectrum News 1 on July 7, 2020

The Foremost Group, a shipping company run by Transporation Secretary Elaine Chao’s family, received at least $350,000, but potentially up to $1 million, in possibly forgivable loans as part of the coronavirus relief Paycheck Protection Program. Chao is the wife of Senate Majority Leader Mitch McConnell.

“Neither my wife nor I have anything to do with that business and didn’t know anything about it,” McConnell said when asked by Spectrum News 1 at an event in Simpson County Tuesday.

Government watchdog groups argue there were no safeguards in place to prevent companies with ties to Congress from receiving money through the Coronavirus Aid, Relief, and Economic Security Act.

“There are no prohibitions in the law from members of Congress or their families benefiting from the PPP loan program,” said Liz Hempowicz, public policy director of the Project on Government Oversight.

Facing mounting pressure, the Trump administration had to make these disclosures, but now Hempowicz says there are more questions than answers.

“There’s a lot of information that’s missing here. For example, how many loans were denied in that first round of funding where the funding ran out before everybody who had applied for it had benefited? How many small businesses were refused these loans at the same time that these companies that are connected to either administration officials or members of Congress approved for these programs,” she said.

Like Hempowicz, Steve Ellis, the president of Taxpayers for Common Sense, says ultimately, the PPP program was meant to keep employees on the payroll no matter the company and to the end that was achieved, it is positive. The question in the weeks ahead will be, did the money really go to the companies who need it most?

“What is the appearance? Is there an appearance of impropriety of actually seeking these loans especially if you are creating them and that’s the one issue. If you structured the program so that your business that otherwise would not have been eligible gets the benefit, well then there is a big problem,” said Ellis.

Ellis says the same politicians who crafted the law will have to fight to get taxpayers reimbursed if appropriate.

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“There should be clawbacks. Government didn’t force anybody to take this money. They decided to apply for it and get the money and so they need to be able to document that they actually did need it,” he said.

In a statement, a Transportation Department spokesperson said, “As mentioned before, the Secretary has no connection to the business and she had no idea a loan was obtained.”

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