Would You Put Trump In Charge Of Guarding Your Money?

Most Americans-- including some who voted for him and even some who plan to vote for him again-- do not find Trump honest and trustworthy. Pollsters never ask if respondents would put their pretty under-age daughters in a room alone with Trump or if they would agree to let Trump hold on to their savings for a few months. I think we've all know from the beginning-- albeit New Yorkers more than anyone is Alabama or Wyoming-- that Trump is a crook from head to toe and always has been. And I think more Americans are waking up to that now.

When Congress passed their big bailout bills, they were smart enough to make sure the bailouts would be subject to oversight by a team of honest brokers. But they somehow weren't smart enough to anticipate that Trump would fire the head of the team and replace him with a lackey. It should have brought chills to every Americans' spine when Trump said he himself would be in charge of making sure all the money was spent properly.




Yesterday Washington Post reporters Peter Whoriskey and Heather Long asked the question we'll be hearing a lot between now and November: Who's Getting These Hundreds Of Billions In The Government Aid?. They know the answer; we won't be finding out any time soon and, obviously, "if the names of the beneficiaries of the aid are withheld, it will be difficult to gauge how much of the relief money is being wasted, fraudulently obtained or reaching places it was intended to go, experts and watchdog groups say... The names of businesses that collectively will receive hundreds of billions of dollars in coronavirus relief from the federal government," they wrote, "may not be disclosed publicly, an omission that critics say could make the massive spending program vulnerable to fraud and favoritism. The $2.2 trillion Cares Act approved by President Trump last month requires that the names of recipients of some forms of federal aid be published, but those requirements do not extend to significant portions of the relief. 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 identity of the recipients. So far, the agency has said it received about 487,000 applications totaling $125 billion in requests. A potentially even larger gap involves the trillions going out to businesses under the auspices of the Federal Reserve."

The legislation requires that the Fed 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." Powell is petrified of Trump and rarely stands up to his outrageous demands.

Though most of the $2.2 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 President Trump already 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 on Monday, 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 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 $2.2 trillion spending 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 Treasury 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 the Fed’s website-- the basic items of loans issued: the identity of the business, how much money was lent 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 it only with certain congressional leaders who oversee Fed activities.

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.

...There are no such requirements, for example, for the $100 billion destined for health care providers, or 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.

...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.

Keep in mind, Trump absconded with millions of dollars he illegally misappropriated from his Inaugural Fund which was widely padded by crooked businessmen and even other countries to bribe him. Yesterday, Neil Barofsky, the former special inspector general for TARP, penned an OpEd for the Times, Why We Desperately Need Oversight of the Coronavirus Stimulus Spending. He went out of his way to take the high-road and not assert that Trump is a crook, a road that at this point in time is just patently absurd. But he did make note that "More than $2 trillion is about to head out the door, committed in a single news release last week by the Federal Reserve Board. In that release, the Federal Reserve announced how it and the Treasury Department intend to leverage just a portion of the $454 billion that Congress gave the department in the Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act, with the potential of trillions more in lending to come."

He asked the key question: "Who will conduct oversight of this staggering amount of taxpayer money? We need to ensure that this government aid is not being stolen, wasted or given to political cronies"-- all of the things Trump is best known for. "And we need to make sure that the public is aware of how and to whom those trillions are distributed. In short, we need watchdogs. As it prepares for more relief in the wake of vast economic ruin caused by Covid-19, Congress has leverage-- and must use it."

During TARP, the compliance officials at the Federal Reserve were often careful and thoughtful. But within the Treasury Department, where many of the key decisions were made, officials often had a far less rigorous approach-- and given the rushed nature of their actions so far, I fear this may apply even more so today.

For the CARES Act, Congress demanded the same watchdog function within Treasury-- but so far, that dog is still in the pound. The legislation promised a brand-new agency headed by a special inspector general for pandemic recovery who would keep the programs on the right policy track and protected from fraud. The new agency would also provide the necessary transparency to make sure that when decision makers fall short, as they inevitably do in the haste of an emergency, it could make quick recommendations to correct course and share both the flaws and the proposed solutions with Congress and the American people.

Perhaps most important, it would shine a bright light on the decision-making process within the Treasury Department, deterring policymakers from making decisions-- which are likely to determine which companies survive and which fail-- based on personal connections or cronyism rather than the merits. Unfortunately, President Trump included a signing statement to the CARES Act that suggested he would limit the ability of the new inspector general to reveal to Congress efforts by his administration to obstruct or impede his inquiries.

Some are also raising questions about the president’s intended nominee for the job, Brian Miller. Even in the absence of what the signing statement may portend about the president’s intentions, the job of special inspector general for pandemic recovery would require fierce independence and the steeliest of spines. Mr. Miller demonstrated those qualities when he was the inspector general of the General Services Administration for nearly 10 years. But he is now on the president’s legal team at the White House and apparently played a role in fending off oversight requests during impeachment.

This raises important questions, but Mr. Miller deserves the opportunity to demonstrate at a confirmation hearing that he is prepared to repel any efforts to muzzle his ability to provide unvarnished reports to Congress. That won’t be possible until he is formally nominated and a confirmation hearing scheduled. Until then, the critically important role of the special inspector general remains unfilled.

The money is already flowing. Critics of the CARES Act pointed out that there could be a delay in the appointment of the special inspector general, but we were told not to worry, there would be a Pandemic Recovery Accountability Committee immediately organized that consisted of sitting inspectors general. Even better, the widely respected acting inspector general of the Defense Department, Glenn Fine, was named as its chairman. But that didn’t last long: He was quickly sacked by Mr. Trump with no explanation, leaving the committee leaderless, dormant and very possibly housebroken.

Because Mr. Fine’s dismissal came after attacks on other inspectors general (including another Pandemic Recovery Accountability Committee member, Christi Grimm, the acting inspector general of the Department of Health and Human Services), a chilling message was sent and received by the watchdogs who are expected to play a crucial role in overseeing the trillions of dollars spread throughout the government as part of CARES: Criticize the programs at your peril, and think twice before even raising your hand for the task of overseeing them.

Until there is a new chairperson of this commission who can operate without the fear of being fired merely for taking the position, this watchdog has been effectively neutered.

And then there was a Congressional Oversight Commission, patterned on the Congressional Oversight Panel from the TARP legislation, which a then little-known Harvard professor named Elizabeth Warren turned into a beacon of transparency and accountability. But the commission, like Congress itself, is dependent on cooperation by the administration to provide access necessary to analyze and report on the programs. The recent assertions by the White House that it can ignore congressional subpoenas provide little comfort that the commission will be able to fulfill its role.

Only one of its five commissioners has been named, and we are waiting for the critical chairman to be named by congressional leaders. Keep in mind that, as we wait, trillions are committed and will begin to be spent.

What is the best use of Congress’s leverage? It is already apparent that additional relief will be necessary. Before parting with another trillion dollars, Congress must condition any further funding on the inclusion of protections to ensure that the inspectors general overseeing the Treasury Department’s actions can be removed only for cause shown, the nomination and hearing for Mr. Miller must proceed as soon as possible, provisions must be enacted ensuring that oversight bodies will have unimpeded access to the information that they need to carry out their tasks, and the seats of the Congressional Oversight Commission must be filled.

Otherwise, buckle up for what oversight helped limit in TARP-- vast amounts of taxpayer money lost to fraud, policy decisions made in the dark with little chance of success and scandals that may make us yearn for the relative quiet of impeachment.