The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed in March 2020 to provide broad-based economic assistance for workers, families, small and large businesses, and state, local and tribal governments. The $2 trillion CARES Act is the largest emergency spending measure bill in US history. With such a large amount of money at stake, the potential for fraud or misappropriation is high.
The CARES Act established 3 bodies to oversee the management of any programs created out of the legislation as well as the disbursement of those funds. These bodies are the Congressional Oversight Committee (COC), the Pandemic Response Accountability Committee (PRAC) and the Office of the Special Inspector General for Pandemic Recovery (SIGPR). (Separately, the House empaneled the Select Subcommittee on the Coronavirus Crisis, and Senate Majority Leader McConnell has implied there will be a similar body in the Senate.) These entities are collectively charged with weeding out fraud and ensuring that taxpayer bailout money is reaching those actually impacted by the pandemic.
Bailout Bandits will continue to track these accountability bodies, highlighting their findings and pointing out where the hospitality industry is implicated.
Unchaired: the Congressional Oversight Committee (COC) starts off without leadership at the helm
The role of the COC is to oversee the Department of the Treasury and the Board of Governors of the Federal Reserve’s implementation of the CARES Act, as well as the impact and effectiveness of loans, loan guarantees and investments. The COC is to submit a monthly report to Congress with these findings, the first of which was released on May 18, 2020. The report consists of general summaries of the programs created to disburse funds, and questions about how those programs are working. The report concludes that only $37.5 billion of the $500 billion made available have been allocated and disbursed.
The COC is a body of 4 members and 1 chairperson. The Senate majority and minority leaders, the House speaker, and House minority leader are each tasked with appointing a member. Additionally, Pelosi and McConnell, as the Speaker of the House and the Senate majority leader, are to work together to select the chairperson after consulting with the minority leaders of both chambers (Sec. 4020(c)(1)(a-e)).
Pelosi and McConnell have yet to name a chairperson, nor have they indicated when it will happen, or who they are eyeing for the role. Without a Chairperson, the Commission cannot hire staff or set up office space. “Once a chair is appointed, I’m looking forward to accomplishing more tangible work like holding hearings with the Treasury and Federal Reserve officials overseeing these programs, receiving support from a commission staff and conducting more detailed oversight,” said Rep. French Hill, a member of the COC.
The COC has the authority to hold hearings, take testimony, and receive evidence. The Chairperson of the Commission is authorized to request information from any department or agency of the United States (Sec. 4020(e)(1-4)).
The members of the COC, and the person that appointed them are as follows:
- Congresswoman Donna Shalala appointed by Speaker Nancy Pelosi (D – CA)
- Congresswoman Shalala represents Florida’s 27th District which includes an area in and around Miami. She served as the Secretary of Health and Human Services under President Bill Clinton in 1993. She currently is on the House Committee on Rules and the House Committee on Education and Labor.
- Congressman French Hill (R – AK) appointed by House minority leader Kevin McCarthy (R – CA)
- Congressman Hill represents Arkansas’ 2nd District including central Arkansas and Little Rock. He served as a senior official in the administration of President George H.W. Bush. He serves on the House Committee on Financial Services.
- Senator Pat Toomey (R – PA) appointed by Senate majority leader Mitch McConnel (R – KY)
- Senator Toomey was elected to the Senate in 2010. He currently serves on the Senate Finance, Budget and Banking, Housing and Urban Affairs Committees.
- Mr. Bharat Ramamurti appointed by Senate minority leader Chuck Schumer (D – NY)
- Mr. Ramamurti, the lone COC member who does not serve in Congress, is the Managing Director of the Corporate Power program at the Roosevelt Institute. He previously served as Senior Counsel for Banking and Economic Policy for Senator Elizabeth Warren and as her top economic advisor during her presidential campaign.
As of June 4, 2020, the Commission does not have a website or a Twitter account, limiting its ability to communicate with the public.
Inspectors General with subpoena powers: the Pandemic Response Accountability Committee (PRAC)
The PRAC is a subcommittee of the Council of the Inspectors General on Integrity and Efficiency (CIGIE). The CIGIE is an independent entity within the executive branch and was established by the “Inspector General Reform Act of 2008”. The purpose of the PRAC is to oversee the management of Coronavirus relief funds across all agencies involved with disbursement. The CARES Act explicitly identified the Inspectors General of the Departments of Education, Homeland Security, Labor, Treasury, Tax Administration, Health and Human Services, Justice, and the Small Business Administration as members of the PRAC. They are to “prevent and detect fraud, waste, abuse and mismanagement; and mitigate major risks that cut across program and agency boundaries” (Sec. 15010(b)(1-2)).
The Committee is to audit agencies’ and departments’ allocation and disbursement of Coronavirus relief funds and submit reports to the President, Congress and the appropriate Congressional Committees with their findings and recommendations. The agency then must submit a report to the President and the appropriate Congressional Committees whether they agree or disagree with the recommendations and any actions they will take to implement the recommendations within 30 days of receiving recommendations from the PRAC (Sec. 15010(d)(1A – 3B). Additionally, the Committee should report “to the Attorney General any instance in which (they have) reasonable grounds to believe there has been a violation of Federal criminal law” (Sec. 15010(d)(1)(B)(x)). Reports are available on their website at https://pandemic.oversight.gov/oversight/reports.
In addition to all the usual power afforded to Inspectors General, the Committee has been given testimonial subpoena authority (TSA), meaning they may issue and enforce subpoenas to compel the testimony of non-Federal officers or employees (Sec. 15010(e)(3)(A)(i-iii)). Without this authority, an individual can avoid testifying by resigning from their position within the Federal government.
According to the CARES Act, in addition to the members of the PRAC specifically identified, the Chairperson can designate other Inspectors General from any agency that is involved with Coronavirus relief to the PRAC (Sec. 15010 (c)(2)(A-E)). Currently, the PRAC is composed of 20 current Inspectors General, including the Acting Chair and Vice Chair.
The CIGIE chairperson (currently Department of Justice Inspector General Michael Horowitz) has the authority to select the PRAC chairperson and vice chairperson from among the PRAC’s statutory members (§15010(c)(1)). The CIGIE chairperson is required to appoint an executive director within 30 days of enactment (i.e., April 26, 2020) and a deputy executive director within 90 days of enactment (i.e., June 25, 2020). When making each appointment, the CIGIE chairperson is required to consult the majority and minority leadership of the House and the Senate.
On March 30, 2020, Horowitz appointed then-acting DOD Inspector General Glenn Fine as PRAC chairperson. Following his appointment, Fine added additional members to the PRAC and appointed NASA Inspector General Paul Martin to Vice Chair on April 1, 2020. On April 6, 2020, President Trump named Environmental Protection Agency Inspector General Sean O’Donnell to replace Fine as acting DOD inspector general, and Fine was no longer eligible to serve as PRAC chairperson. Horowitz is currently serving as acting chairperson. On April 27, 2020, Horowitz appointed Robert A. Westbrooks, Inspector General for the Pension Benefit Guaranty Corporation, as the PRAC Executive Director, and appointed Linda S. Miller to serve as the Deputy Executive Director on May 19, 2020.
The following are members of PRAC (asterisks indicate those non-statuary members appointed by Michael Horowitz and former PRAC Chair and former DOD Inspector General Glenn Fine):
- Michael E. Horowitz, Acting Chair. (Chair of the Council of the Inspectors General on Integrity and Efficiency (CIGIE); Inspector General, Department of Justice OIG)
- *Paul K. Martin, Vice-Chair. (Inspector General, National Aeronautics and Space Administration OIG)
- *Mr. Mitchell L. Behm (Acting Inspector General, Department of Transportation OIG)
- *Mr. Mark Bialek (Inspector General, Board of Governors of the Federal Reserve System/Consumer Financial Protection Bureau OIG)
- Ms. Sandra D. Bruce (Acting Inspector General, Department of Education OIG)
- *Ms. Kathy A. Buller (Inspector General, Peace Corps OIG)
- Mr. Joseph Cuffari (Inspector General, Department of Homeland Security OIG)
- Mr. Scott S. Dahl (Inspector General, Department of Labor OIG)
- On June 2, 2020, Inspector General Scott Dahl announced he is retiring from his post effective June 21, 2020.
- *Ms. Rae Oliver Davis (Inspector General, Department of Housing and Urban Development OIG)
- Mr. Richard Delmar (Deputy Inspector General, Department of the Treasury OIG)
- *Ms. Phyllis K. Fong (Inspector General, Department of Agriculture OIG)
- Mr. J. Russell George (Inspector General, Treasury Inspector General for Tax Administration)
- *Ms. Susan S. Gibson (Inspector General, National Reconnaissance Office OIG)
- Ms. Christi A. Grimm (Principal Deputy Performing Duties of Inspector General, Department of Health and Human Services OIG)
- *Ms. Allison C. Lerner (Inspector General, National Science Foundation OIG)
- *Mr. Jay N. Lerner (Inspector General, Federal Deposit Insurance Corporation OIG)
- *Mr. Michael J. Missal (Inspector General, Department of Veterans Affairs OIG)
- Mr. Sean W. O’Donnell (Acting Inspector General, Department of Defense OIG)
- Mr. Hannibal “Mike” Ware (Inspector General, Small Business Administration OIG)
- *Ms. Tammy L. Whitcomb (Inspector General, U.S. Postal Service OIG)
- Mr. Robert A. Westbrooks, Executive Director, Pandemic Response Accountability Committee
- Ms. Linda S. Miller, Deputy Executive Director, Pandemic Response Accountability Committee
A new overlapping IG: the Special Inspector General for Pandemic Recovery (SIGPR)
The SIGPR is a new Inspector General office within the Department of the Treasury. Duties include conducting, supervising, and coordinating audits and investigations of the management by the Secretary of the Treasury of any program established under the CARES Act. Additionally, the SIGPR will submit reports to Congress, beginning no later than 60 days after the date on which they are confirmed, and once every quarter thereafter. Each report will include a summary of the activities of the IG during the 3 month period as well as a detailed statement of all loans, loan guarantees, other transactions, obligations, expenditures, and revenues associated with any program established by the Secretary of the Treasury. (Sec. 4018(f)(1)). There is some overlap with the COC in terms of the fact they are both charged with overseeing the work of the Department of Treasury.
Like the PRAC, the SIGPR is to make recommendations for agency leadership on measures they should take to prevent or address fraud, waste, abuse, mismanagement, and to mitigate risks. The IG should also report to the Attorney General whenever they have reasonable grounds to believe there has been a violation of Federal criminal law.
The SIGPR has the same powers and authority as other inspectors general as established in the Inspector General Act of 1978, including the authority to request information from any Federal, State or local government agency, subpoena for information, and to take from any person an oath, affirmation or affidavit.
The SIGPR will be appointed by the President, with the advice and consent of the Senate. President Trump nominated Brian D. Miller on April 6, 2020. There was a confirmation hearing before the Senate Banking Committee on May 5, 2020.On May 12, 2020, it was announced that Mr. Miller’s nomination was advanced in a 14-11 vote. He was confirmed by the full Senate on June 2 by a vote of 51-40.