Sarbanes, Blumenthal, Warren, Coons, Jayapal Lead Effort to Strengthen Oversight of Federal COVID-19 Relief Funds and Crack Down on Corruption

Democracy Reform Task Force Chair Rep. John Sarbanes (D-Md.), U.S. Senator Richard Blumenthal (D-Conn.), U.S. Senator Elizabeth Warren (D-Mass.) and U.S. Representative Pramila Jayapal (D-Wash.) today formally introduced the Coronavirus Oversight and Recovery Ethics Act (CORE Act), a bill to ensure stronger oversight, accountability and transparency in the federal government’s response to COVID-19.

The CORE Act has earned strong support in Congress, with 18 House co-sponsors and 8 Senate co-sponsors, along with the endorsement of 57 national grassroots advocacy organizations.

“COVID-19 relief must go to those who need it most. American families, small businesses, health care providers and state and local governments are hurting, and we must do all we can to block special interests and corporate insiders from gaming the system,” said Congressman Sarbanes. “The CORE Act will establish robust oversight and anti-corruption standards to prevent just that and ensure the Trump Administration does not waste taxpayer dollars with giveaways to their wealthy and well-connected political donors.”

"President Trump's war on independent oversight and his purging of the ranks of Inspectors General is a crisis – a pernicious and ongoing attack on the building blocks of our democracy. Just days ago, Secretary Mnuchin called the recipients of taxpayer COVID-19 relief 'proprietary information' while refusing to disclose which giant corporations and Trump donors had accessed money meant for small businesses. Strong oversight isn't about political punishment, it's about making sure that the people who really need relief are the ones who receive it. Real accountability demands a watchdog, not a lapdog, to stop the waste, fraud and favoritism pervading this Administration," said Senator Blumenthal.

“The CORE Act would empower independent oversight, protect whistleblowers, and stop government-sanctioned corruption and profiteering to ensure the health and safety of Americans come first,” said Senator Warren. “Congress must pass our bill in the next relief package to hold the Trump administration accountable as they hand out trillions of dollars in response to the COVID-19 crisis.”

"Every single penny of taxpayer money allocated by Congress for COVID-19 relief should go to families, communities and businesses in need, period," said Senator Coons. "We have to ensure that aid is going to workers and businesses who need it most, not just the businesses with the most political connections. This important legislation will ensure that inspectors general can do their jobs and provide real accountability for the trillions in taxpayer dollars we're investing to keep our economy afloat."

"As families and small businesses struggle to stay afloat during a historic mass unemployment crisis that has seen more than 40 million workers file for unemployment, President Trump and his administration have continued to do what they do best-spread corruption, enrich giant corporations, muzzle the truth and reward their megadonor allies," said Congresswoman Pramila Jayapal. "I'm proud that our CORE Act boldly responds to this corrupt behavior by ensuring the public knows which businesses are getting COVID-19 relief, shining a light on big-money corporate lobbying for these funds and allowing whistleblowers who see illegal, dangerous or wasteful behavior by corporations and the government to speak out without fear."

The CORE Act would:

  • Prohibit Conflicts of Interest: The bill addresses and eliminates conflicts arising in the selection or hiring of contractors or advisors and the distribution of relief grants and loans, similar to conflicts provisions in the TARP bailout. The bill further requires federal ethics officials to impose revolving door restrictions on officials involved in the administration of relief; requires White House task force members who work on pandemic response to file public reports detailing their financial interests; and expands the scope of CARES Act conflicts prohibitions on bailout assistance going to certain companies affiliated with senior government officials to include small business aid and additional senior officials. The bill provides an additional $25 million to the Office of Government Ethics to administer these rules.
  • Empower and Protect Inspectors General: The bill requires that inspectors general (IGs) only be fired for good cause and requires the President to inform Congress when any IG, including an acting IG, is removed from their post. The bill further requires that IG vacancies be filled automatically by the first assistant to the last IG, and that acting IGs enjoy civil service protections, ensuring that they have some recourse if they face retaliation. Any member of the staff of an unlawfully fired IG would be allowed to file suit to challenge the firing, as would any member of the public harmed as the result of such action. The President’s decision to fire or otherwise discipline an IG or acting IG would trigger an automatic, public review by the Council of the Inspectors General on Integrity and Efficiency Integrity.
  • Strengthen the Congressional Oversight Commission: The bill grants Congressional Oversight Commission, which was established in the CARES Act and sits beyond the President’s reach, with subpoena authority for testimony and documents and expands its jurisdiction to include all COVID-19 relief funding, including the Small Business Administration’s Paycheck Protection Program.
  • Strengthen CARES Act Executive Branch Accountability and Oversight Entities: The bill requires the Treasury Secretary to submit a weekly list of any instances in which the Special Inspector General for Pandemic Relief (SIGPR) or the Pandemic Relief Accountability Committee (PRAC) –both established in the CARES Act – believe the executive branch has unreasonably denied them information in the course of their oversight. If the Treasury Secretary omits or misrepresents instances of wrongdoing to Congress, he would be liable for perjury. If the Treasury Secretary fails to provide a required filing, the bill prevents the Secretary and any other senior political appointee in the Treasury Department from being paid.
  • Protect Whistleblowers: The bill establishes strong whistleblower protections for 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, modeled after the whistleblower protections Congress included in the 2009 Recovery Act, would protect Americans who call out wrongdoing, protect against all retaliation and establish a safe, secure and anonymous process for whistleblowers’ claims to be investigated by IGs. The bill also establishes a direct channel for whistleblowers to submit complaints directly to the SIGPR, PRAC and the Congressional Oversight Commission.
  • Restrict and Disclose Lobbying and Political Spending: The bill requires lobbyists to make monthly disclosures regarding all lobbying related to COVID-19 relief spending or lending. The bill also codifies the Obama Administration’s restrictions on Recovery Act lobbying activity, which would restrict all COVID-19 relief lobbying activity to public, written submissions and prohibit closed door meetings and phone calls between government officials and companies seeking relief. Monthly disclosures would include any documents provided by those companies to government officials, including White House staff. Additionally, any company that receives bailout money would be prohibited from engaging in political spending or lobbying expenditures for a least a year after any loan is fully repaid. Finally, the bill bolsters the ability of the Justice Department to enforce lobbying violations under this section.
  • Improve Transparency and Disclosure Around Bailout Funds: The bill dramatically improves transparency about where bailout funds are going. It requires any recipient of emergency funding or support, including contractors and grantees, to provide regular, public reporting about how that money is being used. The bill codifies the Federal Reserve Board’s announcement that it will disclose the names and amounts borrowed for each participant in their lending facilities backstopped with CARES Act money and requires recipients to provide a detailed description of how the assistance was used. The bill requires recipients 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. The bill further requires giant corporations that receive a bailout to disclose whether they have been charged with violations of federal law and the nature of those alleged violations. It also ensures the Paycheck Protection Program actually 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. Finally, the bill automatically discloses the text of lucrative contracts held by companies involved in the administration of relief.
  • Strengthen Enforcement: The bill allows any individual harmed by a company’s misuse of bailout funds to seek recourse through the courts to ensure that harmed parties, like workers fired after a company committed to not fire anyone after receiving bailout funds, have the ability to bring private lawsuits against bailout recipients who do not adhere to bailout terms and seek damages. The bill also hold senior executives of companies that violate bailout terms personally liable to taxpayers, including by having their executive compensation seized.