WASHINGTON — The names of businesses that collectively will receive hundreds of billions of dollars in coronavirus relief from the federal government 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 Donald 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 Cares Act and other legislation generally requires the Fed to disclose the loan recipients and the amounts they receive, but there is a significant exemption: the Fed chairman, Jerome Powell, may request that the information be kept confidential, meaning only congressional leaders would be given access.
Proponents of withholding the information argue that identifying coronavirus aid recipients could make firms hesitant to apply out of concerns for privacy, especially if they are small. Other needy firms may fear that an aid application, once made public, could be construed as a sign of financial frailty. Restarting the economy requires getting money to businesses quickly, these proponents say, so programs should avoid requirements that discourage applications.