The watchdogs overseeing the $2.3 trillion U.S. bailout

Reuters | Apr 3, 2020 at 7:10 PM

WASHINGTON, April 3 (Reuters) - Who's watching over the U.S. government's largest bailout in history - the $2.3 trillion in fiscal stimulus to fight the economic impact of the coronavirus?

Four different watchdogs made up of federal government officials and members of Congress have been created; one key role has not yet been filled.

None of these groups will have any direct control over where any of the funds are directed - those decisions are being made by the U.S. Treasury, headed by Steven Mnuchin, with the help of the Small Business Administration, other federal agencies, and outside advisers.

Instead, the watchdogs' role is to examine the decision-making process, and provide the public information about where the taxpayer dollars and other resources go.

Similar oversight mechanisms were "pretty effective and did a pretty good job of keeping fraud and waste down" during the stimulus spending after the 2008 recession, said Jennifer Ahearn, policy director at Citizens for Responsibility and Ethics in Washington, an ethics advocacy group.

But the scope of what watchdogs are looking at is much wider in this case, she noted. Making the task more difficult, many of the watchdogs are only in 'acting' roles because they have not been confirmed, and they may have less support from the Trump administration.

THE PANDEMIC RESPONSE ACCOUNTABILITY COMMITTEE

The CARES Act https://www.congress.gov/bill/116th-congress/house-bill/748/text?q=%7B%22search%22%3A%5B%22%5C%22CARES+Act%5C%22%22%5D%7D&r=7&s=4 signed into law on March 27 includes $80 million for the creation of this broad committee "to promote transparency and support oversight of funds provided in this Act to prevent, prepare for, and respond to coronavirus, domestically or internationally."

It is made up of 'Inspectors General' from other government agencies including the Department of Defense, Health and Human Services, and Treasury, making it a sort of uber-watchdog group, with broad oversight.

It is tasked with reviewing "the economy, efficiency, and effectiveness" of the administration, and "fraud, waste, abuse, and mismanagement in Coronavirus response programs and operations." It can conduct independent investigations and has subpoena power.

Glenn Fine, the acting Inspector General (IG) from the Department of Defense, was named chair of the committee on March 30. On April 1, he named https://www.oig.dhs.gov/news/press-releases/2020/04012020/additional-ig-designated-members-cigies-pandemic-response-accountability-committee an additional 11 IGs to the committee, from agencies including the Department of Veterans Affairs and the Peace Corps.

The committee is expected to set up a public website by the end of April; until then information can be found on the U.S. federal IG website https://ignet.gov/content/newsroom.

THE SPECIAL INSPECTOR GENERAL FOR PANDEMIC RECOVERY

This new IG, part of the Treasury Department, was given a $25 million budget in the CARES Act to "conduct, supervise, and coordinate audits and investigations of the making, purchase, management, and sale of loans, loan guarantees, and other investments" made by Mnuchin.

The White House is tasked with nominating a person to fill the role, but had not yet done so as of April 3. President Donald Trump will not permit this special IG to report directly to Congress, the White House said https://www.whitehouse.gov/briefings-statements/statement-by-the-president-38 on March 27.

THE CONGRESSIONAL OVERSIGHT COMMISSION

The committee includes five senior members of Congress, who will be authorized to investigate the Treasury and the Federal Reserve's attempts to keep the U.S. economy strong.

They will study the "impact of loans, loan guarantees, and investments made under this subtitle on the financial well-being of the people of the United States and the United States economy, financial markets, and financial institutions."

THE HOUSE SELECT COMMITTEE ON THE CORONAVIRUS

House Speaker Nancy Pelosi said on Thursday she would create a Congressional watchdog to ensure funds "are spent wisely and effectively" related to the three COVID-19 bills already passed by Congress, and any future legislation.