(Politico) When Congress doles out massive amounts of taxpayer money at breakneck speed, safeguards against abuse, waste and graft aren't always airtight.
So when Congress raced to pass an 880-page, $2 trillion rescue package for an American economy collapsing amid the coronavirus pandemic, lawmakers added a series of protections against corruption.
But despite provisions meant to ensure a robust check on President Donald Trump — and to avoid a backlash like the one that that accompanied the 2008 Wall Street bailout — the law also afforded his administration wide latitude to implement it quickly, with Treasury Secretary Steven Mnuchin set to unleash a gusher of cash to shore up the hemorrhaging economy.
Here is how those protections are supposed to work:
1) The Congressional Oversight Commission
Who’s in charge
Congress' main oversight tool is a new, five-member panel that is charged with monitoring a $500 billion fund for distressed industries operated by Mnuchin, in partnership with the Federal Reserve. The four top congressional leaders each get an appointee, with the chair picked by Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell.
Though there's no timeline for the leaders to make their selections, they've indicated that their choices will come quickly. Part of that is by necessity: The law requires that the commission issue reports within 30 days of any funding flowing from Treasury and the Fed as part of the rescue effort — and then issue additional reports every 30 days. Behind-the-scenes lobbying for appointments has intensified since the bill passed.
What money will be watched
The bulk of Mnuchin's fund is intended to help the Fed infuse cash into the economy through a mix of loans, loan guarantees and investments to troubled companies, sectors and state or local governments. But there's also little guidance so far as to how this money will be distributed and to whom, with Mnuchin yet to publish all of his planned procedures. The congressional commission is likely to home in on how these decisions are made.
Mnuchin has, however, already issued guidelines for the airline industry — $25 billion for commercial airlines and $4 billion for cargo carriers. The 11-page guidance recommends that eligible recipients submit applications by April 3 and no later than April 27 to be considered. Those selected for awards are eligible to receive up to the total amount spent to compensate employees between April and September of 2019.
What scrutiny is coming
Federal agencies are required to turn over any data requested by the commission's chair, but this could run into roadblocks if Trump continues his broad rejection of congressional oversight on the Executive Branch.
Though the commission has a similar mandate to some of the other mechanisms in the law, this is the main channel through which Congress can apply a real-time check on the Trump administration. The panel is authorized to hold public hearings, tap experts for insight and spotlight the effectiveness of Mnuchin's decisions.
The Trump clause
The new law, at Democrats' urging, includes a provision prohibiting any funds authorized under the law from going to any entity in which "the President, the Vice President, the head of an Executive department, or a Member of Congress" or "the spouse, child, son-in-law, or daughter-in-law" of any of those officials have a controlling interest. House Democrats are particularly concerned that any oversight mechanisms closely watch this provision or any loopholes. Congressional Democrats are eager to avoid letting any funds benefit Trump businesses or properties.
2) The Special Inspector General for Pandemic Recovery
Who’s in charge
The law also establishes a new watchdog housed in the Treasury Department to specifically monitor Mnuchin’s deployment of the $500 billion in economic rescue funds for distressed industries. This is the same fund that the Congressional Oversight Commission will oversee; Democrats insisted on a two-pronged oversight effort for the fund to ensure Mnuchin's decisions received adequate scrutiny. The special inspector general will be nominated by Trump and confirmed by the Senate, which could produce its own partisan fight.
What money will be watched
Under the law, the new inspector general is required to conduct audits and investigations of loans and other investments made by the Treasurt secretary. The inspector general is also responsible for compiling a list of all funding decisions made by Mnuchin, the rationale behind each one and details about any person hired to help manage the loans and investments.
What scrutiny is coming
The new inspector general is required to issue an initial report 60 days after being confirmed and subsequent reports every quarter thereafter. But Trump has indicated he may intervene in requirements that the new watchdog share some information with Congress. The inspector general is an Executive Branch official, Trump noted in a signing statement, and therefore shouldn't be compelled to provide reports to Congress without the president's approval. In particular, the law requires the inspector general to tell Congress if he or she is "unreasonably" blocked from receiving information necessary to investigate or audit any of Treasury's choices. This has raised alarm among Democrats that Trump could prevent Congress from learning, say, whether any of his properties do in fact benefit from the new law.
3) The Pandemic Response Accountability Committee
Who’s in charge
Perhaps the most potent oversight tool in the new law is this panel of nearly two-dozen inspectors general with broad authority to investigate, audit and probe the implementation of the entire $2 trillion coronavirus rescue package. The chairman, Pentagon watchdog Glenn Fine, was picked by his fellow inspectors general earlier this week. He'll command an $80 million budget and select a staff to help run investigations.
Eight other inspectors general were required to be part of his panel — including the watchdogs of the Justice Department, Health and Human Services Department and Small Business Administration — but Fine on Wednesday added another dozen, including the inspectors general of the Federal Reserve, the Department of Transportation, NASA and the special inspector general for pandemic recovery who will be appointed by Trump.
Here, too, Trump indicated he disagrees with an aspect of the law requiring Fine to coordinate his top staff picks with key congressional committees. Though Trump said he expected Fine to consult with lawmakers, the president argued forcing him to do so would be unconstitutional.
What money will be watched
The committee's purview is broad and touches on every aspect of the relief measure. It includes rooting out waste, fraud and abuse or mismanagement; auditing and reviewing federal contracts authorized by the new law; reviewing the administration of the new funding and loan programs; serving as a liaison between federal agencies responsible for implementing aspects of the law; and referring any potential crimes for prosecution by the Justice Department.
What scrutiny is coming
The new law requires the committee to establish a "user-friendly" website within 30 days, meant to provide regular updates on the implementation of the law. The site is meant to be a publicly accessible portal to review the funding decisions made by Treasury, as well as other agencies. It's also required to include any findings and reports from the inspectors general.
"The website shall provide detailed data on any Federal Government awards that expend covered funds, including a unique trackable identification number for each project, information about the process that was used to award the covered funds, and for any covered funds over $150,000, a detailed explanation of any associated agreement, where applicable," according to the law. The site must also break down the funds obligated by congressional district.
4) General congressional oversight
Who’s in charge
It's the wild, wild, west.
The new coronavirus law contemplates an extensive role for congressional committees. Lawmakers are required to receive regular updates and reports from federal agencies and inspectors general, provide input on some hiring decisions as well as hear about any time an inspector general runs into roadblocks investigating funding decisions.
Committees across Congress all want a piece of investigating aspects of the new law. House Democrats, in particular, are promising to be aggressive in their scrutiny of the Trump administration's implementation. For example, House Financial Services Committee Chairwoman Maxine Waters vowed Wednesday to watch Mnuchin closely and urged him to impose stricter requirements on companies who receive funding than the law requires — such as limiting executive compensation.
