May 12, 2020

Warren, Blumenthal, Coons, Jayapal, and Sarbanes Unveil Coronavirus Oversight and Recovery Ethics (CORE) Act

Members Urged Congressional leadership to Include These Proposals in the Next COVID-19 Relief Package

Bill Summary | Discussion Draft Bill Text

Washington, DC - Today United States Senators Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.), Chris Coons (D-Del.), Co-chair of the Congressional Progressive Caucus Representative Pramila Jayapal (D-WA), and the Chair of the House Democracy Reform Task Force Representative John Sarbanes (D-MD) introduced a discussion draft of their legislation to ensure stronger oversight, accountability, and transparency in the federal government's response to COVID-19 crisis. 

Along with critical aid for hospitals, small businesses, families, unemployed Americans, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) established a $500 billion corporate bailout and Paycheck Protection Program for small businesses. Both of these programs are vulnerable to exploitation for personal, financial, and political gain and could be misused by the Trump Administration to enrich giant corporations and CEOs, make monopolies worse at the expense of workers and consumers, and reward political allies and punish foes. 

The CARES Act imposed some basic oversight of these programs, but President Trump immediately began undermining these provisions by firing and promising to muzzle independent inspectors general charged with pandemic relief oversight. In the next relief package, Congress must pass stronger oversight, accountability, transparency, ethics, and anti-corruption provisions. The provisions must be core to any relief bill to ensure taxpayer dollars serve the interests of the American people, not of the wealthy or well-connected.  

"We must hold the Trump administration  accountable as they hand out trillions of dollars in response to the COVID-19 crisis. We've seen giant public companies scoop up relief meant for small businesses, an inspector general fired, promises made to muzzle independent oversight, companies with political connections cutting in line to access to relief funds, and President Donald Trump putting himself and his buddies first every step of the way," said Senator Warren. "We're proposing legislation to empower inspectors general, prohibit conflicts of interest, and strengthen oversight and enforcement, and to stop any government-sanctioned profiteering and corruption. Congress must include our bill in the next COVID-19 relief package."

"In the days since we first proposed these oversight measures, President Trump removed an Acting IG who blew the whistle on testing shortages, while his son-in-law oversaw an opaque project potentially fast-tracking supplies to his political allies. Real accountability demands a watchdog, not a lapdog, to stop the waste, fraud and favoritism pervading this administration. Getting relief to those who need it - small businesses, struggling families, the working poor and middle class - means keeping an eye on the corporate fat cats who are trying to cut them in line. The only people threatened by oversight are the ones trying to game the system, or hide something," said Senator Blumenthal.

"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.  Congress must include real oversight in the next COVID-19 relief package."

"As families and small businesses struggle to stay afloat during a historic mass unemployment crisis that has seen more than 33 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."

"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."

The CORE Act is endorsed by Citizens for Responsibility and Ethics in Washington (CREW), Open the Government, the Project On Government Oversight (POGO), and Public Citizen, and Transparency International U.S. Office.

The Coronavirus Oversight and Recovery Ethics Act (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 the 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.
  • Empowers & Protects 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 & 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 & 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 & 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.