News outlets sue for information on small-business loans program
A handful of the country’s most prominent news publications are suing the Small Business Administration (SBA) after it refused to release which businesses were receiving money through the $660 billion Paycheck Protection Program (PPP).
The Washington Post, The New York Times, Bloomberg, ProPublica and Dow Jones — which publishes The Wall Street Journal — are all part of the group suing the government agency. The suit comes after the publications initially requested the information through the Freedom of Information Act, a common tool used by news organizations to get information from the government.
After weeks of @SBAgov refusals to release data on who is receiving more than $600 billion in small business loans, @washingtonpost has filed a lawsuit with @nytimes @propublica @business @DowJones to find out how your tax dollars have been spent. https://t.co/SFblt5ytEs
— Ziva Branstetter (@ZivaBranstetter) May 12, 2020
Created by Congress’s $2.2 trillion CARES Act, the PPP was one of the largest programs launched by the federal government to combat the economic fallout related to the coronavirus pandemic. Under the program, small businesses can receive loans that can be forgivable if the money is used to pay for eight weeks of payroll plus 25 percent of all overhead costs during that time, according to the rules laid out by the SBA.
However, since its roll out, the program has been plagued with issues, including large publicly traded companies receiving loans. Treasury Secretary Steven Mnuchin has threatened legal action against these corporations if they don’t return the loan money by Thursday. Notable companies such as Shake Shack, Ruth’s Chris Steak House and the Los Angeles Lakers have returned the PPP funds they received. But those businesses weren’t directly named by the SBA.
The SBA hasn’t said that the names of PPP recipients aren’t important but has sidestepped releasing the information, instead directing the news publications toward more generalized data on its website, according to ProPublica.
“Enormous amounts of taxpayer money are being committed to what is supposed to be a lifeline for millions of struggling American businesses,” ProPublica general counsel Jeremy Kutner said. “The public has an urgent right and need to know how it is being spent, and whether it is being directed to those most in need. We are pleased to be acting along with colleagues at other leading news organizations to make sure this information promptly sees the light of day.”