By now, most people realize that the 2020 CARES Act money was released in haste, with few guardrails and insufficient oversight. Some of its high-profile programs, like the Paycheck Protection Program (PPP) were designed to keep workers employed, but then didn’t require employers to prove that they had retained their workforce.
So Good Jobs First was among the groups applauding President Joe Biden’s State of the Union announcement that the Department of Justice will appoint a chief prosecutor responsible for investigating pandemic fraud.
“We’re going to go after the criminals who stole billions in relief money meant for small business and millions of Americans,” he declared.
This welcome news deserves some recognition during Sunshine Week, the time of year we promote the importance of open government and access to public information. Transparency is the first step in accountability, which in turn prompts reform. Let’s compost the CARES Act experience so officials don’t have to retroactively chase down billions in taxpayer dollars to see whether they were spent right.
For the last two years we’ve a close eye on the transparency of pandemic spending, especially with our Covid Stimulus Watch database. We released a report last December that evaluated the accessibility and content of each state’s covid spending website. Our results showed most states desperately need to step up their transparency game.
The absence of disclosure in pandemic spending creates a myriad of problems for constituents. Cities and counties that got CARES and ARPA money from the state rather than directly from the federal government are less likely to provide details on how they’re spending it, or the proper channels to apply for it. We’re seeing this issue more and more now that ARPA money is trickling down to smaller localities across the country. The lack of information leaves constituents in the dark with no idea what to advocate for and local nonprofits struggling to help groups that need this money most.
Some think tanks have taken it upon themselves to track this money - their efforts nonetheless highlight how government isn’t doing as good of a job as it could be with local disclosure and accessibility.
CARES and American Rescue Plan Act (ARPA) programs that do disclose data prove that transparency can spur change. The most notable example of this is the PPP, which was meant to help small businesses stay open during the height of the pandemic. An analysis of the data, made available on SBA’s website shows that no more than 34% of the $800 billion program went to workers (its main intended beneficiaries).
The SBA’s data, media coverage, and advocacy efforts by non-governmental organizations more than likely played a role in Biden’s decision to appoint a chief prosecutor. According to the White House, the prosecutor and their team will “use state-of-the-art data analytics tools to connect the dots on identity theft and other complex fraud schemes transnationally.”
If the prosecutor does their job and holds accountable recipients who shouldn’t have gotten money or who spent it in violation of its intended purpose, we’ll ensure the next time disaster strikes and we need to move money quickly, it’ll be done with more transparency and accountability.