An unnoticed rule issued by the Small Business Administration earlier in the pandemic allows agency employees, legislators, and other federal officials to bypass an ethics review that aims to avoid conflicts of interest.
The exemption pertained to $ 659 billion Payment Protection Program (PPP) loans, a congressionally approved lending facility aimed at quickly raising money for small businesses affected by the blockades. of coronavirus.
SBA regulations typically require applicants with potential conflicts of interest to obtain a waiver from a Standards of Conduct Committee before the agency can grant them a loan. The regulation is in effect to protect taxpayers’ money from being distributed to well connected people who would not otherwise be eligible.
But the SBA, led by administrator Jovita Carranza, issued a general exemption for that rule as part of PPP.
The Washington Post first reported the rule change on Friday, noting that it was issued by the SBA in April.
The SBA, in a statement on Friday, said the rule was aimed at removing additional barriers for people who obtained much-needed loans, and that disaster assistance funds do not require exemptions from conflicts of interest for the same reason. .
“The Standards of Conduct Committee gave general approval rather than considering on a case-by-case basis in recognition that PPP loans were in some ways similar to disaster loans (requiring no approval from the Standards of Conduct Committee) and in anticipation of the large volume of potential cases that could be brought before the Committee, “SBA spokesman Jim Billimoria said in a statement.
The SBA and the Treasury Department have come under scrutiny for lack of transparency and oversight of the emergency loan program, which offers forgivable loans.
The Government Accountability Office released a report Thursday that said the SBA had received no information about the PPP.
“We encountered the greatest difficulty in trying to obtain information from the Small Business Administration (SBA),” the report said. “The SBA to date has been unable to provide critical information for our review.”
The SBA contested that characterization, saying it was providing information on more than 4.7 million loans.
Thursday, Treasury Secretary Steven Mnuchin
Steven Terner MnuchinTreasury institutes sanctions against companies in Iran’s metal industry The next COVID-19 bill depends on the June employment report On money: Trump, Republican clash over a new round of checks | Dow Sinks More Than 700 Points When COVID-19 Wave Shakes Wall Street | Senate Democrats raise concerns about debit cards used for stimulus payments MORE He said he would increase transparency by providing certain Congressional committees access to specific information on PPP loans below $ 150,000.
Unlike larger loans, Mnuchin was not expected to publish that information publicly, but he accepted under pressure from Democrats to make it available to key committees.
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