Coronavirus Package Includes Oversight and Accountability Measures
Washington, D.C. (Mar. 26, 2020)—Today, Rep. Carolyn B. Maloney, the Chairwoman of the Committee on Oversight and Reform, issued the following statement after the Senate passed a stimulus bill to assist the American people during the coronavirus crisis:
“This bill will go a long way towards helping American workers, families, and businesses. As Chairwoman of the Oversight Committee, I am very pleased that the bill includes important provisions to ensure that taxpayer dollars are used effectively and efficiently, as well as dedicated funding and enhanced authorities for Inspectors General and the independent Government Accountability Office to fight waste, fraud, and abuse in the government spending that will happen under this bill.”
The Coronavirus Aid, Relief, and Economic Security Act includes several provisions offered by Chairwoman Maloney and Senator Gary Peters, the Ranking Member of the Senate Committee on Homeland Security and Governmental Affairs:
- Pandemic Response Accountability Committee:
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- $20 Million for Government Accountability Office: The bill allocates $20 million to enable the independent Government Accountability Office (GAO) to help Congress conduct oversight of the spending under this bill and other efforts to respond to the crisis. The bill provides GAO with the ability to conduct oversight and inspections of private entities receiving funding under the bill to protect against fraud.
The bill also includes these additional protections:
- Special Inspector General for Pandemic Recovery: The bill establishes a Special Inspector General to conduct oversight over stimulus spending by the Department of the Treasury. The bill requires the Special Inspector General to track all loans, loan guarantees, and other obligations and expenditures made by the Treasury Department under the bill. The bill provides $25 million for the Special Inspector General and authorizes the position for five years.
- Congressional Oversight Commission: The bill establishes a commission within the legislative branch to oversee stimulus spending by the Department of Treasury and the Board of Governors of the Federal Reserve. The Commission will be tasked with evaluating issues such as the impact of loans, loan guarantees, and investments made under the bill on the United States people, economy, financial markets, and financial institutions. The Commission will be required to submit reports to Congress every 30 days.
Finally, the bill includes mechanisms to prevent the airline industry from using taxpayer funds for purposes Congress never intended, as the industry did after 9/11. Following that bailout, major airlines funneled hundreds of millions of dollars in bailout funds to shareholders instead of using those funds to stabilize their businesses and protect workers.
For example, Southwest Airlines, which received a $283 million grant from the federal government, repurchased stock and issued dividends worth nearly $300 million between 2001 and 2004.
In addition, after lobbying Congress to provide the airline industry with billions in cash grants, Delta Chief Executive Officer Leo Mullin received $5.8 million in total compensation for his management of the company in 2002—a $3.4 million increase over his compensation for 2001.
At the same time, the airline industry fired tens of thousands of workers and terminated the pensions of thousands of retirees. In 2001 alone, the industry laid off 80,300 employees despite receiving $15 billion in assistance from the federal government.
To prevent a repeat of these abuses, the House and Senate worked together to establish clear requirements for expectations and accountability, including:
- Required Assurances from Air Carriers: The bill requires air carriers to agree to certain conditions in order to accept loans or loan guarantees from the Secretary of the Treasury. These conditions impose limitations on the ability of air carriers to buy back stocks, pay dividends to shareholders, layoff or furlough employees, and increase executive pay.