After a months-long legal battle over the transparency of one of the federal government’s largest coronavirus relief programs, a Washington judge has demanded the release of data on thousands of small business loan recipients.
The Small Business Administration’s Paycheck Protection Program, created by the Coronavirus Aid, Relief, and Economic Security Act in March, has so far granted more than $ 525 billion in loans that can be canceled if the money is mainly spent to keep employees. The Treasury Department initially refused to release the names of the borrowers, saying it would expose “proprietary information.”
In May, ProPublica, in collaboration with several of the country’s largest news agencies, filed a complaint under the Freedom of Information Act to get the information. Two months later, the SBA published Information on 650,000 businesses that received loans ranging from $ 150,000 to a maximum of $ 10 million, which is a fraction of the total number of borrowers.
But the SBA only disclosed loan amounts in wide ranges, claiming that to be more precise, it would reveal confidential company payroll information, and it completely refused to release borrower-level data on 4.5 million loans valued at less than $ 150,000. It also withheld information on sole proprietorships and independent contractors receiving economic disaster loans, a program that disbursed $ 192 billion in total, claiming it would violate beneficiaries’ privacy rights.
District of Columbia Circuit Judge James Boasberg Thursday rejected this claim, noting that borrowers had been informed via the loan application that this data could be revealed following a FOIA lawsuit. The program poses a significant risk of fraud, he added – in September, the Justice Department accused 57 people of breaking the rules – and would therefore benefit from further scrutiny.
“The significant public interest in shedding light on the SBA’s administration of the PPP and EIDL program considerably outweighs any limited private interest in non-disclosure,” Boasberg wrote.
The order requires the SBA to publish the exact names, addresses and loan amounts of all PPP and EIDL borrowers by November 19.
Previously published data (which ProPublica collected in a searchable database) highlighted the widespread abuse of the program, on the part of companies that took more loans than they should have by using several subsidiaries, to temporary employment agencies which have obtained non-standard loans because their contract workers were technically on their payroll. The data also helped reveal deep inequalities in the way the program was administered, with minority-owned businesses receiving disproportionate aid late or not at all.