In April, Florida Republican Senator Marco Rubio said he would fight to make sure the public knew which companies had received taxpayer-backed coronavirus relief loans that totaled $511 billion.
“At the end of the day, we’re going to find out one way or another who got that money,” Rubio said in a virtual town hall event on April 29. “Treasury, the SBA [Small Business Administration] will eventually have to release him. I always thought they were going to have to do it, and if they don’t we will force them to do it.
At the time, Rubio, who oversaw the implementation of the Paycheck Protection Program in his role as head of the Senate Small Business Committee, said his number one goal was to put money between hands of small business owners, and then push for full transparency.
But after Treasury Secretary Steven Mnuchin and Small Business Administration Administrator Jovita Carranza said this week they don’t plan to make PPP loan recipients and amounts public, Rubio changed course.
In one interview with CNN On Thursday, Rubio said he heard from small business owners that disclosing the amount of taxpayer-funded PPP loans is a “trade secret and a competitive disadvantage that can be used against you.”
“If you’re a small business, it’s payroll. So people will be able to figure out how much your payroll is based on how much your loan is,” Rubio said. “Essentially, you know your competitors can figure out how much their competitor is making elsewhere in the country and somehow poach employees or undermine their own.”
Rubio’s spokesman, Nick Iacovella, told the Miami Herald on Friday that the senator wants to work with the SBA and the Treasury Department to “ensure adequate transparency without compromising borrowers’ proprietary information.” Rubio sent a letter last week to the Treasury Department and the SBA asking for more data, but the letter did not ask the agencies to identify the individual companies receiving loans and the amount of the loan.
Rubio suggested on CNN there might be a “middle ground,” where the names of the companies that borrowed the money would be disclosed, but not the amount they received. He also offered another idea, saying the government could perhaps only disclose the beneficiaries of the larger PPP loans – although the money to companies does not have to be returned if it is used to maintain workers. on the payroll during the pandemic, essentially turning the PPP Loan into a grant.
“I don’t really think people are that excited about a $50,000 PPP loan,” Rubio said. “I think I feel like people really want to know more about the $5 or $8 million and $10 million.”
Eleven news outlets sued the Small Business Administration over records of loan recipients and loan amounts and other background information the agency previously released. The Treasury Department argued that releasing the data “would risk exposing the proprietary data of millions of small businesses and the salaries of independent contractors.”
The Treasury Department’s decision not to release details of the loan drew criticism from Democrats.
“Let’s be clear: Secretary Mnuchin is part of the most corrupt administration in history, riddled with strife, cronyism and incompetence,” Massachusetts Sen. Elizabeth Warren tweeted. “It’s absurd that he thinks he should hand out over $500 billion to taxpayers in secret.”
In April, there was a massive public outcry when it was revealed that listed companies with large cash reserves had received PPP loans aimed at small businesses. A number of companies, including Shake Shack and Ruth’s Chris Steakhouse, Gave back their PPP loans.
But information about PPP loans on public companies came from publicly available corporate documents, information that private companies are not required to disclose. The vast majority of PPP beneficiaries are private companies.
In Florida, 343,442 businesses have been approved for a total of $30.5 billion in PPP loans as of May 30 according to the SBA.
Rubio, who has received praise for leading the implementation of the program that helped create 2.5 million jobs in the United States in May after two months of record losses, designed PPP loans to get money from businesses the as quickly as possible.
Rubio said he was comfortable waiving certain requirements that would make it harder for people to defraud the government in exchange for handing over loans to business owners to avoid layoffs. He said the Treasury Department and its Senate Small Business Committee will play a critical oversight role in the coming months to audit and punish people who try to take advantage of the program.
“We thought about the initial requirement and it was a bipartisan agreement that we would have to certify and do the final audit,” Rubio said in April. “Our number one focus right now was how to get money into the hands of employers because every day they make decisions about firing people. And the more people who are laid off, the more people end up in the unemployment system and put pressure on it.
An earlier version of the story misrepresented Rubio’s statement to CNN. He said small business owners told him disclosing PPP loan amounts was a trade secret.
This story was originally published June 12, 2020 5:25 p.m.