After a months-long legal battle over the transparency of one of the federal government’s largest coronavirus relief programs, a judge in Washington has demanded the disclosure 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 provided more than $525 billion in loans that can be canceled if the money is mostly spent to retain employees. The Treasury Department initially refused to release the borrowers’ names, saying it would expose “proprietary information.”
In May, ProPublica, in conjunction with several of the nation’s largest news outlets, filed a Freedom of Information Act lawsuit to obtain the information. Two months later, the SBA released information on 650,000 businesses that received loans between $150,000 and the maximum of $10 million, representing a fraction of the total number of borrowers.
But the SBA only disclosed loan amounts within wide ranges, saying being more specific would reveal confidential information about companies’ payrolls, and it declined to release borrower-level data on 4.5 million loans worth less than $150,000. He also withheld information about sole proprietorships and independent contractors receiving Economic Disaster Loans, a program that disbursed $192 billion in total, saying it would violate recipients’ right to privacy.
On Thursday, District of Columbia Circuit Judge James Boasberg rejected that claim, noting that the borrowers had been told via the loan application that such data could be revealed following a FOIA trial. The program poses a significant risk of fraud, he added – in September the Justice Department charged 57 people with breaking the rules – and would therefore benefit from closer scrutiny.
“The substantial public interest in shedding light on SBA’s administration of the PPP and EIDL program significantly outweighs any limited private interest in non-disclosure,” Boasberg wrote.
The order requires the SBA to disclose the names, addresses and specific loan amounts of all PPP and EIDL borrowers by November 19.
Previously released data (which ProPublica collected in a searchable database) shed light on widespread abuses of the program, from companies taking out more loans than they should have using multiple affiliates, to employment agencies temporary who got bloated 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 disproportionately receiving aid late or not at all.