Leaderless Watchdog for $500 Billion in Aid Preps for Disclosure

(Bloomberg) --

A watchdog created to monitor the work of the Treasury Department and the Federal Reserve in buffering corporate America and Main Street from the Covid-19 pandemic is functioning like an ad hoc committee as it waits for a chairman to start formal operations.

The congressional oversight panel, formed as part of the $2.2 trillion pandemic relief bill, is expected to issue its first report in mid-May but still has no leader and has yet to any conduct formal meetings, said Representative Donna Shalala, a Florida Democrat appointed to the five-person panel.

“We have no staff, we have no office,” Shalala said in an interview on Friday. The panel's first public report is due around mid-month.

Conversations between the panel's four members have already begun, she said, but the appointees -- Shalala; Senator Pat Toomey, a Pennsylvania Republican; Bharat Ramamurti, a former aide to Democratic Senator Elizabeth Warren; and Representative French Hill, Republican of Arkansas -- have yet to meet as a group.

“The commission will have to talk through the issue of transparency once we have a chairman,” Hill said in an interview in April. “The commission should have the staff and resources to conduct its work -- so that each member has good research capacity.”

Lack of Structure

House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell will jointly select a chairman, but haven't so far; the reasons for the delay aren't clear.

Given the lack of official structure, commission members are looking for pointers from the temporary oversight entity that reviewed the Troubled Asset Relief Program during the 2008 economic crisis. The first report from that group, which Warren chaired, listed a series of questions about how Treasury was distributing the bailout funds and what it was requiring of the financial institutions that took the money.

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“Most of us have gone through that in detail to see what questions they asked and what questions we might ask,” Shalala said. “My interest is in protecting workers. I want to make sure the taxpayer money went to protect family and workers in our country, and helps us to recover.”

Ramamurti is already asking the Fed for information on the trillions of dollars in emergency loans the central bank plans to extend to businesses. He wrote in a letter to Fed Chairman Jerome Powell that “the public deserves to know which companies are receiving taxpayer-backed lending through the Fed and on what terms.”

Key Pillar

Following the letter, the Fed has said it will publish details of the transactions on its website, including the names of the companies that receive the aid.

The target date for publishing the first report was triggered a month earlier when the Fed, in coordination with Treasury, announced the rollout of its “Main Street Lending Facility.”

The measure is meant to be a key pillar of the government relief effort while much of the U.S. economy is shuttered; it will provide loans to companies with as many as 15,000 employees or as much as $5 billion in annual revenue. A start date for the facility is expected to be announced soon. The commission is required to issue follow up reports every 30 days.

“We will try to build consensus even though we will have differences on focus,” Shalala said. “If we can't, we can't, but at least what I know from the other members, everybody is going to try.”