Bailout Watchdog Presses Treasury for More Transparency

Written by
Saleha Mohsin
Written by

Saleha Mohsin

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(Bloomberg) -- The special inspector general for pandemic recovery urged the U.S. Treasury Department to provide more transparency and quick access to documents regarding a loan to a shipping company that has already drawn scrutiny from another watchdog group.

In his first report, submitted Monday to the Senate Banking Committee, inspector general Brian Miller said his office had yet to receive documents related to the $700 million loan to YRC Worldwide Inc., the first business to receive funding from $17 billion in coronavirus relief set aside for national security companies.

Miller's panel called on Treasury to provide “timely and unrestricted access” to the loan documents, calling it “critical to effective oversight.” The panel is required to issue public reports monthly.

The Treasury Department took a 30% stake in YRC in exchange for the loan, the agency announced last month.

Another watchdog created by lawmakers to monitor spending of $3 trillion in virus relief has questioned whether YRC was a good recipient of loan money meant for companies critical to national security.

YRC, which ships electronics and supplies to military locations around the world, faces financial risk because of a heavy pension burden and has been rated non-investment grade for over a decade, according to a report last month from the Congressional Oversight Commission.

In his report on Monday, Miller called on lawmakers to give his office much more than the $25 million originally allocated under the CARES Act that provided trillions of dollars in pandemic aid. The costs for setting up a “sufficiently robust IT infrastructure” alone could cost as much as $46 million, the report said.

The report reveals that Miller was the only employee for SIGPR until a month ago. He has now hired a deputy, chief of staff, chief counsel and officials for auditing and investigations. Staff also include experts in data analysis and whistle-blower protection, and they'll work with the Financial Crimes Enforcement Network, the FBI and the Justice Department.

Miller is leading oversight of more than $500 billion going from Treasury and the Federal Reserve to airlines, national security companies and other businesses seeking low-interest loans. He previously served as a White House lawyer and participated in President Donald Trump's impeachment defense.

Trump fought the creation of SIGPR in March when the $2.2 trillion CARES Act was being negotiated. Upon signing it into law, he claimed the power to gag the watchdog, saying that the inspector general can't go to Congress if the administration refuses to provide information about loans and investments made by the Treasury secretary.

However, during his confirmation hearing and in his first report, Miller has promised to be “vigilant and protect the integrity and independence” of his office, telling lawmakers that he's prepared to resign if he is unable to do his job.