Elizabeth Warren

• Pandemic-program role: Co-author of the April 2020 request for an inspector-general investigation of PPP; author of a 2020 letter to the Special Inspector General for Pandemic Recovery on the reach of his jurisdiction.
• Institution - office: U.S. Senate - Massachusetts - Type: elected official

On April 23, 2020, Senator Elizabeth Warren and House Small Business chairwoman Nydia Velázquez asked the two inspectors general who oversaw the Paycheck Protection Program to open "a broad investigation into the program's implementation."¹ Their letter went to SBA Inspector General Hannibal "Mike" Ware and Treasury's acting Inspector General, Richard Delmar. It cited SBA's own count that the largest 4 percent of approved loans took 45 percent of the money, and press reports that big banks had served their richest clients first.¹

The inspector-general request

The letter listed problems it said SBA and Treasury leadership should have foreseen.¹

• a rule requiring 75 percent of each loan to go to payroll, "that was not part of the law";
• lenders reporting trouble getting into SBA's loan-processing system and confusion over what documents to collect;
• banks "processing the largest loans first out of a desire to reap higher fees" and serving existing large customers first;
• public companies, including Potbelly and Ruth's Chris Steak House, taking forgivable loans.

It quoted the New York Times report by Emily Flitter and Stacy Cowley that JPMorgan Chase, Citibank and U.S. Bank "prioritized the applications of their wealthiest clients."¹ It asked the inspectors general for three reviews:¹

• the SBA and Treasury rulemaking, including its protections against waste, fraud and abuse;
• the lending process, including whether banks favored "larger, wealthier customers";
• who got the money, including whether "companies with close ties to Administration officials or other political connections" did.

The Special Inspector General's reach

The CARES Act created a Special Inspector General for Pandemic Recovery inside Treasury. Warren wrote to the new office asserting that it had jurisdiction "to investigate any fraud, waste and abuse of" CARES Act funds. Senator Kelly Loeffler and others wrote separately that it could audit all loans Treasury made or managed, "including those made under the Paycheck Protection Program." The Special Inspector General printed both letters in its first quarterly report, of September 30, 2020, and concluded that the statute's list of reporting duties "does not expand SIGPR's jurisdiction."²

Workers' pay

In April 2020 Warren and Representative Ro Khanna of California proposed an "Essential Workers Bill of Rights," covering health and safety protections, premium pay, collective bargaining and paid sick and family leave, and asked that it be part of the next relief package.³ "Essential workers are the backbone of our nation's response to coronavirus," Warren said.³

Related profiles

• Nydia Velázquez: co-signer of the April 2020 letter.
• Hannibal "Mike" Ware: SBA Inspector General, one of its two addressees.
• Emily Flitter: co-author of the Times report the letter quotes.
• Kelly Loeffler: author of the other jurisdiction letter to the Special Inspector General.

Sources

1. Letter from Senator Elizabeth Warren and Chairwoman Nydia M. Velázquez to SBA Inspector General Hannibal "Mike" Ware and Treasury Acting Inspector General Richard K. Delmar, Apr. 23, 2020. Original: https://www.warren.senate.gov/imo/media/doc/2020.04.23%20Letter%20to%20SBA%20and%20Treasury%20IG.pdf Letter to SBA and Treasury Inspectors General on the Paycheck Protection Program — Elizabeth Warren (stored capture) ↩
2. Special Inspector General for Pandemic Recovery, Quarterly Report to Congress, Sept. 30, 2020. Original: https://www.oversight.gov/sites/default/files/documents/reports/2020-10/SIGPR-Quarterly-Report-to-Congress-September-30-2020.pdf ↩
3. Communications Workers of America, "Warren and Khanna Introduce Essential Workers Bill of Rights to Protect and Compensate Frontline Workers," Apr. 16, 2020. Original: https://cwa-union.org/news/warren-and-khanna-introduce-essential-workers-bill-of-rights-protect-and-compensate-frontline ↩