Five news outlets, including The New York Times this week sued
the U.S. Small Business Administration for more information about its Paycheck Protection Program. The lawsuit accuses the
SBA of stonewalling their requests for greater disclosure, but it's more likely the federal agency is overwhelmed by a program quickly cobbled together amid a disastrous pandemic.
The Washington Post, ProPublica,
Bloomberg and Wall Street Journal parent Dow Jones are also plaintiffs in the suit. They claimed they requested SBA records to determine who received the more than $700 billion in
public assistance through the controversial program.
The SBA violated the Freedom of Information Act, a law aimed at making the government more transparent, by denying their
requests for records, the publications said.
“Plaintiffs submitted these FOIA requests and sought expedited processing of them because of the public interest in
contemporaneously monitoring the disbursement of billions of taxpayer dollars," according to the suit. "The SBA has until now routinely provided such information about businesses that take out SBA
Those loans are forgivable if businesses can show that they meet certain requirements, such as spending the proceeds on keeping people employed. The plan is part
of the government's broader goal to prevent the spread of COVID-19, the respiratory illness caused by the novel coronavirus, by ordering most businesses to suspend any activity that brings people
The PPP caused a furor when companies like Shake Shack and Ashford Hospitality Trust, which have access to other sources of financing, scored multimillion-dollar
loans through a program intended to help mom-and-pop businesses facing extinction. Shake Shack and Ashford subsequently returned the money. Other companies that received and returned monies amid the
outcry include the Los Angeles Lakers and Ruth's Chris Steak House.
The SBA has published reports that show the overall size of its loan programs, but it hasn't released the
names of loan recipients or indicated when it may do so. A court may compel the agency to speed up those disclosures, which likely will happen anyway, once the SBA works through its massive backlog of