July 13, 2020 — The U.S. Small Business Administration has released millions of records on the firms that received loans to stay afloat during the coronavirus pandemic, but the information is woefully short of meeting the demands of the federal Freedom of Information Act.
That’s the assessment of an attorney representing the news organizations pursuing a FOIA lawsuit against the SBA. Maxwell S. Mishkin, an associate at Ballard Spahr LLP, updated National Press Foundation fellows on the status of the lawsuit, which seeks to force the SBA to disclose all taxpayer money given to private entities, regardless of the size of the loan. The government has so far released only limited data on companies and nonprofits that received Paycheck Protection Program loans greater than $150,000.
The lawsuit was filed in May by five media organizations, and has since grown to 11. The Washington Post is the lead plaintiff. (See two key documents filed by the plaintiffs: the amended complaint and a proposed briefing schedule.)
Mishkin laid out the basics of FOIA law and how government records are presumed to be open unless they fall under one of several listed exemptions. The law applies to administration records, not those of Congress or the federal courts. (The Reporters Committee for Freedom of the Press has extensive FOIA backgrounders and resources here.)
The SBA lending program was part of the CARES Act, a $2 trillion stimulus package that is the most visible aspect of the federal government’s $4.5 trillion response to the coronavirus pandemic. The Paycheck Protection Program was based on an existing program whose data is fully available to the public. Unlike the earlier program, however, PPP loans are expected to be forgiven. Mishkin argued that this critical distinction makes it even more important that SBA disclose all data on the program.
In July, in response to Congressional pressure, SBA released limited information, including the names of loan recipients who received more than $150,000 and some information – without the names – of those who received less than $150,000.
The data released covers most of the money dispersed under the PPP but not most of the recipients, Mishkin said. With more than 4 million loans in the program, there are millions for just $20,000 or $50,000 or $100,000 – enough to help a mom-and-pop operation.
Journalists need details to judge whether the program has been fairly administered, particularly amid news reports that Black and other minority-owned small businesses have not been able to access PPP loans at the same rates as well-funded big businesses.
The National Press Foundation training being held July 13-17 is intended to help journalists uncover who did and did not receive federal aid and report on whether the aid helped lessen unemployment or poverty.
The SBA’s existing lending programs release more than 30 fields of information on each loan; the data for 30 years worth of loans are made available on the SBA’s website.
Beyond that, PPP borrowers are told that information on loans will be made available under FOIA.
Although 11 media organizations are involved in the lawsuit, the loan information data should eventually be made available to any reporter who wants it. “There’s a principle called ‘released to one, released to all,’” Mishkin said. “So once information comes out, anybody else who asks for it should be able to get it.”