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Special Inspector General for Pandemic Recovery
Initial Report to Congress
August 3, 2020

CONTENTS
INTRODUCTORY MESSAGE
An Introductory Message from Inspector General Brian D. Miller

2

EXECUTIVE SUMMARY

4

OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR PANDEMIC RECOVERY
Creation and Statutory Authority

9

SIGPR in Context: CARES Act Jurisdiction & Reporting

10

SIGPR in Context: CARES Act Division A Programs

18

SIGPR Mission and Core Values

25

MANAGEMENT AND ADMINISTRATION
Building an Office from the Ground Up: Staffing

27

Building an Office from the Ground Up: Office Space

28

Building an Office from the Ground Up: Budgetary Constraints

29

SIGPR OFFICES AND ACTIVITIES
SIGPR Offices

31

Building Partnerships

34

SIGPR FINDINGS AND REPORTABLE DEVELOPMENTS AND ACTIVITIES
Direct Loans

37

Other Investments Under Section 4003

40

RECOMMENDATIONS
Recommendations to the Department of the Treasury

49

Recommendations to Congress

49

APPENDICES
APPENDIX A

52

APPENDIX B

56

APPENDIX C

61

APPENDIX D

64

INTRODUCTORY MESSAGE

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INTRODUCTORY MESSAGE

An Introductory Message from Inspector General Brian D. Miller
It is an honor to present this 60-day report, which highlights the important work that the Office
of the Special Inspector General for Pandemic Recovery (SIGPR) has begun. As detailed in the
report, SIGPR’s Office of Investigations has begun work on 12 open matters. SIGPR already has
had a formal recommendation accepted and implemented by the Department of the Treasury.
Further, we have two recommendations for Congress.
I am thankful for such a dedicated and talented group of public servants who have sacrificed to
come to work with me as the staff of this brand-new office. Moreover, having started service
with me so recently, their ability to help me produce this report over the past days—in the
midst of a pandemic and without a common space to work or even meet together—is truly
remarkable. To my new staff: Thank you.
I am ever mindful of how important the Office of the SIGPR is in our Nation’s history and to our
Nation’s economic health and recovery. Congress is spending trillions of dollars to address our
economic crisis, and SIGPR is a key part of making sure that those dollars are well-spent. Every
dollar lost to fraud or abuse is a dollar that deserving American families and businesses need.
Most importantly, SIGPR parsed the CARES Act to ensure that SIGPR is following the law as
written. In our view, the text of the CARES Act does not issue SIGPR as expansive a
jurisdictional mandate as some have suggested or, indeed, as I might wish it to be. SIGPR wants
to be certain that it is not exercising authority it doesn’t have. As explained in the report, our
legal analysis is an invitation to Congress to clarify the CARES Act where warranted. We
understand that others may disagree, but this is our best reading of the text.
I hold all government officials, including myself, to a high standard. Basic to the integrity of any
governmental official is following the law as written and not exercising authority Congress did
not grant. We govern only by the consent of the governed, and the attempt to exercise
authority not granted would violate that most inviolable of first principles. Accordingly, unless
and until Congress grants us additional authority, we will follow the law as written and not as
we wish it to be.
In setting up an office from nothing, I am personally working through the intricacies of the
bureaucracy during a pandemic. Starting an office from scratch is a struggle in the best of
times. But every step of every administrative task is more complicated now. Congress created
SIGPR to combat the fraud, waste, and abuse that thrives in the conditions created by the
pandemic—the conditions that precipitated passage of the CARES Act in the first place. As
described in this report, however, that very pandemic has complicated virtually every step of
creating the Office of the SIGPR. I have worked long and hard these past 60 days—joined
recently by my senior staff—to build an office ready and able to implement the mission of the
Office of the SIGPR as expressed by the text of the CARES Act, but starting an office from
scratch in these conditions is an arduous task that necessarily takes more time than anyone
wants.

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INTRODUCTORY MESSAGE

Despite these difficulties, the Office of the SIGPR is making progress in hiring, budgeting,
acquiring physical space to meet and work, setting up the IT infrastructure to share information
within the office, and connecting with other agencies and the public. SIGPR will always strive to
ensure that the American taxpayer gets its best return on investment.

Brian D. Miller
August 3, 2020

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EXECUTIVE SUMMARY

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EXECUTIVE SUMMARY

CARES ACT OVERSIGHT

The Special Inspector General for Pandemic
Recovery (SIGPR) was established by
Section 4018 of the Coronavirus Aid, Relief,
and Economic Security Act (CARES Act).
Under the CARES Act, SIGPR has the duty to
conduct, supervise, and coordinate audits
and investigations of the making, purchase,
management, and sale of loans, loan
guarantees, and other investments by the
Secretary of the Treasury under any
program established by the Secretary under
Division A of the CARES Act, as well as the
management by the Secretary of any
program established under Division A of the
CARES Act.

When there is an express mandate to
disburse trillions of taxpayer dollars,
oversight and accountability are invaluable
because fraud, waste, and abuse are
inevitable. Congress understood this when
it created multiple oversight entities under
the CARES Act and charged existing entities
with additional oversight. But while
redundancies reinforce accountability,
efficiency and fairness counsel in favor of
clarity and deconfliction.
Interpreting the text of the CARES Act,
SIGPR therefore uses this initial report to
offer its best, objective understanding of
the jurisdictional contours for each of the
entities assigned a major oversight role by
the CARES Act and invites Congress to
clarify the areas where potential
ambiguities remain. As for itself, SIGPR
concludes it has jurisdiction over Division A
loans, loan guarantees, and other
investments by the Secretary of the
Treasury, and programs managed by the
Secretary. SIGPR concludes it does not have
jurisdiction over any programs in Division B.

By express incorporation, SIGPR also has
the duties, responsibilities, powers, and
authorities granted inspectors general
under the Inspector General Act of 1978,
including broad subpoena authority.
Nine days after the CARES Act was signed
into law, the President nominated Brian D.
Miller—a former Inspector General of the
General Services Administration—to be
Special Inspector General. Two months
later, on June 2, 2020, IG Miller was
confirmed. Immediately upon
confirmation, IG Miller began the process of
hiring a seasoned and well-respected senior
leadership team.

Of the oversight entities referenced in the
CARES Act, the Pandemic Response
Accountability Committee (PRAC) appears
to have the most expansive jurisdiction,
with its broad oversight mandate related to
various appropriations and the Federal
Government’s response to the nationwide
public health emergency of COVID-19. The
Congressional Oversight Commission, on
the other hand, is given a quite narrow
remit, with its jurisdiction expressly limited
to Subtitle A of Title IV, within Division A.
And finally, GAO’s new CARES Act oversight
jurisdiction broadly covers Division B of the
CARES Act, but does not appear to reach
Division A.

Despite the difficulties inherent in standing
up a new office in the midst of a global
pandemic, this team of IG-community and
law-enforcement veterans has moved
quickly to process the complexities of the
CARES Act and the Government’s
implementation of it, initiate outreach to
law-enforcement partners and other
oversight entities, and begin identifying
areas for preliminary inquiry.

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EXECUTIVE SUMMARY

HIGHLIGHTS

REPORTABLE FINDINGS

In light of the importance of oversight and
accountability to a robust national recovery,
SIGPR has worked diligently in the first 60
days to build its staff and infrastructure
and, critically, to begin providing effective
oversight within its areas of core statutory
jurisdiction. Indeed, in the short time since
IG Miller’s confirmation, SIGPR has located
temporary and long-term office space,
obtained from OPM waivers for three
Federal retirees, hired a senior leadership
team, held briefings, attended meetings,
and joined working groups involving Offices
of Inspector General, PRAC members, lawenforcement personnel, and enforcement
entities such as FinCEN, the FBI, and the
Department of Justice.

The CARES Act requires this initial report to
Congress within 60 days of the Special
Inspector General’s confirmation, and then
quarterly reports thereafter. SIGPR reports
must include detailed information about
Treasury’s loan programs and investments
under CARES Act Section 4003, data
regarding which entities have received
those loans and investments, the current
status of those transactions, and other
information. The information relating to
these reporting requirements that SIGPR
has obtained in the first 60 days is discussed
more fully in this report, but an overview of
the relevant categories and amounts of
obligations by Treasury to date is reflected
in the following table:

In fact, SIGPR has already entered into
formal agreements with two U.S. Attorney
Offices, and the office is in talks with the
SEC, FinCEN, and other partners.
SIGPR has also hired a core leadership
team, including a Deputy Inspector General,
a Chief of Staff, a Chief Counsel, an
Assistant Inspector General for Auditing, an
Assistant Inspector General for
Investigations, an Assistant Inspector
General for Data Analysis, Deconfliction,
Integration, and Whistleblower Protection,
an Assistant Inspector General for
Administration, a CIO, and a CISO.
Additional Counsel, Investigators, and
Auditors are currently in the hiring process,
and several data analysts and evaluators
are being recruited as well.
Importantly, SIGPR’s Hotline is operational
at 202-927-7899, and a website is under
development. Building on its network of
oversight relationships, SIGPR has initiated
twelve investigations and has reviewed well
over 10,000 pages of requested documents.

Funding Program

Obligation Amount

Direct Loans to
Passenger Air
Carriers and
Related Businesses

$0

Direct Loans to
Cargo Air Carriers

$0

Direct Loans to
Businesses Critical
to Maintaining
National Security

$700,000,000

Main Street
Lending Program
(MS Facilities, LLC)

$75,000,000,000

Term Asset-Backed
Securities Facility
(TALF II, LLC)

$10,000,000,000

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EXECUTIVE SUMMARY

Funding Program

Obligation Amount

Primary Market
Corporate Credit
Facility (Corporate
Credit Facilities,
LLC)

$50,000,000,000

Secondary Market
Corporate Credit
Facility (Corporate
Credit Facilities,
LLC)

$25,000,000,000

Municipal Liquidity
Facility (Municipal
Liquidity Facility,
LLC)

$35,000,000,000

RECOMMENDATIONS
Finally, based on its first 60 days of
research, outreach, and analysis, SIGPR
provides three recommendations in this
report. First, SIGPR has already
recommended that, in future loan
agreements, Treasury expressly include
SIGPR in the list of entities entitled to
“timely and unrestricted access” to
information from the borrower. Treasury
agreed to implement the change in future
agreements. Second, SIGPR recommends
that Congress take up S.3751, the Special
Inspector General for Pandemic Recovery
Expedited Hiring Authorities Act of 2020,
sponsored by Senator Grassley. Finally,
SIGPR recommends that Congress consider
the various CARES Act relief programs, how
they overlap, whether the overlap is in the
public interest, and whether legislative
clarification is warranted.

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OFFICE OF THE SPECIAL
INSPECTOR GENERAL FOR
PANDEMIC RECOVERY

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Creation and Statutory Authority
Creation Key Timeline
The President signed the CARES Act into law on March 27, 2020. Just nine days later, the
President nominated Brian D. Miller to serve as the Special Inspector General for Pandemic
Recovery (SIGPR), a new office created by the CARES Act. IG Miller was confirmed 58 days
later, and his senior leadership began to on-board more than 30 days after that.

SIGPR Creation Timeline

Statutory Authority
SIGPR was created by Section 4018 of the CARES Act to serve as one of a host of entities
charged with CARES Act oversight. 1 Specifically, SIGPR is tasked with the duty to conduct,
supervise, and coordinate audits and investigations of the making, purchase, management, and
sale of loans, loan guarantees, and other investments by the Secretary of the Treasury under
any program established by the Secretary under Division A of the CARES Act, as well as the duty
to conduct, supervise, and coordinate audits and investigations of the management by the
Secretary of any program established under Division A of the CARES Act.
Importantly, the CARES Act provides that “the Special Inspector General shall have the
authorities provided in section 6 of the Inspector General Act of 1978.” CARES Act § 4018(d)(1).
Through this express incorporation of the Inspector General Act, the CARES Act grants SIGPR
broad subpoena authority. See 5a U.S.C. § 6(a)(4).
1

The relevant text of Section 4018 of the CARES Act is provided at Appendix A.
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SIGPR in Context: CARES Act Jurisdiction & Reporting
As mentioned, SIGPR is but one of many entities either expressly or inherently tasked with
oversight of the Government’s implementation of the CARES Act and the conduct of private
actors who seek participation in the Act’s trillions of dollars of funding. To help situate SIGPR
within the broader context of the CARES Act’s programmatic framework and the major
oversight entities, to facilitate oversight collaboration and deconfliction, to inform the
American taxpayers, and to provide Congress an opportunity to clarify ambiguities, SIGPR
provides the following legal analysis of the oversight jurisdiction for the major oversight entities
created by the CARES Act and the basic reporting requirements placed upon those entities. A
matrix of these jurisdictional and reporting conclusions is included at Appendix B.
SIGPR jurisdiction
Section 4018 of the CARES Act, which falls under Division A, Title IV, Subtitle A, provides:
It shall be the duty of the Special Inspector General to . . . conduct,
supervise, and coordinate audits and investigations of the making,
purchase, management, and sale of loans, loan guarantees, and
other investments made by the Secretary of the Treasury under any
program established by the Secretary under this Act, and the
management by the Secretary of any program established under
this Act . . . .
CARES Act § 4018(c)(1). Based on this passage, there are three requisite elements to SIGPR’s
jurisdiction under the CARES Act. First, there is an activity element, which limits SIGPR’s
jurisdiction to the following activities: the making, purchase, management, and sale of loans,
loan guarantees, and other investments, as well as the management of programs. Second,
there is an institutional element, which limits SIGPR’s jurisdiction to only those activities
described above that are carried out by the Secretary of the Treasury. Third, there is a divisional
element, which limits SIGPR’s jurisdiction to only those activities described above that are done
pursuant to a program established under “this Act.” Id.
a.

The outer limits of SIGPR jurisdiction: “this Act”

Turning directly to the third element, plain text confirms that SIGPR’s jurisdiction extends to all
relevant activity carried out by the Secretary of the Treasury pursuant to programs created
under Division A of the CARES Act. The most forceful evidence of this is that Section 3 of the
CARES Act states, “Except as expressly provided otherwise, any reference to ‘this Act’ contained
in any division of this Act shall be treated as referring only to the provisions of that division.” Id.
§ 3. Section 4018(c)(1)’s reference to “this Act” is “contained in” Division A. 2 Applying Section

A review of the uses of the term “division” within the CARES Act confirms that such term refers to “Division A” or
“Division B” and not some smaller section thereof. A contrary interpretation would render certain at least one
provision unintelligible. See CARES Act § 6002.

2

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OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR PANDEMIC RECOVERY

3’s definitional rule to Section 4018, SIGPR’s duties must “be treated as referring only to the
provisions of” Division A of the CARES Act. 3
There is a small potential for ambiguity in Section 4018(c)(1)’s reference to “this Act” because
Title IV, Subtitle A—wherein Section 4018 appears—is given the short title “Coronavirus
Economic Stabilization Act of 2020.” Id. § 4001. But several textual clues support the plainreading conclusion that Section 3’s definitional rule governs. For example, throughout Title IV,
Subtitle A, Congress repeatedly used the phrase “this subtitle,” rather than “this Act,” to refer
to the provisions of Subtitle A specifically. In Section 4001, Congress gave “[t]his subtitle” the
short title Coronavirus Economic Stabilization Act of 2020. Id. In the very next section, Congress
wrote, “In this subtitle,” followed by a list of definitions for terms appearing in Subtitle A. Id.
§ 4002. And in Section 4020, Congress established the Congressional Oversight Commission and
charged it with “conduct[ing] oversight of the implementation of this subtitle by the
Department of the Treasury and the Board of Governors of the Federal Reserve System,” id.
§ 4020(b)(1)(A) (emphasis added), and “review[ing] the implementation of this subtitle by the
Federal Government,” id. § 4020(b)(1)(C) (emphasis added).
Accordingly, Sections 4001, 4002, and 4020 show that, when Congress intended to refer to only
Subtitle A, it appropriately used the phrase “this subtitle.” And Section 4020 in particular
demonstrates that Congress knew exactly how to craft a jurisdictional statement limited to
Subtitle A. It is therefore difficult to see how Congress could have intended the defined term
“this Act” to refer only to Subtitle A when used in Section 4018(c)(1) while elsewhere Congress
used the phrase “this subtitle” to do that. Plus, reading the defined term “this Act” to convey
the same meaning as the undefined phrase “this subtitle” would result in impermissible
surplusage. The surplusage canon holds that, “[i]f possible, every word and every provision is to
be given effect.” ANTONIN SCALIA & BRYAN A. GARNER, READING LAW: THE INTERPRETATION OF LEGAL TEXTS
174 (2012). This “canon is well known.” Id. at 179. For this reason, the Supreme Court has
consistently expressed a “reluctance to treat statutory terms as surplusage.” Babbitt v. Sweet
Home Chapter of Communities for a Great Oregon, 515 U.S. 687, 698 (1995); see also Williams
v. Taylor, 529 U.S. 362, 364 (2000) (calling it “the cardinal principle of statutory construction
that courts must give effect, if possible, to every clause and word of a statute”).
Finally, Section 3 may be overridden only where “expressly provided otherwise.” CARES Act § 3
(emphasis added). Nothing about Section 4001 giving a short title to Subtitle A expressly
abrogates Section 3’s definitional rule. As the Supreme Court stated over 70 years ago, a legal
text’s titles and headings “cannot undo or limit that which the text makes plain.” SCALIA &
GARNER, supra, at 221 (quoting Brotherhood of R.R. Trainmen v. Baltimore & Ohio R.R., 331 U.S.
519, 528–29 (1947)). In other words, “a title or heading”—like the short title given Subtitle A—
3

This conclusion accords with that of the Treasury Office of General Counsel, expressed in a letter to the Treasury
Office of Inspector General, wherein the Office of General Counsel reasoned that the term “covered funds” was
limited to Division B of the CARES Act by force of applying Section 3’s definitional rule to “the reference to ‘this
Act’ in the definition of covered funds in Division B.” Letter from Department of the Treasury Office of General
Counsel to Department of the Treasury Office of the Inspector General, at 4 (May 7, 2020). Just as “this Act” refers
to Division B when used to define “covered funds” in a Division B provision, it refers to Division A when used to
describe SIGPR’s duties and jurisdiction in Division A provisions.
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“should never be allowed to override the plain words of a text,” such as the Section 3’s
definitional rule. Id. at 222. This is especially true here, where Congress went on to use the
phrase “this subtitle” several times in Subtitle A to refer to Subtitle A. If Congress understood
Section 4001 to expressly abrogate Section 3’s definitional rule, using the specific phrase “this
subtitle” would have been unnecessary.
* * *
In sum, the phrase “this Act” in Section 4018(c)(1) must be read as referring to Division A of the
CARES Act. First, Section 3 provides the definitional rule that “any reference to ‘this Act’
contained in any division of [the CARES Act] shall be treated as referring only to the provisions
of that division,” and Section 4018 is “contained in” Division A. Second, Congress repeatedly
used the phrase “this subtitle” within Title IV, Subtitle A to refer to Subtitle A, indicating
Congress would have used “this subtitle” rather than “this Act” if it had wanted to refer to
Subtitle A rather than Division A. 4 Third, neither Section 4001 nor any other provision of Title IV
“expressly” abrogates Section 3’s general definitional rule.
b.

The functional limits of SIGPR jurisdiction

The divisional element makes Division A of the CARES Act the outer limit of SIGPR jurisdiction.
But functionally, the activity and institutional elements sharply narrow that jurisdiction. The
institutional element is straightforward: it limits SIGPR’s jurisdiction to the relevant activities
carried out by the Secretary of the Treasury. 5
The activity element of SIGPR’s jurisdiction limits the office’s reach to the making, purchase,
management, and sale of loans, loan guarantees, and other investments, as well as the
management of programs, established under “this Act.” The “loans, loan guarantees, and other
investments” language tracks the language in Subtitle A, Section 4003, Emergency Relief and
Taxpayer Protections. There, “the Secretary is authorized to make loans, loan guarantees, and
other investments in support of eligible businesses, States, and municipalities . . . .” CARES Act
§ 4003(a). And Subsection 4003(b) is entitled “Loans, Loan Guarantees, and other Investments.”
Id. § 4003(b). This phrase is used throughout Section 4003 and does not appear to be used
elsewhere in the CARES Act. As a result, despite SIGPR’s jurisdiction potentially reaching all of
Division A, the portion of the activity element covering loans, loan guarantees, and other
investments made by the Secretary is likely constrained, as a practical matter, to Section 4003.
The latter portion of the activity element, however, gives SIGPR jurisdiction over “the
management by the Secretary of any program established under this Act.” Id. § 4018(c)(1)
The only uses of “this Act” in Subtitle B are as part of the broader phrase “enactment of this Act” as used to set
deadlines or establish other temporal cutoffs. See CARES Act §§ 4113(b)(1)(B), 4113(b)(2), 4116(a), and 4118(b).
Indeed, most of the instances of “this Act” within the CARES Act are contained within a larger phrase, such as “the
date of enactment of this Act,” a particular numbered section “of this act,” or “under this heading in this
Act.” These uses do not call into question the plain-text conclusion that the use of “this Act” in Section 4018(c)(1)
of Subtitle A is subject to the definitional rule of Section 3.
4

The institutional element does not, however, limit SIGPR’s ability to review the conduct of other actors involved
in the relevant activities and programs created or carried out by the Secretary.

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(emphasis added). The broad language of this residual clause is not obviously constrained to
Subtitle A, let alone Section 4003. But it is constrained to only those programs managed by the
Secretary. Which programs are managed by the Secretary is ultimately a factual question that
will require ongoing analysis.
If Congress did not intend the residual clause to grant SIGPR jurisdiction over programs created
under provisions beyond Subtitle A, or otherwise intended the residual clause to ensure SIGPR
oversight of particular programs, Congress may clarify that by amending the text of the CARES
Act.
SIGPR reporting
Section 4018(f) establishes SIGPR’s CARES Act reporting requirements. Under this provision,
SIGPR is to submit a report within 60 days after “the date on which the Special Inspector
General is confirmed”—and every “calendar quarter” thereafter—that “summariz[es] the
activities of the Special Inspector General during the 3-month period ending on the date on
which the Special Inspector General submits the report.” CARES Act § 4018(f)(1)(A). This report
must be submitted to “the appropriate committees of Congress.” Id.
Section 4018(f)(1)(B) states that SIGPR’s reports must include “a detailed statement of all loans,
loan guarantees, other transactions, obligations, expenditures, and revenues associated with
any program established by the Secretary under section 4003, as well as the information
collected under subsection (c)(1).” Id. § 4018(f)(1)(B). The information to be collected under
subsection (c)(1) includes the following:
•
•
•

•
•

“A description of the categories of the loans, loan guarantees, and other
investments made by the Secretary”;
“A listing of the eligible businesses receiving loan[s], loan guarantees, and other
investments made under each category described in subparagraph (A)”;
“An explanation of the reasons the Secretary determined it to be appropriate to
make each loan or loan guarantee under this Act, including a justification of the
price paid for, and other financial terms associated with, the applicable
transaction”;
“A listing of, and detailed biographical information with respect to, each person
hired to manage or service each loan, loan guarantee, or other investment made
under section 4003”; and
An “estimate of the total amount of each loan, loan guarantee, and other
investment made under this Act that is outstanding, the amount of interest and
fees accrued and received with respect to each loan or loan guarantee, the total
amount of matured loans, the type and amount of collateral, if any, and any losses
or gains, if any, recorded or accrued for each loan, loan guarantee, or other
investment.”

Id. § 4018(c)(1)(A)–(E). Accordingly, the specifically enumerated reporting requirements in
Section 4018(f)(1)(B) focus exclusively on Section 4003 and on loans, loan guarantees, and
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other investments by the Secretary, a phrase that itself closely tracks the language of Section
4003. These particularized reporting requirements could raise the question whether Congress
intended SIGPR to investigate activities not arising under Section 4003.
While requirements enumerated in Section 4018(f)(1)(b) are mandatory, there is no textual
reason that they are limiting. Moreover, Section 4018(f)(1)(A) requires SIGPR’s reports to
“summariz[e] the activities of the Special Inspector General,” suggesting Congress broadly
intended SIGPR to report on all its activities, not only Section 4003-related information.
If, however, Congress intended Section 4018(f)(1)(B)’s reporting requirements to suggest a limit
on SIGPR’s oversight jurisdiction to Section 4003 programs, Congress may clarify that by
amending the text of the CARES Act.
PRAC jurisdiction
CARES Act § 15010 creates the Pandemic Response Accountability Committee (PRAC) and
defines its powers and responsibilities. The PRAC’s mandate includes oversight of “covered
funds and the Coronavirus response,” CARES Act § 15010(d)(1)(A), and includes the authority to
investigate, audit, and review those matters, id. § 15010(e)(1). “Covered funds” means “any
funds, including loans, that are made available in any form to any non-Federal entity, not
including an individual” under the “this Act,” the Coronavirus Preparedness and Response
Supplemental Appropriations Act, Pub. L. No. 116-123, the Families First Coronavirus Response
Act, Pub. L. No. 116-127, and any other act primarily making appropriations for the coronavirus
response. Id. § 15010.(a)(6) As discussed in the section on SIGPR’s jurisdiction, “this Act” refers
to the specific CARES Act division in which the term “this Act” appears. The definition of
“covered funds” appears in Division B, meaning the PRAC’s “covered funds” oversight extends
only to those funds appropriated in CARES Act Division B.
The PRAC, however, has oversight authority of all CARES Act divisions through its oversight
authority of “the Coronavirus response,” broadly defined as “the Federal Government’s
response to the nationwide health emergency declared by the Secretary of Health and Human
Services, retroactive to January 27, 2020, pursuant to section 319 of the Public Health Services
Act (42 U.S.C. 247d), as a result of confirmed cases of the novel coronavirus (COVID-19) in the
United States.” Id. § 15010(a)(7). Nothing limits the scope of “the Coronavirus response” in
terms of funding, meaning the PRAC may oversee government actions regardless of whether
those actions involve “covered funds.” The PRAC’s “Coronavirus response” oversight thus
includes many other programs.
PRAC reporting
The PRAC’s reporting requirements are very general. The CARES Act requires the PRAC to
submit to Congress and the President “management alerts on potential management, risk, and
funding problems that require immediate attention,” id. § 15010(d)(2)(A)(i), and to “submit to
Congress such other reports or provide such periodic updates on the work of the Committee as

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the Committee considers appropriate on the use of covered funds and the Coronavirus
response,” id. § 15010(d)(2)(A)(ii).
The PRAC also must make a biannual report to Congress and the President, but that report only
requires the PRAC to “summarize the findings of the Committee.” Id. § 15010(d)(2)(B)(i). The
CARES Act provides no other specifics about the subject matter or details concerning the
“findings” made and reported by the PRAC. In the biannual report, the PRAC must also
“identify[] and quantify[] the impact of any tax expenditures or credits authorized under this
Act to the extent practicable,” despite the absence of anything in the CARES Act specifically
directing the PRAC to oversee or investigate tax matters. Id. § 15010(d)(2)(B)(ii).
Congressional Oversight Commission jurisdiction
CARES Act § 4020 establishes the Congressional Oversight Commission, composed of five
members of the House of Representatives and Senate. It indicates that the Commission is to
“conduct oversight” of the implementation of “this subtitle” by the Department of the Treasury
and the Board of Governors of the Federal Reserve System specifically, and to “review” the
implementation of “this subtitle” by the Federal Government. CARES Act § 4020(b)(1)(A), (C).
“[T]his subtitle” refers to Subtitle A, as discussed above. Id. § 4001. It is unclear why Congress
included both subsection (b)(1)(A) and (b)(1)(C), because it appears that the former may be
wholly included in the latter. But it may have been to stress a particular focus of the
Commission. Nevertheless, Subsection (b)(1)(C) ostensibly encompasses the activities of any
Federal Government actor that implements Subtitle A.
Congressional Oversight Commission reporting
CARES Act § 4020(b)(1)(B) provides that one of the duties of the Commission is to submit to
Congress the report specified in the same section, addressing four enumerated topics. That is
the only reporting required. The report is to be submitted every 30 days, starting within 30
days of “the first exercise by the Secretary and the Board of Governors of the Federal Reserve
System of the authority under [CESA].” Id. § 4020(b)(2)(B). The Commission’s reporting
obligations have begun, and it filed its first report on May 18, 2020. Reports will accordingly be
expected on the 18th day of each month.
GAO jurisdiction
The United States Government Accountability Office (GAO), through the Comptroller General, is
assigned an expansive oversight role in Section 19010, which appears in Division B of the CARES
Act. 6 Section 19010(b) provides,
Congress expressly authorized two GAO studies and one GAO report within three different sections of CARES Act
Division A. See CARES Act §§ 3225 (Reauthorization of Healthy Start Program), 3814 (Extension and Expansion of
Community Mental Health Services Demonstration Program), and 3851 (Regulation of Certain Nonprescription
Drugs that are Marketed Without an Approved Drug Application). But those narrowly tailored studies and report
relate to specific, non-economic-relief programs—two of which preexisted the CARES Act—and are different in

6

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OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR PANDEMIC RECOVERY

The Comptroller General shall conduct monitoring and oversight of the exercise
of authorities, or the receipt, disbursement, and use of funds made available,
under this Act or any other Act to prepare for, respond to, and recover from the
Coronavirus 2019 pandemic and the effect of the pandemic on the health,
economy, and public and private institutions of the United States, including public
health and homeland security efforts by the Federal Government and the use of
selected funds under this or any other Act related to the Coronavirus 2019
pandemic and a comprehensive audit and review of charges made to Federal
contracts pursuant to authorities provided in the Coronavirus Aid, Relief, and
Economic Security Act.
CARES Act § 19010(b). Disentangling this jurisdictional statement, it appears GAO has authority
under the CARES Act to “conduct monitoring and oversight” of the following issues:
i.

The “exercise of authorities” under “this Act or any other Act to prepare for, respond
to, and recover from the Coronavirus 2019 pandemic,” “including public health and
homeland security efforts by the Federal Government and the use of selected funds
under this or any other Act related to the Coronavirus 2019 pandemic”;

ii.

The “receipt, disbursement, and use of funds made available[] under this Act or any
other Act to prepare for, respond to, and recover from the Coronavirus 2019
pandemic,” “including public health and homeland security efforts by the Federal
Government and the use of selected funds under this or any other Act related to the
Coronavirus 2019 pandemic.”

Id. It also appears GAO has the following authority under the CARES Act:
iii.

To conduct a “comprehensive audit and review of charges made to Federal contracts
pursuant to authorities provided in the Coronavirus Aid, Relief, and Economic Security
Act.”

Id.
As with other oversight entities addressed by the CARES Act, the key to understanding the
contours of GAO’s CARES Act oversight jurisdiction lies in the language of two clauses: (1) “this
Act or any other Act to prepare for, respond to, and recover from the Coronavirus 2019
pandemic,” and (2) “this or any other Act related to the Coronavirus 2019 pandemic.”
Following Section 3’s definitional rule and the analysis applied with respect to other entities,
the phrase “this Act” must be taken to mean Division B of the CARES Act because the reference
appears in Division B. See CARES Act § 3 (“Except as expressly provided otherwise, any
reference to ‘this Act’ contained in any division of this Act shall be treated as referring only to
the provisions of that division.”).

kind than the new and broader CARES Act oversight authority that Congress granted GAO in Section 19010. The
analysis in this section purports to analyze only the latter.
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OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR PANDEMIC RECOVERY

Under the guidance of Section 3, GAO’s oversight jurisdiction vis-à-vis the CARES Act thus
appears to be limited to Division B of the CARES Act. But there is a legitimate possibility for
ambiguity as to whether GAO has jurisdiction over any of the programs or provisions of Division
A of the CARES Act by way of the residual clauses of Section 19010(b)—namely, “any other Act
to prepare for, respond to, and recover from the Coronavirus 2019 pandemic” and “any other
Act related to the Coronavirus 2019 pandemic.” In other words, the question is: Does Division
A of the CARES Act, or any other act of Congress created therein, qualify as “any other Act”
related to the Coronavirus 2019 pandemic?
To this question, SIGPR believes the answer is “no.” If Congress’s intention was to grant GAO
jurisdiction over Division A through the phrase “any other Act,” after already granting it
jurisdiction over Division B through the phrase “this Act,” then what Congress wanted to do was
grant GAO jurisdiction over the entirety of the CARES Act. But if that were the case, it is hard to
imagine why Congress would not simply state that GAO has jurisdiction over “the CARES Act,”
rather than awkwardly attempting to stitch that jurisdiction together through a combination of
the defined phrase “this Act” and the undefined phrase “any other Act.” 7 And had Congress
intended to grant GAO jurisdiction over certain subparts of Division A in addition to Division B,
it would have been much more straightforward and natural for Congress to identify those
subparts—which it had before it to identify by name—rather than using the catchall phrase
married with the defined phrase.
Plus, if “any other Act” captured Division A, it would be because that phrase captured all of the
CARES Act. But if that were true, Congress’s use of “this Act” to cover Division B would be
rendered surplusage because Division B would itself be captured by “any other Act.”
SIGPR therefore believes the best reading is that the “any other Act” catchall phrase is designed
to capture other, non-CARES Act legislation responding to the coronavirus pandemic (legislation
that, unlike the CARES Act, does not deploy multiple oversight mechanisms) and any future
such legislation. If, however, Congress intended the residual “any other Act” clauses to
implicitly grant GAO oversight authority over Division A, or some subparts of Division A,
Congress may clarify that by amending the text of the CARES Act.
GAO reporting
Under Section 19010(c), GAO has three separate reporting requirements: regular briefings,
regularly published reports, and periodic supplemental reports. Specifically, Section
19010(c)(1) requires GAO to “offer regular briefings”—i.e., on a monthly basis or more

This accords with the legal analysis conducted by the Treasury Office of General Counsel (OGC) on a similar issue
in a letter dated May 7, 2020 to the Treasury’s Office of Inspector General. There, OGC concluded, among other
things, that “[a]s a matter of ordinary language and plain meaning, Division A is not itself an ‘act,’” and that
“relying on the combination of the ‘this act’ and ‘other Act’ provisions would be a very strange way for Congress
to” stitch together a reference to the entirety of the CARES Act. Letter from Department of the Treasury Office of
General Counsel to Department of the Treasury Office of the Inspector General, at 4 (May 7, 2020).

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OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR PANDEMIC RECOVERY

frequently—“to the appropriate congressional committees regarding Federal public health and
homeland security efforts.” The “appropriate congressional committees” include:
•
•
•
•
•
•

The Senate Appropriations Committee;
The Senate Homeland Security and Governmental Affairs Committee;
The House Appropriations Committee;
The House Homeland Security Committee;
The House Oversight and Reform Committee; and
The House Energy and Commerce Committee.

CARES Act § 19010(a)(1). These briefings must be provided from the “date of enactment of this
Act” to “the date on which the national emergency declared by the President under the
National Emergencies Act” with respect to COVID-19 expires.
Under Section 19010(c)(2), GAO is required to publish reports on GAO’s “ongoing monitoring
and oversight efforts,” which shall be submitted to the “appropriate congressional committees”
and posted to GAO’s website. The reports are to be submitted and published “along with any
audits and investigations conducted” by GAO. These reports are to be submitted and published
monthly, starting 90 days after “enactment of this Act” and ending one year after “enactment
of this Act”; the reports are then to be submitted and published “on a periodic basis.” Id.
§ 19010(c)(2)(A), (B).
Finally, Section 19010(c)(3) requires GAO to “submit to the appropriate congressional
committees additional reports as warranted by the findings of the monitoring and oversight
activities of the Comptroller General.”

SIGPR in Context: CARES Act Division A Programs
Name of Program

Section

Brief Summary

Implementing Authority

Title I, the Keeping American Workers Paid and Employed Act

Paycheck Protection
Program (PPP)

Entrepreneurial
Development

1102

Provides forgivable small business loans to
cover payroll and other costs. Borrowers must
have 500 or fewer employees or otherwise
meet the SBA's size standard for the industry
in which the entity operates.

Amends Section 7(a) of the
Small Business Act (15
U.S.C. 636(a)). Provides the
authority for the
Administrator of the U.S.
SBA to guarantee loans
under the Paycheck
Protection Program.

1103

Authorizes SBA to provide additional financial
awards to resource partners to provide
counseling, training, and education on SBA
resources.

Administered and
developed by SBA.

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Name of Program

Section

Brief Summary

1104

Authorizes reimbursement of any recipient of
assistance under section 22(l) of the Small
Business Act (15 U.S.C. 649(l)) for financial
losses relating to a foreign trade mission or a
trade show exhibition that was cancelled
solely due to the coronavirus public health
emergency.

Under Sec. 1104(b), the
SBA Administrator shall
authorize and manage
reimbursements.

1105

Eliminates the non-federal match requirement
for Women’s Business Centers (WBC) for a
period of three months.

Administered by SBA.
Waives section 29(c)(1) of
the Small Business Act (15
U.S.C. 656(c)(1)).

Minority Business
Development Agency

1108

Authorizes $10 million for the Minority
Business Development Agency within the
Department of Commerce to provide grants to
Minority Business Centers and Minority
Chambers of Commerce for the purpose of
providing counseling, training, and education
on federal resources and business response to
COVID-19 for small businesses.

Eliminates the SBA Minority
Business Center program’s
non-federal match
requirement for a period of
three months and allows
for centers to waive fee-forservice requirements
through September 2021.

Emergency Economic
Injury Disaster Loans
(EIDL)

1110

Provides emergency loans and grants.

Administered by the SBA.

1112

Provides immediate relief to small businesses
with non-disaster SBA loans (7(a), 504, and
microloans).

Requires SBA to pay
principal, interest, and fees
on certain SBA loans for a
period of six months.

State Trade Expansion
Program (STEP)

Waiver of Matching
Funds Requirement
under the Women’s
Business Center
Program

Small Business Debt
Relief Program

Implementing Authority

Title II, Assistance for American Workers, Families, and Businesses

Pandemic
Unemployment
Assistance Program
(PUA)

2102

Provides workers who are unemployed due to
Covid-19 with up to 39 weeks of
unemployment benefits.

The Department of Labor
shall establish a process for
making assistance under
this section available for
weeks beginning on or after
January 27, 2020, and
before the date of
enactment of this Act.

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Name of Program

Temporary Financing of
Short-Time
Compensation
Payments

Section

2108

Brief Summary
This program provides funding to support
“short-time compensation” programs, where
employers reduce employee hours instead of
laying off workers and the employees with
reduced hours receive a pro-rated
unemployment benefit. This provision would
pay 100 percent of the costs they incur in
providing this short-time compensation
through December 31, 2020.

Implementing Authority
Payments made to a State
shall be payable by way of
reimbursement in such
amounts as the
Department of Labor
estimates the State will be
entitled to receive.

Title III, Supporting America's Health Care System in the Fight Against the Coronavirus

Telehealth network and
telehealth resource
centers grant programs

Rural health care
services outreach, rural
health network
development, and small
health care provider
quality improvement
grant programs

Reauthorization of
Healthy Start program

3212

3213

3225

Authorizes Health Resources and Services
Administration (HRSA) grant programs that
promote the use of telehealth technologies for
health care delivery, education, and health
information services. Telehealth offers
flexibility for patients with, or at risk of
contracting, COVID-19 to access screening or
monitoring care while avoiding exposure to
others.
Authorizes HRSA grant programs to strengthen
rural community health by focusing on quality
improvement, increasing health care access,
coordination of care, and integration of
services. Rural residents are
disproportionately older and more likely to
have a chronic disease, which could increase
their risk for more severe illness if they
contract COVID19.

This program provides grants to improve
access to services for women and families who
need additional support during the COVID-19
emergency.

Amends Section 330I of the
Public Health Service Act
(42 U.S.C. 254c–
14), which authorizes
Health Resources and
Services Administration
(HRSA) grant programs as
managed by HHS.
Amends Section 330A of
the Public Health Service
Act (42 U.S.C. 254c), which
authorizes HRSA grant
programs for rural
communities as managed
by HHS.
Amends Section 330H of
the Public Health Service
Act (42 U.S.C. 254c–
8), which manages
allocation of Healthy Start
program grants by the
HRSA as managed by HHS.

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Name of Program

Section

Importance of the
Blood Supply

Nursing workforce
development

HBCU Capital Financing
Program
Extension of Funding
Outreach and
Assistance for LowIncome
Programs

Implementing Authority

3226

Program to improve awareness of the
Directs the Secretary of
importance and safety of blood donation and
HHS to carry out this
the continued need for blood donations during
initiative.
the COVID-19 public health emergency.

3404

Updates Title VIII of the PHSA which pertains
to nurse workforce training programs, which
pertains to programs to support clinician
training and faculty development, including
the training of practitioners in family medicine,
general internal medicine, geriatrics,
pediatrics, and other medical specialties.

Amends Title VIII of the
Public Health Service Act
(42 U.S.C. 296 et seq.) and
pertains to workforce
training programs managed
by HHS.

3512

Loan payment deferral for Historically Black
Colleges and Universities (HBCUs) during the
national emergency period so HBCUs can
devote financial resources to COVID-19 efforts.

Authorizes the Secretary of
Education to defer
payments on current HBCU
Capital Financing loans.

Extends funding for beneficiary outreach and
counseling related to low-income programs
through November 30th, 2020.

Takes effect as if included in
the enactment of Title II of
the Further Consolidated
Appropriations Act, 2020
(Public Law 116–94), which
pertains to HHS.

3803

Extension of Money
Follows the Person
Demonstration Program

Brief Summary

3811

Extends the Medicaid Money Follows the
Person demonstration program that helps
patients transition from the nursing home to
the home setting through November 30, 2020.

Amends Section 6071(h) of
the Deficit Reduction Act of
2005 (42 U.S.C.
1396a note), which directs
HHS to manage the
programs.

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Name of Program
Extension of sexual risk
avoidance education
program

Extension of personal
responsibility education
program

Extension of the
Temporary Assistance
for Needy Families
Program (TANF) and
Related Programs
Extension for
community health
centers, the National
Health Service Corps,
and teaching health
centers that operate
GME programs
Extension of Diabetes
programs

Section

3821

3822

3824

Brief Summary
This section extends the Sexual Risk Avoidance
Education (SRAE) program through November
30, 2020 at current funding levels.
This section extends the Personal
Responsibility Education Program (PREP)
through November 30, 2020 at current funding
levels. PREP provides states, community
groups, tribes, and tribal organizations with
grants to implement evidence-based, or
evidence informed, innovative strategies for
teen pregnancy and HIV/STD prevention,
youth development, and adulthood
preparation for young people.
Activities authorized by part A of title IV and
section 1108(b) of the Social Security Act shall
continue through November 30, 2020, in the
manner authorized for fiscal year 2019, and
out of any money in the Treasury of the United
States not otherwise appropriated, there are
hereby appropriated such sums as may be
necessary for such purpose.

Implementing Authority
Amends Section 510 of the
Social Security Act (42
U.S.C. 710) and extends
Sexual Risk Avoidance
Education programming
managed by HHS.
Amends Section 513 of the
Social Security Act (42
U.S.C. 713) and extends
Personal Responsibility
Education Program which is
managed by HHS.

Extends activities
authorized by part A of title
IV and section 1108(b) of
the Social Security Act and
the TANF program which is
managed by HHS.

3831

Extends mandatory funding for community
health centers, the National Health Service
Corps, and the Teaching Health Center
Graduate Medical Education Program at
current levels through November 30, 2020.

Authorized under sections
330 through 340 of the
Public Health Service Act
(42 U.S.C. 254 through 256),
which is managed by HHS.

3832

Extends mandatory funding for the Special
Diabetes Program for Type I Diabetes and the
Special Diabetes Program for Indians at
current levels through November 30, 2020.

Amends Section 330B
(b)(2)(D) of the Public
Health Service Act (42
U.S.C. 254c–2(b)(2)(D)),
which is managed by HHS.

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OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR PANDEMIC RECOVERY

Name of Program

Section

Brief Summary

Implementing Authority

Title IV, Economic Stabilization and Assistance to Severely Distressed Sectors of US Economy
Subtitle A
Allocates $500 billion to Treasury’s Exchange
Stabilization Fund. Up to $46 billion is reserved Under this section, the
Air Carrier Loan
for loans and loan guarantees to passenger air Department of the
Program and Federal
carriers and certain related businesses, cargo
Treasury may enter into
Reserve Funding
4003 air carriers, and businesses critical to
agreements to make loans
(Exchange Stabilization
maintaining national security. $454 billion is
or loan guarantees and may
reserved to make loans and loan guarantees
make investments into the
Fund)
to, and other investments in, Federal Reserve
Federal Reserve’s facilities.
liquidity facilities.
Excise tax holiday for commercial aviation
No tax shall be imposed
during the pandemic. Excise taxes are applied
Suspension of Certain
under section 4261 or 4271
4007 to the transportation of persons (i.e., ticket
Aviation Excise Taxes
of the Internal Revenue
tax), the transportation of property (i.e., cargo
Code.
tax), and aviation fuel.
Authorizes the FDIC to
Allows FDIC to insure temporarily nontemporarily establish a debt
interest-bearing transaction accounts and
guarantee program to
Debt Guarantee
allows the National Credit Union
4008
guarantee debt of solvent
Authority
Administration to temporarily increase share
insured depositories and
insurance coverage for noninterest-bearing
depository institution
transaction accounts.
holding companies.
Temporarily suspends the statutory limitation
Directs appropriation of any
on the use of the Exchange Stabilization Fund
funds that are used for the
for guarantee programs for the United States
Non-Applicability of
Treasury Money Market
money market mutual fund industry. Any
Restrictions on ESF
4015
Funds Guaranty Program
guarantee shall be limited to the total value of
During National
for the United States
Emergency
a shareholder’s holdings in a participating fund
money market mutual fund
as of the close of business on the day before
industry.
the announcement of the guarantee.

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OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR PANDEMIC RECOVERY

Name of Program

Section

Special Inspector
General for Pandemic
Recovery

4018

Temporary Moratorium
on Eviction Filings

4024

Payroll Support
Program (PSP)

4113

Brief Summary

Implementing Authority

The Special Inspector
General for Pandemic
Recovery shall be appointed
SIGPR shall conduct, supervise and coordinate
by the President and shall
audits and investigations of the making,
conduct, supervise, and
purchase, management, and sale of loans, loan
coordinate audits and
guarantees, and other investments made by
investigations of the
the Secretary of the Treasury under any
making, purchase,
program established by the Secretary under
management, and sale of
this act.
loans, loan guarantees, and
other investments made by
the Treasury Secretary.
Covers housing program (as
For 120 days beginning on the date of
defined in section 41411(a)
enactment, landlords are prohibited from
of the Violence Against
initiating legal action to recover possession of Women Act of 1994
a rental unit or to charge fees, penalties, or
(34 U.S.C. 12491(a))); or the
other charges to the tenant related to such
rural housing voucher
nonpayment of rent where the landlord’s
program under section 542
mortgage on that property is insured,
of the Housing Act of 1949
guaranteed, supplemented, protected, or
(42 U.S.C. 1490r) or has a
assisted in any way by HUD, Fannie Mae,
Federally backed mortgage
Freddie Mac, the rural housing voucher
loan; or Federally backed
program, or the Violence Against Women Act
multifamily mortgage loan
of 1994.
as managed by HUD.
Subtitle B
Provides financial assistance for the exclusive
use of employee wages, salaries, and benefits
in the amounts of up to $25 billion for
passenger air carriers, up to $4 billion for
cargo air carriers, and up to $3 billion for
airline contractors. Provides for $100 million
for administrative fees associated with
providing the financial assistance.

Financial assistance
provided to an air carrier or
contractor under this
subtitle shall be in such
form, on such terms and
conditions as the Treasury
determines appropriate.

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OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR PANDEMIC RECOVERY

Name of Program

Section

Brief Summary
Title V, Coronavirus Relief Funds

Coronavirus Relief Fund

5001

Provides $150 billion to States, Territories,
local governments, and Tribal governments to
use for expenditures incurred due to COVID19.

Title VI, Miscellaneous Provisions

COVID-19 Borrowing
Authority for the United
States Postal Service

6001

Provides $10 billion of borrowing authority for
the USPS to respond to the effects of the
pandemic while preserving authority of the
Treasury to set up the terms of the loan.

Implementing Authority
Amounts appropriated for
fiscal year 2020 under
section 601(a)(1) of the
Social Security Act shall be
subject to the requirements
contained in Public Law
116–94 as managed by the
Treasury.
The Secretary of the
Treasury may lend up $10
billion at the request of the
Postal Service, upon terms
and conditions mutually
agreed upon by the
Secretary and the Postal
Service.

SIGPR Mission and Core Values
The role and mission of the Office of the Special Inspector General for Pandemic Recovery
(SIGPR) is to safeguard the people’s tax dollars appropriated by Congress through the CARES
Act. SIGPR strives to ensure that the American taxpayer gets the best return on investment by
efficiently rooting out fraud, waste, and abuse. The importance of this mission in our Nation’s
history and to our Nation’s economic health and recovery cannot be overstated. Congress is
spending trillions of dollars to address our economic crisis, and SIGPR is a key part of making
sure that those dollars are used for their proper purpose: restoring our robust economy and
sustaining every American during these challenging times. Every dollar lost to fraud or abuse is
a dollar that deserving American families and businesses need.
Fidelity to our Constitution and the laws of our great Nation is a core SIGPR value. The mission
of the office is not to correct every wrong or solve every problem. Instead, through a specific
statutory mandate, SIGPR serves the people of the United States, who not only send their hardearned money to the Federal Government as taxpayers but, most importantly, also govern our
Nation through their democratically elected representatives. These elected representatives
and the President of the United States are directly accountable to the people of the United
States. Government must be by the consent of the governed. Consequently, all government
officials must be careful to exercise only the authority ultimately given by the consent of the
governed and remember that what they do is on the behalf of the American taxpayers.
In carrying out its mission, SIGPR’s goal is to treat everyone with respect, to operate with the
utmost integrity, and to be fair, objective, and independent.
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MANAGEMENT AND
ADMINISTRATION

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MANAGEMENT AND ADMINISTRATION

Building an Office from the Ground Up: Staffing
On June 5, 2020, Brian Miller was sworn in as the Special Inspector General for Pandemic
Recovery, becoming the office’s first and only employee. He had no human resources officer,
no contracting officer, no budget officer, and no information officer. Without his own human
resources officer, standing up the office required assistance from staff at the Department of the
Treasury who, from an organizational standpoint, did not report to IG Miller. Without a
contracting officer, bringing on contractors was a challenge. Without a budget officer,
projecting how resources would be allocated took far more time than it otherwise would have
and slowed SIGPR’s progress toward the priority of investigative factfinding. And without an
information officer, planning for the use and security of information technology was a guessing
game.
In an attempt to hit the ground running, IG Miller began recruiting an experienced senior
leadership team upon his confirmation. The assistance that team could provide, however, was
severely limited until their entry on duty. And regardless of how long that process might have
taken in normal times, it was particularly slow during the pandemic, with key support functions
running on limited hours and partial staffs largely working remotely.
As a result, IG Miller remained the sole SIGPR employee until July 6, 2020—more than 30 days
after IG Miller’s confirmation—when he was finally joined by his first two employees: Assistant
Inspector General for Investigations Thomas Caulfield and Assistant Inspector General for
Auditing Theodore Stehney. Both AIGI Caulfield and AIGA Stehney are reinstated retired career
Senior Executive Service (SES) employees. Between IG Miller, AIGI Caulfield, and AIGA Stehney,
SIGPR immediately boasted over a century of career Federal service.
The hiring process, which had kept SIGPR at one employee until less than 30 days before the
office’s first statutorily mandated report to Congress, was extremely cumbersome. As an
example of the difficulties encountered, resumes for both AIGI Caulfield and AIGA Stehney
were presented to Treasury Human Resources on June 3, 2020. Yet a month later, on July 2,
2020, IG Miller was notified by Treasury Human Resources that neither individual could be
hired by July 6, 2020, the individuals’ intended start date. Over the July 4th holiday weekend,
however, senior officials at the Office of Personnel Management expedited the necessary
paperwork, allowing AIGI Caulfield and AIGA Stehney to enter on duty on July 6, 2020. Despite
the fact that it took over a month to reinstate two SES employees, and only after the lastminute assistance of senior OPM officials, SIGPR was informed that the hiring of AIGI Caulfield
and AIGA Stehney was extremely fast under the circumstances.
The hiring of other senior staff did not go as quickly as for the AIGI and AIGA. Although IG Miller
submitted to Treasury Human Resources resumes for the Assistant Inspector General for Data
Analysis, Deconfliction, Integration, and Whistleblower Protection Coordinator (a former
Inspector General); the Chief of Staff; and the Chief Counsel on June 3, 2020, they did not enter
on duty until mid-July. Other key officials remain suspended in the pipeline. And even the
Assistant Inspector General for Administration, who was simply transferred from another Office
of Inspector General, had to wait weeks to begin.

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To “expedite” hiring, Treasury suggested detailing an HR specialist to SIGPR. But after serving
with SIGPR for just eight days, the detailee took two weeks of leave before then terminating the
detail—leaving the office with no dedicated HR specialist. As a result, the processing of
potential detailees and other new hires was significantly delayed.
Notably, one individual who wanted to transfer from another agency’s Office of Inspector
General to SIGPR became frustrated by the HR process and Treasury’s HR vendor and, as a
result, ultimately chose not to join SIGPR. Still others were dissuaded by the lengthy delays in
getting hired and therefore accepted other employment opportunities. Each hiring setback
further impeded SIGPR’s ability to fully operationalize and initiate the important work of
investigating fraud, waste, and abuse under the CARES Act.
Among other rippling effects on SIGPR’s ability to stand up the organization, the office has been
unable to advertise for or hire the services of a Contracting Officer. A Contracting Officer is the
gate keeper to contracting, with authority from the Federal Government to enter into contracts
on behalf of their organization.
Without a Contracting Officer, SIGPR is unable to enter into contracts, unable to procure the
goods and services necessary to establish and operate the organization, and, most importantly,
unable to acquire the services of experts and consultants that are vital to meeting the office’s
statutory mission. To put it graphically, SIGPR cannot even produce a color copy of this
report—because the office would need a Contracting Officer to purchase color printers and
color copiers—let alone procure basic law-enforcement equipment or badges and credentials
with the proper security features for its Special Agents.
Even for those who are ultimately hired, there remains a lengthy and disjointed onboarding
process. This includes awaiting clearance from the Office of Security Personnel, asset
provisioning, and issuance of a Personal Identity Verification (PIV) card, among other things.
Even for the individuals on detail from other Federal agencies, the provisioning and clearance
processes remain incomplete.
Without flexible hiring authority, SIGPR will continue to work through the cumbersome Federal
hiring process at the expense of more meaningful oversight. 8 Despite the present obstacles, IG
Miller has hired an experienced senior leadership team and is now in the process of hiring
additional staff.

Building an Office from the Ground Up: Office Space
The Department of the Treasury provided IG Miller with an office in the Main Treasury building.
SIGPR, however, had to locate and lease additional space for staff. In the absence of such
additional space, simply planning a meeting at which the new SIGPR employees and leadership
could physically meet each other (many for the first time) took significant time and effort. An

As noted in the Recommendations to Congress, see infra, SIGPR recommends Congress pass S.3751, a bill
introduced by Senator Grassley to provide SIGPR greater hiring flexibility.

8

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MANAGEMENT AND ADMINISTRATION

initial leadership meeting ultimately took place in a conference room of the United States
Attorney’s Office in Alexandria, Virginia.
After reviewing many potential sites, SIGPR obtained a sublease from the Patent and
Trademark Office (PTO) in Alexandria, Virginia. The PTO has proven to be an effective partner
with SIGPR, offering interim space to meet immediate and long-term workspace needs in
concert with the General Services Administration.

Building an Office from the Ground Up: Budgetary Constraints
Congress appropriated $25 million to SIGPR, which will remain available until expended. See
CARES Act § 4018(g)(1). The volume and sensitivity of data to be analyzed within the scope of
SIGPR’s statutory responsibility, however, is substantial. Data analytics will therefore be key to
enabling SIGPR to conduct audits and analysis thoroughly and appropriately. Yet a robust dataanalytics capability will cost more than can be allocated from the initial $25 million budget. The
start-up costs for a sufficiently robust IT infrastructure are estimated at $32 to $46 million over
five years, with those costs front-loaded. Accordingly, SIGPR will require a supplemental
appropriation to enable it to conduct robust data analytics.

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SIGPR OFFICES AND ACTIVITIES

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SIGPR Offices
Audits
The SIGPR Office of Audits has the mission to conduct audits of loans, loan guarantees, and
other investments made by Treasury under any program established by Treasury under Division
A of the CARES Act and to perform audits of the management by Treasury of programs
established under Division A of the CARES Act. The SIGPR Office of Audits will operate under
the authorities and responsibilities of the Inspector General Act of 1978. See CARES Act
§ 4018(c)(3). These duties include making recommendations to agency leadership to promote
economy and efficiency in agency administration, prevent and detect fraud and abuse, and
facilitate the identification and prosecution of participants in fraud or abuse. Audits, reviews,
and other services will be performed in accordance with the Generally Accepted Government
Auditing Standards (GAGAS) and the Council of Inspector General on Integrity and Efficiency
(CIGIE) Quality Standards for Inspection and Evaluation as appropriate. 9 The Office of Audits
will work in close partnership with the other members of the SIGPR team, the Pandemic
Response Accountability Committee (PRAC), other Offices of Inspector General, and other
entities of the Federal Government as necessary to meet its statutory mission.
The Office of Audits is currently staffed with an Assistant Inspector General for Auditing (AIGA),
who started on July 5, 2020. The Treasury Department is currently in the process of developing
and certifying position descriptions for the Office of Audits, the initial step in staffing up the
organization. Once these position descriptions are certified, the Office of Audits will initiate an
extensive recruitment process to build a diverse organization staffed with auditors and
management analysts.
The Office of Audits will begin the process of developing an Audit Plan to identify projects that
represent the highest priorities for assessing the relevant financial-assistance programs and any
other programs established under Division A of the CARES Act that are managed by Treasury.
The Office of Audits will also begin the process of developing the operational policies and
procedures as required under GAGAS, CIGIE, and other professional standards necessary to
operate a fully functioning office of audits.
Investigations
The SIGPR Office of Investigation (OI) has the mission to be both proactive and reactive in the
prevention, detection, and investigation of fraud or corruption involving CARES Act funds and
programs within SIGPR’s jurisdiction. The OI is currently staffed with an Assistant Inspector
General for Investigation (AIGI), who started on July 5, 2020. There is, however, extensive
ongoing recruitment to build a diverse OI of Special Agents (SAs) and Investigative Analysts
(IAs). Once staffed, the OI will work in close partnership with the other members of SIGPR,
Quality Standards for Inspection and Evaluation, Council of the Inspectors General on Integrity and Efficiency
(2012), available at https://www.ignet.gov/sites/default/files/files/iestds12.pdf.

9

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SIGPR OFFICES AND ACTIVITIES

thereby leveraging a broad array of expertise and perspective in developing and working even
the most sophisticated investigations.
The CARES Act incorporates the traditional law-enforcement powers for SAs contained in
Section 6 of the Inspector General Act of 1978 (the “IG Act” or “Section 6”), specifically the
authority to carry firearms, make arrests, and execute warrants. SIGPR SAs are thus authorized
to perform their duties with the same law-enforcement powers as SAs in the other major
Offices of Inspector General. But in doing so, SIGPR SAs must comply with other major
provisions of Section 6. Most importantly, they will conduct themselves and their
investigations in accordance with the Attorney General Guidelines for Office of Inspector
General with Statutory Law Enforcement Authority. 10
While the OI will, of course, pursue any wrongdoers within SIGPR’s jurisdiction, the OI will be
focusing much of its early efforts on any potential fraudulent or corrupt activity related to the
making, purchasing, managing, and/or sale of loans, loan guarantees, and other investments
made by the Secretary of the Treasury under any program established by the Secretary under
Division A of the CARES Act.
Initially, the OI will concentrate on those funds identified within Division A, Title IV, Subtitle A
(Coronavirus Economic Stabilization Act of 2020), which principally provides $500 billion to the
Department of the Treasury’s Exchange Stabilization Fund. These funds roughly include up to
$46 billion for emergency relief to distressed industries—including airlines, businesses
important to maintaining national security, and other eligible businesses—with the remaining
$454 billion to be used to capitalize a menu of Federal Reserve lending and liquidity facilities
designed to support eligible businesses, states and municipalities, and critical financial markets.
Those who make intentional, material misrepresentations regarding any Subtitle A application
process or in their financial reporting to Treasury may be in violation of several criminal
statutes, including securities fraud, wire fraud, mail fraud, and false statements. The OI intends
to investigate these potential crimes vigorously.
In the interests of maximizing criminal and civil enforcement, the OI has and will continue to
coordinate closely with other law-enforcement agencies with the goal of forming lawenforcement partnerships, including task-force relationships, across the federal government to
leverage SIGPR’s expertise and unique position. The OI is currently a member of the CARES Act
Department of Justice COVID-19 Working Group, the Federal Bureau of Investigation (FBI)
COVID-19 Working Group, the CIGIE Financial Oversight AIGI Working Group, and various
federal OIG Investigation COVID-19 working groups.
The OI has obtained formal commitments from the U.S. Attorney’s Offices in the Eastern
District of Virginia and the District of Massachusetts, the FBI Economic Crime Unit, and several
of the CIGIE Offices of Inspector General to work in partnership with the OI to investigate any
Attorney General Guidelines for Offices of Inspector General with Statutory Law Enforcement Authority, Office
of the Attorney General (Dec. 8, 2003), available at
https://www.ignet.gov/sites/default/files/files/QAR%20INV%20AG%20Guidelines%20Statutory%20Law%20Enforc
ement%202003%20Appendix%20F.pdf.
10

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allegation of fraud or corruption related to CARES Act funds. Over the next several months, the
OI will be building more partnerships with other law-enforcement personnel, U.S. Attorney’s
Offices, and oversight entities, not only at the federal level, but also the state and local levels.
With regard to reporting potential misconduct, the OI will take the lead in responding to
referrals made to SIGPR’s Hotline through telephone, e-mail, website, and in-person
complaints, abiding by all applicable whistleblower protections set forth in the Inspector
General Act of 1978, as amended.
Through the OI’s own investigative resources and through partnerships with relevant lawenforcement agencies and oversight bodies, OI personnel—along with the entire SIGPR team—
are committed to robust criminal- and civil-enforcement efforts against those, whether inside
or outside of government, who are involved in fraud or corruption relating to CARES Act funds.
In the OI’s short time of existence, it has initiated twelve preliminary inquiries—seven of which
are proactive and related to Title IV loan applications, five of which are reactive to information
provided by concerned individuals (one related to a state’s unemployment benefits, three
related to business loans, and one related to identity theft) all of which will be worked with the
appropriate jurisdiction.
In coordination with the Office of Data Analysis, Deconfliction, Integration, and Whistleblower
Protection, the OI has established a telephonic Hotline (202-927-7899) for whistleblowers and
reports of fraud, waste, and abuse. The two offices are in the process of establishing a Hotline
and Whistleblower reporting mechanize through a SIGPR dedicated website thereby ensuring
easy and quick notifications to the OI of concerns from citizens. With these tools in place, the
OI anticipates a significant influx of inquiries and investigations.
Data Analysis, Deconfliction, Integration, and Whistleblower Protection
IG Miller recognized an important function for SIGPR leadership to provide is deconfliction
among the many external oversight bodies covered under the CARES Act, as suggested in the
jurisdictional analysis above. The Data Analysis, Deconfliction, Integration, and Whistleblower
Protection (DADI) office is managed by an Assistant Inspector General—a retired Inspector
General from state/local government—who started on July 16, 2020.
This office has the responsibility to ensure that all relevant activities under Division A of the
CARES Act are monitored, tracked, and analyzed, as well as to identify potential allegations of
misconduct and make recommendations. This responsibility also includes deconfliction
between SIGPR and other oversight bodies, including the PRAC, the Congressional Oversight
Commission, and GAO, to ensure efficiency and avoid duplication of effort. In addition, this
office is also responsible for special projects, Congressional coordination, and conducting
evaluations in accordance with professional standards.
This office will issue management alerts and other time-sensitive reports that capture systemic
and urgent issues; utilize data analytics and data-mining capabilities to identify CARES Act
funding trends and anomalies; and deliver prompt, actionable reports to support SIGPR’s
actions before its stakeholders. Additionally, the AIG for DADI serves as the Whistleblower
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Protection coordinator to meet the requirements under Section 116(b) of the Whistleblower
Protection Enhancement Act of 2012, including educational briefings for senior officials.
This office will work closely with the Special IG and other office leadership to seek remedies
where fraud, abuse, and misconduct are substantiated; to develop and organize risk analyses or
studies of patterns and practices; and to make recommendations to improve overall CARES Act
operations. As stated above, the DADI office will consult with the OI—which is responsible for
managing the SIGPR Hotline—on the telephonic Hotline (202-927-7899) for whistleblowers and
reports of fraud, waste, and abuse.

Building Partnerships
Upon confirmation, IG Miller immediately reached out to other organizations involved in
overseeing the CARES Act as well as other law-enforcement agencies that can help SIGPR
provide effective oversight. Among other things, SIGPR has entered into formal agreements
with multiple Offices of the United States Attorney. 11 SIGPR is also coordinating with other
Federal agencies, such as the Financial Crimes Enforcement Network (FinCEN) and the
Securities Exchange Commission and has been in touch with law firms and consulting firms
regarding data analytics.
Additionally, to raise awareness and facilitate productive relationships, IG Miller has been a
featured speaker to working groups of the FBI, working groups of the Executive Office of United
States Attorneys, and the White Collar Chiefs of United States Attorney’s Offices. IG Miller is
also actively coordinating with the relevant components of the United States Department of
Justice and has reached out to several Offices of Inspector General and the Comptroller
General. Notably, IG Miller was a featured speaker at GAO’s National Intergovernmental Audit
Forum’s biennial conference, which had auditors from state and local governments as well. As
of the time of the preparation of this report, the Biennial Conference expected over 3,600
attendees.
As a member of the PRAC, IG Miller participates in the PRAC’s work and coordinates closely
with its other members. In fact, IG Miller is a featured speaker at the August 4, 2020 PRAC
meeting. IG Miller has also spoken with the PRAC’s acting Chair, Michael Horowitz. SIGPR also
participates in the CIGIE.
Importantly, other members of SIGPR senior leadership have begun outreach, too. For
example, the AIGA has arranged to coordinate with GAO and is a member of CIGIE’s Federal
Audit Executive Counsel. The AIGI is currently a member of the DOJ COVID-19 Working Group,
the FBI COVID-19 Working Group, the PRAC Law Enforcement Coordination Committee, the
Council of Inspectors General for Financial Oversight AIGI Working Group, and the CIGE AIGI
COVID-19 Sub-Committee. And the AIG for Data Analysis, Deconfliction, Integration, and
Whistleblower Protection Coordinator is a member of CIGIE’s Inspection and Evaluation
See, e.g., Press Release, U.S. Attorney Announces MOU with Special Inspector General for Pandemic Recovery,
U.S. Dep’t Justice (July 17, 2020), https://www.justice.gov/usao-edva/pr/us-attorney-announces-mou-specialinspector-general-pandemic-recovery.
11

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Committee, PRAC’s data analytics working group, CIGIE’s Whistleblower Working Group, and
the Data Analytics Working Group (DAWG).
Finally, SIGPR has received numerous briefings from Treasury officials, other Inspectors
General, FinCEN, the PRAC, and CIGIE. IG Miller greatly appreciates the support and assistance
of other Treasury Inspectors General, such as Russell George, Treasury Inspector General for
Tax Administration; Rich Delmar, acting Treasury Inspector General; and Christy Goldsmith
Romero, Special Inspector General for the Troubled Asset Relief Program. The SIGPR team also
extends deep appreciation to the staffs of these offices for assisting the various SIGPR members
at the working level. SIGPR’s active efforts at building effective partnerships are designed to
facilitate collaboration and effective investigations while ensuring deconfliction where possible
and appropriate.

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SIGPR FINDINGS AND
REPORTABLE DEVELOPMENTS
AND ACTIVITIES

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The CARES Act expressly requires SIGPR to include in its regular reports to Congress “a detailed
statement of all loans, loan guarantees, other transactions, obligations, expenditures, and
revenues associated with any program established by the Secretary under section 4003, as well
as the information collected under subsection (c)(1).” CARES Act § 4018(f)(1)(B). Accordingly,
below is an explanation of what SIGPR understands to be the categories of loans and other
investments 12 made by the Secretary to date under CARES Act § 4003, including, where
applicable and known, a summary listing of the loans and investments made under each
category and program and the eligible businesses to whom loans were made. More detailed
loan information and a brief explanation of the reasons the Secretary of the Treasury
determined each loan to be appropriate are provided in the appendices. 13

Direct Loans
Introduction
CARES Act § 4003(a) authorizes the Treasury “to make loans, loan guarantees, and other
investments in support of eligible business, States, and municipalities that do not, in the
aggregate, exceed $500,000,000,000.” The CARES Act further categorizes these loans and
investments into four areas. The first three, codified in § 4003(b)(1)–(3), provide loans and loan
guarantees to passenger air carriers and related businesses ($25 billion), cargo air carriers ($4
billion), and businesses critical to maintaining national security ($17 billion). The final area,
codified in § 4003(b)(4), authorizes investment in the Federal Reserve’s various liquidity
programs established under Section 13(3) of the Federal Reserve Act ($454 billion).
On March 30, 2020, the Treasury first announced its guidelines for businesses interested in
applying for loans under CARES Act § 4003(b). 14 Those guidelines incorporate a number of
mandatory loan terms and conditions from the CARES Act, with many designed to protect the
taxpayers’ contribution to the programs. Before making each loan, the Treasury must
determine, or the borrower must agree, that:
•
•
•

12

Unavailable Credit Elsewhere. Credit is not otherwise “reasonably available” for the
borrower at the time of the loan, § 4003(c)(2)(A);
Prudent Borrowing. The loan is being “prudently incurred” by the borrower,
§ 4003(c)(2)(B);
Sufficient Security or Rate. The loan is “sufficiently secured” or “made at a rate” that
both “reflects the risk of the loan” and, “to the extent practicable, not less than an

The Treasury has not established a program for “loan guarantees” under CARES Act § 4003.

Information described by CARES Act § 4018(c)(1)(D) will be included in SIGPR’s first quarterly report, to be
published in September 2020.
13

Procedures and Minimum Requirements for Loans to Air Carriers and Eligible Businesses and National Security
Businesses under Division A, Title IV, Subtitle A of the Coronavirus Aid, Relief, and Economic Security Act, dated
March 30, 2020,
https://home.treasury.gov/system/files/136/Procedures%20and%20Minimum%20Requirements%20for%20Loans.
pdf
14

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•
•

•
•

•
•
•

•
•

interest rate based on market conditions for comparable obligations prevalent prior
to the outbreak” of COVID-19, § 4003(c)(2)(C);
Term. The term of the loan must be “as short as practicable and in any case not longer
than 5 years,” § 4003(c)(2)(D);
No Purchases of Borrower’s Stock. Until a date 12 months after the loan has been
repaid, neither the borrower nor any affiliated person or business, may purchase the
borrower’s (or any parent company’s) stock that is listed on a national securities
exchange, unless required by a preexisting contractual obligation, § 4003(c)(2)(E);
No Dividends. Until a date 12 months after the loan has been repaid, the borrower
may not pay a dividend or other capital distribution on its common stock,
§ 4003(c)(2)(F);
Maintain Employment Levels. The borrower, until September 30, 2020, “shall
maintain its employment levels as of March 24, 2020, to the extent practicable, and
in any case shall not reduce its employment levels by more than 10 percent of the
levels on such date,” § 4003(c)(2)(G);
U.S. Business. The borrower certifies “that it is created or organized in the United
States or under the laws of the United States and has significant operations in and a
majority of its employees based in the United States,” § 4003(c)(2)(H);
Covered Losses. The borrower “must have incurred or is expected to incur covered
losses such that the continued operations of the business are jeopardized, as
determined by the Secretary,” § 4003(c)(2)(I);
Equity Interest or Senior Debt Provided to the Government. The Treasury must
“receive a warrant or equity interest” in the borrower if the borrower “has issued
securities that are traded on a national securities exchange”; otherwise, the Treasury
must “receive a warrant or equity interest” in the borrower or “a senior debt
instrument” from the borrower. Issuance of the warrant, equity, or debt “shall be
designed to provide for a reasonable participation by the Secretary, for the benefit of
taxpayers, in equity appreciation in the case of a warrant or other equity interest, or
a reasonable interest rate premium, in the case of a debt instrument,” § 4003(d)(1)–
(2);
No Loan Forgiveness. The principal amount of any loan cannot be reduced through
loan forgiveness, § 4003(d)(3);
Limitation on Employee Compensation. CARES Act § 4004 requires borrowers to limit
compensation for certain employees as follows:
o No officer or employee of the borrower “whose total compensation exceeded
$425,000 in calendar year 2019,” may receive “total compensation which
exceeds” the amount the officer or employee received in calendar year 2019,
for a period beginning on the date the loan agreement was executed and
ending one year after the loan is repaid.
o No officer or employee of the borrower may receive “severance pay or other
benefits upon termination of employment” with the borrower “which exceeds
twice the maximum total compensation received by the officer or employee
from the eligible business in calendar year 2019,” for a period beginning on
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•
•

the date the loan agreement was executed and ending one year after the loan
is repaid.
o No officer or employee of the borrower “whose total compensation exceeded
$3,000,000 in calendar year 2019,” may receive “total compensation in excess
of the sum of . . . $3,000,000” and “50 percent of the excess over $3,000,000
of the total compensation received by the officer or employee from the
eligible business in calendar year 2019,” for a period beginning on the date the
loan agreement was executed and ending one year after the loan is repaid.
Continuation of Air Service. If a borrower is an air carrier, the borrower must maintain
scheduled air services deemed necessary by the Secretary of Transportation to ensure
service to any location served by the borrower before March 1, 2020, § 4005; and
Conflicts of Interest. Direct loans, like all transactions described in CARES Act § 4003,
may not be made to “covered entities” under the CARES Act’s conflict of interest
provision in § 4019. The provision defines a “covered entity” as one where the
President, Vice President, head of an Executive Department, member of Congress, or
a certain family members holds 20% or more of any class of equity interest in the
entity receiving the loan or involved in the § 4003 transaction.

Air Carrier Loan Program (ALP)
CARES Act § 4003(b)(1)–(2) allocates $25 billion for loans and loan guarantees to passenger air
carriers, aviation maintenance facilities certified under 14 C.F.R. Part 145, and air
transportation ticket agents. An additional $4 billion is allocated for cargo air carriers. While
the Treasury has received loan applications for these programs, it has not yet executed any loan
agreements. On July 2, 2020, however, the Treasury announced that it had signed letters of
intent outlining basic loan terms with five major airlines: American Airlines, Frontier Airlines,
Hawaiian Airlines, Sky West Airlines, and Spirit Airlines. 15 On July 7, 2020, the Treasury
announced that Alaska Airlines, Delta Air Lines, JetBlue Airways, United Airlines, and Southwest
Airlines have likewise signed letters of intent. 16
In future reports, after Treasury has issued loans under Section 4003(b)(1)–(2), detail
concerning loans issued under this authority will be provided in an appendix.
Businesses Critical to National Security
CARES Act § 4003(b)(3) allocates up to $17 billion for loans and loan guarantees to “businesses
critical to maintaining national security.” The CARES Act does not define the term “businesses
critical to maintaining national security”; however, the Treasury established criteria for making
this determination in its Frequently Asked Questions for the § 4003 loans on April 10, 2020:
Treasury and Five Major Airlines Agree on Loan Terms, July 2, 2020, https://home.treasury.gov/news/pressreleases/sm1050.
15

Statement from Secretary Steven T. Mnuchin on CARES Act Loans to Major Airlines, July 7, 2020,
https://home.treasury.gov/news/press-releases/sm1054.

16

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A business critical to maintaining national security is one that, unless otherwise
approved as set forth below, is at the time of the business’s application:
(1) performing under a “DX”-priority rated contract or order under the
Defense Priorities and Allocations System regulations (15 C.F.R. part 700);
or
(2) operating under a valid top secret facility security clearance under the
National Industrial Security Program regulations (32 C.F.R. part 2004).
Applicants that do not satisfy either of these two criteria may be considered for
loans if, based on a recommendation and certification by the Secretary of
Defense or the Director of National Intelligence that the applicant business is
critical to maintaining national security, the Secretary of the Treasury determines
that the applicant business is critical to maintaining national security. 17
The following table summarizes the § 4003(b)(3) loans to date. Further detail concerning the
loans is provided in Appendix C.
Recipient
YRC Worldwide, Inc

Loan Date

Maturity Date

7/8/2020

9/24/2024

Maximum
Potential Principal
Loan Amount
$700,000,000

Interest and
Fees Accrued as
of July 24, 2020
$490, 000

Other Investments Under Section 4003
Introduction
CARES Act § 4004(b)(4) allocates $454 billion for “loans and loan guarantees to, and other
investments in, programs or facilities established by the Board of Governors of the Federal
Reserve System for the purpose of providing liquidity to the financial system that supports
lending to eligible business, States, or municipalities” by “purchasing obligations or other
interests” directly from the issuer or through secondary markets, and “making loans, including
loans or other advances secured by collateral.”
The Federal Reserve has established several liquidity programs, described in detail below, using
its emergency lending powers under Section 13(3) of the Federal Reserve Act, codified at 12
U.S.C. § 343(3). That provision, used extensively during the 2008 financial crises and amended
by the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 Stat.
1375, allows the Federal Reserve to lend money in “unusual and exigent circumstances” to
participants in “any program or facility with broad-based eligibility” who are “unable to secure
adequate credit accommodations from other banking institutions.” The Federal Reserve,
17

Q&A: Loans to Air Carriers and Eligible Businesses and National Security Businesses, Updated as of April 10,
2020, at 1, https://home.treasury.gov/system/files/136/CARES-Airline-Loan-Support-Q-and-A-nationalsecurity.pdf.
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however, may not lend to insolvent entities, and its programs must be approved by the
Secretary of the Treasury.
Thus far, the Treasury has committed $195 billion (of the allocated $454 billion) to support the
Federal Reserve’s liquidity programs. The Treasury provides those funds to a limited liability
company, referred to as a special purpose vehicle (SPV), formed and controlled by one of the
individual Federal Reserve Banks to administer its assigned liquidity programs. The Federal
Reserve Bank responsible for the given program then contributes additional Federal Reserve
funds to the SPV to arrive at the total amount of funds available through the program to
support market liquidity.
The Treasury’s contribution from the CARES Act is intended to protect the Federal Reserve from
losses. When executing a given transaction through one of the liquidity programs, the Federal
Reserve uses a “gearing ratio” to determine how much of the transaction will involve CARES Act
funds versus Federal Reserve funds. For higher risk transactions, the Federal Reserve will use a
lower ratio of Federal Reserve funds to CARES Act funds, thus reducing the Federal Reserve’s
exposure to loss. The basic functioning of the Federal Reserve’s “gearing ratio” is explained in
its responses to questions from the Congressional Oversight Commission, which are disclosed in
that commission’s July 20, 2020 report. 18
On its website, the Federal Reserve Board provides extensive information about its SPVs and
programs, including very detailed terms and conditions for loans and other transactions. The
Federal Reserve Board also provides detailed information about each transaction in
spreadsheet form so that one can, for example, evaluate the individual loans made by the TALF
program. 19 The Federal Reserve regularly updates this information and posts it under the
“Policy Tools” section of its website. 20
The following table summarizes Treasury’s investments in the SPVs to date.
Recipient
Corporate Credit Facilities, LLC
Municipal Liquidity Facility, LLC
TALF II, LLC
MS Facilities, LLC

Total Treasury
Commitment
$75,000,000,000
$35,000,000,000
$10,000,000,000
$75,000,000,000

Gain/(Loss)
$0
$0
$0
$0

The following paragraphs describe the SPVs and the programs they administer.
The Third Report of the Congressional Oversight Commission, July 20, 2020, at 3,
https://www.toomey.senate.gov/files/documents/Oversight%20Commission%20%203rd%20Report%20(FINAL)_7.20.20.pdf.
18

See TALF Transaction-specific Disclosures (XLSX), dated July 1, 2020, at
https://www.federalreserve.gov/publications/files/talf-transaction-specific-disclosures-7-10-20.xlsx.
19

Board of Governors of the Federal Reserve System website, Policy Tools,
https://www.federalreserve.gov/monetarypolicy/policytools.htm.

20

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SIGPR FINDINGS AND REPORTABLE DEVELOPMENTS AND ACTIVITIES

Corporate Credit Facilities, LLC
Corporate Credit Facilities, LLC was formed by the Federal Reserve Bank of New York on April
31, 2020 to operate the Primary Market Corporate Credit Facility (PMCCF) and the Secondary
Market Corporate Credit Facility (SMCCF). The Treasury has committed $50 billion to support
the PMCCF and $25 billion to support the SMCCF. With additional funds from the Federal
Reserve, the facilities can purchase up to $750 billion in debt securities under these programs.
The PMCCF will purchase corporate bonds as the sole investor in a bond issuance. The facility
may also purchase syndicated loans or bonds at issuance. The bonds and loans must have a
maturity of four years or less, and the facility is limited to purchasing 25% of any syndicated
loan or bond. To be eligible for the program, an issuer must have an investment-grade credit
rating as of March 22, 2020. The facility will cease purchasing securities on December 31,
2020. 21 As of July 10, 2020, the PMCCF has made no transactions.
The SMCCF will purchase the following debt securities on the secondary market:
•
•
•

Individual corporate bonds having a remaining maturity of five years or less that were
issued by businesses with investment-grade credit ratings as of March 22, 2020;
Corporate bond exchange-traded funds (ETFs) whose objective is to provide broad
exposure to the U.S. corporate bond market, including exposure to both investmentgrade and high-yield bonds; and
Individual corporate bonds with remaining maturity of five years or less that would create
a bond portfolio reflecting a broad market index of the U.S. corporate bond market.

The facility will cease purchasing securities on December 31, 2020. 22 Detailed transaction
information for the SMCCF’s purchases is available on the Federal Reserve’s website. 23
Municipal Liquidity Facility, LLC
Municipal Liquidity Facility, LLC was formed by the Federal Reserve Bank of New York on May 1,
2020 to operate the Municipal Liquidity Facility (MLF). The Treasury has committed $35 billion
to support this program. With additional funding from the Federal Reserve, the facility will
have up to $500 billion to support state and local governments and related entities.

21

See Terms Sheet, Primary Market Corporate Credit Facility, at
https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200629a1.pdf for additional details.
See also Press Release, Board of Governors of the Federal Reserve System (July 28, 2020),
https://www.federalreserve.gov/newsevents/pressreleases/monetary20200728a.htm (announcing “an extension
through December 31 of [the] lending facilities that were scheduled to expire on or around September 30”).
See Term Sheet, Secondary Market Corporate Credit Facility, at
https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200615a1.pdf for additional details.

22

Board of Governors of the Federal Reserve System website, Policy Tools, Secondary Market Corporate Credit
Facility, https://www.federalreserve.gov/monetarypolicy/smccf.htm.

23

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SIGPR FINDINGS AND REPORTABLE DEVELOPMENTS AND ACTIVITIES

The facility will purchase various revenue, tax, and bond anticipation notes issued by states, the
District of Columbia, large cities and counties, multi-state entities, and revenue bond issuers.
The notes must mature within three years of issuance, and the issuing entity generally must
have an investment-grade credit rating at the time of issuance. Issuers must use the proceeds
of the notes to alleviate cash flow problems resulting from reduced tax revenue, increased
expenses, or similar financial problems related to the COVID-19 pandemic. The facility will
cease purchasing notes on December 31, 2020. 24 Transaction-specific details for the MLF are
available on the Federal Reserve’s website and updated regularly. 25
As of July 10, 2020, the Federal Reserve reported only one transaction for the MLF. On June 2,
2020, the MLF purchased a $1.2 billion note from the State of Illinois. The note matures on
June 5, 2021 and bears a rate of 3.82%.
TALF II, LLC
TALF II, LLC was formed by the Federal Reserve Bank of New York on April 13, 2020 to operate
the Term Asset-Backed Securities Facility, or TALF. (The original TALF, LLC was established
during the 2008 financial crisis). The Treasury has committed $10 billion to support this
program. With additional funding from the Federal Reserve, the facility will have up to $100
billion to support TALF lending.
TALF, LLC will make three-year, nonrecourse loans to borrowers who issue asset-backed
securities to serve as collateral for the loans. An asset-backed security is one composed of a
pool of debt obligations. The security’s value and performance depend on the value and
performance of the underlying pool of debt. Asset-backed securities eligible to serve as
collateral for a TALF loan include asset-backed securities based on auto loans and leases,
student loans, credit card receivables, floorplan loans, commercial mortgages, collateralized
loan obligations, and other common credit arrangements. TALF will accept as collateral only
those asset-backed securities with the highest investment-grade rating. 26 TALF will cease
purchasing securities on December 31, 2020. Transaction-specific details for the TALF are
available on the Federal Reserve’s website and updated regularly. 27
MS Facilities, LLC
MS Facilities, LLC was formed by the Federal Reserve Bank of Boston on May 18, 2020 to
operate the Federal Reserve’s various Main Street Lending Programs (MSLP). Treasury has
See Term Sheet, Municipal Liquidity Facility, at
https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200603a1.pdf for additional details.

24

Board of Governors of the Federal Reserve System website, Policy Tools, Municipal Liquidity Facility, at
https://www.federalreserve.gov/monetarypolicy/muni.htm.

25

See Term Sheet, Term Asset-Backed Securities Loan Facility, at
https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200512a1.pdf for additional details.

26

Board of Governors of the Federal Reserve System website, Policy Tools, Term Asset-Backed Loan Facility, at
https://www.federalreserve.gov/monetarypolicy/talf.htm.

27

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SIGPR FINDINGS AND REPORTABLE DEVELOPMENTS AND ACTIVITIES

committed $75 billion to support the programs. With additional funds from the Federal
Reserve, the Main Street Lending Program will support up to $600 billion in lending.
The MSLP will support private lending to medium and small-sized businesses by purchasing 95%
participations in loans that are made by private lenders and conform to the terms of an MSLP
program. The private lender must retain a 5% participation in the loan. The loans may be
secured or unsecured. The Federal Reserve Bank of Boston has published the following graphic
showing the operation of the MSLP 28:

MSLP will cease purchasing loan participations on December 31, 2020. Additional terms for
each program apply as follows:
Loans to for-profit businesses
The MSLP offers three loan programs to for-profit business: Main Street New Loan Facility
(MSNLF), Main Street Priority Loan Facility (MSPLF), and Main Street Expanded Loan Facility
(MSELF). Each program has the following basic terms:

Federal Reserve Bank of Boston, The Federal Reserve’s Main Street Lending Program, at
https://www.bostonfed.org/supervision-and-regulation/supervision/special-facilities/main-street-lendingprogram/main-street-lending-program-overview.aspx
28

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SIGPR FINDINGS AND REPORTABLE DEVELOPMENTS AND ACTIVITIES

Loan Term

5 years

Employees and Revenue

Either 15,000 or fewer employees, or 2019
revenue of $5 billion or less

Rate

Adjustable Rate of LIBOR (1 or 3 mo.) plus 3%

Interest Deferral

Deferred for 1 year

Principal Deferral

Deferred for 2 years, 15% due in each of years
3 and 4, 70% due in year 5

The MSNLF and MSPLF differ in the size of loans available and in additional terms to
compensate for the greater exposure to loss in the larger MSPLF loans. Both programs offer
new loans, as opposed to refinancing old ones, which is the aim of the third facility discussed
below. The MSNLF has a minimum loan amount of $250,000. The maximum is the lesser of
$35 million or an amount that would not cause the borrower’s total outstanding and undrawn
debt to exceed four times the borrower’s 2019 earnings before adjusted interest, taxes,
depreciation, and amortization (EBITDA). The new loan need not be senior to the borrower’s
other debt, but it must not be contractually subordinated to the borrower’s other debt. 29
Like the MSNLF, the minimum MSPLF loan is $250,000. The maximum, however, is the lesser of
either $50 million or an amount that would not cause the borrower’s total outstanding and
undrawn debt to exceed six times the borrower’s 2019 adjusted EBITDA. The MSPLF
compensates for the higher loan amount by requiring the loan to be either equal (pari passu) or
senior in priority to the borrower’s other debts, with the exception of mortgage debt. Unlike
MSNLF loans, MSPLF loans have some level of repayment preference among the borrower’s
various debts in the event the borrower becomes insolvent. 30
While MSNLF and MSPLF support new loans, MSELF loans allow businesses to refinance existing
loans or revolving credit facilities. The MSELF portion of the refinancing must be a term loan
and must be senior or pari passu in priority to the borrower’s other debt, with the exception of
mortgage debt. The minimum MSELF loan is $10 million. The maximum is the lesser of $300
million or an amount that would not cause the borrower’s total outstanding and undrawn debt
to exceed six times the borrower’s 2019 adjusted EBITDA. 31
See Term Sheet, Main Street New Loan Facility, at
https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200608a1.pdf for additional details.

29

See Term Sheet, Main Street Priority Loan Facility, at
https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200608a2.pdf for additional details.

30

31

See Term Sheet, Main Street Existing Loan Facility, at
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SIGPR FINDINGS AND REPORTABLE DEVELOPMENTS AND ACTIVITIES

Loans to nonprofit organizations
MSLP offers two loan programs to nonprofit organizations: Nonprofit Organization New Loan
Facility (NONLF) and Nonprofit Organization Expanded Loan Facility (NOELF). Like the MSLP
programs available to for-profit businesses, the MSLP programs available to nonprofit
organizations offer support for both new loans (NONLF) and refinancing for existing loans
(NOELF). Also like the MSLP loans to for-profit business, MSLP loans to nonprofit organizations
have some common terms:
Loan Term

5 years

Minimum
Employees

At least 10 employees

Employees and
Revenue

Either 15,000 or fewer employees, or 2019 revenue of $5 billion or less
•

Financial Conditions

•
•
•

Total non-donation revenues of at least 60% of expenses for 2017
through 2019
At least a 2% operating margin for 2019
At least 60 days current cash on hand
Ratio of cash, investments, and other repayment resources to
outstanding debt and certain other liabilities of greater than 55%

Endowment Cap

Less than $3 billion

Rate

Adjustable Rate of LIBOR (1 or 3 mo.) plus 3%

Interest Deferral

Deferred for 1 year

Principal Deferral

Deferred for 2 years, 15% due in each of years 3 and 4, 70% due in year
5

The NONLF minimum loan amount is $250,000. The maximum loan amount is the lesser of $35
million or the borrower’s average quarterly revenue in 2019. The new loan need not be senior
to the borrower’s existing debt, but it may not be contractually subordinated to that existing
debt. 32
https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200608a3.pdf for additional details.
See Term Sheet, Nonprofit Organization New Loan Facility, at
https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200717a2.pdf for additional details.

32

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SIGPR FINDINGS AND REPORTABLE DEVELOPMENTS AND ACTIVITIES

NOELF loans, like MSELF loans, allow borrowers to refinance existing loans or revolving credit
facilities. The NOELF portion of the refinancing must be a term loan and must be senior or pari
passu in priority to the borrower’s other debt, with the exception of mortgage debt. The
minimum NOELF loan is $10 million. The maximum is the lesser of $300 million or borrower’s
average quarterly revenue in 2019. 33

See Term Sheet, Nonprofit Organization Existing Loan Facility, at
https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200717a1.pdf

33

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RECOMMENDATIONS

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RECOMMENDATIONS

Recommendations to the Department of the Treasury
On July 8, 2020, Treasury made its first direct loan under CARES Act § 4003. The loan was made
to YRC Worldwide, Inc., a large trucking firm critical to maintaining national security. Section
6.19 of the loan agreement, entitled “Treasury Access,” required YRC to:
Provide Treasury, the Treasury Inspector General, and such other entities as
authorized by Treasury timely and unrestricted access to all documents, papers,
or other records, including electronic records, of the Borrower related to the
Loans, to enable Treasury and the Treasury Inspector General to make audits,
examinations, and otherwise evaluate the Borrower’s compliance with the terms
of this Agreement. This right also includes timely and reasonable access to the
Lender’s and its Affiliates’ personnel for the purpose of interview and discussion
related to such documents.
Timely and complete access to information is critical to effective oversight. For that reason,
CARES Act § 4018(d)(1) grants SIGPR all “authorities provided in Section 6 of the Inspector
General Act,” which, in turn, grants SIGPR timely access to documents and materials available
to Treasury that relate to programs under SIGPR’s jurisdictional purview. Yet SIGPR was not
specifically included in the list of entities provided access to loan information from YRC.
Recommendation: SIGPR recommended that in future loan agreements, Treasury expressly
include SIGPR in the list of entities entitled to “timely and unrestricted access” to information
from the borrower. Treasury agreed to implement the change in future agreements.
SIGPR’s recommendation and Treasury’s response are included as Appendix D.

Recommendations to Congress
Hiring authority
As detailed above, see infra Part II.A, SIGPR has faced significant headwinds in attempting to
staff up quickly so that the office can turn its collective focus to finding and exposing fraud,
waste, and abuse under the CARES Act. While the office has worked diligently to meet its
statutory mandates with a limited roster, additional hiring authority and flexibility would
provide a tremendous boost to the office’s ability to conduct critically needed oversight.
Recommendation: SIGPR recommends that Congress take up S.3751, the Special Inspector
General for Pandemic Recovery Expedited Hiring Authorities Act of 2020, sponsored by Senator
Grassley. SIGPR thanks Senator Grassley for introducing the bill, as well as Senators Hassan,
Crapo, Ernst, and Booker for their co-sponsorship of it.
Multiple-dipping under the CARES Act
In responding to the coronavirus pandemic, Congress created numerous financial-support
programs that provide assistance to a wide array of interests. Often, an individual or entity may
receive assistance from more than one program. An individual may benefit both from a
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RECOMMENDATIONS

personal Economic Impact Payment of $1,200 and enhanced benefits from the CARES Act’s
unemployment-compensation provisions. For another example, some healthcare providers
received funds through the Department of Health and Human Services CARES Act Provider
Relief Fund while also receiving a Paycheck Protection Program loan. If used appropriately,
neither form of support requires repayment. And some hospitals that received hundreds of
millions of dollars from the Provider Relief Fund may still qualify, or may believe they qualify,
for a loan under the Federal Reserve’s Main Street Lending Program.
Creating multiple programs resulting in multiple forms of financial support to a single individual
or entity may well be sound policy. But in such circumstances, the risk of fraud and abuse
increases and questions arise. It is not obvious, for example, why an air carrier should receive
both a Paycheck Protection Program loan and a Payroll Support Program payment. Yet several
have. Those air carriers, moreover, may arguably have a third funding source available to them:
Treasury’s direct loans under CARES Act § 4003, or the Federal Reserve’s Main Street Lending
Program. 34 And though they are ineligible for the Paycheck Protection Program, the nine air
carriers with the largest anticipated Payroll Support Program payments—totaling $22.4 billion
of the allotted $25 billion—have all signed letters of intent to participate in Treasury’s direct
loan program under CARES Act § 4003—a program falling within SIGPR’s core jurisdiction and
that allocates $25 billion for loans to passenger air carriers and related businesses.
The questions raised by the potential for widespread double- and triple-dipping under the
CARES Act are particularly acute with respect to the various CARES Act loan programs because
Congress has positioned both Treasury and the Federal Reserve as lenders of last resort. Direct
loans under CARES Act § 4003, for example, are expressly limited to borrowers “for which credit
is not reasonably available at the time of the transaction.” CARES Act § 4003(c)(2)(A). And
emergency lending by the Federal Reserve is expressly limited to borrowers who are “unable to
secure adequate credit accommodations from other banking institutions.” 12 U.S.C.
§ 343(3)(A).
These express statutory limitations raise the question whether a loan applicant that has
received or expects to receive millions of dollars under other CARES Act programs can
reasonably certify to a lack of access to adequate capital. SIGPR intends to monitor this issue.
Recommendation: SIGPR recommends that Congress consider the various CARES Act relief
programs, how they overlap, whether the overlap is in the public interest, and whether
legislative clarity is warranted.

34

Recipients of CARES Act § 4003 loans are ineligible for the Main Street Lending Program.
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APPENDICES

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APPENDICES

APPENDIX A
CARES Act, Division A, Title IV
SEC. 4018. SPECIAL INSPECTOR GENERAL FOR PANDEMIC RECOVERY.
(a) Office of Inspector General.--There is hereby established
within the Department of the Treasury the Office of the Special
Inspector General for Pandemic Recovery.
(b) Appointment of Inspector General; Removal.-(1) In general.--The head of the Office of the Special
Inspector General for Pandemic Recovery shall be the Special
Inspector General for Pandemic Recovery (referred to in this
section as the ``Special Inspector General''), who shall be
appointed by the President, by and with the advice and consent of
the Senate.
(2) Nomination.--The nomination of the Special Inspector
General shall be made on the basis of integrity and demonstrated
ability in accounting, auditing, financial analysis, law,
management analysis, public administration, or investigations. The
nomination of an individual as Special Inspector General shall be
made as soon as practicable after any loan, loan guarantee, or
other investment is made under section 4003.
(3) Removal.--The Special Inspector General shall be removable
from office in accordance with the provisions of section 3(b) of
the Inspector General Act of 1978 (5 U.S.C. App.).
(4) Political activity.--For purposes of section 7324 of title
5, United States Code, the Special Inspector General shall not be
considered an employee who determines policies to be pursued by the
United States in the nationwide administration of Federal law.
(5) Basic pay.--The annual rate of basic pay of the Special
Inspector General shall be the annual rate of basic pay for an
Inspector General under section 3(e) of the Inspector General Act
of 1978 (5 U.S.C. App.).
(c) Duties.-(1) In general.--It shall be the duty of the Special Inspector
General to, in accordance with section 4(b)(1) of the Inspector
General Act of 1978 (5 U.S.C. App.), conduct, supervise, and
coordinate audits and investigations of the making, purchase,
management, and sale of loans, loan guarantees, and other
investments made by the Secretary of the Treasury under any program
established by the Secretary under this Act, and the management by
the Secretary of any program established under this Act, including
by collecting and summarizing the following information:
(A) A description of the categories of the loans, loan
guarantees, and other investments made by the Secretary.
(B) A listing of the eligible businesses receiving loan,
loan guarantees, and other investments made under each category
described in subparagraph (A).
(C) An explanation of the reasons the Secretary determined
it to be appropriate to make each loan or loan guarantee under
this Act, including a justification of the price paid for, and
other financial terms associated with, the applicable
transaction.
(D) A listing of, and detailed biographical information
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APPENDICES

with respect to, each person hired to manage or service each
loan, loan guarantee, or other investment made under section
4003.
(E) A current, as of the date on which the information is
collected, estimate of the total amount of each loan, loan
guarantee, and other investment made under this Act that is
outstanding, the amount of interest and fees accrued and
received with respect to each loan or loan guarantee, the total
amount of matured loans, the type and amount of collateral, if
any, and any losses or gains, if any, recorded or accrued for
each loan, loan guarantee, or other investment.
(2) Maintenance of systems.--The Special Inspector General
shall establish, maintain, and oversee such systems, procedures,
and controls as the Special Inspector General considers appropriate
to discharge the duties of the Special Inspector General under
paragraph (1).
(3) Additional duties and responsibilities.--In addition to the
duties described in paragraphs (1) and (2), the Special Inspector
General shall also have the duties and responsibilities of
inspectors general under the Inspector General Act of 1978 (5
U.S.C. App.).
(d) Powers and Authorities.-(1) In general.--In carrying out the duties of the Special
Inspector General under subsection (c), the Special Inspector
General shall have the authorities provided in section 6 of the
Inspector General Act of 1978 (5 U.S.C. App.).
(2) Treatment of office.--The Office of the Special Inspector
General for Pandemic Recovery shall be considered to be an office
described in section 6(f)(3) of the Inspector General Act of 1978
(5 U.S.C. App.) and shall be exempt from an initial determination
by the Attorney General under section 6(f)(2) of that Act.
(e) Personnel, Facilities, and Other Resources.-(1) Appointment of officers and employees.--The Special
Inspector General may select, appoint, and employ such officers and
employees as may be necessary for carrying out the duties of the
Special Inspector General, subject to the provisions of title 5,
United States Code, governing appointments in the competitive
service, and the provisions of chapter 51 and subchapter III of
chapter 53 of that title, relating to classification and General
Schedule pay rates.
(2) Experts and consultants.--The Special Inspector General may
obtain services as authorized under section 3109 of title 5, United
States Code, at daily rates not to exceed the equivalent rate
prescribed for grade GS-15 of the General Schedule by section 5332
of that title.
(3) Contracts.--The Special Inspector General may enter into
contracts and other arrangements for audits, studies, analyses, and
other services with public agencies and with private persons, and
make such payments as may be necessary to carry out the duties of
the Inspector General.
(4) Requests for information.-(A) In general.--Upon request of the Special Inspector
General for information or assistance from any department,
agency, or other entity of the Federal Government, the head of
that department, agency, or entity shall, to the extent

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APPENDICES

practicable and not in contravention of any existing law,
furnish that information or assistance to the Special Inspector
General, or an authorized designee.
(B) Refusal to provide requested information.--Whenever
information or assistance requested by the Special Inspector
General is, in the judgment of the Special Inspector General,
unreasonably refused or not provided, the Special Inspector
General shall report the circumstances to the appropriate
committees of Congress without delay.
(f) Reports.-(1) Quarterly reports.-(A) In general.--Not later than 60 days after the date on
which the Special Inspector General is confirmed, and once
every calendar quarter thereafter, the Special Inspector
General shall submit to the appropriate committees of Congress
a report summarizing the activities of the Special Inspector
General during the 3-month period ending on the date on which
the Special Inspector General submits the report.
(B) Contents.--Each report submitted under subparagraph (A)
shall include, for the period covered by the report, a detailed
statement of all loans, loan guarantees, other transactions,
obligations, expenditures, and revenues associated with any
program established by the Secretary under section 4003, as
well as the information collected under subsection (c)(1).
(2) Rule of construction.--Nothing in this subsection may be
construed to authorize the public disclosure of information that
is-(A) specifically prohibited from disclosure by any other
provision of law;
(B) specifically required by Executive order to be
protected from disclosure in the interest of national defense
or national security or in the conduct of foreign affairs; or
(C) a part of an ongoing criminal investigation.
(g) Funding.-(1) In general.--Of the amounts made available to the Secretary
under section 4027, $25,000,000 shall be made available to the
Special Inspector General to carry out this section.
(2) Availability.--The amounts made available to the Special
Inspector General under paragraph (1) shall remain available until
expended.
(h) Termination.--The Office of the Special Inspector General shall
terminate on the date 5 years after the enactment of this Act.
(i) Council of the Inspectors General on Integrity and
Efficiency.--The Special Inspector General shall be a member of the
Council of the Inspectors General on Integrity and Efficiency
established under section 11 of the Inspector General Act of 1978 (5
U.S.C. App.) until the date of termination of the Office of the Special
Inspector General.
(j) Corrective Responses to Audit Problems.--The Secretary shall-(1) take action to address deficiencies identified by a report
or investigation of the Special Inspector General; or
(2) with respect to a deficiency identified under paragraph
(1), certify to the Committee on Banking, Housing, and Urban
Affairs of the Senate, the Committee on Finance of the Senate, the
Committee on Financial Services of the House of Representatives,

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APPENDICES

and the Committee on Ways and Means of the House of Representatives
that no action is necessary or appropriate.

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APPENDICES

APPENDIX B
CARES ACT OVERSIGHT MATRIX
Entity

Jurisdictional Mandate

Reporting Requirements
•

•

SIGPR
•

Conduct, supervise, and coordinate audits
and investigations of the making,
purchase, management, and sale of
loans, loan guarantees, and other
investments by the Secretary under any
program established by the Secretary
under Division A of the CARES Act.
Conduct, supervise, and coordinate audits
and investigations of the management by
the Secretary of any program established
under Division A of the CARES Act. 35

A quarterly report to Congress that includes:
o A statement of all loans, loan guarantees,
other transactions, obligations,
expenditures, and revenues associated
with any program established by the
Secretary under section 4003;
o The categories of loans, loan guarantees,
and other investments made by the
Secretary;
o The eligible businesses receiving the
relevant loans, loan guarantees, and other
investments;
o Why the Secretary deemed it appropriate
to make each loan or loan guarantee on
the agreed terms;
o A list with biographical information of
each person hired to manage or service

Section 4018(c)(1) of the CARES Act provides SIGPR’s jurisdictional mandate. The most important aspect of the jurisdictional statement is a divisional
element that limits SIGPR’s jurisdiction to the relevant activities carried out by the Secretary of the Treasury pursuant to a program established under “this
Act.” CARES Act § 4018(c)(1). Section 3 of the CARES Act states, “Except as expressly provided otherwise, any reference to ‘this Act’ contained in any division of
this Act shall be treated as referring only to the provisions of that division.” Id. § 3. Section 4018(c)(1)’s reference to “this Act” is “contained in” Division A.
Applying Section 3’s definitional rule to Section 4018, SIGPR’s duties must “be treated as referring only to the provisions of” Division A of the CARES Act—no
less and no more.
35

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APPENDICES

Entity

Jurisdictional Mandate

Reporting Requirements
each loan, loan guarantee, or other
investment made under section 4003; and
o An estimate of the amount of each loan,
loan guarantee, and other investment that
is outstanding, the amount of interest and
fees accrued and received with respect to
each loan or loan guarantee, the total
amount of matured loans, the type and
amount of collateral, if any, and any losses
or gains, if any, recorded or accrued for
each loan, loan guarantee, or other
investment.

•
PRAC

Conduct oversight, audits, reviews, and
investigations into the use of funds
appropriated for the coronavirus
response that are made available in any

•

Report periodic management alerts on risk and
funding problems requiring immediate attention,
as well as other periodic reports on other subjects
the PRAC deems necessary.

•

Report biannually to Congress and the President
on PRAC findings, including the impact of tax
expenditures and credits.

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APPENDICES

Entity

Jurisdictional Mandate

Reporting Requirements

form, including loans, to any non-Federal
entity. 36

Congressional
Oversight
Commission

•

Conduct oversight, audits, reviews, and
investigations into the Federal
Government’s response to the
coronavirus pandemic.

•

Conduct oversight of the implementation
of the Coronavirus Economic Stabilization
Act of 2020 by the Treasury and the
Board of Governors of the Federal
Reserve System, including their efforts
under Subtitle A to provide economic
stability in response to COVID-19.

•

A report to Congress every 30 days that includes:
o The use by the Secretary and the Board of
Governors of the Federal Reserve of CESA
authority, including contracting authority
and administration of CESA’s provisions;

36

The CARES Act uses the term “covered funds” to refer to funds appropriated under CARES Act Division B, the Coronavirus Preparedness and Response
Supplemental Appropriations Act, the Families First Coronavirus Response Act, and any other act primarily making appropriations for the coronavirus response.
CARES Act § 15010(a)(6). Interested federal agencies differ on whether “covered funds” includes funds appropriated under CARES Act Division A for programs
such as the Paycheck Protection Program, the Coronavirus Relief Fund, or the Treasury’s various loan and investment programs in CARES Act Title IV. The
CARES Act, however, also broadly authorizes the PRAC to oversee the “Coronavirus response,” id. § 15010(d)(1)(A), which is “the Federal Government’s
response to the nationwide health emergency” resulting from “confirmed coronavirus cases in the United States,” id. § 15010(a)(7), without regard for
whether that response involves “covered funds.”
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APPENDICES

Entity

Jurisdictional Mandate
•

Reporting Requirements
o The impact of loans, loan guarantees, and
investments made under CESA on the
financial well-being of the people of the
United States and the economy, financial
markets, and financial institutions;

Review the implementation of Subtitle A
by the Federal Government.

o The extent to which the information made
available on transactions under CESA has
contributed to market transparency;
o The effectiveness of loans, loan
guarantees, and investments made under
CESA on minimizing costs and maximizing
benefits to taxpayers.
•

GAO

•

Oversight of authorities exercised under
Division B of the CARES Act or any other
Act to prepare for, respond to, and
recover from the Coronavirus 2019
pandemic, including public health and
homeland security efforts by the Federal
Government and the use of selected
funds under CARES Act, Division B, or any
other Act related to the Coronavirus 2019
pandemic.
Oversight of the funds made available
under Division B of the CARES Act, or any

•

Regular briefings—i.e., on a monthly basis or
more frequently—to the appropriate
congressional committees regarding Federal
public health and homeland security efforts.

•

Monthly reports 37 on GAO’s ongoing monitoring
and oversight efforts shall be submitted to the
appropriate congressional committees and
posted to GAO’s website; the reports are to be
accompanied by any audits and investigations
conducted by GAO.

These “monthly” reports are to be submitted and published monthly starting 90 days after “enactment of this Act” and ending one year after “enactment of
this Act”; the reports are then then to be submitted and published “on a periodic basis. CARES Act § 19010(c)(2)(A), (B).

37

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APPENDICES

Entity

Jurisdictional Mandate

Reporting Requirements

other Act to prepare for, respond to, and
recover from the Coronavirus 2019
pandemic, including public health and
homeland security efforts by the Federal
Government and the use of selected
funds under this or any other Act related
to the Coronavirus 2019 pandemic.
•

Conduct a comprehensive audit and
review of charges made to Federal
contracts pursuant to authorities
provided in the Coronavirus Aid, Relief,
and Economic Security Act.

•

Audit the certifications made by air
carriers and supporting contractors
stating the amount of wages, salaries,
benefits, and other compensation paid
for the period April 1, 2019 through
September 30, 2019 for purposes of
determining amounts payable under the
Air Carrier Worker Support program
(CARES Act, Title IV, Subtitle B).

Treasury OIG

•

•

Submit to the appropriate congressional
committees additional reports as warranted by
the findings of the monitoring and oversight
activities of the Comptroller General.

•

The CARES Act does not create new reporting
requirements for the Treasury OIG.

Conduct monitoring and oversight of the
Coronavirus Relief Fund for State, Tribal,
and local governments (CARES Act, Title
V).

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APPENDICES

APPENDIX C
LOANS ISSUED UNDER CARES ACT § 4003(b)(3)
YRC Worldwide, Inc.

Maximum
Potential
Principal Loan
Amount
$700,000,000

Principal
Disbursed

Principal
Outstanding

$236,174,924.95 $236,174,924.95

Interest
and Fees
Accrued
as of July
24, 2020

Interest
and Fees
Received

Gain/(Loss)

$490,000

$0

$0

Collateral and Taxpayer Compensation
The Treasury is making the loan in two tranches: Tranche A for $300,000,000 and Tranche B for
$400,000,000. Both tranches are secured by a junior security interest in substantially all of YRC
Worldwide’s assets and a senior security interest in undisbursed loan proceeds. Tranche B is
further secured by a senior security interest in certain truck and trailers belonging to YRC. The
loan matures on September 30, 2024.
In addition to these security interests, Treasury received YRC Worldwide, Inc. common stock
equal to 29.6% of the company’s fully-diluted stock. 38
Secretary’s Justification
On July 1, 2020, the Treasury issued a press release announcing this loan, and noting it was
made “based on a certification by the Secretary of Defense that YRC is critical to maintaining
national security.” 39 The press release further noted that:
YRC is a leading provider of critical military transportation and other hauling
services to the U.S. government and provides 68% of less-than-truckload services
to the Department of Defense. This loan will enable YRC to maintain
approximately 30,000 trucking jobs and continue to support essential military
supply chain operations and the transport of industrial, commercial, and retail
goods to more than 200,000 corporate customers across North America.
See Transaction Summary, available at https://home.treasury.gov/system/files/136/YRC-TransactionSummary.pdf, for additional details. The complete loan agreement is available at
https://home.treasury.gov/system/files/136/YRC-Documentation.pdf
38

Treasury to Provide Loan to YRC Worldwide, July 1, 2020, available at https://home.treasury.gov/news/pressreleases/sm1049
39

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The press release also quoted the Secretary: “This loan will enable a critical vendor to the
Department of Defense to maintain significant employment while providing appropriate
compensation to taxpayers.”
SIGPR requested that Treasury provide the certification from the Department of Defense
certifying that YRC is an entity critical to national security, and Treasury agreed to do so. The
certification is included on the following page with the names redacted of the three companies
that have not yet executed, and ultimately may not execute, a loan agreement with Treasury.

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Department of Defense Certification

REDACTED
REDACTED
REDACTED

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APPENDIX D
Letter to Under Secretary for International Affairs from Assistant Inspector General for Audits

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APPENDICES

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APPENDICES

Letter to Assistant Inspector General for Audits from Under Secretary for International Affairs

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1

f

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