Although a final version of the Coronavirus Aid, Relief, and Economic Security (CARES) Act is not yet available, based on what we know so far, it appears that the legislation will include the provisions described below establishing oversight functions for the use of stimulus and bailout funds.  According to a number of sources, the bill provides for a Treasury Department Special Inspector General for Pandemic Recovery, a Pandemic Response Accountability Committee, and a Congressional Oversight Commission with subpoena power.  Senate leaders reportedly modeled these provisions after the Troubled Asset Relief Program (TARP), which was similarly subject to a special inspector general, oversight board, and five-member congressional oversight panel.  We expect that these provisions likely will survive any further negotiations and votes in both houses of Congress.

Special Inspector General for Pandemic Recovery

The bill establishes a Special Inspector General for Pandemic Recovery within the Department of the Treasury.  The Special Inspector General will be presidentially appointed, as was the Special Inspector General for TARP.  They will be responsible for conducting, supervising, and coordinating audits and investigations of the making, purchase, management, and sale of loans, loan guarantees, and other investments by the Treasury under this Act.  Like the Special Inspector General for TARP, the Special Inspector General for Pandemic Recovery will also be responsible for providing quarterly reports to Congress.

Pandemic Response Accountability Committee

The bill establishes a Pandemic Response Accountability Committee through the Council of Inspectors General on Integrity and Efficiency to enhance government-wide protection for taxpayer dollars, and appropriates $80,000,000 for the Committee.  TARP created a similar oversight board, called the Financial Stability Oversight Board, which was comprised of the Chairman of the Board of Governors of the Federal Reserve System, the Secretary of the Treasury, the Director of the Federal Housing Finance Agency, the Chairman of the Securities Exchange Commission, and the Secretary of Housing and Urban Development.

Congressional Oversight Commission

The bill authorizes the creation of a bipartisan Congressional Oversight Commission charged with the oversight of the Department and Treasury and Federal Reserve as they work to provide economic stability in the wake of the Coronavirus.  Like the TARP Congressional Oversight Panel, the Oversight Commission will consist of five congressionally appointed members:

  1. 1 member appointed by the Speaker of the House of Representatives;
  2. 1 member appointed by the House Minority Leader;
  3. 1 member appointed by the Senate Majority Leader;
  4. 1 member appointed by the Senate Minority Leader; and
  5. 1 member appointed by the Speaker of the House and Senate Majority Leader, after consultation with the Senate Minority Leader and House Minority Leader.

Also like the TARP Congressional Oversight Panel, the CARES Congressional Oversight Commission will have significant authority to conduct oversight and investigations.  It will be allowed to hold hearings, take testimony, and make requests for information.  It will also be required to submit reports to Congress every 30 days, like the TARP Oversight Panel.  The reports must specify the following:

  • The impact of purchases made on the financial wellbeing of people, financial markets, and financial institutions;
  • The extent to which the information made available on transactions has contributed to market transparency; and
  • The effectiveness of loans, loan guarantees, and investments made in minimizing long-term costs to taxpayers and maximizing the benefits for taxpayers.

The Commission will terminate on September 30, 2025.  We expect the Commission to be very active in that time, based on its predecessor.  The TARP Congressional Oversight Panel held twenty-six hearings over two-and-a-half years on the causes, symptoms, and effects of the economic crisis and government response and reform efforts.

Given the significance of these newly proposed oversight functions, we will revisit this topic in greater detail once CARES is enacted.

—Updated 4/6/2020

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Photo of Robert Kelner Robert Kelner

Robert Kelner is the chair of Covington’s Election and Political Law Practice Group. Mr. Kelner provides political law compliance advice to a wide range of corporate and political clients.  His compliance practice focuses on federal and state campaign finance, lobbying disclosure, pay to…

Robert Kelner is the chair of Covington’s Election and Political Law Practice Group. Mr. Kelner provides political law compliance advice to a wide range of corporate and political clients.  His compliance practice focuses on federal and state campaign finance, lobbying disclosure, pay to play, and government ethics laws, as well as legal ethics rules.  His expertise includes the Federal Election Campaign Act, Lobbying Disclosure Act, Ethics in Government Act, Foreign Agents Registration Act, and Foreign Corrupt Practices Act.  He is also a leading authority on the arcane rules governing political contributions by municipal securities dealers, investment advisers, hedge funds, and private equity funds.  Mr. Kelner advises Presidential political appointees on the complex process of being vetted and confirmed for such appointments.

In addition, he regularly advises corporations and corporate executives on instituting political law compliance programs.  He conducts compliance training for senior corporate executives and lobbyists.  He has extensive experience conducting corporate internal investigations concerning campaign finance and lobbying law compliance, as well as other corporate compliance matters.  Mr. Kelner regularly defends clients in investigations by the Federal Election Commission, the U.S. Department of Justice, the U.S. House & Senate Ethics Committees, the House Oversight & Government Reform Committee, the House & Senate Judiciary Committees, the House Energy & Commerce Committee and its Subcommittee on Oversight & Investigations, the Senate Finance Committee, the Senate Special Committee on Aging, the Senate Permanent Subcommittee on Investigations, the Senate Health, Education, Labor, and Pensions Committee, and other congressional committees.  He has prepared numerous CEOs and corporate executives for testimony before congressional investigation panels, and he regularly leads the Practicing Law Institute’s training program on congressional investigations for in-house lawyers.  He also defends clients in Lobbying Disclosure Act audits by the GAO and enforcement actions and audits by state election and lobbying enforcement agencies.

Mr. Kelner has appeared as a commentator on political law matters on The PBS News Hour, CNBC, Fox News, and NPR, and he has been quoted in the New York Times, Washington Post, Wall Street Journal, Legal Times, Washington Times, Roll Call, The Hill, Politico, USA Today, Financial Times, and other publications.

Photo of Brian D. Smith Brian D. Smith

Brian Smith provides strategic and legal advice on matters that require substantial political, reputational, or government relations considerations.  He represents companies and individuals in high-profile or high-risk investigations, particularly congressional investigations, criminal investigations with political implications, and investigations related to political law compliance. …

Brian Smith provides strategic and legal advice on matters that require substantial political, reputational, or government relations considerations.  He represents companies and individuals in high-profile or high-risk investigations, particularly congressional investigations, criminal investigations with political implications, and investigations related to political law compliance.  He has significant experience in crisis management, where he advises clients facing combined legal, political, and media relations risks.  His practice also includes the development and execution of government relations initiatives, including securing the U.S. government’s political support on behalf of U.S. companies facing international legal issues.