On March 27, 2020, President Trump signed into the law the  Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which included $500 billion for assistance to eligible businesses, states, and municipalities.  As with prior economic stimulus laws, the CARES Act contained several provisions establishing strict oversight over the distributed funds, and dedicating resources to detecting and punishing fraud, waste, and abuse in relation to those funds.

One of the layers of oversight is creation of the Special Inspector General for Pandemic Relief (“SIGPR”), which will be housed within the Treasury Department and will be tasked with auditing and investigating the funds that are distributed under the Act.  As with other Inspector Generals (“IGs”), the SIGPR will be tasked with detecting and preventing fraud, waste, and abuse in connection with funds distributed under the Act, and will have all of the powers given to other IGs under the Inspector General Act, including issuing subpoenas.  The SIGPR is to be appointed by the President and confirmed by the Senate. On April 3, President Trump nominated Brian Miller – currently Senior Associate Counsel in the Office of White House Counsel – to fill the position of SIGPR. Before joining the White House legal team, Miller served as the IG for the General Services Administration. Miller’s nomination is currently awaiting Senate confirmation.

In addition, the CARES Act also contains a provision establishing a Pandemic Response Accountability Committee (“PRAC”), which has the purpose of overseeing all spending, lending, and other outflows appropriated under the Act, and under any past or future COVID-19 related measures, including preventing and detecting fraud, waste, abuse, and mismanagement.  The PRAC will be chaired by Acting Department of Defense Inspector General Glenn Fine, and is composed of inspector generals from various agencies, including the Departments of Defense, Education, Health and Human Services, Homeland Security, Justice, Labor, and the Treasury, as well as the Small Business Administration and the SIGPR, once confirmed. Like the SIGPR, the PRAC will have all of the powers of other IGs contained in the Inspector General Act, including subpoena powers.

Finally, the CARES Act also creates the Congressional Oversight Commission, which will be composed of  individuals chosen by Senate majority and minority leaders, the Speaker of the House, and the House minority leader. Senate Majority Leader Mitch McConnell and Speaker of the House Nancy Pelosi will appoint a chair, in consultation with Senate and House minority leaders.  The Commission will oversee implementation of the Act’s economic relief provisions, hold hearings, and submit monthly reports to Congress.  

If prior experience is any guide, SIGPR and PRAC will lead to a plethora of investigations and enforcement proceedings related to the distribution of CARES Act funds.  For example, the Emergency Economic Stabilization Act of 2008 (often called the “bank bailout”) created the Troubled Asset Relief Program (“TARP”), which contained similar provisions creating various boards and committees to oversee the distribution of TARP assets, including the Special Inspector General for TARP (or “SIGTARP”).  Investigations conducted by SIGTARP, which is still actively conducting investigations and audits related to the distribution of TARP funds, have thus far led to the recovery of over $11 billion and the conviction of 381 defendants, including 76 bankers. 

The attorneys at Chilivis Grubman — which includes a former federal prosecutor –represent businesses and individuals in connection with government investigations and audits, including those conducted by Offices of Inspector General.  If you need assistance with such matter, please contact us today.