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Pandemic Loan Programs Borrower Info Must Be Released by SBA (1)

Nov. 5, 2020, 8:39 PM; Updated: Nov. 5, 2020, 9:39 PM

The Small Business Administration must release detailed information about the businesses that received loans from the Paycheck Protection Program and Economic Injury Disaster Loan program, including the names of those recipients and the precise amount of each loan, a federal judge in Washington said Thursday.

The agency has disbursed $717 billion in economic relief under the two programs since the beginning of the Covid-19 pandemic, Judge James E. Boasberg said in his opinion for the U.S. District Court for the District of Columbia. That is an enormous amount of taxpayer money, exceeding the government’s Medicaid expenditures in 2018 as well as the entirety of the Defense Department’s budget request for 2021, the court said.

Prior partial disclosures to national news networks like the Washington Post, the New York Times, and Bloomberg LP “contained glaring gaps,” the court said. The SBA cited the Freedom of Information Act’s privacy and confidentiality exemptions to withhold both dollar figures and borrower names for PPP loans, as well as the precise amount of any loan in excess of $150,000, according to the opinion.

But the PPP loan application expressly informed potential borrowers that their names and the amounts of their loans could be released upon a FOIA request, the court said. The SBA also told potential EIDL borrowers that similar information is generally required to be released under FOIA if requested by third parties, it said.

FOIA’s privacy and confidentiality exemptions therefore don’t protect the requested information, and disclosure would be in the public’s interest, the court said.

“In light of SBA’s awesome statutory responsibility to administer the federal government’s effort at keeping the nation’s small businesses afloat amidst an economic and health crisis of unprecedented proportions, the public interest in learning how well the agency fulfilled its charge is particularly pronounced,” the court said.

The SBA must supplement its previous disclosures by releasing the names, addresses, and precise loan amounts for all individuals and entities that obtained coronavirus-related PPP and EIDL loans by Nov. 19, the court said.

Ballard Spahr LLP represented the plaintiffs, which included Bloomberg LP. The Justice Department represented the SBA.

The case is WP Co., LLC v. US Small Business Admin., D.D.C., No. 20-cv-01240, 11/5/20.

(Updated with additional reporting throughout.)

To contact the reporter on this story: Porter Wells in Washington at pwells@bloomberglaw.com

To contact the editor responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com

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