Rubio vowed to make PPP loans public. Now he asks if they are trade secrets

In April, Florida Republican Sen. Marco Rubio said he would fight to make sure the public knew which businesses received taxpayer-backed coronavirus relief loans that totaled $511 billion.

“Bottom line is, we’re going to know one way or another who got this money,” Rubio said in a virtual town hall event on April 29. “Treasury, the SBA [Small Business Administration] is eventually going to have to release that. I always thought they were going to have to, and if they don’t, we’ll make them do it.”

At the time, Rubio, who oversaw the implementation of the Paycheck Protection Program in his role leading the Senate Small Business Committee, said his number one focus was getting money into the hands of small business owners and then he would push for full transparency.

But after Treasury Secretary Steven Mnuchin and the administrator of the Small Business Administration, Jovita Carranza, said this week they do not plan to make PPP loan recipients and amounts public, Rubio changed course.

In an interview with CNN on Thursday, Rubio said he heard from small business owners that disclosing the amount of taxpayer-funded PPP loans is a “trade secret and a competitive disadvantage that can be used against you.”

“If you’re a small business, this is about payroll. And so people are going to be able to tell how much your payroll is based on your loan amount,” Rubio said. “In essence, you know your competitors can figure out how much their competitor somewhere else in the country is making and sort of either poach employees or undercut their own.”

Rubio spokesperson Nick Iacovella told the Miami Herald on Friday that the senator wants to work with the SBA and the Treasury Department to “ensure there is adequate transparency without compromising borrowers’ proprietary information.” Rubio sent a letter last week to the Treasury Department and SBA asking for more data, but the letter did not ask for the agencies to identify individual companies who receive loans and the amount of the loan.

Rubio did suggest on CNN that there might be a “middle ground,” where the names of businesses that borrowed money would be disclosed but not the amount they received. He offered another idea, too, saying that perhaps the government could disclose only the recipients of the larger PPP loans — although the money to businesses does not have to be paid back if it’s used to keep workers on payroll during the pandemic, essentially turning the PPP loan into a grant.

“I don’t really think people are that fired up about a $50,000 PPP loan,” Rubio said. “I think my sense is people really want to know about the $5 million or $8 million and $10 million ones.”

Eleven news organizations have sued the Small Business Administration for records on loan recipients and amounts of loans and other basic information the agency has previously released. The Treasury Department has argued that releasing the data would “risk disclosing proprietary data of millions of small businesses and the salaries of independent contractors.”

The Treasury Department’s decision not to disclose loan details drew criticism from Democrats.

“Let’s be clear: Secretary Mnuchin is part of the most corrupt administration in history riddled with conflicts, cronyism and incompetence,” Massachusetts Sen. Elizabeth Warren tweeted. “It’s absurd that he believes he should hand out more than $500 billion of taxpayers funds in secret.”

In April, there was massive public outcry when it was revealed that publicly traded companies with significant cash reserves received PPP loans that were intended for small businesses. A number of companies, including Shake Shack and Ruth’s Chris Steakhouse, gave back their PPP loans.

But the PPP loan information on public companies came from publicly available corporate filings, information that private companies are not required to disclose. The vast majority of PPP recipients are private companies.

In Florida, 343,442 businesses were approved for a total $30.5 billion in PPP loans as of May 30, according to the SBA.

Rubio, who has received praise for leading the implementation of the program that played a part in the U.S. adding 2.5 million jobs in May after two months of record losses, designed PPP loans to get businesses money as fast as possible.

Rubio has said he was comfortable waiving some requirements that would make it harder for people to defraud the government in exchange for getting the loans into the hands of business owners to stave off layoffs. He said the Treasury Department and his Senate Small Business Committee would play a vital oversight role in the coming months to audit and punish people who tried to take advantage of the program.

“We thought about the front-end requirement and it was a bipartisan agreement that we’re going to have to certify and do the back-end audit on it,” Rubio said in April. “Right now, our number one objective was how are we going to move money into the hands of employers because, every day, they’re making decisions about laying people off. And the more people that get laid off, the more people wind up in the unemployment system and putting pressure on it.”

A previous version of the story inaccurately described Rubio’s statement on CNN. He said small business owners told him disclosing PPP loan amounts to a trade secret.

This story was originally published June 12, 2020 at 5:25 PM.