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Inspector General Wants Answers From Mnuchin, Cruz On Pandemic Lending Program

Former Treasury Secretary Steven Mnuchin and Texas Sen. Ted Cruz are the subjects of a pair of watchdog investigations, Bloomberg reported.

Mnuchin is under investigation over his decision to roll back the U.S. Federal Reserve’s emergency lending programs late last year, according to Bloomberg. Democrats have said that decision was politically motivated.

Meanwhile, Cruz faces scrutiny over his persuasion of the Fed to broaden emergency lending rules to help oil and gas companies have an easier time applying for low interest rate loans, Bloomberg reported.

Both probes came to light in the watchdog’s report released Monday (Feb. 1). Brian Miller, the special Inspector General for Pandemic Recovery (SIGPR) tasked with handling the oversight of the U.S. Department of the Treasury and Fed’s response to the pandemic, is leading the investigations, according to Bloomberg. Miller was an appointee of former President Donald Trump, and this will mark one of his more significant moves thus far.

The aforementioned emergency lending powers were a focus of Congress as the pandemic relief legislation was on the table in December, Bloomberg reported, with Republicans wanting to make it harder to bring the program back and Democrats pushing to keep the structures in place. Eventually, a compromise was reached in order to let Congress approve similar facilities later, after the stimulus had been stalled for days.

In mid-November, Mnuchin said he would pull unused money authorized by the CARES Act in March in order to back the Fed’s emergency lending facilities, and the Treasury also rolled out plans to put those funds, along with other leftover lending authorization, which amounts to around $455 billion, into the department’s general fund, according to Bloomberg.

Congress has authority over that, Bloomberg reported, rather than the Exchange Stabilization Fund overseen by the secretary. House Speaker Nancy Pelosi criticized the move as a politically motivated one to hold back the incoming President Joe Biden administration.

According to a SIGPR spokesperson, the Treasury responded to these concerns on Jan. 19, the last full day of the Trump administration, and the concerns about discontinuing the emergency lending program were settled when Congress compromised, Bloomberg reported.

Cruz’s office didn’t reply to a request from Bloomberg for comment.

Fraud targeting government programs to help people and businesses during the pandemic has been a major issue, PYMNTS reported, with geolocation data being proposed a prime way to help stop it. According to experts, data could be collected from numerous points with the utmost accuracy in order to detect anomalies that could show fraud.

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