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'I will be watching carefully': Elizabeth Warren just put the Treasury Department and Federal Reserve on notice about the $500 billion corporate bailout fund

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  • Warren sent a letter to Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell on Tuesday, pressing them to ensure stimulus money for corporations is responsibly used.
  • “I will be watching carefully as you hand out these funds,” Warren wrote.
  • A battle is brewing among top Democrats and the Trump administration around oversight of a $500 billion corporate lending program.
  • Visit Business Insider’s homepage for more stories.

Sen. Elizabeth Warren put Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell on notice on Tuesday as efforts ramp up to administer a colossal $2 trillion stimulus law.

In a letter sent to both leaders, Warren pressed them to use their sway to ensure money lent to corporations under the recent stimulus package is responsibly used.

“The legislation gives you the authority to fill this gap: it gives you extraordinary powers to make discretionary decisions about the recipients of this huge bailout for big corporations, and the terms and conditions under which they receive aid,” Warren said in the letter.

She urged Mnuchin to reject aid for companies that have “long records of financial mismanagement or lawbreaking.”

Then the senator from Massachusetts issued a warning: “I will be watching carefully as you hand out these funds.”

Read more: Bank of America examined the stock market during every recession since 1929 and concluded the recent meltdown is not over. Here’s its trading strategy for a deeper crash.

Warren doubled down on her call to enact stricter conditions on companies that accept emergency federal funding to ensure it benefits workers instead of executives. They include using the money to keep workers on payrolls, barring stock buybacks, and curbing increases in executive pay.

The recent $2 trillion stimulus legislation Trump signed on Friday carves out $500 billion in taxpayer money for loans to large corporations. Mnuchin will oversee the fund.

The pot of money does carry restrictions for corporations and limits stock buybacks. Progressives, though, have panned it as inadequate.

A clash is already brewing between Democrats and the Trump administration around oversight of the program.

Senate Democrats also sent a letter to Mnuchin on Tuesday calling on the Treasury Secretary to appoint an independent inspector general “without delay,” The Washington Post reported. Under the stimulus law, the White House would appoint a person to fill the role and the Senate would confirm.

President Trump tried curbing oversight of the program shortly after signing the stimulus into law, releasing a memo saying the administration wouldn’t allow the inspector general to inform Congress without “presidential supervision.”

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