Federal Reserve Fails to Disclose Information about Oil and Gas Industry Bailouts

For Immediate Release
 

The Federal Reserve has failed to meet a deadline to provide documents concerning the oil and gas industry’s participation in the Main Street Lending Program, one of the government’s most important financial assistance programs intended to respond to the COVID-19 crisis.

From the start, critics expressed concern that the terms of the lending program could allow financially strapped oil and gas companies to receive bailouts. Those concerns were heightened when news reports revealed that the Fed had made important changes to program’s terms -- changes that directly mirrored the requests coming from industry lobbyists and politicians.

In response to those developments, Food & Water Action filed a Freedom of Information Act request on May 4, seeking access to all relevant communications between the Federal Reserve, the White House, oil and gas companies and their affiliated trade organizations.

The deadline to produce documents was June 17. 

The key changes to the Main Street Lending Program were an increase in the maximum loan amount (from $150 million to $200 million), expanding the program to much larger companies, and offering assistance to heavily indebted companies, a change requested by Senator Ted Cruz (R-Tx.) and others.

If the lending program was changed in order to benefit specific companies, it could be a violation of the Federal Reserve Act, which forbids structuring programs to benefit a specific company or industry.

Today, Food & Water Action filed a complaint against the Federal Reserve in the U.S. District Court for DC, over the agency’s failure to comply with FOIA and produce requested materials in a timely manner.

Food & Water Action attorney Adam Carlesco released the following statement:

“The Federal Reserve was tasked with creating a massive program to protect workers’ livelihoods during an intense economic and public health crisis. We should, at the very least, expect transparency about how the program is structured, and whether or not corporate interests have improperly influenced the terms of this relief program. There is evidence that the Main Street Lending program was altered to assist oil and gas companies that were already becoming insolvent before the pandemic, and that the changes were precisely what these powerful industries were demanding.

“The public has a right to know if the Fed created an oil and gas bailout at the behest of an industry that has wreaked havoc on our air, water, climate, and potentially the global financial system. As the climate crisis demands an abrupt shift away from fossil fuels, the federal government should not be creating programs to bail out these polluters.”

###