Media outlets win FOIA suit; receive federal loan data and $122K in fees

A coalition of news outlets was awarded more than $122,000 by a Washington, D.C., district court on Jan. 21, 2021, over a public records lawsuit against the federal government that sought data related to a pandemic-era financial aid program.

The lawsuit was filed by 11 news agencies led by The Washington Post and including Bloomberg, publisher of Bloomberg News; Dow Jones, publisher of The Wall Street Journal; ProPublica; The New York Times; ABC News; American City Business Journals; CNN; NBC News; The Associated Press; and Reveal from The Center for Investigative Reporting.

The group sued under the Freedom of Information Act to force the Small Business Administration to release detailed Paycheck Protection Program loan data. The program was part of a 2020 federal initiative to provide forgivable loans to small businesses, but controversy soon arose over how the agency was dispersing the more than $700 billion.

Each of the plaintiffs submitted records requests to the SBA in April and May 2020, according to Ballard Spahr, which represented the media outlets. According to the firm, the agency initially said it would release the requested information, but when it provided only “boilerplate responses” and redacted records, the news outlets sued under the FOIA statute in May.

Kristine Coratti Kelly, a spokesperson for the Post, said in a statement to Law360 at the time that the news organizations brought the lawsuit to “enable the public to see how their tax dollars are being spent on these massive loan programs.”

In November 2020, District Judge James Boasberg ordered the agency to release the data, rejecting its argument over privacy and confidentiality exemptions.

Ballard Spahr attorney Charles Tobin wrote in a Media Law Resource Center post that the court had “eviscerated the SBA’s arguments,” which would have allowed it to avoid providing both the size of the loan and the name of the borrower for millions of the COVID-related loans above $150,000. The SBA did not appeal.

The ruling led to the release of data that showed widespread abuse of the federal program. In its ensuing investigation, the Post reported that more than half the money from the loan program went to just five percent of the recipients.

“The data shows that this program primarily benefited​​ the well-banked and well-lawyered at the expense of the small businesses it was supposed to benefit,” Liz Hempowicz, director of public policy for the nonprofit Project on Government Oversight, told the Post in December 2020.

ProPublica also used the data to create a publicly accessible database showing every company that was approved for a PPP loan.