Economic aid legislation will likely result in increased scrutiny of certain industries, similar to investigations that followed relief efforts in the 2008 financial crisis.

By the White Collar Defense & Investigations Practice

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) became law. It provides more than US$2 trillion in emergency relief to address the financial upheaval created by the COVID-19 pandemic and is the largest stimulus package in US history. The CARES Act establishes multiple new oversight bodies with respect to this spending in both the Executive and Legislative branches, which will supplement existing law enforcement mechanisms. These oversight processes will likely generate significant investigation activity in the months and years ahead, targeting fraud, waste, and abuse across the CARES Act’s programs and various sectors of the economy.

This Client Alert provides an overview of the new oversight mechanisms, compares them to similar oversight efforts from the US$700 billion Troubled Asset Relief Program of 2008, and outlines best practices for companies participating in CARES Act programs to prepare for the new landscape of government investigations and public scrutiny. The Alert concludes with an overview of similar relief programs in other countries and the potential for enhanced scrutiny in those jurisdictions.