One of the most trusted people in the United States is Jerome Powell, head of the central bank. Some 58% of Americans have confidence in the Federal Reserve chairman, according to an April Gallup Poll. Yet as the Fed begins to disburse trillions of dollars to distressed companies, Mr. Powell knows he must work hard to keep that trust – by preventing corruption in the use of the taxpayers’ money.
On Thursday the Fed said it would disclose the names of companies receiving its assistance along with the terms of the loans. The information will be listed on a website at least every 30 days.
The Fed’s unusual transparency is one example of officials around the world trying to maintain support during the fight against COVID-19. When people are sacrificing so much for the collective good, leaders cannot afford anger at government malfeasance or at private actors who take advantage of the crisis for their own benefit.
A few countries like Taiwan have shown in their response to the coronavirus that open and accountable government can be an effective virus killer and perhaps an economy saver. The Council of Europe’s anti-bribery body just issued guidelines to its 50 member states on ways to prevent corruption. And the group of wealthy countries known as the Organization for Economic Cooperation and Development says it will help countries safeguard public procurement, transparency, and whistleblowers.
“It is in moments of disaster response and relief that the values of open government can come under intense pressure, but can also meaningfully contribute to better outcomes,” says the international group Open Government Partnership.
Citizens also seem to be taking up the cause. The U.S. Justice Department’s National Center for Disaster Fraud has received more than 9,000 tips in recent weeks about consumer fraud, price gouging, hoarding, and other potential crimes related to the crisis. More than 3,000 of the tips were deemed worthy of investigation.
“The pandemic opened up a business opportunity for predatory criminals,” states a report by Europol, the European Union’s law enforcement arm. Both officials and citizens have strong incentives to keep that door of opportunity shut. Their best tools are transparency and accountability, especially in agencies like the Fed handing out trillions of dollars. Honesty is a powerful disinfectant.