A Call for Public Disclosure of Captive Arrangements

Jason Schupp
2 min readNov 13, 2020
Photo by Roman Kraft on Unsplash

Eleven national news organizations submitted Freedom of Information Act (FOIA) requests to the Small Business Administration (SBA) demanding public disclosure of the names of borrowers under the Paycheck Protection Program as well as details on individual loan amounts. The SBA disclosed some information but refused many of the details to “protect confidential commercial information and information the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.”

These news organizations would have none if it, “[e]mphasizing the significant public interest in full transparency surrounding the massive disbursement of taxpayer funds pursuant to SBA’s COVID-relating lending programs.” They further claimed transparency would “enable the press and the public to monitor whether taxpayer funds have been distributed fairly and equitably.”

Last week a federal judge in D.C. agreed:

Here, the Court finds that the balancing is not particularly close. The significant public interest in shedding light on SBA’s administration of the PPP and EIDL program dramatically outweighs any limited private interest in nondisclosure.

Hooray for transparency and the protection of the American taxpayer!

What some of these valiant news organizations prefer remain hidden from the American taxpayer and Congress is how they themselves have engaged in sophisticated financial engineering to extract hundreds of millions of dollars in federal commitments from a similar disaster relief program.

While the Paycheck Protection Program limits any single loan to $10 million, the Terrorism Risk Insurance Act (TRIA) offers taxpayer funding to an individual corporation without limit. Indeed, at least two of these self-proclaimed defenders of the people’s right to know have set up secretive “captive” insurance companies to tap into this $100 billion program:

  • Dow Jones & Company, Inc. (The Wall Street Journal) set up 21CF Insurance Services, Inc. to shift some $800 million of nuclear, biological, chemical, and radiological terrorism risk onto the balance sheets of the American taxpayer.
  • The New York Times Company set up Midtown Insurance Company to shift nearly $1 billion of nuclear, biological, chemical, and radiological terrorism risk onto the balance sheets of the American taxpayer.

Neither organization has ever disclosed to readers its massive interest in this federal program despite reporting on it regularly. In fairness, The New York Times did disclose its captive once, in an article unrelated to TRIA which described captives like Midtown Insurance Company as “too good to be true”.

Credible investigative journalism is essential to a strong democracy. News organizations that fight to hold others to standards of transparency they refuse to apply to themselves sacrifice their credibility and add to our nation’s rising tide of hypocrisy and cynicism. You owe us better.



Jason Schupp

Founder and Managing Member, Centers for Better Insurance, LLC