By Al Barbarino

Law360 (April 21, 2020, 7:04 PM EDT ) A group of Democratic senators is asking the Federal Reserve for transparency surrounding two massive credit facilities launched last month that could make as much as $750 billion in corporate debt purchases to prop up struggling companies during the COVID-19 pandemic.

In a letter Monday to Fed Chairman Jerome Powell, the senators requested monthly disclosures that would detail the flow of funds from the facilities and specify the industries targeted, citing concerns about support for industries contributing to climate change.

"We ask that you ensure the Fed's actions are fully transparent," the senators said. "Taxpayers deserve transparency and accountability from the Fed."

The Federal Reserve Bank of New York is heading up the program with an initial $75 billion in Coronavirus Aid, Relief and Economic Security Act funding from the U.S. Department of Treasury, tapping investment management giant BlackRock to manage the facilities. The New York Fed said Friday that the combined size of the facilities could reach $750 billion.

The group of nine Democratic senators, led by Sherrod Brown of Ohio, Brian Schatz of Hawaii and Sheldon Whitehouse of Rhode Island, requested the underlying investment guidelines provided to BlackRock and monthly transaction-specific data including the identity of issuers and the terms of any financing, citing Fed reporting requirements under Dodd-Frank Act and the CARES Act.

They also expressed concern that the funding could be used to "help sustain industries that may drive a future climate financial crisis" and that the Trump administration could pursue targeted relief for industries whose troubles are only "partially attributable" to the pandemic.

Trump tweeted Tuesday that he has instructed Treasury Secretary Steven Mnuchin and Energy Secretary Dan Brouillette to create a plan to fund to the struggling oil and gas industries as oil prices closed Monday in negative territory.

"We will never let the great U.S. Oil & Gas Industry down," he wrote.

The comments follow a letter from Republican senators, led by Sen. Kevin Cramer of North Dakota, to Powell and Mnuchin earlier this month urging CARES Act funding be kept "neutral and free of bias" while voicing concerns that BlackRock would avoid energy and transportation companies due to the asset manager's own climate-related investment policies.

"BlackRock must act without regard to this or other investment policies BlackRock has adopted for its own funds," the Republican senators wrote on April 7.

The initial Treasury funding will inject $50 billion and $25 billion equity investments into the two facilities, focused on the primary and secondary markets, respectively. The primary vehicle will purchase bonds and syndicated loans at issuance while the secondary fund will buy corporate bonds and exchange-traded funds issued by investment-grade U.S. companies, according to the New York Fed.

"Given the [Treasury's] equity investment in the facilities, it is in the taxpayer interest to fully understand how … [BlackRock] will make purchasing decisions," the Democratic senators wrote. "It will be important for policymakers, taxpayers, and the market to understand how FRBNY will direct BlackRock to allocate those resources."

The New York Fed noted that it will publicly disclose information regarding participants, transaction amounts, costs, revenues and fees and that additional information will be forthcoming once the facilities are operating in the coming weeks.

Powell's office did not immediately respond to requests for comment and BlackRock declined to comment.

--Editing by Emily Kokoll.

For a reprint of this article, please contact reprints@law360.com.