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Wednesday, June 12, 2024

Auditors Find ‘Widespread Fraud’ in Federal Government’s Pandemic Spending

'There was no oversight of any of these dollars in the last Congress... '

(Ken Silva, Headline USAThe U.S. federal government has spent more than $5 trillion on pandemic relief programs to date, with untold billions of dollars of that money being lost to widespread fraud, according to testimony given Wednesday to the House Committee on Oversight and Accountability.

Speaking at the committee’s first hearing of the year, Government Accountability Office Comptroller General Gene Dodaro said the true level of Covid-related fraud has yet to be determined.

“Nevertheless, in December 2022, GAO found that measures and estimates indicate substantial levels of fraud and potential fraud during the pandemic,” he said, adding, “There is already ample evidence of widespread fraud, improper payments, and accountability deficiencies during the pandemic.”

Dodaro outlined some of the fraud that has been spotted, including $61 billion in unemployment insurance payments and more than $1 billion in paycheck protection program payments.

Dodaro cautioned that the true amount of unemployment insurance fraud is likely much higher, because the $61 billion is an estimate based on pre-pandemic fraud rates.

Likewise, DOJ Inspector General Michael Horowitz said PPP fraud extends at least into the tens of billions of dollars, and possibly into the hundreds of billions. Horowitz said at the committee hearing that the DOJ spotted $5.4 billion in fraud earlier this week.

“We determined that 69,000 questionable SSNs were used to obtain $5.4 billion in pandemic loans and that another 175,000 questionable SSNs were used in applications that were not paid or approved,” Horowitz told legislators.

Horowitz said the DOJ’s COVID-19 Fraud Enforcement Task Force has levied criminal charges against more than 1,800 defendants for losses estimated at $1.3 billion, and has launched civil investigations into more than 1,800 individuals and entities for alleged misconduct of pandemic relief loans totaling more than $6 billion.

The Small Business Administration’s inspector general has another 536 open investigations involving PPP or other pandemic relief spending, he said.

Dodaro said a major reason for the widespread fraud was that government wasn’t prepared to properly track the trillions of dollars in pandemic spending over the last two years.

For instance, Dodaro said the American Rescue Plan Act allocated $40 million to fund a Pandemic Response Accountability Committee, which was supposed to establish the “Pandemic Analytics Center of Excellence” to track spending.

“However, [the analytics center] was not established until more than a year after agencies began distributing relief funds,” Dodaro said. “The delayed establishment of the center resulted in the loss of valuable time for IGs to help program officials understand fraud risks and identify potential fraud.”

Dodaro and Horowitz discussed other technical reasons for the government not effectively tracking fraud—but Rep. Byron Donalds, R-Fla., attributed the problem to political apathy.

“There was no oversight of any of these dollars in the last Congress. I know that because I sat on this committee, and there were no oversight hearings associated with any of the pandemic spending,” Donalds said. “So I’m glad we’re tackling this now.”

Ken Silva is a staff writer at Headline USA. Follow him at twitter.com/jd_cashless.

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