WASHINGTON, D.C. — House Republicans last week began their promised aggressive oversight of the Biden administration, focusing on what watchdogs described as “indications of widespread fraud” in federal coronavirus aid programs.
More than 1,000 people have pleaded guilty or have been convicted on federal charges of defrauding the myriad COVID-19 relief programs that Congress established in the early days of the pandemic. More than 600 other people and entities face federal fraud charges.
But that’s just the start, according to investigators who testified as the House Oversight and Accountability Committee held its first hearing in the new Congress on fraud and waste in federal pandemic spending. Congress approved about $4.6 trillion in spending from six coronavirus relief laws, beginning in March 2020, when Donald Trump was in the White House and including the $1.9 trillion package that Democrats passed in the first months of the Biden presidency.
“We owe it to the American people to get to the bottom of the greatest theft of American taxpayer dollars in history,” said Rep. James Comer, R-Ky., the committee chairman.
Gene L. Dodaro, head of the Government Accountability Office, told lawmakers that it will be some time before the full extent of fraud is known. The inspector general for the Small Business Administration has more than 500 ongoing investigations involving loan programs designed to help businesses meet operating expenses during the pandemic. The Labor Department’s internal watchdog continues to open at least 100 unemployment insurance fraud investigations each week.
The GAO said the more than 1,000 convictions related to COVID-19 relief fraud are one measure of how extensive it was. “There are definitely indications of widespread fraud, but it’s impossible to estimate right now what the full extent will be,” Dodaro said.
Michael Horowitz, the Justice Department inspector general who chairs the Pandemic Response Accountability Committee, told lawmakers that the amount of fraud and misspent funds is “clearly in the tens of billions of dollars.”
“It wouldn’t surprise me if it exceeds ultimately more than $100 billion, but we have so much work to do,” Horowitz said. “So we’re going to be counting and figuring this out for years to come. We’re going to go after every penny we can.”
Some 20 inspectors general work collaboratively to investigate pandemic relief spending. Horowitz said data analysis is critical to their work.
For example, this week the committee issued a fraud alert regarding the use of questionable Social Security numbers to obtain $5.4 billion in pandemic-related loans and grants. He said a team of data scientist compared tens of millions of applications with data at the Social Security Administration to see if they fully matched the SSA’s records.
“Over 69,000 didn’t,” Horowitz said. “This type of advanced data analytics is transforming how we do oversight.”
To prevent fraud during future emergencies, Horowitz recommended that Congress permanently fund the committee’s data analytics center. He said the recent fraud alert identifying potentially $5.4 billion in fraud is 360 times the annual cost of operating such a platform, so the return on investment for taxpayers is clear.
One of the biggest factors in the COVID fraud that occurred was the need to get dollars out to people and businesses as quickly as possible. Horowitz said it is critical that agencies assess applicant eligibility before payments are sent out, but the SBA allowed entities applying for Paycheck Protection Program to self-certify they were eligible. He said that resulted in $3.6 billion going out to some 57,000 applicants on the federal government’s do-not pay list, “a list the SBA did not bother to cross-check.”
The House committee, which plans to examine an array of hot-button issues, includes some of the most strident critics of the Biden administration as well as some of its most ardent supporters. The clash in perspectives was evident from the start as Comer complained that the Biden administration faced little to no scrutiny last Congress.
“This committee has for too long stood on the sidelines while taxpayer dollars were wasted by bureaucrats whose only priority is getting money out the door,” Comer said.
White House spokesman Ian Sams issued a statement after the hearing saying that Biden has empowered inspectors general to monitor COVID relief programs, secured money to strengthen anti-fraud measures and appointed a chief pandemic prosecutor.
“Many Republicans on the Oversight Committee defended the prior administration’s handling of these programs and opposed efforts to fund fraud prevention, yet are now using this issue to try to score political points,” Sams said.
