US Report: Potential $200B COVID Aid Theft

Facts

• A report from the inspector general of the US Small Business Administration (SBA) estimates that $200B out of the agency's $1.2T in COVID relief funds disbursed through the Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP) were misappropriated.¹
• The inspector general claims that 17% of the funds went to "potentially fraudulent actors," with $64B in PPP and $136B in EIDL funds being stolen.²
• The report alleges that usual safeguards against fraud were weakened or removed during the pandemic in an effort to disburse the funds quickly, which "attracted an overwhelming number of fraudsters."³
• A senior SBA official disputed the findings in an addendum to the report, saying they "significantly overestimate" fraud at the agency. An Associated Press report estimated pandemic aid fraud totaled $280B, mostly from SBA programs, while the agency pegs EIDL fraud at around $28B.⁴
• In explaining the methodology of the report, the SBA inspector general said it "utilizes investigative casework, prior (inspector general) reporting, and cutting-edge data" to identify suspected fraud.⁴
• Federal agencies are involved in 570 investigations into pandemic fraud and misappropriation, with at least $30B being seized or returned to the SBA. SBA inspector general Hannibal "Mike" Ware is set to testify in front of Congress in July regarding his report.³

Sources: ¹Reuters, ²Associated Press, ³FOX News, and ⁴PBS NewsHour.

Narratives

• Republican narrative, as provided by Wall Street Journal. The scope and scale of COVID relief fraud may never be truly known, as the government irresponsibly gave out fistfuls of taxpayer money to those that did not deserve it. The government has had long standing issues with benefit fraud, as this wastefulness adds to the US' gargantuan national debt. While Democrats have tried to brush aside the extent of the mismanagement, the American people deserve to know what went wrong.
• Democratic narrative, as provided by Washington Post. The government tried to disburse COVID funds to those that needed them the most, which is what happened to the vast majority of the funds provided. It was the Trump admin. that insisted on a policy of retroactive enforcement for inevitable instances of fraud, with Biden adding more stringent oversight measures when he entered office. We need to use the lessons from COVID to build a better emergency relief system, not as an excuse to tear it apart.