The figures that the inspector general of the US Small Business Administration (SBA) released Tuesday far exceed the agency’s previous projections and expose the vulnerability of Paycheck Protection (PPP) and COVID-19 Economic Injury Disaster Loan (COVID-EIDL) programs, especially during the early stages of the coronavirus pandemic.
According to the inspector general’s report, “at least 17% of all COVID-EIDL and PPP funds were given to potentially fraudulent subjects.”
Fraud for the COVID-19 Economic Injury Disaster Loan Program is estimated to have exceeded $136 billion, representing 33% of the total invested in the program, according to the report. Meanwhile, the estimated fraud of the Payment Protection Program is 64,000 million, according to the inspector general.
In comments attached to the report, a senior SBA official questioned the new figures. Bailey DeVries, the SBA’s acting associate administrator for capital access, said the inspector general’s approach “contains serious flaws that significantly overestimate fraud and inadvertently mislead the public into believing that the work we do together did not have a significant impact on fraud protection.”
The SBA inspector general had previously estimated fraud on the COVID-EIDL at $86 billion, and $20 billion on the PPP.
The Associated Press reported June 13 that fraudsters and fraudsters had drained about $280 billion of COVID emergency assistance, while another $123 billion was wasted or misspent. The bulk of the potential losses are from the two SBA programs and another initiative to provide unemployment benefits to workers suddenly out of work amid the economic chaos caused by the pandemic.
All three initiatives were launched during the administration of President Donald Trump and passed down to his successor. In total, the losses the AP estimated represent 10% of the $4.2 trillion the federal government has disbursed in COVID assistance so far.
The federal government has now reported possible fraud of $276 billion, a figure that fits the AP’s analysis.
Gene Sperling, a senior White House official in charge of pandemic relief spending, said in an interview Tuesday that 86% of fraud, or potential fraud, in emergency credit programs occurred during the first nine months of the pandemic, when Trump was president.
“$200 billion is a very large number, but this again has to be remembered as potential fraud,” Sperling said. of 40,000”.
But, he added: “However, it is unacceptably high.”
SBA Inspector General Hannibal Ware said in a statement Tuesday that the report “uses investigative welfare, previous reports (from the inspector general’s office) and innovative data analysis to identify various fraud schemes used to possibly steal more than 200,000 million dollars to the American taxpayers and to exploit the programs directed to help those in need”.
Ware told The Associated Press earlier this month that the latest fraud figures will not be the last released by his office.
“We will continue to estimate the amount of fraud until we have concluded the investigations in this regard,” he said.
That could take time. His office has a backlog of more than 90,000 actionable leads on pandemic assistance fraud, which is work for nearly a century.
The SBA issued its own report Tuesday, detailing the measures it has put in place to combat fraud. The agency’s administrator, Isabella Casillas Guzman, said in a statement that the report details “the effective measures that have been implemented to combat fraud and hold those who act wrong to account.”
The SBA previously told the AP that the federal government has not developed an accepted system for evaluating fraud in federal programs. Previous analysis, the agency noted, has flagged “potential fraud” or “indicators of fraud” in a way that conveys those numbers as a true estimate of fraud when they are not. Regarding the COVID-EIDL program, the agency noted that its “working estimate” uncovered a possible $28 billion in fraud.
Fraud in unemployment assistance programs during the pandemic remains at $76 billion, according to testimony by Labor Department inspector general Larry Turner before Congress. This is a conservative estimate. Another $115 billion was accidentally sent to people who were not supposed to receive these benefits, according to his testimony.
The Biden administration implemented stricter measures to curb pandemic-related fraud, including the use of a database of people to whom payments should not be made. Biden also recently proposed a $1.6 billion plan to increase police efforts to go after fraudsters of pandemic assistance programs.
Bob Westbrooks, former executive director of the Pandemic Response Accountability Commission, said in an interview that the $200 billion figure is “unacceptable, unprecedented and immeasurable.” Westbrooks published last week the book “Left Holding the Bag: A Watchdog’s Account of How Washington Fumbled its COVID Test.”
“The speedy distribution of funds and the integrity of the programs are not mutually exclusive,” Westbrooks said Tuesday. “The government can walk and chew gum at the same time. They should have put basic fraud checks in place to verify people’s identities and make sure aid was getting into the right hands.”
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McDermott reported from Providence, Rhode Island.
FUENTE: Associated Press
