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Today, I want us to consider one way the government wastes our money — how they oversee government programs.
Specifically, I’d like to look at the staggering fraud tied to COVID-19 relief programs. Billions of dollars were set aside to help businesses survive the pandemic, but much of it vanished into thin air.
So, how did this happen?
The Paycheck Protection Program
Let’s start with the Paycheck Protection Program, or PPP.
In theory, the Paycheck Protection Program was a lifeline for small businesses, allowing them to keep employees on payroll during lockdowns. In practice it became one of the largest fraud operations in U.S. history.
A Collection of Thieves
Criminals, from organized rings to opportunistic individuals, took advantage of weak oversight. According to the Inspector General of the Small Business Administration (SBA), over $200 billion of COVID relief funds were potentially stolen or misused.
That’s billion with a ‘B’. CNN reports that roughly 17% of the $1.2 trillion disbursed through PPP loans is under suspicion for fraud. Imagine that: nearly one out of every five dollars was potentially stolen.
How Did They Do It?
How did they do it?
Simple: fake businesses, inflated employee counts, and identity theft. Some fraudsters created shell companies that didn’t even exist before the pandemic. Others claimed to employ hundreds of people when in reality, they had none. Even convicted felons and prisoners applied for loans and got them.
The Inspector General’s report outlines how the SBA failed to catch these fraudulent claims in time. One of the main reasons? They relied on self-certification. Essentially, applicants were trusted to tell the truth with minimal verification. And by the time red flags were raised, much of the damage had already been done.
Is Anyone Responsible?
The Justice Department has been working to recover some of the stolen funds, but the scale of the fraud is so massive that it’s unlikely we’ll ever see full restitution.
As a taxpayer, that should be of concern to you.
Oversight
How did billions of dollars slip through the cracks? The systems in place were clearly not equipped to handle the sheer volume of claims, nor the level of deception.
But the SBA was responsible.
Will Anyone be Held Accountable?
So, what can we do? It starts with demanding better oversight and accountability from our leaders. We need stronger safeguards to ensure that future relief efforts don’t end up enriching criminals at the expense of the people who actually need help.
It’s time for us, as citizens, to hold our government accountable, to ensure that when billions of dollars are allocated, they end up where they belong—not in the pockets of fraudsters.
If someone had a significant role is losing 200 billion dollars of our money, should that person still have a job watching over how our tax money is spent?
Imagine you worked for a company and the boss gave you $10,000 cash to deposit in the bank. On the way to the bank, you lost $2,000 of that money.
Do you think your boss is going to be happy?
Do you think you will get a promotion or pay raise?
Do you think you will be required to pay back the money you lost?
If it was your fault, there’s a good chance you would have to pay it back, and even if you keep your job, you probably won’t receive a pay raise or a promotion to a more responsible position.
Those responses don’t apply in government work.
The people who make costly mistakes just keep working at their jobs.
We need to make our public officials accountable for their actions.
The SBA Inspector General identified the problem, but will anyone pay the price for losing 200 billion of our dollars?
Probably not.
Before I go, I’d like to share a blessing with you from the Old Testament.
“May the Lord bless and protect you; may the Lord’s face radiate with joy because of you; may he be gracious to you, show you his favor, and give you his peace.”
Numbers 6:24-26 (The Living Bible)
Until next time … be the reason someone smiles today
RESOURCES FOR THIS EPISODE
“COVID-19 Pandemic EIDL and PPP Loan Fraud Landscape” by the U.S. Small Business Administration, Office of the Inspector General, June 27,2023.
“Biggest fraud in a generation: The looting of the Covid relief plan known as PPP” by Ken Dilanian and Laura Strickler. NBC News, March 28, 2022.
“Fraudsters potentially stole over $200 billion in Covid relief aid, watchdog says,” by Matt Egan and Katie Lobosco, CNN. June 28, 2023.
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