The pandemic is ending. The White House is reluctantly ending the state of emergency declared in March 2020. The more than $5 trillion appropriated to deal with the economic effects of a shutdown that most experts now say wasn’t necessary is still being spent. Some of the rules created during the pandemic will be with us forever.
The White House says the COVID emergency will end in May. For most of us, it ended more than a year ago (I placed the ending of the pandemic emergency on opening day of the 2021 baseball season when they began to allow crowds back into stadiums).
There are many things to investigate about the pandemic. Where and how COVID made the leap from bat to human; when the Chinese knew the coronavirus was loose; the U.S. response to the pandemic; and a host of issues connected to the vaccine and other COVID mitigation strategies that proved less than effective.
But ask the average American on the street how much of the $5 trillion we spent on COVID relief was lost to fraud, and you’re likely to get a blank stare in return.
Government spending invites fraud. Unlike a corporation, whose investments are carefully calibrated and where due diligence is done to protect that investment, the trillions of dollars given to individuals and businesses in pandemic relief were doled out based on faith. The government expected applicants for the aid to have a real need and that all the information they gave on their applications for funds was true.
Fraudsters, scammers, and crooks must’ve thought they had died and gone to heaven. But in the end, those experts at the flim-flam were mere amateurs. The major leagues of graft occurred when criminal gangs began to ramp up operations. That’s where the serious money was stolen — money we’ll never get back.
How much was taken by fraud?
The emergency era may have passed for most Americans who had to do crazy things like attend to their families and jobs, but it remained for the Biden administration, who loved governing under a state of emergency. Covid was too good to let go. It allowed for a smooth wealth transfer from taxpayers directly into scams and to the already wealthy through all the various relief plans. It facilitated the largest fraud in a generation—$80 billion missing from PPP, a few hundred billion scammed from unemployment relief, and $80 billion disappeared from a disaster relief program. Before you say that’s a right-wing conspiracy, all those numbers come from NBC reporting.
Estimates vary because, quite frankly, Democrats don’t want to know how much was lost to fraud.
Did the Democrats set up any committees or show much interest in getting to the bottom of COVID fraud? Estimates of how much in COVID relief funds was lost to fraud start at $500 billion. Most of that is non-recoverable. The federal government has already charged 1,500 people with defrauding pandemic-aid programs, and more than 450 people have been convicted so far. But that’s a drop in the bucket. The government says that as of last August, it had 39,000 investigations underway. And just 50 agents from the Small Business Administration are combing through two million potentially fraudulent loan applications.
The House Oversight Committee has begun to examine the fraud. It’s so gigantic that we shouldn’t expect them to be able to give us an exact accounting of how much was lost.
Michael Horowitz, chairman of the Pandemic Response Accountability Committee (PRAC), laid the scope of the problem out for committee members.
Of the $5 trillion total spent on pandemic relief throughout both the Trump and Biden administrations, Horowitz said the amount siphoned off by fraud could be anywhere from tens of billions of dollars to over $100 billion, but that it would be years before the final number was tallied.
The issue, Horowitz said, was that trillion-dollar programs had to get off the ground quickly to prevent potential economic collapse but they lacked key fraud protections, including verification systems and information sharing with other agencies to match up Social Security numbers with peoples’ names and birthdates.
“I think the problem at the outset of the pandemic was the lack of preparedness,” Horowitz told the committee. “Understanding this was a 100-year event with the pandemic, but we have emergencies all the time, like earthquakes, floods, hurricanes, tornadoes and other disasters … We don’t take the steps after an event like this, or smaller ones, to fix what’s needed.”
The stupidity of the government is mind-boggling. Yes, it was an emergency. But no one was in danger of dying without the funds — certainly not business owners who walked off with $80 billion from the Paycheck Protection Program.
The excuse that the economy was about to implode is unprovable. And as it turns out, no one was interested in taking even the most basic precautions against fraud.
Haywood Talcove, the CEO for government at LexisNexis Risk Solutions, who works with the government to verify identities, said that stealing from the pandemic relief programs was as simple as going on the internet and taking the names of existing businesses or creating new, fake ones.
“There’s absolutely no security on there. There’s no validation of any information,” Talcove said. “And voila, you have company ABC with 40 employees and a payroll of $10 million. And you go and apply for a PPP loan. It was a piece of cake.”
So more than $5 trillion goes out the door, and about 10% — at least $500 billion– is lost. The media isn’t much interested because the story is not sexy enough. Democrats have a compelling interest in not highlighting the scams because many of the thefts could have been prevented.
That $500 billion is half the federal deficit. It’s two-thirds of the defense budget. It’s taxpayer money that was incompetently managed and negligently given out.
But don’t worry about it. Go ahead and bury your face in your phone and ignore the thieves who are robbing you blind and laughing all the way to the bank.
