Has Anyone Been Fired for the Massive Theft of COVID Funds?

The list of fraudsters is longer than anyone thought possible. And the fraud schemes range from the clever to plans so stupid you have to wonder who was dumber — the fraudster or the government manager who approved the funds.

No one was fired for the malfeasance, the negligence, the stupidity, the laziness, or the sheer, shocking incompetence involved in losing hundreds of billions of dollars to criminals and ordinary people who saw that a child could rob the government of hundreds of thousands of dollars without any effort at all.

No one was fired, but Biden is actually trying to promote one of the most extraordinarily inept bureaucrats in the country to the position of Secretary of Labor. Julie Su ran the California Employment Development Department during the COVID-19 crisis where about $30 billion disappeared into the ether, including tens of millions of dollars in unemployment benefits stolen by California inmates sitting at computers in prison robbing the taxpayer blind while guards watched.

No termination, no disciplinary action has been reported. And we wonder why these clowns lose billions of dollars every year in Medicare fraud, small business loan fraud, and every other fraud imaginable.

COVID fraud is special because of the ease with which criminals and ordinary people attacked the $4.5 trillion in "emergency spending" appropriated by Congress like a pack of jackals attacking a rotting carcass. Common sense rules designed to limit fraud went out the window. According to a new Government Accountability Office (GAO) report, we'll probably never know the extent of the fraud.

"When the federal government provides emergency assistance, the risk of payment errors—including those attributable to fraud—may increase because the need to provide this assistance quickly can lead agencies to relax or forego effective safeguards," the GAO explained in a new report summing up efforts to recoup stolen funds. "Because not all fraud will be identified, investigated, and adjudicated through judicial or other systems, the full extent of fraud associated with the COVID-19 relief funds will never be known with certainty."

It's hard to even get a rough estimate of the amount of criminality involved. Just two programs run by the Small Business Administration during COVID lost close to $200 billion to fraud alone.

Reason:

As Reason has previously reported, auditors believe that about $200 billion was fraudulently disbursed from two programs run by the Small Business Administration (SBA) during the pandemic. That's about one-sixth of all spending run through the SBA's Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program. Additionally, the GAO believes that between $100 billion and $135 billion in federal unemployment funds—provided to states on a temporary basis during the pandemic—were lost to fraud.
One former U.S. attorney has called it "the biggest fraud in a generation."

It may be the biggest fraud in history, although the Iraqi oil-for-food scandal may have been larger due to differences in the value of the 1995 dollar with the dollar's value today.

Earlier this year, the SBA decided not to try and collect delinquent loans of $100,000 or less, figuring it wasn't worth the effort and that many of those loans were probably fraudulent anyway.

And the fraud doesn't include just plain old, run-of-the-mill, stupid spending.

Of course, none of these calculations of COVID-19 aid lost to fraud include other types of pandemic-era spending that was clearly wasteful and unnecessary, even if it didn't meet the legal standard for fraud. Much of the aid delivered to cities and states was blown on frivolities like golf courses or was used to pad public employees' paychecks. Iowa spent $12.5 million of its $4.5 billion cut of the federal bailout on a new baseball stadium near the Field of Dreams movie set, while Michigan spent $25.6 million on a travel marketing campaign.
The federal and state officials who approved that spending won't be seeing the inside of a jail cell, even though the distinction between using COVID-19 aid to build a baseball stadium and using PPP funds to buy a luxury car is mostly an aesthetic one.

Our ancestors solved the problem of crooked or stupid officials with a bucket of tar, a feather mattress, and a lot of pitchforks.

Wise ancestors, there.