By Judson Berger
Friday, October 14, 2022
Everywhere we look these days, Robert Conquest’s “laws” of politics are being affirmed, notably the one about
how the best way to understand a bureaucratic organization is to assume it’s
controlled by a cabal of enemies. How else to explain California’s
high-speed-rail debacle? Or, more significantly, the scope of pandemic-era
fraud that’s only now being discovered?
Writing for National Review’s Capital Matters this
week, the Manhattan Institute’s Brian Riedl shows us the dark side of Covid-relief aid. The abuse goes
beyond the ordinary cost of doing government business, into almost ludicrous
territory:
A Florida man fraudulently used a $7.2 million emergency loan to purchase a
12,579-square-foot mansion and several cars. A California couple fraudulently
collected $18 million and purchased “three houses, diamonds, gold coins, luxury
watches, expensive furniture and other valuables.” Another man forged enough
applications to collect $27 million in Paycheck Protection Program (PPP)
funds.
“The biggest fraud in a generation.” That’s how a former
U.S. attorney described the immense waste and abuse from the federal
government’s emergency pandemic aid. . . .
The numbers are staggering. Approximately $80 billion of
the $800 billion disbursed by the PPP program was likely fraudulent. Added to
that, the Small Business Administration also disbursed as much as $80 billion in fraudulent Economic Injury Disaster
loans. And on top of that, the unemployment-insurance system lost as much
as $163 billion of its $1 trillion in pandemic-era
disbursements to fraud and overpayments.
That’s just the fraud stuff, within programs that were
otherwise worthy and vital during the pandemic emergency. State and local
governments also received billions they didn’t need, money that is now sitting
in accounts or paying for extravagances or going to new-age feel-gooderies. Riedl estimates that the total
figure for money squandered in the realms of waste, fraud, and unnecessary
nonsense spanning the Trump and Biden administrations could approach $1
trillion.
Credit to those engaged in the Sisyphean task of tracking
this down and ideally clawing some of it back. Michael Horowitz, the
pandemic-response oversight chair whom you might recognize from his day job as
Justice Department IG, said last month that the Labor Department watchdog
alone had charged more than 1,000 people with unemployment-insurance fraud. He
noted efforts to improve anti-fraud controls — but aside from being a reminder
of how obscenely mismanaged these programs are, and of how exploitative some of
our fellow countrymen can be during moments of national vulnerability, this
level of waste belies the cries for ever more of it.
The pandemic-oversight committee notes it is trying to
keep track of over
$5 trillion in related spending. We’ve since committed another $1
trillion (half of it new spending) for infrastructure and given up
an estimated $400 billion via Biden’s student-debt
“forgiveness” (if it holds up in court), among other projects. The Committee
for a Responsible Federal Budget estimates that the Biden administration has enacted
policies that will add nearly $2.5 trillion to deficits over the next
decade, not counting the Covid-linked American Rescue Plan.
This is kindling, of course, for our inflation and national-debt problems.
At the very least, as Riedl says, taxpayers deserve better than the
“avalanche” of pandemic fraud and waste. The most recent head-shaker, described
as the “largest pandemic relief fraud scheme charged to date,” involved a
network of dozens of people in Minnesota who allegedly obtained nearly $250
million meant for feeding needy kids. The details need no embellishment,
and can be found here. Credit, again, to the feds for catching
this. That $250 million can be siphoned away before somebody notices, however,
is a reasonably strong sign that our policy-making has lost touch with the
meaning of money.
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