cloudyn.png
Wednesday August 17th, 2022 6:51AM

Clyburn: US failed to stop fraud in COVID-19 loan program

By The Associated Press
Related Articles
  Contact Editor

The U.S. government failed to take basic steps at the beginning of the coronavirus pandemic to prevent fraud in a federal aid program intended to help small businesses, depleting the funds and putting Americans at a greater risk of suffering the consequences of identity theft, the head of a congressional panel examining the payouts said Tuesday.

Democratic Rep. James Clyburn blamed the Trump administration for the problems in the COVID-19 Economic Injury Disaster Loan program, overseen by the U.S. Small Business Administration, amid revelations that as much as 20% of the money may have been awarded to fraudsters. Clyburn said the Biden administration has implemented measures to identify potential fraud and directed loan officers to address indications of fraud before approving loans, while Congress has invested in fraud prevention and accountability.

House Majority Whip Steve Scalise said the Trump administration and Congress worked together at the beginning of the pandemic, when uncertainty was rampant and much of the economy was locked down, to deliver "much needed relief as fast as we could to help save as many jobs as we could" and prevent the economy from crashing.

Scalise, R-La., said Democrats are undermining the successes, and he asked why the House Select Subcommittee on the Coronavirus Crisis wasn't looking into the enhanced unemployment insurance program that was plagued by “egregious and unprecedented fraud” and is a “leading contributor” to the high inflation rates.

“I hope that in our oversight of pandemic programs, my Democratic colleagues will be able to recognize the difference between what was needed to save the economy during an unprecedented pandemic versus pushing a partisan, inflation-inducing agenda,” he said.

Clyburn, of South Carolina, said the subcommittee will determine what more must be done to bring perpetrators of fraud to justice and how to protect future emergency programs.

The SBA’s Office of the Inspector General has estimated that at least $80 billion distributed from the $400 billion EIDL program could have been fraudulent, much of it in scams using stolen identities. Separately, staff for the select subcommittee issued a report Tuesday that found that some 1.6 million applications for the loans may have been approved without being evaluated.

The SBA's inspector general, Hannibal “Mike” Ware, said initially there was a huge struggle at the agency about the “need for speed versus the need for controls.” He said he was “screaming” about the need for fraud controls. He said the most concerning thing was self-certification, which meant applicants could say they had a business or a certain number of employees and get money.

The subcommittee hearing also tackled broader fraud concerns with the flood of pandemic aid from multiple federal government programs for states, local governments, businesses and the unemployed. The $5 trillion in total aid, delivered in a series of bills signed by Presidents Donald Trump and Joe Biden, have come with numerous complications.

Fraud overwhelmed enhanced unemployment insurance programs funded by the federal government and administered by the states. There was so much aid to governments that many struggled to find a way to spend it all under the original regulations. And there have been questions about whether the Paycheck Protection Program to keep employees working was worth it.

The Secret Service said in December that nearly $100 billion has been stolen from COVID-19 relief programs, basing that estimate on its cases and data from the Labor Department and the Small Business Administration. The White House downplayed the estimate, saying it was based on old reports.

The Federal Emergency Management Agency may have been double-billed for the funerals of hundreds of people who died of COVID-19, the Government Accountability Office said in April. States and cities continue to be slow to spend their pandemic relief money.

The select subcommittee said Tuesday that more than $10 billion allocated under two massive business loan programs has been returned because of investigations and bank actions. Federal prosecutors have charged nearly 1,500 people with crimes related to fraud against the government over the business loans and enhanced unemployment insurance programs.

The government's Pandemic Response Accountability Committee says inspectors general for various federal agencies have at least 1,150 ongoing investigations into fraud from the different aid funds. Officials say it could take years to untangle all the problems.

___

McDermott reported from Providence, Rhode Island, and Mulvihill reported from Cherry Hill, New Jersey.

  • Associated Categories: Associated Press (AP), AP Online Headlines - Washington, AP Online Congress News, AP Health, AP Business, AP Business - Economy, AP Business - Small Business
© Copyright 2022 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Clyburn: US failed to stop fraud in COVID-19 loan program
The head of a congressional panel says the U.S. government failed to take basic steps at the start of the coronavirus pandemic to prevent fraud in a federal aid program intended to help small businesses
12:09PM ( 2 minutes ago )
Russians control 80% of contested city in eastern Ukraine
A regional governor says Russian forces control about 80% of the city of Sievierodonetsk — the main focus of the war now in eastern Ukraine
12:06PM ( 6 minutes ago )
Biden to visit 'pariah' Saudi Arabia and Israel next month
President Joe Biden will make his first trip to the Middle East next month with visits to Israel, the occupied West Bank and Saudi Arabia
12:01PM ( 11 minutes ago )
Associated Press (AP)
1/6 panel postpones hearing with ex-Justice Dept. officials
The committee investigating the Jan. 6, 2021 riot at the U.S. Capitol has postponed a hearing that was to feature Trump-era Justice Department officials
10:02AM ( 2 hours ago )
Poland changes judiciary law; demands EU release COVID funds
Polish President Andrzej Duda has signed into law regulations replacing the controversial body disciplining judges with a new accountability panel
9:41AM ( 2 hours ago )
Congress examines fraud in pandemic aid for small businesses
A congressional panel is set to examine payouts under a federal coronavirus pandemic aid program intended to help small businesses weather the COVID-19 outbreak
8:04AM ( 4 hours ago )
AP Online Headlines - Washington
Experts: Anti-LGBTQ rhetoric could galvanize extremists
Experts warn that extremist groups may see anti-LGBTQ rhetoric by influencers as a call to action
12:13AM ( 11 hours ago )
Kentucky shatters its fatal overdose record; fentanyl blamed
A new state report says fatal drug overdoses rose nearly 15% in Kentucky last year
5:46PM ( 18 hours ago )
Biden signs bill for national Asian Pacific history museum
President Joe Biden has signed a bill creating a commission to study establishing a national museum on the history of Asian Americans and Pacific Islanders in the United States
5:13PM ( 18 hours ago )
AP Online Congress News
Wall Street wobbles a day after tumbling into bear market
Wall Street is wobbling Tuesday in its first trading after tumbling into a bear market on worries central banks will clamp the brakes too hard on the economy
11:23AM ( 49 minutes ago )
Happy the elephant isn't a person, top New York court rules
New York’s top court has rejected a closely watched effort to free Happy the elephant from the Bronx Zoo
11:21AM ( 51 minutes ago )
Yellowstone closed after historic floods; some areas cut off
Communities bordering Yellowstone National Park are isolated and tourists stranded after record floodwaters knocked out roads and bridges in Wyoming and Montana and forced the closure of all entrances to the park
11:03AM ( 1 hour ago )
AP Business
May US producer prices soared 10.8% as energy prices jumped
U.S. producer prices surged 10.8% in May from a year earlier, underscoring the ongoing threat to the economy from a bout of inflation that shows no sign of slowing
9:07AM ( 3 hours ago )
May US producer prices soared 10.8 % as energy prices jumped
U.S. producer prices surged 10.8% in May from a year earlier, underscoring the ongoing threat to the economy from a bout of inflation that shows no sign of slowing
8:37AM ( 3 hours ago )
The S&P 500 is in a bear market; here’s what that means
Wall Street opened the week with heavy losses that put the benchmark S&P 500 at a level considered to be a so-called bear market
8:01AM ( 4 hours ago )
AP Business - Economy
Small businesses are facing ‘summer of uncertainty’
Small businesses that depend on outdoor crowds and free-spending tourists aren’t sure what to expect this summer
10:06AM ( 4 days ago )
After rough run, Kohl's surges on potential takeover
Shares of the department store Kohl’s are up more than 11% after the retailer said that it is in advanced talks to be sold in a deal worth about $8 billion
11:40AM ( 1 week ago )
Small businesses still struggle to find enough workers
Some small businesses are still struggling to hire qualified workers, even as the broader picture in the U.S. job market looks much brighter
1:29PM ( 1 month ago )
AP Business - Small Business
Russians control 80% of contested city in eastern Ukraine
A regional governor says Russian forces control about 80% of the city of Sievierodonetsk — the main focus of the war now in eastern Ukraine
12:06PM ( 6 minutes ago )
Clyburn: US failed to stop fraud in COVID-19 loan programs
The head of a congressional panel says the U.S. government failed to take basic steps at the start of the coronavirus pandemic to prevent fraud in a federal aid program intended to help small businesses
12:01PM ( 11 minutes ago )
Former Kurdish rebel has key role in Sweden's NATO bid
A former Kurdish rebel fighter turned Swedish lawmaker has emerged as a central figure in the drama surrounding Sweden and Finland’s historic bid to join NATO
11:47AM ( 25 minutes ago )
US Open updates | Koepka testy and tired of Saudi talk
Brooks Koepka is getting a little testy when talk turns to the Saudi-funded LIV Golf series
11:40AM ( 32 minutes ago )
Police: House Republican's tour of Capitol wasn't suspicious
Police have determined a House Republican who led a tour of the U.S. Capitol the day before the Jan. 6 attack was simply showing his constituents around and not suspicious
11:28AM ( 44 minutes ago )