A new report from U.S. Sen. Joni Ernst (R-IA), the ranking member of the Senate Small Business Committee, found that the Small Business Administration (SBA) was scammed out of hundreds of billions of dollars intended to go to COVID relief programs.
Ernst is pushing federal investigators to continue working to retrieve the money. The report, Small Business COVID-19 Fraud: Three Years Later State of Play, details the SBA’s effort to discount the full extent of fraud and to cast doubt on the estimates of fraud made by experts.
Ernst joined the Senate Homeland Security and Governmental Affairs Subcommittee on Emerging Threats and Spending Oversight to question witnesses, including SBA Inspector General Hannibal “Mike” Ware. Ernst asked Ware about the more than $200 billion in COVID relief funds fraudulently paid to scammers.
“Flagrant fraud within government programs, especially when it goes unpunished, hurts taxpayers and harms small businesses most,” she said.
Ernst is advocating for the passage of her Strengthening Taxpayer Recoveries Act which would require the SBA to collect all of the COVID funds owed to taxpayers, including money given to fraudsters, and to expand the jurisdiction of the Special Inspector General for Pandemic Recovery to find more fraud.
During the pandemic, the SBA was in charge of the Paycheck Protection Program (PPP), COVID-19 Economic Injury Disaster Loans (EIDL), and the Restaurant Revitalization Funds. Money in those funds was made available on a “first come, first served” basis, and money ran out quickly. Ernst’s office said that many qualifying businesses were turned away as “felons, gang members, and drug traffickers raked in cash.” Ernst’s office alleges that one fraudster took $8 million from the program while nearly 2,000 restaurants in Iowa were left empty-handed.