Biden-Harris administration failed to recoup $200B in fraudulent COVID loans, House committee says
Fox News
FIRST ON FOX: A new report from the House of Representatives is accusing the Biden administration of failing to recover some $200 billion in fraudulent COVID-19 pandemic loans.
The House Small Business Committee, led by Chairman Roger Williams, R-Texas, has been conducting a years-long investigation into how the Small Business Administration (SBA) has handled the emergency financial aid programs that sprung up when state governments shut down businesses across the country during the pandemic.
“In creating the COVID Lending Programs, Congress understood that the relief funds needed to be issued quickly to help businesses cope with the economic strain of the pandemic,” a new report released by the committee said.
“The rush to get pandemic relief funding out quickly resulted in shortcuts being taken to deliver aid quickly to small businesses in hopes of recouping improper disbursements on the back end.”
The report also accused the SBA of making “numerous decisions that decreased the likelihood” the government would be able to recoup any money given under false pretenses.
“In total, it is likely that $200 billion from the COVID Lending Programs were disbursed to fraudulent recipients,” the report said.
Out of roughly $5.5 trillion Congress approved for aid during the pandemic, roughly $1.2 trillion went to the SBA.
It was largely disbursed by two major pieces of legislation, the CARES Act, signed by former President Trump, and the American Rescue Plan, signed by President Biden.
While making recommendations for reform across the entire COVID loan system, the report accused Democrats of devoting disproportionate attention to the Paycheck Protection Program (PPP), which accounted for roughly $64 billion in fraudulent loans, rather than the Economic Injury Disaster Loan (EIDL), which the report said saw $136 billion in fraud.
Written by staff for the committee’s Republican majority, the report acknowledged that the additional responsibility given by the Trump administration in 2020 strained its comparatively smaller federal agency infrastructure.
“In the days after Congress passed the initial COVID relief legislation, SBA employees worked night and day to craft the rules and policies for its new lending programs,” the report said.
The SBA had already issued more money in the first 14 days of these programs than it had in the previous 14 years combined, the report said.
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It said SBA staff “did a remarkable job” setting them up, “but under the circumstances, these SBA employees did not have adequate support, staff, or time to design these programs to be fraud resistant.”
The report accused the Biden administration of not doing enough to put in anti-fraud guardrails and failing to recover the funds lost after taking over the White House in January 2021.
The report also knocked the previous Democratic majority Congress for focusing on PPP, while the “fraud rate” for EIDL “was approximately four times higher.”
It accused Democrats of focusing on PPP because of the involvement of private sector partners.
“It is likely that this misplaced focus by Congressional Democrats, and their surrogates in the media, obscured the realities of fraud in these programs, at least to some degree,” the report said. “While there should be investigations to ensure private companies are following the rules, Members of Congress and their staff should be careful to direct their efforts toward oversight that is beneficial to the American people, and not just part of a broader messaging push against an emerging industry.”
Republicans noted that PPP needed “substantial changes” to be made more effective and less vulnerable to fraud.
Fox News Digital reached out to the SBA and the House Small Business Committee’s Democratic minority for comment.