The House Small Business Committee, led by Chairman Roger Williams, R-Texas, has accused the Biden administration of failing to recover around $200 billion in fraudulent COVID-19 pandemic loans. The committee’s investigation focused on the handling of emergency financial aid programs by the Small Business Administration (SBA) during the pandemic. The report revealed that shortcuts were taken to quickly issue relief funds to businesses, resulting in improper disbursements. The report also criticized the SBA for making decisions that decreased the likelihood of recovering money given under false pretenses, estimating that $200 billion from the COVID lending programs went to fraudulent recipients out of $5.5 trillion approved for aid during the pandemic.
The report recommended reforming the entire COVID loan system and accused Democrats of disproportionately focusing on the Paycheck Protection Program (PPP) rather than the Economic Injury Disaster Loan (EIDL), which saw $136 billion in fraud. Despite acknowledging the strain on the SBA’s infrastructure in 2020, the report criticized the Biden administration for not implementing sufficient anti-fraud measures and failing to recover lost funds after taking office in January 2021. The report also criticized the previous Democratic majority Congress for focusing on PPP, even though the fraud rate for EIDL was significantly higher. Republicans suggested that substantial changes were needed to make PPP more effective and less vulnerable to fraud.
According to the report, the rush to issue pandemic relief funding quickly led to shortcuts being taken to help businesses cope with the economic strain of the pandemic. The SBA had already issued more money in the first 14 days of the programs than it had in the previous 14 years combined, with staff working tirelessly to design the rules and policies for the lending programs. However, the report highlighted that SBA employees did not have sufficient support, staff, or time to design fraud-resistant programs. The Biden administration was criticized for not putting in place adequate anti-fraud guardrails and for failing to recover the funds lost in fraudulent loans.
The report also mentioned that the Democrats’ focus on PPP due to private sector partners’ involvement may have obscured the realities of fraud in the programs. Congressional Democrats were criticized for their misplaced focus and their failure to address the higher fraud rate in EIDL compared to PPP. The report suggested that investigations should ensure private companies are following the rules, but Congressional oversight efforts should be directed towards beneficial measures for the American people and not just part of a broader messaging push against an emerging industry. Republicans emphasized the need for beneficial oversight efforts and substantial changes to make the PPP 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 but did not receive a response. The report from the House Small Business Committee highlighted the challenges faced by the SBA in handling emergency financial aid programs during the pandemic, including shortcuts taken to quickly disburse relief funds and the lack of adequate anti-fraud measures. The report also criticized the Biden administration for failing to recover lost funds and the previous Democratic majority Congress for focusing on PPP rather than addressing the higher fraud rate in EIDL. Republicans called for substantial changes to make the PPP more effective and less susceptible to fraud.
