A congressional report blames the Trump administration for wasting billions in COVID-19 small business relief funds by failing to implement common sense anti-fraud protections.
The report released Tuesday accuses the Trump administration of failing to properly oversee the Economic Injury Disaster Loan program, a $378 billion plan to help small businesses cope with the crushing impact of the pandemic.
“(The) report underscores once again the Trump Administration’s failure to act as an effective guardian of Americans’ taxpayer dollars in responding to the economic crisis triggered by the coronavirus pandemic,” said Rep. James Clyburn (D-S.C.), the chair of the House Select Subcommittee on the Coronavirus Crisis.
The Small Business Administration allowed a Virginia company to score a head-spinning $350 million “windfall profit” on a $750 million no-bid contract.
The company hired just six employees to run the loan processing operation and outsourced most of the work to two subcontractors.
“(Officials) failed to take reasonable steps to prevent EIDL funds from being lost to fraud, and they wasted additional public funds by overpaying a contractor that did little to implement the program,” Clyburn added.
The report comes as the committee holds a hearing Tuesday during which Biden administration officials will give updates on their efforts to detect and punish fraud in COVID assistance.
Earlier reports say as much as $80 billion, or nearly 20% of the entire small business program, may have been lost to fraud. Some fake owners of phony small businesses allegedly used the taxpayer dollars to splurge on Teslas and Rolex watches.
The Democratic-led panel says the Biden administration has scrambled to implement checks to ensure that only deserving and legitimate businesses get assistance, not “criminal enterprises.”