The alleged wave of hatred was directed at two of the government’s most generous emergency initiatives, the Paycheck Protection Program, known as PPP, and the Economic Injury Disaster Loan, known as EIDL. Started under President Donald Trump — and administered by the beleaguered Small Business Administration — the roughly $1 trillion in loans and grants were designed to help cash-strapped businesses stay afloat during the worst economic crisis since the Great Depression.
But the money also served as a source for criminal activity, as malicious actors took advantage of SBA and its poor oversight to incriminate Washington for huge sums. In the latter example, the PRAC found that SBA failed to prevent a wave of applications from collecting federal money using suspicious social security numbers.
The PRAC studied more than 33 million applicants and discovered more than 221,000 ineligible social security numbers on applications for assistance. That included thousands of cases where, for example, the number itself was “unissued” by the government, or it didn’t match the correct name and birth information.
More than a quarter of those applications, using nearly 70,000 suspect social security numbers, were approved between April 2020 and October 2022 despite the suspicious information — and the government lent those applicants about $5.4 billion, the report said.
The revelations confirmed the massive task facing the government in overseeing more than $5 trillion in emergency aid approved since 2020. The risk of loss is especially high with SBA, which already accounts for more than 93 percent of its PPP recipients.
The fraud is also likely to excite GOP critics who initially helped pass PPP, EIDL and other major pandemic programs. The House Oversight Committee — now headed by Chairman James Comer (R-Ky.) — will hold a hearing on covid fraud Wednesday with testimony from PRAC director Michael Horowitz.
The SBA did not immediately respond to a request for comment.
Speaking Monday at an event hosted by the National Press Club, Comer seemed to predict his growing anxiety about the fate of the country’s stimulus dollars.
“I don’t think history will be favorable to the PPP loan program,” he said.
This is a breaking news story. It will be updated.
