Key House Republicans have demanded that the secretary of labor preserve evidence of how he has grappled with the massive amount of fraud in the pandemic unemployment program, saying the Labor Department’s response to the theft of perhaps hundreds of billions of dollars is “unacceptable.”
Rep. Kevin Brady of Texas, the top Republican on the House Ways and Means Committee, and Rep. Brad Wenstrup, Ohio Republican, said the administration has been particularly bad about trying to claw back the stolen money.
In a letter to Marty Walsh first obtained by The Washington Times, the lawmakers instructed the labor secretary to preserve the department’s documents showing what officials knew about the extent of fraud and when they knew it. They also asked Mr. Walsh to answer a series of letters investigating how fraud has been handled.
Both moves suggest a preview of the kinds of questions the Labor Department and others that oversaw trillions of dollars in pandemic spending are likely to face if Republicans win control of one of the chambers of Congress in elections Tuesday.
“The lack of a sufficient response and action from the administration to date is disappointing and unacceptable,” the Republicans wrote.
Democrats have investigated the pandemic, but their efforts have focused heavily on dinging the Trump administration’s handling of COVID-19.
The Times has reached out to the Labor Department for comment.
Government watchdogs are trying to piece together estimates of total levels of fraud and abuse, though outside estimates for pandemic unemployment insurance (UI) alone run from tens of billions of dollars to nearly half of the roughly $800 billion spent.
Even taking a midpoint estimate of $200 billion or so suggests a fraud of mammoth proportions.
The Small Business Administration’s two major pandemic loan programs were also beset with fraud.
Even specialty programs such as emergency rental assistance are showing signs of having been scammed.
The Republicans said the levels demand attention. They said the model used — pushing money out the door with few accountability checks and trying to recapture it later — had failed.
“The amount of UI fraud is staggering, which is why congressional Republicans have repeatedly sought information about the billions of taxpayer dollars stolen due to fraud and worked to stop the ‘pay and chase’ model and improve accountability in pandemic unemployment programs,” Mr. Brady and Mr. Wenstrup wrote in their letter Thursday. “Today we reiterate our requests for information about the administration’s knowledge of UI fraud and what is being done to recover stolen dollars.”
They pointed to letters from May 2021, February 2022 and May 2022 where they asked for answers. They said they hadn’t received a response to the initial letter and the Labor Department’s answers to the other two letters were “insufficient.”
The Republicans also tried to force a resolution of inquiry — a way to prod information from the executive branch — through the Ways and Means Committee in July but were derailed by Democrats.
Only a tiny fraction of the hundreds of billions of dollars in fraudulent payments has been recovered.
Experts say so much of it, particularly the unemployment money, was paid to criminal syndicates abroad or to U.S. accounts before the money was quickly moved abroad.
Fraud was just one of the problems in pandemic spending.
In some cases, the government issued loans that it expected to be repaid, yet debtors aren’t doing so.
The Small Business Administration has said borrowers owing less than $100,000 wouldn’t face collections.
An inspector general said that meant the government decided not to collect 59,000 loans totaling $1.1 billion as of June. The inspector general warned that hundreds of thousands of other loans were in arrears and, if all were written off, would cost the government another $16 billion.
In other cases, including pandemic unemployment assistance, the government overpaid.
Mr. Brady and Mr. Wenstrup said in their letter that the Labor Department developed guidance to allow states to forgo attempts to collect on those overpayments. The Republicans said they want to know the legal basis for that decision and warned that it could undercut ongoing fraud investigations.
• Stephen Dinan can be reached at firstname.lastname@example.org.
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