A recent report from the Small Business Administration's (SBA) inspector general told us that as much as $76 billion in COVID-era grants and loans may have been lost to fraud, but how exactly did that happen?
We know that human actors at the agency were under pressure to approve grants and loans as quickly as possible during an economic crisis, but while that's understandable, Bloomberg reports that the approval process never actually came down to human action. The computer system did everything.
The Trump regime spent $750 million on a new computer system to implement the program and the system evidently had no way to cross reference if an applicant business actually existed.
The computer system was designed to run fraud checks on the person submitting the application, the bank account designated to receive the money, even the Internet address used to submit it. But it had no reliable way of checking to see if a small business actually existed.
No matter how implausible an applicant’s business profile, as long as the computerized checks were cleared, a grant would be issued. By the time a human loan officer reviewed the file, it was too late.
Loan officers grew accustomed to seeing ridiculous applications easily score grants. There were purported farmers using an address in the middle of a city and multiple small businesses supposedly located in the same single-family home, each claiming to have 10 employees, the minimum to qualify for the full $10,000. One phony business profile showed up again and again: a sole proprietorship with exactly 10 employees and a mere $24,000 in annual revenue. [...]
It’s unclear why the designers of Rapid Decision didn’t give it a way of identifying phony businesses. The Internal Revenue Service assigns a unique ID to every U.S. business that pays employees, but the SBA didn’t require that all businesses claiming to have employees submit ID numbers.
I'm just saying, if you actually intended to design a system that could be taken advantage of, it might look like this: a system that automatically wires money to virtually anyone who clicks.
Bloomberg's report goes into greater detail about the "viral" nature of fraud, including street-by-street campaigns to recruit people to abuse the system. Foreigners also secured cash from the program by simply opening new bank accounts or recruiting an American to transfer money for them. It reads like the biggest scam bonanza of all time.
You know, for as long as I can remember in my life, from the time my first political memories were formed in the 1990s, Republicans have screeched about wasteful spending and abuse, but there is no one in the world; no other governing body or party on the planet that is worse at wasteful spending than Republicans. You could literally burn piles of money and that would at least keep you warm. Republicans figuratively burn through mountains of money with nothing to show for it. Wasteful spending is their superpower.
The Iraq war, for example, is not directly connected to the coronavirus pandemic or fraud at the Small Business Administration, but consider the staggering amount of money in the trillions of dollars that we've wasted under Republican administrations over the past 20 years. We could have literally gone to Mars for the cost.