House panel finds fraud and abuse in PPP business aid program
Congressional investigators say they have identified lapses pointing to possible fraud and abuse in the Trump administration’s coronavirus relief program, including more than $1 billion awarded to small businesses that received multiple loans.
A report, issued Tuesday by a House subcommittee, says a lack of government oversight and accountability for the $600-billion-plus program “may have led to billions of dollars being diverted to fraud, waste and abuse, rather than reaching small businesses truly in need.”
The Small Business Administration’s Paycheck Protection Program was a signature piece of the government’s economic aid program responding to the pandemic. The nation’s small businesses received a gut punch in the spring as huge swaths of the economy were shut down, millions lost jobs and consumers curtailed spending.
The program was overseen by the Treasury Department. Because the SBA only audited loans exceeding $2 million, about 99% of the awards received little or no oversight, the investigators said.
The loans are forgivable if businesses use the money to keep employees on the payroll or rehire workers who have been laid off.
The investigation by the House Select Subcommittee on the Coronavirus Crisis also found that more than 600 loans, totaling $96 million, went to companies that were excluded from doing business with the government because of previous violations. And more than 350 loans, worth $195 million, were awarded to government contractors with “significant performance and integrity issues,” the report said.
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