“Grifting” is defined as the act of obtaining money or property illicitly, as through some kind of a confidence game or fraudulent scheme. “Grifters” are typically thought of as small-time swindlers, like the Robert Redford character at the beginning of the film The Sting.
So when the Associate Press called its story about the theft that occurred in connection with federal programs designed to provide COVID-19 aid funds “the great grift,” there’s a bit of a disconnect–because the AP reports that the total amount that apparently was swindled from two programs administered by the Small Business Administration, and thereby from U.S. taxpayers, amounts to more than $200 billion. Even by the colossal spending standards of the modern federal government, that’s a lot of money.
According to the inspector general for the SBA, the money came from two COVID-19 programs: the Paycheck Protection program and the COVID-19 Economic Injury Disaster Loan program. The inspector general’s investigation concluded that at least 17 percent of all of the funds of these two programs were disbursed to potentially fraudulent actors. The SBA itself contests these figures and contends that the inspector general’s report overestimates the actual amount of the fraud, but the Associated Press has independently reported that fraudsters stole about $280 billion from these two SBA programs and a third program intended to help workers who suddenly became unemployed due to the COVID shutdowns. The AP concludes that another $123 billion was wasted or misspent.
The disagreement over the amount of fraud comes because the SBA points out that the U.S. government doesn’t have a generally accepted system for assessing the impact of fraud on federal spending programs. The SBA inspector general says his report “utilizes investigative casework, prior (inspector general) reporting, and cutting-edge data analysis to identify multiple fraud schemes used to potentially steal over $200 billion from American taxpayers and exploit programs meant to help those in need.”
It’s amazing to think that, in these days of enormous federal budgets, there is no accepted way of assessing how much federal money is procured by fraudsters–and it’s also galling to think that nearly one in five dollars spent by two emergency programs designed to help people and businesses hurt by the COVID pandemic went to swindlers. Congress loves to pass sweeping spending bills and say that its job is done, but the SBA inspector general’s report shows that the devil is in the details. If our legislators were really serious about getting spending under control, they need to do the heavy lifting, and develop mechanisms designed to ensure that federal money actually goes to the intended recipients, not grifters.