America's Talking - Episode 84: How Much Pandemic Aid Was Lost to Fraud? Answer Still ‘Impossible to Estimate'

Episode Date: February 3, 2023

Join The Center Square's Executive Editor Dan McCaleb and Reporter Brett Rowland as they discuss a U.S. House committee hearing made clear the total cost of fraud and waste in taxpayer-funded pandemic relief programs remains unknown. An oversight committee hearing Wednesday highlighted the cost of fraud in taxpayer-funded pandemic relief programs as federal agencies continue to tally losses. Hays County, Texas, resident Brandon Dunn lost his son to illicit fentanyl poisoning last year. His son and two other teenage boys from the same rural county died of fentanyl overdoses less than 60 days apart. --- Listen to Other ATN Productions: America's Talking: An interview podcast hosted by Austin Berg. Guests include professors, journalists, artists, business and nonprofit leaders, authors, and more. Everyday Economics: Join economist Dr. Orphe Divounguy and Chris Krug as they discuss global markets, inflation, and everything else that will help you understand the economic world around you. Future of Freedom: Future of Freedom is a bi-weekly podcast highlighting the work of the non-profits which are shaping the future of the freedom movement. Listeners will hear civil, intellectual conversations about why the organizations exist, what their mission is, and how they work to achieve it. Hosted by Scot Bertram. Support this podcast: https://podcasters.spotify.com/pod/show/america-in-focus/support Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hello, everyone, and welcome to the America and Focus podcast powered by the Center Square. American Focus is a production of America's Talking Network. I'm Dan McAulib, executive editor of the Center Square Newswire Service. To support great podcasts like this one, please donate by clicking the link in the show description. Joining me today for a second executive week is Brett Roland, investigative reporter at the Center Square. Casey Harper, the Center Square's bureau chief, took the week off to spend some time with his wife and their new boy. baby boy, Brett, how are you? I'm great. How are you, Dan?

I'm doing well. You don't sound so great. Brett, sounds like you'd have a bad, I don't know, head cold or something? Yeah, I've got a cold, but I'm feeling better than I have been for the last couple days. So, um, in comparison to how I felt on Tuesday, this is way better. Well, way to be a trooper filling in for, uh, Casey Harper again this week. We are recording this on Friday, February 3rd. Brett, with Republicans now holding. a slight majority in the U.S. House. They've launched a couple of different investigations, one that you've been following. They're holding hearings on the tens of billions of dollars and fraud associated with all

the COVID-19 relief funds, Congress approved, and federal agencies have doled out since the start of the pandemic in March 2020. Tell us what you've learned. Well, the panel and the House committee that's looking into this is very partisan. and there's a lot of arguing back and forth. Democrats are trying to blame the Trump administration. Republicans are blaming Democrats. But once you get past all that, it starts to get really interesting.

One of the things that came out of the hearing this week was that essentially they don't really know how much money was lost to fraud and waste in these programs yet. And that number might not be known for years. In fact, there's still hundreds of pending fraud cases. There's new cases every week that are popping up from unemployment insurance. So the extent of this fraud is really not going to be known for some time. Now, they tried to throw around some estimates like $570 billion. But the experts are saying, really, it's just too early to know. It basically said that it's impossible at this point to estimate the full extent

of the fraud right now. You just threw that one number out there. And it's a complete guess. It's an estimate. So let's be clear about that. $570 billion. Yeah. So that is one of the numbers that's out there.

So specifically the Comptroller General of the United States was asked about this by Paul Gosser, a Republican from Arizona. He asked, he said, you know, there's been some estimates, $560 billion. is that accurate? And he basically said there's thousands of people who have pled guilty. There are hundreds of people

who are still pending charges. We're not going to know. This is going to go on for a while. He said there's indications of widespread fraud, but just how much it's impossible to know. So he couldn't even put a figure on it. Now, people really wanted to get a number out of this

hearing, but it didn't come out. There is no solid number. of exactly how much fraud there was. Now, it's important to remember that even if it, you know, even if it's far above $560 billion, that there was $4.1 trillion in federal aid or sorry, $4.6 trillion in pandemic aid that went out the door. So you would expect, given that amount of money, that there would be some amount of loss, but we don't know exactly the extent of that loss or waste or fraud or abuse right now. I'm no math genius, but using those two numbers, again, estimates, that would be almost like one in five dollars that were paid out during the pandemic, went to fraudsters.

So that could be. And I think that as better numbers come in and there's more sort of tallying up, those will become better known. One of the issues that was brought up by all three of the people who, all three of the experts that testified at this hearing this week was that there was a lot. of safeguards that just weren't ever put in place, safeguards that, lessons that we should have learned from the Great Recession, lessons we should have learned from just years and years of government fraud. I mean, one of the things that came out was that the federal government's not very good at making accurately paying the right people, the right amount of money. And that's been a long-going problem.

And organizations or agencies like the government accountability office have for years urged federal agencies to put in place a lot of these safeguards and a lot of like fraud abuse framework and protocols that just haven't been done. And this fraud is evidence that that work wasn't done. The federal government wasn't prepared for this, but they should have been. Let me just pull out one of the numbers from your story, this committee that's in. investigating this widespread fraud, identified more than 69,000 questionable social security numbers used to obtain $5.4 billion from the small business administration's COVID-19 economic injury, disaster loan program, and paycheck protection program. Aren't social security numbers, isn't there a way to identify whether they're legitimate social security numbers? Yes, there should be.

You and I make every day we make transactions online. We file our taxes online. There are programs in place to verify identity over the federal government. This hasn't really been their strong suit. And now some of this, they said that it could have been just like on those social security numbers. Some of those social security numbers, it's not that they were like didn't match the name. Some of them had never been issued before, Dan. So it was like, you know, it should have been a clear indication.

that there was fraud. So it's a combination of, yes, there was some sophisticated fraud, and there were some people that were out to scam the system. But there was also a lot of just things that weren't in place. For example, a lot of these loans and grants and money that went out the door was based on self-certification of the businesses or the employer saying, oh, I have 10 employees and we did $4.5 million in business. And they said, click the box if you self-certify.

But, I mean, you and I know that there's got to be a higher threshold for when you're sending out that much money that quickly, you've got to be a little bit more careful about what you're doing with it. I think American taxpayers expect that kind of consistency. And one of the other things that came out in testimony is that federal agencies didn't even use the U.S. Department of Treasuries do not pay list. They have this list of people who have questionable dealings with the government or are in arrears or there's many ways to make it out of this do not pay list. But no one was using this as a cross-referencing tool. And had they, they could have saved billions of dollars from even going out the door in the first place. And as you referenced a few minutes ago, you're working on a story today pushing this story forward that there are several government watchdog groups that even before the pandemic, years before the pandemic began in 2020, strongly urged the federal government to put these

checks and balances in place because of fraud before the pandemic, yet they didn't do that. Tell us about what, tell us what you're working on today. Yeah. So a lot of this came, there's several investigators general that are looking into this, but one of them, the Comptroller General of the United States, Gene Dodaro, he testified essentially that when lawmakers passed, the fraud. Reduction and Data Analytics Act in 2016, that required agencies to implement a lot of these fraud prevention efforts that the GAO's office had said, you need to do. But those things just

never happened. He said agencies were slow to implement the legislation and were not prepared to distribute the aid. But it's not as if they didn't have a chance or that they, you know, yes, everybody who got up and testified said, yes, this money need to get out quickly. But they all said it needed to get out quickly and correctly. And the preparations just were not in place for that. So you can blame, you know, the Democrats want to blame the Republicans. And Republicans want to blame the Democrats. But this stuff, to me, is bipartisan failure.

I mean, both sides should have been, hey, we have these rules. We pass this law. Let's implement this law. Let's, you know, actually get things in place. And I understand the federal government's a huge bureaucracy. But to me, there's not a whole lot of excuse for this. Yeah, interesting and sad at the same time. We'll continue, of course, following this investigation into wasted taxpayer dollars.

But let's move on. Brett, also this week, House Republicans on the Judiciary Committee launched committee hearings on the border and fentanyl crisis. Our correspondent in Texas, Bethany Blige. frankly covered that for us, but I know you've been following it somewhat too. What happened at the Judiciary Committee this week? I mean, there was some powerful testimony from Brandon Dunn, who lost his son to fentanyl poisoning. He has lost two sons to fentanyl overdoses less than 60 days apart. His son, Noah, was a sophomore in high school. He was murdered

by a drug dealer selling counterfeit percassette pills. Instead of percocet, it was fentanyl. And he didn't know how much fentanyl he was taking and died in an overdose. But the saddest part here is that this story is by no means a one-off. There's hundreds and thousands of deaths like this each year. And the number is growing greatly, because of fentanyl, it was a powerful drug, certainly.

And it's replacing a lot of better known or users were able to better regulate their heroin intake, but with a more powerful opioid, they don't know the dosage limits, and there's been a lot of overdoses as a result. And this is also not just a border story. it's not just border states that need to worry about this. Fentanyl is everywhere. Now, we've written stories out of Washington state, out of Pennsylvania, out of pretty much every state in the country,

that Fentanyl, elicit fentanyl, has made it to their communities, and because of, as you pointed out, it's much more powerful than other opioids, just an amount that weighs less than a mosquito. We've reported this, too, can kill. And what we know is that the precursors of fentanyl are made in China, they're shipped to the Mexican drug cartels, who then put it into these other common opioids to make it look like a regular opioid pill.

And many people, they just don't know what they're ingesting if they take this. because fentanyl has been secretly put into the drug. Right. Fentanyl has been a huge problem. I think that for a long time it was manufactured in China. I think now it's been manufactured by Mexican cartels and brought directly in. And I mean, the cartels, depending on how you look at it, are filling a need when that's America's need for opioids. And people continue to take opioids.

There are considers to be opioid addiction problems. And I don't see this going away soon. I think interdiction is a great strategy. But it's obviously not working as well as it could. I mean, the fentanyl is going to continue to pose a problem. Opioid deaths in general are going to continue to pose a problem. And I don't think this is the last story that we're going to write about this problem at all. This isn't going away anytime soon.

And of course, Republicans blame the Biden administration and the changes to border policies that he's implemented since he first took office. Of course, we know that illegal border crossings have sur-skyrocketed since President Biden took office. So border security is a related issue to this fentanyl crisis. Yes, for sure. And how that border policy plays out could end up impact. acting a huge number of things, but certainly fentanyl overdose deaths could be one of them. All right. We will at the Center Square, of course, continue covering the border and fentanyl crisis story.

Read all of our good work at thecentersquare.com. Right, let's move on. We talk about taxes a lot at the Center Square. That's one of our key portion of our mission. Let's talk about, I don't know, something that could be called a secret tax or a backdoor tax. And that's how that's all the fines and fees, whether it be from traffic tickets, red light cameras, court costs, et cetera, that are assessed to Americans. Reason Foundation released a study this week that essentially rank the states and how much they assess fines and fees against their residents. What can you tell us here?

Well, I mean, this is just an amazing story. So essentially, local governments across the country pocketed about nine. billion dollars in fines and fees in 2020. But the states that were leading the way and sort of nickel and doming the residents the most were New York, Illinois, Texas, and Georgia, all were paying out more than $35 each on average per capita. So, I mean, that's just like every time you turn around, you're paying an extra tax fine fee to the state or local government. And this is a huge amount of money. I mean, $9 billion. It's, it's, you know, when you're hit up for $10 or $35 or $100 parking ticket or a traffic ticket,

you know, that one-time expense doesn't seem so much. But when you look at it and how it's essentially become a different form of taxation, and you see some local governments who are basing a huge percentage of their revenue on citations or ticket revenue, it becomes it becomes something else entirely. It becomes taxation. Brett, you and I are both based in Illinois in the suburbs of Chicago

and a trend starting, I don't know, 10, 12, maybe a little bit more than that years ago were these red light cameras that local municipalities, mayors, police chiefs, etc., said we're all about safety. We want people to slow down and not run through red lights, but I think you and I assume you agree with me, but I don't know this for sure. It's not about safety. It's a money grab by these local

municipalities. Yes, and there's been a lot of great research that's been done around this. I mean, a lot of them in a town that you and I both know, there is a red light camera and that most of the red light violations at this particular intersection are not people running the red light, but rather people failing to make a full, complete stop before making a right turn. So that's certainly not the most dangerous thing that you can do at an intersection. Yes, you should come to a full and complete stop. But a lot of these really were set up to get ticket revenue. In Illinois, we've seen these cameras essentially grew like vines throughout the suburbs

in the city. And now they've been slowly taken down as people get more and more upset that, hey, they're not, A, doing what they said. You said they were going to do. They're not making a road safer. and we're getting ticketed every time for these minor infractions, and it's adding up to millions and millions and millions of dollars. And I think this hits those who don't make a lot of money the hardest, because then they have, if they can't pay, they have to go to court,

or then they continue driving because they have to get to their job, and then they get a citation for drive without a license or driving, you know, with some other moving violation, and it sort of adds up and adds up, and here we've got $9 billion. Wow. Craziness. Government needs its money and they'll take it anyway. They can get it, I guess. Let's move on though, Brett. You wrote another story this week about two Republican congressmen who filed legislation that would cap the pay of diversity, equity, and inclusion employees at the Department of Defense. Tell us about this story. This one, in my view, this is my opinion here, Dan, but I think this is somewhat clever, but misguided. So it's interesting.

So two Republican congressmen, they filed legislation that would limit pay for diversity, equity, inclusion employees at the Department of Fence. And they would limit it to a specific amount to that that is paid to frontline soldiers, which is about $31,000 per year. That's the rank there is E5 for people who know a lot about defense or military ranks. But so they would limit those roles to $31,000 a year. I think that's certainly an interesting. argument and they make, say, you know, if you're working on this device or in some basis

can be a device of ideology, you shouldn't be paid more than the soldiers who are protecting our countries. And I get that, but I don't know that that actually works. I don't know that one job is equatable to the other. Being a frontline soldier requires a different skill set, I'm sure, than trying to make an organization more diverse. Now, whether you think our Department of Defense needs to be more diverse, I guess is a different topic. And I I'm sure that you could make the case that it does need to be more diverse. But whether this is the way to go about it, I'm not sure. What did you think about this one, Dan?

Well, I guess the first thing that kind of surprised me about this one is that we pay our front-line soldiers just $31,000 a year. Casey Harper last year, you know, when inflation was surging and, you know, the costs of groceries and everything else had surged, wrote a story about the Department of Defense actually read. recommending that its frontline soldiers get on food stamps because what we pay them, $31,000 a year, apparently, it wasn't good enough to support themselves and their families. So that's sort of a secondary point, but that is shocking. And of course, at the Center Square, we cover the news with the taxpayer's sensibility. How does government spending affect taxpayers? but I would certainly argue in this case, our frontline soldiers should make more than $31,000 a year.

Now, to take that further to this diversity, equity, inclusion employees, yes, it does take a different skill set, but should they be paid more than our frontline soldiers? I don't know. At least it's starting a conversation, I guess. I agree with you. And it's an interesting conversation to have. How do we value, how do we determine pay for government workers? You know, and a lot of times, especially in the private sector, pay tends to be dependent on how many employees you're responsible for or what size your budget that you're responsible for or your duties or responsibilities. We know that that's not always the case in public sector pay. But I certainly think that there's some interesting conversations to be had around this. and I think that we'll continue to see more of them.

I doubt this bill is going to pass. And I think it's also important to remember that the Department of Defense has a $773 billion budget. So there's a lot going on within that department. I don't think that this bill would end up, one, I don't think it's going to pass. Two, I don't think it would end up saving taxpayers a ton of money. But I think it does raise some good. questions about how we value the employees that we hire and how we decide on pay for different jobs.

Brett, we just have about one minute or so left. So quickly we want to talk about one final story, and that's two members of Congress representing the state of Washington have filed a bill that would essentially bar members of the Chinese Communist Party, including businesses, from buying agricultural land. in the U.S. That's been a national security concern for a number of years now. What can you tell us here? So the two Republican lawmakers, U.S. reps from Washington, Kathy McMorris, Dan and Dan Newhouse, they've introduced the prohibition of agricultural land for the People's Republic of China. So this would essentially keep the Chinese Communist Party from owning American agricultural real estate.

they specifically cite issues with companies buying up land in Washington. I know that you and I have seen it here in Illinois and other agricultural areas as well. And I think there's definitely a conversation to be had here, too, about national security and what we want, how we want to protect our agricultural land, which it can be very valuable. Story that will continue, also continue to follow at the CenterSquare.com. But Brett, thank you for joining me again this week. That's all the time we have. A reminder to our listeners, you can find all of the Center Squares podcast at America's Talking.com.

Take a look. Please subscribe. There is no cost. This has been the American Unfocused Podcast for Brett Rowland. I'm Dan McKalep. We'll talk to you next week.