The historic spending of the US government on pandemic aid in 2020 and 2021 was accompanied by a historic amount of fraud and theft, with hundreds of billions of dollars potentially stolen.
But despite many excellent investigative reports on the Covid relief scam, and various government investigations into it, it never dominates the news agenda or carries much political weight. It’s become more of a background problem than a big scandal that everyone pays attention to.
The Covid Relief Bill has had a tremendous impact in helping millions of people across the United States, mitigating the devastating economic blow from the sudden suspension of many in-person activities in 2020. Still, given the huge sums of money involved and how much the right is preoccupied with exaggerated controversies over much smaller sums of money supposedly unused in the presidency, it’s a sophisticated scam. I am surprised that has received at least no attention. Barack Obama’s Stimulus Act.
The main reason for the relatively muted response is that focusing on this is unlikely to bring political gain to either party. Passed the Covid Relief Bill that is on the way. And the details of the fraud don’t really fit into the top priorities of either party’s current message.
how the fraud happened
Scammers and fraudsters pounced as federal and state governments tried to quickly provide pandemic relief funds to people and businesses in need in 2020.
Ken Dilanian and Laura Strickler of NBC News wrote in March that pandemic fraud across three major relief programs could range from $250 billion to $560 billion, according to experts they consulted. (However, it is difficult to estimate the exact amount, so no one knows). The federal government has approved nearly $5 trillion in total pandemic relief, according to The Washington Post.
Former U.S. Attorney Matthew Schneider told NBC it was “the biggest scam of a generation,” adding, “Nothing like this has ever happened.” It wrote that the pandemic relief scam “could be the largest wave of fraud in US history.”
While some perpetrators were domestic, many of the scams targeted internet crimes by foreign scammers operating in countries such as Russia, China and Nigeria. These included willing hustlers trying to get their hands on what was seen as easy money, while others were more organized criminals. Or it turns out that when a state agency offers free money on the internet with minimal protection for identity verification, people will come and try to steal that money.
The main programs covered included expanding unemployment insurance benefits and payroll protection programs. Both of these were signed into the CARES Act of March 2020 by Trump after passing the Democratic House and Republican Senate. That means the Trump administration was in charge of the executive branch when many of the thefts were committed. After President Biden takes office in 2021, Democrats passed their own Pandemic Assistance Plan, extending the expansion of unemployment insurance benefits for a few more months.
Why do politics play out this way
All of the above makes for a messy picture of political responsibility. Republicans cannot frame this as a purely Democratic scandal when Trump signed the bill and was president when much of the theft occurred. Expanded it even further under Biden. So it’s an incentive not to delve too deeply into what went wrong. Unless, of course, some Republican with incentives to make Trump look bad decides to put it on his feet, like potential 2024 presidential candidate Ron DeSantis.
There is a general consensus among Democrats that exaggerating government benefit fraud can be used to discredit the use of government benefits to help ordinary people. There seems to be fear (reminiscent of Ronald Reagan’s “Queen of Welfare” attack). Both mainstream and left Democrats were thrilled by the generosity of the vastly increased unemployment benefits and hoped to somehow make these changes permanent. Thinking too much about all the stolen money doesn’t help here.
But one might think that it is usually anti-spending Republicans who are the big stinkers on issues like this. But as Republicans increasingly fixate on domestic culture wars, the details of the pandemic relief scam (money stolen by foreign hackers) don’t seem to fit very well with their current message.
This is evident in a recent funny exchange on the pages of The Wall Street Journal. Rep. James Comer (R-K.), the incoming chairman of the House Oversight Committee, wrote an op-ed on the pandemic relief scam, along with his five other issues he plans to investigate. But his most specific concern was the use of pandemic relief funds by some states and local governments for “electric buses and controversial ideologies.” In an earlier press release, his office claimed to have found evidence that pandemic relief funds “woke the initiative.”
American Enterprise Institute Fellow Matt Weidinger responded to Comer’s article in a letter to the WSJ urging them to focus on the bigger picture of the scam so it doesn’t happen again. “Criminal gangs, including those based in Russia and China, have used stolen personal information to seize U.S. tax dollars on an industrial scale,” Weidinger writes. This can be read as: Focus on the real issues, not just the culture wars crap. We’ll see if the Republican House majority will listen next year.
Finally, and more broadly, this is an unprecedented situation, where even though many fraudsters were seeking help, many who needed help got help, so the political system and public There could be general feelings of generosity from both. Admittedly, this may be a lot. But the last few years have been tough for everyone, haven’t they?