We've heard a lot of about the shortcomings of the Paycheck Protection Program (PPP) and the Small Business Administration's (SBA) struggle to create a realistic system for forgiveness that doesn't enable fraud, but don't sleep on the SBA's other disaster program, the Economic Injury Disaster Loan (EIDL).
At this point, it appears the SBA's other program may have been more widely abused than the paycheck program.
A new report from SBA Inspector General Michael Ware found that a truly staggering amount of money was approved for fraudulent businesses that don't exist.
Look at this shit:
In one case, the agency approved 10 loans for 10 different bathroom renovation companies in the same city as part of the SBA's Economic Injury Disaster Loan (EIDL) program.
"However, we were not able to locate any bathroom renovation companies in that company's name in that city. Additionally, the email address indicates it is for a burrito restaurant, which we did locate in that city. SBA disbursed $1.4 million for these potentially fraudulent companies," the report said.
In another case, applicants using the same email address at a fish market applied for 85 loans "in various company names of jewelry stores, psychiatric services, construction, gas stations, and other non-seafood businesses." All but one of the loans were approved.
Overall, the report says the SBA approved $78 billion in program applications to potentially fraudulent or ineligible applicants, although not all of that was ultimately disbursed.
$78 billion!
SBA Administrator Jovita Carranza responded to the SBA inspector general's report by saying it "does not fully and accurately portray SBA's highly successful delivery of an unprecedented volume of disaster assistance" which is just magnificent bullshit.
The Economic Injury Disaster Loan (EIDL) program totaled about $378 billion in funding appropriated by Congress so, if $78 billion of it was approved for fraudulent applicants, that means almost 21 percent of the program was wasted.
I suppose the most generous thing you could say about this is that even those who were fraudulently approved probably spent the money on something, even if it was a new Corvette, so in that sense it may have been economically stimulative in any case.
I still believe we should have just mailed more or bigger checks directly to Americans and skipped the middle-men. All the fraud is with the middle-men.