SCANDAL OF OUR TIMES – OVERNIGHT.  If the reporting is accurate, this is a scandal of mammoth proportions.  But who will have the guts to investigate?  From the Washington Times: 

As the coronavirus pandemic raged, Uncle Sam was doing more than putting money in unemployed Americans’ pockets — the federal government was also shipping tens of billions of dollars overseas to fraudsters working with the country’s most prominent adversaries, such as China and Russia.

Haywood Talcove, CEO for LexisNexis Risk Solutions’ government division, says 40% of the more than $700 billion spent on unemployment went to fraudsters. 

Most of that ill-gotten money — $175 billion of it — went to overseas actors. And most of that, perhaps $140 billion, went to organizations that are state-sponsored.

“It makes me mad that there hasn’t been enough oversight, that the tools that are needed when you’re distributing this type of money aren’t in place,” Mr. Talcove told The Washington Times. “It allows our adversaries, the Russians, the Chinese, the Nigerians, the Romanians, to use that money to hurt our country.”

He said the money lost to fraud could have provided $160,000 to each individual in the country below the poverty line. Or it could have paid a Harvard University-level tuition for four years for every 18-year-old in the country.

Instead, it ended up in the hands of criminals, from low-level grifters to sophisticated government-backed syndicates.

Nearly two years after the pandemic first broke out in China, and 20 months after Congress passed its first major coronavirus bailout bill, the U.S. is still reeling. 

Virus variants are still breaking out, and the economy is facing a chaotic jobs market and soaring inflation.

Government assistance has begun to ratchet down, but there’s not yet been a full accounting of the $6 trillion or so Congress allocated, including the $717 billion the Committee for a Responsible Federal Budget calculates went to pandemic unemployment assistance.

Congress initially offered a $600-a-week boost on top of what states were already paying, and granted new eligibility to people who’d exhausted their benefits. The program was later extended, though at $300 a week.

The problem, Mr. Talcove said, is that the states just weren’t ready for that kind of money to flow through their unemployment systems. But fraud rings were.

For years, they’d been using the same playbook, combining names and pilfered personal identifying information to scam companies and government agencies like disaster relief or the IRS.

They’d not targeted unemployment because the money had been pretty small potatoes. But a $600-a-week federal payout on top of states’ payouts suddenly made it worthwhile. 

The average pandemic unemployment payout totaled $26,000, or more than the average tax-refund fraud, Mr. Talcove said.

California, which received more than $130 billion of the unemployment money, likely saw tens of billions of dollars in bogus payments made. Even a jurisdiction like the District of Columbia, with about $2 billion in federal assistance, lost about $800 million in bad disbursements, Mr. Talcove estimates.

In Michigan, an auditor’s report earlier this month found the state didn’t require individuals to self-certify the reason they were out of work. That meant people who didn’t deserve the money under the federal rules were nonetheless allowed to get checks in Michigan.

Even after being warned by the feds, Michigan took months to change its system, allowing people to continue to be paid benefits they shouldn’t have gotten. 

The auditor said at least 300,000 bogus claims were paid because of the bungle, and the money won’t be recovered because applicants didn’t actually scam the system.

Mr. Talcove said private companies could never withstand those kinds of losses. “With government, they just get to print more money,” he said.

COMMENT:  This demands a full Congressional investigation.  But will we get it?  I doubt it.  There are, allegedly, too many hands in the cash bucket, too many public figures.  There are reputations to maintain, future presidential candidates to protect. 

The story is just getting reported.  I cannot verify every line of it, but the sourcing appears to be sound, and the detail is compelling.  We were robbed.  Big time.  But who will care?

November 29, 2021