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We are here today to discuss your White Paper on the SBA’s COVID-19 Pandemic landscape, and also review SBA’s recently issued report on “Protecting the Integrity of the Pandemic Relief Programs.”

First, let me thank you and the federal employees who work for the Office of the Inspector General. The past three years have been extremely challenging for the SBA and your office as well.

The agency executed 14 years of lending in 14 days to help keep small businesses afloat in the pandemic. And your office has been working around the clock issuing reports and launching investigations to combat the potential fraud in the pandemic relief programs.

Turning to your report, your office estimates that there is $200 billion in potentially fraudulent COVID EIDL and PPP loans, which is unsettling.

The SBA issued a report the same day and found that $36 billion of the $1.2 trillion in pandemic relief was likely obtained fraudulently. Further, 86% of the fraud occurred in the first nine months of the pandemic, under the Trump Administration.
The findings in these two reports are wildly different, and quite frankly confusing.

I understand there will be discrepancies in the reporting, but I am concerned over the degree to which the estimates vary. If our committee is going to conduct proper oversight of the SBA, we need to be assured that the reports we are receiving – whether from the OIG or SBA – are measured and accurate. I also look forward to continuing to work with the GAO on its findings as a nonpartisan entity. It is our duty to drill down to ensure we are prepared in the event of another global catastrophe.

Today, I intend to discuss the methodologies that were used to come up with these findings, and address SBA’s concerns that your report overestimated the amount of fraud.

I also would like to learn more about your plan to recover the fraudulent loans and hold the bad actors accountable. To date, your oversight and investigative work has resulted in 1,011 indictments, 803 arrests, and 529 convictions related to the pandemic aid. And approximately $30 billion in aid was seized or returned. Your efforts are to be commended, but more work will need to be done to hold wrongdoers accountable and recover taxpayers’ dollars.

As you know, I, along with Rep. Luetkemeyer, sponsored bipartisan legislation to extend the statute of limitations for fraud in PPP and EIDL programs in the last Congress. These two bills, which became law, sent a strong message that unscrupulous behavior will not be tolerated and those that committed fraud will be held accountable in the years to come.

To capitalize on these two new laws, I understand you will need the full FY 2024 budget request. The Biden Administration requested $47.7 million for the OIG, an increase of $15.6 million from FY 2023 enacted levels. Unfortunately, Republicans in Congress want to pare funding back to FY 2022 levels, and the most recent proposal provides $32 million for the OIG, hindering your ability to recover fraudulent funds

I appreciate your oversight and investigative work and that’s why I am supportive of the President’s request for increased funding your office. I’m fully committed to working with my colleagues to oppose any short-sighted cutbacks to your office.

With that said, I fully expect that you will work closely with the SBA to further refine this data and help to close the gap between the two estimates.