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	<title> - WASTE, FRAUD, AND ABUSE GO VIRAL: INSPECTORS GENERAL ON CURING THE DISEASE</title>
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	[House Hearing, 118 Congress]
	[From the U.S. Government Publishing Office]


	WASTE, FRAUD, AND ABUSE GO VIRAL:
	INSPECTORS GENERAL ON CURING
	THE DISEASE

	=======================================================================

	HEARING

	BEFORE THE

	SUBCOMMITTEE ON GOVERNMENT OPERATIONS AND THE FEDERAL WORKFORCE

	OF THE

	COMMITTEE ON OVERSIGHT
	AND ACCOUNTABILITY

	HOUSE OF REPRESENTATIVES

	ONE HUNDRED EIGHTEENTH CONGRESS

	FIRST SESSION

	__________

	MARCH 9, 2023

	__________

	Serial No. 118-10

	__________

	Printed for the use of the Committee on Oversight and Accountability

	[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


	Available on: govinfo.gov
	oversight.house.gov or
	docs.house.gov

	__________


	U.S. GOVERNMENT PUBLISHING OFFICE
	51-631 PDF WASHINGTON : 2023

	-----------------------------------------------------------------------------------


	COMMITTEE ON OVERSIGHT AND ACCOUNTABILITY

	JAMES COMER, Kentucky, Chairman

	Jim Jordan, Ohio Jamie Raskin, Maryland, Ranking
	Mike Turner, Ohio Minority Member
	Paul Gosar, Arizona Eleanor Holmes Norton, District of
	Virginia Foxx, North Carolina Columbia
	Glenn Grothman, Wisconsin Stephen F. Lynch, Massachusetts
	Gary Palmer, Alabama Gerald E. Connolly, Virginia
	Clay Higgins, Louisiana Raja Krishnamoorthi, Illinois
	Pete Sessions, Texas Ro Khanna, California
	Andy Biggs, Arizona Kweisi Mfume, Maryland
	Nancy Mace, South Carolina Alexandria Ocasio-Cortez, New York
	Jake LaTurner, Kansas Katie Porter, California
	Pat Fallon, Texas Cori Bush, Missouri
	Byron Donalds, Florida Shontel Brown, Ohio
	Kelly Armstrong, North Dakota Jimmy Gomez, California
	Scott Perry, Pennsylvania Melanie Stansbury, New Mexico
	William Timmons, South Carolina Robert Garcia, California
	Tim Burchett, Tennessee Maxwell Frost, Florida
	Marjorie Taylor Greene, Georgia Becca Balint, Vermont
	Lisa McClain, Michigan Summer Lee, Pennsylvania
	Lauren Boebert, Colorado Greg Casar, Texas
	Russell Fry, South Carolina Jasmine Crockett, Texas
	Anna Paulina Luna, Florida Dan Goldman, New York
	Chuck Edwards, North Carolina Jared Moskowitz, Florida
	Nick Langworthy, New York
	Eric Burlison, Missouri

	Mark Marin, Staff Director
	Jessica Donlon, Deputy Staff Director and General Counsel
	Bill Womack, Senior Advisor
	Ryan Giachetti, Counsel
	Mallory Cogar, Deputy Director of Operations and Chief Clerk
	Contact Number: 202-225-5074

	Julie Tagen, Minority Staff Director
	Contact Number: 202-225-5051
	------

	Subcommittee on Government Operations and the Federal Workforce

	Pete Sessions, Texas, Chairman
	Gary Palmer, Alabama Kweisi Mfume, Maryland Ranking
	Clay Higgins, Louisiana Minority Member
	Andy Biggs, Arizona Eleanor Holmes Norton, District of
	Byron Donalds, Florida Columbia
	William Timmons, South Carolina Maxwell Frost, Florida
	Tim Burchett, Tennessee Greg Casar, Texas
	Marjorie Taylor Greene, Georgia Gerald E. Connolly, Virginia
	Lauren Boebert, Colorado Melanie Stansbury, New Mexico
	Russell Fry, South Carolina Robert Garcia, California
	Chuck Edwards, North Carolina Becca Balint, Vermont
	Eric Burlison, Missouri Summer Lee, Pennsylvania
	Jasmine Crockett, Texas


	C O N T E N T S

	----------
	Page

	Hearing held on March 9, 2023.................................... 1

	Witnesses

	Mr. Larry D. Turner, Inspector General, U.S. Department of Labor
	Oral Statement................................................... 5

	Mr. Richard Delmar, Acting Inspector General, U.S. Department of
	the
	Treasury
	Oral Statement................................................... 7

	Mr. Sheldon Shoemaker, Deputy Inspector General, U.S. Small
	Business Administration
	Oral Statement................................................... 8

	Written opening statements and statements for the witnesses are
	available on the U.S. House of Representatives Document
	Repository at: docs.house.gov.

	Index of Documents

	----------

	* Final Report of the Select Subcommittee on the Coronavirus
	Crisis, December 2022; submitted by Rep. Mfume.

	* Statement for the Record; submitted by Rep. Connolly.

	* Questions for the Record: to Mr. Delmar; submitted by Rep.
	Sessions.

	* Questions for the Record: to Mr. Delmar; submitted by Rep.
	Mfume.

	* Questions for the Record: to Mr. Delmar; submitted by Rep.
	Connolly.

	* Questions for the Record: to Mr. Turner; submitted by Rep.
	Sessions.

	* Questions for the Record: to Mr. Turner; submitted by Rep.
	Mfume.

	* Questions for the Record: to Mr. Turner; submitted by Rep.
	Connolly.

	* Questions for the Record: to Mr. Shoemaker; submitted by Rep.
	Sessions.

	* Questions for the Record: to Mr. Shoemaker; submitted by Rep.
	Mfume.

	* Questions for the Record: to Mr. Shoemaker; submitted by Rep.
	Connolly.

	* Questions for the Record: to Mr. Shoemaker; submitted by Rep.
	Garcia.

	Documents are available at: docs.house.gov.


	WASTE, FRAUD, AND ABUSE GO VIRAL:
	INSPECTORS GENERAL ON CURING
	THE DISEASE

	----------


	Thursday, March 9, 2023

	House of Representatives

	Committee on Oversight and Accountability

	Subcommittee on Government Operations and the Federal Workforce

	Washington, D.C.

	The Committee met, pursuant to notice, at 2:02 p.m., in
	room 2154, Rayburn Office Building, Hon. Pete Sessions
	(Chairman of the Subcommittee) presiding.
	Present: Representatives Sessions, Comer, Palmer, Higgins,
	Biggs, Donalds, Timmons, Greene, Boebert, Edwards, Burlison,
	Mfume, Norton, Connolly, Stansbury, Garcia, Frost, Balint, and
	Casar.
	Mr. Sessions. The Subcommittee on Government Operations and
	the Federal Workforce will come to order.
	I want to thank each of you for being here. It is now 2 on
	March the 9th. And with agreement--we are the minority and the
	majority--we are delighted to have the hearing today, which we
	are going to make sure that we get closer to working for a more
	efficient government on behalf of the taxpayer.
	Without objection, the Chair may declare recess at any
	time.
	I recognize myself for the purpose of making an opening
	statement.
	I would like to welcome each of you to the first hearing of
	the newly configured Government Operations and Federal
	Workforce Subcommittee. I would like to offer welcome to the
	Ranking Member of the Committee, my friend, Mr. Mfume. Mr.
	Mfume, I look forward to working with you. And as we have
	agreed, even though this is all brand new, we are going to work
	together, but you should expect me to approach you about the
	items that I think are important, and I want to hear from you
	about those items which you believe we should, with joint
	agreement, undertake together.
	Today, we will continue the work of this Committee that
	began last month to examine what is called waste, fraud, and
	abuse in the COVID relief programs. Already the Committee's
	work has made an impact in the form of the Biden
	Administration's long overdue anti-fraud plan, which was
	formally released in the wake of the full Committee hearing
	last month. We have yet to see the details of the plan, but
	this Administration has made certain that they will brief us on
	this issue because it is important to them, it is important to
	us, and it is important to the American people.
	So here we are, trying to work together, calling for
	bipartisan legislation, but we must do this, and it really sits
	right now on the feet of the Administration to make sure we all
	work together. We are not going to blame anyone. We want to run
	to fix, not fight. But hearing the experts last month, this
	Committee heard that Federal and state agencies were not
	prepared for this massive undertaking, which included a lot of
	money, of funds, and created an unprecedented demand and
	accelerated timeframes to deal with a pandemic. But the reality
	is fraud and improper payments in Federal programs have been
	growing, and these are not new problems. They are problems that
	must be addressed, and I have a sneaking suspicion we are going
	to find out we may be in the same circumstance again. So, it is
	up to all of us to work together to find better answers.
	Another reality is that the amount of fraud and improper
	payments in the COVID relief program is so large that it is
	larger than the GDP of many other countries. So, we need to
	look past the past and determine the underlying problems, but
	we need to focus on the present, what is being done, and the
	future, what needs to be done. We need to determine what we
	need to do in terms of additional legislation. If it is
	required, we want to approach it as best we can together. And
	the statute of limitations on fraud cases likely to be
	extended, we will ask your opinion on that.
	As our work continues, we need to examine why existing
	Federal capacities and capabilities, like the Treasury's Do Not
	Pay system, apparently did not serve as the most failsafe
	system during the pandemic. We need to examine efforts to
	protect against identity theft, a main factor in COVID fraud.
	This will lead us to GSA's Login.gov, intended to be a one-stop
	shop to verify the identity of those seeking Federal benefits.
	We need to hear from the private sector, both in terms of what
	technologies exist to protect against fraud, but also to make
	sure that we are bringing to bear those things which allow
	government quickly and ably to prepare itself for crisis. So,
	there is a lot that needs to be done as part of this: adopting
	a recurrent oversight model for the Subcommittee to track
	agency progress.
	I want to thank today's witnesses. Mr. Turner, thank you
	for taking time to be with us today, Inspector General from the
	Department of Labor; Mr. Delmar, Acting Inspector General at
	the Department of Treasury; and Mr. Shoemaker, Deputy Inspector
	General at the SBA, Small Business Administration. So, Mr.
	Shoemaker, I understand you got this promotion six months ago,
	so congratulations. We are delighted that you are here. I also
	understand that you are appearing in place of Mr. Ware, the
	Inspector General, since he is at a memorial service for his
	grandmother. I hope that you would convey to him that your
	presence today is appreciated and that we wish him the best in
	this time of need for his family matters.
	With that, I would now like to recognize the Ranking
	Member, my friend, Mr. Mfume, for any opening statement that he
	would choose to make. The gentleman is now recognized for the
	purpose of making an opening statement.
	Mr. Mfume. Well, thank you very, very much, Mr. Chair. I
	want to thank you for convening this meeting. I agree with what
	you said earlier that our purpose here is to find out what went
	wrong and how to make sure it doesn't go wrong again. And I
	want to add my thanks again to the three of you, as the
	Chairman just mentioned, individually and collectively, for
	what you do. And I know I keep saying it is a hard job, but it
	is a hard job because when it is done right, it really requires
	a great deal of going beyond the job descript and working to
	find ways to make us better as a Nation. So, thank you again,
	Mr. Sessions. I am looking forward to working with you. This is
	our inaugural meeting of this Committee that has been
	established in the 118th Congress, and I am hoping that we can
	move forward in many ways on bipartisan issues to come up with
	solutions because at the end of the day, that is why we were
	all sent here.
	Today, the Oversight Subcommittee on Government Operations
	and the Federal Workforce convenes. As I just said, it is the
	first hearing of the 118th Congress. As Ranking Member of the
	Subcommittee and as a Member who represents a large population
	of Federal workers, I look forward to supporting our Nation's
	hard working civil servants. And the American people, in my
	opinion, deserve a Federal Government that delivers
	responsible, credible, and effective policies and programs.
	Though we may differ sometimes in terms of our strategies and
	our programs, I believe that the Chair and I are seriously
	committed to serving the constituencies to the best of our
	abilities. And Chairman Sessions, again, I am looking forward
	to the many days and weeks ahead as we try to do that together.
	Today, we hold the second hearing of this Congress focused
	on the subject of evaluating improper payments and fraud in
	pandemic programs. I want to remind my fellow Members that
	millions of Americans, regardless of their political
	affiliation or their geography, felt the effects of the global
	pandemic when individuals and families and communities
	desperately needed a lifeline. Congress acted swiftly to
	provide expanded unemployment benefits to workers. We directed
	administrative funding to states that were struggling to
	process skyrocketing unemployment insurance claims, and these
	expanded benefits over time helped millions of Americans to
	make ends meet. And my office alone worked with hundreds of
	constituents throughout the Greater Baltimore area to ensure
	that they receive these crucial dollars, these real dollars
	that were meant for real people.
	The pandemic triggered, as we all know, economic
	uncertainty, particularly the disastrous things that have
	happened to our small business community, so much so that by
	April 2020, an estimated 45 percent of those businesses across
	the country unfortunately were forced to shut their doors.
	Thankfully, Congress's Paycheck Protection Program authorized
	the Small Business Administration to distribute a record $800
	billion to help affected businesses across the country continue
	to pay their employees. Unfortunately, what we have seen
	previously failed to implement the safeguards that we in the
	Congress explicitly designed by statute, which exacerbated, in
	my opinion, the pandemic fraud.
	On the other hand, Congress and the Biden Administration
	took decisive action to identify improper payments and to
	combat fraud. For example, congressional Democrats passed the
	American Rescue Plan, which included additional funding for
	Federal offices and offices of inspectors general to be able to
	do what all of you are doing, that is to combat fraud. We
	established the COVID-19 Fraud Enforcement Task Force, as you
	are aware. And in the previous Congress, while I served as vice
	chair of the Small Business Committee, we held substantial
	hearings on COVID-19 pandemic relief programs. We participated
	in numerous bipartisan briefings with the SBA. I co-sponsored
	and we all moved to pass H.R. 7352, the PPP and Bank Fraud
	Enforcement Harmonization Act of 2022, which, again, was a
	bipartisan bill to extend the statute of limitations and to be
	able to go after the bad guys that continued to commit PPP
	fraud. These are real solutions that helped the agencies to
	crack down on fraud and to make sure that our Federal dollars
	were being used and being sent to where they were intended to
	go.
	In March 2020, the Subcommittee on Government Operations,
	led by my friend, Mr. Connolly of Virginia, held a hearing to
	explore how the Federal Government should, in fact, use data
	sharing, proactive analytics, and customer experience to
	research and to prevent improper payments and fraud before they
	occur.
	Throughout the pandemic, many of us have fought hard on
	behalf of Americans all over the country. I would remind
	everyone that it was under Chairman Jim Clyburn's leadership
	that the Subcommittee on the Coronavirus Crisis held seven
	hearings focused on combating fraud in relief programs and
	recovered millions, at least $109 million, and they are still
	recovering money that was improperly used and payments that
	went out improperly. Among the many accomplishments, that
	committee helped us to be able to do what we ought to do when
	things go awry, and that is to try to find a way to save
	taxpayers' dollars before they continue to become victims of
	fraud. And I would like to enter, Mr. Chairman, into the record
	the final report of that subcommittee.
	Mr. Sessions. Without objection, it will be entered in the
	record.
	Mr. Mfume. Thank you, sir, which details the major
	successes of that Democratic effort to prevent fraudsters from
	exploiting weaknesses in the program.
	I would like to just close by saying I want to really be
	clear. Fraudsters must be identified, prosecuted, and sent to
	jail. This is theft, grand theft with a great deal of
	premeditation, and to be able to find a way to recover funds
	and to protect the innocent, I think is the very least we can
	do. And the innocent, in this instance, is the United States of
	America, which responded, as it should, to the great need that
	had come about as a result of the pandemic.
	So, I look forward to today's hearing. Gentlemen, I would
	just say this to you also. Aside from the fact that I think you
	have a very hard job, we are looking to you to find out what
	you found out and to tell us how we can legislatively and in a
	bipartisan manner put in place the things that we need, based
	on your investigations, to stop a lot of what is still going
	on, but more importantly, to prevent the things that are
	incubating now that we--and you have identified and we know are
	huge problems.
	So, with that, Mr. Chair, I want to thank you again, and I
	yield back the balance of my time.
	Mr. Sessions. I thank the gentleman, the Ranking Member, my
	friend, but also for his comments which we agree on. And so, we
	will shake hands here with an opportunity to begin that way,
	and we will work on this. I want to thank also the
	distinguished gentleman, the Chairman of the Committee, Mr.
	Comer, for him taking time to be with us today, also my
	colleagues that have joined us, and my colleagues and your
	colleagues that are on this side.
	We will go through witness introductions here very quickly.
	The gentleman, Mr. Larry Turner, serves as Inspector General of
	the Department of Labor. He leads the organization in detecting
	and deterring waste, fraud, and abuse in the Department of
	Labor programs. This includes investigating fraudulent
	unemployment insurance claims and improper payments that
	resulted from COVID-19 pandemic programs. Our next witness will
	be the gentleman, Richard Delmar, serves as the Acting
	Inspector General of the Treasury Department. In this role, he
	conducts oversight of Treasury programs and operations,
	including the Coronavirus Relief Fund and the Coronavirus State
	and Local Fiscal Recovery Funds. He also supported the
	operation of the Pandemic Response Accountability Committee to
	bring together the IG's affected in all the areas. Last,
	Sheldon Shoemaker is the Deputy Inspector General at the U.S.
	Small Business Administration Office of Inspector General. He
	serves as a principal adviser to the IG and assists with
	conducting oversight of the SBA's programs and operations,
	including the Paycheck Protection Program and the Economic
	Injury Disaster Loan program.
	Gentlemen, I would ask pursuant to Committee Rule 9(g), the
	witnesses would please stand and raise their right hands to be
	sworn, and the gentlemen will affirm at the end, if you would
	choose.
	Do you solemnly swear or affirm that the testimony that you
	are about to give is the truth, the whole truth and nothing but
	the truth, so help you God?
	[A chorus of ayes.]
	Mr. Sessions. Let the record reflect that all three
	witnesses, thank you very much, answered the question in the
	affirmative, and thank you very much.
	We are now going to begin those opening statements. Mr.
	Turner, you will be first. Mr. Delmar, you will be second. Mr.
	Shoemaker, you will be third.
	The gentleman, Mr. Turner, is recognized.

	STATEMENT OF LARRY D. TURNER, INSPECTOR GENERAL, U.S.
	DEPARTMENT OF LABOR

	Mr. Turner. Good afternoon, Chairman Sessions, Ranking
	Member Mfume, and distinguished Members of the Committee. Thank
	you for the opportunity to testify today. Although the OIG
	oversees all DOL programs, my testimony focuses on our
	oversight of the Unemployment Insurance Program. The views
	expressed here are based on the independent work of the OIG and
	are not intended to reflect DOL's positions.
	Mr. Chairman, the OIG remains committed to assisting DOL
	and Congress in improving the efficiency and integrity of the
	UI Program. Strengthening the program to prevent and detect
	fraud is key to ensuring that unemployed workers quickly
	receive needed benefits while safeguarding taxpayer dollars.
	For many years, the OIG has highlighted significant concerns
	with DOL and states' ability to deploy UI benefits
	expeditiously and efficiently while ensuring integrity and
	adequate oversight. The pandemic compounded these challenges,
	creating a perfect storm. As the OIG reported, states were not
	prepared to process the historic volume of claims, resulting in
	significant delays. Initial reliance on claimant self-
	certification rendered the PUA Program susceptible to fraud,
	and the unprecedented infusion of Federal funds gave fraudsters
	a high value target to exploit.
	That, combined with ease of identity theft and system
	weaknesses previously identified by the OIG, allowed criminals
	to defraud the program. DOL recently reported an annual
	improper payment rate estimate of 21.52 percent for Fiscal Year
	2022. When applied to the approximately $888 billion in UI
	benefits paid during the pandemic, at least $191 billion could
	have been paid improperly, with a significant portion
	attributable to fraud.
	Following the passage of the CARES Act, fraud against the
	UI Program exploded. Since April 1, 2010, the OIG opened more
	than 198,000 UI investigative matters. This represents 1,000
	times increase in the volume of our UI work. The OIG took
	immediate action to respond to this crisis. After passage of
	the CARES Act, we issued an advisory report identifying initial
	areas of concern for DOL and the states. Since then, we
	released several additional reports. We also hired additional
	investigators, strengthened our data analytics program, and
	worked with DOJ to create a national UI fraud Task Force. We
	leveraged CIGI and PRAC resources, implemented outreach and
	education with the states, and collaborate with PRAC, DOJ and
	the Secret Service to recover fraudulent funds. We also engaged
	with international law enforcement partners to pursue
	transnational organized criminal groups.
	The OIG efforts resulted in more than 700 search warrants
	executed and 1,200 individuals charged with UI fraud. These
	charges resulted in more than 500 convictions, 11,000 months of
	incarceration, and now $105 million of investigative results.
	We also identified $45.6 billion in potentially fraudulent UI
	benefits paid to four high-risk areas.
	In response to our recommendations, DOL instituted efforts
	to improve the UI Program. However, several OIG recommendations
	remain unimplemented regarding OIG's access to UI data: state
	staffing and IT modernization, guidance and assistance to the
	states, and controls for improper payments.
	Mr. Chairman, I want to take a minute to highlight three
	challenges impacting our work. First is data access. For years,
	the OIG requested access to data to proactively monitor the UI
	Program. Given the magnitude of the issues at the start of the
	pandemic, we took the unprecedented step of issuing IG
	subpoenas to all state work force agencies. The data allowed us
	to identify billions in potential fraud. However, the subpoena
	process took months and delayed our ability to detect fraud.
	Second, the statute of limitations associated with pandemic
	UI fraud will start to expire in early 2025. UI crimes often
	include complex schemes and require significant resources and
	time to investigate. Last year, we recommended that Congress
	extend the statute of limitations. Third, our work is being
	impacted by resource limitations. The OIG received $38.5
	million to oversee close to $1 trillion in expanded programs.
	Unfortunately, it will be fully expended by April 2024.
	Combined with a lower-than-expected Fiscal Year 2023
	appropriation, our funding is insufficient to maintain the
	level of oversight we deployed during the pandemic. However,
	the President's recent proposal to provide OIG with $100
	million would allow us to continue fighting pandemic-related
	fraud beyond 2024.
	Mr. Chairman, thank you for the opportunity to testify
	about our work overseeing the UI Program. I want to thank the
	dedicated OIG employees, who continue to work tirelessly in
	support of our oversight mission. I look forward to answering
	any questions that you or any Members of the Committee may
	have. Thank you.
	Mr. Sessions. Mr. Turner, thank you very much. We are going
	to take you up on the activities that you talked about, and
	that will be done together. Mr. Delmar, you are recognized.

	STATEMENT OF RICHARD DELMAR, ACTING INSPECTOR GENERAL, U.S.
	DEPARTMENT OF THE TREASURY

	Mr. Delmar. Thank you, Mr. Chairman, Ranking Member Mfume,
	and Members of the Subcommittee. I am Rich Delmar, the Acting
	Inspector General of the Treasury Department. Thanks for
	inviting me to discuss our office's oversight work to address
	wasteful spending in pandemic recovery programs.
	Among the three acts that we are talking about here,
	Treasury's responsibilities and workloads have expanded greatly
	since 2020. The Department, other than the IRS, is tasked with
	programming for over $655 billion in aid to more than 35,000
	recipients, including state, local, territorial, and tribal
	government entities, all in a relatively short period of time.
	My office is responsible for oversight of 12 programs, and I
	will talk today about four of them where our oversight has
	found improper payments, fraud, question costs, and internal
	control problems. They are the Air Carrier Payroll Support
	Program, the original Coronavirus Relief Fund, the Emergency
	Rental Assistance Program, and the State and Local Fiscal
	Recovery Fund.
	The Air Carrier Payroll Support Program requires Treasury
	to provide financial assistance to passenger and cargo air
	carriers and related contractors for the continuation of
	payments of employees' wages, salaries, and benefits. Among the
	three acts, a total of $63 billion has been and will be made
	available to these recipients. We are mandated to audit the
	certified financial reports that a subset of this eligible
	universe provides to Treasury and that determines the funding
	amounts that they receive. In our work, we found that unclear
	guidance and rules resulted in systemic calculation and
	reporting mistakes. We worked with Treasury to correct this,
	and the applicants resubmitted their reports, but it allowed
	self-certification with no independent Treasury review of the
	financial information. This is not fully effective, and we are
	working with the Department to get a statistically reliable
	estimate of improper payments.
	Moving on. The Coronavirus Relief Fund appropriated $150
	billion for making payments to states, territories, tribal
	governments, and qualifying units of local government for costs
	incurred between March 2020 and December 2021, or December 2022
	for tribal entities. Through our reviews of the quarterly
	audited awardee reporting, through audits and desk reviews, we
	have identified question costs of $2.6 billion thus far for
	unsupported and unallowable charges to the CRF. We have
	identified internal control deficiencies, such as lack of
	supporting documentation, unallowable costs, and payroll
	expenses not supported, and we expect that these types of
	findings will likely occur in other Treasury programs if not
	corrected.
	Under the two emergency rental programs, $47 billion was
	approved for grants to states, territories, tribal governments,
	and certain units of local government. We are auditing
	Treasury's implementation of the program, and we have noted
	concerns with an overall delayed standup of the grantee
	reporting portal and Treasury's compliance monitoring
	functions, which impedes monitoring and audit. These ERA
	programs have engendered a lot of coverage and a lot of
	complaints that we have received. We have set up a cross-
	functional component made up of auditors, investigators, and
	lawyers to review and process these complaints to determine
	whether they warrant investigation, or audit, or referral to
	another agency for resolution. That is a significant priority
	for us.
	Last, the $350 billion State and Local Fiscal Recovery Fund
	has a broader set of allowable uses. And we have been auditing
	the implementation of this, and we have noted, again, a delayed
	standup of the portal for grantee reporting and monitoring
	functions, and this, of course, impedes monitoring and audit.
	So, in sum, I would say that the challenge of quickly
	setting up operations to disperse large quantities of money to
	large networks of recipients created issues. The Agency should
	not solely rely on self-certification by entities. Relief
	guidance needs to be accurate and issued quickly. The absence
	of internal controls creates problems for people getting money
	that they are not entitled to. Failing to stand up timely
	reporting capabilities creates monitoring challenges. Watchdogs
	need timely access to the data, and program integrity can be
	enhanced by other means such as state and local enforcement,
	both criminal and civil. Thank you for the opportunity to
	testify before you.
	Mr. Sessions. Mr. Delmar, thank you very much. Mr.
	Shoemaker, you are recognized.

	STATEMENT OF SHELDON SHOEMAKER, DEPUTY INSPECTOR GENERAL, U.S.
	SMALL BUSINESS ADMINISTRATION

	Mr. Shoemaker. Chairman Sessions, Ranking Member Mfume, and
	distinguished Members of the Subcommittee, on behalf of
	Inspector General Ware, who is unable to be here this afternoon
	due to a death in his family, thank you for the opportunity to
	appear before you today. I am honored to represent the
	dedicated men and women of SBA OIG and their work to combat
	fraud and improper payments in SBA's pandemic response
	programs.
	Our office proactively raised awareness of the risk
	associated with loan programs intended to mitigate economic
	damage and disasters. Prior to the kickoff of SBA's pandemic
	response programs, we issued three white papers to offer
	insights learned from our decades of oversight, including
	oversight of SBA's role in the Nation's response to the Great
	Recession of 2008 and natural disasters, such as major
	hurricanes. Our insight offered key internal controls for
	policymakers to consider in mitigating the risk of fraud and
	improper payments, put another way, to avoid a pay-and-chase
	model.
	Though SBA's programs are credited for bolstering the
	Nation's small businesses during the pandemic, our oversight
	has found the internal control environment did not prevent or
	deter fraud, and, in many instances, did not provide assurance
	that eligible recipients receive funds. SBA's first round of
	PPP loans resulted in 14 years' worth of lending in 14 days,
	and its EIDL Program included a bridge grant up to $10,000 to
	expedite funds to assist the Nation's small businesses and
	instill confidence in the Nation's economy. As the program
	swelled to more than $1 trillion, so did the risk to taxpayers.
	Our oversight efforts identified systemic weaknesses that
	existed prior to the pandemic were further strained by the
	effort. For example, SBA's disaster response programs are
	consistently at risk for improper payments. This is due in
	large part to the speed at which the disaster loans are
	delivered relative to the calibration of the internal control
	balance. We can see the parallels in SBA's response programs.
	While fraudulent payments are considered improper, not all
	improper payments are the result of fraud. However, the fraud
	committed in SBA's programs has been characterized as the
	biggest fraud in a generation. We have unleashed the power of
	data analytics in our oversight fueled by the expertise and
	experience of our criminal investigators, auditors, and
	analysts. We intend to publish an estimate of the fraud
	existing within PPP and EIDL Programs in mid to late spring.
	Our office has designated SBA's Pandemic Response Program
	as the most significant top management and performance
	challenge facing the Agency. Our oversight reviews and
	resources are directed toward this challenge along with other
	top management challenges. To date, we have issued 29 pandemic-
	related reports with dozens of recommendations for corrective
	action to the Agency. In one report, we questioned the
	expenditure of $4.5 billion in EIDL Advanced Program. The
	criteria in place allowed for $1,000 in grant money for each
	employee, up to 10 employees. We found $4.5 billion in payments
	to sole proprietors that exceeded the allowable $1,000 per
	employee. A simple system control that disallowed payments over
	$1,000 for each employee or a validation with tax
	identification records could have prevented these improper
	payments.
	We also found in both PPP and EIDL, the Department of
	Treasury's Do Not Pay list was not included within the initial
	internal control environment, resulting in billions of dollars
	of likely improper payments. The EIDL Program also was rife
	with suspected identity theft, with SBA having received over
	1.6 million complaints associated with EIDL applications. When
	identity assurance is not provided to the internal control
	environment, we can anticipate improper payments and fraud.
	With our law enforcement partners, we have taken the fraud
	fight directly to the doorsteps of the wrongdoers. Our
	investigative work has resulted in 793 indictments, 635
	arrests, 446 convictions, and that is as of January 2023. Also,
	over $8 billion in EIDL funds have been returned to SBA by
	financial institutions and another $20 billion by borrowers.
	OIG has played a key role in the return of these funds by
	working with law enforcement partners, financial institutions,
	and educating the public about fraud in the pandemic relief
	programs. We are grateful for congressional action last year to
	extend the statute of limitations for PPP and EIDL to 10 years.
	It is vital that sufficient resources also are available to
	our office to bring wrongdoers to justice and deter future
	wrongdoing. The Nation can depend on OIG to provide
	independent, objective, and timely oversight of SBA. Thank you
	for the opportunity to speak to you today. I am happy to answer
	any questions you may have of me.
	Mr. Sessions. Gentlemen, thank you very much, the
	opportunity for you to be here highlights your viewpoints in
	working within your agencies. Mr. Turner and Mr. Shoemaker,
	what happened to the money that was recovered?
	Mr. Turner. Well, it was an easy target for fraudsters
	partly because of self-certification, I believe, and with the
	IG not able to go and get direct access to the data that we
	needed, we couldn't determine it earlier. But we were one of
	the first groups to identify that self-certification was a
	problem, and we brought it to the attention of the Department.
	I believe the first nine months with the self-certification
	went unchecked, and that had a lot to do with a lot of the
	fraud.
	Mr. Sessions. OK. Mr. Shoemaker, you referred to money that
	was, as a result of the investigation, found and brought back.
	What happened to that money?
	Mr. Shoemaker. Yes. As I indicated, there was $20 billion
	returned from borrowers and $8 billion by financial
	institutions. There is also money that is recovered through our
	investigations, so this money is coming back to SBA in multiple
	different vectors. And you know, the timeliness of it actually
	landing in the Treasury is an issue. We actually have an
	ongoing review to trace that money, to audit to ensure exactly
	where that money is coming back into the SBA programs so that
	it can be made available potentially for other uses or, at a
	minimum, be available within the Treasury.
	Mr. Sessions. Mr. Mfume, would that be something that you
	would like to also have us work together on?
	Mr. Mfume. It would be.
	Mr. Sessions. They went out and got money, they brought it
	back in, what did you do with it.
	Mr. Mfume. It would be.
	Mr. Sessions. So, we will be following back up on that, and
	Mr. Shoemaker and Mr. Turner, I would like to flag that for
	you. We are interested in the money that was recovered, where
	that money exists, where it came back, where it exists, and
	what the legality is of those funds.
	Mr. Turner, some of the things that we talked about today
	deal with issues that we spoke of down when Mr. Mfume and I
	were at your table and deals with getting data from states. Is
	this idea that you have that, that we are concurring on,
	something that you would like us to work together, or is it
	something that you would go do theoretically by yourself?
	Mr. Turner. Well, I think it would help to get help from
	you because our interpretation of the CARES Act allowed us to
	have authority to get that data. Also, the IG Act gives us the
	authority. However, the Department interpreted that they didn't
	have the authority to provide that directly to us.
	Mr. Sessions. That is great. Mr. Shoemaker?
	Mr. Shoemaker. On unemployment insurance?
	Mr. Sessions. On the opportunity to work--whether you need
	our assistance to work with you on these problems in dealing
	with the states?
	Mr. Shoemaker. SBA's programs are not state programs. The
	pandemic response programs--the PPP Program, SBA has lending
	partners, you know, which is across the Nation, but SBA's
	programs are not directed to the states.
	Mr. Sessions. Right. Right. Where the problem is, is also
	in banks that represent those people, so we will have to work
	on that. Thank you very much, gentlemen. Mr. Mfume?
	Mr. Mfume. Thank you, Mr. Chair. Well, gentlemen, one thing
	we are sure of, and that is that the road to hell is still
	paved with good intentions. We were in an absolute national
	emergency. Members of this body on both sides of the aisle and
	in the other body all were searching for answers. We had to
	come up with a way to appropriate funds to get them out. And as
	I listen to your testimony now regarding what you have found,
	the best intentions there have often gone astray, and that is
	why I keep getting back to what you found, what you think we
	ought to do with it, and how that we never, ever make these
	kinds of mistakes again.
	Mr. Shoemaker, I want to talk a bit about the Emergency
	Rental Assistance. That particularly got my attention because
	of this whole issue of self-certification, which I think
	everybody should have realized that a bell was going off. And I
	don't know if that was the case at SBA or anywhere else, but
	when you allow self-certification, you allow a lot of hanky-
	panky to take place. And there are a lot of people,
	unscrupulous people who took advantage of this, which is what I
	keep saying over and over again. I am glad you are prosecuting
	them, I am glad they are going to jail, and I am glad that for
	the people who pay their tax dollars. In this instance at
	least, there is some hope that some of the money will be
	recovered. And I am thinking particularly about senior citizens
	who really needed rental assistance, people with disabilities,
	our Nation's veterans, middle-class people who are unemployed,
	and poor people, all of which needed this Emergency Rental
	Assistance. And your findings are astounding, and I am just
	hoping that moving forward the lessons learned here are lessons
	learned forever.
	Now, we extended the statute of limitations, as you
	mentioned. Do you think, or any of you think, there needs to be
	another extension beyond the 10-year window that we are in
	right now?
	Mr. Turner. I believe there should be an extension beyond
	the 10 years. You know, just the cases that we have alone that
	are open, 168,000, we figured it would take 11 years just to go
	through those cases, and we are getting 100 to 300 complaints
	weekly.
	Mr. Mfume. OK. While I have you, Mr. Turner, you talked
	also about the impediment that you face in terms of data
	access. Can you expand on that for just a moment?
	Mr. Turner. Yes, I can. At the beginning of the pandemic,
	we had to issue IG subpoenas because we went to the Department,
	and we are not able to get them to agree as we felt that they
	should be able to provide us direct access. And I think going
	forward, if Congress could somehow be more explicit in terms of
	what can and cannot be done will probably be helpful. But
	anyway, I had to issue IG subpoenas, and that took months to
	get the data that we couldn't get the Department to give out
	guidance directly. And that also caused us some of the delay
	because we had to get it in a certain format in addition to
	that, but we didn't stop there with notifying the Department.
	We also gave advisory reports and alert memos and met with
	Members of Congress to alert them to the problem. It was only
	because of what we put forth that that was officially changed
	nine months later, but at that point, about $80 billion had
	gone through the PUA Program.
	Mr. Mfume. And do you find now with this sort of
	congressional oversight, by way of committees that have
	jurisdiction over many of these agencies, that they are
	complying faster, or is it about the same in terms of your
	access to their data?
	Mr. Turner. Well, we have a temporary fix in place right
	now that expires at the end of the year. So, we are trying to
	work with the Department, and they have given grants to the
	states that comply with our requests. But again, that agreement
	expires at the end of the year, and then there is about a 14-
	month delta there between them using the rulemaking process to
	try to put a rule in place.
	Mr. Mfume. And unfortunately, there is no way we can
	truncate the subpoena process, so compliance, I think, is the
	best remedy there. And I hope the word at least goes out from
	this hearing to all respective agencies of the government that
	they have to find a way to provide access to this data. I am
	surprised that you have got, how many pending, 180,000?
	Mr. Turner. We have 162,000 that are open complaints right
	now that we are still going through.
	Mr. Mfume. OK. So, the suggestion for an extension, again,
	on the statute of limitations is well taken and well heard. Mr.
	Turner, one quick thing and I will yield. I don't have any time
	left. Would direct hiring authority expedite the recruiting
	process and enable your office to recruit a deeper pool of
	candidates to assist you?
	Mr. Turner. Yes, we believe so.
	Mr. Mfume. Thank you very much. I yield back, Mr. Chair.
	Mr. Sessions. Thank you very much. The gentleman from
	Arizona, Mr. Biggs.
	Mr. Biggs. Thank you, Mr. Chairman. I thank the witnesses
	for being here. The Federal Government spent $5 trillion-plus
	in relief programs in response to COVID-19. And estimates vary
	widely, but testimony from experts before this Committee last
	year suggested that waste, fraud, and abuse in the COVID-19
	unemployment program alone exceeded $400 billion, at least half
	of which went to organized foreign crime syndicates. So, I have
	got a bunch of questions for each of you. I am not going to be
	able to get to all of them, but I am going to start with Mr.
	Delmar. I will try to get back to you, Mr. Turner, so you are
	off the hook for the beginning. But, Mr. Delmar, the Treasury
	Department is responsible for managing coronavirus relief
	funds, state and local fiscal recovery funds, as well as
	several other funds. Can you provide the Committee with the
	total amount of funding that remains unspent across accounts at
	Treasury?
	Mr. Delmar. Yes, I can. We can actually give you a specific
	written summary.
	Mr. Biggs. When might we expect that?
	Mr. Delmar. I can get that to you next week, sir.
	Mr. Biggs. That would be beautiful. Thank you, Mr. Delmar,
	and that would include state agencies as well?
	Mr. Delmar. I am sorry?
	Mr. Biggs. Would that include what amount of money remains
	unspent in state agencies? Do you have that information?
	Mr. Delmar. I don't know. I will find out and I will get
	back to you.
	Mr. Biggs. OK. Does your office have, and you will need to
	get back to me, I am sure, on this, too, state-by-state numbers
	for unspent funding, both obligated and unobligated in programs
	that are unexpired or otherwise expired?
	Mr. Delmar. I believe we have them for overall, and I am
	sure we could probably find them on a state-by-state basis.
	Mr. Biggs. OK. If you could please provide what information
	you have to the Committee by next week, that would be great.
	Mr. Biggs. Mr. Turner, during testimony delivered to this
	Committee last year, we were informed that the California state
	auditor reported that the state's Employment Development
	Department was slow to take action to address unemployment
	insurance fraud. In total, California alone lost in excess of
	$10 billion to fraudulent claims, and you have mentioned some
	of those. Can you identify for us some of the failures of the
	California Department?
	Mr. Turner. Well, let me just say, it was just not
	California. We found that some of those problems that
	California experienced was experienced throughout the country.
	I hear what you are saying, but it was really through our
	reviews----
	Mr. Sessions. Could the gentleman answer the question----
	Mr. Biggs. Yes.
	Mr. Sessions [continuing]. Specifically as it relates to
	California, please?
	Mr. Biggs. I am OK if you just say they all have self-
	identification, which was a problem. Are we getting back to
	that?
	Mr. Turner. Yes, with self-certification, and also there
	was stolen identity, stolen Social Security numbers.
	Mr. Biggs. So, you had ID theft as well?
	Mr. Turner. Correct.
	Mr. Biggs. OK. In what ways does the Department of Labor
	track state work force agencies that slow walked correction of
	fraud in UI Programs?
	Mr. Turner. State that again, please? I'm sorry.
	Mr. Biggs. Yes. In what ways does the Department of Labor
	track state work force agencies that slow walked correctives of
	fraud in the UI Programs?
	Mr. Turner. Basically, through our reviews and audits, we
	were able to take a look at are they meeting the standards. I
	think the standard is to issue those payments out between 14 to
	21 days, and the average was one to two months.
	Mr. Biggs. Thank you. Mr. Shoemaker, with regard to SBA, a
	year ago--this is a year ago--there was estimates that there
	was $76 billion in potential fraud in the SBA program. The SBA
	itself estimated $78 billion. Secret Service estimated $100
	billion in improper payments. What is that number finally that
	SBA holds to now in improper payments?
	Mr. Shoemaker. Thank you for the question. The number you
	are referring to was $78 billion in the EIDL Program. That was
	a result of work from our office, and that was a collection of
	our reports that we remove the duplicates. So, we had a number,
	it was $78 billion. That number is $86 billion from ensuing
	work. That does not include the PPP Program. You know, our work
	in that area has uncovered probably another $20 billion
	potential fraud in the PPP Program, but we have an ongoing
	project right now to come up with a comprehensive estimate of
	the fraud within the PPP and the EIDL Program. So currently
	what I could tell you, it will be more than $100 billion.
	Mr. Biggs. Thank you, and then I just want to get back to
	you, Mr. Turner. I want to make sure I understand what is the
	estimate of the fraud that your Agency has uncovered, the IG's
	office has uncovered in the unemployment arena.
	Mr. Turner. We are looking at $76 billion, and that is
	based on the fraud rate that the Department produced at 8.5
	percent of $888 billion, so $76 billion, and we believe that is
	on the low end for the fact that PUA was not included in that
	number. And the Department will have the PUA number issued
	sometime this year is what they have told us.
	Mr. Biggs. All right. Thank you. I appreciate all of you
	being here. Thank you, Mr. Chairman. I yield.
	Mr. Sessions. Mr. Turner, I would like to just ask a
	question just to follow up, be sure Mr. Mfume and I got it.
	Social Security numbers were duplicate to where they went to
	two people, or it went to a different person that may not have
	qualified?
	Mr. Turner. It went to kind of both. We had Social Security
	numbers that were stolen off the dark web, and in some cases,
	we have one person file for claims in 42 different states.
	Mr. Sessions. Thank you, Mr. Turner. The gentlewoman from
	the District of Columbia, Ms. Norton.
	Ms. Norton. Thank you, Mr. Chairman, and I appreciate this
	hearing. The Pandemic Response Accountability Committee, Mr.
	Shoemaker, provides independent oversight of approximately $5
	trillion in pandemic relief spending and helps coordinating to
	facilitate oversight by Federal inspectors general.
	Congressional Democrats enacted the American Rescue Plan, which
	provided an additional $40 million to the Pandemic Rescue
	Accountability Committee to further strengthen their oversight.
	In 2021, the Pandemic Response Accountability Committee created
	the so-called Pandemic Analytical Center of Excellence--we call
	that PACE--a leading-edge analytic platform that inspectors
	general can leverage to root out and prevent fraud. So, Mr.
	Shoemaker, my question to you is how has your office leveraged
	the enhanced data analytics capabilities that the PACE offers
	to optimize the effects of your limited resources?
	Mr. Shoemaker. Thank you for the question. Our office in
	the early days of the pandemic received over 100,000 hotline
	complaints. That was within the first year. We typically
	receive less than 1,000. That number has since increased to
	over 230,000, so we engaged the PACE to help us triage those
	hotline complaints. That was at the initial stage. We have
	since developed an in-house data analytics capability where we
	have further refined that process to use topic modeling
	artificial intelligence to distill that 230,000 leads into
	81,000 actionable leads, which equates to about 100 years'
	worth of investigative work for our office.
	The PACE also has what we would consider a kind of a
	groundbreaking effort of shared service where they put in place
	a blanket purchase agreement for data scientists, data
	validate, data visualization, and data structuring. We have
	taken advantage of that contracting vehicle. So, the limited
	number of data scientists we have within our office--we also
	have contracted data scientists to help us do our work, so we
	are using the data scientists to basically force multiply our
	criminal investigators so we work harder and smarter with these
	tools.
	Ms. Norton. All right. So, as I understand it, enhanced
	data analytics do save you valuable time and resources by
	enabling your office to determine which complaints to pursue.
	That is correct?
	Mr. Shoemaker. That is correct, and at SBA OIG, we have
	basically integrated data analytics into heart of our
	oversight.
	Ms. Norton. Mr. Shoemaker, how could codifying the
	capabilities of the PACE ensure that you and other inspectors
	general can more effectively and efficiently conduct oversight?
	Mr. Shoemaker. At the early stages, they were a resource
	that we were able to leverage. So, the fact that you would want
	that resource to be available during the next disaster for the
	inspector general community, I think that that is a worthwhile
	investment.
	Ms. Norton. Thank you. Mr. Delmar, do you agree that access
	to a permanent and effective data analytics capability would
	help you do your job?
	Mr. Delmar. Yes, ma'am. Like Mr. Shoemaker, we have set up
	an in-house data analytics function. We have hired several data
	professionals, and we have found that it is an excellent tool
	to just basically get our arms around the incredible volume of
	information that we are getting from all the reporting from all
	the thousands of recipients. And it gives us an opportunity to
	make sense of the raw numbers and detect trends, detect where
	problems are.
	We do a lot of what we call risk analysis to decide where
	the best places are to devote our resources with the best
	chance of finding mistakes and finding fraud, so I think the
	big thing about the PACE is it is a lesson from the last time.
	The Recovery Operation Center with the RAD board back in the
	crisis of 2008, that was not maintained, and so when this new
	crisis came, oversight was pretty much starting from scratch.
	And for the matter of that, the Department was in a lot of ways
	starting from scratch. Having an in-house capability and saved
	knowledge will make it quicker and more efficient to be able to
	respond to the next crisis.
	Ms. Norton. Thank you. Thanks very much, Mr. Chairman.
	Mr. Sessions. Thank you very much. The gentleman from North
	Carolina, Mr. Edwards.
	Mr. Edwards. Thank you, Mr. Chairman. To all of you, thank
	you for being here. We appreciate you taking time. My questions
	are for Mr. Turner. Your office issued an advisory around
	claims using Social Security numbers that were filed in
	multiple states, used for deceased persons, of Federal inmates,
	and used to file for unemployment claims with suspicious email
	accounts. What mechanisms exist for states to know when Social
	Security numbers are used in multiple states?
	Mr. Turner. Well, I think going through NASWA, the
	Integrity Data Hub is a tool that they can use to compare and
	cross reference Social Security numbers.
	Mr. Edwards. And you say they can use it, yet this
	happened. So, were they not using it?
	Mr. Turner. Well, it is not mandatory. It is not required
	for them to belong to that or participate in the IDH. So, it is
	optional, and not all states participate.
	Mr. Edwards. Maybe we can change that. In December, you
	issued to the Department a qualified opinion on its financial
	statements, in part because it could not support $7.9 billion
	in unprocessed claims. How are there still unprocessed claims?
	Mr. Turner. We would like to know the same. Part of it has
	been because some of the appeals that some of the states have
	made or some of the claimants have made has not really been
	processed, and some states have not even reported the status,
	and that is what really caused that. And so, the $7.9 billion
	that the Department mentioned was really kind of a guess and we
	needed more accountability and more proof, and that was the
	work that needed to be done by the Department.
	Mr. Edwards. Thank you for that. What are the key metrics
	that this Subcommittee should track to determine if progress is
	being made to prepare for the next crisis and to protect
	against fraud and improper payments generally in unemployment
	programs?
	Mr. Turner. Well, I think there are several. One I would
	say would be the improper payment rate. The other one would be
	the fraud rate. And then I think also if the Department could
	keep track of whether we get permanent access to the data that
	we are requesting would be another thing they could look at, as
	well as the PUA rate, which is supposed be released at the end
	of the year. Those will be the four things that I would say.
	Mr. Edwards. OK. And your office has referred over 23,000
	fraud matters, I understand, that don't meet Federal
	prosecution guidelines back to the states for further action.
	Are you tracking somehow what the states do with those cases?
	Mr. Turner. Yes, we do. When we refer those cases, we do
	track those. We also plan on doing audit work to see exactly
	what they did with those cases.
	Mr. Edwards. OK. Last question from me. I served on the
	Oversight Committee in North Carolina for our unemployment
	program, and I know that during the pandemic, we were issued a
	couple of sequestration orders from the Federal Government to
	return several hundred thousand, maybe even a few million
	dollars of unemployment money that we had received. Would you
	know what the total amount of unemployment money is that was
	sequestered from around the country?
	Mr. Turner. I am not sure what that would be because
	unemployment insurance is an entitlement, so I don't know why
	that would have been sequestered.
	Mr. Edwards. All right. Thank you. Mr. Chairman, I would
	like to yield the rest of my time to Representative Biggs.
	Mr. Sessions. Mr. Biggs? I am sorry, would the gentleman
	state that again who he would like to give the----
	Mr. Edwards. I was going to yield the balance of my time to
	Representative Biggs, but I am told that he is----
	Mr. Sessions. You can't see him. He is not here.
	Mr. Edwards. OK.
	Mr. Sessions. The gentleman yield back his time?
	Mr. Edwards. Yes, sir.
	Mr. Sessions. The gentleman yields back his time. Thank you
	very much. The distinguished gentleman from Florida, Mr. Frost.
	Mr. Frost. Thank you, Mr. Chairman, and I appreciate you
	all being here today. Unemployment insurance programs are
	essential to emergency lifelines. Obviously, when the pandemic
	hit, millions of Americans could not work. Congress passed
	expanded unemployment benefits to keep people fed, keep people
	housed. The government did its job, but it quickly became
	obvious that without functional state infrastructure, which we
	have spoken about a little bit, to distribute it, that aid, a
	lot of times, can get wasted. That is where a lot of waste,
	fraud, and abuse really stems from. And we have to talk about
	these antiquated state unemployment insurance systems wasting
	the time and abusing people who are facing hard times.
	I want to return quickly to a question that my colleague
	from Arizona had brought up. He seemed pretty specifically
	concerned with the state of California's unemployment system.
	Mr. Shoemaker, you indicated that identity theft was one of
	those issues. Would you say this issue was unique to
	California, or did many states experience this problem with
	identity theft verification?
	Mr. Shoemaker. I believe Mr. Turner was speaking about
	unemployment insurance relative to California. For SBA, though,
	the EIDL Program did experience identity theft. I would be
	happy to speak to that, but I think the question about
	California is to Mr. Turner.
	Mr. Frost. Yes, Mr. Turner?
	Mr. Turner. Yes. I think in the early days, the first maybe
	five or six months, California had a high rate because there
	was not really the scrutinization when it came to Social
	Security numbers.
	Mr. Frost. Yes. Was this a problem that was unique to
	California, or if any other states----
	Mr. Turner. No, that was a problem that occurred throughout
	the country.
	Mr. Frost. OK. So, it was a problem that occurred
	throughout the country. You know, in my state, there are
	reports that have come out that show that our Governor,
	Governor DeSantis knew before the pandemic that Florida's
	unemployment system had major problems, glitches, and different
	messages. There was no really serious attempts to help remedy
	those problems. At the height of the pandemic, my state of
	Florida actually had the worst unemployment system, slowest
	unemployment system, in the country in terms of processing
	claims, and at one point, the system crashed. People had to
	move to using paper forms. The state representative of mine,
	Anna Eskamani, had to really step up to really help people
	through the process, and we are still hearing from constituents
	that are having problems with the website right now. This means
	in days of hunger, people not knowing if they have enough money
	to buy groceries, and et cetera. You know, it helps increase
	that anxiety and desperation.
	Mr. Turner, are certain states still challenged to pay
	unemployment insurance claims in a timely manner?
	Mr. Turner. Certain states are still challenged. In part,
	it has been because of the lack of IT modernization that we
	have pointed out on a lot of our reviews, and the antiquated
	systems that they had at the beginning of the pandemic, which
	still have not been completely addressed.
	Mr. Frost. What is being done to modernize these states' IT
	systems so that way, unemployed workers don't suffer, you know,
	lengthy delays to receive their benefits?
	Mr. Turner. Well, I think it is going to require more
	oversight on the Department's part to make sure that the funds
	that are being given are being utilized. During the Recovery
	Act of 2010, there was $7 billion that was set aside for IT
	modernization, and I think about $2 billion of that actually
	went to benefits payments, and another $1.3 billion did not get
	used in the time that it was required.
	Mr. Frost. Got you. Got you. Now, to, like, you know, turn
	to the solutions. You know, Congress enacted the American
	Rescue Plan, $3.1 billion to modernize and strengthen Federal
	unemployment insurance systems. Mr. Turner, if a state
	unemployment insurance system is modernized, do you think that
	directly translates to more efficient and effective user
	experience?
	Mr. Turner. Without a doubt.
	Mr. Frost. And would you agree that that means there is
	less waste, there is less fraud, there is less abuse when we
	are able to put more money into those IT systems?
	Mr. Turner. Yes, I would agree with that.
	Mr. Frost. OK. Thank you. I pray that my home state of
	Florida will take advantage of the opportunity to modernize the
	IT system so constituents are better served. Thank you all for
	your time, and I yield back.
	Mr. Sessions. And the distinguished gentleman from Florida,
	Mr. Donalds, is recognized.
	Mr. Donalds. Thank you so much, Mr. Chairman. Mr. Turner,
	actually to pick back up, you mentioned just in the previous
	line of questioning that about $2 billion of the $7 billion
	that was in the Recovery Act was actually used for benefit
	payments, not modernization. Is that correct?
	Mr. Turner. That is correct, and they were allowed to do
	that within the rules of the dispense of those funds. So, it
	was allowed, but that is what happened to it, yes.
	Mr. Donalds. Do you know what the allocation was of the $2
	billion that was used across the various states? Was that
	proportionally used?
	Mr. Turner. I can't answer that. I am not sure.
	Mr. Donalds. OK. All right. I just wanted to get
	clarification on that because, I mean, like a decade ago, which
	is typical of Washington, we said you could spend X amount of
	money on this, and then in rulemaking, it gets changed to be
	used for Y, you know. Maybe sometimes you might wonder why some
	of these things don't get solved. I would actually argue for
	our colleagues as we appropriate dollars into the future, if we
	say it should be appropriated for X purpose, it should not be
	allowed to be used for Y purpose.
	Mr. Turner. I would agree with your recommendation.
	Mr. Donalds. Is that fair?
	Mr. Turner. That is what I would suggest, yes.
	Mr. Donalds. Actually, to the other IGs, is that a fair
	recommendation for Members of Congress to not be loose with
	appropriating standards?
	Mr. Delmar. I would say, sir, that, you know, the more
	clear the legislation is, the more clear Congress' intent is on
	what is to be benefited and what isn't, the more efficient the
	rule making and the guidance will be, and the more efficient
	the actual administration of the program will be.
	Mr. Donalds. All right. Mr. Shoemaker, you can comment as
	well if you would like to.
	Mr. Shoemaker. I would just align myself with the comments.
	Mr. Donalds. Well, I appreciate that because, you know,
	somebody who has, you know, been a legislator now in two
	different legislative bodies, yes, a clear direction from the
	legislature, in this particular instance, Congress, is
	necessary to help you guys do your jobs and the agencies alike.
	So maybe that is homework for myself and for my colleagues on
	both sides of the aisle. Real quick, Mr. Shoemaker. You talked
	a little bit about the Treasury's Do Not Pay List with respect
	to the EIDL Program. Do you want to expand upon your thoughts
	about why SBA was not using Treasury's Do Not Pay List?
	Mr. Shoemaker. Yes, thanks for the question. These programs
	are calibrated for speed, and I believe SBA at the time just
	did not put that control in place. And then even once they did
	put the control in place, there is a validation that is
	required whenever you get a positive hit. You know, they are
	not always, you know, a definitive hit, so it does take
	resources to verify. So, I believe that they calibrated the
	control environment to not include that just for the sake of
	speed. And of course, we see the results of that, because what
	occurs is you have that lack of assurance that only eligible
	entities are receiving those funds.
	Mr. Donalds. OK. And I appreciate that. A real quick
	question for all of you, and Mr. Delmar, I am going to start
	with you. Does Treasury have an accurate accounting of the
	amount of taxpayer dollars that have been distributed to
	deceased individuals?
	Mr. Delmar. I believe overall it does. I mean, the amounts
	that go out can be quantified. The problem in the reporting is,
	from the recipients, we don't always get all the data that we
	need and we do not get it in a timely fashion, and some of the
	recipients have their own infrastructure problems that we have
	seen delays and, you know, incomplete responses. And the
	purposes to which----
	Mr. Donalds. And not to cut you off, but when you say
	recipients, do you mean individuals? Do you mean organizations?
	Do you mean business?
	Mr. Delmar. Organizations.
	Mr. Donalds. OK. So, there are organizations that Treasury
	sends money to that do not have enough computers, enough
	ability to respond back to the information that Treasury
	requires for dispensing those funds?
	Mr. Delmar. We have seen examples of that.
	Mr. Donalds. And Treasury still dispenses the funds?
	Mr. Delmar. Well, I do not know off the top of my head, you
	know, how often and how recently the funds have gone out. We
	can certainly get you follow-up information on that.
	Mr. Donalds. Well, Members, look, it looks like we got
	somewhere else that we got to figure something out because if
	Treasury is sending money out and there are requirements for
	information, and the recipients aren't getting that back to
	Treasury, why are we sending them money? I mean, it is like a
	simple thing. If I am going to give you $10 and I say, hey, but
	I need this, and you do not do it, you don't get $10 more from
	me. That is just a personal thing.
	Real quick, just wrapping up. Mr. Turner, Mr. Shoemaker, I
	don't know if you can comment. Do your areas, Labor or SBA, do
	they keep track or have an accounting of money going to
	deceased individuals?
	Mr. Turner. We have $267 million.
	Mr. Donalds. Billion or million?
	Mr. Turner. Million.
	Mr. Donalds. Million?
	Mr. Turner. Yes.
	Mr. Donalds. Well, you almost scared me with that one. That
	is $267 million scares me too, you know. OK. All right.
	Mr. Turner. But we identified $45.6 billion. That was part
	of what we found in our review of those four areas, and $267
	million of that was for deceased individuals.
	Mr. Donalds. Forty-five billion dollars went out. I know I
	am a little slightly over, Mr. Chairman. May I ask your
	indulgence just to clarify this point?
	Mr. Sessions. I appreciate the gentleman continuing his
	line of questioning as any Member of this Committee would get
	that to clarify questions.
	Mr. Donalds. OK. Thank you, Mr. Chairman.
	Mr. Sessions. The gentleman may continue.
	Mr. Donalds. I appreciate that. Thank you, Mr. Chairman.
	Just to clarify. We have $45 billion through the auspices of
	the Department of Labor that have gone out, of which $267
	million has gone to deceased individuals?
	Mr. Turner. Yes, and that is potential fraud, but, yes, the
	number $267 million is correct.
	Mr. Donalds. All right. Listen, thank you so much, Mr.
	Turner. Thank you for the indulgence, Mr. Chairman. I yield
	back.
	Mr. Sessions. Mr. Donalds, thank you very much. The
	gentleman yields back his time. The gentleman from Texas, Mr.
	Casar.
	Mr. Casar. Thank you, Mr. Chairman. In the 35th District of
	Texas, we stretch from East Austin down to the west side of San
	Antonio. The No. 1 industry that employs folks in my district
	is service and hospitality. My constituents are overwhelmingly
	cooks, servers, hotel workers, barbacks, the folks that
	oftentimes lost their jobs during the pandemic. And so, to be
	really clear, there is nobody that would be more upset about
	fraud and abuse of unemployment insurance and fraud and abuse
	of critical programs that were to keep their lives running and
	to keep them alive than the working-class folks in my district.
	And that is why I am so appreciative that the Biden
	Administration has put forward such significant funds to
	looking out for fraud, especially from large criminal
	organizations and oftentimes wealthy individuals that were
	trying to game the system.
	So, Mr. Turner, how would President Biden's allocation of
	tens, if not hundreds of millions of dollars to prosecuting
	systemic pandemic fraud address your findings on fraud in DOL
	pandemic assistance programs?
	Mr. Turner. Thanks for asking that question. Currently, the
	money that we have for ARPA expires at the end of this fiscal
	year, and in the first and second quarter, the rest of the
	CARES Act fund will expire. So, if we are able to sustain the
	level that we are currently operating under, we will need some
	funds right away, and so that $100 million that the President
	is proposing would really help us do that. One of the caveats
	that I would say is that we need it right away because without
	that, we are going to lose, through attrition, about 30
	employees this year and another 20 next year, so I just want to
	point that out. But it would really be very helpful for us to
	be able to go after some of those fraudsters that we have been
	talking about.
	Mr. Casar. And you expect that the investments we make in
	pursuing that kind of fraud, we are going to get more than that
	amount of money back?
	Mr. Turner. Well, let me just say this. I can't say that
	because, like----
	Mr. Casar. But that is your hope?
	Mr. Turner [continuing]. Once fraud goes out of the door,
	it is hard to get it back. What we can do is go after the
	fraudsters that committed these atrocities, so that is what I
	would tell you, but it is quite hard and very complicated in
	getting funds back. We have identified about $905 million that
	we through our work that we have been able to get back, and
	that is not all in funds. That is just through the process of
	the judicial system, civil cases that we are able to get, and
	it takes a while for it to go through the judicial system where
	it may be four or five years before we actually see some of
	that.
	Mr. Casar. I appreciate that, and either for you, Mr.
	Turner, or whoever else here is appropriate. I also just saw
	that in the budget that was released today that there were
	continued significant investments in making sure that we
	recover funds and make investments in holding people
	accountable that are committing this kind of fraud. Is there
	any further information that we need, Mr. Shoemaker?
	Mr. Shoemaker. Sure. The President did put forward a
	request for $100 million. I can assure this Subcommittee that
	you will receive return on investment from our office on that
	$100 million. Our current base budget was $24 million. We have
	returned $9.2 billion in dollar accomplishments in just three
	years alone, which represents an exponential return on
	investment. The President put forward a budget for our office
	in Fiscal Year 2024 of $63 million. Those funds, as Mr. Turner
	said, are critical to our office. If we do not receive those
	funds, we will be in the same situation as Mr. Turner, where we
	will have to, you know, consider the attrition rate next year,
	in Fiscal Year 2024. So, it is critical that we have our base
	budget of Fiscal Year 2024 as well as the supplemental funds
	that were asked for last Thursday.
	Mr. Casar. Thank you, Mr. Shoemaker. I think you proved to
	us how that kind of investment can make a really big
	difference. I think it is a core function of what we should be
	doing as oversight. Mr. Sessions likely recalls that there once
	was a legendary chairman of this Committee, Jack Brooks from
	Beaumont, who, whether administrations were Republican or
	Democratic, made sure that we were going after fraudsters in
	this way. So, I hope that is a portion of the President's
	budget that we can have some bipartisan support for to continue
	that kind of work. Thank you. I yield back my time.
	Mr. Sessions. The gentleman yields back his time. Thank you
	very much. The distinguished young gentlewoman from Colorado,
	Mrs. Boebert.
	Mrs. Boebert. Thank you, Mr. Chairman. Almost three years
	of COVID madness, mask mandates, vaccine mandates, a $4.6
	trillion spending spree, school, church, statewide shutdowns,
	this Committee is finally committed to getting to the bottom of
	the $560 billion in taxpayer money that was lost in waste,
	fraud, and abuse. The GAO estimates that there is still $90.5
	billion in COVID-19 relief funds that remain available for
	obligation and are vulnerable to that same waste, fraud, and
	abuse. GAO and IGs have identified multiple recommendations to
	protect against waste, fraud, and abuse that have yet to be
	implemented by the Biden Administration. Instead, they have
	thrown more money at the problem. Rather than being reactive
	and spending more money to find money, the Federal Government
	should enact policies to ensure that this kind of abuse never
	occurs again.
	Media reports have found that payments were made to over a
	half a million Federal prisoners, Japanese citizens living in
	Japan, illegal immigrants, and 1.1 million deceased
	individuals. In addition to this, our office issued an advisory
	around claims using Social Security numbers filed in multiple
	states and filed under suspicious email accounts. Now, I know
	that some of my colleagues have inquired about these Social
	Security issues that we are having, but, Inspector General
	Turner, if I may, what mechanisms are currently in place for
	states to identify these suspicious Social Security numbers and
	identify these instances of fraud before they happen?
	Mr. Turner. I would say IT modernization is one of the
	keys, but also, a lot of the states are using the Integrity
	Data Hub, which the national association like workforce
	agencies are using. Our only challenge with that is that that
	is a volunteer, you know, program, so it is not required, and
	so, therefore, they do not get a chance to do the cross
	matching that is needed.
	Mrs. Boebert. OK. Good to know that that is just volunteer.
	And are there any specific challenges states are having to
	access the Master Death File at the Social Security
	Administration?
	Mr. Turner. I believe that the IDH as well, that is where
	they can do that cross match, and they do use the----
	Mrs. Boebert. Yes, sir.
	Mr. Turner [continuing]. Master Death File.
	Mrs. Boebert. And it was also mentioned that your office
	has referred over 23,000 fraudulent claims that cannot be
	processed federally back to the states for further action, and
	you are tracking those. Have any criminal referrals aligned
	with this--been made from any of the IGs? Have there been any
	kind of criminal referrals issued for the waste, fraud, and
	abuse?
	Mr. Turner. Are you saying about from the 23,000 or just in
	general?
	Mrs. Boebert. In total?
	Mr. Turner. There is----
	Mrs. Boebert. I am sorry. I know about the 23,000.
	Mr. Turner. OK.
	Mrs. Boebert. But over all of this, have there been any?
	Mr. Turner. Yes, we have 1,200 indictments and we have
	had----
	Mrs. Boebert. OK.
	Mr. Turner [continuing]. Six-hundred convictions.
	Mrs. Boebert. Incredible. Thank you. And Inspector General
	Shoemaker, with over $76 billion of potential fraudulent PPP
	and EIDL loans, what is SBA's plan to investigate these cases,
	and how does your office plan to conduct the oversight for this
	plan?
	Mr. Shoemaker. Sure. So, our investigative work so far has
	resulted in 793 indictments, 635 arrests, 446 convictions. We
	have received $20 billion returned from the borrowers in the
	EIDL Program as well as $8 billion from the financial
	institutions. We have over 500 cases ongoing at present, and we
	work cooperatively with the DOJ Joint Strike Forces. You know,
	we bring evidence to the prosecutors, they are willing to take
	these cases, and the wrongdoers are getting significant
	sentences, four, five years.
	Mrs. Boebert. Thank you very much, Inspector General, and
	actually, Inspector General Delmar, same question to you. Any
	criminal referrals, indictments, prosecutions that have taken
	place?
	Mr. Delmar. Yes, ma'am. I don't have the number with me. I
	can certainly get that for you. We have worked with the
	Department of Justice, and we have worked with some state
	agencies as well. We also pursue and encourage civil remedies
	to recover the funds.
	Mrs. Boebert. Thank you very much. I appreciate all three
	of you being here and testifying before this Subcommittee
	today. I appreciate your work and your service, and with that,
	I yield.
	Mr. Session. Thank you very much. The distinguished
	gentleman from Vermont is recognized. Excuse me. You would
	think I could read. The gentlewoman, Ms. Stansbury, from New
	Mexico.
	Ms. Stansbury. Thank you, Mr. Chairman, and thank you also
	to our Ranking Member, and I want to just start this afternoon
	by thanking you especially for the tone you set in this
	Subcommittee hearing of bipartisanship, of collaboration, and
	of true oversight. That is truly in the spirit of why we are
	here, and I really appreciate it.
	Mr. Sessions. And I thank the gentlewoman. And I hope that
	you will expect the same from Mr. Connolly, Mr. Mfume, and
	myself because we intend to deliver that on behalf of the
	American people, and I thank the gentlewoman for recognizing
	that.
	Ms. Stansbury. Thank you. I am proud and excited to be able
	to serve on this Subcommittee. I am a former Federal employee
	myself. I worked at the Office of Management and Budget, and I
	was a program examiner there. And so I know very well the work
	of our OIGs and the critical work that you do to investigate
	waste, fraud, and abuse in our agencies, make sure that
	individuals who are conducting their affairs in a way that is
	not congruent with the oaths that we take are held accountable,
	and that, ultimately, this body, Congress, is able to take
	action in order to have accountability as well as our court
	systems.
	I know today we are here to talk about pandemic relief. I
	did want to follow on one of the comments that you made, Mr.
	Turner, about the perfect storm that happened at the beginning
	of the pandemic. I was serving in the New Mexico State House at
	the time, and I really appreciate the way you characterized the
	situation because I think for folks who were sort of in the
	trenches trying to implement these programs, it is hard for
	folks to understand. In my district alone, we had thousands and
	thousands of people who suddenly were home. They had no way to
	earn income. They had rent or their mortgages coming up. They
	had no way to get groceries. And in my communities that I
	represent, which are predominantly low income and many folks
	who are on fixed incomes, Medicaid, Medicare and, of course,
	other programs, it was an incredibly difficult time.
	And what I saw on the front lines of our state agencies is
	that they just were not prepared. They did not have the
	infrastructure. They didn't even have the IT infrastructure to
	handle the volume of phone calls and emails that they were
	getting, more or less the ability to serve all of the needs,
	and I think we also saw this at the Federal level with the SBA.
	When I took office in the summer of 2021, we had a number of
	our constituent cases that involved individuals whose SBA loans
	had been stolen through passwords through the system, so I
	think we all know that it was an incredibly difficult time. Our
	Feds, our state entities really rallied and did their best, and
	I want to thank those of you who were serving at that time. I
	know it was a really difficult time.
	I know that the main focus of this hearing is really on
	oversight of the pandemic programs themselves, but since we are
	here and this is our first hearing, I would love to just do a
	quick lightning round with my remaining two minutes from each
	of you to just hear from you generally what tools and resources
	would help you do your jobs better as inspectors generals and
	how can Congress actually help. And we will start with Mr.
	Turner and then rapidly go down the line.
	Mr. Turner. I think direct access to data would help us. It
	would allow us to get to issues faster. Had we had direct
	access, then we wouldn't have had to wait nine months to find
	the problems that were going on with the PUA. I also think
	modernization. As you mentioned, there are a lot of antiquated
	systems, and it is a game changer to have IT that is really
	modern. It does not take, you know, long for IT systems to be
	antiquated, and to go 10 years or 15 years is quite a while.
	Ms. Stansbury. Absolutely. And Mr. Delmar?
	Mr. Delmar. Data access, certainly. IT modernization,
	certainly. One thing I would say is we found that the no-year
	and multi-year funds that we got to do our work with respect to
	the CRF and a couple of other programs were very helpful, and
	that would be a good idea to be able to focus over the length
	of the program, funds devoted to enabling the oversight.
	Ms. Stansbury. Thank you very much, and Mr. Shoemaker?
	Mr. Shoemaker. We received $25 million in the CARES Act and
	$25 million in ARPA as supplemental funds no-year money. Those
	funds will be exhausted by 2024. We have approximately 185
	dedicated men and women working for us. The President has put
	forward a budget for our base in Fiscal Year 2024 that would
	allow us to sustain that as a permanent resource. SBA as an
	agency is forever changed, so we need to match that with our
	oversight. And the systemic weaknesses that SBA experienced on
	a day-to-day basis, the strain that it was under, we believe
	that we can provide, you know, a lot of oversight to drive
	corrective action.
	Ms. Stansbury. That is extremely helpful. Thank you,
	gentlemen, and thank you to your staffs who are sitting behind
	you for serving the American people. We appreciate you.
	Mr. Sessions. The gentlewoman yields back her time. Thank
	you very much. The distinguished gentleman, my friend from
	Louisiana, Mr. Higgins, is recognized.
	Mr. Higgins. Thank you, Mr. Chairman. Gentlemen, I am going
	to move pretty quickly here. Each of you, ``Yes'' or ``No,''
	are you familiar with the various Do Not Pay systems?
	Mr. Delmar. Yes.
	Mr. Turner. Yes.
	Mr. Higgins. Mr. Turner?
	Mr. Turner. Yes.
	Mr. Higgins. Mr. Delmar?
	Mr. Delmar. Yes.
	Mr. Higgins. Mr. Shoemaker?
	Mr. Shoemaker. Yes.
	Mr. Higgins. OK. So, for the purposes of clarity for the
	Americans watching, Do Not Pay systems, in my understanding, is
	the Treasury inspector general oversees the Bureau of Fiscal
	Service, which operates a Do Not Pay system, the systems or
	data matching services that agencies use to help to prevent
	fraudulent payments in various systems. And further, there is
	another layer of that system that the Consolidated
	Appropriations Act in 2021, is my understanding, allows the
	Social Security Administration to share its state-reported
	death data with the Treasury Department's DNP portal. So there
	appears to be, prior to many of these fraudulent payments going
	out, an effort by Congress and by the executive branch to put
	protective measures in place whereby our bureaucracies would
	not send out billions of dollars of fraudulent payments in
	manners that are shocking to Americans when they are revealed.
	I am going to ask Mr. Delmar and Mr. Turner to respond. I
	am advised that largely regarding COVID payments, the DNP
	systems, why they were not used, or underused, or set aside,
	for what reasons I do not know, and that the Social Security
	Administration's death record system was not utilized to filter
	payments before they went out. So, we are talking about
	responding as a Congress and working together with the
	executive branch to protect against this ever happening again.
	It does not appear that the protections we had in place were
	utilized to stop it from happening this time. Mr. Turner,
	please respond?
	Mr. Turner. Yes, I think part of the problem is that the
	states were inundated and some states did not participate in
	the Integrity Data Hub, which actually has access to the Master
	File, so that was part of the problem. Also, I think in their--
	--
	Mr. Higgins. Well, let me interject, Mr. Turner, not to cut
	you off, good sir, but to stay in this dialog because the
	American people are watching and the government had no problem
	telling us every night how many people allegedly were dying of
	COVID. There seemed to be plenty of death records available
	through the CDC because we were inundated with data about how
	many people were dying allegedly of COVID. It turned out they
	died with COVID, but that is another story for another day. So,
	you are saying that you did filter your payments through death
	records?
	Mr. Turner. What I am saying to you is not all states did
	because not all states participate, but also unemployment
	insurance is an entitlement, which is not affected by the Do
	Not Pay list.
	Mr. Higgins. But the Do Not Pay systems, again, my
	understanding--it is not my area of expertise. It is why you
	gentlemen are here. We are asking. Doesn't the Do Not Pay
	system protect against, say, the same name used multiple times
	at different addresses or the same address with hundred
	different names, or, you know, a variety of reasonable reviews
	that computers conduct to protect against fraudulent payments.
	Isn't that what the Do Not Pay systems are?
	Mr. Turner. I would have to defer to Mr. Delmar.
	Mr. Delmar. The Do Not Pay system takes in data from a
	number of other data bases. You mentioned the Social Security
	Death Master File. The 2021 appropriation did create a three-
	year opportunity for Social Security to provide that
	information to DNP. It is supposed to start by the end of this
	year and go for three years. It is my understanding that the
	Department----
	Mr. Higgins. Were other filters engaged, sir, before
	payments were sent out for COVID moneys that were fraudulently
	accessed protecting against, say, multiple payments going to
	the same address under different names, et cetera?
	Mr. Delmar. Well, the DNP system, whatever information was
	in there, in addition to the Death Master File, there are a
	couple of other systems from other agencies that the Fiscal
	Service would like to get to make the DNP a more complete
	resource to provide a filter.
	Mr. Higgins. Thank you, gentlemen. Mr. Chairman, I am not
	sure I actually got an answer here in the five minutes, but I
	yield my time. I am expired.
	Mr. Sessions. The gentleman yields back his time. The
	gentleman from California, Mr. Garcia, is recognized.
	Mr. Garcia. Thank you very much, Mr. Chairman. I thank our
	witnesses. I appreciate you all being here today. Just a few
	broad notes. Before joining Congress, I was mayor of Long
	Beach, California. It is a city of about half a million people,
	and I was mayor the entire time during the COVID emergency. I
	think it is important to remember that this was the single
	largest loss of life event not just in my city, but in the
	country. In the modern era, it was a devastating emergency. It
	was serious at every level, and certainly, when you have that
	level of an emergency, mistakes are going to be made along the
	way, and I think overall, agencies did the very best to respond
	in the best way possible.
	I am personally very proud of the response that we had in
	our community. The White House called our response in Long
	Beach a national model. The Governor called the response the
	best in the state. And so, I think we did what we could, but we
	also made, like every single community across the country, some
	mistakes that we learned from. I think the idea here, and
	hopefully, the goal of this Committee and many others is that
	we can work to prevent future pandemics so if a pandemic were
	to arise, that we do the best we can to address them and to get
	folks support and help. And I know that is something that all
	of you are working to ensure that our systems are at a better
	place in the future.
	The CARES Act, American Rescue Plan literally saved
	communities, saved states, and saved cities, and we know this
	because we have seen the data. I know it by what I saw in my
	own community. And so, I want to thank all of you for also
	looking into these programs and for also the work that you have
	done in ensuring that the money is being spent adequately and
	in the right places, so thank you for that. Through that money,
	we funded testing programs, we funded lifesaving programs for
	families, and helped small businesses across the community,
	which is important. And also, I think one thing we have heard
	throughout the Committee is a lot of attacks on programs and
	the PPP Program, which is understandable, but this all started,
	and the pandemic started, and this program and PPP started
	under President Donald Trump.
	And so, I understand that when the President set up
	initially the response and the programs, it wasn't perfect.
	There were mistakes that were made, and as much as I wish the
	Trump Administration had done a lot more to help small
	businesses to set up this program so there would be less fraud
	and less abuse--I wish that would have happened--it didn't
	happen. But I also understand that we were in a national
	emergency, and sometimes folks, and particularly public
	servants across Federal agencies, are doing the best that they
	can.
	I very much support the work that was done to support small
	businesses. We saved small businesses and communities, and I am
	very grateful for that, and I want to also, just beyond that,
	on the PPP Program ask a specific question. It is something
	that relates to a few instances in California. We have had
	numerous workers reach out to our office and others in the
	state that are concerned that some of the PPP funds that may
	have gone to large corporations. And in this particular case,
	we are talking about hotel workers where PPP funds may have not
	gone to the workers themselves or to support some of the salary
	needs that were part of the requirements for certain loans.
	My direct question, and perhaps this can be for the SBA
	inspector, for Mr. Ware, SBA OIG currently has tens of
	thousands of complaints, I believe. How are those being
	prioritized right now?
	Mr. Shoemaker. Thank you for the question. In regards to
	size standards, we actually have an ongoing review right now
	looking at the size standards relative to PPP. So, if you have
	constituents that have complaints, you know, please contact our
	hotline to give us that information. We certainly will take
	that into consideration.
	How are we looking at our hotline? So, I indicated we have
	230,000 hotline complaints. We have used data analytics,
	specifically artificial intelligence, machine learning through
	a process called topic modeling to differentiate the complaints
	into eight buckets. Of that, we have identified 81,000 of
	actionable leads. We are now marrying that data with the actual
	PPP loan data, and in doing so, we will prioritize our work to
	look at the cases that have the most impact, that instill the
	most integrity within SBA's programs, and I say that because we
	have limited resources. We have 51 criminal investigators.
	Mr. Garcia. I appreciate that, sir. For example, in this
	case, I have been certainly approached by a group of workers
	and some of our hotel workers that have big concerns about some
	of the PPP loans. And if we are able to directly maybe get that
	information to you about this specific instance, that would be
	very helpful to them, and I do appreciate your time.
	Mr. Shoemaker. Thank you.
	Mr. Garcia. Can I get that commitment, sir?
	Mr. Shoemaker. Absolutely.
	Mr. Garcia. Thank you very much, sir. And with that, Mr.
	Chairman, I yield back, and as I do, I also want to thank the
	Committee for what has been a pretty productive subcommittee
	meeting, so thank you.
	Mr. Sessions. Thank you very much. The gentleman yields
	back his time. The distinguished gentlewoman from Georgia, Ms.
	Greene.
	Ms. Greene. Thank you, Mr. Chairman. I appreciate it. And
	gentlemen, I thank you for coming before the Committee today
	and discussing this very, very important issue, especially
	given that our government has the American people in over $31
	trillion in debt. So, we appreciate you helping track that down
	and where it goes.
	Since all the money has been spent on COVID, there is
	approximately over $400 billion missing, which is extremely
	concerning to most Americans, and I just want to talk for a
	brief second about how difficult it has been. Obviously,
	everyone knows this: the government shutting down our economy,
	shutting down businesses, paying people basically to stay home,
	the difficulties for employers to get their employees to come
	back to work to start going again. And, you know, here we have
	the GAO estimates that the total fraud in pandemic UI Programs
	amounts to at least $60 billion.
	Just a brief question for you, Mr. Turner. Were there any
	states that seemed to be particularly vulnerable to fraud and
	improper payments in their UI Programs?
	Mr. Turner. We saw across the country most states exhibit
	the same problems and challenges, saw all of them that were
	vulnerable, and there was vulnerability that was displayed.
	Ms. Greene. What types of problems were there?
	Mr. Turner. Again, the multi-state claims with stolen
	identities was the No. 1 problem. Just multi-claims and people
	filing for numerous people, to include deceased individuals,
	prisoners, suspicious email, multi-states.
	Ms. Greene. Chasing down those basically criminals, has
	that been something that your Department has been putting a lot
	of time to?
	Mr. Turner. Without a doubt, I mean, from day one. And we
	have only maybe just scratched the surface, so that has been
	the biggest challenge for us.
	Ms. Greene. Approximately how many charges have you filed
	or how many people have you filed charges against?
	Mr. Turner. Twelve hundred indictments and 600 charges, and
	just kind of let me give you an example of the scope of what we
	have been dealing with. You know, before COVID, before the
	pandemic took place, we had maybe 100 cases or complaints a
	year on UI fraud. Since then, we have been getting 100 to 300 a
	week.
	Ms. Green. Wow, that is a considerable amount. Thank you
	for answering my question. I would like to ask about the Do Not
	Pay system. I know you all have been asked about this a good
	bit before. The Office of Management and Budget and the
	Treasury Department jointly maintain the Do Not Pay system,
	which is a free service that agencies can use to verify a
	recipient's eligibility for payment. I would just like to ask
	Mr. Delmar, Mr. Turner had said previously that some states
	don't use the Do Not Pay system. Is that correct, and if so,
	why not?
	Mr. Delmar. I believe they are now required to, but that
	wasn't always the case. So, I think the combination of they
	have made improvements in their interface, it is an easier
	system to use than it was, and the additional data bases that
	we talked about, the Death Master File and a couple of others.
	And one point I was going to make is the current legislation
	allows a three-year use of the Death Master File for DNP, so
	that would go from the end of this year through the end of
	2026, roughly. I think there is a proposal to make that a
	permanent allowance, and I think that would do a lot to make
	the system more effective in stopping multiple payments or
	ineligible payments.
	Ms. Greene. Right. There seemed to be plenty of them, I
	think. Did all agencies involved in pandemic relief use the Do
	Not Pay system?
	Mr. Delmar. I don't think all did. I can get you more
	specific information and address your question, you know, with
	a lot more depth, and we will do follow-up on that.
	Ms. Greene. Great. Thank you so much.
	Ms. Green. The Pandemic Response Accountability Committee
	found 69,323 questionable Social Security numbers allegedly
	used to obtain $5.4 billion in COVID relief according to a
	report. Mr. Shoemaker, do you know what happened to that money,
	and was it ever recovered?
	Mr. Shoemaker. In this specific instance, no, I do not know
	if that money was recovered. It could possibly be associated
	with ongoing cases or cases in the past. That was a different
	type of a project. That was a data analytics project just to
	review, but what that report indicates is a very powerful
	resource, which is the Social Security Administration. That
	data is not readily available to the Office of Inspector
	General. It is not readily available to programs whenever they
	stand it up.
	So, when we talk about the instances when an agency may not
	have used Do Not Pay, the government has data available. If
	that data is made available, we are in the business of best
	evidence. If you are an auditor or you are an investigator and
	you are looking for the best evidence, you go to the source. If
	that source data is available in the programs and in oversight,
	we certainly can unlock the power of that data.
	Ms. Greene. Right. Well, that makes sense. In October 2020,
	your office said that SBA's management continues to insist that
	it controls are robust despite overwhelming evidence to the
	contrary. Do you still agree with that assessment?
	Mr. Shoemaker. Certainly, that assessment at that time, and
	I believe that, that assessment has been proven true. The over
	700 indictments and 600 arrests is further proof that there is
	rampant fraud in the EIDL Program.
	Ms. Greene. Thank you very much. I yield back my time.
	Mr. Sessions. The gentlewoman yields back her time. Thank
	you very much. The distinguished gentleman from Virginia, Mr.
	Connolly, is recognized.
	Mr. Connolly. Thank you, Mr. Chairman, and thank you to Mr.
	Mfume, the Ranking Member, for having this hearing. This is the
	old part of my old subcommittee, so I look forward to working
	with you as we progress. And thank you to our witnesses for
	being here today. I must say I am impressed with the data you
	presented us in terms of indictments, prosecutions,
	convictions, and recovery.
	I think it is important to remember the context. Congress,
	in the worst pandemic in 100 years, in which people, by the
	way, did not allegedly die. They died. Almost a million and a
	half Americans are dead. Mr. Garcia didn't mention it, but I
	believe his mother and stepfather succumbed to COVID when he
	was the mayor of Long Beach. All of us have stories of loved
	ones, and friends, and associates who died from COVID because
	protocols weren't in place, vaccines weren't yet ready. We did
	not know how to manage this unknown thing, but also the economy
	was collapsing.
	Let us go back to April 2020. The economy was contracting
	by double digits. Today, the economy is growing at almost three
	percent. Unemployment was hitting depression level. Today, the
	unemployment rate is 3.4 percent, and what plagues us is not
	enough workers. Manufacturing was contracting. Small businesses
	were failing about half a million a week, something like that.
	We pumped $5 trillion into the economy, and it worked. We
	turned around the economy. We saved small businesses. We saved
	state and local governments. We saved people's jobs. We kept
	food on the table. We kept people in their homes free from
	eviction or repossession. It was a massive enterprise, and in
	that massive enterprise, we know there are bad actors who are
	going to cheat, and that is where you come in and try to help
	us prosecute those individuals and to recover taxpayer dollars
	that are and were at risk.
	Mr. Shoemaker, I remember particularly the Small Business
	Administration, and I'll focus on the other part of our
	Subcommittee, which is the IT part. I believe the basic IT
	platform for SBA is E-Tran. Is that correct?
	Mr. Shoemaker. The 7(a) lending program, yes, the E-Tran.
	Mr. Connolly. Yes, and I believe back in April 2020, the
	normal annual budget of SBA is about $20 billion a year. Is
	that correct?
	Mr. Shoemaker. I think that is high.
	Mr. Connolly. That might even be high?
	Mr. Shoemaker. Yes. Yes.
	Mr. Connolly. And we pumped $600 billion into SBA in April
	2020?
	Mr. Shoemaker. Yes.
	Mr. Connolly. Over 30 times the normal budget of SBA. Is
	that correct?
	Mr. Shoemaker. That is correct. So, SBA, its normal 7(a)
	lending portfolio was about $35 billion. So, the CARES Act
	authorized $349 billion, and as you indicated, I believe
	Congress had a concern at that time. There were oversight
	resources put into place, but what was not foreseen was another
	$300 billion infused into the program.
	Mr. Connolly. Correct.
	Mr. Shoemaker. And another $150 billion, to take us to $813
	billion.
	Mr. Connolly. And the problem was that we wanted it to get
	to Main Street, to the mom and pop businesses, small, minority
	owned, women owned, veteran owned, that don't normally
	participate maybe in SBA programs. And that meant we had to
	find outreach to them quickly and to perhaps broaden the number
	of financial institutions and the kinds of financial
	institutions that might manage those portfolios.
	Mr. Shoemaker. That is correct. There were approximately
	2,000 SBA lenders in the 7(a) Program. That number was expanded
	over to 5,000 lenders to ensure that the money could, you know,
	make it out into Main Street.
	Mr. Connolly. Right. So, I think SBA is a great example. We
	wanted this money to go out quickly to save the economy, and to
	save businesses, and to keep people employed and the public
	served, and that put a huge burden on SBA. I mean, you had to
	kind of retrofit almost overnight, and there were lots of
	hiccups along the way. But how would you grade the agency's
	performance overall, though, when we look back on it in an
	unprecedented pandemic with unprecedented amounts of money and
	demand for loans and loans turned into grants?
	Mr. Shoemaker. So, our office at the inception of the
	pandemic, you know, our job was to let SBA know of the risk and
	vulnerabilities that we saw based upon our past oversight
	experience. And in doing so, we let the Agency know that strong
	guidance to the lending community would be vital to ensuring
	these programs are issued timely, and then also to have a
	robust internal control environment.
	So, what is asked of any agency for any program, you know,
	would have been an expectation of SBA at that time, would be to
	have an objective. The objective would be to provide assistance
	to eligible entities, and the ask from that point would be to
	establish an internal control environment to meet that
	objective. And so, from OIG's perspective, it is to have
	assurance, you know, that is what the internal control
	environment will be.
	But you are absolutely right. There were guardrails that
	were lowered as a result of that. You know, for example, the
	Congress did not allow SBA to utilize tax transcripts for the
	EIDL Program. The Congress also mandated the PPP Program have
	self-certification as part of the process. So, when we talk
	about underwriting in the PPP Program, we are not talking about
	underwriting that is anywhere near what a 7(a) underwriting
	would look like. So those guardrails were substantially
	lowered, and when you don't have assurance of an eligible
	entity, you, at a minimum, are going to lead to an improper
	payment, and, as we see in these programs today, fraud.
	Mr. Connolly. Thank you, and thank you, Mr. Chairman, and
	thank you, Mr. Mfume.
	Mr. Sessions. The gentleman yields back his time. The
	distinguished gentleman from Greenville, South Carolina, Mr.
	Timmons, is recognized.
	Mr. Timmons. Thank you, Mr. Chairman. We had a hearing
	about a month ago on pandemic relief fraud. PPP came up, and I
	asked Horowitz, the IG of DOJ, why he does not just get
	Treasury or SBA to run a report of any business that got a PPP
	loan that either didn't have withholdings in 2019 or the
	formula was off. The formula was technically your highest month
	in 2019 times 2.5. Generally, that is how it was. And if that
	formula was substantially divergent from what it should have
	been, then he goes and looks into it.
	And I didn't realize this, but he said that would be great.
	I wish I could have that, but it is illegal. They can't give me
	that. This is H.R. 1476, and what it does is it tells Treasury
	to run the report. It is two separate reports. It is a list of
	every business that had no withholdings whatsoever in 2019 that
	got a PPP loan because that is clearly fraudulent. Well, there
	is an exception to that, or any business, the PPP loan they got
	was four times their high month in 2019, which is we are giving
	them some breathing room. I am not trying to get people that
	were close. I am trying to get people that just stole. That
	seems like a pretty good plan. What are your thoughts? Do you
	think it is good legislation? Who wants to start? We will start
	with Treasury, Mr. Delmar.
	Mr. Delmar. My office does not have oversight of the IRS,
	but that said, you know, I agree with what Mr. Horowitz said
	about the extent of Section 6103 and the uses to which tax
	information can be put. But if your legislation is a specific
	exception to the general prohibition in 6103, I am sure it
	would have----
	Mr. Timmons. Have that effect.
	Mr. Delmar [continuing]. A useful effect.
	Mr. Timmons. And again, we are not giving them anything
	other than just this report, and that report would be
	sufficient to go and subpoena other records to then build the
	case to then start arresting people. So, it seems to me that
	this legislation, if it was signed into law, would accomplish
	the objective. And I guess, to his credit, the President is
	trying to achieve the same objective. He just wants to blow
	$300 million to achieve it.
	So back and front, two pages. If he signs this into law, it
	saves $300 million. I mean, I guess we are still going to spend
	some money, because we are going to have to hire some
	additional prosecutors because it is going to be a lot of
	people, but at the end of the day, we are going to recover--it
	is allegedly up to $100 billion. You have already identified $5
	billion, so if there is $50 billion to $90 billion out there,
	we are going to recover some. It is going to cost a lot of
	money to pursue it, but it is going to save a lot of money. I
	mean, all Americans can agree that if $100 billion was stolen
	through the PPP loan program, I mean, I think these people need
	to be held accountable. I don't think that is a partisan issue.
	Let's go to Mr. Shoemaker. I mean, SBA has all of this
	data. The legislation says that Treasury is going to work with
	IRS and SBA to deliver this report to the Attorney General. I
	mean, this wouldn't be hard for you to do. You have software. I
	mean, you have access to this information, do you not?
	Mr. Shoemaker. We do have access to the PPP data. The SBA
	does have access to some of the tax transcripts, but the data
	run that IG Horowitz is indicating, that is not available to us
	at present.
	Mr. Timmons. OK. So that would be IRS?
	Mr. Shoemaker. Yes.
	Mr. Timmons. Well, the IRS and SBA are going to have to
	work on this together, and that is what the legislation as
	drafted says----
	Mr. Shoemaker. Yes.
	Mr. Timmons [continuing]. Because they are going to need
	your help to see the PPP amount and then the alleged
	justification, and then the actual tax records will show
	whether it was legitimate.
	Mr. Shoemaker. An indication, yes.
	Mr. Timmons. And again, there are always going to be
	exceptions, but overwhelmingly, this will achieve the desired
	objective and save the $300 million that has being proposed to
	throw at it, but also likely recover quite a bit.
	Mr. Shoemaker. The thing that I believe that we need to
	think through, this is after the fact. This is pay-and-chase.
	Imagine if this control was on the front side.
	Mr. Timmons. It would have delayed the ability to get the
	money out, I am sure, and at the end of the day, we were
	building the cars. We were driving 90 miles an hour down the
	road. I will say that SBA and the government brought my faith
	back into humanity during COVID. People were working enormous
	amounts of time to get the needed relief out the door, and so I
	appreciate all the work that the Federal Government did to
	achieve that objective. I am over time. Mr. Chairman, thank
	you. I yield back.
	Mr. Sessions. The gentleman from South Carolina yields back
	his time. The gentlewoman from Vermont, Ms. Balint.
	Ms. Balint. Thank you, Mr. Chair, and thank you, Mr.
	Turner, Mr. Delmar, and Mr. Shoemaker. I know it has been a
	long afternoon, so I really appreciate your time. I was on the
	front lines dealing with the pandemic in Vermont. I was leader
	of the Vermont Senate, and what I remember most about that time
	was thousands and thousands of Vermonters calling my office,
	calling my colleagues with one message over and over again. We
	are desperate, right? We can't afford food. We can't afford our
	housing. And the answer for many of them was the Federal
	assistance they received in expanded unemployment benefits and
	through the Paycheck Protection Program.
	So obviously, these are huge national programs. We are all,
	I think, in agreement that we have to make sure we are rooting
	out fraudsters, that we are making sure that we are, you know,
	holding scammers accountable, but I want to put a face to this
	program, PPP in particular. When Vermonters think about that
	program, they think of places like Otter Creek Child Center and
	College Street Children's Center. The PPP Program helped these
	childcare centers stay afloat in the early days of the pandemic
	so that they could continue serving families. People were
	desperate for how it was that they were going to continue to
	get the care that their children needed.
	And, you know, according to folks who work at Otter Creek
	Child Center in Middlebury, PPP helped us support both families
	and teachers through our closure period from March 18 to May
	31. That is 2020. The funds allowed us to continue to cover
	payroll, keep spots available to families for when we reopened
	in June 2020, and PPP provided a critical safety net and a
	stress relief in a very uncertain time and a very stressful
	time. So, the funds allowed us to successfully reopen in June
	2020, meeting all required state and Federal mandates, while
	only being at 50 of capacity because of extenuating
	circumstances related to the pandemic. So, I can say I am here
	as a Member of Congress, newly elected, but I am also here as a
	mom, and a former teacher, and a member of my community, and I
	know how critical that program was.
	PPP meant that hundreds of kids could keep getting high-
	quality early childcare at places like Otter Creek and College
	Street Children's Center. It also meant that their parents
	could stay in the work force or get back into the work force,
	something that we are all still struggling with.
	So, as I said earlier, we need these programs to have
	integrity, right? We need to hold fraudsters and scammers
	accountable, not just to the Federal Government, but
	accountable to their communities and the resources they were
	taking away from organizations that desperately needed that
	money.
	So, Mr. Shoemaker, can you just take me through how did
	fraudsters take advantage of PPP Program and the expanded
	program we called EIDL, or the Economic Injury Disaster Loan
	programs? Can you just give me some examples? And I apologize.
	I was needing to be in another hearing. That is how it is in
	Congress. You got to be in the other hearing. You got to run
	back. So, if I am, you know, asking you something you have
	already covered, please forgive me, but if you could highlight
	that, that would be helpful to me.
	Mr. Shoemaker. Sure. Within PPP, there are a number of
	different fraud scams. In Oregon, there was a dentist. There
	was $170 million attempted to be stolen across all the
	programs, RF programs alone. In May 2022, there was a scam
	called My Buddy Loans, where these individuals, they put 400
	applications in for EIDL loans. Millions of dollars were lost,
	and so what you have is identity theft, and SBA's programs did
	not provide an assurance of identity, so you had those types of
	scams. You had romance scams where, you know, folks were duped.
	You had false businesses, false documentation, where, if you
	had assisted an internal control to validate the information,
	that could prevent that.
	So those are the types of scams that are out there, but,
	you know, IG Ware is sort of famous for this. Fraudsters are
	going to do what fraudsters do. They are going to come for the
	money, so you have to have the internal controls to root those
	guys out before they, you know, tear down the system.
	Ms. Balint. I appreciate that. So, in essence, I think we
	all want to try to focus on solutions here, right? It is a
	``yes/and.'' Yes, we helped a lot of people and we need to do
	it better in the future. And so, I want to make sure that we
	are continuing to make the investments that inspector generals
	need in order to make sure that the money that we are setting
	aside is going to those individuals and those organizations
	that desperately need it and not going to fraudsters. So, I
	thank you for your time. I yield back.
	Mr. Sessions. The gentlewoman yields back her time. Now I
	recognize the distinguished gentleman from Alabama, the
	chairman of the Policy Committee for Republicans, the
	gentlemen, Mr. Palmer.
	Mr. Palmer. I thank the Chairman, and I associate myself
	with the gentlelady's remarks ``running back and forth.'' It is
	very aerobic being in Congress. I have got some serious issues
	with how your agencies have handled the fraud. Would you
	repeat--and I don't remember who the witness was that gave the
	amount of fraud that we think cumulatively has occurred. Did I
	hear it could be as high as $800 billion?
	Mr. Turner. I know we calculated fraud to be $76 billion,
	and this is on the conservative side. That is Labor.
	Mr. Shoemaker. In PPP and EIDL, you know, currently our
	work has demonstrated approximately $100 billion in potential
	fraud, but we have an ongoing assessment that is due out in mid
	to late spring to be a comprehensive look at PPP and EIDL
	fraud.
	Mr. Palmer. Have you heard that it could be as high as $800
	billion?
	Mr. Shoemaker. No.
	Mr. Turner. I have never heard that amount.
	Mr. Palmer. You never heard that amount?
	Mr. Turner. I think the most I have heard was $400 billion.
	And again, we do not know where that came from because we get
	our rate from the Department, and that is what our numbers are
	based on.
	Mr. Palmer. And I was involved in trying to get to the
	bottom of the fraud in the state of Alabama. I was trying to
	get information, but in my working with some of the
	investigators, I found it very difficult. They were being
	denied access to information. That included deputy inspector
	general from the Department of Labor, Alabama investigators. I
	am concerned that the amount of fraud is substantially higher
	than what you gentlemen have acknowledged, and I just wonder
	how diligent, Inspector General Turner, the Department of Labor
	is going to be in trying to recover this. Is there any hope to
	recover this amount of money that has been taken fraudulently?
	Mr. Turner. Well, let me just assure you we take fraud
	serious, and we----
	Mr. Palmer. I didn't ask you that. I am asking you are you
	focused on this.
	Mr. Turner. Yes, we are. We are focused on it, but we also
	realize that once fraud leaves out the door, it is so hard to
	get back because there are so many factors beyond our control.
	Mr. Palmer. Well, one of those factors that all of you are
	dealing with are in some cases states that are not willing to
	work with you. Is that a fair assessment?
	Mr. Turner. I don't know if that is a fair assessment when
	it comes to recovery because the states as well as other law
	enforcement agencies, to include PRAC and DOJ, have all been
	partners, and we have all been working this together.
	Mr. Palmer. Well, the GAO recommended that the Department
	of Labor collect data on the overpayments, what you have done
	in the pandemic unemployment assistance program. And it was
	done with regular unemployment payments, and the Department of
	Labor agreed to do that. But as of September of last year, only
	30 states have reported some of this data. So, if you can't get
	the states to report, I don't care how much you are personally
	interested in trying to recover it, you are not going to get
	very far, are you?
	Mr. Turner. I agree totally with you. You made my case for
	me. We need direct access, and that is what we have said from
	day one, and that is what we continue to say today.
	Mr. Palmer. Mr. Chairman, it might be good if we start
	bringing in some secretaries of labor from the states to have a
	discussion about this. And one of the reasons I am so concerned
	about it is that every dollar of this fraudulent money that we
	sent out is borrowed. We just heard the director of the
	Congressional Budget Office yesterday tell us that in 10 years,
	the cumulative spending on interest on the debt will reach
	$10.9 trillion. Part of that interest is going to be on money
	that was stolen through these pandemic relief programs.
	I think we owe it to the American people to do everything
	that we can within our power to recover this and hold people
	accountable, and part of the problem was that we didn't put
	guardrails on this to reduce the amount of fraud, particularly
	on unemployment. We had states taking applications from foreign
	IP addresses. They were not requiring employer verification of
	layoffs. They were allowing people to personally certify
	themselves for this, and I could go on and on the list.
	And it was very lucrative. If you looked at this on an
	hourly wage rate for a regular 40-hour week, we were not only
	making people whole, we were making people pretty well off. And
	I just think, Mr. Chairman, that it is not enough to just hold
	this hearing. And I know the frustration that I am sure each
	one of you feel because I think you are committed to ensuring
	that the taxpayers' dollars are well spent and appropriately
	spent. But I think we may need to continue this and maybe bring
	in some secretaries of states from some of these states where
	it was even more egregious than it was in all of them and try
	to get to the bottom of this because we owe it to the
	taxpayers. We are paying an interest on it. I yield back.
	Mr. Sessions. I thank the distinguished gentleman for his
	comments. And, in fact, I would want to yield now time to Mr.
	Mfume for any closing comments, and then we will close this
	one, folks. At this time, the distinguished gentleman is
	recognized.
	Mr. Mfume. Thank you very much, Mr. Chairman. I just want
	to, again, express my appreciation to the three witnesses, to
	you, and to other Members of this Committee for delving into
	this. It has been a bipartisan effort, and I assume it will
	continue that way. And there are a lot of ideas that have come
	out of this hearing, particularly the extension of the statute
	of limitations and other things, so I thank you very much. Sir,
	I yield back.
	Mr. Sessions. The distinguished gentleman, the Ranking
	Member yields back. I, too, want to, as we started this
	hearing, to thank each of you and your staffs. But let's extend
	that also to the people who were back and IGs all across the
	country that you have that worked diligently on behalf of the
	taxpayer, and I believe as part of rule of law, and I believe
	part of Americanism. So, I want to thank each of you.
	We have had a consensus conversation, even though some have
	come and gone and come and gone, about where we are going to
	gather ourselves together, and I would expect to be able to
	politely offer that to you for your feedback so that we
	continue down the road. Mr. Mfume and I will work together, and
	we expect you to do the same with us, and we thank you very
	much.
	This ends the hearing today, and our thanks to each of you.
	[Whereupon, at 4:08 p.m., the Subcommittee was adjourned.]

	[all]
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