House Panel Identifies Tens Of Thousands Of PPP Loans At 'High Risk' For Fraud Or Abuse
Tens of thousands of loans issued by the Trump administration as part an economic relief program for small businesses struggling amid the coronavirus pandemic face a “high risk of fraud, waste or abuse,” according to a report issued Tuesday by a House panel.
The House Select Subcommittee on the Coronavirus Crisis, which was created in April to oversee the Trump administration’s response to the economic disaster caused by the pandemic, found that billions of dollars dispersed as part of the Paycheck Protection Program (PPP) may have been misappropriated.
The PPP, a $669 billion business loan program, has granted more than 5.2 million loans since it was established in late March by the Coronavirus Aid, Relief and Economic Security Act, also known as the CARES Act.
In its report Tuesday, the House subcommittee found over $1 billion in loans went to companies that received multiple PPP loans ― a violation of the program’s rules. The subcommittee also said over $96 million went to companies that were ineligible for the program or had been flagged for potential fraud.
The Small Business Administration, which implemented the PPP, approved more than 350 loans that amounted to roughly $195 million to government contractors that were previously flagged for “integrity” or “performance” issues, according to the House subcommittee.
Though PPP helped millions of small businesses “stay afloat” during the coronavirus crisis, inadequate oversight made the program vulnerable to abuse, the subcommittee’s chairman, Rep. Jim Clyburn (D-S.C.), said in a statement Tuesday.
“A lack of oversight and accountability from SBA and Treasury may have led to billions of dollars being diverted to fraud, waste, and abuse, rather than reaching small businesses truly in need,” Clyburn said in his statement.
The Treasury Department and SBA have said they will only audit loans that are over $2 million and “other loans as appropriate.” But the House...
