[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                    
          
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               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.]

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