Three years after the deadly pandemic brought the United States to a screeching halt — shutting down businesses, industries, government offices, schools and much of daily life as we had known it — memories of how terrible those days were have begun to fade a little.
Before politicians and the general public become too outraged over reports of the staggering amount of fraud in federal COVID-19 relief programs, we should remember the enormous need in those dark months when businesses were in danger of closing for good and people thrown out of work were scrambling to take care of themselves and their families.
Yes, recent reports that billions of dollars of federal COVID-19 funds were stolen or misspent are shocking and appalling. A recent report from The Associated Press says that fraudsters may have stolen more than $280 billion in COVID relief aid, while as much as another $123 billion was wasted or used wrongly.
Those losses together come to about 10% of the $4.2 trillion in COVID relief aid the federal government doled out. There’s about another trillion dollars in aid yet to be paid.
Sadly, it’s not surprising that some people would take advantage of a devastating pandemic that killed more than 1.13 million Americans, put enormous pressure on hospitals and medical workers, and stressed our economy almost to the breaking point. Some were hardened criminals and gangsters. Others just saw an opportunity and thought it was OK to game the system.
Unscrupulous crooks used the Social Security numbers of dead people and federal prisoners to get unemployment checks. Fraudsters collected benefits in more than one state. People whose business ventures and finances were in good shape got money intended to keep struggling mom-and-pop shops from folding.
In Washington, more investigations are under way, and politicians are arguing about what went wrong and who’s to blame.
Investigations and accountability are vitally important. Already, the government has charged more than 2,230 defendants with crimes related to pandemic fraud. Every effort should be made to punish people who profited from the pandemic and to recover fraudulently obtained money. The continuing investigations, criminal charges, convictions and recovered monies should get as much attention as the shocking scope of the fraud.
It’s also important to learn the right lessons from what happened.
Some mistakes were inevitable. This $5.3 trillion federal rescue package was unprecedented in size, and the necessary haste made things tougher. The agencies responsible for distributing funds, including the Small Business Administration, the Internal Revenue Service and state unemployment agencies, were unprepared and understaffed.
The situation was likely made worse by the Trump administration’s early attempts in 2020 to downplay the pandemic and then to put the burden of dealing with it on the states. When the situation became dire, the administration hastily set up three large pandemic-relief programs and began pumping money out.
Critics now say that haste was a mistake and that more should have been done to make certain that money reached its intended recipients. Probably some greater care could have been taken; when the Biden administration took over, it began using the Treasury Department’s “Do Not Pay” database of problematic contractors and individuals to weed out fraud, a process that critics say takes only a few days.
But overall, the urgency was justified. In such a dire emergency, it was more important to get help to people and businesses who desperately needed it than to make applicants plod through miles of red tape to prove their worthiness. Remember, back then, many frantic people were bemoaning how long it took to get help.
The biggest danger is that as we are disgusted by the enormity of the fraud and waste, we will lose sight of how urgent the need was and how the aid programs shored up the economy and saved desperate people. If wary Americans refuse to step up with relief programs when some future emergency demands them, that would be the greatest damage the thieves and fraudsters have done.
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