Elon Musk and President Donald Trump say they have uncovered huge “fraud” in the US federal government.
During Oval Office remarks on February 11, Trump said their efforts to cut spending had turned up “billions and billions of dollars in waste, fraud and abuse”.
Trump added: “We found fraud and abuse, I would say those two words as opposed to the third word that I usually use, but in this case, fraud and abuse.”
Trump and Musk used the word “fraud” or “fraudster” combined about a dozen times during their Oval Office question-and-answer session.
So far, neither Musk nor the Trump White House has shown evidence of this alleged criminal activity that they have found.
On February 12, during a White House news conference, a reporter asked Press Secretary Karoline Leavitt for evidence of fraud.
“I love to bring the receipts,” Leavitt said. She cited three contracts for $36,000 for diversity, equity and inclusion [DEI] programmes at US Citizenship and Immigration Services, $3.4m for the Council for Inclusive Innovation at the US Patent and Trademark Office, and $57,000 related to climate change in Sri Lanka.
“I would argue that all of these things are fraudulent,” Leavitt said. “They are wasteful and they are an abuse of the American taxpayer’s dollar.”
When PolitiFact asked about these claims, the White House press office pointed to an April 2024 Government Accountability Office report that found the “federal government loses an estimated $233 billion to $521 billion” every year to fraud.
The White House also sent a list of dozens of Department of Government Efficiency “wins”, including cancelled media outlet subscriptions and contracts for DEI initiatives, consulting and administrative expenses.
“Nothing they have identified is, to my knowledge, evidence of ‘fraud’ or ‘corruption’. Fraud and corruption are crimes,” said Jessica Tillipman, associate dean for government procurement law at George Washington University. “This administration simply has different spending priorities than the last administration. But to label all of it as fraud or corruption is extremely misleading.”
Trump has torn down governmental fraud-finding tools. He fired more than a dozen inspectors general whose job was to ferret out fraud and inefficiencies. He paused the Foreign Corrupt Practices Act, which prohibits businesses from taking bribes from foreign officials.
Government reports show that fraudulent spending is a measurable problem for the federal government. But the evidence that DOGE has uncovered new examples has yet to be proved.
Here’s an overview of how the government deals with waste, fraud and abuse.
Fraud is not the same as waste or abuse
Waste, fraud and abuse are not interchangeable terms.
The Government Accountability Office (GAO) says waste is “using or expending resources carelessly, extravagantly or to no purpose”. Abuse is “behaviour that is deficient or improper”. Fraud “involves obtaining something of value through wilful misrepresentation” and is labelled after a legal process.
“Fraud is a very high legal standard,” said David M Walker, who serves on the federal government’s Defense Business Board, which advises the Defense Department on business management.
To qualify as fraud, an activity has to be illegal with evidence of intent, which is “the most difficult thing to prove”, he said.
Walker, the former US government comptroller who led the GAO under Democratic and Republican administrations, said most of the examples he has heard from DOGE could be characterised as waste and abuse. Walker offered the Paycheck Protection Program, which Congress passed in March 2020 to help small businesses cover payroll early in the COVID-19 pandemic, as an example of a programme that had fraudulent payments that the government later caught. The US Small Business Administration inspector general later estimated $64bn in fraud.
The Government Accountability Office is staffed with auditors, and federal inspectors general offices have auditors and law enforcement on staff. Both refer suspected fraud to investigators.
“Anytime someone looks at data (spending data, for example), you will see anomalies that catch your attention and warrant review,” said Robert Westbrooks, the Pandemic Response Accountability Committee executive director who worked in government oversight roles during Democratic and Republican administrations. “That does not necessarily mean the transaction is fraudulent or wasteful.”
Westbrooks reviewed the White House list of DOGE “wins” and said he saw no evidence of an intent to deceive.
“Waste is in the eye of the beholder,” he said. “Fraud, on the other hand, is determined by a court.”
Before Trump, inspectors general found criminal activity
Congress passed the Inspector General Act of 1978 in response to anticorruption efforts that started after the 1972 Watergate break-in and cover-up that led to President Richard Nixon’s resignation. An agency inspector general’s mission is to conduct independent and objective audits, investigations and inspections, and prevent and detect waste, fraud and abuse.
Only the president can remove inspectors general. Trump fired 17 inspectors general on January 25, prompting a lawsuit by many seeking to get their jobs back. The lawsuit says Trump did not follow the law that requires him to notify Congress 30 days before he removes inspectors general. (Trump also pushed out a handful of inspectors general in spring 2020.)
Trump later fired US Agency for International Development (USAID) Inspector General Paul Martin following a February 10 advisory that the federal government’s pause on foreign assistance posed financial risks. (The unsigned notice came from the USAID inspector general.) The notice said the government’s pause on foreign aid put more than $489m of food assistance at risk of spoilage or diversion and limited officials’ ability to respond to fraud and waste allegations.
In the past, many inspectors general have found fraud.
The Council of the Inspectors General on Integrity and Efficiency issued an annual report for 2023 that highlighted federal efforts to combat fraud, waste and abuse. The report showed that the work of inspectors general led to more than 4,000 prosecutions and identified nearly $93.1bn in potential savings.
The findings resulted in about 3,000 suspensions, reprimands and terminations for federal contractors and federal, state and local employees.
Inspectors general in recent years have found fraudulent activity in COVID-19 relief programmes, including $5.4bn in pandemic relief loans obtained via fabricated Social Security numbers.
Inspectors general at other agencies have also found wrongdoing that prompted prosecutions, including a bid-rigging scheme related to NGO contracts funded in part by USAID.
Another probe led to a $6.9m settlement with an international nongovernmental organisation over inflated invoices. The inspector general also suspended or prevented some organisations from doing business with USAID.
