Congress passed the $2.2 trillion CARES Act in March 2020. Included in that law, which was signed into law by President Donald Trump, was the "Paycheck Protection Program" – more than $600 billion in loans to small businesses, some of which were eligible for loan forgiveness. That is, if a company used it to keep their business going during the pandemic, they wouldn't have to pay it back.
The problem, according to Tom Schatz – president of Citizens Against Government Waste – is when someone announces "free money," all kinds of riffraff come running.
"There are very few consequences for wasting the taxpayers' money," he begins, "and the government is much better at sending out the taxpayers' money than it is at preventing it from being wasted or recovering it when it is wasted."
Now auditors are saying as much as $80 billion – more than 10% of the money – was looted by people who either inflated their number of employees or made up entirely fictitious companies.
Schatz says the most galling thing about the theft was that those in charge of the Paycheck Protection Program knew it was being looted – and did nothing about it.
"It was easy to get [some money] because the government didn't really care who was getting it. Their objective was to hand it out," he asserts. "They knew right away that there would be a lot of fraud, and they honestly didn't care."
The government, says Schatz, is trying to recover the money but is only recouping a fraction of it.
"The Department of Justice is bringing cases against a lot of these individuals. Some of them are going to jail; a lot of them had to pay back the things that they bought or that they stole," he reports. "So, they are covering Lamborghinis and Teslas and homes and a lot of other ill-gotten gains."
The Paycheck Protection Program was originally intended to expire June 30, 2020 … then was extended to early August 2020 … then ultimately to March 31, 2021. In March 2021, President Joe Biden signed a bill extending the deadline for the PPP to May 31, 2021.