The first Trump administration facilitated the biggest pandemic fraud in the country

One of the things I'm noticing in all the coverage of the "Minnesota fraud" issue is that it is common to hear reporters refer to it as the largest pandemic fraud in the country. Given that the Minnesota Star Tribune has documented $218 million of fraud currently being prosecuted, it's worth taking a moment to check that claim.

In March 2020, the CARES Act was passed and signed by President Trump. Included were loan programs (Paycheck Protection Program and Economic Injury Disaster Loans) administered by the Small Business Administration that would be forgiven if borrowers fulfilled the requirements of how the money was to be used. 

In June 2023, the SBA Inspector General issued a report that included the following (emphasis mine):

We estimate that SBA disbursed over $200 billion in potentially fraudulent COVID-19 EIDLs, EIDL Targeted Advances, Supplemental Targeted Advances, and PPP loans.

In a previous report, this is what they found:

SBA did not have an organizational structure with clearly defined roles, responsibilities, and processes to manage and handle potentially fraudulent PPP loans across the program. In addition, the agency did not establish a centralized entity to design, lead, and manage fraud risk. 

While it is important to note that the IG was reporting "potential fraud," it's clear that the actual number would dwarf anything we're currently seeing in Minnesota.

But it gets worse. According to the non-partisan watchdog Project on Government Oversight, as these loans were distributed, some were marked with red flags as being at high risk for fraud so that they could be more closely assessed before being forgiven. But here's what happened:

The data obtained by POGO appears to show mass close-outs of 2.7 million flags on two separate days near the end of the Trump administration. On a third day shortly before President Joe Biden’s inauguration, the SBA cleared out 99.1% of “special review” flags, almost entirely assigned to the very largest PPP loans above $2 million.

On the infamous date of January 6, 2021, the Trump administration removed the red flag warnings on 99% of loans over $2 million - almost guaranteeing that they would be forgiven. In other words, Trump isn't just extorting fraudsters for pardons, his administration actually facilitated the largest pandemic fraud during his first term. 

All of that is why I was enraged when I saw that the current SBA Administrator Kelly Loeffler wrote a letter to MN Gov. Tim Walz announcing that she was cutting off all SBA funding to Minnesota because the state "failed to safeguard taxpayer dollars." She actually had the gall to include in her letter that they had identified "13,600 PPP loans in Minnesota, totaling about $430 million, that were initially flagged by SBA as fraudulent."

These people are absolutely shameless.