Republicans in the House of Representatives are asking the inspectors general of eleven cabinet- and sub-cabinet-level executive branch agencies to prepare plans that will allow Infrastructure Investment and Jobs Act (IIJA) funds to be distributed without the potential for significant fraud.
The House Republicans reference fraud associated with COVID-19 relief programs, as well as failed broadband expansion programs, in their letters. The IIJA distributes $1.2 trillion in federal funds, with $550 billion of it recently approved. The remainder is redirected from COVID-19 relief dollars that were not spent.
“As much as $400 billion, or half of the unemployment claims, could be fraudulent,” the Republicans write, citing the estimate of an online identity protection company. Paycheck Protection Program (PPP) funds were targeted by criminals, with the Department of Justice publicly charging over 100 people with fraud and other charges in relation to misrepresentations and falsehoods connected with applications for and spending of PPP loans.
Attorney General Merrick Garland announced a task force in May 2021 aimed at various forms of fraud associated with the COVID-19 pandemic and government programs created to respond to it.
“It’s no secret the government has a history of mismanaging grant and loan programs. Whether funds are given to phantom projects that never materialize or the grants are never awarded, taxpayers are on the hook for waste, fraud, and abuse. The Infrastructure Investment and Jobs Act is filled to the brim with grant programs ripe for bad actors to exploit and incompetent bureaucrats to mismanage,” Ohio Rep. Bob Gibbs, who organized the letter campaign, said in a statement.
“Given the extraordinary and unprecedented level of funding in the bipartisan infrastructure bill, taxpayers deserve to know that agency inspectors general are keeping a close and watchful eye on these funds. My colleagues and I are very concerned about the potential for these programs to be mismanaged or used to reward Democrat interest groups. That is why we are demanding to know how inspectors general will prevent corruption and mismanagement. The last thing we need is another Solyndra-style corruption scandal,” he added.
Substantial amounts of IIJA funds will be distributed through block grants to states, and through regional commissions and agencies. Regional commissions such as the Appalachian Regional Commission (ARC), aimed at job creation through grants to start-ups, local businesses, as well as non-profits, received billions of dollars for distribution. Gayle Manchin, the wife of key negotiator Democratic Sen. Joe Manchin of West Virginia, currently chairs the ARC.
