By firing inspectors general, Trump is covering up pandemic-era fraud

Pretending to register emotional support animals was a lucrative scheme for a Washington, D.C. man who fraudulently received more than $2.1 million in pandemic relief loans from the Small Business Administration in 2020.

He used the funds to purchase a 33-foot boat, a new car and a rowhouse in Northeast D.C. This perpetrator's fraud was uncovered by investigators, including the SBA inspector general, and he was sentenced to 78 months in prison in 2022.

There are thousands of open investigations into pandemic-era fraud at the SBA, but on Jan. 24 President Trump removed the agency’s chief fraud investigator, Inspector General Hannibal “Mike” Ware, without cause — and likely in violation of the law — alongside 17 other agency inspectors general.

Lawmakers from both parties should be concerned that Ware’s firing is Trump’s attempt to avoid responsibility for his first administration’s ham-fisted delivery of pandemic relief programs, such as the Paycheck Protection Program, which enabled more than 86 percent of all pandemic fraud in the SBA’s $1.2 trillion relief programs.

Over the last three years, I had a front-row seat at SBA, where I led our congressional efforts, including cleaning up the fraud from the first Trump administration. Ware worked closely with SBA leadership and Congress, playing a critical role in recovering taxpayer dollars in partnership with agency leadership.

Our team did an intensive staff review to look for likely fraud with input from the lending community and tips from members of Congress. We shared that information with the inspector general, who then often partnered with other federal law enforcement agencies to investigate and advance justice. These investigations had bipartisan support, and former President Joe Biden signed into law a bipartisan bill to increase the statute of limitations for pandemic fraud from five years to 10 years — meaning that the inspector general could be investigating pandemic fraud throughout the next four years of the Trump administration.

The inspector general's firing shows a shift in priorities for the new administration away from Republican talking points about getting tough on fraud. It will instead let fraudsters and criminals evade responsibility. For example, former Sen. and now Secretary of State Marco Rubio (R-Fla.), author of the legislation creating the pandemic programs, said fraudsters “should go to jail and pay restitution for what they stole.”

Ware testified before Congress that his office has “over 100-years’ worth of criminal investigative work” via the more than 250,000 tips received by the SBA’s fraud hotline, which generated 95,000 actionable leads. During my time at the SBA, our leadership team was not always aligned with the inspector general’s recommendations, but our direct lines of communication helped strengthen our fraud prevention efforts. Ware’s investigations were not viewed as overly partisan, and he won bipartisan praise from persistent SBA critics, including Rep. Beth Van Duyne (R-Texas), who said Ware has done a “commendable job” in fighting fraud.

The inspector general and Congress often acknowledged that the Biden administration inherited massive problems that SBA Administrator Isabel Guzman worked to correct. She directed the agency to operate with both speed and certainty — implementing standards to check tax returns and conduct automated fraud screenings before disbursing funds to prevent taxpayer dollars from going to tax cheats or criminals.

Under Guzman’s watch, SBA implemented a Fraud Risk Review Board — on which I was privileged to serve — to look at fraud risks across SBA programs. SBA also put into operation new technology to efficiently deploy future emergency programs with lower fraud risk and to strengthen the agency’s core disaster and business loan programs.

These reforms made a difference, but so did SBA’s partnership with our inspector general. Members of Congress brought concerns to my office daily about their constituents who were affected by fraud. We received tips about Paycheck Protection Program fraud, including employers who were ineligible for the loans they received. Elderly senior citizens and legitimate businesses had their identities stolen by fraudsters to obtain loans during the early days of the pandemic. All of these cases were investigated by the inspector general and law enforcement, and his office helped recover hundreds of millions in stolen funds.

Taxpayers stand to lose billions if fraudsters are allowed to evade investigation, and the decision to fire SBA’s inspector general is a green light to criminals and a blatant attempt to cover up the failures of Trump’s first term. If members of Congress are truly serious about recovering stolen taxpayer dollars and fighting fraud, they will push back and restore Ware and other fired inspectors general to their positions.

George Holman is the former associate administrator for congressional and legislative affairs at the Small Business Administration. He previously worked on Capitol Hill for Senate Majority Leader Harry Reid.

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