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More Than $200 Billion in COVID-19 Aid May Have Been Stolen, Federal Watchdog Says

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More than $200 billion may have been stolen from two large COVID-19 relief initiatives:

According to new estimates from a federal watchdog looking into federally funded programs that assisted small businesses survive the worst public health crisis in more than a century, more than $200 billion may have been stolen from two significant COVID-19 relief initiatives.

The figures revealed on Tuesday by the U.S. Small Business Administration inspector general show how much more vulnerable the Paycheck Protection and COVID-19 Economic Injury Disaster Loan programs were to fraudsters than the office’s earlier estimates. This was especially true during the early stages of the coronavirus pandemic.

The inspector general’s report said “at least 17 percent of all COVID-EIDL and PPP funds were disbursed to potentially fraudulent actors.” According to the report, the COVID-19 Economic Injury Disaster Loan Program fraud estimate is more than $136 billion, or 33% of the program’s overall budget. The inspector general estimated that the Paycheck Protection fraud cost $64 billion.

A senior SBA official disputed the new numbers in comments that were included with the report. SBA’s interim associate administrator for capital access, Bailey DeVries, stated that the inspector general’s “approach contains serious flaws that significantly overestimate fraud and unintentionally mislead the public to believe that the work we did together had no significant impact in protecting against fraud.”

The COVID-19 disaster loan program and the Paycheck Protection program both had fraud estimates of $86 billion and $20 billion, respectively, by the SBA inspector general.

According to a June 13 AP report, scammers and swindlers may have stolen about $280 billion in COVID-19 emergency aid, and another $123 billion was lost or misused. The two SBA programs and another to provide unemployment benefits to workers suddenly out of work due to the economic upheaval caused by the pandemic account for the majority of the potential losses. President Joe Biden took over the three projects that were started by the Trump administration. The total loss estimated by AP amounts to 10% of the $4.2 trillion in COVID relief aid that the US government has already paid out.

The amount of potential fraud that the federal government has now disclosed is $276 billion, which is consistent with the AP’s calculations.

During the first nine months of the pandemic, while President Donald Trump was in office, 86% of the fraud—or potential fraud—in the emergency loan programs occurred, according to Gene Sperling, a senior White House official in charge of overseeing pandemic relief spending.

“$200 billion is a very big number, but this, again, should be remembered as potential fraud,” Sperling said. “We think the amount of likely or actual fraud is significantly less, significantly under $100 billion, perhaps around $40 billion.”

But he added, “whichever it is, it’s unacceptably high.”

The SBA inspector general, Hannibal “Mike” Ware, said in a statement Tuesday that the report “utilizes investigative casework, prior (inspector general) reporting, and cutting-edge data analysis to identify multiple fraud schemes used to potentially steal over $200 billion from American taxpayers and exploit programs meant to help those in need.”

Ware, in an interview with The Associated Press earlier this month, said these latest fraud figures won’t be the last ones issued by his office.

“We will continue to assess fraud until we’re finished with the investigations on these things,” Ware said. That could be a long while. His office has a backlog of more than 90,000 actionable leads into pandemic relief fraud, which amounts to nearly a century’s worth of work.

The SBA published a report on its own anti-fraud policies on Tuesday. The report details “the effective measures added to fight fraud and hold bad actors responsible,” according to an email statement from the agency’s administrator, Isabella Casillas Guzman.

SBA previously told The Associated Press the federal government has not developed an accepted system for assessing fraud in federal programs. Previous analyses, the agency said, have pointed to “potential fraud” or “fraud indicators” in a manner that conveys those numbers as a true fraud estimate when they are not. For the COVID-19 Economic Injury Disaster Loan program, the agency said it’s “working estimate” found $28 billion in likely fraud.

According to Larry Turner, inspector general for the Labor Department, fraud in pandemic unemployment assistance programs has reached $76 billion. That is a reasonable guess. According to his testimony, an additional $115 billion was inadvertently distributed to individuals who weren’t eligible for the benefits.

In order to combat widespread fraud, the Biden administration implemented stricter regulations, including the use of a “Do Not Pay” database. Additionally, Biden recently put forth a $1.6 billion plan to increase law enforcement’s capacity to pursue pandemic relief scammers.

Bob Westbrooks, a former executive director of the federal Pandemic Response Accountability Committee, said in an interview the $200 billion number is “unacceptable, unprecedented and unfathomable.” Westbrooks published a book last week, “Left Holding the Bag: A Watchdog’s Account of How Washington Fumbled its COVID Test.”

“The swift distribution of funds and program integrity are not mutually exclusive,” Westbrooks said Tuesday. “The government can walk and chew gum at the same time. They should have put basic fraud controls in place to verify people’s identity and to make sure targeted relief was getting into the right hands.”

According to John Griffin, a finance professor at the University of Texas at Austin’s McCombs School of Business, the fraudulent payouts have consequences.

In a recent paper, Griffin and colleagues claimed that fraud in pandemic relief drove up home prices.

Even after adjusting for other variables that affect home prices such as land supply, prior house price growth, and the ability to telework, the study found that people who fraudulently obtained Paycheck Protection loans were more likely to purchase a home than people who obtained legitimate loans and that housing prices increased by an average of 5.7 percentage points in ZIP codes with high levels of fraud during the pandemic. That would add $22,800 to a house worth $400,000.

Griffin said Tuesday that the study also discovered rises in consumer spending in ZIP codes where people had received significant amounts of fraudulent money, which may have fueled inflation more generally.

“If you paid too much for your house because fraudsters pumped up the house prices in your ZIP code and then your house price ends up going down, you could be the victim of an unintended consequence of fraud,” he said in an interview. “It’s another reason why we should care about fraud.”

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CIA Secret Report Reveals Warning to Russia of Terrorist Attack was Marked “Urgent” but Failed to Identify Target

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US warning regarding a potential terrorist attack at a concert venue in Russia was labeled as “urgent.” However, the warning, according to Hersh’s source, did not specify Crocus City Hall as the target, despite some media reports suggesting otherwise.

The CIA allegedly provided the warning to Russian intelligence before the concert at the Crocus City Hall marking it “urgent,” meaning that the data in it “was credible and near term,” Hersh quoted the official as saying.

“The highly secret report on the attack in Moscow was prepared by the Counterterrorism Center at CIA headquarters and delivered to the terrorism division of the Russian Federal Security Service located in the old KGB building in Moscow. Separate briefings were presented in person by the FBI officer at the embassy. This is an established relationship,” the official said.

The warning, however, did not mention Crocus City Hall near Moscow and only said that an attack was being planned at some “public gathering,” according to the official.

The information provided by the official is contrary to a Washington Post report published on Tuesday claiming that Crocus City Hall was specifically identified in the warning as the target of a terrorist attack.

On March 22, several armed men broke into Crocus City Hall, a major concert venue just outside Moscow, and started shooting at people. They also started a fire in one of the auditoriums, which was full of people ahead of a concert. The attack left 695 casualties, including 144 dead, according to the latest data from the Russian Emergencies Ministry.

The four main suspects in the case — all of them citizens of Tajikistan — tried to flee the scene in a car but were detained and charged with terrorism. Russian authorities believe the perpetrators planned to flee to Ukraine, where a safe haven had been arranged for them. An investigation is underway.

Later in March, The New York Times reported, citing European and US security officials, that the US intelligence agencies did not provide the Russian side with all the information they had about the threat of a terrorist attack at Crocus City Hall in the Moscow Region out of fear that Russian authorities might learn about their intelligence sources or methods of work.

Russian Federal Security Service (FSB) Director Alexander Bortnikov also said that the information transmitted by the United States on the preparation of a terrorist attack was of a general nature, and the Russian special services responded to it.

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Biden Admin is Using Fraudulent Climate Dataset in Push For Green Agenda, According to Government Watchdog

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A government watchdog group has filed a complaint with the Biden administration over its use of a dataset frequently used to push its climate agenda.

Protect the Public’s Trust (PPT) filed the complaint with the Commerce Department over the National Oceanic and Atmospheric Administration’s (NOAA) “Billions Project” dataset, which purports to keep track of natural [and climate] disasters that have caused at least $1 billion in damages going back to 1980. The billion-dollar disasters (BDD) data — cited frequently by the Biden administration to insinuate that climate change is intensifying and justify sweeping green policies — is based on opaque data derived from questionable accounting practices, PPT alleges in the complaint.

“American families and businesses continue to struggle with persistently high inflation, which many attribute in large part to the energy policies and government spending of the current administration. The idea that blatant violations of scientific integrity could be underlying the rationale for these policies should concern every American,” Michael Chamberlain, PPT’s director, told the Daily Caller News Foundation. “Unfortunately, this is far from an isolated incident. The Biden Administration came into office pledging that its decision making would be grounded in the highest-quality science, but all too often has failed to live up to those promises.”

The complaint was filed with the Commerce Department, as NOAA operates under its auspices, Chamberlain told the DCNF.

PPT’s complaint alleges that NOAA does not adequately disclose its sources and methods for compiling the BDD dataset, adds and removes BDD events from the dataset without providing its rationale for doing so and produces cost estimates that are sometimes significantly different than those generated by more conventional accounting procedures.

While NOAA states that it develops its BDD data from more than a dozen sources, the agency does not disclose those sources for specific events or show how it calculates loss estimates from those sources, PPT’s complaint alleges.

The complaint further alleges that NOAA’s accounting methods are opaque and “produce suspect results.”

For example, when Hurricane Id alia took aim at Florida in 2023, NOAA initially projected that the storm would cause about $2.5 billion worth of damages before insured losses ultimately came in at about $310 million, according to PPT’s complaint, which cites the Florida Office of Insurance Regulation

 for that figure. Nevertheless, NOAA subsequently marked up its estimate for how much damage the storm caused to $3.5 billion, a discrepancy for which NOAA provided no explanation, PPT alleges in its complaint.

NOAA researchers have disclosed in the past that the agency considers factors such as functions pertaining to livestock feeding costs — in addition to more conventional types of damages — in their cost calculations.

Further, the complaint alleges that BDD events are quietly added and removed from the dataset without explanation, citing Roger Pielke Jr., a former academic who believes climate change to be a real threat but opposes politicized science. In a forthcoming paper analyzing the merits of BDD statistics, Pielke compared the dataset in late 2022 to the dataset in the middle of 2023 and found that ten new BDD events were added to the list and 3 were subtracted without explanation.

Apart from the issues with methodology alleged by PPT in its complaint, the use of BDD events as a proxy for climate change’s intensity is inherently misleading because economic data does not reflect changes in meteorological conditions, as Pielke has previously explained to the DCNF.

For example, increasing concentrations of assets, especially in coastal areas, can confound the usefulness of BDD events as an indicator for the intensity of climate change, as Energy and Environment Legal Institute Senior Policy Fellow Steve Milloy has previously explained to the DCNF. Hypothetically, the same exact hurricane could hit the same exact place, decades apart, with vastly different damage totals; this would be the case because there are simply more assets sitting in the way of the storm, not because the storm was any more violent due to worsening climate change.

NOAA has acknowledged this limitation of the dataset in prior communications with the DCNF.

Additionally, NOAA will add disasters to the list retrospectively because it adjusts for inflation, meaning that a hurricane that caused $800 million in damages in 1980 dollars would be added to the list because the damages exceed $1 billion when adjusted for inflation, for example.

The Biden administration has frequently cited the BDD dataset to substantiate its massive climate agenda.

For example, Deputy Energy Secretary David Turk cited the dataset in written testimony submitted to lawmakers in February explaining the White House’s decision to pause new approvals for liquefied natural gas export terminals.

The BDD statistics are also referenced Fifth National Climate Assessment (NCA5), the Biden administration’s landmark climate report that is intended to provide the most sound scientific basis for lawmakers and officials to craft climate policy.

NOAA asserted that the increasing frequency of BDD events is a sign of intensifying climate change in a January press release and blog post summarizing 2023, and then defended the use of the dataset in subsequent communications with the DCNF.

“Sensational climate claims made without proper scientific basis and spread by government officials threaten the public’s trust in its scientific officials and undermines the government’s mission of stewarding the environment,” PPT’s complaint states. “It also poses the danger of policymakers basing consequential government policy on unscientific claims unsupported by evidence.”

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U.S. Military Has Started Recalling Retirees Due to Recruiting Crisis

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The U.S. Army Publishing Directorate released the ALARACT 017/2024, titled, “Utilization of the Army Retiree Recall Program.”

The document cites Executive Order 13223 from the Bush administration in 2001.

A retiree recall is a “retired Soldier who is ordered to active duty (AD) from the Retired Reserve or the retired list under 10 USC 688/688a, 12301(a), or 12301(d). Per AR 601-10, Recalled retiree Soldiers must be aligned to a valid vacant AC requirement that matches the grade and skill of the retiree before he or she may be recalled to AD,” according to the document. “The retiree population will be utilized as a last resort to fill Active Component vacant requirements.”

The ALARACT 017/2024 comes as the U.S. military is experiencing a recruitment crisis.

The U.S. Army recently announced that it is cutting thousands of positions. Authorized troop levels will now be an estimated 470,000 by fiscal year 2029, down 24,000 from its 494,000 soldiers.

“While making these investments and adding formations, the Army must also reduce force structure to protect readiness in light of decreased end strength. The Army is currently significantly over-structured, meaning there are not enough soldiers to fill out existing units and organizations. Army leaders seek to have at least 470,000 soldiers in the Active Component by FY29, which is nearly 20,000 above the current end strength but a reduction of about 24,000 authorizations compared to currently planned force structure,” the report

 states.

It added that the Army is “undertaking a similarly important transformation of its recruiting enterprise so that it can man units sufficiently, continue to bring the right types and amounts of new talent into the Army, and rebuild its overall end strength.” Noting the ongoing recruitment failure within the U.S. military, the document noted, “The Army must solve its recruiting challenges to successfully transform for the future.”

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