[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                       FEDERAL PANDEMIC SPENDING:
                       A PRESCRIPTION FOR WASTE,
                            FRAUD AND ABUSE

=======================================================================

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      OVERSIGHT AND ACCOUNTABILITY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            FEBRUARY 1, 2023

                               __________

                            Serial No. 118-1

                               __________

  Printed for the use of the Committee on Oversight and Accountability
  
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]  


                       Available on: govinfo.gov,
                         oversight.house.gov or
                             docs.house.gov
                             
                               __________

                                
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
50-896 PDF                  WASHINGTON : 2023                    
          
-----------------------------------------------------------------------------------                              
                             
                             
                             
                             
               COMMITTEE ON OVERSIGHT AND ACCOUNTABILITY

                    JAMES COMER, Kentucky, Chairman

Jim Jordan, Ohio                     Jamie Raskin, Maryland, Ranking 
Mike Turner, Ohio                        Minority Member
Paul Gosar, Arizona                  Eleanor Holmes Norton, District of 
Virginia Foxx, North Carolina            Columbia
Glenn Grothman, Wisconsin            Stephen F. Lynch, Massachusetts
Gary Palmer, Alabama                 Gerald E. Connolly, Virginia
Clay Higgins, Louisiana              Raja Krishnamoorthi, Illinois
Pete Sessions, Texas                 Ro Khanna, California
Andy Biggs, Arizona                  Kweisi Mfume, Maryland
Nancy Mace, South Carolina           Alexandria Ocasio-Cortez, New York
Jake LaTurner, Kansas                Katie Porter, California
Pat Fallon, Texas                    Cori Bush, Missouri
Byron Donalds, Florida               Shontel Brown, Ohio
Kelly Armstrong, North Dakota        Jimmy Gomez, California
Scott Perry, Pennsylvania            Melanie Stansbury, New Mexico
William Timmons, South Carolina      Robert Garcia, California
Tim Burchett, Tennessee              Maxwell Frost, Florida
Marjorie Taylor Greene, Georgia      Becca Balint, Vermont
Lisa McClain, Michigan               Summer Lee, Pennsylvania
Lauren Boebert, Colorado             Greg Casar, Texas
Russell Fry, South Carolina          Jasmine Crockett, Texas
Anna Paulina Luna, Florida           Dan Goldman, New York
Chuck Edwards, North Carolina        Jared Moskowitz, Florida
Nick Langworthy, New York
Eric Burlison, Missouri

                       Mark Marin, Staff Director
        Jessica Donlon, Deputy Staff Director & General Counsel
          Daniel Ashworth, Deputy Chief Counsel for Oversight
             Raj Bharwani, Senior Professional Staff Member
                Sarah Feeney, Professional Staff Member
      Mallory Cogar, Deputy Director of Operations and Chief Clerk

                      Contact Number: 202-225-5074

                  Julie Tagen, Minority Staff Director
                                 
                                 
                                 ------                                                                                 
                         
                         C  O  N  T  E  N  T  S

                              ----------                              

                                                                   Page
Hearing held on February 1, 2023.................................     1

                               Witnesses

The Honorable Gene L. Dodaro, Comptroller General of the United 
  States, Government Accountability Office
    Oral Statement...............................................     6

The Honorable Michael E. Horowitz, Chair, Pandemic Response 
  Accountability Committee
    Oral Statement...............................................     7

Mr. David M. Smith, Assistant Director, Office of Investigations, 
  U.S. Secret Service
    Oral Statement...............................................     9

Ms. Rebecca Dixon, Executive Director, National Employment Law 
  Project
    Oral Statement...............................................    81

 Opening statements and the prepared statements for the witnesses 
  are available in the U.S. House of Representatives Repository 
  at: docs.house.gov.
                           INDEX OF DOCUMENTS

                              ----------                              

  * Memo, Implementation Guidance for Supplemental Funding 
  Provided in Response to COVID-19; submitted by Rep. Raskin.

  * Report, PRAC, ``State-Entitled Key Insights in State Pandemic 

  Unemployment Insurance Programs;'' submitted by Rep. Ocasio-
  Cortez.

  * Article, New York Times, ``How Bar's Quest to Find Flaws in 
  the Russia Inquiry Unraveled;'' submitted by Rep. Goldman.

  * Letter, Jan. 31, 2023, from Reps. Lieu and Goldman, to 
  Inspector General Barr Durham; submitted by Rep. Goldman.

  * Graphic, COVID Funding; submitted by Rep. Luna.

  * Letter, January 31, 2023, from Office of the Inspector 
  General, Social Security Administration, to Chairman Comer; 
  submitted by Chairman Comer.

  * Letter, January 27, 2023, from Sen. Sen. Ernst, to Chairman 
  Michael Horowitz; submitted by Rep. Burlison.

  * Article, Politico, ``Biden Administration Reroutes Billions 
  in Emergency Stockpile, COVID Funds to Border Crunch;'' 
  submitted by Rep. Donalds.

  * Report, Small Business Administration, OIG, ``Paycheck 
  Protection 
  Program Eligibility for Non-Profit Organizations;'' submitted 
  by Rep. Brown.

  * Statement for the Record; Ranking Member Connolly; submitted 
  by Ranking Member Connolly.

  * Questions for the Record: to Mr. Dodaro; submitted by 
  Chairman Comer.

  * Questions for the Record: to Mr. Dodaro; submitted by Rep. 
  Palmer.

  * Questions for the Record: to Mr. Dodaro; submitted by Rep. 
  Donalds.

  * Questions for the Record: to Mr. Dodaro; submitted by Rep. 
  Perry.

  * Questions for the Record: to Mr. Michael Horowitz; submitted 
  by Chairman Comer.

  * Questions for the Record: to Mr. Michael Horowitz; submitted 
  by Rep. Palmer.

  * Questions for the Record: to Mr. Michael Horowitz; submitted 
  by Rep. Perry.

  * Questions for the Record: to Mr. Michael Horowitz; submitted 
  by Luna.

  * Questions for the Record: to Mr. Smith; submitted by Chairman 
  Comer.

  * Questions for the Record: to Mr. Smith; submitted by Rep. 
  McClain.

  * Questions for the Record: to Mr. Dodaro; submitted by Rep. 
  Raskin.

  * Questions for the Record: to Mr. David Smith; submitted by 
  Rep. Raskin.

  * Questions for the Record: to Mr. Michael Horowitz; submitted 
  by Rep. Raskin.

The documents listed are available at: docs.house.gov.

 
                       FEDERAL PANDEMIC SPENDING:
                       A PRESCRIPTION FOR WASTE,
                            FRAUD AND ABUSE

                              ----------                              


                      Wednesday, February 1, 2023

                  House of Representatives,
         Committee on Oversight and Accountability,
                                                   Washington, D.C.

    The committee met, pursuant to notice, at 10:05 a.m., in 
room 2154, Rayburn House Office Building, Hon. James Comer 
(chairman of the committee) presiding.
    Present: Representatives Comer, Gosar, Foxx, Grothman, 
Palmer, Higgins, Biggs, Mace, LaTurner, Fallon, Donalds, 
Sessions, Armstrong, Perry, Timmons, Burchett, Greene, McClain, 
Boebert, Fry, Luna, Edwards, Langworthy, Burlison, Raskin, 
Norton, Lynch, Connolly, Krishnamoorthi, Khanna, Mfume, Ocasio-
Cortez, Porter, Bush, Brown, Gomez, Stansbury, Garcia, Frost, 
Balint, Lee, Casar, Crockett, Goldman, and Moskowitz.
    Chairman Comer. We will call this hearing to order, the 
first hearing of the 118th Congress for the House Committee on 
Oversight and Accountability. Welcome.
    As chairman, I intend to focus this committee's attention 
and resources on its core mission, to ensure our government is 
working for the American people in an efficient manner, 
agencies guard taxpayer funds from fraudsters and ineligible 
participants, and political leadership be held accountable for 
bad consequences of their policies.
    Last Congress, Democrats strayed far from this mission. The 
Biden Administration faced little to no scrutiny under 
unchecked one-party Democrat rule in Washington. This committee 
conducted almost no oversight of Federal Government agencies, 
programs, or policies. The non-partisan Lugar Center gave 
Democrats an F in oversight last Congress. Instead, this 
committee spent its time and resources demonizing America's oil 
and gas industry, investigating an NFL football team, and 
examining pet flea and tick collars.
    The American people have suffered from the lack of 
oversight and accountability. Crises have continued and 
worsened. Our Nation is facing the worst border crisis in 
American history. Fentanyl, which is coming across the Southern 
border, is the leading cause of death for many Americans. 
Americans are facing high energy prices resulting from policies 
aimed at diminishing domestic energy production, and the 
American people have struggled with consequences of prolonged 
COVID closures and lockdowns, inflation, and shortages of labor 
and goods. That is why this first hearing is so important.
    Today's hearing is the first step in examining the massive 
waste, fraud, and abuse in COVID relief programs. In March 
2020, the United States struggled to respond to growing threats 
presented by COVID-19. With the economy on the brink of 
collapse, Congress passed a series of bills intended to both 
fund the public health response and keep the economy afloat. 
The largest of these measures was the Bipartisan CARES Act. It 
created programs like the Paycheck Protection Program, which 
saved jobs at small businesses across the country. It rolled 
out pandemic unemployment insurance to help American workers 
who were victims of business closures and spiking unemployment. 
These programs brought relief to many Americans, but with 
massive government spending comes opportunity for waste, fraud, 
and abuse.
    Unfortunately, Democrats conducted little oversight of the 
over $2 trillion spent under the CARES Act. They did the exact 
opposite. They spent another $2 trillion, but this time with 
absolutely no protections or guardrails to prevent waste. And 
worse, they spent this money when there was no sign that it was 
actually needed. This out-of-control spending led to 40-year 
high inflation, kept people out of work longer, and harmed our 
economy. During the markup for this legislation, many of us 
warned that without oversight mechanisms in place, taxpayer 
dollars were at risk of being misused or lost to fraud, waste, 
or abuse.
    Republican amendments would have put strings attached on 
those dollars. They would have allowed for oversight, but 
Democrats voted down every single amendment we offered. And 
what happens if there is no oversight? Nothing good. We have 
seen reports that between $163 billion to $400 billion in 
unemployment insurance benefits were paid out improperly. We 
have seen reports that between $76 billion to more than $100 
billion in Paycheck Protection Program and Economic Injury and 
Disaster Loan Programs were lost to improper payments. We have 
seen reports that $266 billion in improper payments were made 
by Medicaid during the pandemic. That is why we are having our 
first hearing of the new Congress on waste, fraud, abuse in 
pandemic spending programs. We will hold many more of these 
hearings on this important issue.
    We owe it to the American people to get to the bottom of 
the greatest theft of American taxpayer dollars in history. We 
must identify where this money went, how much ended up in the 
hands of fraudsters or ineligible participants, and what should 
be done to ensure that it never happens again. This committee 
will evaluate the hundreds of billions of dollars in grants and 
loans doled out for nearly every agency in the Federal 
Government to ensure those funds were appropriately used to 
respond to the pandemic and not wasted on ineligible payees or 
unrelated matters.
    We will investigate the $189 billion in elementary and 
secondary school emergency relief funds, money meant to help 
reopen schools and address learning loss. Instead, these funds 
were often used on unrelated expenditures and even to push 
divisive ideologies onto our students. We will work to ensure 
that the watchdogs in our offices of Inspectors General and our 
law enforcement officers, agents, and prosecutors have the 
tools they need to track down fraudsters and recover illegally 
obtained COVID-19 taxpayer funds.
    This committee has for too long stood on the sidelines 
while taxpayer dollars were wasted by bureaucrats, whose only 
priority is getting money out the door. Today, we will hear 
from Inspector General Michael Horowitz, GAO's comptroller 
general, Gene Dodaro, and assistant director, David Smith, with 
the Office of Investigations at the Secret Service. Thank you 
all for being here to testify about your efforts to conduct 
oversight of pandemic funding.
    I now yield to Ranking Member Raskin for his opening 
statement.
    Mr. Raskin. Mr. Chairman, thank you kindly. Our committee's 
purpose is to ensure that government is effectively delivering 
on its promises to the American people. And as the new ranking 
member, I am eager to work with you and the rest of the 
committee in carrying out this shared responsibility in a 
thorough, serious, nonpartisan, and even-handed way.
    When I heard that our first hearing would spotlight 
pandemic relief programs, I was pleased because I thought it 
would follow up on everything the Democratic majority had been 
doing in the 117th Congress since COVID-19 began. I was hopeful 
for an opportunity to consider together how we can identify 
schemes of fraud and self-enrichment, ripping off the 
taxpayers, and continue to strengthen the structural efficiency 
of critical government programs that help families and 
businesses across America meet the challenges of the pandemic. 
Just as the political system and the campaign finance system 
have recently been proven shockingly vulnerable to imposters, 
hustlers, con men, big liars, outright fraudsters, and fakes, 
some of the programs developed to respond to the COVID-19 
pandemic have proven vulnerable to the relentless, deceitful, 
and fraudulent designs of criminal predators when they, too, 
decide to exploit the generosity of the American people. The 
traditional language of waste, fraud, and abuse does not quite 
capture the confidence games in organized criminal artifices 
and schemes that have targeted and exploited relief programs 
built on the solidarity and goodwill of the American people.
    The House Select Subcommittee on the Coronavirus, which was 
chaired in the last Congress by then Majority Whip Clyburn, and 
which I served on, led the effort to identify and combat these 
criminal actors. The subcommittee conducted no fewer than seven 
hearings focused on rooting out fraud in relief programs. I 
will never forget how under Chairman Clyburn's leadership, in 
our first week or two of existence, the subcommittee recovered 
an improper $10 million Paycheck Protection Program loan. Less 
than three months later, we helped secure the return of $109 
million from a nursing home chain that was not using the loan 
as Congress had specifically intended.
    In March 2021, we exposed how the Trump administration's 
reckless mismanagement of small business relief programs and 
refusal to implement basic anti-fraud controls led to nearly 
$84 billion in fraudulent loans. Just months later, we issued 
another report highlighting how the Trump administration 
awarded $95.7 million in pandemic Food Box Program funds to 
three companies that all raised severe red flags. Then again, 
in April 2022, we showed how Trump White House officials 
overruled career Department of Defense officials to approve a 
$700 million national security loan to a single company in 
violation of legal requirements, and so on. We used the 
spotlight and bully pulpit of a small subcommittee to expose 
and reverse colossal frauds taking place against the American 
people.
    While I remain optimistic that this hearing can 
meaningfully explore ways to ensure the taxpayer dollars go 
where intended, I confess I am troubled that some of our 
colleagues seem to want to cherry pick facts and deploy 
distorted figures to attack the underlying legitimacy of the 
programs themselves, the programs that were a lifeline and 
salvation for millions of businesses and families across the 
country. Recall that while the former President denied, 
trivialized, and dismissed the COVID-19 pandemic, it was 
Congress which acted responsibly, and swiftly, and in 
bipartisan fashion to create and supercharge programs that 
saved countless businesses and families from bankruptcy and 
ruin. These programs included expanded unemployment insurance 
benefits and the PPP Program, which empowered families and 
businesses to avoid economic collapse. As a result of our 
actions, the COVID-19 economic recession was the shortest on 
record.
    The programs were by no means perfect. Antique government 
IT systems, many running on obsolete software, collapsed and 
were incapable of adapting to the scope of the crisis. States 
entered the pandemic at a 50-year low for unemployment 
insurance system funding, and UI claims burgeoned from 211,000 
to 6.6 million, a 3,000 percent increase over a three-week 
period in March 2020. People unsure of how they would pay their 
housing or medical bills panicked as they waited hours on phone 
calls for customer service representatives were reached, to 
endless busy signals in unemployment insurance purgatory. My 
home state of Maryland was no exception. In the one-year period 
from March 2020 until March 2021, my district office received 
1,400 anguished constituent requests for help with 
unemployment. This is in contrast to one constituent request we 
received in all of 2019.
    Congress asked agencies and states to do the near 
impossible, and they did their very best. Expanded UI benefits 
kept an estimated 5 million to 6 million people out of poverty 
in 2020 and 6.7 million people above the poverty line in 2021. 
The Center for Budget and Policy Priorities estimates that 
expanded benefits may have saved the lives of as many as 27,000 
people in high-risk occupations who may have died from COVID 
had they not had access to benefits.
    Organized criminals and fraudsters took advantage of these 
circumstances by exploiting weaknesses in our IT systems. This 
problem was compounded by critical decisions made by the Trump 
administration that hamstrung pandemic relief and anti-
corruption oversight from the very outset, crippling the 
government's ability to detect fraud. Despite specific 
legislative instruction from Congress in our pandemic relief 
bills, the Trump administration regularly told agencies to 
ignore data reporting requirements. But congressional Democrats 
and the Biden Administration have worked diligently from the 
start to recover funds stolen by organized criminal groups and 
other fraudsters, helped states modernize their IT systems, and 
build new structural capacities to detect and prevent fraud. 
Under President Biden's leadership, departments and agencies 
across the government moved swiftly to strengthen program 
integrity and bolster efforts to prevent, detect, and pursue 
fraud, which festered under the lackadaisical stewardship of 
the prior administration.
    In the days preceding this hearing, Republicans have 
claimed that Democrats on this committee and in the Biden 
Administration neglected to conduct meaningful oversight of 
these programs. The record demonstrates these assertions are 
baseless. Democrats have systematically ferreted out fraud, 
waste, and abuse in pandemic relief, although we all can 
certainly be doing a much more effective job, and that is what 
this hearing should be about. As the work of the 118th Congress 
commences, I urge all of my colleagues across the aisle and on 
our side to remember the crucial role this committee must play 
in eliminating fraudulent schemes by imposters in order to 
protect the integrity of the programs that we adopt and that 
America needs. With that, Mr. Chairman, I am happy to yield 
back.
    Chairman Comer. The ranking member yields back. It gives me 
great pleasure to introduce our panel. I will go through and 
introduce each member, and then we will turn it over to begin 
their opening statements, but let me say this. This is a pretty 
quality panel. I think if you wanted to have the perfect 
hearing to determine waste, fraud, and abuse in the Federal 
Government, I can't think of three better witnesses from three 
more appropriate agencies to come before this committee. And I 
think you will see this is going to begin a trend of having 
credible witnesses that are here to talk about serious 
substantive issues, and I am very proud of this witness panel 
today.
    Our first witness today is Mr. Gene Dodaro, the eighth 
comptroller general of the United States and head of the U.S. 
Government Accountability Office, or GAO. In a career spanning 
over 49 years at GAO, Mr. Dodaro has worn many hats and 
testified before Congress dozens of times on important national 
issues, including waste, fraud, abuse, and mismanagement in the 
Nation's response to the Coronavirus pandemic. Mr. Dodaro's 
extensive experience at the helm of an agency, often referred 
to as the congressional watchdog, is invaluable. We are glad to 
have you here for this very important oversight topic, and we 
look forward to your testimony.
    Our second witness, no stranger to Congress, is Mr. Michael 
Horowitz, who is the chair of the Pandemic Response 
Accountability Committee, or PRAC, and Inspector General of the 
Department of Justice. Mr. Horowitz is testifying today in his 
role as chair of PRAC, an entity created by the CARES Act to 
support independent oversight of pandemic relief spending. The 
PRAC coordinates cross-agency investigations by agency 
inspectors general, enabling faster identification of fraud 
search across multiple programs. This is a very important role, 
Mr. Horowitz, and the committee looks forward to learning more 
about your and your colleagues' efforts to detect fraud, waste, 
abuse, and mismanagement of taxpayer dollars.
    Our third witness is Mr. David Smith, assistant director 
Office of Investigations at the U.S. Secret Service. As the 
28th assistant director for the Office of Investigations, Mr. 
Smith leads the Agency's global investigative mission, 
comprising 161 offices and over 3,000 employees. Mr. Smith's 
office also oversees the Secret Service's national pandemic 
fraud investigations and cross-agency coordinated efforts, 
including investigations of foreign nationals stealing COVID 
relief funds. I look forward to hearing about the Agency's 
investigations into pandemic relief fraud and ongoing efforts 
to counter such activities. Welcome, Mr. Smith.
    We will begin with Mr. Dodaro, and I hope I pronounced that 
right. I apologize if I didn't.

STATEMENT OF GENE L. DODARO, COMPTROLLER GENERAL OF THE UNITED 
               STATES, UNITED STATES GOVERNMENT 
                     ACCOUNTABILITY OFFICE

    Mr. Dodaro. It was excellent, Mr. Chairman. Very good. I 
appreciate it. Thank you very much.
    Good morning, Mr. Chairman, Ranking Member Raskin, members 
of the committee. Very pleased to be here. I commend you, Mr. 
Chairman, for holding this hearing, and I am very pleased to 
see the attendance.
    I would like to focus my comments this morning on four 
points that I believe were the main causes of the widespread 
fraud that has occurred and what could be done to deal with 
these issues. First, agencies should have been much better 
prepared in order to prevent fraud in the first place. We 
worked with the Congress back in 2016 when the Congress passed 
the Fraud Reduction and Data Analytics Act, which required 
agencies to implement GAO's fraud risk framework to help 
prevent fraud in the first place. Agencies were slow to 
implement this legislation and, therefore, were not prepared 
properly when the Coronavirus emergency occurred. This needs 
greater attention and oversight, I believe, from this 
committee.
    Second, the urgency in providing relief funds led to 
tradeoffs that limited the ability to achieve accountability 
and transparency goals of the legislation. These tradeoffs 
included allowing self-certifications and applications, 
limiting the amount of supporting documentation that applicants 
had to apply. These tradeoffs, along with internal control 
weaknesses within the agencies, made these programs much more 
susceptible to fraud than otherwise would have been the case. 
Now, Congress rectified some of these tradeoffs in subsequent 
legislation. Agencies have begun to implement our 
recommendations, but there is much more that needs to be done 
to deal with the remaining COVID programs to catch people who 
have perpetrated fraud and bring them to justice. But unless we 
make these changes, we are not better prepared for the future, 
for future emergencies, which certainly will come with disaster 
assistance, and relief, and other events that are unforeseen, 
but certainly will come.
    Third, advocating, and I have done this before, that there 
is a permanent center for excellence and analytics in the 
inspector general community. Now, this first one was created 
back in the Recovery Act when we had the Great Recession, and 
that recovery operation center helped prevent fraud and enabled 
the IGs to work together because a lot of the fraudsters hit 
multiple programs as well, and this brought in great data 
analytics experience. Unfortunately, this center was terminated 
in 2015, and I recommended that Treasury had the ability to 
pick up the center operations. They declined on that. I 
recommended that Congress make it permanent at that point in 
time. I was not successful. I am at it again, and I think it 
makes sense to have this to deal with.
    Fraud occurs in regular Federal programs all the time, as 
well as improper payments, which we talk about in our 
statement. If you had this permanent capability, it would not 
only deal with regular fraud, but it would be ready and there 
when emergencies occur, and you won't waste time standing up. 
Every day wasted is another day susceptible to fraud and 
improper payments. This would help.
    Fourth, the government has an underlying improper payment 
problem. These are payments that shouldn't have been made or 
made in the wrong amounts, and I have testified before this 
committee many, many times on this problem over the years. It 
occurs in a wide range of Federal programs. It is pervasive 
across the government. So, when you have that type of problem 
that we are not dealing with on a regular basis, and you add 
additional spending, billions, hundreds of billions, in this 
case, trillions of dollars, you are going to have these types 
of problems in place. So, I have many recommendations in my 
testimony that I think would help address this issue, and I 
have put forth at least 10 legislative suggestions for how 
Congress can act to make sure that this problem doesn't happen 
again at the magnitude in which we have seen in this particular 
case.
    So, I am looking forward to answering questions today. I am 
also looking forward to working with this committee to put 
solutions in place that can guarantee when the Federal 
Government finds it necessary in this case to provide funds for 
public health purposes and the economic repercussions of 
disasters, that it is done in a way that gets the funds to the 
people who need it and not allow this type of fraudulent 
activity to plague our national programs.
    Thank you very much, Mr. Chairman.
    Chairman Comer. Thank you. Mr. Horowitz?

  STATEMENT OF MICHAEL E. HOROWITZ, CHAIR, PANDEMIC RESPONSE 
     ACCOUNTABILITY COMMITTEE, AND INSPECTOR GENERAL, U.S. 
                     DEPARTMENT OF JUSTICE

    Mr. Horowitz. Thank you. Mr. Chairman, Ranking Member 
Raskin, members of the committee, thank you for holding today's 
very important hearing.
    This committee has consistently worked on a bipartisan 
basis with the oversight community to advance program payment 
integrity, government spending transparency, and the use of 
data analytics, all of which have helped us to fight fraud, 
waste, and abuse, and ensure that government benefits go to 
those who need them most. Yet, as our pandemic oversight work 
has demonstrated, far more can and should be done to protect 
taxpayer money.
    For example, earlier this week, we issued a fraud alert, 
finding that over 69,000 questionable Social Security numbers 
were used to obtain $5.4 billion in pandemic loans and grants. 
This alert resulted from PRAC data scientists using our 
analytics platform to assess over 33 million EIDL and PPP loan 
applications. From that work, they developed a targeted subset 
of applications and asked the Social Security Administration if 
the name, date of birth, and Social Security numbers on those 
applications fully matched information in SSA's records. Over 
69,000 didn't. This type of advanced data analytics work is 
transforming how we do oversight and would not have been 
possible without this committee's support for data transparency 
and spending accountability.
    Our fraud alert also demonstrates the need for additional 
measures to improve program integrity. In particular, agencies 
must strike a better balance both in times of crises and in 
routine program administration between the speed with which 
they issue benefits and the need to assess applicant 
eligibility before payments are sent out. For example, SBA's 
central focus on getting PPP loans issued as quickly as 
possible at the outset of the pandemic, based solely on an 
applicant self-certification of eligibility, resulted in 
substantial fraud as well as SBA issuing 57,000 loans worth 
$3.6 billion to entities that were already on the government's 
Do Not Pay list, a list SBA didn't bother to cross check.
    The Federal Government needs more robust cross-agency data 
sharing agreements to improve program administration, reduce 
improper payments and identity fraud, and better prepare before 
the next crisis hits. For example, consent-based identity 
verification systems can have a significant impact in reducing 
identity fraud, as we detailed in our fraud alert. Similarly, 
authorizing agencies to access SSA's Master Death File index 
would help eliminate improper payments to deceased individuals. 
These are just two of many eligibility verification tools that 
agencies should be using.
    Our oversight reports also highlight the need for agencies 
to be more transparent about spending information and to 
address data reporting gaps and data reporting weaknesses. The 
public has a right to know how its money is being spent, and 
policymakers need to be able to assess whether programs are 
effective. Moreover, transparency results in greater 
accountability. As Justice Brandeis famously stated, 
transparency is said to be the best of disinfectants.
    Through our oversight work, we are making progress. For the 
past two years, we have met weekly with OMB leadership and the 
American Rescue Plan implementation team. These meetings have 
enabled the PRAC and IGs to timely share concerns with 
executive branch leadership and ensure that impediments to our 
oversight are being addressed promptly. We have also 
participated in more than two dozen meetings on agency-specific 
pandemic relief programs prior to their implementation and 
before money went out the door. In December 2021, OMB issued a 
memorandum highlighting the value of this model and 
institutionalizing it.
    Finally, let me touch on three PRAC legislative priorities. 
First, we hope Congress will take up legislation to make 
permanent the PRAC's data analytics platform. Taxpayers need 
that sophisticated tool to continue to exist, and I appreciate 
the Comptroller General's continued support for that. Second, 
Congress should consider raising the jurisdictional amount in 
the Program Fraud Civil Remedies Act from $150,000 to $1 
million so IGs can more effectively pursue smaller-dollar 
frauds. Finally, Congress should consider extending from 5 to 
10 years the statute of limitations for pandemic unemployment 
insurance fraud as it did last year with PPP and EIDL fraud.
    The PRAC and the IG community is committed to using all of 
the tools we have been provided--criminal, civil and 
administrative--to pursue for the taxpayers every dollar that 
fraudsters stole from pandemic programs. Thank you for your 
continued support for those efforts, and I would be pleased to 
answer any questions the committee may have.
    Chairman Comer. Thank you, Mr. Horowitz. Mr. Smith?

    STATEMENT OF DAVID SMITH, ASSISTANT DIRECTOR, OFFICE OF 
          INVESTIGATIONS, UNITED STATES SECRET SERVICE

    Mr. Smith. Good morning, Chairman Comer, Ranking Member 
Raskin, and distinguished members of the committee. Thank you 
for the opportunity to appear today and discuss the ongoing 
efforts of the U.S. Secret Service to counter pandemic-related 
fraud. As the chairman mentioned, I serve as the assistant 
director for the Secret Service Office of Investigations, 
overseeing our 161 offices. I also oversee our 42 cyber fraud 
task forces that are central to our criminal investigations. I 
also direct our National Computer Forensics Institute in 
Hoover, Alabama, which trains and equips local law enforcement, 
as well as prosecutors and judges. I thank you all for your 
recent support of our institute and reauthorizing it.
    For more than 150 years, the Secret Service has conducted 
criminal investigations to protect the American public and 
financial infrastructure from criminal exploitation. We 
continue to do so while also fulfilling our protective duties. 
After 21 years in Federal law enforcement, exploitation of 
government programs by criminals is not new to me. I often say 
the pandemic didn't create any new criminals. It just provided 
more opportunities for them to exploit. Countering pandemic-
related fraud has been our investigative priority since March 
2020. In less than three years, we have opened thousands of 
investigations, recovered over $1 billion, arrested nearly 500 
criminals, yet there is more work to do. It is our duty to 
detect and arrest criminals, seize their illicit assets, and 
disrupt their networks. Our experience in combating pandemic-
related fraud reaffirms our investigative strategy. We continue 
to evolve our application of technology and training to develop 
skilled investigators, who can in turn combat emerging criminal 
tactics.
    We recognize the potential for fraud based on our 
experience following major disasters. Prior to the CARES Act 
enactment back in March 2020, we reached out to some natural 
partners to include the Offices of the Inspector General for 
the Small Business Administration, the Department of Labor, and 
the Council of the Inspector Generals on Integrity and 
Efficiency. We understood that many key partners had limited 
resources, and the best way to address the potential wave of 
fraud was to work together. We also worked with our 
longstanding partners in fighting financial crimes at the 
Department of Justice, including U.S. attorney's offices around 
the country, the Department of Treasury, FinCEN, and many 
others.
    The Secret Service is seeing the full spectrum of pandemic-
related fraud. This included N-95 mask schemes, ransomware 
attacks targeting hospitals, the wide use of stolen identities, 
and inmates applying for benefits. Numerous cases also involved 
insiders with access to personal data. Criminals were prepared 
to exploit the pandemic, in part because for years they were 
selling identities stolen from past data breaches. They were 
also fabricating identities using personal and financial data 
to real people combined with false information. Our 
investigations also reveal that criminals used shell companies 
and false employment information. These tactics were repurposed 
for broad use during the pandemic.
    In closing, I will share some observations from our 
pandemic-related fraud investigative experience. The prevalence 
of identity theft and the volume of personal data assessable to 
criminals is undeniable. Continuing to improve identity 
verification standard for government funding programs is 
important. Advanced collaboration, as some of my colleagues 
mentioned earlier, between government entities and the 
financial sector is essential for mitigating fraud targeting 
government programs, especially during emergencies. Ensuring 
law enforcement are at the table would be a major step in 
curtailing fraud of this magnitude as well. Our cyber fraud 
task forces are a proven model for such collaboration in these 
task forces. Similarly, in our protective mission, we 
constantly communicate the importance of sharing information 
and planning for contingencies.
    Thank you again for the opportunity to testify today, and I 
am honored to represent the dedicated men and women of the 
Secret Service. I look forward to your questions.
    Chairman Comer. Thank you, Mr. Smith. Before we get to the 
questions, I am going to ask if you will stand and take the 
oath here. Do you all--raise your right hands?
    Do you all swear or affirm that the testimony you are about 
to give is the truth, the whole truth, and nothing but the 
truth, so help you God?
    [A chorus of ayes.]
    Chairman Comer. Let the record reflect the witnesses have 
all answered in the affirmative, and we want to thank you.
    Without objection, your written statements will be made 
part of the record.
    And before we move into the question portion, we have a lot 
of new members, a lot of freshmen that have never served in any 
committee in Congress, and I just wanted to make sure everyone 
knows the rules here. We will rotate back and forth five 
minutes. Please adhere to the five minutes. We are going to try 
to be strictly by the book. The order is determined by myself 
and Ranking Member Raskin. Please be respectful of everyone's 
five minutes. I was telling some of the freshmen that during 
the 2017 session, my first full year in Congress, I was the 
very last person, dead last in seniority in the very far 
corner, and you appreciate when people don't go over their 
time. But this is your time to ask anything you want, so 
please, to both sides, let's be respectful of each member's 
five minutes. With that, I will begin questioning, and we will 
start with Mr. Horowitz.
    You mentioned the Do Not Pay list. Can you briefly tell us 
what that is?
    Mr. Horowitz. So, Treasury has set up a list of suspicious 
payees. It doesn't mean they are not eligible. It doesn't mean 
they can't get benefits. It means that they are on a list that 
requires, at a minimum, secondary screening, secondary 
consideration, and evaluation.
    Chairman Comer. Was this used by government agencies to 
prevent fraud? So, this is a tool that I would assume would 
have been eligible in their toolbox. Let's say the Small 
Business Administration or some agency that was doling out a 
lot of money really quickly, did they utilize the Do Not Pay 
list?
    Mr. Horowitz. They did not, and the issue there is we have 
heard over and over again, at the time, well, we needed to get 
the money out right away. There was an emergency. No dispute 
about that. We needed to get the money out right away. There 
was an emergency. It gets back to what the Comptroller General 
said. He needs to be ready for that. This list was sitting 
there. This was not anything that would have taken much time. 
There needs to be preparation.
    Chairman Comer. So, let me get this straight. The Do Not 
Pay list, I would assume that would be people that owe back 
taxes, people that maybe owe child support?
    Mr. Horowitz. There are a variety of reasons----
    Chairman Comer. Convicted of fraud.
    Mr. Horowitz. Indicative of potential fraud, indicative of 
individuals who are in arrears in other payments. You can get 
on the list for a variety of reasons.
    Chairman Comer. So, how many people do we know received 
money from the Federal Government that were on the Do Not Pay 
list?
    Mr. Horowitz. I don't know across all programs. What I do 
know is from the SBA's PPP Program because almost $400 billion 
went out in two weeks----
    Chairman Comer. Right.
    Mr. Horowitz [continuing]. In that program, of that amount, 
$57,000, $3.6 billion shouldn't have gone out right away. I am 
not saying every one of those would have been denied, but at a 
minimum, there should have been secondary screening.
    Chairman Comer. So, what would be involved? What would this 
SBA had to have done, if we could go back in time, to ensure 
that people on the Do Not Pay list were flagged at least for 
further review?
    Mr. Horowitz. Well, frankly, interacting with the Treasury 
Department in advance to make sure that that screening was 
occurring, that data matching was occurring.
    Chairman Comer. Yes. Unbelievable. Mr. Dodaro, by the end 
of 2020, Congress had already passed five laws containing more 
than $3 trillion in COVID relief funds. More than $1 trillion 
had been flagged by GAO as at-risk for waste, fraud, abuse. 
Inspectors general and law enforcement officials were already 
highlighting concerns about COVID relief money flowing to 
criminals and other ineligible recipients instead of Americans 
in need, and the economy was improving. Nevertheless, Democrats 
insisted on $1.9 trillion more COVID relief spending through 
the American Rescue Plan Act, ARPA, putting those funds at risk 
and theft and the economy at risk of massive inflation and 
recession. So sir, did we lose funds included in the American 
Rescue Plan to fraud, and were additional improper payments 
made at the ARP after the ARP was passed?
    Mr. Dodaro. Yes. I mean, the improper payments estimate, 
for example, for 2022 is the first year that the Paycheck 
Protection Program and the Economic Injury Disaster Loan 
Program made improper payment estimates. That was about $29 
billion for PPP and about $7 billion, over $6 billion for the 
EIDL program. We had urged that those improper payments be made 
earlier in 2021, but they didn't make those estimates then.
    Chairman Comer. Did you encourage Congress to do that?
    Mr. Dodaro. No, the agencies. And my recommendations to the 
Agency----
    Chairman Comer. What could Congress have done to have 
prevented this?
    Mr. Dodaro. As one of my legislative recommendations from 
GAO is that any new programs over $100 million--not billion--
$100 million, be designated immediately because of this past 
problem to be susceptible to improper payments and, therefore, 
make an estimate in the very first year of the program. Right 
now, the improper payments estimates only have to be made 2 or 
3 years after a program has already started. It is too late. It 
is too late. And some of these temporary programs, they are all 
done. So Congress can and should have that as a requirement to 
be put in place.
    Chairman Comer. Well hopefully, that will be some kind of 
bipartisan legislative fix from this committee very soon. Mr. 
Horowitz, same question. I have got 40 seconds. What warning 
signs were there, and what should have been done?
    Mr. Horowitz. There were plenty of warning signs. Frankly, 
the urgency and speed to get it out without any consideration 
of what was already available to use, like Do Not Pay, as we 
did in our fraud alert this week, had there been agreements in 
place, they could have checked again. So, Security 
Administration, I think it is very important that consent-based 
verification tools be put in place for programs. What you need 
to know is whether the applicant is eligible. You can't just 
self-certify, and they were relying on self-certification.
    Chairman Comer. Wow. Thank you. I am sure we will have many 
discussions moving forward, but my time has expired. I yield to 
the distinguished ranking member, Mr. Raskin, for five minutes.
    Mr. Raskin. Mr. Chairman, thank you much. Mr. Horowitz, 
following up on that, when did the SBA start using the Do Not 
Pay program to check the eligibility of applicants for PPP 
loans?
    Mr. Horowitz. Following recommendations by SBA OIG, the 
PRAC, and GAO. They started in 2021.
    Mr. Raskin. In January 2021, at the beginning of the Biden 
administration.
    Mr. Horowitz. They said they were, and actually I am not 
sure who exactly started then. One of the issues has been 
getting them to implement.
    Mr. Raskin. Yes.
    Mr. Horowitz [continuing]. Statement, what they said, but 
they did make efforts to start, and they did subsequently start 
doing that.
    Mr. Raskin. Great. Well, when we passed the CARES Act in 
2020 and we created the Pandemic Response Accountability 
Committee, which you lead, the CARES Act included specific 
language directing the PRAC to create a user-friendly website--
--
    Mr. Horowitz. Right.
    Mr. Raskin [continuing]. To give the American people an 
overview of how pandemic relief funds were being spent all the 
way down to the project, community level. But guidance released 
on April 10, 2020, by President Trump, made it nearly 
impossible to effectively track pandemic relief funding past 
the first distribution. And, Mr. Chairman, I would want to ask 
unanimous consent to insert the administration's April 10, 
2020, guidance into the record.
    Chairman Comer. Without objection.
    Mr. Raskin. So, Mr. Horowitz, how did this guidance affect 
the PRAC's ability to identify and prevent pandemic relief 
fraud?
    Mr. Horowitz. So, in the CARES Act, Congress said that the 
PRAC needed to launch a website within 30 days. We did. Go to 
pandemicoversight.gov, you can see how the money has been 
spent. You can get to your local zip code if you would like. We 
were challenged at the outset because OMB leadership decided to 
use what was already existing, reporting tools in 
USAspending.gov, which we did not believe was sufficient, GAO 
did not believe was sufficient, and SBA, and others IGs didn't 
believe was sufficient to meet the requirements of the CARES 
Act.
    The memorandum that went out that you mentioned put that in 
place, and it limited our ability at the outset to get the data 
we needed. For folks who followed our website from 2020 
forward, you will see gradual additions to the website. Indeed, 
SBA wouldn't give us the information. This was an SBA agency 
issue until September or October 2020. We couldn't get much of 
any data from them because they were litigating FOIA lawsuits.
    Mr. Raskin. Got you. So, do you think that that guidance 
met the language and the spirit of the CARES Act requirements 
for tracking pandemic relief spending all the way to the 
ground?
    Mr. Horowitz. The public should know where money went. 
Congress needs to know where money went. You can't figure out 
whether a policy worked, whether it has been defrauded, who is 
accountable if you don't know where the money went.
    Mr. Raskin. Mr. Dodaro, following the 2008 financial 
crisis, President Obama signed the American Recovery and 
Reinvestment Act to stimulate the economy and to get us out of 
the Great Recession. I think that was a $787 billion program if 
memory serves. Do you think that that Trump administration 2020 
guidance we are talking about effectively incorporated lessons 
that were learned from Obama's successful implementation of the 
American Recovery and Reinvestment Act?
    Mr. Dodaro. Not to the full extent that they should have 
been. The Recovery Act reporting required reporting from 
recipients, and the Recovery Act Board created that, so you had 
much more timely reporting than what you had under the guidance 
that Mr. Horowitz just talked about, which is using 
USAspending.gov. So, they could have taken some of those 
lessons, I think, and so----
    Mr. Raskin. Got you. So Mr. Horowitz, then did you at all 
express your frustration with this undermining of the CARES Act 
determination that the public have complete accountability and 
transparency?
    Mr. Horowitz. At the time, PRAC leadership was meeting with 
OMB and expressing the need to have better reporting portals 
than what existed with USAspending. There are many issues with 
USAspending. IGs have written about those that need to be 
fixed. GAO has written report after report about that. Those 
need to be fixed. If you want to find the best information that 
is out there, it is actually for the Coronavirus Relief Fund, 
which was the $150 billion in the CARES Act that went to the 
states. The reason that is there, that information there is 
because the Treasury IG, working with the PRAC, created the 
Recipient Reporting Portal. We couldn't do that. It cost us 
money. They cost them money. We couldn't do that for, you know, 
trillions of dollars, but that is what needs to be done.
    Mr. Raskin. Well, I am proud that we included those 
provisions in the CARES Act precisely to ferret out fraud, to 
try to prevent the waste and abuse. But it obviously requires 
leadership at the Presidential level, at the very top, a 
commitment to making sure that everything is accountable and 
transparent. Thank you, Mr. Chairman. I yield back.
    Chairman Comer. The chair recognizes Mr. Gosar for five 
minutes.
    Mr. Gosar. Thank you. Good seeing you, gentlemen. It is a 
pleasure to see you this morning. You bring up mandated regular 
reporting aspects, is a big key, and Congress has dictated a 
lot to you, but Congress hasn't done their fair share either. 
So, when you look at the National Emergencies Act, there is a 
requirement that the Congress meet every six months to have a 
detailed report instead of a synopsizing all this all over a 
year or a year-and-a-half. It would be better to have these 
numbers on a basis over six months, having account of it. Would 
you agree with me, Mr. Horowitz?
    Mr. Horowitz. Yes. I think more regular reporting would be 
helpful, and part of that is getting the data information from 
agencies to the public to Congress in a timely fashion, yes.
    Mr. Gosar. So, do you agree with that, Mr. Dodaro?
    Mr. Dodaro. Absolutely. Absolutely.
    Mr. Gosar. Part of the National Emergencies Act-- that 
actually Congress must, shall convene to look at these 
expenditures and to have some rein over it. I think that part 
of our purview is the power of the purse. So, if you are not 
having accountability to this body, to this Congress, you are 
lacking in your jurisdiction of oversight. I guess, having said 
that, looking at what we have seen in this gobbledygook of 
national emergencies-- date back, that are open to the 1970's. 
I don't know how you figure these numbers out. I mean, it is 
crazy. I just don't know how this works.
    So my question is, to the American taxpayer, there are 
estimates of $560 billion of fraud in the COVID-19 funds. Do 
you agree with that, Mr. Dodaro?
    Mr. Dodaro. It will be a while before the full extent of 
fraud is known.
    Mr. Gosar. Right.
    Mr. Dodaro. As I mentioned in my statement, you know, there 
has been over 1,000 people have pled guilty or been convicted. 
There are over 600 charges still pending against people. The 
SBA IG has 536 active investigations right now. The Department 
of Labor IG is opening up 100 new cases every week. So, this is 
going to go on for a while. There are definitely indications of 
widespread fraud, but it is impossible to estimate right now 
what the full extent will be. Time will have to unfold, and 
these investigations will have to be undertaken because the 
definition of ``fraud'' is willful misrepresentation to get 
something of value that is adjudicated through a court or some 
other judicial process.
    Mr. Gosar. Would you agree that continued reporting would 
be better, you know, a timely reporting to the jurisdictional 
committee like this one or Transportation? In regards to the 
amount of fraud, the number of fraud, what can Congress do to 
allocate, you know, more streamlining in this process? Do you 
see a process that we can go forward with that?
    Mr. Dodaro. Yes. I mean, there is a regular process for the 
inspector generals to report semiannually, but when you have 
extraordinary circumstances like we have, there could be more 
frequent reporting in those cases. But there are definitely 
benefits of having more frequent interaction and oversight by 
Congress with oversight bodies, the GAO and the Inspector 
Generals in this case, the Secret Service, because some of 
these legislative solutions that I have recommended could have 
been taken a lot earlier in the process.
    Mr. Gosar. And so, if we are rewriting the National 
Emergencies Act, would you be able to give us your inferences 
as to how to detail the changes?
    Mr. Dodaro. I will be happy to look at the act and make 
suggestions, yes.
    Mr. Gosar. OK. How about you, Mr. Horowitz? I mean, you 
always come up with great ideas.
    Mr. Horowitz. Yes, absolutely. I would be happy to.
    Mr. Gosar. To Mr. Smith, do you see any aspects of--
particularly, from the Secret Service, where we can make some 
amends within the National Emergency Act?
    Mr. Smith. Thank you for the question, sir. As I mentioned 
in my opening, similar to our protective mission, which our 
brand is largely associated with, one of the central tenets of 
our mission is advance work. And, as some of the co-panelists 
spoke about earlier, our cyber fraud task forces or our task 
force, incorporating private sector, incorporating academia. 
And what we do is share information on a continual basis, so we 
don't wait until the President shows up in a district to 
establish relationships. We do that prior to that time. So 
similarly, in our investigative mission, we know that it is 
important to maintain relationships with financial 
institutions, academia, in order to get in front of fraud and 
share ideas because we have a constant cadence of interacting 
with bad guys in the context of our jobs.
    Mr. Gosar. Thank you. I might run out of time. I yield 
back.
    Chairman Comer. The chair recognizes Mr. Lynch for five 
minutes.
    Mr. Lynch. Thank you, Mr. Chairman, and the ranking member 
for holding this hearing, and I want to thank our panelists for 
your good work. I recognize you from previous hearings, and 
thank you again.
    This was a difficult challenge from the very beginning, and 
I just want to take us back to the Trump administration's 
initial response. So, back in 2019 and 2020, Mr. Trump, on 
January 24, 2020, the day the second coronavirus virus case was 
confirmed in the United States, President Trump tweeted and 
again reiterated that, ``China has been working very hard to 
contain the coronavirus. It will all work out. I want to thank 
President Xi,'' and then went on to say that the coronavirus 
would be over by Easter. Based on what we know now, did those 
statements by the President of the United States induce the 
sense of urgency that the American people should have harbored 
with respect to this pandemic, Mr. Dodaro?
    Mr. Dodaro. I think that the actions that the Congress take 
shows a sense of urgency in passing the CARES Act back in March 
2020, on a bipartisan basis, and I think that sent the right 
signal and a sense of urgency that needed to be addressed to 
those issues.
    Mr. Lynch. You are exceedingly diplomatic as always.
    Mr. Dodaro. That is why I am still here.
    Mr. Lynch. Mr. Horowitz and Mr. Smith, you want to take a 
crack at that question?
    Mr. Horowitz. Not particularly.
    Mr. Lynch. Well, let me just get down into the details a 
little bit here, unless Mr. Smith, you would like to add? No. 
OK. I am not sure of the division of labor within your 
agencies, but are any of you familiar with the Yellow 
Corporation during your investigations? No?
    Mr. Dodaro. Sorry, which corporation?
    Mr. Lynch. Yellow Corporation. It was a trucking company 
apparently with political connections to the Trump 
administration. Are you familiar with that?
    Mr. Dodaro. I think that is the one that there was a loan 
given to out of one of the programs, and I think we----
    Mr. Lynch. Correct. Let me refresh. Let me try to----
    Mr. Dodaro. We looked at that issue.
    Mr. Lynch. OK. Yes.
    Mr. Dodaro. We looked at that.
    Mr. Lynch. All right. Thank you. Let me try to refresh your 
recollection. So, the Select Subcommittee report confirmed that 
a $700 million loan to this trucking company that was 
politically connected to the Trump administration was given 
this $700 million loan, and Trump administration political 
appointees overruled Defense Department officials in that case 
to actually certify the company, as ``critical to maintaining 
national security and, therefore, eligible for the loan.'' The 
company then went on to use the loan for long-term capital 
investments in violation of the CARES Act requirement. I was 
just curious. I know you are familiar with it. Do you have 
anything else you could add to that fact pattern?
    Mr. Dodaro. I would be happy to provide our results for the 
record. I can't remember offhand, and I don't want to misstate.
    Mr. Lynch. OK. All right. Well, we could take that at a 
later time.
    Mr. Lynch. What are the lessons learned based on how the 
Trump administration responded initially to the pandemic?
    Mr. Dodaro. No. 1, I think there should have been more 
preparedness on the part of the agencies to prevent fraud. You 
know, Congress passed legislation in 2016 based on GAO's advice 
on how to prevent fraud in the first place. Part of this is 
there is a cultural problem. In most cases, the fraud issues, 
people think of the inspector generals and think of the Secret 
Service and GAO, but you got to prevent it in the first place, 
but the agencies were slow to implement it.
    Mr. Lynch. Yes.
    Mr. Dodaro. The OMB was supposed to create a working group 
to develop this. We issued a report in 2019, said the working 
group had never met, that it needed to take more actions, No. 
1. No. 2, I think the other lesson learned for the Congress is 
to be careful about putting provisions in the legislation that 
make programs more susceptible to fraud, allowing, for example, 
the self-certifications, not using tax credit transcripts, 
rather, so I think there is legislation there as well. Third, 
the agencies that had not addressed improper payment problems, 
they know they have payment problems, and not addressing open 
GAO and IG recommendations make them less prepared. So, there 
are a lot of lessons and my legislative solutions to these 
address some of these lessons learned.
    Mr. Lynch. Thank you, Mr. Chairman. My time has expired, 
and I yield back.
    Chairman Comer. The chair now recognizes Dr. Foxx for five 
minutes.
    Ms. Foxx. Thank you very much, Mr. Chairman, and I thank 
you for holding the hearing. Well, I have no questions for Mr. 
Dodaro, but I do want to thank him so much for the work he and 
his team do on behalf of the American people in helping us 
figure out ways to be more efficient and find the waste, fraud, 
and abuse, and I appreciate your comments just now.
    Since coming to Congress, I have fought for transparency 
and accountability in Federal spending, and with trillions of 
dollars of COVID aid spent over such a short period of time, it 
is imperative we closely watch where and how that money was 
spent, and I think you have given us some more ideas. It is 
likely something we are going to have to track for a long time. 
But Mr. Horowitz, I have questions for you. Can you speak to 
the need for the Pandemic Response Accountability Committee, or 
PRAC is and its importance?
    Mr. Horowitz. Thank you, Congresswoman. I think it was 
critical for Congress to set up the PRAC when the CARES Act was 
passed. At the time, we were asked to oversee $2 trillion. It 
is now $5 trillion of pandemic oversight. And what it did was 
it brought the inspector general community together to 
coordinate oversight. We created a data analytics platform to 
do the kind of work that resulted in our fraud alert last week, 
and you gave us hiring authority to bring on great data 
scientists, a great team that has enabled us to do this work. 
We got it up and running, and we moved forward. And as a 
result, we have been able to coordinate more closely with not 
only our IG partners, but with the GAO. And with state and 
local auditors, we created a state Auditor-in-Residence 
Program. We have two auditors from the state of Tennessee who 
have come on board recently. First ever that has been done in 
the IG community because we want to coordinate with our 
counterparts and our oversight partners at the state and local 
level. And so, we have brought together people in a way that we 
have never had before in the IG community.
    Ms. Foxx. So in your work, how would you rate, with the 
PRAC, the various COVID relief funding programs from most to 
least susceptible to improper payments?
    Mr. Horowitz. Well, I think what you have seen so far is 
the three of the biggest programs: the Paycheck Protection 
Program, the Economic Injury Disaster Loan Program, and the 
Unemployment Insurance Program. Those three programs, which by 
the way, account for just under $2 trillion of the spending, 
have shown to be highly susceptible to fraud for different 
reasons. PPP----
    Ms. Foxx. Can you give us the characteristics that cause 
that?
    Mr. Horowitz. Yes. So, for PPP and EIDL, those were 
administered at the Federal level. And the problem there was 
the desire to simply get the money out as quickly as possible, 
without taking, not an unreasonable amount of time, but an 
appropriate amount of time to make sure that they were sending 
the money to the right people. That was the problem, among 
others, with those two programs. On the unemployment insurance, 
the issue was different because that is administered by the 50 
states. The problem there is the lack of coordination among 
them and with the Labor Department, and the Labor IG has 
written extensively about that problem.
    Ms. Foxx. So, we have some recommendations on what to do in 
that area.
    Mr. Horowitz. A number of recommendations.
    Ms. Foxx. Good.
    Mr. Horowitz. And I would be happy to send them up to you.
    Ms. Foxx. Absolutely. Since the Labor Department is in the 
jurisdiction of the Education and Workforce Committee, I am 
anxious to see those.
    Ms. Foxx. So, you charged 47 defendants in a $250 million 
fraud scheme involving a Minnesota nonprofit, Feeding Our 
Future, one of the largest COVID aid-related frauds uncovered. 
What, if any, indicators, were there of this sort of fraud, and 
could it have been stopped earlier?
    Mr. Horowitz. So, it is always hard to say whether 
something could be stopped earlier. We want to obviously be 
careful in hindsight to say that. But had there been on these 
various programs, a preclearing or a prereview of an applicant, 
first of all, whether it was a legal entity. Did it really 
exist? Was the email address coming from overseas? Was it from 
an IP address, I mean, coming from overseas? As we just 
reported on, did names, date of birth, and Social Security 
numbers match what is in SSA's--Social Security 
Administration's--records? That is an easy check. Were they on 
a Do Not Pay list? There were multiple steps that could have 
been taken in many of these instances. They could have, at a 
minimum, paused, hit the pause button, take a second look to 
make sure they are eligible.
    Ms. Foxx. Mr. Chairman, I know my time is up, but I would 
like to make one quick comment. I am really concerned about 
what Mr. Horowitz said about the 2016 bill being passed on how 
to prevent fraud, and the agencies were slow to implement. We 
have got to get to the root of these kinds of things, and say 
to these agencies, and fire people if they don't do things they 
are supposed to do. That is our biggest problem in the Federal 
Government. Nobody can be held accountable. Thank you. I yield 
back.
    Chairman Comer. Thank you. The chair recognizes Mr. 
Krishnamoorthi.
    Mr. Krishnamoorthi. Thank you, Mr. Chairman. Mr. Smith, I 
want to ask you about your ongoing investigations involving 
transnational criminal actors defrauding our pandemic relief 
programs. It looks like in a statement that the Secret Service 
put out in December, you talked about a group called APT 41. 
Are you familiar with that?
    Mr. Smith. Yes, sir.
    Mr. Krishnamoorthi. And it says in your statement, APT 41 
is a ``Chinese state-sponsored cyberthreat group that is highly 
adept at conducting espionage missions and financial crimes for 
personal gain.'' Are you familiar with that?
    Mr. Smith. I am familiar with the article, sir. Yes, sir.
    Mr. Krishnamoorthi. And apparently, according to this same 
article, this group, the APT 41, Chinese state-sponsored cyber 
gang, stole tens of millions of dollars in U.S. COVID Relief 
benefits, including SBA loans, unemployment insurance funds, in 
over a dozen states. Isn't that right?
    Mr. Smith. That is what the article stated, yes, sir.
    Mr. Krishnamoorthi. Now, tell me, sir, since that article 
came out, I got to believe that they have probably targeted a 
lot of states beyond a dozen. Can you tell us how widespread 
the geographic coverage was in terms of the number of states 
that they had tried to target?
    Mr. Smith. So again, I am familiar with the article. Our 
national pandemic fraud coordinator, who testified last summer, 
who I appointed to that position, was a supervisor in one of 
our field offices, the spirit of what he was conveying was that 
it is unimaginable that organized transnational criminal 
organized groups did not look to exploit pandemic-related fraud 
no different than, you know, an American would. There are some 
commonalities between some of the thousands of bank accounts 
that we have seen used to move illicitly gained pandemic fraud 
resources that were also being used by some of those 
transnational criminal organized groups, to include the one you 
mentioned. It is also worth mentioning when we do have cases 
that involve transnational criminal organized groups or state-
sponsored entities, we do----
    Mr. Krishnamoorthi. Let me stop you there. OK. We have now 
established APT 41 is a Chinese state-sponsored cyber gang. 
Now, let me just turn your attention to Russia. Have we 
identified any Russian state-sponsored cyber gangs involved in 
pandemic fraud?
    Mr. Smith. A lot of the Russian underlying pandemic-related 
fraud has to do with folks dealing in identity theft. So, for 
decades, we have known forums wherein people that deal with----
    Mr. Krishnamoorthi. State sponsored, though. Are they state 
sponsored?
    Mr. Smith. Sir, the Secret Service focuses on financial 
crimes. Whether or not an entity is state sponsored or not is 
generally not why we tend to focus on them. We follow money, 
and if that leads us to a state-sponsored actor, we don't stop 
the case, but we then employ our partners at DOJ.
    Mr. Krishnamoorthi. And have you come across that link yet, 
in other words, that required a referral to DOJ?
    Mr. Smith. That referral to DOJ is actually part of the 
task force the DOJ started at the beginning of the pandemic. 
So, there are cases wherein we have some linkages or 
commonalities between cases we are working for financial crime 
reasons, and there may be a state sponsor act that has some 
commonalities there.
    Mr. Krishnamoorthi. OK. So, now we have established that 
there have been Chinese state-sponsored cyber gangs as well as 
Russian state-sponsored linked to the state individuals who 
have committed pandemic relief crimes?
    Mr. Smith. Sir, what I said was that there are 
commonalities between some of the accounts and other indicators 
we have seen. That is what I said.
    Mr. Krishnamoorthi. OK. Now with regard to APT 41, in 
particular, in your statement--I am sorry, the U.S. Secret 
Service's statement.
    Mr. Smith. Yes, sir.
    Mr. Krishnamoorthi. It said it was ``state-sponsored''. 
Now, have you been able to identify any evidence that the 
Chinese Communist Party ordered or asked this particular cyber 
gang to commit this fraud, or do we have evidence that they 
just merely looked the other way and permitted them, knowing 
them to have committed this fraud?
    Mr. Smith. Sir, I have no evidence as to what the Chinese 
Government ordered a transnational criminal organized entity to 
do.
    Mr. Krishnamoorthi. Are there any other cyber gangs, state 
sponsored, either Chinese or Russian or any other state-
sponsored criminal gangs that have committed pandemic fraud?
    Mr. Smith. Sir, just last year, we disrupted a 
transnational criminal organized group known as Black Axe. They 
are Nigerian based. They are operating in South Africa, and 
they have a longstanding history of committing a lot of 
different types of fraud, and they use a lot of the pre-
existing money mules. There is an extensive money mule network 
that operates here in the states. Again, even the transnational 
criminal organized groups overwhelmingly used or leveraged an 
American or an American profile to facilitate pandemic-related 
fraud. So, we did see that and we had an operation that 
disrupted that group just last year.
    Mr. Krishnamoorthi. Thank you.
    Chairman Comer. The chair recognizes Mr. Grothman for five 
minutes.
    Mr. Grothman. Sure. A few more questions, follow-up 
questions for Mr. Smith. Could you give me a little more 
information as far as a stereotype, as far as fraud being 
committed by people abroad, or fraud being committed by 
immigrants?
    Mr. Smith. What was the last word, fraud being committed by 
who, second part?
    Mr. Grothman. Immigrants. Immigrants. Immigrants.
    Mr. Smith. So, I am not going to get into stereotypes. We 
follow money. We follow evidence. And at the end of the day, as 
I mentioned to the previous committee member, the majority of 
the cases we have seen, even if there is a criminal looking to 
exploit pandemic-related fraud abroad, they use an American 
mule. We had certain campaigns that are cyber fraud task forces 
communicated to don't be a money mule, whether witting or 
unwitting, because what we saw was a lot of Americans being 
utilized to move money abroad because the criminals didn't know 
that overwhelmingly what we were looking for were, you know, 
American bank accounts, American identities to issue money to. 
So, they use that and leverage an extensive network of money 
mules that preside overwhelmingly here in the United States to 
get that money into their hands.
    Mr. Grothman. Well, there would be an example. Is the mule 
in America? Are they have contacts within the foreign nations? 
I mean, are they immigrants from the foreign nations? Are you 
just grabbing a random person off the street? I mean, could you 
comment on these mules?
    Mr. Smith. So we have, you know, dozens of cases, hundreds 
of cases where, you know, we would have a person in ``fill in 
the blank'' state. One state comes to mind where there was a 
mule that had literally funneled $12 million to some criminals 
that resided abroad. And once we start following the money, 
once we start looking at some of the commonalities and bank 
accounts, and we have an opportunity to go interview a person--
--
    Mr. Grothman. Right. Could you tell me what those countries 
were abroad, and could you tell me the background of the mules 
here, where did they have connections to the country abroad?
    Mr. Smith. So, one of the cases, as I mentioned a second 
ago, was out of South Africa, focused on some Nigerian 
individuals in a group called Black Axe. That case I just 
mentioned with the $12 million was one of the cases where in a 
money mule sent money to accounts that were operated by Black 
Axe. And I want to impress upon the group here, money mules are 
not a new concept. Like, there is an extensive network.
    Mr. Grothman. Right. You are not answering my question.
    Mr. Smith. Sir.
    Mr. Grothman. Presumably, they got these mules somewhere, 
OK? You mentioned Nigeria. You mentioned South Africa, where 
the people who did the work in America connected in those 
countries in any way. Were they immigrants from those 
countries? Were they just random people they find on the 
internet? Were the immigrants from those countries?
    Mr. Smith. Not necessarily, sir.
    Mr. Grothman. I know not necessarily, but does it happen, 
and how often does it happen?
    Mr. Smith. Overwhelmingly, in our experience, that does not 
happen. Criminals just take advantage of folks looking to make 
a quick buck, and the pandemic offered that opportunity with 
the amount of resources that were made available.
    Mr. Grothman. OK. Now in general, Mr. Horowitz, I can think 
of flaws in these programs that the fraud would be almost 
predictable. But can you tell us, in the future, what things we 
can do in programs so the fraud is not committed so easily?
    Mr. Horowitz. So, I think one of the easiest things to do 
that wasn't done is to prepare, as the Comptroller General 
said, by employing verification tools, identity verification 
tools. The amount of identity theft was extraordinary here, and 
it needs to be addressed because we are not only talking about 
when that occurs, theft from a government program, theft from 
the taxpayers, but for anybody who has been on the receiving 
end of having their identity stolen, you understand how you are 
victimized in that way. And just in the fraud alert, we 
indicated we now have 200,000 social security numbers that were 
used that we need to follow up on to see if those individuals' 
identities were stolen.
    Mr. Grothman. So, in other words, the money is going to, it 
is going to an account or something other than the person who 
is committing the fraud?
    Mr. Horowitz. Correct. So, what is happening is individuals 
are claiming that they are the person whose name is on the 
application, whose date of birth is on the application, and or 
whose social security number is on the application. When we 
checked and went to Social Security Administration to ask them 
to verify it, a check they can do. We entered into that. They 
were doing large-scale verification for us. They came back and 
said those don't all match for those 212,000 numbers, which 
means in some instances, it could be a false positive. Somebody 
could have transposed their social security number down or 
their date of birth down, so there are going to be some of 
those. But presumably, for most of them, those are individuals 
who obtained, on the dark web through other means, social 
security numbers that were previously stolen from individuals 
and had their identity stolen.
    Mr. Grothman. And then they wind up going to a bank account 
that has this person's name on it, but this person doesn't even 
know the bank account.
    Chairman Comer. The gentleman's time has expired, but we 
will let you finish the question.
    Mr. Horowitz. Yes, certainly there is an ability to go to 
the bank, particularly if, as with the PPP Program, the Agency 
has said you don't need to do anything other than accept the 
person's verification that it is them. In other words, all that 
had to happen in the PPP Program at the outset was you went to 
the lender, you signed an application saying, no, I am really 
this person, and they accepted it. No one can walk into a bank 
today and get a loan and say, no, no, really, I am this person, 
give me the money, but that is what was going on.
    Chairman Comer. Chair recognizes Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman. Mr. Horowitz, this 
question is for you. Democrats provided the Department of Labor 
inspector general $25 million in the American Rescue Plan to 
combat fraud and corruption in the process. Also in the 
American Rescue Plan, Democrats made critical investments in 
fraud prevention and accountability, including providing more 
than $200 million in funding for watchdogs to investigate 
fraud, waste, and abuse as well as $2 billion to support 
states' modernization of unemployment insurance systems to 
reduce fraud vulnerabilities. The Biden administration has 
begun using these funds to support state efforts to make 
unemployment insurance systems both more accessible to eligible 
recipients and less susceptible to fraud. The American Rescue 
Plan provided significant funding to the pandemic recovery 
accountability committee as well. Yet my Republican colleagues 
voted against these commonsense measures to reduce fraud.
    When the American Rescue Plan became law, Mr. Horowitz, you 
released the following statement, and here I am quoting you, 
``The enactment of the American Rescue Plan adds to the 
important independent oversight responsibilities of the PRAC 
and its member inspector generals. We appreciate the ongoing 
support from Congress and the administration of the PRAC in and 
its oversight mission.'' Mr. Horowitz, how much funding did the 
PRAC receive in the American Rescue Plan to perform the vital 
oversight functions?
    Mr. Horowitz. In the ARP, in the American Rescue Plan, the 
PRAC received $40 million of funding.
    Ms. Norton. Now, Mr. Horowitz and Mr. Dodaro, what other 
resources and authorities do you need to continue your work?
    Mr. Horowitz. So, as I mentioned in my written statement at 
the outset, I think very important to continue the data 
analytics platform that $40 million that was in the American 
Rescue Plan covered our ability to start the data analytics 
platform we have in 2021. It is funded through 2025, but we 
sunset on September 30, 2025. We turn the key off at that point 
unless it is extended.
    Congress invested $40 million to fund that over four-and-a-
half years. That is $15 million, $16 million we are spending 
right now. Just the fraud alert alone this past week, we 
identified $5.4 billion of potential fraud. That is 360 times 
the amount of money that we spent this year, or spending this 
year, to run our data analytics platform. In other words, it 
would take us 360 years of spending at that number to add up to 
$5.4 billion, so that, I think, is very critical.
    Mr. Dodaro. I would agree. I want to throw my support 
behind the establishment of this platform, a data analytics 
platform. Right now, it only applies to pandemic spending, and 
it is going to expire. This happened back after the Recovery 
Act, as I mentioned in my opening statement, and it was a very 
effective process then, but it expired in 2015. Now, if it had 
been in place at the beginning when the CARES Act was passed in 
2020, I think we could have saved a lot of money and prevented 
fraud or went after it earlier. But it wasn't established until 
the American Rescue Plan in 2021, so by that point, hundreds of 
billions of dollars have been already spent. So, I think this 
is a prudent investment on the part of the Federal Government 
to have this capability in the IG community on an ongoing 
basis. It will more than pay for itself many times over.
    Ms. Norton. In addition to the funding, Democrats included 
funding to the American Rescue Plan to provide grants to states 
to engage their local community organizations that represent 
those eligible for benefits. The goal is to help states learn 
how to more effectively reach these traditionally 
underrepresented and under-resourced communities. So, may I ask 
you, Mr. Horowitz and Mr. Dodaro, will these types of 
investments in the community engagement help you separate 
paperwork errors, other unintentional mistakes, and actual 
fraud?
    Mr. Dodaro. I think it is important to recognize, and we 
have ongoing work. So, we are going to be looking at that issue 
to see how effective Labor is working with the states and with 
those entities, so that is very important. Today, we focused a 
lot on the fraud part of the Unemployment Insurance Program, 
but on the benefit side, there was lack of timely benefits that 
were given to people. We find also some disparities in terms of 
how different people, different races have been treated. So, 
there is a lot to be done in unemployment insurance area to 
make sure there are timely payments made to the proper people 
in a balanced, equitable fashion, whilst stopping fraud on the 
other area.
    Now, we have added the Unemployment Insurance Program, 
along with the PPP, and Economic Injury Disaster Loan Program 
to the list of high-risk areas across Federal Government. The 
unemployment insurance area is badly in need of transformation, 
not only in dealing with these community organizations, but the 
IT systems in the states are terribly antiquated and not 
capable of executing this type of program in the future until 
they are modernized.
    Chairman Comer. Thank you. The chair recognizes Mr. Palmer.
    Mr. Palmer. Thank you, Mr. Chairman, and I thank the 
witnesses. To date, do we know the full amount of improper 
payments of COVID funds, Mr. Dodaro?
    Mr. Dodaro. There are estimates that have been made on the 
unemployment insurance area. In 2020, the estimate was improper 
payments was $78 billion, up from about $9 billion in 2020. And 
then there was another $18.9 billion of improper payments 
reported by unemployment insurance program for 2022, and that 
was a 22 percent error rate, and the year before was 18.9 
percent error rate. Prior to the pandemic, it was about nine 
percent, and the PPP and EIDL areas combined is about $36 
billion.
    Mr. Palmer. We are talking $135 billion. I have done math 
in my head.
    Mr. Dodaro. Yes.
    Mr. Palmer. As you know I like to do.
    Mr. Dodaro. Yes, I do.
    Mr. Palmer. It appears to me that some Federal agencies 
might not have been as forthcoming with information as both you 
and Mr. Horowitz would have needed. The Small Business 
Administration potentially violated Federal law by failing to 
respond to the GAO's requests. Has that been the case that they 
have not responded to your request?
    Mr. Dodaro. It was early on in the start of the programs. 
It has gotten much better and I actually had to go back in 2020 
and 2021. I testified before the Coronavirus Select Committee, 
and I had called the chair and ranking members of this Small 
Business Committees, both the authorizers and the 
appropriators, to get help. I mean, we couldn't get any 
information on SBA at all, and it wasn't until later, there was 
a lawsuit where they had to then disclose the amounts of loans. 
Now it has gotten better.
    Mr. Palmer. One of the problems is that the unemployment 
insurance programs authorized under the CARES Act were excluded 
from the program's total reported improper payments because 
they were not in existence for more than 12 months, and these 
programs represented about 70 percent of the unemployment 
payments in 2020. Should Congress consider legislation reform, 
the improper payments reporting periods in order to more 
accurately track the COVID relief funds in the future if we 
have to have this again?
    Mr. Dodaro. Yes, absolutely, and that is one of my 
legislative recommendations.
    Mr. Palmer. I would appreciate, and I have enjoyed working 
with both you and Mr. Horowitz over the years on things like 
this, if you would provide to me in writing your 
recommendations for legislative fixes.
    Mr. Palmer. I want to move to something else. It has been 
discussed about what actions Republicans took, and I just want 
to ask you, if we had required two-factor identification for 
online applications or provided state unemployment agencies by 
fax/email or other means, or transmission, a copy of the 
claimant's state ID, if we had utilized protocols to prohibit 
applications from foreign IP addresses, if we denied claimants 
using virtual private network identification, require 
individuals--I could go down this whole list of things--would 
that have helped reduce the amount of fraud?
    Mr. Dodaro. Yes.
    Mr. Palmer. Well, I just want to point out, Mr. Chairman, 
that these are recommendations that were made by Republicans in 
the House and Senate, including myself. I introduced a bill to 
do this that were largely ignored. When we began to see the 
massive amount of fraud as early as, I think, April/May 2020, 
Mr. Horowitz, I think, and working with the Department of 
Labor, the Office of Inspector General there, that billions of 
dollars had already gone out, and we couldn't get these 
guardrails back in, would that have helped, Mr. Horowitz?
    Mr. Horowitz. Absolutely, and the fraud did start right off 
the bat. I mean, for the PPP Program sent out $400 billion in 
two weeks.
    Mr. Palmer. Let me ask one other question. What we have 
seen toward in the last few months here is states using their 
COVID relief funds for things like New Jersey, $50 million in 
state and local fiscal recovery funds to bolster the state's 
bid to host the 2026 World Cup. We saw the state of Washington 
sent out $128 million in 1,000 payments to 120,000 illegal 
immigrants. We saw Colorado Springs use $6.6 million to put an 
irrigation system at two local golf courses, $5 million dollar 
state of Massachusetts pay off debts incurred by Edward M. 
Kennedy Institute for the U.S. Senate in Boston. Are any of 
those improper uses of funds? I mean, I know we wanted to give 
them flexibility, but isn't that a little bit out of the box?
    Mr. Dodaro. Yes. Well, there are broad uses authorized in 
the legislation for that money. We are looking at it right now, 
and so we will try to identify those areas that may be out of 
bounds legally. But it reminds me that the Recovery Act, when 
there was a lot of questions about the use of the money, 
whether that was appropriate or not, when it was really, you 
know, legally authorized because the government gave great 
flexibility to the state and local community to make decisions. 
The other issue you had to deal with always at the state and 
local level was fungibility of the money.
    Mr. Palmer. Well, they didn't have that early on, and Mr. 
Chairman, I think this might be something we want to look into 
because it is not just the fraud. It is the improper use of 
some of the funds. And my time has expired. I always enjoy 
hearing from you guys. I yield back.
    Chairman Comer. Absolutely. The chair recognizes Ms. 
Ocasio-Cortez.
    Ms. Ocasio-Cortez. Thank you so much, Mr. Chairman. This 
hearing is called Federal Pandemic Spending: A Prescription for 
Waste, Fraud and Abuse, UI, unemployment assistance, the 
Paycheck Protection Program, all of it. And in the wind-up to 
this hearing, on January 13, I see that the chair sent several 
letters to three states--Pennsylvania, California, and my home 
state of New York--with serious allegations of widespread fraud 
and abuse. But I am curious a little bit about how we got to 
these three states. Mr. Dodaro, if you were auditing or 
investigating what went wrong in states in the distribution of 
pandemic-related unemployment insurance, how would you go about 
choosing which states to examine?
    Mr. Dodaro. Well, we would look at a number of factors. One 
would be the amount of money that would go there. We would look 
for geographic distribution of the programs. We would look for 
other characteristics of state programs, a number of claims, 
for example, that have been there. And so, we would take a 
nationwide sample.
    Ms. Ocasio-Cortez. And even, you know, in your experience, 
looking at perhaps even something like a per capita approach, 
or you know, in your expertise, if you had to estimate some of 
the top candidate states, what do you think some of those 
states would be and why, and, again, more on like a per capita 
level?
    Mr. Dodaro. Yes, I don't have the per capita numbers in my 
head, so I don't want to venture a guess at this point. I would 
be happy to provide something for the record.
    Ms. Ocasio-Cortez. Overall, let's say not from per capita. 
What would be some of the top states that you would look at in 
terms of your experience and oversight of these programs?
    Mr. Dodaro. Well, certainly California and New York are 
always candidates to look at in those cases, but you have 
Michigan, you have Florida, you have states in the South and 
the West. And so, we would have a geographic distribution in 
order to make sure that we covered the money. What we try to do 
in these cases is cover, like right now we are looking at the 
State and Local Coronavirus Relief Fund, and we have selected 
18 states, and they account for about 60 percent of the total 
amount of money.
    Ms. Ocasio-Cortez. Thank you, Mr. Dodaro. I would like to 
submit to the record this report from the Pandemic Response 
Accountability Committee, ``State-Entitled Key Insights in 
State Pandemic Unemployment Insurance Programs.''
    Ms. Ocasio-Cortez. Now, Mr. Horowitz and Mr. Dodaro, can 
you think of any methodology that would have brought the 
committee to send those three letters specifically to just 
those three states? Is there any methodology you can think of 
that would just result in Pennsylvania, New York, and 
California being under investigation by this committee?
    Mr. Dodaro. Well, I would defer to the committee. I don't 
really know what their objectives were in that case, and I 
don't think----
    Ms. Ocasio-Cortez. I understand. Now, I wanted to get into 
this report, and according to this report to PRAC, for example, 
Arizona paid $1.6 billion to individuals to--stolen identities 
to get unemployment insurance benefits. Louisiana dispersed 
more than $1 million to individuals after the date of their 
death. And in Kentucky, state employees applied for 
unemployment benefits while still employed by the state, and 
were able to hack the state's information management system and 
remove holds on their own accounts, and none of these states 
have been put under investigation by this committee.
    I find it very interesting because as was stated at the 
beginning, the bipartisan nature of oversight is what gives it 
its power. And what we are seeing are investigations into, and 
I believe that the methodology for these three states is highly 
questionable. And I ask for this committee, if we are going to 
perform oversight, then let's perform oversight. Congressional 
Democrats are ready to perform that oversight and help our 
constituents get the benefits they need to pay their bills. And 
I think that there is no shortage of members of this committee 
who are willing to stand up to their own party when it is 
necessary, but I cannot for the life of me understand why the 
majority would send these three letters just to these three 
states that leave us with no other conclusion that there needs 
to be some rank partisanship in this investigation.
    Committee Republicans, I ask you now, if we are going to 
start off, let's do it right. And with that, I yield my time.
    Chairman Comer. Before I yield back, if Ms. Ocasio-Cortez 
is willing, I would love to join in a joint investigation of 
the Kentucky unemployment system and New York unemployment 
system if you wanted to do that, a joint probe or whatever. I 
would love to work with you on that or any of the 50 states 
because I believe it is a problem in all 50 states, especially 
Kentucky. You are exactly right.
    The chair recognizes Mr. Higgins for five minutes.
    Mr. Higgins. Thank you, Mr. Chairman. We knew there would 
be fraud because fraud is always connected to money. I 
supported the CARES Act as a Nation's initial response to the 
new virus. We didn't know what it was. The CARES Act was our 
effort to respond and to help American families and American 
employees remain financially stable while we endured the impact 
of this unknown virus. So, here we are into year 4 of 2 weeks 
to flatten the curve, and it very well falls upon this 
committee under Republican majority to begin conducting 
meaningful oversight into the massive fraud that was no doubt 
staged to take place when you start rolling out programs with 
trillions of dollars.
    Some estimates as high as $7 trillion, the total economic 
commitment from the United States of America, American 
treasures, $7 trillion. That is $7,000 billion. It is $140 
billion per sovereign state is an average of 62 counties per 
state tested. That is over $2 billion per county. I would argue 
that Americans across the country and in local and state 
government would say they would have done much better if every 
county could have received $2.2 billion in the form of a block 
grant. Of course there was going to be massive fraud with 
programs like this, but what we expected was not the absence of 
fraud. What Americans expected is a presence of accountability 
and criminal prosecution, and that accountability is what this 
Republican-controlled Oversight Committee is going to deliver.
    We know that fraud is not born in the mechanisms of man. 
Fraud is born in the heart of man. It is to be anticipated. The 
gentleman referred to certain tradeoffs between urgency and 
processes that were put in place as these trillions of dollars 
was set to be dispersed. Well, may I say that we anticipated 
this, but some of us, in order for the most conservative of us 
to support a $2 trillion response to this unknown virus, we 
insisted that this money be made available through local banks 
and credit unions. And we pushed the SBA product out through, 
my recollection is about 4,500 lending institutions that had 
never handled an SBA product before.
    We wanted, and we insisted that regular Americans would be 
able to communicate directly with the bankers they knew to 
access this assistance. So, we knew it was ripe for fraud, but 
we expected criminal investigations to take place, and we 
expected people to be put in jail. Accountability for criminal 
acts generally begins with a suspicion and a report at the 
local level of fraud, theft, forgery, identity theft, et 
cetera. That leads to an investigation, should lead to an 
arrest, should lead to prosecution, should lead to conviction 
and incarceration. May I say America will be just fine had we 
witnessed that kind of accountability, but it has to be pushed 
out of congressional investigations. That hasn't happened for 
the last three years. It will happen now.
    Director Smith, so specifically regarding investigations, 
that it is understandable that the most massive cases will be 
prioritized, millions and millions of dollars. But according to 
my research, the vast amount of fraud that we have witnessed is 
primarily from smaller cases, and I have been advised that they 
have gone ignored. Can you speak to that, sir? What are we 
doing at the Federal level to assist local and state 
investigators to go after these smaller cases?
    Mr. Smith. Sir, as I mentioned before, we follow money. We 
follow evidence. And one of the things that I talked about in 
my opening was the Secret Service training state and local law 
enforcement professionals at our National Computer Forensics 
Institute. It is the ultimate teach a man to fish, if you will. 
We train thousands of state and local law enforcement 
professionals every year to be able to investigate cases 
locally.
    I was just down in the chairman's home state last week in 
Kentucky talking to some of our cyber fraud taskforce partners. 
And they were actually briefing me on cases they were working 
at a local level that were focused on elder abuse and some 
pandemic-related fraud. So, we are a Federal law enforcement 
entity, but we do have a responsibility to help train, equip, 
and resource our local partners who help us in every aspect of 
our mission to be able to build their capacity locally.
    Mr. Higgins. Thank you for your response, Director. Mr. 
Chairman, I yield.
    Chairman Comer. The chair now recognizes Ms. Porter for 
five minutes.
    Ms. Porter. Good morning. I have questions about 
unemployment insurance. Mr. Dodaro, could you read this 
headline for the room? Yes, could you turn your microphone on, 
sir?
    Mr. Dodaro. Sorry. I am sorry. ``California's EDD 
Unemployment System Disaster: Predictable Fiasco.''
    Ms. Porter. Thank you. We are going to get everyone in on 
the fun. Mr. Horowitz, could you please read this headline?
    Mr. Horowitz. There is no way I can read this headline 
because I didn't bring my glasses with me.
    Ms. Porter. OK. I will read it for you: ``EDD's New 
Software Has Thousands of Defects, Some Critical.'' Mr. Smith, 
we will see, is also an eye test in case you need to get a 
checkup. Can you read that for me, Mr. Smith?
    Mr. Smith. It says, ``The North Carolina Unemployment 
Agency is a Broken System.''
    Ms. Porter. A broken system. North Carolina Unemployment 
Agency, a broken system. Mr. Horowitz, do these headlines seem 
familiar? Do they seem representative of the problems with the 
unemployment system during the pandemic?
    Mr. Horowitz. They do.
    Ms. Porter. They do. Would it surprise you to know that all 
of these new stories are from 2013 and 2014, long before COVID-
19 was a problem?
    Mr. Horowitz. Not at all. This has been an issue that GAO 
has spoken about for decades maybe. I am not sure if it is that 
long, but certainly we have as IGs as well. The unemployment 
insurance system needs to be fixed.
    Ms. Porter. I could not agree more. So, let's talk about 
that and how we can fix it. What these headlines show, of 
course, is that, as you said, state unemployment agencies have 
long had problems getting help to people who need it and 
preventing our tax dollars from ending up in the wrong hands. 
When the pandemic first began, we needed to deliver relief 
quickly. But due to chronic underinvestment in technology and 
systems at states that administer programs, we saw the same 
problems with waste, fraud, and abuse that we have seen for 
decades under Democratic and Republican Presidents, in blue 
states and red states. Mr. Dodaro, I want to talk about the 
GAO's High Risk List. What is that?
    Mr. Dodaro. The High Risk List was originally created to 
identify, for the Congress and the Administration, areas across 
Federal Government that we believe were highly susceptible to 
fraud, waste, abuse, and mismanagement, or in need of broad-
based transformation as it evolved.
    Ms. Porter. Did GAO identify unemployment system, UI, as a 
high-risk program?
    Mr. Dodaro. Yes.
    Ms. Porter. When?
    Mr. Dodaro. In 2022.
    Ms. Porter. June 2022. In June 2022, the year before 
unemployment was added to the high-risk list, do you know what 
the rate was of overpayment for unemployment insurance?
    Mr. Dodaro. In 2021, it was 18.9 percent.
    Ms. Porter. Great. And according to the Department of 
Labor, before that, before you put it on the high-risk list, it 
was about 15 percent. In 2019, it was about 9.5 percent. In 
2018, it was 12.1 percent. In fact, the overpayment rate has 
been over 10 percent for 14 of the last 18 years according to 
the Department of Labor's OIG. When GAO announced that the 
unemployment system had been designated as high risk, you said, 
``GAO is concerned that many longstanding problems may go 
unaddressed.'' Do you remember saying that?
    Mr. Dodaro. I believe so, yes.
    Ms. Porter. Is that a little bit of an understatement at 
this point?
    Mr. Dodaro. Well, you know, for many of those years, it was 
mostly state money that was collected. There really wasn't big 
Federal investment in this until the pandemic broke, or perhaps 
earlier in some other emergency situation, but I thought the 
time obviously was right.
    Ms. Porter. Yes. What the OIG has said is the UI program 
has experienced some of the highest improper payment rates 
across the Federal Government. So, my question is, why don't we 
fix this?
    Mr. Dodaro. Well, I think it requires some leadership on 
the part of the Congress and the Labor Department. You know, 
like a lot of these programs where the Federal Government has 
relied on the state and local governments, they give them a lot 
of discretion, and when times are good, unemployment is low, 
you know, they don't get a lot of attention until these 
problems come up.
    Ms. Porter. Mr. Dodaro, here is how I think about this. 
When someone has a dollar and they lose a dime of it, they 
think, shucks. But when someone has $100 and they lose 10 
bucks, they are like little angry, and it just keeps going up, 
and now we are in the billions and trillions. So, I would love 
to have your continued pressure on the Department of Labor to 
use all of the funding that Congress provided in the American 
Rescue Plan to actually modernize UI because I am trying to add 
up where that $2 billion from the American Rescue Plan has 
gone, and it does not seem to have all been deployed and spent 
to improve these programs.
    Mr. Dodaro. Yes. No, I agree. We are going to follow that 
$2 billion. Also, I was in the Senate testifying last March 
with Michael Horowitz and the IG from the Labor Department. He 
mentioned the money that was given to states after the Great 
Recession to reform the programs, and he mentioned some of that 
money went unused.
    Ms. Porter. No, it absolutely did. Mr. Chair, if you will 
indulge me for just one minute. In California, after the 
American Recovery Act, they were given a $2 million grant to 
EDD to prevent fraud, and guess what? It worked. At the end of 
the grant program, California quit using the Fraud Detection 
Program, penny wise and pound-foolish because that exact Fraud 
Detection Program would have prevented and saved tens of 
billions of dollars for Federal taxpayers during this pandemic. 
So, I appreciate the chairman's indulgence, and I yield back.
    Chairman Comer. Mr. Palmer, you want to be recognized?
    Mr. Palmer. Thank you, Mr. Chairman. I just want to affirm 
the gentlelady from California. Mr. Dodaro and I have worked on 
this for quite a while, and over half of the problems with 
improper payments are antiquated data systems at the state and 
Federal level, administrative error, and failure to verify 
eligibility. So, I just want to affirm what you just said, and 
I yield back.
    Chairman Comer. The chair now recognizes Mr. Sessions for 
five minutes.
    Mr. Sessions. Mr. Chairman, thank you very much. Mr. 
Dodaro, welcome. Mr. Horowitz, good to see you again. I would 
like to focus my question to you while it is this general 
subject. We have had conversations about ideas that went back 
and forth with the administration. Is there anybody at work? 
Are they there? Are you working with them? They are answering 
questions. Give me an idea about people at work, at least for 
the last two years. What has that been like?
    Mr. Horowitz. Yes. You know, we are engaged with folks. The 
Labor IG has been engaged with the Labor Department to try and 
address longstanding problems. As the Congresswoman said, this 
is not new. We have been engaged with OMB leadership and White 
House leadership to try, along with the labor IG, to try and 
push these issues forwards and get them addressed because the 
numbers are staggering.
    Mr. Sessions. Well, they are staggering. Then what is the 
progress--have they have come back to you? You have had 
meetings? What have they said?
    Mr. Horowitz. We have made some progress. Just to give you 
a sense of some of the basic issues, the Labor IG, because 
these programs are managed by 54 entities, the 50 states and 
other territories, the Labor IG needed to send regularly 
subpoenas to the 50 states to get the data because that data 
isn't housed at the Labor Department.
    Mr. Sessions. So, all 50 states denied information?
    Mr. Horowitz. No, no, they didn't, but to get it, you 
needed to go to them and ask for it, and they needed legal 
process to be able to send it. So, we now have it at the PRAC. 
We are looking at it. Just to give you an example, you know, it 
was found because it is this locally based system. One social 
security number we have identified today, so far, was used in 
29 states because the systems don't talk to each other. They 
are not managed at the Labor Department, at the Federal level. 
They are managed at the state level, and, frankly, it is not 
fair to blame the states for that. They are not resourced to be 
able to fix and modernize their various systems. Some states 
have done more than others, but they are all, I think, it is 
fair to say, if not all, most are struggling with this.
    Mr. Sessions. But not a new issue.
    Mr. Horowitz. Not a new issue at all, and GAO has probably 
been at the forefront of that with the Labor IG speaking of 
this.
    Mr. Dodaro. Yes, I think, you know, part of the problem 
Congressman Sessions is there is not sustained attention to 
these issues over time. And these issues require multi-year 
efforts. And, you know, we have been working with the agencies, 
but quite frankly, where there are state-administered programs, 
Medicaid is another one, for example, which has huge improper 
payments, where it is administered at the state level. The 
Federal agencies give a lot of discretion to the states, and, 
quite frankly, there is not enough oversight on the part of the 
states.
    Now, this is a particular issue in the unemployment 
insurance program because in normal times, it is state money 
that is leveled on employers that pay, and there are no Federal 
funds involved until there is an issue where they need the 
money. And so, there is not a good sense of direction as to how 
involved our country wants the Federal Government to be 
involved in state-administered systems. And so, you run into a 
federalism issue a bit with these programs, and, quite frankly, 
I think it would benefit from congressional oversight and 
direction as to what signals that you want to send these----
    Mr. Sessions. OK. Well, we agree with that. Mr. Dodaro, is 
there still such a thing that we invented with you years ago, 
1997, the high risk series.
    Mr. Dodaro. It is still there.
    Mr. Sessions. It is still there.
    Mr. Dodaro. And SBA, two programs are on emergency loans 
are on the high-risk list along with the Unemployment Insurance 
Program, and there are 37 areas. We are getting ready for our 
normal update at the beginning of each new Congress. So, we are 
ready to unveil the update on the list soon.
    Mr. Sessions. That would be great. One question. Is this 
information on your website for the agency, or where do we find 
this information?
    Mr. Dodaro. It is on our website. We have a whole special 
section, a medallion. It is GAO.gov, on our homepage, there is 
a medallion that says, ``High Risk List.''
    Mr. Sessions. Great. I want to thank all three of you. The 
gentleman, Mr. Smith, please know that the Secret Service is a 
valuable organization to us, but you should know that you have 
got employee problems that we have been trying to work on for 
years, and I encourage your management to look at that about 
how they treat their employees and how quickly they respond 
back to the needs of those people. And I appreciate each of 
your time. Mr. Chairman, I yield back.
    Chairman Comer. Thank you. The chair now recognizes Mr. 
Gomez for five minutes.
    Mr. Gomez. Thank you, Mr. Chairman. This is the first 
hearing of a two-year session, and I want to be very clear to 
the American people what I believe that the majority, the 
Republicans in this committee and in Congress will do over the 
next two years. They will attempt to rewrite history. They will 
attempt to absolve themselves of any of the decisions they made 
over the last two years in order to fit their own political 
narrative, everything from the pandemic response to January 6, 
to holding President Trump accountable himself. We even had 
colleagues here that believe that some of the January 6 
insurrectionists were patriots and heroes. They are not. They 
are traitors. That is what those are. Those insurrectionists 
were traitors.
    So, let's focus on unemployment insurance. The chairman and 
the majority of the Republicans voted 3 times in 2020 for UI 
benefit extension. Three times, and that is a good thing 
because it put money in the pockets of Americans who were 
struggling to make rent, to pay food, just to get by. But after 
a month of voting to extend those benefits, one month later, 
they voted to slash and to stop those unemployment benefits. 
What changed? Did they not know about some of the concerns of 
that program at that time? No. What changed is we had President 
Biden. My hunch is if it was President Trump, they probably 
would have voted to extend those benefits once again, but it 
wasn't. And why are they cherry-picking this program and not 
focusing on other programs?
    So, now let's talk about the Paycheck Protection Program. 
You know, as members, we voted to put the money in the pockets 
of constituents who needed it the most to keep their small 
businesses afloat. We voted to put money in their pockets, not 
Members of Congress. We have colleagues from Georgia who had 
$183,504 forgiven. Other Republican members had up to $4.3 
million forgiven. Why not focus on this program? That is 
because if they did, they would have to answer these questions 
regarding their own businesses, their own loans, their own--and 
why were those forgiven and not others.
    So, if we want to talk about handouts, we want to talk 
about fraud, you know, let's talk about it. Let's not cherry-
pick programs. Let's pick all the programs that were in place 
during the pandemic, and let's talk about if we want to do 
oversight, let's do it, but this isn't about oversight. It is 
about passing the buck and making one, too, so don't be fooled. 
The American people shouldn't be fooled by them trying to 
rewrite history and the role, and responsibility, and the 
implementation of those programs. I believe they were a good 
thing. You know, yes, no program is perfect, but it really did 
keep afloat the American economy, the American worker, and made 
sure that we didn't fall into a deep, deep recession.
    So with that, let's focus on, Inspector General, on the 
PRAC estimates. The PRAC estimates on the website say that we 
spent roughly $653 billion in pandemic expanded unemployment. 
However, your website also points out less than a quarter of 
that could potentially be improper, and less than that was 
fraud. Can you speak to the fact that a substantial majority of 
funds did what they were intended to do and keep Americans out 
of poverty and save lives?
    Mr. Horowitz. Certainly, Congressman. In all of the work we 
have done in the oversight work, no one has suggested or in any 
way sought to undermine the importance of these programs. We 
all can recall what was going on in March 2020, April 2020, and 
the need to assist and help people. The problem has been not 
that the programs were well intentioned or valuable. The 
problem is we have seen substantial amounts of that money not 
going to the people who is intended to help because of the 
fraud.
    We have also had hearings, and panels, and programs about 
the scope of the identity fraud, such that, for example, we 
heard how in the Unemployment Insurance Program, individuals 
who were intended beneficiaries, sometimes when they went to 
get benefits were denied because the state agency thought they 
were the fraudster, not the person who came first who was the 
actual fraudster. And so, they struggled to just get the 
benefits they were entitled to. That is why these programs need 
to be fixed and addressed because Congress meant the money to 
go to the people who really needed it, and that is where we 
should be putting our efforts.
    Mr. Gomez. Thank you. With that, I yield back.
    Chairman Comer. The chair now recognizes Mr. Biggs for five 
minutes.
    Mr. Biggs. Thank you, Mr. Chairman. Thanks for all of you. 
I am sorry, I have been in and out doing multiple hearings as 
we do. It is good to see you again, Mr. Horowitz. Mr. Dodaro, 
it is good to see you, and welcome, Mr. Smith. So I guess, I am 
going to try to broad shoot this thing here. Is there any money 
not expended in any of the COVID Relief packages that you are 
aware of?
    Mr. Dodaro. Yes, there is about, as of November 2022, there 
is about $157 billion in unobligated funds.
    Mr. Biggs. OK. Unencumbered, unobligated, unspent?
    Mr. Dodaro. Right.
    Mr. Biggs. OK. Great. Thank you. And what is the total 
amount that you estimate was spent through either fraud, 
improper payments, or waste in any of those programs? Go ahead, 
Mr. Horowitz.
    Mr. Horowitz. So, Congressman, it is even at this point too 
early to give any estimate that is reasonable. What I have said 
before and I will say again, it is clearly in the tens of 
billions of dollars, but it wouldn't surprise me if it exceeds 
ultimately more than $100 billion, but we have so much work to 
do. It is why Congress extended the statute of limitations last 
year to 10 years. We are in year three, and that is why we need 
that extension on the unemployment insurance side as well, so 
we are going to be counting and figuring this out for years to 
come. We are going to go after every penny we can. We are going 
to use every tool you give us, but it is going to take time, 
and we are not there yet.
    Mr. Biggs. Yes, sure. And, Mr. Smith, I read that you had 
returned through an analysis of, I think, 30,000 financial 
institutions, something about $3 billion to unemployment 
insurance benefits. Is that correct?
    Mr. Smith. Yes, sir.
    Mr. Biggs. OK. And I want to get to this because I think 
this is interesting. During the last round of questioning, the 
assertion was made that there was $653 billion overall in 
unemployment insurance that was disseminated through those 
programs, and that the estimate was somewhere below 25 percent 
was improper payments, fraud or whatever. So, if that is the 
case though, I mean, is that accurate? First of all, I want to 
just make sure. I don't want to be misstating something. That 
is what I understood the testimony to be.
    Mr. Dodaro. Yes. The Department of Labor estimated for 
2021, improper payments of $78 billion, which is about 18.9 
percent rate.
    Mr. Biggs. OK.
    Mr. Dodaro. And in 2022, it estimated $18.9 billion. That 
is a 22 percent improper payment rate. And so, those are the 
estimates of the Department of Labor, and those estimates are 
for the regular unemployment benefits. It is not for the 
pandemic unemployment insurance fund. So, those aren't complete 
estimates for all the Federal spending that was made during the 
period of time.
    Mr. Biggs. OK.
    Mr. Dodaro. The Labor Department is now trying to figure 
out the Pandemic Unemployment Insurance Program. That is the 
one that went to people who are self-employed or working part 
time or, you know, that was the new program that was created. 
The other Federal programs extended the benefits, were added to 
the benefit during a period of time. Those programs are covered 
by the estimates, but not the other one, the new one.
    Mr. Biggs. Doggone, I am more confused now than ever.
    Mr. Dodaro. Yes, but I just want to be clear on exactly 
what has happened.
    Mr. Biggs. No, I appreciate that.
    Mr. Dodaro. Yes. Right.
    Mr. Biggs. And as we go forward, maybe we could get 
together and just kind of suss out a little bit, you know, what 
that range might look like in totality versus----
    Mr. Dodaro. Yes. You know, what we have done is we have 
estimated on the unemployment insurance area. If you take the 
fraud rate and extrapolated that at the low end, the low end of 
the estimate is greater than $60 billion.
    Mr. Biggs. Sixty billion dollars. Yes, I saw that.
    Mr. Dodaro. Right, and now we are working to try to figure 
out an estimate. Again, no one will know--I agree with 
Michael--until all these investigations are underway. And I 
mentioned, the Labor Department IG is opening up 100 new 
investigations every week, and the PPP Program has over 500 
investigations underway. So, there will be investigations into 
fraud on this for a period of time, but we are trying to give a 
sense of what we think the magnitude would be.
    Mr. Biggs. Well, I look forward to continued discussion 
with you, gentlemen. And I just have to, Mr. Chairman, my 
colleague from New York earlier mentioned fraud occurring 
within the Unemployment Insurance Program in my home state of 
Arizona. What she did not mention is that Arizona actually 
identified the problem, partnered with a private sector 
company, and implemented an identity verification system 
because it is kind of getting to what you are talking about 
there, that a Biden administration official, Treasury, called, 
``kind of a silver bullet,'' and that ``almost immediately the 
fraud ring saw the game was up,'' once the tools were rolled 
out, and you had a 99 percent reduction in fraud once when we 
implemented those measures in my state.
    So, I would love to take a closer look at Arizona's 
response, how it worked, why it worked, and maybe we get there, 
at the Federal level as well, Mr. Chairman. And so, I 
appreciate, again, you all being here today, and thank you, Mr. 
Chairman. I yield back.
    Chairman Comer. Very good. The chair recognizes the 
gentleman from California, Mr. Garcia, for five minutes.
    Mr. Garcia. Thank you very much, Mr. Chairman, and I want 
to thank you and the committee for having us. We look forward 
to, of course, hearing from and having been heard from all of 
our witnesses, so thank you very much.
    Before joining Congress, I served as mayor of Long Beach, 
California. It is a city of about half a million people, 
coastal community. I was mayor during the entire time of the 
pandemic and the emergency. I also happen to be very proud of 
the response that we had as a community to this pandemic. 
President Biden called our response locally in Long Beach a 
national model. The Governor of California said it was the best 
response from a city in the state of California. In fact, we 
were the first community to vaccinate 99 percent of our 
seniors. We were the first community to vaccinate all of our 
public school teachers in our school system, and we were the 
first city to reopen our public schools as a school system in 
the state of California.
    So, I lived the pandemic 24 hours a day, every single day 
since it started. And I think it is important as we have this 
hearing and others on this important topic because I know that 
the issue around the pandemic, and our response will continue 
to be an important topic for the Congress. It is important to 
remember that this emergency was a catastrophic loss of life 
event. We have lost over a million Americans across this 
country. And just in Long Beach alone, we have lost over 1,300 
residents, friends, families, and neighbors. Personally, I lost 
both my mom and my stepfather to the pandemic. My mom was a 
healthcare worker, and so the loss is real for a lot of us. We 
also saw our economy collapse. Jobs were lost, businesses were 
closed, folks became unhoused, and families and kids were 
greatly impacted, particularly around schooling and their 
ability to learn every single day.
    Now, there has been a lot of attacks by the Republicans on 
this committee and across the House on the Biden administration 
and our response on the work that is happening in our agencies. 
I think it is really important to also note that we had a 
catastrophic emergency and that the President, the Vice 
President, and all the folks in our agencies did and are doing 
the best job that they can to manage this emergency, so I want 
to thank the President for his response. I want to thank his 
continuous work that is happening right now in our recovery.
    A lot of folks don't realize that the CARES Act and the 
American Rescue Plan saved lives. It saved small businesses. It 
saved cities. It saved nonprofits. The money that was sent to 
us by the Federal Government kept cities like Long Beach afloat 
and countless others across the country. It allowed us to 
provide food for those that were hungry. It allowed us to keep 
people in their homes with tenant and rental assistance. It 
allowed us to open homeless shelters when people were falling 
into homelessness. It allowed us to provide small business 
grants to small businesses that needed to stay open, to 
restaurants that were about to close. And so, I am grateful to 
all of you that were involved in some type of oversight or 
implementation. I am grateful to the Federal Government for 
providing support for our cities. And most importantly, the 
money from the CARES Act and the American Rescue Plan provided 
opportunities for us to test, to vaccinate, and to keep workers 
employed.
    It is important to note that in any major crisis or 
emergency, there are going to be mistakes. We were all moving 
fast and quickly. We take them seriously and we learn from 
them. In California, for example, we have already seized and 
recovered over a billion dollars in fraud and abuse. I think it 
is important to know that mistakes in emergencies are going to 
happen, but it is also to know who should be held accountable 
for some of these concerns being brought up by my Republican 
colleagues. And if Comptroller Dodaro can just remind us who 
was actually President when the pandemic started?
    Mr. Dodaro. President Trump.
    Mr. Garcia. Thank you for that because I remember as Mayor 
how difficult it was to get any sort of support from the White 
House. There was no PPE. We weren't getting our masks on time. 
We had to go procure tests ourselves. And so, I am sympathetic 
that oftentimes in emergencies, things are going to be 
difficult. Us as a city had to spend $20 million of our own 
money immediately without knowing if we were getting reimbursed 
or having support from FEMA, just to keep people alive on the 
ground. And to Assistant Director Smith, which administration 
actually established the COVID-19 Fraud Enforcement Task Force?
    Mr. Smith. Sir, we were protecting President Trump at the 
beginning of the pandemic.
    Mr. Garcia. But then I believe President Biden actually put 
in place an additional committee on fraud and abuse on the 
pandemic. So, I say that because there is obviously going to be 
mistakes made across administrations, but I am grateful to the 
Biden-Harris administration today for actually trying to do as 
best they can to address some of the abuses that are happening. 
I also think it is important to put the entire context of what 
we are talking about in this idea that we have just experienced 
the single largest loss of life event in the modern era of our 
country. So, I want to thank the three of you for your service, 
and I want to thank the committee for bringing this up in this 
hearing. I yield back the rest of my time.
    Mr. Palmer.[Presiding.] Before I recognize the next member, 
Mr. Dodaro, you said there were $137 billion in unobligated 
COVID funds that----
    Mr. Dodaro. I believe it was $157 billion.
    Mr. Palmer. A hundred and fifty seven billion?
    Mr. Dodaro. Yes.
    Mr. Palmer. If you have a general estimate of the total 
amount of unobligated funds in all agency accounts regardless 
of what they were there for, do you have an idea of what is out 
there?
    Mr. Dodaro. Do you mean for all Federal spending?
    Mr. Palmer. Yes, and unobligated funds.
    Mr. Dodaro. I don't have any idea on that right now. I can 
find out and provide it for the record.
    Mr. Palmer. I would appreciate it if you would provide 
that.
    Mr. Dodaro. It is a big government.
    Mr. Palmer. Yes.
    Mr. Palmer. The chair now recognizes gentlelady from South 
Carolina, Ms. Mace, for her questions.
    Ms. Mace. Thank you, Mr. Chairman. I also want to thank the 
ranking member for this hearing today. And the partisanship and 
the politics of this hearing is absolute and complete B.S. Our 
country and the entire world faced a pandemic unlike anything 
our generation has ever faced, and some decisions were made 
that were good and some decisions were made that I am sure we 
are going to look back on 20 years from now and have a great 
heartburn over like all of the fraud that has been committed.
    You know, partisanship in politics has kept us from doing 
our job on oversight. It keeps us from doing our job in 
Congress. It keeps our Federal agencies from being able to be 
the best that they can be. And any time that the Federal 
Government spends trillions of dollars, we should ensure it is 
safekeeping regardless of who is in power. COVID-19 is not the 
fault of this administration or the past administration at all, 
but it is up to us. I mean, the spending and the fraud has been 
a product of Republicans and Democrats for generations and for 
decades. We have got to ensure that the safekeeping of this 
money is done better now than ever before.
    There was guidance from Federal agencies on how to allocate 
these funds. The guidance was vague and led to potential 
integrity concerns and opportunities for bad actors seeking to 
take advantage. And I know that at the time this was rushed, 
and there was an urgency because of the worldwide emergency, 
but even with these concerns, the money kept flowing. As the 
last two COVID Relief spending bills added to the sum total of 
$1.15 trillion payments to individuals, just over $1 trillion 
to unemployment, when we literally paid people to stay home. No 
wonder none of us should be surprised it was hard to get people 
out of their homes and back to work, and we had, you know, $779 
billion for PPP loans. A total of about $5 trillion was spent 
roughly on COVID relief.
    As of today, there have been over 1,000 people convicted of 
fraud relating to COVID-19 problems. Over 600 are currently 
facing similar Federal charges, and it sounds like by the 
testimony today, there might be thousands more charged in the 
years ahead. And I appreciate everyone's testimony today, 
coming here and being forthright with our committee.
    Today I am encouraged by our leadership on oversight, that 
we will leave no stone unturned to uncover waste, fraud, and 
abuse plaguing these programs. And the thing that I found, I 
think, most interesting to me in the testimony today is the 
data issues that we as a Federal Government have. You 
mentioned, Mr. Horowitz, about having to subpoena 50 states for 
data, and it doesn't matter if we are dealing with immigration, 
or we are dealing with COVID relief fraud, or we are dealing 
with background checks on bad guys trying to buy guns. We have 
a real problem with data, data integrations, our systems 
talking to one another, or legacy technology that is being 
utilized. And if we don't fix it soon, we are just going to be 
overrun with it.
    So, I appreciate some of the ideas that have been put 
forth, but one of the things that has intrigued me and I think 
it probably intrigues a lot of people, and this is in the few 
moments that I have left in the committee today, is the use of 
artificial intelligence in some of this and trying to find the 
fraud. And of course, now we all know about it, since ChatGPT, 
5 million users, I mean, 1 million users in the first five days 
and only growing exponentially, and they are not the only ones. 
I mean, there is GitHub, and Copilot, and a bunch of others.
    But I would just--my questions today, and I will start with 
you, Mr. Horowitz. Can you explain the type of work, you know, 
how is AI being used? Is it advantageous? Is it speeding up the 
process? How useful is it? Just some of your feedback with the 
use of AI and detecting fraud.
    Mr. Horowitz. Yes, and thank you, Congresswoman. It's a 
very important question you raise, and I think at the outset, 
people need to be cautious about it. We have also read about 
some of the cautions in using AI. I know IGs are doing 
oversight work in that space. GAO is as well, but it can be 
very helpful. And in fact it is just a further advancement at 
some level of the analytics that we are using to try and find 
issues, and anomalies, and problems, and things we should be 
following up on.
    So, for example, we used a more primitive form of AI at the 
outset to try and help the SBA inspector general because they 
were getting in one day 1,000 or more complaints, which was 
more than they had gotten in the prior year in total. They 
needed to try and figure out and triage those, what were the 
highest level most important ones. They came to the PRAC. We 
helped them triage that by using a form of, if you will, AI, 
far more primitive than what you mentioned. But those are the 
kinds of things we can do. It is something that we have to do 
as governmentwide agencies need to use it. Inspectors General 
need to use it. I know GAO uses it. It is the future of 
oversight.
    Ms. Mace. Thank you. And I have run out of time, but I look 
forward to working with you all as the new subcommittee 
chairman on Tech, Cyber and Government Innovation. It is going 
to be a huge marker for us to determine waste, fraud, and abuse 
in the future and I agree. Thank you for your time today.
    Mr. Palmer. The chair now recognizes gentleman from 
Florida, Mr. Frost, for five minutes for his questions.
    Mr. Frost. Thank you, Mr. Chairman. I am glad that we are 
starting this committee talking about waste, fraud, and abuse, 
and how we can make government work better for the people. You 
know, Mr. Chairman, the previous comments, I agree with the 
initial comment that we need to take the politics out of the 
discussion, take the politics out of this, and the posturing 
and the hyperbole, so that way we can work together, again, to 
modernize our government and make it work for the people. And I 
hope this committee will continue to look into other financial 
abuses such as wage theft and corporate welfare as we continue 
over the next two years.
    Assistant Director Smith, you know, we have heard a lot of 
hyperbole and political posturing from this committee today. I 
think the way that we communicate and talk about an issue is 
extremely important in finding the solution. You know, we have 
heard things like the ``greatest theft in our country's 
history.'' I am curious from the point of view from law 
enforcement, does that type of hyperbole when talking about 
crime work to exacerbate the issue?
    Mr. Smith. Sir, thank you for the question. I think it is 
inconsequential to the bad guys as a law enforcement 
professional. Bad actors exploit situations, no matter what the 
political climate is, so we focus on investigating violations 
of identity theft, fraud, wire fraud and bank fraud.
    Mr. Frost. OK. Thank you. Thank you, Mr. Dodaro. Is it 
Dodaro, right? Yes, OK. All the GAO's recommendations include 
increasing the capacity and resources of the Federal Government 
to help deal with the waste, fraud, and abuse. You know, 
oversight isn't just talking about an issue, you know. We have 
to solve it. And in the spirit of solving it, can real 
improvements be made without additional resources and money to 
the government, to these departments and agencies, so that way 
they are set up for success to deal with the issues?
    Mr. Dodaro. Yes, some of them can be made without 
additional resources. Some need additional resources, such as 
the IG community, to continue their investigations on fraud, 
but also to set up this analytics center. And so, you know, it 
is really a mixture of both.
    Mr. Frost. Do you think that the amount of resources that 
were allocated during the previous administration was 
sufficient enough for what we are dealing with?
    Mr. Dodaro. I think there was adequate money given. I think 
it was just a choice of decisions that were made. In some 
cases, you know, I talked about limitations in the legislation 
itself. The agencies made decisions that I think could have 
been different decisions. They were given money to help 
administer the programs. I think there could have been a little 
bit more flexibility that was given.
    I know Treasury has run into some problems recently because 
they couldn't redistribute the money among some of the 
programs, particularly new programs, because until you start 
administering them, you don't know whether it is an adequate 
allocation or not. Congress fixed that with the latest 
Consolidation Appropriation Act. But I think by and large, the 
resources were there, it was just some decisions that were 
unfortunate.
    Mr. Frost. Got you. Thank you. Thank you. Mr. Horowitz, on 
this committee, I have heard a lot of demonizing of Washington 
bureaucrats, and bureaucrats are often scapegoated. And to be 
clear, when we talk about bureaucrats, we are talking mainly 
about working class people who have decided to serve their 
country by working to power our government. Do you believe that 
one of the central issues here is that agencies and departments 
were not set up for success? And I am thinking specifically 
about the previous administration, we got into this issue. Do 
you believe they were set up for success to be able to dole out 
the amount of money that was being given out?
    Mr. Horowitz. You know, I think the problem at the outset 
of the pandemic was, as the comptroller general has mentioned, 
the lack of preparedness. Now, understanding this was a 100-
year event with the pandemic, but we have emergencies all the 
time. We have earthquakes, floods, hurricanes, tornadoes, other 
disaster relief. It happens regularly, not at the scale perhaps 
as this did, but we don't take the steps after an event like 
this or smaller emergency events to fix what is needed. That 
was the problem.
    Just to give you a sense of it, the SBA, Small Business 
Administration, which administered the PPP and EIDL Program, 
the largest amount of money they had ever given out in a loan 
program prior to the pandemic was $30 billion. They were giving 
out $50 billion in a day when the pandemic hit. So when you 
say, were they ready for success, well, if you go to an agency 
that has experience giving out $30 billion over a year and you 
say, here is $800 billion, get the money out the door, which 
was the initial PPP Program. That is a recipe for a very 
challenging situation, no matter who is running the agency.
    Mr. Frost. Yes. No, no, thank you, Mr. Horowitz. Yes, and I 
think the point here is, I agree, we need to prepare for the 
future here, whether it is a pandemic or anything else. And I 
am looking forward to working with my Republican colleagues on 
ensuring that we give the adequate resources and know how to 
our agencies and departments, so when this happens again, we 
are prepared for it. Thank you. I yield back.
    Mr. Palmer. The chair now recognizes the gentleman from 
Florida, Mr. Donalds, for five minutes for his questions.
    Mr. Donalds. Thank you, Mr. Chairman, and to the witnesses, 
thank you for being here. It is actually great to have all the 
witnesses here in person. It is a novel thing in the 118th 
Congress, so really appreciate your attendance.
    A couple of things has been stated through the hearing 
that, you know, we want to make sure that oversight is being 
conducted, of course. But I would like to remind a lot of my 
colleagues and a lot of the freshmen who are here for the first 
time, there was no oversight over any of these dollars in the 
last Congress. I know that because I sat on this committee, and 
there were no oversight hearings about anything associated with 
pandemic spending, so I am glad that we are tackling this now.
    And it is critical because the other thing that is kind of 
in the news cycle, especially today, tomorrow, will be with us 
for a couple months, is we have hit our debt ceiling. We are 
out of money, folks, $31.5 trillion. We don't have new money. 
And so, if you are going to take account of having to 
potentially raise the debt ceiling in the United States of 
America, you have to take account of how the Federal Government 
goes through the process of spending its money, whether through 
normal times or even through pandemic times.
    Mr. Chairman, I want to submit for the record an article by 
Politico. The title of the article is, ``Biden Administration 
Reroutes Billions in Emergency Stockpile, COVID Funds to the 
Border Crunch.'' That is the article.
    Mr. Donalds. The article states that the administration 
went through a process of reappropriating, or moving around 
almost $2 billion from money supposed to go to the Strategic 
National Stockpile, and also funds intended to help study long 
COVID that was at the National Institute of Health and rerouted 
to actually help house migrants coming across the Southern 
border because of the President's reckless border policy. So 
Mr. Dodaro, are you aware of this reshuffling of dollars from 
the pandemic emergency to the southern border, in my view, 
failed strategy of the President?
    Mr. Dodaro. Yes.
    Mr. Donalds. And, Mr. Dodaro, when the President made this 
rerouting, what were some of the uses of funds that it was used 
for at the southern border?
    Mr. Dodaro. I don't have that information right now. I am 
aware the situation and what happened, but I don't know, you 
know, the details.
    Mr. Donalds. OK. Well, one of the things that I will 
request from you and your office is could you provide the 
committee those details?
    Mr. Dodaro. Sure.
    Mr. Donalds. Because it is going to be important for the 
Oversight Committee to understand that when money was shuffled 
from pandemic response to border policy, which, by the way was 
just a unilateral policy shift at the beginning of the Biden 
administration, that could have put American citizens at risk 
during the pandemic. And the reason why this is illustrative is 
because if we go down the line of setting precedents on how 
funding is going to be used, we should have an idea of what 
administrations have done in the past. So, I think this is 
actually very critical information.
    One other point, there is money that came through the 
American Rescue Plan, the $1.9 trillion, ``COVID bailout of the 
American economy,'' I say, quote/unquote because it really 
didn't work, but a bunch of that money is actually supposed to 
go to state and local governments, including to school 
districts through ESSER funds.
    Now, Mr. Dodaro, there is another tranche of this money 
that is slated to go out. This goes to the previous question by 
Mr. Palmer, about obligated funds, somewhere to the tune of 
half a trillion dollars that is slated to go out, and the 
President has now said that he is going to end the COVID 
emergency effective May 11. If the COVID emergency ends 
effective May 11, what is going to happen with these ESSER 
funds that are obligated, but have not yet been transmitted?
    Mr. Dodaro. I will have our attorneys take a look at that 
to make sure because we have appropriation law attorneys that 
provide assistance. But I think--I am not sure the funding is 
tied to the national emergency declaration in terms of what is 
been appropriated already. And I know some of the funds are 
available for use up to 2026, some up to 2030, so I don't know 
if the termination of the national emergency would trump what 
is already in the legislation in terms of how available those 
funds are made, but I will have our attorneys take a look at 
it.
    My guess would be that the appropriation would be the 
governing factor for the uses of those funds in the future, 
that they would still be available, but I don't know for sure. 
I will have a double check on that. There are some funding 
things, particularly in Medicaid, for example, that would have 
to be changed that are tied to the national emergency 
declaration.
    Mr. Donalds. Agreed. Medicaid is one of those things that 
is tied to the national emergency. I would just proffer for the 
committee that if we are going to go down this road of having 
to find a way to raise our debt ceiling, one of the things we 
should do is we should end letting money go out the door that 
was tied to the pandemic. That is now essentially over. With 
that I yield back.
    Mr. Palmer. The chair now recognizes the gentlelady from 
Vermont, Ms. Balint, for five minutes for her questions.
    Ms. Balint. Thank you, Mr. Chair, and good afternoon, all. 
Thank you for being here. I am sitting here as a new Member of 
Congress, but I am also sitting here as a former leader of my 
state senate in Vermont, and was on essentially our state's 
frontlines in dealing with the pandemic emergency much like my 
colleague, Mr. Garcia. And I want to be clear that we all want 
to reduce improper payments. I think that is clear. I don't 
know some of my colleagues on the Republican side, but I think 
we all can agree that that is a goal because it is the people's 
money.
    What I want us to do, though, is bring us back to that 
moment at the beginning of the pandemic. It is a moment that I 
remember so clearly, thousands and thousands of Vermonters 
calling my office, calling the office of all of my colleagues, 
Republicans and Democrats, to say, we are desperate. We are 
desperate. We can't pay our bills. We don't have money for 
food. We can't pay our rental payments. And I cannot convey to 
you the loss of sleep or the worry that we all had as state 
legislatures trying to protect our people. And what I am 
concerned about this morning is I feel like at the heart of 
this hearing, has been a false choice between ease of access to 
government assistance when disasters strike. And as Mr. Garcia 
said, we lost over 1.1 million Americans, and I am sure like 
many of the people in this room, I know people who succumbed to 
the pandemic. So, I believe it is a false choice between ease 
of access to help alleviate fraud, and making sure people get 
the help they need. This is about real people. It is about real 
families. It is about desperate people needing assistance.
    And so, the question I have for you this morning is, do you 
agree with that assertion that government must either choose 
speed or accuracy, because what I know is getting the money out 
quickly to people desperately in need saved lives in every 
community in my home state.
    Mr. Dodaro. I think you can do both if you are prepared, 
and that is what I have said all along. I have acknowledged in 
all our reports the important assistance delivered to needy 
Americans, but there are definitely choices. I mean one of the 
things, the economic impact statements where the money went 
directly to individuals, there were some problems with that. 
The first round, $1.4 billion, went to deceased individuals. We 
have gotten about half of that back, one of which was my own 
mother who had passed away earlier and my sister returned the 
money, though, so.
    Ms. Balint. Is that on the record, Mr. Dodaro?
    Mr. Dodaro. Yes.
    Ms. Balint. OK. Just checking.
    Mr. Dodaro. Yes. No, that is.
    Ms. Balint. I am joking.
    Mr. Dodaro. I have already said it when I testified in 2020 
on this.
    Ms. Balint. OK.
    Mr. Dodaro. But the programs that are administered through 
third parties present problems, and if the agencies are 
prepared and they are designed properly, you can get the money 
out quickly, but you can also minimize the fraud. We are not 
saying you can never eliminate it, but I think if the agencies 
are prepared, the programs are designed properly, people can 
get the aid they need as soon as possible. What happened with 
the fraud, though, is because some of these funds were 
limited----
    Ms. Balint. Can I, Mr. Dodaro, just because I am going to 
run out of time. I appreciate it.
    Mr. Dodaro. Yes, sure.
    Ms. Balint. So, a follow-up question is, can you highlight 
for us the ways in which we can design benefit systems with the 
recipient in mind, making sure that we are combating improper 
use of funds, but making sure it is meeting the needs of the 
people on the other side, those real Americans who need the 
help?
    Mr. Dodaro. Right. Yes. Well, I think we need better 
identity verification systems to know who the people are that 
are applying. Mr. Horowitz talked about that. I have talked 
about that. We have made recommendations about that. I think 
the agencies ought to be better prepared to know how to prevent 
fraud from happening in the first place. There are a lot of 
different ways that those things could be done and be done 
properly.
    Ms. Balint. I appreciate that, and I am eager to partner 
with anyone on this committee that wants to address these two 
things simultaneously. And I just want to say, in this 
committee, we have to keep the people back home in mind every 
single day. I yield back.
    Mr. Palmer. The chair now recognizes the gentleman from 
North Dakota, Mr. Armstrong, for five minutes for his 
questions.
    Mr. Armstrong. Thank you, Mr. Chair. At this point in time, 
we have all seen the headlines, ``Paycheck Protection Program 
fraud,'' ``Economic Injury Disaster Loan fraud,'' ``improper 
unemployment payments.'' And I would like to concur with my 
colleague from Florida in that one of the common and 
unfortunate denominators to these headlines is that when they 
held the majority, Oversight Committee Democrats failed to hold 
a single hearing to protect COVID relief programs from waste, 
fraud, and abuse.
    But I think the most frightening result of this lack of 
oversight is that foreign hackers, including those acting on 
behalf of foreign countries, have tapped into these large 
funding mechanisms and stolen dollars meant for struggling 
Americans. I understand that the large scope and quick 
disbursement of COVID relief can result in waste, fraud, and 
abuse, but it is unacceptable that our strategic adversaries 
had such an easy means to infiltrate through cyber means. 
Specifically, in December of last year, it was reported that a 
hacking group which was talked about a little earlier as APT 
41, stole at least $20 million in U.S. COVID relief funds, 
including both unemployment insurance dollars and Small 
Business Administration loans.
    By the time the COVID relief funds became a target of 
opportunity, APT 41 had been in existence for about 10 years 
and had become the workhorse of the cyber espionage activities 
for the Chinese Communist Party. The hackers are believed to be 
connected very closely to the government, and they allegedly 
act on orders directly from China's Ministry of State Security. 
While there are many bad actors targeting government programs, 
this is allegedly the first strategic foe, a state-sponsored 
cyber threat of the U.S. COVID benefit funds.
    Assistant Director Smith, earlier you answered that the 
Secret Service is unsure if APT 41 was directly ordered by the 
Chinese government to target U.S. COVID relief funds. When do 
you think the Secret Service expects to have resolution on if 
the hackers acted on their own accord or by government 
direction?
    Mr. Smith. Sir, sometimes in the context of a criminal 
investigation, those answers never get reconciled. As I said 
before to your colleague who asked me the question originally, 
we focus on financial crimes, and sometimes financial crimes 
leads you and the evidence leads you to entities that may have 
other interests in mind. Again, if that happens, we employ our 
partners at the Department of Justice, who may also have some 
additional angles into how they are looking at particular 
groups.
    Mr. Armstrong. And just generally speaking, whether they 
were working directly for them or not, I mean, the Chinese 
Communist Party knows of their existence, right?
    Mr. Smith. I cannot attest to what their knowledge is or 
not.
    Mr. Armstrong. Reports have stated that Secret Service 
recovered nearly half of the $20 million stolen by the APT 41 
hackers. I am assuming you are continuing that investigation.
    Mr. Smith. Yes, sir.
    Mr. Armstrong. These are kind of unfair in that. Do you 
have any timelines and like do you have anything you could 
share with us, either publicly or sometime privately?
    Mr. Smith. That case is a large, very broad case out of our 
Denver Field Office, and it will be unpacking that for some 
time, sir.
    Mr. Armstrong. Comptroller Dodaro, as I mentioned, hackers 
have targeted the unemployment insurance funds of several 
states, the extent of which is still unknown. What can we do 
outside of tearing down those entire systems in all 50 states 
to provide states with whatever safeguards the Federal 
Government can on unemployment insurance programs, even without 
enhanced COVID benefits from foreign actors?
    Mr. Dodaro. Well, I think the Labor Department, with some 
of the funds that have been given available, has begun to set 
up identity verification methods, means to also check 
addresses, so those efforts need to be continued to go down the 
road. But cybersecurity is an issue that the Federal 
Government, governments at all levels haven't heeded. I put 
that on the high-risk list across the Federal Government in 
1997 and added critical infrastructure protection in 2003. This 
problem has been known for a while, and I think we need to make 
sure we have more modern systems that can check. The other 
problem is allowing data sharing. It took me years to get 
Congress to allow the Social Security Administration or to 
require them to give the Death Master File to the Treasury 
Department so we could stop paying deceased individuals. That 
hasn't even happened yet. It is not scheduled to happen until 
next year, and recommending that that be expedited.
    So, there are a lot of things that could be done, but the 
systems have to be modernized. There are too many legacy 
systems. Some of the state systems go back to the 1970's, and 
some of the Federal Governments are decades old as well.
    Mr. Armstrong. Yes, in many states, that is the last IT 
upgrade everybody does, I mean, regardless, all the way across. 
So, thank you. I yield back.
    Mr. Palmer. The chair recognizes Ms. Lee.
    Ms. Lee. Thank you, Chairman, and thank you to the 
witnesses for your testimony. It is still surreal to be in this 
room on the Oversight Committee.
    In January 2023, our country has experienced multiple mass 
shootings and a lynching at the hands of police. And yet here 
we are, the very first hearing of the Oversight Committee, to 
criticize critical unemployment benefits from a global 
pandemic. This isn't just politics for me. Before joining 
Congress, I, like many of my colleagues, served for years as a 
state legislator in Pennsylvania. Just one year later, we 
crashed head on into this global pandemic that, frankly, we 
were not remotely prepared to handle.
    Every single day, I heard over and over and over the 
desperate calls of folks unable to access food banks, people 
facing the risk of homelessness, folks literally contemplating 
suicide, unable to eat or work. Every call was a real 
Pennsylvanian, a real person whose literal lives relied on the 
same benefits my colleague see fit to criticize this morning. 
When the benefits were ended in September 2021, there were 
174,572 people receiving the pandemic emergency UC and 387,932 
people receiving the pandemic unemployment assistance in the 
Pittsburgh Metro Area. The pandemic relief was literally the 
difference between life and death for my community and 
communities all over the country, so focus on the people 
impacted.
    I turn to you, Mr. Horowitz. Understanding $3.1 billion was 
secured in the Consolidated Appropriations Act of 2023 to 
protect and strengthen the federated UI system under the 
Department of Labor Inspector General, can you tell us how 
these investments could be used to improve the federated 
Unemployment Insurance system?
    Mr. Horowitz. Absolutely. Thank you, Congresswoman. And, 
you know, we held hearings about the value of the Unemployment 
Insurance Program and other programs to help communities, as 
you said, but also heard about the challenges that communities 
had to get the money in the right place. First and foremost, 
the money needs to be used to modernize IT systems. It is 
different state to state. Some states have older systems than 
others. But it seems to me that one of the first things that 
has to happen is the funding needs to be used to modernize 
antiquated state systems.
    Ms. Lee. Thank you. I can certainly attest to that. Ours 
was a system that was entirely ill-equipped to handle this. By 
March 2020, I believe, almost a million Pennsylvanians found 
themselves suddenly unemployed. With that in mind, I have the 
same question for Mr. Dodaro. Again, how these investments 
could improve the federated Unemployment Insurance system?
    Mr. Dodaro. I would echo the first comment that Mr. 
Horowitz made that the IT modernization systems need to be put 
in place in each state. Now each state has a different program. 
I mean, their eligibility requirements are different. So, it 
has to be tailored systems. Second, though, I think there ought 
to be more data sharing agreements made on the part of the 
states to work together. Mr. Horowitz gave an example before of 
a Social Security number, one number that was used by 29 
states. That shouldn't be able to happen with the use of modern 
technology. I also think that the Labor Department ought to try 
to have states voluntarily implement fraud reduction programs. 
I mean, there was fraud rate of about at least four percent in 
these unemployment programs before the pandemic.
    So, there has been fraud in these programs for a number of 
years. And the requirement for the Federal agencies to 
implement GAO's fraud reduction framework is for Federal 
agencies, but it doesn't cascade down to the state level, which 
is something I think Congress ought to consider. And the Labor 
Department is helping them have fraud prevention programs. They 
have to make sure that they are adequately staffed properly as 
well. The problem was that, you know, we were at historic and 
low unemployment rates. The states had reduced their staffing 
systems, had old IT systems, not a prescription for success, 
and so I think they need to deal with those issues.
    Ms. Lee. Thank you, and thank you, Mr. Chairman. I yield 
back.
    Chairman Comer.[Presiding.] Thank you. The chair now 
recognizes Mr. Timmons for five minutes.
    Mr. Timmons. Thank you, Mr. Chairman. Mr. Dodaro, I want to 
begin by thanking you for your work with the Select Committee 
on the Modernization of Congress. We were able to get signed 
into law just in December the Improving Government for American 
Taxpayers Act. We hope that we can get the executive branch to 
act on your recommendations and probably save taxpayers 
billions and billions of dollars, so I just want to begin by 
thanking you for that.
    Mr. Horowitz, it seems that there is likely tens of 
billions of dollars in PPP loan fraud that has yet to be 
uncovered. Is that fair?
    Mr. Horowitz. There is likely tens of billions.
    Mr. Timmons. Some estimates are as high as $100 billion, 
but we can just agree on tens of billions?
    Mr. Horowitz. Yes.
    Mr. Timmons. That is fine. It seems to me that you have all 
of the information necessary at your disposal to identify this 
fairly rapidly. You look at the Q4. Well, you get the business 
tax ID number and you compare the Q4 withholdings for W2 
employees versus the amount of the PPP loan, and then the Q2 
and Q3 of 2020 withholdings, and there should be an algorithm 
or some sort of a proportionality between those different 
numbers. So, that should be some sort of a report that you can 
run and then you can just start arresting people. Is that not 
how this should happen?
    Mr. Horowitz. There might be a little more sophistication 
to it, perhaps, but let me just say, we don't have access to 
that data.
    Mr. Timmons. What do you need from Congress because it is 
literally a report. You should be able to run a report on those 
four data points, and then you are going to get tens of 
thousands of businesses that got PPP loans fraudulently, 
because if the metrics don't match up, then they lied, and they 
stole, and they need to go to jail. So, what do you need?
    Mr. Horowitz. A clear congressional action in legislation 
that says that. It took the fraud alert we issued this week 
matching our information, and all we did was send name, date of 
birth, and social to the Social Security Administration and 
said don't send us back your data. Just give us yes/no answers. 
Are these the real names? It took us 10 months to do that.
    Mr. Timmons. Again, we agree----
    Mr. Horowitz. Yes.
    Mr. Timmons [continuing]. That the Q4 withholdings of 2019 
and the Q2 and the Q3 withholdings of 2020, plus the amount of 
the PPP loan, those numbers should have a proportional 
correlation that we can all agree is fairly straightforward. It 
is going to be up and down a little bit depending on how much 
your rent is, what your utilities are, but those numbers should 
all match up. And if there is a huge discrepancy, and whatever 
that correlation is, then they probably stole, and it was 
fraudulent. Do you just need us to force everybody to create 
that report?
    Mr. Horowitz. What we need is access to data. It is what 
the comptroller said about just the Death Master File Index.
    Mr. Timmons. I don't even think you need access to that. 
You need that report run, and you need to have the list, and 
the discrepancy, and the correlation of those four metrics, and 
then you need to go and start putting people in jail.
    Mr. Horowitz. We need the data analytics platform to 
continue, and we need access to all of this data, and Congress 
has to legislate that.
    Mr. Timmons. Do you need access to the data, or do you just 
need Treasury to run a report?
    Mr. Horowitz. They won't run the report unless it is clear. 
We have access----
    Mr. Timmons. We can make them run the report.
    Mr. Horowitz. That is what we would need as well then. 
That's correct.
    Mr. Timmons. I am sure that this is not a partisan issue. 
If people stole tens of billions of dollars in COVID relief, 
possibly denying benefits to people that actually needed it, 
those people need to be held accountable. And the fact that 
here we are years later and we still have not done something, 
that should literally be as simple as running a report in a 
computer at the Treasury Department. I mean, you need us to 
pass a law making them do that.
    Mr. Horowitz. We need a law. We would love to get employer 
identification number information to see if some of it actually 
exists.
    Mr. Timmons. Why would Treasury not do this?
    Mr. Horowitz. Because there are Federal laws, like Section 
6103 of the Tax Code, that restricts sharing of tax 
information. And we are not talking just for the public's 
benefit, not individual income tax returns that we are talking 
about, but 6103 is written broadly for a variety of very good 
reasons to limit where that--that tax information.
    Mr. Timmons. All right. Well, look, there are four pieces 
of data that are attached to every business tax ID number, and 
this should be easy. I will work on legislation with everyone 
that is willing, and we will try to get you that information as 
quickly as possible. Thank you. With that, I yield back.
    Chairman Comer. The chair recognizes Mr. Casar for five 
minutes.
    Mr. Casar. Thank you, Chairman, and thank you, Ranking 
Member. I am so glad that we are having this hearing. After 
years in local government working 24/7 during the pandemic to 
save lives and jobs in Texas, I have this opportunity to thank 
the Congress for their work, bipartisan work on the CARES Act. 
And thank you to congressional Democrats for the American 
Rescue Plan.
    Congress should be proud of the way that those bills helped 
save people's homes, kept people in their jobs and kept people 
alive. I want to be clear. No one in the country is more 
strongly against fraud than my working-class constituents who 
needed those COVID dollars to make sure their small businesses 
kept running, to make sure they got PPE at work, to make sure 
they got vaccines, to make sure their house wasn't foreclosed 
on. Any dollar taken from those programs by fraudsters is a 
dollar taken away from people who needed support.
    And similarly, we must be against fraudulent 
mischaracterizations of COVID relief programs that ultimately 
aim to reduce aid to people in need through these programs and 
other programs. We can talk all day in D.C. about COVID 
programs theoretically, but as a former city leader who put 
these programs in place, I can tell you that thanks to the work 
of the Congress and President Biden, local leaders in my 
community, one, saved people's homes; two, saved local 
economies; and three, saved lives.
    So, before I ask my question, I just want to share some 
facts that you may not have heard from Texas. One, we kept 
people from losing their homes through protections against 
evictions and foreclosures plus Federal housing relief dollars. 
The city of Austin reduced evictions in 2021 by 75 percent, 
keeping thousands of people in their homes. Conservative 
estimates are that COVID housing programs kept over a million 
Americans from losing their homes.
    Two, we saved local economies. Because these programs and 
this kind of funding, the city of San Antonio in my district 
was able to support over 1,200 small family businesses, keeping 
them from closing, provided 160,000 meals to residents in need, 
trained over 5,000 struggling workers, putting thousands of 
people to work. The ARP kept 12 million people out of poverty, 
and pandemic relief programs according to CBO, kept GDP up 
eight percentage points.
    And third, we saved lives. Thanks to the funding for 
vaccinations and public health programs plus our COVID rules, 
the city of Austin had the lowest, along with Travis County, 
had the lowest COVID-19 death rate amongst our major Texas 
cities. Every death in our community was a tragedy, and if we 
had been able to achieve that same rate across Texas, we would 
have 45,000 more Texans who would have survived the pandemic. 
President Biden's vaccination strategy, along with local 
leaders' efforts, have kept nearly half a million people from 
being hospitalized.
    I just want to be clear. You cannot fraud your way to these 
lower COVID death numbers. You cannot cook the books and save 
this number of people from losing their homes, or their jobs, 
or their businesses. The hospital beds, the food lines, the 
morgues do not lie. These COVID relief programs did powerful 
work, even while we continue to work to root out any instance 
of fraud.
    So, what I want to ask our panel here today is that we, of 
course, need to focus on getting rid of fraud, but without 
telling these stories of success, we could weaponize 
accountability efforts to undermine these programs that you 
have said have helped struggling Americans. So, in your time 
targeting fraud, can you give us examples of programs you have 
looked into that functioned well, served the American people 
with urgency, and ensured that dollars actually got to the 
people that needed them the most?
    Mr. Horowitz. I would say, Congressman, we haven't heard 
stories from people that said these programs were a complete 
waste. That is not what we have heard. We have heard success 
stories in many of the programs. We have talked about PPP, and 
EIDL, and the unemployment insurance. Restaurant revitalization 
program helped restaurants. The various state and local funding 
vehicles had a substantial impact. We actually visited six 
communities as part of our oversight work and are working on a 
report on it to see how they used COVID-related funds, what 
impact it had on those communities. And so, we have gone to 
communities around the country to get that information.
    The challenge has been making sure that large percentages 
of that money went to the people it was intended for and went 
to the communities it was intended to help. So, I wouldn't come 
here and say we heard testimony that these programs were bad. 
What we heard was these programs were helpful, and how do you 
fix the fraud to make sure the money goes to the right place.
    Mr. Casar. Thank you for that. Yes, of course, you know, 
helping folks out in a mile-long food line, those folks aren't 
there committing fraud. But what we are trying to do here is 
make sure that we are recovering dollars that weren't getting 
to those folks.
    Mr. Dodaro. Yes. No, I agree with what Michael has said. 
But I would also add, you know, Operation Warp Speed, I 
thought, was a very effective program. We were able, working 
with the private sector and government, to develop the vaccines 
in a record time. Normally, it would take 10 to 15 years to 
develop a vaccine, but Operation Warp Speed worked, I think, 
extraordinarily well. The programs have provided funding to 
help support healthcare workers, providers was very effective 
as well. But all of these programs had some level of 
effectiveness, but it could have been even more effective, is 
what we are saying. If all the money that was allocated was 
used properly, we could have maybe saved more people, helped 
more people out, and that is our goal.
    Mr. Casar. Thank you. I think it is our goal as well. I 
yield back.
    Chairman Comer. The gentleman's time has expired. The chair 
recognizes Mrs. McClain for five minutes.
    Mrs. McClain. Thank you, Mr. Chairman, and thank you all 
for being here today. I appreciate it. A little bit of 
background is, I come from the financial services background, 
and I really want to focus on the waste, the fraud and abuse 
and really to represent the American people.
    In my background, if I were to defraud a client, probably 
two things would happen. One, I would have to pay the money 
back, and two, I probably do a little time for that, and 
rightly so. So, I want to really focus on what are the 
consequences and what are the penalties, and then what is the 
relationship, because if I understand it correctly, it is your 
job, Mr. Smith, to kind of make a preliminary case and then 
hand it over to the DOJ. Am I directionally correct on my 
understanding?
    Mr. Smith. Yes, sir. Yes, ma'am. Yes, ma'am.
    Mrs. McClain. So, in your testimony, you mentioned that the 
Department has recovered over a billion dollars, which I think 
is a good start. However, we still have $500 billion in 
potential fraud out there that we have just identified, and who 
knows, there might be more. So, I am curious as to how many 
pandemic fraud cases your office has actually referred to the 
DOJ. Do you know that?
    Mr. Smith. So, to give you some background, we have opened 
over 5,000 cases since March 2020. We obviously follow the 
evidence, and once we feel like there is investigative merit, 
we take those cases to the Department of Justice, U.S. 
attorney's offices. And those U.S. attorney's offices look at 
those cases and the prosecutorial merit of those, along with 
other Federal law enforcement entities because it is not just 
the Secret Service----
    Mrs. McClain. Sure.
    Mr. Smith [continuing]. But other Federal law enforcement 
entities who are bringing pandemic-related cases as well. They 
have to de-conflict and prioritize.
    Mrs. McClain. So, let's stick with that theme because I am 
trying to get some answers. So, you have over 5,000 cases. How 
many of those have you referred to the DOJ, give or take?
    Mr. Smith. When we open the case, once we feel like there 
is enough evidence to move forward from a prosecutorial 
judicial standpoint, we present that case to the U.S. 
attorney's office. I don't have the breakdown of how many were 
presented yet. I can get that number back to you though.
    Mrs. McClain. If you could, directionally, do you have an 
idea?
    Mr. Smith. When we open the case, the----
    Mrs. McClain. Is it a 90 percent accept rate? Is it a 20 
percent?
    Mr. Smith. Well, accept rate is actually different than 
presentation rate because when we open a case, the intent is to 
eventually present it to the U.S. attorney's office.
    Mrs. McClain. Right. So, I am trying to make the 
correlation to you commit a crime, there is a consequence. And 
what I am trying to do for the American people to help justify 
for them their tax dollars being misused on fraudulent basis, 
and I appreciate and applaud your efforts. I am trying to 
connect the dots on what is the number. Directionally, you have 
no idea. Does the DOJ accept most of the cases? Are most of the 
cases that you find accepted?
    Mr. Smith. I mentioned in a previous response, so as a 
Federal law enforcement entity, we are, you know, by nature, 
trying to go after the most egregious actors.
    Mrs. McClain. Sure.
    Mr. Smith. That is why we train state and locals----
    Mrs. McClain. Yes.
    Mr. Smith [continuing]. In our Computer Forensics Institute 
down in Alabama to focus on a local level, but we are confident 
in our colleagues at the DOJ. They take as many cases as they 
can, and they work----
    Mrs. McClain. So, with all due respect, you may be 
confident, but I don't know if the American people are 
confident with their tax dollars. And I don't mean any 
disrespect, but that is why I am trying to ask these numbers is 
to get some answers for the American people. Let me rephrase 
it. How many of these cases are currently being prosecuted by 
the DOJ? Do you know that?
    Mr. Smith. I don't know that overall number for the 
Department of Justice. I do know that we have made nearly 500 
arrests since the beginning of the pandemic.
    Mrs. McClain. OK. So, you have made 500 arrests. What has 
the result of that been? So, I know you have recovered over a 
billion dollars, right? Any jail time?
    Mr. Smith. Yes, ma'am.
    Mrs. McClain. Can you talk to that effect?
    Mr. Smith. I haven't compiled the number of years or months 
total from the 500 arrests. I haven't done that, ma'am.
    Mrs. McClain. OK, because I do think at the end of the day, 
just like we treat our children, if there is a consequence to 
your action. Mr. Dodaro, you talked earlier about deterrence. 
Well, part of the deterrence process may be actually if we 
publicly show the American people that we are going after these 
criminals, these people that are stealing American's hard-
earned moneys, and not only are we recovering the money, but 
they are doing time and hard time, that might help on the 
deterrence. So, when can I expect some results or a report?
    Mr. Smith. Ma'am, I will give you a timeframe on that when 
I get back to the team, but we have been pursuing results since 
the beginning of the pandemic and----
    Mrs. McClain. But I would like an accurate accounting of 
the results, if at all possible, and just to help on a positive 
note saying, listen, we are good stewards of your money. We are 
trying to get your money back. So, with that, I know I am over 
time.
    Chairman Comer. Right. The gentlelady's time has expired, 
but feel free to answer the question.
    Mr. Dodaro. Thank you very much, Mr. Chairman. So far, 
according to the data that we have analyzed from the Department 
of Justice, there have been over a thousand people who have 
pled guilty or been convicted. There are over 600 charges 
pending against another 600 people. There have been at least 
779 people who have been sentenced so far. This is on page 6 of 
my written testimony. The number of people, it has gone from 
one year probation to 17 years in prison, so the sentences are 
significant. We have a number of individual examples sprinkled 
throughout our testimony. So, that is a broad accounting at 
this point. Michael probably has even a more precise 
accounting.
    Mr. Horowitz. Yes, I was going to just build on that. You 
know, there are the numbers. I agree with Mr. Dodaro. 
Everything is on our public website. We post all of the cases 
that we are as an inspector general community involved in. I 
couldn't agree with you more. The public needs to know there 
are consequences. Crime doesn't pay. And what we are going to 
do as inspectors general, as long as that clock is running, and 
Congress last year extended it from 5 to 10 years in one group 
of cases--hopefully, we will do it in others--we are going to 
keep going. It is going to go for seven more years or more, but 
are going to hold everybody who we can hold accountable, 
accountable. And as inspectors general, we don't care about 
dollar thresholds. We are going to go after the smallest dollar 
to the biggest. Obviously, you prioritize. We have multiyear 
sentences to date for some people. No one should think they got 
to get-out-of-jail free card, but one of the things that can 
help, because we are not only talking about fraud, we are 
talking about improper payments, right, and recovering money.
    And so, that is where one of the things I mentioned 
earlier--the Program Fraud Civil Remedies Act, it is an 
administrative way we can get money back. It is not criminal, 
but the taxpayers know we are getting the money back. Right now 
the threshold to use, it is $150,000. We want to raise it to a 
million dollars so that we can go after that.
    Chairman Comer. Thank you. The chair recognizes Ms. 
Crockett.
    Ms. Crockett. Thank you, Mr. Chair. I have changed my 
question a little bit, so I am going to go to my roots. As a 
criminal defense attorney, a lot of times I would voir dire a 
jury. And one of the questions that I would ask is, is it 
better to convict an innocent person or to let a guilty one go 
free? And oftentimes, the look that I am seeing on Mr. Smith's 
face is the look that I would get from potential jurors because 
for them, it was an impossible question because neither one of 
them sounded like a good resolution. And I bring this up 
because what we are talking about is government, which happens 
to be less than perfect. We are also talking about a once-in-a-
lifetime pandemic.
    And so, what I want to better understand is, I want us to 
be real. I feel like in this hearing we have talked a lot as if 
we can erode all bad guys, make criminals disappear. I believe 
in the opening remarks from Mr. Dodaro, he talked about the 
fact that, basically, there are those that were sitting and 
ready to pounce, not necessarily that the pandemic was 
producing some super criminal all of a sudden, but these are 
fraudsters, many of them who had a record.
    When you talk about these sentences, one can presume that 
the higher sentences went with people that most likely had been 
in trouble at some point in time before in their lives, and so 
I want to talk about realistically. Let me first begin by 
saying, I applaud the efforts that all of you have made in your 
respective areas, to make sure that we are doing our part. But 
I think that what we are losing sight of is the fact that we 
save lives, and there were people that were in desperate need. 
And when we talk about our economy and the fact that we are 
still struggling to recover from the pandemic, we minimized 
some of that. This was a mitigation exercise that Congress had. 
And so, while it may not have been perfect, because there 
wasn't a playbook for the previous pandemic, because I am 
guessing most of you all weren't here a 100 years ago.
    I am trying to find out, when you look at it overall, if we 
wanted to be realistic about this imperfect system, if we were 
to throw out percentages of fraud because I know that right now 
you don't have a crystal ball to know exactly how much fraud 
has occurred. But when we look at, say, other programs that 
have been rolled out, what is a good threshold for what we 
should anticipate as kind of part of the business that we 
unfortunately may endure when we are talking about such a 
large--government is big. And so, it is definitely not perfect. 
There is a lot of people in it. What are we talking about 
realistically, and how far off of that mark were we when we 
look at these types of circumstances? And it doesn't matter who 
answers.
    Mr. Horowitz. Yes. Congresswoman, it is an excellent 
question, and I don't have any precise number I can tell you. I 
think for all of us who have done this for a while, the lack of 
preparedness and the management of the programs at the outset 
created a much larger opportunity for fraud than should have 
happened. Whether that should have been--as you noted, there is 
always going to be fraud in programs where there are some bad 
people out there who will, no matter how much you try, find 
their way to get the money illegally. But I think most of us 
think that percentage of fraud could have been much smaller.
    Ms. Crockett. OK.
    Mr. Horowitz. And whatever we are going to end up here, had 
there been preparedness and action taken in advance.
    Ms. Crockett. OK.
    Mr. Dodaro. Part of the framework that we work with 
Congress to put in law back in 2016 requires a fraud risk 
assessment, a profile, but also a tolerance level for risk. 
That would be said for every individual program. So, you would 
make a conscious decision up front of what you are willing to 
tolerate in order to have that tradeoff for speed, and getting 
delivery of services out there as fast as possible to save 
lives, to help deal with economic consequences.
    Right now, it is just whatever happens to us, as a 
government happens to us, and we deal with the consequences. 
And I have been in GAO over 49 years, so we have been a lot of 
disasters during that period of time: Katrina, and the American 
Rescue Act, during the Great Recession, the $700 billion to 
unfreeze the credit markets during the global financial crisis. 
In this situation, there is more fraud than we have seen in 
equivalent type of things over the years, recognizing that this 
was the biggest American rescue in our history. But had we been 
better prepared and actually implemented requirements for 
managing fraud consciously up front, we would reduce the amount 
of fraud and made better use of that money to help really 
achieve the objectives of the legislation.
    Ms. Crockett. Thank you.
    Mr. Smith. As I said in my opening remarks, I always think 
that collaborating and sharing information on the front end 
will lead to some mitigation of criminal behavior. But 
obviously, my experience as a law enforcement professional 
says, you know, there is always going to be some element of 
criminal activity afoot.
    Ms. Crockett. Thank you so much.
    Chairman Comer. The chair now recognizes Mrs. Boebert for 
five minutes.
    Mrs. Boebert. Thank you, Mr. Chairman, and thank you so 
much to our witnesses who are here today. I appreciate your 
time and your willingness to be here and speak with us, and 
answer these very important questions. Now, I am going to get 
right to it.
    Members of Congress have been told that American taxpayers 
were defrauded a possible $560 billion as a result of the 
Federal Government's negligence in carrying out these Federal 
COVID relief funding programs. And I am going to start with a 
rhetorical question here, but does anyone know of an 
organization in America, or around the world, public or 
private, that has been scammed out of $560 billion, and simply, 
is that OK? I certainly can't think of one, and I don't think 
that it is OK either. So, after what was the largest fleecing 
in American history, possibly world history, can any one of the 
witnesses today give me the name of one administrator, one 
director, a supervisor that was fired, demoted, or put on leave 
because they failed to keep hundreds of billions of dollars 
from being stolen from the American taxpayers? And I will yield 
very quickly to each of our witnesses for simple ``yes'' or 
``no,'' and I will start with you, Director Smith.
    Mr. Smith. No, ma'am. That is not my focus.
    Mrs. Boebert. Thank you.
    Mr. Horowitz. I don't know that as I sit here. I could ask 
the fellow IGs to see if they know of any actions that have 
been taken from an administrative side.
    Mrs. Boebert. Thank you.
    Mr. Dodaro. Yes, offhand, I do not.
    Mrs. Boebert. Thank you. I didn't think so, and that is 
pretty insane. Five hundred and sixty billion dollars we are 
projecting, and we have hundreds of billions of dollars lost, 
causing massive inflation. Seventy percent of the money, 
according to the CEO of LexisNexis Risk Solutions, ended up 
lining the pockets of crime in countries like China, Nigeria, 
Russia, and not a single person in charge of distributing that 
money has been held accountable.
    So, here is how badly the American taxpayer was conned. The 
United States Federal Government has reportedly been defrauded 
of more money in the last two years than the entire 2022 tax 
revenue of England, Italy, Mexico, Ireland, Greece, Israel, 
Canada, Poland, and Brazil combined. The American taxpayers 
have one question: how the heck were these bureaucrats so dang 
incompetent, that they were being scammed out of $35 million 
every hour for nearly two years? Absolutely insane.
    And what is equally concerning is the fact that, for years, 
Congress has known the size and scope with which the American 
taxpayer was defrauded, yet this committee refused to act until 
now. Now, the Republicans hold the gavel and in a desperate 
attempt to protect the Bidens, the Big Tech industry, the 
Democrat Party, the mainstream media has tried to discredit 
this committee before our work has even begun. There should be 
nothing more bipartisan than ensuring American tax dollars 
aren't stolen by fraudsters, but sadly, it has taken a 
Republic-controlled Oversight and Accountability Committee to 
be willing to get to work on it.
    So, here we are. The American people had their businesses 
shut down. They lost their jobs, their livelihoods, their 
life's work because of government mandates and shutdowns, and 
that same government spent trillions of dollars, lost hundreds 
of billions, and the result is skyrocketing inflation and 
interest rates for the American people. And our role is to 
ensure that we find out how this happened and make sure that it 
never happens again, and hold those that stole money from the 
American people accountable.
    And, Chair Horowitz, I would like to ask you, under the 
Biden administration, we have seen the DOJ wage a full out 
attack against the American people from accusing parents 
concerned about their children's education of being domestic 
terrorists, to raiding the homes of pro-life activists, to 
pressuring private companies to censor conservatives. As 
Republicans have continued to mention throughout this hearing, 
there is a clear difference between people who were issued 
improper payments versus fraudsters who have stolen hundreds of 
billions of dollars collectively from the American taxpayer 
with malicious intent. Now, Chair Horowitz, what is the 
Department of Justice doing to ensure that the Federal 
Government is targeting criminals and those who knowingly took 
millions of dollars from the Federal Government to fund 
criminal gangs in Russia, China, and Nigeria?
    Mr. Horowitz. So, we have worked with the Department, 
inspectors general, and the PRAC have worked with the Justice 
Department on these investigative matters. They have set up a 
fraud task force. We are a member of it with the Secret 
Service. We have worked closely with law enforcement partners 
across the Federal Government. It is going to take a 
substantial amount of time, effort, and resources because there 
are so many cases. We have that partnership working right now. 
We are going to continue to refer cases to them, and they are 
going to have to make assessments on which cases to bring 
criminally. We are also working with them on the prepayment 
signed on with the civil lawyers as well because, again, we 
want to get the money back for the taxpayers.
    Mrs. Boebert. Yes. Thank you, Mr. Chair. I yield back.
    Chairman Comer. Thank you. The chair recognizes Mr. Goldman 
for five minutes.
    Mr. Goldman. Thank you, Mr. Chairman, and thank you to our 
witnesses for your service and being here today. After that 
effort to blame the victim for fraud by bad actors, let's first 
go back to the undisputed premise that the money appropriated 
by Congress, including by nearly all of my Republican 
colleagues on the other side during the past 2 Congresses, was 
both life-saving and economic saving, as we faced the worst 
pandemic in our history.
    Now, as a prosecutor, I prosecuted rampant mortgage fraud 
that resulted from the subprime mortgage crisis, and we know 
there was significant fraud arising out of the TARP program 
following the 2008 financial crash. But I was shocked to learn 
in preparing for this hearing that many of the COVID benefits 
or at least some of them were available based on a self-
certification process. Am I correct, Mr. Horowitz, that that 
means that individuals could receive COVID relief funds simply 
by certifying their eligibility without any independent review?
    Mr. Horowitz. That is correct.
    Mr. Goldman. Now, would you agree--Mr. Horowitz as also a 
former Federal prosecutor and current IG of DOJ--that is self-
certification process is a recipe for fraud?
    Mr. Horowitz. Absolutely.
    Mr. Goldman. I read your opening statement closely, and I 
appreciate very much your call for more resources for data and 
data analysis, which, in my experience, is the most effective 
way of rooting out identity theft, unquestionably the biggest 
cause of COVID fraud, as well as most other frauds. Mr. 
Horowitz, in your view, has the Department of Justice received 
enough money to prosecute fraud related to COVID relief funds 
to the very fullest extent?
    Mr. Horowitz. I think that is going to be a question over 
time because they are ramping up dramatically as we are, and as 
Secret Service is, and others. They will need additional 
resources, particularly this year and in the coming years, to 
deal with what I think will be a continued, you know, a 
substantial number of cases.
    Mr. Goldman. So, you would certainly agree that the 
Department would benefit from more funds for COVID relief 
fraud?
    Mr. Horowitz. I believe they will need that this year and 
in the years to come.
    Mr. Goldman. I want to ask you to switch your hats now back 
to the inspector general for the Department of Justice, and I 
am going to direct your attention to a recent New York Times 
article entitled, ``How Barr's Quest to Find Flaws in the 
Russia Inquiry Unraveled,'' which is dated January 26, 2023. 
Did you read this lengthy article last week, Mr. Horowitz?
    Mr. Horowitz. I did read it.
    Mr. Goldman. OK. Mr. Chairman, I ask for unanimous consent 
to introduce this article into the record.
    Chairman Comer. Without objection, so ordered.
    Mr. Goldman. Now, this article is based on a month-long 
investigation by the Times exposing a tremendous amount of 
waste and abuse, but no fraud by Special Counsel John Durham, 
who was assigned by former AG Bill Barr to investigate the 
origins of the Russia investigation under a false conspiracy 
theory. Mr. Horowitz, you released a report on that exact 
topic, didn't you?
    Mr. Horowitz. We released our report about the handling of 
Crossfire Hurricane and the FISA matter in December 2019.
    Mr. Goldman. And Crossfire Hurricane, just to be clear, 
became the Special Counsel Mueller's investigation, right?
    Mr. Horowitz. What has been referred to colloquially as the 
``Russia investigation.''
    Mr. Goldman. Right, and you concluded that the initiation 
of a full Russia investigation by the FBI was legitimate and 
supported by the evidence. Is that correct?
    Mr. Horowitz. I would want to go back and find the exact 
words I used in that report, but we did not find evidence of 
inappropriate decision-making in that regard. But again, I 
would want to use the precise language I used in that report. 
It is public. It is on our website.
    Mr. Goldman. OK. And you referred one case to Special 
Counsel Durham, correct?
    Mr. Horowitz. That is correct, and attorney, Mr. 
Clinesmith, who we found had altered a document.
    Mr. Goldman. And he pled guilty, and other than that case, 
do you know how many cases Mr. Durham charged?
    Mr. Horowitz. As to what is public, I have no idea if there 
is anything under seal. I am assuming not, but I don't know the 
answer to that. There are two public cases beyond that.
    Mr. Goldman. And how many convictions did he get?
    Mr. Horowitz. Other than the Clinesmith case, the other 
cases were--the juries has found the individuals not guilty.
    Mr. Goldman. Mr. Horowitz, last night, Congressman Ted Lieu 
and I sent you a letter requesting that you conduct an 
investigation into Special Counsel Durham's investigation to 
see if Mr. Barr or Mr. Durham violated any department policies, 
regulations, or law. Have you reviewed this letter yet?
    Mr. Horowitz. I was not aware that you had sent that until 
you just showed it to me, but I certainly will read it and 
review it.
    Mr. Goldman. Mr. Chair, I would ask for unanimous consent 
to offer into the record, and could I just add----
    Chairman Comer. Without objection. The gentleman's time has 
expired.
    Mr. Goldman. Mr. Horowitz, can you just commit to right 
now----
    Chairman Comer. Gentleman's time has expired. We appreciate 
the questions on COVID and appreciate the passion for 
investigations. We will get to that in the next few weeks, but 
thank you for the questions. The chair now recognizes Mr. Fry 
for five minutes.
    Mr. Fry. First, Mr. Chairman, thank you for holding this 
hearing today. Thank you to the witnesses for being here. I am 
going to highlight an example of COVID fraud in my very own 
district. Just last year, two members of a Myrtle Beach family 
were sentenced in Federal prison and a third to probation for 
their roles in a scheme to defraud the government out of more 
than $500,000 through a series of fake tax returns and stealing 
stimulus checks sent to other Americans under the CARES Act. 
While many people are struggling to make ends meet during the 
pandemic, these criminals went on a shopping spree with money 
stolen from the American people. You know, while I am a Member 
of Congress, I am also a resident of that district. This is in 
my very own community, so I want to thank you, Chairman for 
holding this because this also touches home as it does for many 
Americans.
    I would imagine, Mr. Smith, that this is by no means the 
only place that this is happening. Can you talk about or touch 
on similar instances that are occurring around the country from 
a factual standpoint?
    Mr. Smith. Yes, sir. While we talk somewhat about 
transnational criminal organized groups, our experience in the 
5,000-plus criminal investigations that we have opened is 
overwhelmingly, you know, homegrown actors. You talked about 
your home district, Myrtle Beach. Our Columbia, South Carolina 
Field Office is one of our most active field offices, 
especially when it comes to employing taskforce partners. They 
actually won the cyber games that were hosted by the National 
Computer Forensics Institute last year. So, we do have a lot of 
capacity, a lot of law enforcement passion in your district.
    But as you mentioned in your question, that is a similar 
footprint that exists in our other cyber fraud task forces, the 
41 other ones around the country. And what we do is employ not 
just agents with guns, but analysts and other professionals 
that collaborate together with those financial institutions, 
with those local banking communities and local law enforcement 
professionals to, you know, detect and arrest bad people.
    Mr. Fry. Thank you, and I know you touched on how you are 
investigating some of these actions, but can you touch on how 
you are identifying new cases of fraud or abuse moving forward?
    Mr. Smith. So, early in the pandemic, as I mentioned in my 
opening, we partnered with the Department of Labor, OIG, and 
SBA OIG, and we assigned MOU, Memorandum of Understanding, 
where we shared information, shared anomalies, shared 
indicators of compromise that lead us to bad actors. I 
mentioned earlier how we talked to a lot of money mules. We 
follow money, and once you follow money and what accounts that 
those resources went into, generally speaking, you are going to 
get to the bottom of a crime because overwhelmingly, our 
investigations focus on folks that are looking to enrich 
themselves through illicit activity. So, once you start 
knocking on doors, asking questions, and looking into bank 
accounts, you usually got to get some answers from a law 
enforcement perspective.
    Mr. Fry. Thank you. Mr. Dodaro, once an improper payment 
has been made, how difficult is it to recoup that money?
    Mr. Dodaro. Well, it is important to recognize that the 
improper payment estimates are estimates and projected, but 
when they are found, it is always difficult to recover the 
money. I think in the last two years, there have been improper 
payments of over $200 billion. Recoveries have been about $20, 
$23 billion.
    Mr. Fry. So 10, 12 percent-ish?
    Mr. Dodaro. Yes.
    Mr. Fry. I mean, in this instance, would you agree that 
improper payments are not always recoverable? I mean, you are 
going to run into a brick wall?
    Mr. Dodaro. Absolutely, and you are going to have the same 
issue with fraud.
    Mr. Fry. Out of all the improper payments that had been 
made, and I know you have collected $23 billion back, how much 
can we realistically expect to recover?
    Mr. Dodaro. That has been about the consistent number that 
I have seen over time. The main thing I have been trying to do 
and convince Congress to have some legislation to do this and 
oversight, is the stop the improper payments in the first 
place. The same with fraud. Unless you prevent this from 
happening, the prospects of recovering this money over a period 
of time are pretty slim, based on historical evidence.
    Mr. Fry. And I am going to ask this to you and direct to my 
final question. Is it possible from a strategy standpoint to 
enlist the help of states either incentivizing it or whatever 
to broaden that perspective? Is that a decent policy initiative 
to look into?
    Mr. Dodaro. Absolutely. I have been trying to convince each 
administration I have worked with the use the state auditors 
more effectively in that area, Medicaid program in particular. 
The Medicaid program alone in the last two years has had $98 
billion and $80 billion in improper payments. State auditors 
could help greatly. State auditors could help in the 
unemployment insurance area, and auditing the Federal 
Government, they ought to support state auditors, and they can 
use them to hold people more accountable for third party 
deliveries.
    Mr. Fry. Thank you. I yield back.
    Chairman Comer. The chair recognizes Mr. Moskowitz for five 
minutes.
    Mr. Moskowitz. Mr. Chairman, thank you, and thank you for 
holding this hearing today on Pandemic Response, Waste, Fraud, 
and Abuse. I think we can agree on a bipartisan basis that, of 
course, we want to find out about waste, fraud, and abuse 
because in the emergency management business, one of the things 
we do after a disaster is we do after action reviews, and we 
look at what went right and what went wrong to not repeat those 
same mistakes.
    And so, when the country began--you know, we are facing an 
unprecedented whole-of-country crisis, the first 50-state 
disaster in American history. Every state had a disaster 
declaration. At the same time, the Trump administration was ill 
prepared and, in fact, several times wanted the states to take 
the lead instead of the Federal Government, specifically when 
it came to PPE. And so, we have heard a lot about fraud and 
abuse today.
    I want to focus on the waste. It is not as sexy as fraud 
and abuse, but the amount of waste that happened during the 
pandemic, especially in the PPE space, is something that I want 
to discuss. You know, that void that was created when the 
states had to step up and procure all these resources. The 
states had to compete against everybody but Antarctica, but, 
most importantly, the Federal Government. And while the Federal 
Government was raising prices, companies were price gouging the 
Federal Government, while the Federal Government was not 
following their own procurement. In fact, $18 billion was spent 
by the Trump administration procuring these goods. Ten billion 
dollars of that did not go through procurement. It was sole-
sourced contracts.
    And so, one of the things I want to talk about as the 
former director of emergency management for the state of 
Florida for Governor DeSantis is, and this question is for you, 
Mr. Horowitz. Did the Inspector General's Office ever look at 
anyone within the inner circle at the White House on whether 
they were involved in specifically selecting vendors and 
negotiating pricing for PPE?
    Mr. Horowitz. So, each inspector general has authority by 
law in the IG Act over the employees in their building, in 
their agency. We do not have authority to investigate 
individuals outside, and there is no inspector general for the 
Executive Office of the President or the White House.
    Mr. Moskowitz. OK. I appreciate that. So, let's switch over 
to the GAO then. Has the GAO examined whether anyone within 
Trump's inner circle, including family members, were involved 
in decisions on who should get what contracts and the $10 
billion that didn't go through procurement, and the pricing 
that was paid for all sorts of different PPE, whether that be 
masks or ventilators? I mean, trust me, I have read all of the 
stuff, but I just want to know, did you guys specifically look 
at any of that?
    Mr. Dodaro. No, we did not.
    Mr. Moskowitz. OK. So, what if I proffered for you that 
when states could not get this PPE out of FEMA or out of HHS, 
that we had to call the White House to get this stuff released 
directly from his inner circle? What if I proffered for you? 
Would that sound like normal procurement process during an 
emergency?
    Mr. Dodaro. Probably not.
    Mr. Moskowitz. Right. So, you know, one of the questions 
that I think we should focus on, Mr. Chairman, in this hearing 
is that COVID was not a two-year event. It was a three-year 
event. And I am more than happy to join with the majority and 
look at the fraud and abuse that went on in the last two years 
in COVID-related programs, but I think it is only fair for us 
to also look at the beginning of the disaster and the amount of 
government waste that existed by the Federal Government sole 
sourcing contracts and negotiating pricing within the White 
House subverting the process from Federal agencies, because not 
only did that drive up cost and waste. That filtered down to 
the other 50 states because if the Federal Government was 
paying more money, and if I wanted to buy those supplies, I had 
to pay more money. So, it isn't just the $18 billion that was 
spent here. It is the money now that FEMA has to reimburse 
those states for goods that were too expensive because the 
Federal Government drove up those prices. I yield back.
    Chairman Comer. The chair recognizes Mrs. Luna for five 
minutes.
    Mrs. Luna. I just want to thank the chairman and all of the 
witnesses for participating, and I know it has been a long day, 
so I will try to keep this short.
    COVID improper payments continue to be an area of concern 
in the Federal Government due to lack of oversight from the 
Biden administration, as Representative Boebert had stated. 
Estimates range as high as $560 billion of government COVID 
spending was subject to fraud, waste, and abuse. That is our 
hard-earned taxpayer dollars that could have been used to feed 
families, heat homes, and fill up the pump during the Biden-
caused inflation crisis.
    President Biden continued to approve COVID spending with no 
guardrails in place to make sure that money was going where it 
was intended to go. We have seen the Federal Government 
spending and distributing to illegal immigrants, the same 
illegal immigrants, mind you, that did not take or pass the 
health screening process for legal immigrants to come here. And 
in addition to that, they did not pay into our taxpayer system. 
I would like to submit the graphic into record.
    [Chart]
    Mrs. Luna. We can see that the city of Chicago is sending 
$71 million for financial assistance for underserved 
communities, such as undocumented residents. The state of 
Washington is handing out $340 million in grant payments for 
immigrants or illegal immigrants who are not otherwise eligible 
for Federal stimulus. And the city of Boston is sending $1 
million in direct cash transfers to legal immigrants, who are 
unable to receive Federal COVID benefits. This rewards a 
dangerous process incentivizing people to come here illegally 
where some estimated that a shocking 60 percent of Latin-
American children, who crossed the border largely because they 
are seeking the American Dream and understand some of the 
benefits people offer in this country are caught by cartels, 
exploited for child pornography, and drug trafficking. These 
are not cherry-picked facts or distorted figures. This is 
actually happening.
    My question is for Mr. Horowitz. If illegal immigrants are 
prohibited from Federal public benefits, then why are they 
allowed to receive Federal COVID dollars from programs like the 
American Rescue Plan?
    Mr. Horowitz. So, I would have to go back and look at, you 
know, each program and what eligibility determinations were 
made, and who was eligible, and I am happy to follow up with 
you and provide information to you. We are looking at anybody 
who is ineligible. Frankly, we don't break it down between the 
categories of as to why, so we are looking for people who are 
ineligible. We are working with our law enforcement partners on 
that, whether you are here legally, not here legally, you 
really own the business, or you never owned a business. You 
know, we are going to follow up and pursue that.
    Mrs. Luna. Before I yield back my time, real quick, I just 
want to put out there that obviously being a part of Oversight, 
we want to ensure that our taxpayer dollars are being 
safeguarded, right? But also, that government funds are not 
being used to largely incentivize and hurt people in the 
process. And so, just to finalize and maybe just your personal 
opinion, do you believe that because of this type of 
inappropriate spending, that it is putting people in harm's way 
that would potentially not be subject to this victimization?
    Mr. Horowitz. So, you know, as I said earlier, I don't 
think we have heard testimony that these programs weren't 
helpful to individuals. In fact, for many of them, like the PPP 
Program, we have heard from small businesses that it saved 
them. For restaurants in the restaurant revitalization program, 
for unemployment insurance, we heard testimony about how it 
kept people afloat during this period. So, we haven't heard 
testimony that the programs were a waste and useless.
    What we heard was there was a lack of preparation to issue 
the benefits. It resulted in fraud, a lot of identity fraud, 
and what we have heard is how it victimized not just the public 
who lost the benefit of these programs to wrongdoers, it harmed 
the person whose identity was stolen. That individual has to 
deal with that, and it often harms the individual who is 
intended to benefit because they often struggle to get the 
benefits because the fraudster got there first----
    Mrs. Luna. Thank you.
    Mr. Horowitz [continuing]. And the program said they were 
the fraudster.
    Mrs. Luna. Thank you. And now before I leave, Chairman, 
would you please submit the graphic for record? Thank you.
    Chairman Comer. Without objection.
    Chairman Comer. And thank you for your questions. Just to 
note, they just called floor vote. We are going to get two more 
questioners in, then we will recess and reconvene 10 minutes 
after votes. There are only two votes, and we move a lot 
quicker than Pelosi did, so the recess won't take long. But 
now, the chair recognizes Mr. Connolly for five minutes.
    Mr. Connolly. I thank the Chair, and I welcome Mr. Dodaro. 
Mr. Horowitz, welcome back. Mr. Smith, welcome to the 
committee. My questions are going to be to you, Mr. Dodaro, and 
you, Mr. Horowitz. On Monday, the Pandemic Response 
Accountability Committee, led by you, Mr. Horowitz, released a 
fraud alert that found fraudsters used nearly 70,000 
questionable Social Security numbers to obtain as much as $5.4 
billion from SBA's paycheck protection program. Is that 
correct?
    Mr. Horowitz. That is correct.
    Mr. Connolly. And the fraud could have been stopped if the 
Federal Government invested in appropriate data analytics 
capacity and focused on sharing that data across agency silos 
and among various levels of government. Is that fair 
assessment?
    Mr. Horowitz. That is correct.
    Mr. Connolly. Would you agree with that, Mr. Dodaro?
    Mr. Dodaro. Absolutely.
    Mr. Connolly. So, based on previous conversations, we have 
about improper payments and trying to curb that, which this 
committee has been talking about for a long time, and has been 
a high-risk category for GAO for a long time as well. I 
introduced the Stop Fraud Act, that in fact, would, by statute, 
do just that. It would have used data analytics and would have 
propagated that data analytics information sharing across 
Federal agencies, a desirable goal that could very well have 
curbed or prevented the fraud we are concerned about. And the 
bill would also create a center of excellence to look at best 
practices and to try to assist other agencies in achieving 
those goals. Unfortunately, not a single Republican co-
sponsored that bill, today's hearing concern notwithstanding.
    So, I would invite the Chairman, Mr. Comer, maybe to take a 
second look at the Stop Fraud Act, and maybe we can, as he 
indicated yesterday his desire and the desirability of 
cooperating on a bipartisan basis. I do think Stop Fraud Act 
has real bipartisan potential, and I would welcome Mr. Comer 
joining me in that effort, but I do think that there are steps 
we can take, and could have and should have taken that might 
have made a difference. Mr. Dodaro, would you like to comment 
on that?
    Mr. Dodaro. I have since 2015 recommended the permanent 
creation of a data analytics capacity to support the IG 
community. It has proven value, and I was very disappointed 
that the Treasury Department did not pick up that option that 
Congress gave them to take over the Recovery Operations 
Center's existing capacity, and I was also disappointed that 
Congress didn't act on my recommendation back in 2015.
    Mr. Connolly. Right.
    Mr. Dodaro. But better late than ever, and so, I hope that 
Congress does pass that. I think it will have tremendous proven 
value and return many more dollars than the investment, but it 
has to be made permanent so it is ready to go any time.
    Mr. Connolly. Yes, absolutely. Mr. Horowitz, would you like 
to comment on that?
    Mr. Horowitz. I would just say ditto at some level, but I 
would remind, as you know, and remind Congress, the law was 
created with tens of millions of dollars in taxpayer money. It 
was very effective. It went away in 2015. We had to start from 
scratch in 2021 with a new appropriation from Congress and more 
money. We not only wouldn't have had to do that, but I bet we 
would have found some wrongdoing, fraud, and other recoveries 
in that intervening five years between the two disasters 
because there were other disaster relief programs.
    Mr. Connolly. And I guess the final point I would pick up 
on, and you testified to this earlier Mr. Dodaro, it is the 
culture too. What is rewarded. You know, what is rewarded is 
pushing money out the door, and funding programs, and having 
metrics that show many people you have helped to reach all 
worthwhile goals. But what is not really rewarded comparably 
is, and when I say $4 billion, I avoided fraud, I took measures 
to make sure it couldn't happen. And we have to change that 
culture, and I am hoping this piece of legislation is a big 
step in that direction, but I think your point is very well 
taken. And I yield back.
    Mr. Dodaro. Yes. And actually, the other culture that has 
to be corrected, if I may, Mr. Chairman?
    Chairman Comer. Go ahead.
    Mr. Dodaro. Is to make it clear to agencies' management for 
the programs, that prevention of fraud is their responsibility. 
It is not just the auditors coming in later, the investigators, 
Secret Service, or whoever, because unless it is prevented up 
front, it is not really going to be totally successful. We will 
always need to have investigations afterwards, but unless that 
culture shifts to the agencies' management and Congress holds 
them accountable, you are not going to really be as successful 
as we all want to be.
    Chairman Comer. Thank you. And before we yield back, I 
would like to comment. We are going to hold these agencies 
accountable. That day starts today. I ask unanimous consent to 
enter into the record a letter from the inspector general of 
the Social Security Administration, dated January 31, 2023. 
This letter describes various activities that that office has 
undertaken with respect to COVID fraud, notably in relation to 
the misuse of social security numbers, which is an issue at the 
heart of what you all have discussed today in many COVID fraud 
schemes. This letter also points out that the Social Security 
IG has never dedicated funds for oversight. He has never 
received dedicated funds for oversight. This is another step 
Democrats could have taken in the American Rescue Plan, but 
chose not to.
    So, without objection, I will enter this into the record.
    Chairman Comer. Our last question before recess, Mr. Fallon 
from Texas.
    Mr. Fallon. Oh, thank you, Mr. Chairman. Mr. Horowitz, we 
are hearing a lot of testimony, and would it be fair to say 
that we are talking about billions of dollars in fraud?
    Mr. Horowitz. Correct.
    Mr. Fallon. It could be tens, it could be hundreds of 
billions of dollars. The facts matter. I think we are 
discussing the largest case of fraud in the history of the 
United States, and, frankly, this might be the largest case of 
fraud in human history. As we have known about these extremes 
since early 2021, and it is absolutely an embarrassment to this 
institution, to the executive branch, to all the Federal 
Agencies involved.
    The U.S. Government has been swindled by not only our own 
people, but criminals in Russia, in China, Romania, and 
Nigeria, to name a few. It is estimated that 40 percent of 
pandemic unemployment assistance funds, about $4 billion of 
taxpayer money went to criminal organizations and authoritarian 
regimes, like Russia and China. Just put this into perspective, 
according to the World Bank, there are 194 recognized countries 
on earth, and 171 of them don't even have annual GDPs that rise 
to that level of $560 billion. To add insult to injury, 
Democrats did not hold one, not one full committee hearing on 
oversight last Congress on COVID-19 fraud, which begs the 
question, what is this committee even for? Quite frankly, it is 
for a hearing just like this when a potential amount of $0.5 
trillion has been stolen. And what did the Democrats do instead 
of investigating rampant COVID fraud? They used the 
reconciliation process to ram through $1.9 trillion of spending 
in the form of the American Rescue Plan Act that continued to 
fund broken programs we knew were systemically fraudulent.
    So I ask again, what did the Democrats do for two years in 
oversight instead of investigating the largest fraud in 
history? Well, they held hearings on the dangers of flea and 
tick collars for pets, whether or not the Postal Service could 
handle packages during the holidays, the developments in state 
cannabis laws, and potential bipartisan reefer reform. They 
made villains out of CEOs of the critical and essential 
American energy sector, who are the most effective and most 
efficient in the world at extracting natural resources. In 
fact, they help guarantee our national security.
    So, I wonder if Democrats considered if their massive 
spending and barring Federal land leases and permits for 
drilling had anything to do with the 40-year high in energy 
prices we have seen. They held hearings on protecting the free 
speech of environmentalist activists and others that agree with 
them, while at the same time celebrating censorship of those 
who didn't share their views. And get this: they hosted two 
depositions, one roundtable, and one full committee hearing on 
the Washington Redskins, or Commanders rather they are called 
nowadays, and why? Because somebody had a bee in their bonnet 
about Daniel Snyder.
    We had hearings to tell us believe it or not that pollution 
is racist. The weather, racist. Climate change, racist. COVID-
19 by definition, an indiscriminate virus was racist. Material 
healthcare, you guessed it, racist. And America itself, the 
land of opportunity and prosperity where millions of people 
come to this country every year, both legally and illegally, to 
live their dream, many Democrats told us for two years that 
America is systemically and irrevocably racist, that white 
privilege runs amok. Fortunately, the hard data proves this 
leftist talking point to be categorically false, and the list 
of useless hearings goes on and on. Plain and simple, the last 
few years were an egregious dereliction of duty and a waste.
    So, Mr. Chairman, it is with tremendous delight and relish 
that I see this committee actually and actively tackling 
serious matters of import to our country and our citizens, 
like, for instance, criminal transnational organized crime, 
stealing $0.5 trillion from the American Treasury, and, by 
extension, the American taxpayers, very pockets. So Mr. 
Chairman, thank you very much, and I yield back.
    Chairman Comer. Thank you, gentleman. We are going to now, 
without objection, go into recess, and we will reconvene 10 
minutes after the last vote. We only have two votes, which 
won't be long. I know we have about eight or nine more 
questioners and then a second panel. So, without objection, we 
are in recess until 10 minutes after conclusion of the last 
vote.

    [Recess.]
    Mr. LaTurner.[Presiding.] The committee will come back to 
order.
    The chair recognizes the gentleman from California, Mr. 
Khanna.
    Mr. Khanna. Thank you, Mr. Chair. You know, we have a 
tendency in this place to always run down everything Congress 
does or that Washington does. I would submit that our response 
as a Nation to the pandemic is one of the most extraordinary 
responses on a bipartisan basis that this country has ever had. 
We had 22 million people out of work with the pandemic. Most 
other nations around the world followed austerity politics. 
They didn't have enough aid.
    We spent, on a bipartisan basis, $5 trillion to make sure 
that millions of people got back to work, to make sure that we 
have a 3.5-percent unemployment rate, not a 10-percent 
employment rate, to make sure that we didn't have a depression 
in this country, to make sure that 6 million people didn't go 
into poverty. That was what unemployment insurance extension 
was about.
    We voted not because it was going to help red states or 
blue states. We voted because it was going to help the United 
States of America. And we learned the lesson of the Great 
Recession that the stimulus then, which the Republicans 
opposed, was actually too small, that we needed to go bigger, 
and the person who realized that was not just the Republicans. 
It was Donald Trump. Three-point-three trillion dollars of the 
spending we are talking about was Trump oriented spending.
    My first question to you is, what percent of fraud are we 
talking about on the $5 trillion? Is it less than two percent, 
three percent? I mean, what percent are we talking about?
    Mr. Horowitz. Congressman, at this point, I am not in a 
position to tell you----
    Mr. Khanna. Ballpark.
    Mr. Horowitz. I have no idea at this point.
    Mr. Khanna. You don't know? Is it less than 50 percent?
    Mr. Horowitz. It is less than 50 percent.
    Mr. Khanna. Is it less than 10 percent?
    Mr. Horowitz. There are some programs. I am not sure 
where----
    Mr. Khanna. Overall. Are you saying there is a possibility?
    Mr. Horowitz. We have a lot of investigating going on, so I 
am not going to make a guesstimate when I don't really have----
    Mr. Khanna. Does anyone have a sense if it is less than 10 
percent, five percent? You have no idea what percent?
    Mr. Dodaro. There are still hundreds of cases that are 
being investigated, so we----
    Mr. Khanna. So, let me ask this. Is there any evidence that 
the fraud is higher on the $1.8 trillion that was allocated 
under President Biden's Rescue Plan as opposed to the $3.3 
trillion that President Trump signed off on the CARES Act? 
There is no evidence of that, right? I mean, the fraud was 
equally applicable, potentially, to the $3.3 trillion as the 
$1.8 trillion. Is that a fair statement?
    Mr. Dodaro. I would say that is a fair statement.
    Mr. Khanna. And Mr. Horowitz?
    Mr. Horowitz. Yes.
    Mr. Khanna. Mr. Smith?
    Mr. Smith. The breakdown of our criminal investigations is 
roughly 45 percent UI based and the other 55 percent SBA, but 
that is just a Secret Service context, just to give you what we 
have opened up.
    Mr. Khanna. Yes, but the UI was extended under the CARES 
Act when President Trump was President. And by the way, the 
Democrats objected back then to a lot of the deregulation on 
SBA and a lot of the deregulation and how that was 
administered. But I just want to be clear because they are 
trying to imply that somehow this fraud, which, in my view is, 
is less than 2 to 3 percent, I mean, you can't say it, but even 
if you think that the fraud, it was $100 billion, that is still 
less than a couple percent of the total spending. They are 
trying to imply that somehow President Biden is to blame for 
that, and that you would agree is just not factual, correct? I 
mean, you can't blame President Biden and not blame President 
Trump with $3.3 trillion of it was under Trump. Is that 
correct?
    Mr. Dodaro. I mean, we are looking at the totality of the 
programs from 2020 to current day, and we are finding problems 
across that whole spectrum.
    Mr. Khanna. Mr. Horowitz?
    Mr. Horowitz. Yes, the fraud began in March 2020. We are 
looking at fraud cases throughout. Most of the money went out 
in the earlier periods of time, but there is fraud throughout.
    Mr. Khanna. It is a great point. Most went out earlier. So, 
if anything, the Trump administration probably is more to blame 
for that three percent of the fraud. Let me ask this to Mr. 
Dodaro. One of the challenges has been the antiquated IT 
systems in many of these states prior to the pandemic, and this 
is actually one of the challenges with the unemployment claims. 
Could you compare Republican led state performances on these IT 
systems versus Democratic states or talk more generally about 
these IT systems?
    Mr. Dodaro. Well, I can talk generally. We didn't look at 
it that way. We don't look at things on a partisan basis. But 
the IT systems, some of them date back to the 1970's, from what 
we understand, and efforts were made to try to modernize them. 
You know, we keep a list of the highest risk areas. This is at 
the Federal level for the Federal Government. IT acquisitions 
and operations on the high risk list government wide for the 
Federal Government.
    At the state level, they were having similar problems, and 
that contributed to their inability to detect some of the 
fraud. They weren't able to do matching on some cases in some 
of the larger states, and with the volume of claims that came 
through, they needed to have automated processes. And some 
states, they were doing it manually, you know, visually just 
trying to----
    Mr. Khanna. That was one of the big reasons for the fraud, 
correct?
    Mr. Dodaro. That was a contributing factor, yes. And the 
other contributing factor was self-certifications, and self-
certifications, I think was one of the biggest contributing 
factors were, you know, the people could just say, I'm eligible 
for this program. In some cases, they weren't allowed and not 
required to submit supporting documentation, so he just said 
it, take people word for it, and that is a prescription for 
fraud.
    Mr. LaTurner. The gentleman's time has expired. The chair 
recognizes the gentleman from North Carolina, Mr. Edwards.
    Mr. Edwards. Thank you, Mr. Chair. This is working now. 
Gentlemen, thank you so much for being with us this afternoon. 
And I have got to tell you, sitting here and watching you be 
still for as many hours as you did at our age, is a real test 
of stamina, so you have my respect. You are going to have to 
tell me how you do that some time.
    I want to shift gears just a little bit. We talked about 
fraud, and waste, and abuse quite a bit. I would like to turn 
the conversation if we may, just for a couple of minutes to 
government efficiency. Through the pandemic, I have observed 
across all industries, because of the loss of work force, and 
we could get into the reasons for that. That is a whole series 
of hearings, I am sure. But every industry that I talked to 
seems to have been forced to reinvent itself through the 
pandemic and now that the pandemic is coming to a close. And by 
reinvent itself, I am talking about doing more or the same job 
with fewer people. And serving as an appropriations chair for 
the state of North Carolina immediately before I got here, it 
occurs to me, because every state agency that was coming to me 
asking for their appropriation for the following year was 
asking for more, not less. And I am just curious what you might 
be seeing, or are you in a position to comment on, has 
government been able in any way to reinvent itself.
    This Congress is on the cusp of having to make some really 
critical decisions to raise the debt limit to change our 
spending trajectory. And I would like to know that government 
is working as hard to reinvent itself and do more with less 
just like every other industry out there is doing. Do you have 
any evidence or commentary on that observation?
    Mr. Dodaro. I don't know if I put it in the category of 
reinventing itself, but for 11 years now, I issued an annual 
report to the Congress on overlap, duplication, and 
fragmentation in the Federal Government, and how to achieve 
cost savings and perhaps revenue enhancements, and we have 
issued almost 1,300 recommendations over that period of time. 
About half of those recommendations have been fully 
implemented, some partially implemented. To date, there have 
been financial benefits to the government of over half a 
trillion dollars, and I think $565 billion. So, there are 
efforts underway, and there are hundreds of other GAO 
recommendations we haven't opened yet, that haven't been 
implemented, that could save tens of billions of additional 
dollars.
    Right now, we probably have around 5,000 recommendations 
implemented. I will be issuing that report again this spring. 
And we also have the high risk list that I have referenced 
earlier in areas that need a transformation, and that program 
over the last 15 years has saved $675 billion. So, there are 
improvements being made. They are difficult to effectuate, but 
there is much more that could be done for government to do 
that, and I think congressional oversight has been key where 
there has been progress. It has been through congressional 
action for the big dollars.
    Mr. Edwards. Thank you. I will be waiting on that report. 
That will be my favorite read this spring. One other quick 
question. I know from chairing oversight of unemployment in 
North Carolina, the Federal Government had this process where 
they came back and asked for unemployment funds that had 
already been appropriated through a process called 
sequestration. Are you familiar with that, and if so, can you 
tell me nationwide how many dollars were sequestered? And of 
that, how many were actually recollected from the state?
    Mr. Dodaro. Yes. I am not familiar specifically with the 
Unemployment Insurance Program. The only sequestration I am 
familiar with was due to the Budget Control Act of 2011, and by 
there, the Congress set limits on discretionary spending. And 
if the appropriation bills didn't come down to those levels, 
there was an across-the-board government cut to bring them down 
to those levels. That happened in 2013 and 2014. That was like 
the equivalent of, if my memory serves me right, about seven 
percent cut at that time.
    Mr. LaTurner. The gentlemen's time has expired.
    Mr. Edwards. Thank you very much.
    Mr. LaTurner. The chair recognizes the gentlelady from New 
Mexico, Ms. Stansbury, for five minutes.
    Ms. Stansbury. Thank you, Mr. Chairman, and ranking member, 
members of the committee. And of course, gentlemen, on the 
panel, thank you for your time today. I want to take this 
opportunity at the start of this Congress and this committee's 
first hearing to say how honored I am to serve on this 
committee and to join in the oversight of this committee's 
work. As a New Mexican and as an American, I am deeply proud to 
serve our country and to serve our communities, and to serve 
under the leadership of our ranking member in particular, Mr. 
Jamie Raskin, who is a hero and a scholar here in the House.
    Our job on this committee is to defend our democracy and 
our basic institutions, to protect our rights as Americans, and 
as a member of the truth squad on this side of the aisle, to 
hold our government accountable, and counter the lies, 
conspiracy theories, and extremism that we are going to hear on 
this committee this Congress. In a couple of words, we are here 
to fight for the American people and for the people of New 
Mexico, which is where I was born and raised.
    And in fact, I am grateful for this discussion today, 
because as a native New Mexican and as somebody who grew up in 
a working family that struggled to make ends meet with a single 
mother, I personally know what it means to live on the edge, 
and why critical relief programs, like the programs that we are 
talking about here today in this committee, were passed by this 
body to help millions of Americans, who would have fallen 
through the cracks, as we saw in previous economic disruptions.
    In fact, the early relief programs, whether that is the 
insurance, the PPP Program, the subsequent American Recovery 
Plan, literally saved lives. Let me say that, again, these 
programs saved lives. In fact, in New Mexico, almost 93,000 New 
Mexicans received unemployment insurance. When the pandemic 
began, I was serving in the state legislature. We called 
thousands of New Mexicans in my district to find out how they 
were doing welfare checks: elders who were stranded in their 
homes without access to healthcare, people whose family members 
had died, people who were unable to get food and water, 
especially in our rural and tribal communities. These programs 
were designed to save lives and to keep individuals from 
falling into the free-fall of economic disaster during a 
pandemic.
    We know there was fraud and abuse. There is fraud and abuse 
wherever there are humans who take advantage of systems that do 
not have proper oversight. I know a lot about oversight. I used 
to work in the Office of Management and Budget in this 
government. I was a Senate staffer, I conducted financial 
oversight. I know what that looks like. And I have never seen 
more financial fraud and abuse of this system than I saw in the 
previous administration under Donald Trump in which financial 
systems were abused, including by his cronies and fraudsters 
who were involved in his administration and his friends across 
the country. And our job is to make sure that they are held 
accountable and that we are looking out for the people and our 
communities. So, let's get the story straight.
    I know, gentlemen, you have been here a long time today, 
many, many hours. I know you are ready probably to go take a 
break and rest, and we thank you for your time this morning for 
serving our country and the roles that you all play in doing 
that oversight, but I want to just ask a couple of few 
questions to clarify what is going on.
    So, Mr. Dodaro, I know you have talked a lot this morning 
and probably answered this question in multiple ways, but I 
want to be very specific. Can you tell us how many convictions 
and guilty pleas have come from Federal charges regarding fraud 
with these COVID relief programs?
    Mr. Dodaro. Yes. So far, according to the Department of 
Justice system, there have been over 1,000 people who have 
either pled guilty or have been convicted. There are another 
600 people where charges are pending. There are hundreds of 
investigations underway now----
    Ms. Stansbury. Thank you.
    Mr. Dodaro [continuing]. And will be done of the 1,000 
people who have been guilty or----
    Ms. Stansbury. Thank you, Mr. Dodaro. I want to just 
clarify. So, we are talking less than 2,000 people, and we are 
talking about millions of Americans whose lives were impacted 
by these programs: 93,000 New Mexicans and less than 3,000 
cases of fraud and abuse. Now, we need to hold those who 
committed crimes accountable, and that is exactly what we are 
going to do on this committee through the oversight of our 
Federal programs, who are tasked with that role and our law 
enforcement and our court system.
    Mr. LaTurner. The gentlelady's time has expired.
    Ms. Stansbury. But our job is to make sure that the 
American people are represented and we keep this government 
accountable. And with that, Mr. Chairman, I yield back.
    Mr. LaTurner. The chair recognizes the gentleman from New 
York, Mr. Langworthy.
    Mr. Langworthy. Thank you very much, Mr. Chairman, and I 
thank the witnesses for their long testimony here today and 
your patience.
    This is an interesting topic for me because I was a victim 
of unemployment fraud in my prior role as chairman of the New 
York state Republican Party, and a fraudster and a criminal 
applied for unemployment insurance in my name through a 
previous address that I hadn't lived at for over 10 years. The 
Erie County District Attorney in my community also was a victim 
in the same fashion where a fraudster used his name and very 
public profile to apply for unemployment insurance. So, it was 
a very prevalent problem in my state, and reports indicate that 
billions of taxpayer dollars had been wasted due to 
mismanagement, fraud, inefficient processes by the government 
throughout this entire pandemic. You know, when a stock 
brokerage loses billions of dollars of their customers' 
investments, the brokerage itself is blamed. However, when 
government does this, it is swept under the rug. The government 
should not be excused for losing money on this extraordinary 
level. Mismanagement and indiscretion to this degree is 
unacceptable, and it is an absolute disservice to the 
hardworking taxpayers that have entrusted their dollars, their 
hard-earned money to this government.
    So, Mr. Dodaro, in my home state of New York, a report from 
the Department of Labor showed that throughout the state Fiscal 
Year of 2021, the government wasted an estimated $11 billion of 
taxpayer money. The primary reason for this waste is the New 
York State Department of Labor was using outdated technology 
that it was recommended to replace not once, not twice, 
beginning in 2010, and again in 2015. So, Mr. Dodaro, I would 
like to ask you, are there other agencies in the Federal 
Government or any state governments, to your knowledge, whose 
outdated technology has led to wasted taxpayer dollars to that 
extent, and if so, would you mind mentioning who they are?
    Mr. Dodaro. The problems with the IT systems affected a 
number of states, and, you know, to what extent compared to New 
York, I am not able to talk about that at this time. I know 
there were similar problems in California, for example, and we 
are now looking at additional states, but it was a problem 
affecting a lot of states.
    Mr. Langworthy. And it was Federal money coming down to the 
states to make these programs whole. How, in the future, would 
we hold Federal agencies and state Governments accountable for 
failing to put in place mechanisms to reduce this risk of 
improper payment or actually just being so porous a fraud is so 
many states like New York were?
    Mr. Dodaro. Yes. One way would be to make sure that they 
implement our recommendations that we have made by the GAO, 
inspector generals, and state auditors. Figures that you quote 
on New York came up from state auditors' office, state 
auditors, and other states--California, Kansas, and others--
have issued reports as well. So, one way is to make sure all 
those recommendations are implemented. Another way is to make 
sure that states certify that their systems meet certain 
standards and that there is appropriate independent 
verification that those systems are now able to meet certain 
standards. The Department of Labor should also provide some 
standards to the states, but each state has its own different 
system and eligibility requirements. So, it has to be tailored 
to the individual State.
    Mr. Langworthy. Are there any mechanisms or penalties 
available to the Federal Government to prevent this sort of 
thing from happening again with states that won't listen to the 
guidance?
    Mr. Dodaro. Not to my knowledge right now. They would have 
to be instituted, and I think it would be good to be able to do 
that.
    Mr. Langworthy. It seems like we put ourselves in a pretty 
feckless position as a Federal Government, if we, you know, 
continue to allow states to ignore guidance that has been 
leveled on them, especially large populous states, you know, 
that have a population that is open to that much unemployment 
benefit. We can all agree that their losses to the tune of half 
a trillion dollars is unacceptable. I think everybody in this 
room can agree to that. We can't allow this to occur again. We 
have to be way better stewards of the taxpayer dollar and take 
that responsibility much more seriously, but I thank you very 
much for your time here, and I yield back.
    Mr. LaTurner. The gentleman yields back.
    The chair recognizes the gentleman from Maryland, Mr. 
Burlison.
    Mr. Burlison. From Missouri. Thank you. Thank you, Mr. 
Chair.
    Mr. LaTurner. My apologies. I am sorry. The ``O'' looks 
like a ``D'' on my list here. The gentleman is recognized.
    Mr. Burlison. Thank you. I am very honored to serve on 
House Oversight Committee this Congress, and I would like to 
thank the chair for the hard work that he has been doing on 
this committee. I look forward to working with each one of my 
colleagues here in the 118th Congress.
    My question is to Mr. Horowitz. On Monday, Senator Ernst 
revealed that thousands of Federal employees have double dipped 
on taxpayers and applied for pandemic unemployment assistance 
in addition to receiving their Federal paycheck. You know, just 
as a personal note, business owners and working families in 
Southwest Missouri, which is not exactly the richest part of 
the Nation, struggled quite a bit during the pandemic and their 
livelihoods were threatened, and yet Federal employees have the 
comfort of a government paycheck. Yet there is evidence that 
thousands of these Federal employees may have falsely claimed 
that they lost their job. My first question is, how is this 
even possible? Is there nothing in place to cross-check these 
employees or do we just pay out the benefits to whomever it 
applies?
    Mr. Horowitz. So, one of the challenges is, in fact, the 
absence of cross-checking information, and that has been a 
problem across programs. I am aware of Senator Ernst's letter, 
and we are following up on that. We have done that, for 
example, at DOJ. I have looked at some of these issues, and we 
can look at it. It takes a fair amount of time once you get the 
hits to figure out actually whether there are fraud cases or 
not because there are spouses who potentially were eligible. We 
have identified where there are addresses. It turns out there 
are apartment buildings, so we then have to figure out who else 
is in that building, you know, whether that address is a hit or 
not. So, there are things we need to do to make sure we have 
got the right number ultimately, but it is an important issue, 
and we are going to follow up on it.
    Mr. Burlison. Before I forget, Mr. Chairman, I seek 
unanimous consent to enter into the record the letter from 
Senator Ernst to the Honorable Michael Horowitz.
    Mr. LaTurner. Thank you. Without objection. My apologies.
    Mr. Burlison. Thank you. Mr. Horowitz, in your report to 
Congress last fall, you said that the PRAC was working to 
identify active Federal employees who applied for PPP, and that 
so far, you had matched tens of thousands of employees with SBA 
loans for which they were not eligible. Do you have any updates 
on that analysis?
    Mr. Horowitz. We have matched the numbers, and that is what 
I was mentioning to you, we are working through. For example, 
in my office, we do have cases that are moving forward as a 
result of that, but it has taken a considerable amount of time 
to get from the large number to the smaller number because of 
the absence of particularized data. The challenge has been 
Agency data not being sufficient to immediately figure this 
out.
    Mr. Burlison. Do you have an estimated, like an ETA, as 
when you might have the results?
    Mr. Horowitz. Well, when we find the case, we start 
investigating it. We were working with our law enforcement 
partners at that point, and hopefully those cases will wind up 
being prosecuted.
    Mr. Burlison. And then what actions have we taken, if any, 
or what actions will be taken? I guess, if you could answer 
both, what action has been taken against Federal employees who 
might have applied for unemployment benefits fraudulently, and 
what actions would be taken?
    Mr. Horowitz. Well, you know, we are going to pursue those 
cases to the fullest extent possible, including seeking 
prosecutions working with our law enforcement partners on it. I 
can give you an example. We have several on the PPP/EIDL side. 
For example, a relatively higher-level person at NASA Agency 
was sentenced to considerable number of years in prison. He was 
worked in their financial office, who engaged in, I can't 
remember whether it was PPP or EIDL fraud, but----
    Mr. Burlison. That is disturbing.
    Mr. Horowitz. So, we are pursuing those cases.
    Mr. Burlison. That is good to know. Thank you. Mr. 
Chairman, before I forget, earlier we heard from Congressman 
Donalds about an article from Politico that the Biden 
administration had re-routed billions in emergency stockpile 
funds for the border, and I seek unanimous consent to enter 
this into the record.
    Mr. LaTurner. Yes, Mr. Burlison, from Missouri, without 
objection.
    Mr. Burlison. Thank you. I yield back.
    Mr. LaTurner. The gentleman yields back. The chair 
recognizes the gentlelady from Georgia, Ms. Greene.
    Ms. Greene. Thank you, Mr. Chairman. I would like to bring 
up something that was brought up by one of our Democrat 
colleagues on this panel about Republican Members of Congress 
taking PPP loans. I never took one as a Member of Congress, but 
as a business owner, I did take a PPP loan in order to be able 
to pay my employees. And I am so thankful I was able to do that 
because they would have lost their jobs, and I think it is 
important to recognize. But the minority side of our committee 
here is having a witness on the next panel that had said that 
she didn't or her or any of her affiliates take any Federal 
grants or contracts related to this hearing's subject matter. 
But in fact, as executive director of the National Employment 
Law Project, they took over $825,000 in PPP loans from the SBA, 
so that that does need to be pointed out about the next panel 
witnesses.
    Here we are a Nation that our government spent over $5 
trillion in COVID relief funding, and we can't find $560 
billion, I believe, of that money of the Americans hard-earned 
taxpayer funding. We are also a Nation at $34 trillion in debt, 
and we are on the verge of having to handle our debt ceiling, 
raise it once again, and here we are looking at waste, fraud, 
and abuse.
    And gentlemen, I thank you for coming and speaking to our 
committee on this issue. I know it has been a long day for you, 
but I would like to ask some questions about the type of 
funding that has been used with COVID relief funds, and it is 
pretty shocking to me. You know, I read some examples. For 
example, Washington, DC.'s Mayor Muriel Bowser plans to use 
$31.5 million in American Rescue Plan Funds to transition homes 
to green energy over the next five years.
    As many small businesses were shut down, children lost two 
years in education, child suicide rates went up, and it is hard 
to even imagine a child committing suicide. Many people died 
from COVID. Healthcare workers were fired from vaccine 
mandates, many other people were fired because of vaccine 
mandates, and all the issues that have come out of COVID. I 
want to ask about how this money has been spent because 
clearly, there is a tremendous amount of waste, fraud, and 
abuse. And a lot of our hard-earned taxpayers' dollars spent on 
things that don't even make sense that they have been spent on.
    So, Mr. Dodaro, if you don't mind answering a few of my 
questions, can you tell me as our comptroller of the United 
States, how much COVID cash was given to abortion?
    Mr. Dodaro. I do not know that answer. I don't have that 
answer.
    Ms. Greene. Oh, OK. So, I can tell you Planned Parenthood 
Clinics received $80 billion in COVID relief loans, which is 
hard to understand how that happened. Mr. Dodaro, can you tell 
me how much money COVID cash went toward diversity, equity, and 
inclusion, or racism issues?
    Mr. Dodaro. Again, we have not looked at that issue, so I 
don't know.
    Ms. Greene. Oh, geez. Well, I can tell you the Pennsylvania 
Humanities Council did receive $1.4 million in relief and used 
it for equity and geographic diversity. I am not sure how that 
helped in a pandemic time. Mr. Dodaro, can you tell me how much 
COVID cash went to CRT?
    Mr. Dodaro. CRT?
    Ms. Greene. Critical race theory in education. It is a 
racist curriculum used to teach children that somehow their 
white skin is not equal to black skin and other things at 
education.
    Mr. Dodaro. Yes. No, I do not know that, but I do know that 
there are provisions that the Federal funds, generally, they 
are not used--supposed to be used for curriculum. That is a 
state----
    Ms. Greene. Oh, Mr. Dodaro, I have to tell you in Illinois, 
they received $5.1 billion at an elementary school there that 
used it for equity and diversity, so it is being used for these 
things. Mr. Dodaro, can you tell me how much money was given at 
Drag Queen Story Hour?
    Mr. Dodaro. I am sorry. Can you repeat that?
    Ms. Greene. Drag Queen Story Time where men dressed up as 
women and read confusing books to children.
    Mr. Dodaro. At first, I thought you said, ``dry clean,'' so 
I am sorry.
    Ms. Greene. It is OK.
    Mr. Dodaro. No, I don't know the answer to either one of 
those two.
    Ms. Greene. We need to look into this, and I urge you to do 
that. Bradbury-Sullivan LGBT Community Center in Pennsylvania 
received $16,000 for Drag Queen Story Time from COVID cash. I 
think this is an issue that needs to be looked into. A lot of 
this money went to things that should have never gone to.
    Mr. LaTurner. The gentlelady's time has expired.
    Ms. Greene. And I thank you so much, and I yield back the 
remainder of my time.
    Mr. LaTurner. The gentlelady's time has expired.
    The chair recognizes the gentleman from Pennsylvania, Mr. 
Perry.
    Mr. Perry. I thank the chairman. Gentlemen, thanks for 
hanging in there. I know it has been a long day. Listen, I 
think it is important a couple of things to acknowledge. A lot 
of these folks that are involved in this, the government took 
them out of their jobs, told them they couldn't go to work, 
Federal or state government couldn't run their businesses, and 
so there are a lot of people that this did a lot of good things 
for, and we all want to acknowledge that. There was a lot that 
was unknown.
    I don't agree with taking people out of their jobs or not 
allowing them to run their businesses, but that is another 
story for another day. The other thing that I just want to make 
a point is a personal sticking point for me. I don't see 
unemployment insurance. I see unemployment compensation. There 
is no insurance about this. There is no actual aerials, there 
is no risk assessment to any of this, but that is a sticking 
point, but it becomes an entitlement for some folks.
    But in the interest of unemployment compensation, what I 
wonder, what I find interesting, among other things, is that 
according to a combination of estimates, $560 billion of that 
Federal COVID relief funding may have been either lost to fraud 
or paid improperly. And while some of my colleagues on the 
other side of the aisle condensed that to a percentage of the 
overall and would kind of have us believe that it is acceptable 
because it is a small percentage of trillions of dollars, I 
don't know: $560 billion. I am from a little town in 
Pennsylvania. That seems like a lot of money to folks like me. 
I imagine you feel the same way. This is pursuant to ID ME, 40 
percent, that is nearly half of pandemic unemployment 
assistance funds. That is $400 billion that did not go to 
Americans and instead went to criminal gangs in Russia, China, 
and Nigeria.
    Now I am from Pennsylvania, and we have got our own 
particular problems there, and we can get into that, but a 
Nigerian crime ring named Scattered Canary was involved in 
submitting more than 2 million claims. Two million claims from 
Nigeria. There is this other one, APT 41, and I know that you 
have all--mentioned here before--talked about that $20 million 
stolen unemployment comp scheme began in mid-2020 and spammed 
2000 accounts with more than $40,000 financial transactions. 
What in the Sam Hill is going on in our states? But the Federal 
Government gives the money to the states. They have an 
unemployment compensation system, so it is already up and 
running. So, we are just adding some more fuel to them so that 
they can take care of these people that have been put out of 
work by their government.
    How are foreigners? Like, do these states not see Nigeria, 
China, or some IP address that be associated with a foreign 
country and say, huh, I wonder why foreign countries are 
getting unemployment compensation, or, you know, do they fly 
back to work in America every day from Nigeria or from China or 
from Russia? Well, I don't know. Can you make sense of this to, 
like, a small country boy like me?
    Mr. Horowitz. I don't think I can make sense of it, but I 
can tell you that it is one of the problems we have identified 
along the way, not just in the Unemployment Insurance Program 
and others that agencies aren't picking up the IP addresses for 
these applicants because the country was largely shut down. 
Most of these applications came in electronically, and that is 
clearly one of the red flags. And something by the way, as we 
get this data, we are going to be looking at is how many IP 
addresses were there associated with these various programs 
that were IP addresses from overseas.
    Mr. Perry. I mean, some of the most egregious ones 
Washington State, California, New York. I come from 
Pennsylvania. I have got a whole list here of infractions from 
the state that I am proud to represent. These unemployment 
compensation systems have been around for a long time, so this 
is kind of in the past now or maybe it is still ongoing, maybe 
it is not at the same level. What assurance can you give me or 
anybody else here that the states have addressed any of this so 
that it, like, maybe it is not happening at the same scale, but 
if it has happened here, it probably continues to happen? What 
assurance can you give any of us that this has been solved at 
this point, and why should the Federal Government give one more 
dime to any of these states that are allowing that? Look, we 
are looking at a debt ceiling increase. They want $2.6 
trillion. We just talked about $500 billion just handed out to 
foreign criminals. What assurance can you give us moving 
forward that any of this is solved right now?
    Mr. Horowitz. I am not going to give you any assurance that 
it is all----
    Mr. Perry. Is zero the right answer?
    Mr. Horowitz. That is why this hearing is actually 
important because, among other reasons, but there are fixes 
that need to happen. GAO has been talking about this for 
decades, and the Congress has to get involved. The 
administration has to get involved. The states have to get 
involved. We have to fix the problem.
    Mr. LaTurner. The gentleman's time has expired.
    Mr. Perry. Thank you, gentlemen. I appreciate you.
    Mr. LaTurner. The chair recognizes the gentlelady from 
Ohio, Ms. Brown.
    Ms. Brown. Thank you, Mr. Chair. I would just like to point 
out that my Republican colleagues are once again demonstrating 
the extreme lengths they will go to villainize reproductive 
freedom. Contrary to their allegations, Planned Parenthood 
health centers that received PPP loans were eligible non-profit 
recipients consistent with the SBA's rules governing 
affiliation, status, and size. The Small Business Office of the 
Inspector General affirmed this conclusion in a September 2022 
report that specifically determined Planned Parenthood health 
centers met PPP loan eligibility requirements. So, I would ask 
unanimous consent that the SBA OIG report be made part of the 
record, and I urge my Republican colleagues to cease their 
baseless draconian attacks against the reproductive freedoms of 
people once and for all.
    And finally, the last point I want to make is just because 
you disagree with the spending doesn't mean that it is 
fraudulent, wasteful, or abusive. And with that, I yield back.
    Mr. LaTurner. Without objection, it will be entered into 
the record.
    Mr. LaTurner. The gentlelady yields back. The chair 
recognizes the gentleman from Tennessee, Mr. Burchett.
    Mr. Burchett. Thank you, Mr. Chairman, and I am not an 
attorney, and I am not trying to do any ``got you,'' so if you 
all want to give me just a ``yes'' or ``no,'' it would be 
great. All right. Assistant Director Smith, in 2021, NBC 
reported that between $90 and $400 billion pandemic-related 
unemployment U.S. taxpayers' dollars had been stolen, and half 
of that was taken by foreign criminals. Is this consistent with 
what your investigation revealed?
    Mr. Smith. Sir, I can't validate that particular news 
piece. Which outlet did you say it was from?
    Mr. Burchett. NBC News. It has been widely reported in 
other areas, but they were the biggest dog that wagged its tail 
on that, I guess.
    Mr. Smith. I am not the----
    Mr. Burchett. OK. Well, the former assistant director of 
investigation of the Secret Service, Jeremy Sheridan, called 
this theft, ``the largest fraud scheme that I have ever 
encountered.'' And I guess what I am getting at is, is that it 
seems to be it is clear that foreign and maybe some localized 
organized crime syndicates and other bad actors have 
perpetrated some crimes against the American taxpayers. 
Assistant Director Smith, do you agree with Mr. Sheridan or 
have you ever encountered a larger fraud scheme?
    Mr. Smith. I agree with former Assistant Director 
Sheridan's sentiments. The magnitude of pandemic-related fraud 
was what made it unique.
    Mr. Burchett. Do you think that in your professional 
capacity or otherwise that maybe some of these funds could be 
linked to terrorism organizations, that these things would fund 
them?
    Mr. Smith. Sir, I don't have any direct evidence linking 
terrorist organizations to pandemic relief funds, but as I 
mentioned earlier, it is not beyond the realm of possibility of 
transnational criminal organizations and groups of various 
sorts.
    Mr. Burchett. And drugs and human trafficking, all those 
dirt bags that kind of run together, I guess.
    Mr. Smith. Yes, sir. The group I mentioned earlier, like 
Black Axe out of Nigeria, they involve themselves in human 
trafficking, drug trafficking, the full gambit itself.
    Mr. Burchett. OK.
    Mr. Smith. They are also involved in pandemic-related----
    Mr. Burchett. All right, and thank you. Comptroller Mr. 
Dodaro--did I say that name right? I get it.
    Mr. Dodaro. Pretty close.
    Mr. Burchett. Pretty close. Well, Burchett, so we can just 
go to get massacred together. I sent a letter in April 2020 to 
then Treasury Secretary Mnuchin, raising concerns about 
economic impact payments going to ineligible foreign nationals. 
And my Republican colleagues have tried to warn our friends 
across the aisle that we should not go blindly throwing money 
at this pandemic without oversight. Unfortunately, I am afraid 
they didn't listen. Does the GAO have details in the amount of 
payments that were incorrectly provided to eligible foreign 
nationals or deceased individuals during the rush to send COVID 
checks to all corners of the world? I am sure this has sort of 
been asked earlier, but I have been in and out, so if you would 
tell me.
    Mr. Dodaro. No, no, I understand. First on deceased 
individuals, there is a tax inspector general.
    Mr. Burchett. Right.
    Mr. Dodaro. They found $1.4 billion sent to deceased 
individuals in the first and second round of the economic 
incentive payments.
    Mr. Burchett. Right. Now, would you call that fraud or just 
mistakes, or just people have died since that had gone on?
    Mr. Dodaro. It is a mistake.
    Mr. Burchett. OK. Wow.
    Mr. Dodaro. It is a mistake. And actually, IRS interpreted 
it that Congress intended them to do that. So, it wasn't until 
Treasury stepped in and said that that was inappropriate and we 
recommended that they try to get that money back, and they did 
receive about half of it back.
    Mr. Burchett. OK. Do you agree with the assessment that 
several experts and some government officials at different 
levels, they have indicated that there was so much fraud in the 
COVID relief because of the lack of clear guidance, and that 
was done by Congress obviously amid the rush to give away 
taxpayer dollars?
    Mr. Dodaro. That was a contributing factor, particularly at 
the PPP level, but I think the main things were self-
certification, lack of supporting documentation.
    Mr. Burchett. Right.
    Mr. Dodaro. And actually, the CARES Act prohibited the 
Economic Injury Disaster Loan Program from using tax 
transcripts to compare against the loans.
    Mr. Burchett. Wow.
    Mr. Dodaro. And so, now Congress fixed these things later, 
but those things affected the Unemployment Insurance Program, 
too.
    Mr. Burchett. Right.
    Mr. Dodaro. Congress gave an incentive for states to waive 
some of the requirements by giving them additional money to do 
it.
    Mr. Burchett. Cow is already out of the barn.
    Mr. Dodaro. The cow, the pig, the chicken, and----
    Mr. Burchett. Yes, the whole barnyard. So, because of that 
lack of clear guidance, have we learned anything? Do we have 
the proper things in place to stop that from happening again? 
And I am running out of time. Give me a quick one, Mr. 
Chairman.
    Mr. Dodaro. We are starting to move, but it is slow, but 
much more needs to be done to be better prepared next time.
    Mr. Burchett. All right. Thank you. Thank you, you all. I 
know you all probably woke up this morning and thought, wow, I 
am going to go before Congress. It is going to be great, and 
now, you are still here, so----
    Mr. LaTurner. The gentleman's time has expired. I am going 
to recognize myself for five minutes.
    Although, I served on this committee last Congress, I am 
excited to bring much needed accountability to Washington for 
the first time in over two years. My Republican colleagues and 
I are committed to returning this committee to its proper role 
of rooting out waste, fraud, and abuse, and mismanagement in 
the Federal Government, and that commitment starts today.
    In the span of one year, Congress passed upwards of $4.6 
trillion in the form of economic stimulus bills and expanded 
eligibility for Federal relief programs, like unemployment 
insurance. When communities across America started to recover 
from the pandemic, Congress continued to saturate states with 
millions of taxpayer dollars under the guise of COVID-19 relief 
without the means to distribute it efficiently or safely. A 
Kansas audit showed that my home state may have made hundreds 
of millions of dollars in fraudulent payments when state agency 
systems were overwhelmed by an unprecedented number of 
claimants. As recently as last September, the Department of 
Justice charged 47 people with using the Federal Child 
Nutrition Program in Minnesota to siphon $250 million. And it 
is no secret that many states have used these funds to alter 
school curriculums, give illegal immigrants stimulus checks, 
and advance green energy initiatives.
    Public trust in our government is at an all-time low, and 
we cannot expect that to change if we continue this poor 
stewardship of Americans' tax dollars. I think Congress can do 
better, and I look forward to discussing with our witnesses how 
to avoid this level of fraud and waste of taxpayer dollars in 
the future.
    Mr. Dodaro, and I will ask the same question of the other 
two witnesses, your institution is tasked with monitoring 
administrative agencies and providing recommendations for 
improvement. Per GAO's website and the testimony we have heard, 
fraud detection is a difficult task. Can GAO ascribe a monetary 
cost to conducting fraud detection and retroactive 
certification of payments? If not, can you describe the 
potential opportunity cost to the taxpayer of directing agency 
attention toward auditing massive COVID payments after they are 
distributed?
    Mr. Dodaro. It is much more efficient to prevent the fraud 
from occurring in the first place. That is why we worked with 
Congress back in 2015 to 2016 to pass the Fraud Reduction and 
Data Analytics Act to put in place a framework that we develop 
for best practices on how to prevent fraud in the first place. 
Much more efficient, much more effective.
    Mr. LaTurner. Mr. Horowitz?
    Mr. Horowitz. Yes, I would say the same thing. We talked 
about this earlier, about the recovery rate when the money is 
already gone and you have to chase it down. It is a 10-12 
percent rate, I think Mr. Dodaro indicated. Keep in mind, 
money, for example, that goes overseas takes a long time to try 
and track that down, if you ever can, and so that is the 
challenge. There is no better way to eliminate or reduce fraud 
rates than to detect it and prevent it at the outset.
    Mr. LaTurner. Mr. Smith? The winner of the easiest name 
award on the panel today.
    Mr. Smith. Thank you.
    Mr. LaTurner. Yes, it is.
    Mr. Smith. I agree with my colleagues. The Secret Service, 
prior to the pandemic, is in the business of mitigating 
financial crimes and fraud. I mentioned earlier that that is in 
our DNA, if you will. We do advanced work because we know 
criminals are nonstop in their efforts in trying to defraud 
Americans, whether before the pandemic or not.
    Mr. LaTurner. Let's stay with you. You worked with 
government entities like the Small Business Administration, the 
Department of Labor, ahead of the enactment of the pandemic 
relief funding to explore strategies to address what you 
describe as a, quote, ``a looming wave of potentially 
fraudulent activity.'' Drawing from your experience, tracking 
fraud in Federal relief programs, what could the government 
have done to better support states and entities in charge of 
dispersing funds?
    Mr. Smith. What could we have done to support the states?
    Mr. LaTurner. Correct.
    Mr. Smith. So, one of the things I mentioned earlier was 
putting out alerts. So, our Cyber Fraud Task Forces and our 
Global Investigative Operations Center, which is the hub of all 
of our task forces, submitted alerts, GIOC alerts, if you will, 
to 30,000-plus financial institutions and to those partners. 
What we were doing was sharing indicators of compromise with 
those entities, such as if an individual was using an IP 
address that was from an overseas originating point, or if a 
financial institution saw, if you happen to see an account 
being opened fairly recently and that account was being used to 
move a substantial amount of money in a short period of time, 
that would be something you would flag. So, one of the things 
we did at the beginning of the pandemic and even prior was 
sharing information and indicators of compromise that we are 
seeing not only from other entities, but from criminals 
themselves, because keep in mind, as a Federal law enforcement 
entity, we do work with criminals. We have confidential 
informants, and we get information from the inside, if you 
will, regarding what tactics are afoot.
    Mr. LaTurner. Thank you, and the committee thanks all three 
of you for being here today and doing a great job answering 
questions.
    At this time, we are going to pause and change out the 
panels.

    [Recess.]
    Mr. LaTurner. The committee will come back to order.
    For our second panel today, I would like to introduce Ms. 
Rebecca Dixon, the executive director of the National 
Employment Law Project. Welcome to the committee.
    Please stand and raise your right hand.
    Do you swear or affirm that the testimony you are about to 
give is the truth, the whole truth, and nothing but the truth, 
so help you God?
    Ms. Dixon. Aye.
    Mr. LaTurner. Let the record reflect the witness has 
answered in the affirmative. Thank you.
    Without objection, your written statement will be part of 
the record.
    You are now recognized for five minutes for your opening 
statement.

STATEMENT OF REBECCA DIXON, EXECUTIVE DIRECTOR OF THE NATIONAL 
                     EMPLOYMENT LAW PROJECT

    Ms. Dixon. Good afternoon, Chairman Comer, Ranking Member 
Raskin, and members of the committee. Thank you for the 
opportunity to testify today. I am Rebecca Dixon, executive 
director of the National Employment Law Project, a nonprofit 
research, policy, and capacity-building organization that for 
more than 50 years has sought to strengthen protections and 
build power for workers in the U.S., including workers who are 
unemployed.
    We must never lose sight of the terrible hardship that the 
early days of the COVID-19 pandemic imposed on workers, 
families, and communities nationwide. By April 2020, 23 million 
U.S. workers were unemployed. Congress stepped up to pass six 
bills which created programs that literally saved lives and 
livelihoods and prevented what could have been a prolonged and 
devastating economic collapse. This robust policy response 
helped to make the COVID recession the shortest on record and 
contributed to an economic recovery that has brought the 
unemployment rate from a high of 14.7 percent in 2020 to 3.5 
percent today. Indeed, according to Moody's Analytics, without 
these programs, the economy would have succumbed to a double-
dip recession. A combination of well-designed social insurance 
programs drove poverty to the lowest level on record in 2021, 
cutting the number of poor children by nearly half and keeping 
over 25 million people out of poverty.
    One important piece of the protections enacted by Congress 
were the pandemic unemployment insurance programs that not only 
contributed to the historic reductions in poverty in 2020 and 
2021, but they also broadly supported recipients' financial 
stability and overall well-being, filling in the substantial 
gaps in the Nation's inadequate UI system. UI is particularly 
effective at getting money into the hands of consumers who need 
it and who will spend it quickly, and this supports businesses 
in their communities and stabilizes state economies.
    Unfortunately, a decades-long failure to properly invest in 
the administration of the UI system made it an appealing target 
for organized crime during the pandemic. Chronically 
underfunded and understaffed state UI systems operating with 
antiquated technology were tasked with building and 
implementing a major new set of Federal programs with little 
advanced preparation. This resulted in multiple points of 
vulnerability for criminal enterprises, which have previously 
stolen the identities of workers during private sector data 
breaches. They seized upon this pandemic as a time to use those 
stolen identities to fraudulently obtain UI benefits.
    As the temporary Federal pandemic programs had to be built 
virtually overnight, state agencies were not able to design 
systems to protect against identity fraud in these programs. As 
detailed in my written testimony, Department of Labor has had 
notable recent successes in pioneering national fraud 
prevention solutions and enlisting state participation. Using 
funds from the American Rescue Plan, DOL has made substantial 
investments in strengthening state systems to detect and 
prevent future identity fraud. DOL Tiger Teams, equity grants, 
and IT modernization assistance all combine a focus on 
improving access to UI for eligible workers with resources and 
expertise to combat fraudulent activity. DOL also offers a wide 
range of technical and system support for state fraud 
prevention, detection, and recovery.
    State participation in the Integrity Data Hub and the use 
of its crossmatch systems have increased significantly since 
the pandemic with more states using DOL's identity verification 
service, incarceration data exchange, and recently launched 
bank account verification service that enables states to thwart 
ID fraud by verifying that a bank account belongs to the worker 
claiming benefits. Moreover, states can no longer bring in 
contractors to help run their programs as they were given 
emergency flexibility to do so during the height of the 
pandemic. GAO noted that a major cause of increased identity 
fraud was the insufficient number of state UI staff and the 
fact that new staff were severely under-trained. Although 
intended to handle a historic increase in claims, inexperienced 
and insufficiently trained contract staff, through no fault of 
their own, both contributed to increased fraudulent activity 
and created greater obstacles for workers who were seeking 
benefits.
    As for the outdated IT systems used by so many state 
programs, Congress has provided much-needed increases in 
Federal funding for UI administration and worker-centered 
technology modernization over the past two years. Congress must 
continue making these investments because sophisticated 
criminal enterprises will continue to seek vulnerabilities in 
state systems, and state agencies will need to keep pace.
    In conclusion, the pandemic relief that Congress enacted 
combined to provide critical lifeline to workers, families, and 
communities in the Nation's economy. I hope that this committee 
will recognize the tremendous value of COVID relief programs 
and work together to find meaningful solutions to the ever-
evolving problem of identity fraud that has undermined their 
effectiveness. Thank you.
    Mr. LaTurner. Thank you, Ms. Dixon. The chair recognizes 
the gentlelady from Ohio, Ms. Brown.
    Ms. Brown. Thank you, Mr. Chair. Since this is our first 
committee hearing of this Congress, I want to express my hope 
that this committee will, on a bipartisan basis, find ways to 
strengthen Federal programs and serve everyday working people. 
I truly want to work with my colleagues on both sides of the 
aisle to make life better for all our constituents, including 
mine back home in Ohio.
    In that spirit, I want to share some real-life stories of 
people in Ohio who have benefited from some of the lifesaving 
pandemic relief programs we are discussing today. Here is an 
example. Tiffany from Northeast Ohio said, and I quote, ``I was 
laid off on March 13, 2020. Even though it took a month to 
begin receiving my unemployment benefits, I am so thankful for 
them. Without them, my family of four wouldn't have anything at 
all coming in. The extra Federal money per week enabled me to 
pay my bills and helped me to provide for my children in such a 
traumatic situation.'' Tiffany's testimony is just one example 
among millions in all our districts, urban or rural, dense or 
sparse, rich or poor, for whom this Federal assistance made all 
the difference.
    Ms. Dixon, how did COVID-19 relief legislation, such as the 
bipartisan CARES Act and the American Rescue Plan, save 
American families from disaster?
    Ms. Dixon. So, one thing we know is that the economy is 70 
percent consumer spending. Consumer spending drives our 
economy, and with 23 million workers out of work, there would 
have been an enormous contraction of spending, which would have 
then sent us into a double-dip recession. It also prevented 
hunger and homelessness and really allowed families to focus on 
caregiving for their sick family members. And it was just 
really a lifeline, a critical, important way that Congress came 
through for working families.
    Ms. Brown. Thank you very much. So, it is clear to me that 
the Biden administration and Congress took decisive action to 
provide relief for the American people. The critical and much-
needed investments in health and economic programs are helping 
the country recover and bounce back from the worst pandemic in 
recent memory, so let us not forget that, and we are continuing 
to emerge stronger than ever. And with that, Mr. Chairman, I 
yield back the balance of my time.
    Mr. LaTurner. The gentlelady yields back. The chair 
recognizes the gentlelady from Vermont, Ms. Balint.
    Ms. Balint. Thank you, Mr. Chair. First of all, thank you 
for being here. I really appreciate it. As you know, Ms. Dixon, 
in March and April 2020, we experienced really an unprecedented 
economic shock. Twenty-two million people lost their jobs, 
millions of people suddenly found themselves without an income, 
and in April in 2020, when I was a leader in the Vermont 
Senate, we saw Vermont's seasonally adjusted unemployment rate 
go up to 15.6 percent, which was up 12 percent from the year 
before. So, thankfully, Congress stepped in and helped us to 
expand the unemployment insurance. And as you said and as 
others have said, it was an absolute lifeline for families and 
individuals.
    So, my question is, without unemployment insurance 
programs, how would individuals and families be able to respond 
to such an economic crisis? Like, what happens without these 
kinds of funds to allow individuals and families to stay 
afloat?
    Ms. Dixon. It is not necessarily well-known, but the 
unemployment insurance is the first line of defense against 
poverty and homelessness. It is the only universal cash program 
that we have that provides cash to working families when they 
lose a job. There is nothing else. And what we saw in the Great 
Recession, when folks were exhausting their benefits, is the 
other program that they turned to was the SNAP program, and 
there really was nothing else. And so, it just can't be 
stressed enough how critical this program is to making sure 
that families can maintain while they search for work.
    Ms. Balint. I really appreciate that distinction, and I 
think we can't overstress it. I know for me, having worked 
directly with individuals and families, thousands of 
Vermonters, that is exactly what I was hearing from my own 
constituents. So, when we think about unemployment insurance 
programs and how they assist workers in job searches, do job 
searches change when an individual is benefiting from an 
unemployment insurance benefit?
    Ms. Dixon. The benefit has many important qualities. One is 
that it allows workers to actually match with jobs that match 
their skills so they are not trying to take the first possible 
thing that is offered to them, which is not good for the 
economy because those folks' skills are being unused. So, it 
does give them the breathing room to find a good match that is 
going to be close to the salary that they were receiving before 
they lost their job.
    Ms. Balint. And I would assume that not only would those 
skills go unused, but when you have a worker who is mismatched, 
they are much less likely to stay in that job, so exacerbating 
this cycle of turnover, which we know is not good for 
employers, it is not good for employees or families. And is 
that the case? Do we see that there is a connection there with 
job churn?
    Ms. Dixon. There absolutely is, and we have heard employers 
loud and clear, particularly in some of the industries that 
were hardest hit in the pandemic, the service industry, the 
restaurant industry, where workers have actually left those 
industries entirely to go to other industries because better 
conditions and better pay. And so, if a worker takes a job, we 
want them to actually be able to stay in that job, advance in 
that job. So, it is important to them and their families, just 
as it is important to employers to have stability in the role 
that they are in.
    Ms. Balint. Thank you. Just one more question. From your 
perspective, from your experience, and your research, and the 
work that you do in your position, why do you think we need to 
continue to invest in and modernize state unemployment 
insurance systems, because we heard in the earlier testimony 
how there was a breakdown there. So, we would love to hear from 
you, from your perspective, why that is so important.
    Ms. Dixon. So, about a decade ago, I did a report that was 
a deep dive on unemployment insurance administration and the 
impact on being able to pay benefits, and what I found then was 
that the average UI benefits IT system was 26 years old. That 
was 10 years ago, and at the time, the oldest one was 46 years 
old. And so, it is critical for us to invest, to actually put 
the money in. So, usually when there is a crisis like this 
pandemic, there is investment in unemployment, there is 
investment in the IT systems, there is investment in 
administration, but then as soon as the economy recovers, we 
take our foot off the gas, and we really need to keep our foot 
on the gas for this program. We need to actually make the 
changes that are needed so that these systems function 
correctly all the time, whether it is one family who is 
suffering unemployment or it is millions of people suffering 
unemployment.
    Ms. Balint. Thank you so much. I yield back.
    Mr. LaTurner. The gentlelady's time has expired. The chair 
recognizes the gentlelady from Missouri, Ms. Bush.
    Ms. Bush. Thank you. St. Louis and I are here in support of 
a government that ensures no one lives in poverty. During March 
and April 2020, the U.S. economy lost more than 22 million 
jobs. Our unemployment rate jumped from 3.5 percent in January 
2020 to a pandemic peak unemployment rate of 14.7 percent in 
April 2020. St. Louis families and families all across the 
country were in need of emergency assistance during those 
uncertain times.
    One such story shared by the National Employment Law 
Project comes from my constituent, Deshauna, a single mother 
from St. Louis. She said, ``If it wasn't for unemployment, I 
would have been put out of my apartment. Thank God for the 
help. I am still trying to get myself out of debt, but the 
pandemic unemployment gives me and my son a little security. I 
am a single parent getting no help from the other parent, plus 
losing my job, so it has definitely been a blessing.''
    The CARES Act created a temporary unemployment insurance 
program called the Pandemic Unemployment Assistance, or the 
PUA. In 2020, President Biden signed the American Rescue Plan 
into law, which extended PUA and other temporary unemployment 
insurance benefits. The PUA unlocked unemployment insurance 
benefits to workers and to families who were otherwise excluded 
from regular UI programs. This program was the difference 
between a full dinner table and an empty one for a number of 
families. Ms. Dixon, who benefited the most from these 
programs, and can you tell us why? And thank you for being 
here.
    Ms. Dixon. So, the unemployment insurance program was 
created 80-plus years ago, and it has not been substantially 
modernized, and it was created on a structurally racist 
foundation that was aimed at white male breadwinners. And so, 
if that is the foundation. That is who mostly benefits from 
unemployment insurance, and so that means women workers, folks 
who work part time. It means people who work in restaurants and 
service jobs where their wages are low, they often are just 
entirely left out of the program, and most workers who are in 
gig jobs are also excluded from the program.
    So, as the work force has changed over time, many workers 
have been left on the sidelines, and particularly, this impacts 
women and workers of color. And so, adding this program 
actually invited them into the program, some for the first time 
in their working lives.
    Ms. Bush. Thank you. In August 2020, the Department of 
Labor announced that it would distribute up to $260 million in 
grants to states to address disparities in the service delivery 
and administration of state unemployment insurance systems and 
promote equitable access to benefits. Ms. Dixon, how have the 
Department of Labor's equity grants impacted local communities 
across our country?
    Ms. Dixon. One of the most critical things to understand 
when folks are doing this work in the states, they want to pay 
benefits, so they are not standing in the way. They are 
actually working really hard when they are understaffed and, 
you know, underinvested in. And one of the things that the 
Equity Grant Program has helped is for those folks to 
understand what the impacts are of the way the program is 
designed, so that it is not necessarily the individuals and the 
actions that they are taking, but it is the system and how they 
need to change what they do to help offset the inequities in 
the system. And that has been a really critical piece for 
states to take to heart as they are working to serve unemployed 
workers.
    Ms. Bush. Thank you. Sadly, Republicans are so focused on 
cutting programs that benefit regular everyday people, that it 
is impossible to take their criticisms of these programs 
seriously. We need to ensure funds are being used properly and 
then expand these programs and expand them permanently. 
Democrats will continue to lead with bold legislation that 
tackles our Nation's crises while advancing equity and equal 
opportunity. Thank you, and I yield back.
    Mr. LaTurner. The gentlelady yields back. The chair 
recognizes the gentlelady from Pennsylvania, Ms. Lee.
    Ms. Lee. Thank you, Chairman, and thank you so much, Ms. 
Dixon, for your testimony. On the last panel, I discussed and 
we discussed my time at the state legislature in Pennsylvania 
where we heard intimate struggles of Americans that they faced 
throughout the pandemic. They often had to choose whether to 
pay their rent or their childcare, as we know. And we also know 
that these conditions are unacceptable. Ms. Dixon, I understand 
all states approach unemployment differently. Based on your 
research, is there an ideal state system we could learn from 
here in Congress?
    Ms. Dixon. So, rather than an ideal state system, the thing 
that Congress could do is create a universal baseline that is 
Federal standards that every state has to meet. Right now, 
depending on the state that you happen to be unemployed in, you 
may receive a benefit as low as $235 a week as the maximum, or 
you may receive eligibility for as low as 12 weeks of payment 
as opposed to 26 weeks in other states. And so, that doesn't 
make any sense that we would have this patchwork of programs if 
we really want to make sure and we are serious about coming 
through for unemployed workers when they need us the most.
    And so, having a baseline of standards where there is a 
minimum 26 weeks that all states have to pay, where there is a 
minimum dollar amount that fits what the state's economy is, 
that there is a minimum set of eligibility standards that fits 
all workers. We need that, and we need that crucially. We also 
need an extended benefits program that turns on automatically 
and just triggers on when there is a crisis so that workers are 
not waiting for congressional action, but they can rely on 
their programs to just spring into action.
    Ms. Lee. Thank you. We talked about how some of the 
different workers or different people benefited more from some 
of these programs. Could you elaborate on the disparate impact 
the pandemic had on communities of color that you shared in 
your testimony?
    Ms. Dixon. Yes. So, our labor market is very stratified, 
and by ``stratified,'' I mean that women make up the largest 
portion of low-wage workers and people of color also, and those 
jobs were actually really hit hard in this pandemic. And so, 
those folks lost their jobs, but because of history, they also 
don't have wealth accumulated in savings. And so, the fact that 
Congress took action so quickly and was able to get the money 
out the door, it meant a lot to folks who did not have savings 
to rely on and for whom this program made the difference 
between being able to pay rent and stay in their homes.
    Ms. Lee. Thank you. Last, where would we have been without 
these programs? In other words, what would have happened to the 
millions of individuals who relied on these programs during the 
pandemic without them?
    Ms. Dixon. We would have had incredible child poverty, and 
a tsunami of evictions, and many other ills that we were able 
to avoid, and that was really great for children, for families 
and communities. And Congress really came through for working 
people in this program, and it is something that we will feel 
the positive effects of for generations. When families are in 
poverty, it is very hard on children. It is hard on the mental 
health of parents if they don't have income. And so, there is a 
payoff beyond just the actual monetary amount that happens in 
families that we will be reaping the benefits for generations 
to come.
    Ms. Lee. Thank you for your testimony and for your answers. 
With that, I yield back.
    Mr. LaTurner. The gentlelady yields back. The chair 
recognizes Mr. Goldman from New York.
    Mr. Goldman. Thank you very much, Mr. Chairman, and thank 
you, Ms. Dixon, for being here with us today. I am from New 
York. New York State experienced its first COVID-19 case on 
March 1, 2020, and I actually got COVID myself on March 10, 
very early on. New York was at the epicenter of the pandemic at 
the beginning, and more than 78,000 New Yorkers have died as a 
result of COVID. As families in New York endured record 
unemployment throughout the pandemic, the unemployment 
insurance system became a lifeline to nearly 5 million New 
Yorkers. In my district, organizations like the Chinese-
American Planning Council connected at least 740 households 
with unemployment insurance, nearly 2,000 families with housing 
assistance. And more than 1,300 people who were excluded from 
Federal relief programs got aid through New York City's 
innovative Immigrant Emergency Relief Program, and that is just 
one outstanding organization of many.
    When COVID surged and 22 million people lost their job, it 
fell to our unemployment insurance system to take on the 
immense volume of new claims. New York's Department of Labor 
distributed more than $105 billion, which is the equivalent of 
50 years' worth of benefits in the two years from the start of 
the pandemic. But obviously, this new influx of benefits opened 
itself up to fraud, especially through identity theft online, 
which I know you have spoken about. The New York State 
Department of Labor has recommended that Congress provide 
sustained investments and additional resources to help states 
combat the ever-evolving threat of cyber fraud.
    And, Ms. Dixon, I am curious what you think Congress should 
do to assist states, separate from the sort of Federal baseline 
that you talked about. Where would our resources be most 
effective in assisting states to modernize and upgrade its 
unemployment insurance systems?
    Ms. Dixon. I am echoing folks from the first panel. The 
information technology investments are critical. We have a 
decentralized system. There are 53 different unemployment 
insurance programs, and so there are 53 opportunities for 
criminal fraud rings to attack the system. And so, really being 
able to invest in those systems, to harden those systems, to 
make sure that those offices are staffed. And one other really 
critical thing that Congress could do is create a program like 
the Extended Benefit Program that actually can be pre-
programmed and already have the fraud measures built into it so 
that when there is a crisis, it just triggers on, and states 
are ready, and they are not rushing to program a different 
program each time that there is a crisis.
    Mr. Goldman. Thank you. One of the most, I think, 
productive and effective measures that Congress passed was the 
child tax credit, and I would love for you to talk a little bit 
about the success of the child tax credit and why it was so 
successful at reducing child poverty.
    Ms. Dixon. So, one piece of it was that money actually went 
into families' bank accounts, and they did not have to wait 
until they filed their taxes to get this money. And so, when 
you add that money together with the unemployment insurance 
payments, you have families actually getting cash to meet their 
needs at a critical time. And we see that in the reduction of 
poverty, like what the huge impact that was to families and 
children all over the United States.
    Mr. Goldman. And you are drawing a distinction between the 
earned income tax credit, which comes when you are paying your 
taxes, as opposed to cash direct deposited or sent to you by 
check in that moment. Is that what you are saying?
    Ms. Dixon. No. So, the child tax credit is also generally 
not paid on a monthly basis the way it was in this instance. 
So, it generally is something that either folks are changing 
their tax withholding to account for, or they are waiting until 
they file their taxes to get it. So, what was really 
revolutionary was actually giving the cash, putting the cash in 
families' bank accounts.
    Mr. Goldman. And in my final seconds, can you talk 
especially about how important that child tax credit was to 
underserved communities and people of color in particular?
    Ms. Dixon. Well, we know that those families are the ones 
who are hit the hardest in this pandemic, but they are also 
sort of chronically hit the hardest because they are in the 
lowest-paying jobs. And so, to make sure that children actually 
have their needs met, this was critical, and it was critical. 
It would have been critical at any time, but it was especially 
critical during this pandemic, and it would be great if 
Congress could figure out how to reinstate it because the 
impact was just phenomenal for families.
    Mr. Goldman. Thank you, and I yield back.
    Mr. LaTurner. The gentleman's time has expired. The chair 
recognizes the gentlelady from New York, Ms. Ocasio-Cortez.
    Ms. Ocasio-Cortez. Thank you, Mr. Chair. It can be 
difficult to remember given all that has happened in the last 
three years, but I would like us to envision ourselves back in 
those first few months of the pandemic in the spring of 2020. 
In March and April 2020 alone, the economy lost more than 22 
million jobs, and the unemployment rate skyrocketed to 14.7 
percent. Jobs in sectors that are absolutely essential to the 
American economy were threatened. But after the CARES Act, 
states were able to put in place expanded unemployment 
insurance programs to assist workers who had lost their jobs, 
and Census data shows that these expanded benefits kept 
approximately 5.5 million people out of poverty in 2020.
    Ms. Dixon, I am curious about, from your vantage point, how 
expanded unemployment insurance played out as such a vital 
lifeline for workers as well as states during the pandemic.
    Ms. Dixon. So, one of the reasons that Congress put in 
place these programs is because the unemployment insurance 
program in the states is inadequate, inadequate in who it 
covers, inadequate in how much the weekly benefit amount is. 
And so, when Congress added $600 a week and then $300, that was 
amazing, especially in states where the national average 
benefit is only $300 a week. And so, this made it possible for 
folks to stay in their homes. They didn't have to choose 
between food and gas in their cars. It was critical, and I 
think that part of what we have to do is learn from the 
successes.
    So, we have talked a lot about instances where there was 
identity theft and fraud, but we haven't talked about the 
amazing number of folks who got UI for the first time and what 
it meant for them and their ability to stay attached to the 
work force. And so, I think we really have to mine the data on 
the good pieces and figure out what we can carry forward and 
what Congress can do to actually carry those pieces forward as 
a minimum standard for states to implement.
    Ms. Ocasio-Cortez. Absolutely. Thank you for that 
information because, you know, for so much in this hearing, 
there is a constant focus not just on the notion of the 
pandemic response being fraudulent or wasteful, but it seems as 
though a particular fixation on the unemployment program, 
which, as you stated, if it weren't for the Federal 
unemployment supplemental program, families would have been 
potentially enduring months of unemployment and having to just 
scrounge by on as little as $300 a week. And especially when it 
comes to skyrocketing costs of housing, would it be also in 
your assessment that this could have also potentially, without 
that Federal response, dramatically expanded the amount of 
housing insecurity and people who may even be struggling with 
homelessness if it weren't for that supplemental?
    Ms. Dixon. It absolutely did because even though there were 
also things that Congress created that were housing supplements 
and assistance, it did take a while to get out, and the UI 
program is the quickest way to get money into the pockets of 
workers. And so, this really did have a critical influence on 
being able to stay in homes and for folks to be able to pay 
their rent. And, you know, there was an eviction moratorium, 
but it also means that they are not sitting there with $10,000 
of back rent that they can never pay. So, you know, it kept 
them going in a way that made sure that they weren't incurring 
debt to actually try to just do their basic living expenses.
    Ms. Ocasio-Cortez. Absolutely, and despite the United 
States experiencing the worst job losses since the Great 
Depression during that early COVID period, the COVID-19 
recession was also the shortest on record. But to expand on 
this point that you are making, how did these pandemic relief 
programs, particularly unemployment insurance, help stabilize 
the economy even from a more macro perspective?
    Ms. Dixon. So, because so much of our economy is based on 
consumer spending, that is the first thing that families cut 
back on, and so we know it is kind of like a, it is an 
unvirtuous cycle. So, there is an economic downturn, there is a 
contraction, and it just gets worse and worse. And so, the UI 
program actually did what it was designed to do, which was to 
stabilize the economy, to stabilize communities and state 
economies, and to prevent that downward spiral, and to prevent 
a double-dip recession, which we had some experience with a 
pretty terrible recession not that long ago. And so, just being 
able to get through this pandemic without that protracted 
recession and also without that protracted high unemployment 
rate.
    Ms. Ocasio-Cortez. So thank you, and I yield back to the 
chair.
    Mr. LaTurner. The gentlelady yields back. The chair 
recognizes the distinguished ranking member, Mr. Raskin.
    Mr. Raskin. Thank you kindly, Mr. Chairman. Ms. Dixon, 
welcome. I have got a question that is triggered by something 
that you said, which is, well, why did our unemployment 
insurance system grow up in such a way that it is decentralized 
in the 50 states rather than being one national program because 
it seems like the problems are just legion with doing it that 
way.
    Ms. Dixon. So, the reason is because the Southern planter 
class in the 1930's would not have approved a program of that 
nature. There were actually proposals to make it a universal 
program, to make it paid for out of general fund dollars, and 
those were not adopted because the Southern states did not want 
people of color, black people in particular, to have access to 
this program. They wanted the control to be able to decide who 
qualifies and who does not.
    Mr. Raskin. I mean, to my mind, it is almost like having 50 
different Social Security programs or 50 different Medicare 
programs, right? And we have just been through a period where 
we have seen the brokenness of a system that is that 
decentralized. So well, thank you for clarifying that for me. 
The bottom line here is that expanded unemployment insurance, 
even with these dysfunctional antiquated state systems, allowed 
millions of people to fill in financial gaps in their lives at 
a time of unprecedented difficulty and loss. Would you share a 
few examples with us of how expanded unemployment insurance 
benefited the people that you work with?
    Ms. Dixon. So, though we don't directly represent workers, 
I do get emails from workers who don't know that, and often I 
can refer them to legal representation. But it is very, very 
satisfying when the email that you get from a worker is about 
how grateful they are, that this program is in place, that this 
program got extended, and that they are able to focus on their 
family and their livelihood. And so, getting those kinds of 
emails from workers, it really does fill my soul and makes me 
want to show up every day to do this job.
    And so, workers were really organizing around these 
benefits. They were active, they were engaged, and it has been 
critical and phenomenal that they had these benefits to cover 
their basic needs in this, like, you know, once-in-a-century 
crisis.
    Mr. Raskin. Got you. Is there anything else you would like 
to tell us before you go?
    Ms. Dixon. Don't take your foot off the gas in supporting 
UI administrative funding and providing support for upgrading 
IT systems and all of the things. On behalf of working people, 
really grateful for the way that Congress came through, and 
just hope that you all, with what you have heard today from me 
and from the other panel, will take seriously the need to 
invest in the infrastructure of this program so that it can 
function well without Congress having to step in when there is 
a crisis or just when there is a personal crisis for a family.
    Mr. Raskin. Thank you for your wonderful testimony and for 
your commitment to the cause. And, Mr. Chairman, I will yield 
back to you.
    Mr. LaTurner. The gentleman yields back. Before we adjourn 
this hearing, I would like to introduce our five subcommittee 
chairs on behalf of Chairman Comer. Congresswoman Nancy Mace 
will chair the Subcommittee on Cybersecurity Information 
Technology and Government Innovation, Congressman Pat Fallon 
will chair the Subcommittee on Economic Growth, Energy Policy, 
and Regulatory Affairs, Congressman Pete Sessions will chair 
the Subcommittee on Government Operations and the Federal 
Workforce, Congresswoman Lisa McClain will chair the 
Subcommittee on Health Care and Financial Services, and 
Congressman Glenn Grothman will chair the Subcommittee on 
National Security, the Border, and Foreign Affairs.
    I yield to the ranking member for introduction of his 
subcommittee ranking members.
    Mr. Raskin. Well, thank you very much. Mr. Connolly will be 
our ranking member on the Subcommittee on Cybersecurity, IT, 
and Government Innovation, Ms. Bush will be our ranking member 
on Subcommittee on Economic Growth, Energy Policy, and 
Regulatory Affairs, Mr. Mfume will be the ranking member on 
Government Operations and the Workforce, Mr. Krishnamoorthi 
will be the ranking member on the Subcommittee on Health Care 
and Financial Services, and Ms. Porter will be ranking member 
on National Security, the Border, and Foreign Affairs.
    Mr. LaTurner. I ask unanimous consent that the resolution 
naming the five subcommittee chairs and the five ranking 
members is approved.
    In closing, I want to thank our panelists once again for 
their important and insightful testimony today. I also want to 
thank my colleagues for participating in our first oversight 
hearing of the 118th Congress, an oversight hearing that goes 
to the very heart of this committee's jurisdiction, protecting 
taxpayer dollars from fraud, waste, and abuse.
    With that and without objection, all members will have five 
legislative days within which to submit extraneous materials 
and to submit additional written questions for the witnesses to 
the chair, which will be forwarded to the witnesses for their 
response.
    Mr. LaTurner. With that, our hearing is adjourned.
    [Whereupon, at 3:52 p.m., the committee was adjourned.]

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