In a decisive move to confront a staggering wave of fraudulent pandemic aid claims, the Republican chairs of the Small Business Committee in both the House and Senate are rolling out a new legislative proposal. Senator Joni Ernst of Iowa and Representative Roger Williams of Texas are spearheading the effort, targeting the nearly 2 million “likely fraudulent” applications highlighted in a recent government report. Their weapon of choice? The SBA Fraud Enforcement Extension Act, set to debut on Wednesday, which aims to bring alleged wrongdoers to justice and ensure small businesses aren’t left in the lurch.
The legislation stretches the statute of limitations to a full decade for fraud tied to two key relief programs launched in 2020: the Shuttered Venue Operators Grant (SVOG) and the Restaurant Revitalization Fund.
This isn’t the duo’s first rodeo—back in 2022, Ernst, Williams, and fellow lawmakers pushed a similar measure to root out violators of the Paycheck Protection Program. Their goal remains clear: hold accountable those who exploited emergency aid, leaving countless legitimate small businesses high and dry.
A recent analysis from the Government Accountability Office (GAO), a nonpartisan watchdog, paints a troubling picture. During the Biden administration, the Small Business Administration (SBA) either issued or backed over $1 trillion in loans to more than 10 million small businesses. While the agency rolled out a four-step fraud prevention plan, execution stumbled. The SBA’s inspector general couldn’t fully investigate two-thirds of flagged cases due to missing or inaccurate data from the agency.
The GAO issued a formal recommendation to fix these gaps, but according to its website, the issue remains “open,” with no clear record of progress. Even more alarming, the report notes that fraud safeguards weren’t fully in place until “more than half” of the programs’ funds had already been disbursed.
Ernst isn’t mincing words. “I will not allow criminals to run out the clock and escape justice simply because the Biden administration was asleep at the wheel,” she told Fox News Digital on Tuesday. “Thousands of hardworking small businesses were deprived of desperately needed relief because swindlers, gang members, and felons cashing in on COVID drained the programs. Every single con artist who stole from taxpayers will be held accountable.”
In Iowa, her home state, 1,800 restaurants qualified for aid but never saw a dime, fueling speculation about how much money was siphoned off by fraudsters instead of reaching family-owned establishments.
Down in Texas, Williams’ constituents faced a mixed bag. Federal aid kept tens of thousands of restaurants afloat, but many others, as reported by Houston PBS, watched funds dry up before they could recover.
The Texas Restaurant Association warned that 12,000 eateries teetered on the brink of closure by 2022. Adding fuel to the fire, Business Insider revealed that some SVOG funds ended up in the hands of Hollywood celebrities, who splurged on private jets, lavish parties, and personal payouts.
Williams is equally fired up. “The SBA distributes millions of dollars to small businesses in need every year. However, where small business owners found the capital needed to stay afloat during the COVID-19 pandemic, bad actors saw the opportunity to defraud the government,” he said to Fox News Digital.
“It is imperative that every fraudster who stole and exploited taxpayer dollars during our nation’s utmost hour of need be prosecuted to the full extent of the law.” With March marking five years since the initial COVID lockdowns, he insists that extending the SBA and law enforcement’s reach to pursue these culprits is non-negotiable.
The SBA, for its part, isn’t staying silent. When pressed about the GAO’s findings, spokesperson Caitlin O’Dea explained to Fox News Digital that Administrator Kelly Loeffler has already ramped up fraud prevention efforts.
“The SBA fully supports all efforts to crack down on fraud within its loan programs – in stark contrast to the last administration, which failed to investigate or address more than $200B in estimated pandemic-era fraud,” she said. “[SBA] will continue working to hold pandemic-era fraudsters accountable.”
As the battle lines form, Ernst and Williams are betting their bill will deliver justice—and a lifeline—to the small businesses still reeling from a crisis exploited by opportunists. With the clock ticking, the fight to reclaim taxpayer dollars is just heating up.
The Fairview Gazette will keep you in the loop on any updates to this story.
