A few weeks ago, 60 Minutes, to its credit, did a segment with Linda Miller, who spent ten years in the Government Accountability Office and wrote a rulebook on preventing fraud in federal programs. Miller says there is vastly more fraud in federal spending than people realize:
Last year, the Government Accountability Office released a report estimating the federal government loses as much as $521 billion a year to fraud. But Miller and other fraud experts believe the number is higher.
Linda Miller: I believe the government is losing between $550 billion and about $750 billion a year. We’re coming up close to the $1 trillion amount– is lost, every year, to fraud.
Who commits the large-scale fraud? Much of it is done by foreign actors and organized criminal gangs:
Linda Miller: What we’re really talking about is nation-state actors. We’re talking about organized crime rings. We’re talking about using vast amounts of stolen Americans’ identities to monetize them for, you know, criminal activity.
The problem exploded during the pandemic – when the government rushed trillions of dollars into the economy to help struggling Americans.
Applications for relief programs moved online, making it easier for people to access aid, but with few safeguards, scammers, hackers and organized crime rings also cashed in.
In 2020, Miller was appointed to an independent watchdog committee that tracked how COVID relief money was spent.
Linda Miller: We could tell, right away, it was like, “Oh. Well, that’s all gonna get stolen.”
Cecilia Vega: You saw it coming?
Linda Miller: Oh, yeah. I mean, It was like they threw money in the air and just let people run around and grab it. The most egregious part is that a lot of the people who stole that money were foreign adversarial nation states.
Cecilia Vega: So who are they? Who are you talking about?
Linda Miller: We’re talking about China. We’re talking about Russia.
Cecilia Vega: Impersonating Americans, in a lot of cases?
Linda Miller: Yes. Right.
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Last year, the FBI unraveled one of the largest digital fraud cases in U.S. history, in which cyber criminals from around the world used stolen identities to pocket $6 billion in pandemic unemployment funds.
When a disaster happens, the professional fraudsters swing into action:
Cecilia Vega: What are the hot spots for fraud, right now?
Linda Miller: Disaster funding–is a really big issue. When a disaster happens in the country, the fraud actors see where it’s coming. They look at the zip codes. And they begin buying stolen identities, so that they can begin applying for disaster loans, disaster grants, on behalf of stolen identities.
Apparently you can buy the identity of pretty much any American for a nominal sum.
Our government has reached a state of impotent ossification where it is doubtful whether it has the will, let alone the capacity, to resist being pillaged by hostile actors and criminal gangs. And, to compound the problem, one of our two major political parties never wants to cut any spending, under any circumstances. The fact that a large percentage of government spending goes to fraudsters is of zero concern.
Minnesota, where I live, is a case in point. Minnesota is probably the most corrupt state in the union. The American Experiment Scandal Tracker stands at over $611 million, just since the beginning of the Tim Walz administration. That isn’t the wasteful spending that the government indulges in every day, that is 27 specific criminal frauds. One of them is Feeding Our Future, in which probably $500 million in federal tax money was stolen from a program administered by the state’s Department of Education.
In response to this awful record, there is a proposal to create an Office of Inspector General, that would be charged with monitoring state spending and taking legal action in cases of fraud. Polling shows that 72% of Minnesotans support that proposal, but it couldn’t get through our legislature. Why? Because the Democrats wouldn’t vote for it. The brutal reality is that the Democratic Party doesn’t mind fraud, and might even be in favor of it. As long as that remains true, nothing is going to change.
