Senator Joni Ernst, Chair of the Senate Committee on Small Business and Entrepreneurship, has raised concerns about significant fraud in the Small Business Administration’s (SBA) COVID relief programs. She is urging Congress to pass her SBA Fraud Enforcement Extension Act before the statute of limitations expires for certain programs.
Ernst pointed out that while programs such as the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) were vital for small businesses during the pandemic, inadequate oversight led to an estimated $200 billion in fraudulent loans. “Nearly six years ago, the Small Business Administration’s pandemic relief programs provided a much-needed lifeline for small businesses in Iowa and across America,” Ernst said. “Millions of small business owners and their employees were saved from closure and mass layoffs thanks to Paycheck Protection Program and Economic Injury Disaster Loan funds awarded by the SBA.”
She continued, “But as we’ve seen time and again, when government funds seem ‘free’ for the taking, bad actors are ready to steal and scam.” According to Ernst, weaknesses in program oversight allowed extensive fraud at taxpayer expense.
The senator cited reports from both the Pandemic Response Accountability Committee (PRAC) and SBA Office of Inspector General highlighting how self-certification increased vulnerability to fraud. “The Pandemic Response Accountability Committee, or PRAC, sounded the alarm years ago on how allowing applicants to self-certify their eligibility increases fraud. Self-certification allows the government to rely on an applicant’s promise that they meet program requirements,” she said.
Ernst also criticized actions taken under President Biden’s administration regarding loan forgiveness processes: “Unfortunately for taxpayers, the Biden administration ignored repeated watchdog warnings, allowing blanket forgiveness without additional verification on PPP loans under $150,000 and potentially allowing a large swath of fraud to escape meaningful scrutiny.”
Specific cases mentioned included improper awards from other relief efforts like the Restaurant Revitalization Fund (RRF) and Shuttered Venue Operators Grant (SVOG). She noted incidents involving music artist Chris Brown allegedly receiving $10 million inappropriately through these funds.
Efforts continue within federal agencies. “To date, PRAC has diligently helped law enforcement partners expose more than $2.4 billion in estimated fraud loss,” Ernst stated. The senator further highlighted ongoing manual reviews by SBA staff covering thousands of RRF awards worth billions of dollars.
She emphasized urgency: “Without my legislation, as soon as April, fraudsters who stole funds will escape justice.” The proposed bill would extend statutes of limitations so investigators can continue pursuing cases related to SVOG and RRF programs.
Ernst concluded with a call for bipartisan action: “I call on Democrats to stop blocking this legislation so there can be real accountability.”
Joni Ernst leads several key committees including Small Business and Entrepreneurship; she also participates in Armed Services; Agriculture, Nutrition and Forestry; as well as Homeland Security and Governmental Affairs committees according to her official website. Her office provides constituent services such as casework assistance throughout Iowa (source). Elected in 2014 as Iowa’s first female U.S. Senator—and first female combat veteran—she continues serving Iowans at a federal level (source).
