We need an investigation into $2 billion lost to fraud

The state auditor general reported last month that about $1.9 billion in pandemic-related federal unemployment aid to Illinois went to scammers. It seems unlikely how much, if any, of that money we’ll ever be able to get back, but one thing is certain: We should create systems to make sure it can’t happen again.

The issues here apply to a one-time emergency program, so it may seem natural to question the long-term value of a new investigation and study. But this debacle is much bigger and much more multifaceted than a simple case of bureaucratic confusion in the midst of a massive emergency.

For one thing, the department at the center of Auditor General Frank Mautino’s report has been under heat from the beginning regarding its handling of unemployment claims and payouts. That, indeed, is part of the problem. The Illinois Department of Employment Security blames distracted resources for a large part of the fraud. Authorities there say they were forced to try to weed out fraudulent and ineligible appeals for federal Pandemic Unemployment Assistance money at the same time they were under fire for not getting money to claimants fast enough.

Gov. JB Pritzker also said the federal government created the PUA program hastily, with little or no guidance for effectively vetting individual claims.

These may be reasonable hindsight responses. But surely, the situation cannot end there. It seems only reasonable to take a closer, deeper look at what happened, why it happened, how it happened and what can be done to keep it from happening in similar circumstances in the future - as well as, of course, what can be done to get any of that $1.9 billion back.

The $1.9 billion, by the way is more than half the $3.6 billion allotted to Illinois. One can only shudder to think we would ever consider the loss to fraud of more than half of any aid program to be an acceptable, unretrievable cost of doing business.

Nor is this solely an Illinois issue. Some estimates say $163 billion was lost nationwide to such scams on this program, so it sounds like there’s reason for the federal government and all the states to review what happened.

For ourselves in Illinois, unfortunately, Mautino’s report immediately set off political divisions that seem likely to be repeated everywhere. Republican leaders went on the attack, and the governor and IDES became defensive. But there is so much potential for blame to go around in this situation, which of course rolled out during the Republican Trump administration, that it is just short of comical to watch the pointing fingers flutter and wag.

Was this a failure of the Trump administration to distribute the funds appropriately so states could block hackers and scammers? Was it a failure of the Pritzker administration to instill discipline in the process? Was it a failure of IDES leadership? Of computer incompatibility? Of sufficient labor power?

The questions run on and on, and they do not have to be political. In truth, they are bureaucratic and systemic. So, to Illinois leaders of all parties, let’s ask this: Accept that serious mistakes occurred here, set up a nonpartisan panel to investigate what happened and whether anything more can be done and then get out of the way.

At the outset of an unprecedented and unfamiliar crisis, the federal government acted decisively and cooperatively to help individuals and businesses avoid disaster. Unscrupulous thieves took advantage of an opening. There has to be a way to permit the former while thwarting the latter.

Illinois leaders from both parties need to waste no time – and certainly no partisan breath – looking for it.

The Daily Herald