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New evidence from Cook County shows Paycheck Protection Plan was far too open to fraud. Root it out.

The federal government’s Paycheck Protection Plan, a program costing a whopping $953 billion, kept a lot of struggling businesses afloat during the pandemic. But evidence is mounting that the porous scheme, set up by the administration of Donald Trump, extended by the Joe Biden crew and administered throughout by the US Small Business Administration, was poorly inoculated against fraud.

Prima facie evidence has emerged right here in Cook County. where else?

Patrick Blanchard, head of the Office of the Independent Inspector General, told the Tribune last week that he had found evidence that four Cook County employees committed “financial fraud directed at the federal government.”

Blanchard’s allegations are that those public servants (three of whom worked with Cook County President Toni Preckwinkle on the county’s finances) ripped off taxpayers to the tune of $120,000 by either claiming to operate businesses that did not really exist or grossly exaggerating the receipts of a personal business that did exist, so as to snag more federal free cash in the form of forgivable loans.

Blanchard alleges that those employees (one of whom worked for the Board of Review) then spent that money, the taxpayers’ money, on vacations and other personal stuff. And at least in some cases, he alleges they perpetuated this fraud while sitting at their desks, using county printers and whatnot.

Clearly, the safeguards for this program were less than robust and the fraud was not so difficult to pull off. All you had to do was invent a business of some sort and money could then flow your way.

Easy enough for almost anyone to do. Or so it appears.

But here’s the rub with this investigation. Blanchard, who did fine work here, did not set out to track down PPP fraud, which was not his remit, being a federal program. Actually, he was looking into whether or not the Cook County employees were complying with the rules involving dual employment. Clearly, he figured out that the PPP reporting mechanisms and data allowed him to check if any employees were owning businesses on the side without complying with all the reporting rules required of them as Cook County employees.

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He allegedly found that employees were operating illicit businesses, alright.

Fictional ones.

So if an inspector general from local government not specifically looking for PPP fraud found it staring him in the face, it suggests that whatever thievery was happening right here in Cook County is merely the tip of the iceberg. Indeed, some estimates of PPP fraud have ranged as high as $80 billion.

Loans went to politicians, dubious enterprises of all shades and sizes and also to businesses that were far from small. A good chunk even was likely taken by criminals from outside the country.

That quartet of Cook County miscreants, who were not named in the report, should be prosecuted for this alleged fraud and, if the evidence ends up looking as definitive as it now seems, they should be fired by Preckwinkle, if they haven’t already resigned.

Preckwinkle campaigned on a promise of accountability and fiscal transparency. It doesn’t matter that the fraud was not directed at the county’s money. People who make up or exaggerate businesses to snag federal money have no place in public service.

The jig is up here and it is time for Preckwinkle, who has said she is looking into this matter, to reassure taxpayers that she intends to sweep away this kind of fiscal corruption in her own house. Putting employees on some future “do not hire” list is hardly adequate punishment. Theft is theft, even if the federal government provided the temptation through its own incompetence. If you can’t trust an employee with federal money, you can’t trust them with the county’s cash either.

This also might be an interesting line of inquiry for the inspector general for Chicago.

The bigger issue here, of course, is whether or not all of the fraud has been rooted out nationally and whether there is still more that can be done, especially given the amount of money involved. So far, the number of prosecutions for PPP fraud is laughably low.

The PPP was, of course, conceived in a time of panic and laudable efforts were made to minimize complexity and get the forgivable loans out as quickly as possible. Many legitimate business owners were unimpeachably honest and owe the survival of their businesses to that speed.

But there now needs to be rigorous debate as to whether this was the right plan in the first place, as distinct, say, from helping individuals with this money or offering some other kind of relief.

Did the PPP really save that many jobs? How many businesses that would have failed even without a pandemic were propped up by taxpayers’ cash? In the event of another crisis like the one America faced in 2020 and beyond, is this the right kind of program?

And was it worth the impact on inflation, a business-killing phenomenon in its own right?

All of those are good and essential questions.

If four moonlighting Cook County employees could so easily steal our money, allegedly, you can bet your life they were far from alone.

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