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Remember the signs at a fast food chains locations, billions and billions served. The same could be said of the federal disaster spending for pandemic; millions and millions of awards, billions and billions of dollars. The Pandemic Response Accountability Committee made up of inspectors general recently launched a group of dashboards to help people see which agencies got how much money and where it went. Justice Department IG and PRAC Chairman Michael Horowitz joined the Federal Drive with Tom Temin.

Interview transcript:

Tom Temin: And before we get to those dashboards, there’s an even newer gambit that you have launched in the last couple of weeks. And that is the Pandemic analytic Center of Excellence. Tell us what’s going on there.

Michael Horowitz: So, you know, we learned pretty quickly Tom, that when you are overseeing $5 trillion in pandemic relief spending, which is what our mandate is, you can’t do that with people, no matter how many people you get. And so we needed to harness the data that was available.Oone of the challenges, by the way, has been the federal government’s lack of good data in so many different ways. But we’ve been able to build an analytics platform, get what data we can. And we now have over 150 million codes, lines of data that we’re using to look for anomalies, to look for the fraud, we’re looking for, you know, for example, the use of social security numbers for individuals who based on the numbers are likely under age 12, or over age 80, or are deceased. And so we’re looking for anomalies like that we’re finding multiple uses of the same telephone number, the same address across agencies, things the federal government hasn’t been able to do with data. That’s what we’re trying to do.

Tom Temin: The question is, why weren’t the structures set up before the bills were passed?

Michael Horowitz: You know, one of the problems was, when Congress did set this up for the IG community back when the Recovery Act was passed in 2009, the IG community created a data analytics platform. But in 2015, when the Recovery Board sunset, the IG board that oversaw that sunset, there wasn’t funding to continue the analytics platform. And so because the executive branch, legislative branch, the White House, and Congress didn’t agree to fund it, it went away. So we had to rebuild it from the pandemic in 2020.

Tom Temin: The only thing the government ever sunset in the past 150 years basically, was the analytics platform. And so you are learning what’s going on, what action can be taken from what you’re learning save people under 12, or over that might have gotten awards they weren’t entitled to?

Michael Horowitz: So one of the other things we’ve done here at the at the PRAC, at the Pandemic Response Accountability Committee, is create a law enforcement task force. We’re bringing together agents from across the IG community, all of the agents who are willing to help some of my agents at the Justice Department are part of that task force, others are contributing. And so we are following up work partnering with the Secret Service, the FBI, HSI, other federal law enforcement agencies, state, local counterparts, and in fact, we are getting dozens, and now hundreds of convictions. And in fact, yesterday we got the first conviction for someone who actually had the audacity to go to trial. Despite the evidence, we had found that that individual co-defendant pled guilty and got nine years in jail. Yesterday, the defendant, who was the other defendan,t was convicted, had applied for over $10 million in pandemic loans, got a million dollars and invested in cryptocurrency, luxury apartments and Mercedes. That person the jury didn’t take long to convict and is now facing sentencing.

Tom Temin: Yeah, not exactly like Goodfellas. When they knocked off Kennedy Airport, they pinched something like $6 million from a Lufthansa flight. The rule was don’t buy anything expensive and bring the Feds dawn on us.

Michael Horowitz: They don’t use as in that case, false identities, false tax returns, by the way, all submitted to the SBA to get the loans.

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Tom Temin: What’s your sense of how much if any of this can be clawed back in terms of financial return? It’s one thing to convict people and God bless you for doing that. But can any of the money come back to the Treasury?

Michael Horowitz: Yeah, so when we find the money, we’re going out and seizing it. We or the Marshal Service or the Secret Service, whoever was  the seizing agency now is the proud owner and has to sell cryptocurrency you know, offload luxury apartments, luxury cars. It’s oftentimes not sitting in a bank account, but when it is sitting in a bank account, we’ll get it back. We’ve recovered over a billion dollars to date for the taxpayers. That’s probably a small amount of fraud that we’re looking at. But one of the things we’re committed to here at the PRAC and I’m committed to is we’re going to chase every penny and and I mean, every penny. That’s what we do as inspectors general as you know, it doesn’t need to be $10 million, it can be $5,000. And we’re gonna go after it, we’re gonna claw back as much as we can, you can’t have a situation where crime pays. You just can’t have that.

Tom Temin: We’re speaking with Michael Horowitz, chairman of the Pandemic Response Accountability Committee, also inspector general at the Justice Department. And are there any particular programs of I mean, this $5 trillion or so was several programs, payroll protection, and so on. Any of them particularly more rife from what you can tell analytically than others?

Michael Horowitz: Yeah, so the three biggest programs all about $800 billion. So combined, roughly half of the $5 trillion was the Paycheck Protection Program, the PPP program, Economic Injury Disaster Loan program, referred to as EIDL, and the unemployment insurance programs, those three accounted for $800 billion each. So about $2.4 trillion, $2.5 trillion total. And those have been the programs that we’ve found rife with corruption and wrongdoing, and fraud. For PPP and EIDL, one of the biggest challenges is the huge amounts of money that went out in April and May of 2020, right at the beginning of the pandemic, based solely on self-certification, someone walked in, or someone submitted online, an application and simply certifies that they really own these businesses, they really employ these people. And SBA sent them the money, no questions asked. And you know, you can’t do that at a bank. No, you can’t you don’t walk into a bank and say, “No, no, trust me. I really do employ 200 people and, you know, have X millions in assets”.

Tom Temin: Sure. So you then you have a problem of not so much a problem, but a challenge of some purely federally administered programs. But when it comes to unemployment, that money flowed through the state systems. And are you getting cooperation from the state agencies in this analytical effort and trying to get some of that back?

Michael Horowitz: Yes, we are. In fact, we’ve been working with the with the Labor Department inspector general, they have gotten data from all what our 54 agencies because of the U.S. territories and others that administer the unemployment insurance program. And so they’re looking at the data, we’ve just arranged to get that as well at the PRAC. And so we’re looking at that, and it is a major challenge. And the challenge is that we’ve got 54 separately administering programs. And so for example, we’ve identified in the Labor IGs, identified one case where the same security number was used to get benefits in 29 different states. Because isn’t that ability, or hasn’t been that ability in the past, to change that. We’re working with the administration, Gene Sperling, who leads the White House implementation team has been engaged with us in weekly meetings over the last year and a half. And this is one of the key issues that we’ve been talking about, how do you fix this problem?

Tom Temin: Yes, because this tool and the expertise you’re gaining, it seems to me could be repurposed for almost every federal program, grants, direct cash payments, you name it, even contracting to some extent, once you get this analytical chops sort of up to speed.

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Michael Horowitz: You’re exactly right. In fact, as the new inspector general at the Justice Department in a grant program, as you said, I first saw this problem we had found, and the Justice Department agency had found that a grantee was a high risk grantee, and should not get additional grants without close scrutiny. Well, it turned out another agency didn’t know that. And in the course of our investigation, we learned that other agency, at the same time the Justice Department itself, not us, had put them on a high risk list. The other agency didn’t know that and gave a grant, that can’t happen.

Tom Temin: Sure. And just give us a sense of how you are developing the algorithms. You must have a pretty sharp staff. Do you have contractor support to feed all of this, to gather the data to normalize it? I mean, it’s a big process on the technology front too, isn’t it?

Michael Horowitz: Yeah, it is. It’s a huge challenge. As everybody knows, it’s a challenge. Oftentimes, it’s federal government to recruit top tier talent in the IT space and the statistical in the statistician space, in the mathematics space. And we were fortunate in the Cares Act, the law that the first major pandemic relief law gave us that created the PRAC, gave us hiring authority to directly hire individuals. And we’ve used that to create what we call a data science fellows project. So we are looking to recruit and have recruited about two dozen tremendous, talented individuals who are recent graduates of colleges, graduate programs, who want to come and work for the federal government want to help in this huge national disaster relief effort. And so we have an unbelievably talented group we’ve set up a webpage, the public can go to our webpage pandemicoversight.gov Go to our analytics platform, you can see the biographies of the fellows we’ve been able to hire through this program. It’s an amazing group. And the great thing about it, Tom is, once these folks come on board, we’re gonna be able to have them get permanent jobs in the IG community, and hopefully recruit them to stay because our organization, the PRAC, sunsets in 2025. For example, my office has already hired one of those data fellows at DOJ OIG, they’re tremendously talented people. And we’re fortunate. And one of the lessons from this, by the way, is the federal government needs to mimic this across agencies to recruit top tier talent in the IT space.

Tom Temin: It seems like almost as if this whole project could be adopted by CIGIE, and somehow become a part of that so that it has that permanence. And doesn’t sunset like the PRAC itself.

Michael Horowitz: You’re exactly right Tom. In fact, that’s one of the things we’ve been talking with bipartisan legislators to do, which is in 2025, rather than repeat what happened in 2015, when the Recovery Board sunset and the abilities were lost, how do we continue that? How do we keep it going? And I’ve also talked about this with OMB leadership, and the White House team led by Gene Sperling. Everybody needs to think about 2025. It may seem like a long way away. But as all of us in the federal government know, we’re already budgeting for 2024. It isn’t far off.

Tom Temin: Sure. And let’s get to the dashboards that you opened up a few weeks ago. This was what it sounds like a dashboard, looking into the different programs. What does that show? And I guess, big question is, what is the take up in? Are people visiting the site and looking into the information?

Michael Horowitz: Yeah, no great question about that. One of the things we were committed to do from the outset, as the legislation required was on transparency, making sure the public knew where its money went. And also empowering them as citizen watchdogs, allowing them to report to us as they have been on potential fraud, other issues they’re seeing. The dashboards were initially what we created, and it’s still available, is people can use their zip codes, and get down to the zip code level on where the money went. The new dashboards allows people to dig down within each agency, and see how each agency has spent the money. So federal employees listening and want to know how their agency, the HHS, Department of Energy, Labor Department, wherever they’re working, they want to see how their agency has spent the money, they can drill down and see that, again, we’re about trying to empower users to get down to as granular a level as our data allows us to get that’s been a little bit of a challenge is being able to use the data to get to a granular level, the federal government needs to do better at that. But that’s what we’re doing.

Tom Temin: It seems like this matches, in some ways, the ongoing dashboard for I think it’s usa spending.gov. That’s been up for a number of years. It has its limitations, but it’s better than it was any correlation between the two and a way of maybe harmonizing them so that it becomes something comprehensive?

Michael Horowitz: So what we’ve and usaspending.gov, as you know, is grows out of the recovery boards.gov. That’s was the first initiative, what we’ve tried to do is take usaspending.gov’s data, which is useful, but not complete. Take that data as well as other data we’ve been able to get that isn’t on usaspending.gov. And that is what we’ve been able to bring together. But you’re right, the hope would be that we can our experience can help improve usaspending.gov, much like recovery board’s efforts launched usaspending.gov. That has to happen.

Tom Temin: And have you been monitoring it and seeing is it actually being visited and looked at?

Michael Horowitz: Yes. So we are using analytics platforms, we are getting 1000s of users regularly to our website. And what we have been trying to do and I think particularly effectively doing is on our through our Twitter account and others, constantly sending out messages. Folks who want to follow us by the way who are listening, go to our pandemicoversight.gov website and sign up for a Twitter account or go to Twitter and find us  on pandemic oversight. You will get regular messages. We just issued one on Halloween that viewers could see how many corn maze companies that ran corn mazes and haunted houses got loans, legitimate loans, just you know, people can look at that and see how much did the pandemic money help people, not just how much fraud was there.

Tom Temin: A Halloween without candy corn that would truly be un-American, I guess.

Michael Horowitz: That would truly be un-American as someone who loves candy corn, I agree with you although I will tell you it’s a controversial subject in my office whether you like it or don’t like it.

Tom Temin: Well, you just put the bowl out and see what people take up. And so what are your plans now for 2023 calendar as we as the year approaches, because we’re all on a CR  right now. So that’s that’s a ways off.

Michael Horowitz: So we have a few things going on in a significant way. One is obviously the investigations will continue. President Biden signed an extension of the statute limitations, bipartisan bill passed by Congress from five to 10 years so that work will continue. Its substantial and will continue sadly to grow. We’re continuing our other oversight work. So for example, we’ve been doing field work to try and understand at a granular level in communities across the country, how did this money help them? And what were the impediments to their ability to use the money. And so we’re finishing up that work, you can look for a report next year on that effort. We’re continuing to get data. We’re working right now, for example, to be able to match certain information we have with certain social security data from the law enforcement standpoint, because we think we found indicators of fraud there. And we’re going to continue that effort as well. And then we’ve put out already, as folks who visit our website will see, two reports on lessons learned, identifying challenges and problems that the federal government needs to think about going forward. We’re going to continue that effort and put out further reports as we identify and learn from our work. Because there’s a lot here that we’ve learned, as you might imagine, with $5 trillion of oversight. And as everybody who’s ever done this knows, there will be future emergencies, hopefully no pandemics, let’s wait another 100 years or more. But there’s earthquakes, there’s hurricanes, there’s fires, there’s natural disasters, Congress supports those efforts. And the public wants to make sure that all the tools that can be used are used to prevent fraud.

Tom Temin: Final question, getting back to the dashboard. Has it resulted in any whistleblower types of alerts or any kind of tips? Hey, I saw where this was in my zip code. And you know, Joe, over there ended up with a new Rolls Royce or something like that?

Michael Horowitz:
Absolutely. In fact, that’s why we keep putting this data out to to have the public, let us know about this. And you know what else we’re doing is we’re doing monthly and quarterly meetings with our state local counterparts. And we’re passing along to them fraud tips. So that not only are we doing work in the space, they’re on the grant, our state, local counterparts, state auditors, local auditors, state and local law enforcement. They’re the ones who are the first line defenders in many respects. So we’re doing that as well. That’s been a very important part of what we’ve been doing.

Tom Temin: Michael Horowitz is chairman of the Pandemic Response Accountability Committee, and inspector general at the Justice Department.

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