Justice Department strips stimulus watchdog of power

The leader of an agency overseeing federal stimulus programs said Friday that Treasury Department officials had resisted his attempts to investigate fraud in the Paycheck Protection Program, resulting in the Justice Department resolving the dispute by stripping the agency of its jurisdiction.

The Special Inspector General for Pandemic Recovery said he’d have to “stand down” as a result from investigating some of the most fraud-prone programs passed by Congress in 2020 during the coronavirus pandemic.

“The consequence is permanently reduced oversight of these programs,” Inspector General Brian Miller said in the report to Congress released late Friday night. “My only conclusion is that things are not working well.”

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Miller’s report followed an opinion by the Justice Department’s Office of Legal Counsel that Congress didn’t intend to include those programs in SIGPR’s jurisdiction. Instead, the Office of Legal Counsel said, the agency was responsible only for programs created by the Coronavirus Economic Stabilization Act, a smaller part of the overall Coronavirus Aid, Relief, and Economic Security Act, or CARES.

Miller, a former White House lawyer who was appointed by then-President Donald Trump last year, called on Congress to amend the law to give him explicit jurisdiction over the Payroll Support Program and the Coronavirus Relief Fund.

The Project on Government Oversight, a watchdog group, has tracked criminal charges against at least 209 individuals in 119 cases related to Paycheck Protection Program fraud in its first year. The organization said in a report earlier this month that of $445 million in illicit loan requests, “more than half of that amount — $246 million — actually went to accused fraudsters.”

“Treasury supports strong oversight, and we will continue to make sure all of our inspectors general, congressional committees of jurisdiction, and other oversight bodies have the information they need,” Alexandra LaManna, a Treasury spokeswoman, said in an emailed statement on Saturday.

— With assistance from Saleha Mohsin