[House Hearing, 118 Congress] [From the U.S. Government Publishing Office] ACTION THROUGH INNOVATION: PRIVATE SECTOR SOLUTIONS TO RECOUPING STOLEN PANDEMIC LOAN FUNDS ======================================================================= HEARING BEFORE THE COMMITTEE ON SMALL BUSINESS UNITED STATES HOUSE OF REPRESENTATIVES ONE HUNDRED EIGHTEENTH CONGRESS FIRST SESSION __________ HEARING HELD SEPTEMBER 27, 2023 __________ [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] Small Business Committee Document Number 118-027 Available via the GPO Website: www.govinfo.gov __________ U.S. GOVERNMENT PUBLISHING OFFICE 53-334 WASHINGTON : 2024 ----------------------------------------------------------------------------------- HOUSE COMMITTEE ON SMALL BUSINESS ROGER WILLIAMS, Texas, Chairman BLAINE LUETKEMEYER, Missouri PETE STAUBER, Minnesota DAN MEUSER, Pennsylvania BETH VAN DUYNE, Texas MARIA SALAZAR, Florida TRACEY MANN, Kansas JAKE ELLZEY, Texas MARC MOLINARO, New York MARK ALFORD, Missouri ELI CRANE, Arizona AARON BEAN, Florida WESLEY HUNT, Texas NICK LALOTA, New York NYDIA VELAZQUEZ, New York, Ranking Member JARED GOLDEN, Maine KWEISI MFUME, Maryland DEAN PHILLIPS, Minnesota GREG LANDSMAN, Ohio MORGAN MCGARVEY, Kentucky MARIE GLUESENKAMP PEREZ, Washington HILLARY SCHOLTEN, Michigan SHRI THANEDAR, Michigan JUDY CHU, California SHARICE DAVIDS, Kansas CHRIS PAPPAS, New Hampshire Ben Johnson, Majority Staff Director Melissa Jun C O N T E N T S OPENING STATEMENTS Page Hon. Roger Williams.............................................. 1 Hon. Nydia Velazquez............................................. 2 WITNESSES Mr. Richard C. Breeden, Chairman, Breeden Capital Management, LLC, Lantana, FL............................................... 5 Mr. JT Taylor, Senior Director of Fraud Investigations and Operations, ID.me, Mclean, VA.................................. 6 Mr. Dean Zerbe, National Managing Director, Alliantgroup, Washington, DC................................................. 8 Ms. Linda Miller, Former Deputy Executive Director, PRAC, Currently Chief Executive Officer of Audient Group, LLC, Washington, DC................................................. 10 APPENDIX Prepared Statements: Mr. Richard C. Breeden, Chairman, Breeden Capital Management, LLC, Lantana, FL........................................... 33 Mr. JT Taylor, Senior Director of Fraud Investigations and Operations, ID.me, Mclean, VA.............................. 46 Mr. Dean Zerbe, National Managing Director, Alliantgroup, Washington, DC............................................. 68 Ms. Linda Miller, Former Deputy Executive Director, PRAC, Currently Chief Executive Officer of Audient Group, LLC, Washington, D.............................................. 82 Questions and Answers for the Record: Questions from Hon. Velazquez to Ms. Linda Miller and Answers from Ms. Linda Miller...................................... 86 Additional Material for the Record: Discussion Draft............................................. 88 ACTION THROUGH INNOVATION: PRIVATE SECTOR SOLUTIONS TO RECOUPING STOLEN PANDEMIC FUNDS ---------- WEDNESDAY, SEPTEMBER 27, 2023 House of Representatives, Committee on Small Business, Washington, DC. The Committee met, pursuant to call, at 9:58 a.m., in Room 2360, Rayburn House Office Building, Hon. Roger Williams [chairman of the Committee] presiding. Present: Representatives Williams, Stauber, Meuser, Salazar, Molinaro, Alford, Bean, LaLota, Velazquez, Phillips, McGarvey, Gluesenkamp Perez, Scholten, Chu, and Davids. . Chairman WILLIAMS. Good morning. Before we get started I want to recognize our colleague from the great state of Missouri for the prayer and the pledge. Would you please stand? Mr. ALFORD. Let's go to God in prayer. God, we are just so thankful to be here today on this Small Business Committee. We ask a blessing on our Chair and our Ranking Member that they will guide us and direct us as we question the witnesses today and give us discernment and wisdom, God, that you will help us with our votes to lead this great nation to greater prosperity through small business, the fabric of America, God. Through Jesus Christ I pray. Amen. I pledge allegiance to the flag of the United States of America. And to the Republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Chairman WILLIAMS. Good morning, everyone. And I now call the Committee on Small Business to order. Without objection, the Chair is authorized to declare a recess of the Committee at any time. I now recognize myself for my opening statement. Welcome to today's hearing where we will be looking at the unacceptable amount of fraud that occurred during the COVID-19 pandemic and what could be done to recoup those stolen taxpayer dollars. During the pandemic, the SBA took an outsized role in helping America's economy. The PPP and the EIDL loan programs were incredibly important for our nation's entrepreneurs and allowed many businesses to keep their doors open throughout all the uncertainty. However, the after action reports show that these programs were extremely susceptible to fraud. The OIG estimates that $200 billion dollars in taxpayers' money were given out to bad actors which accounts for almost 20 percent of all pandemic lending. This is completely unacceptable and we must find ways to rectify these issues. If we keep doing business as normal, the OIG says that they will have more than 100 years of casework to go through in order to properly investigate all the loans that have been tagged as fraudulent. In the private sector, if there was an accounting hole of this magnitude, the business owners would do all they could to get his receivable back into the bank account. This Commitmtee is working to find creative solutions to do just that and recoup the stolen pandemic funds for the taxpayers. I am proud that in our last two markups, this Committee passed four COVID fraud bills that must be done to recover those stolen dollars. We cannot allow the American taxpayer to be on the hook for 200 billion, and we must do a better job to maintain public trust that this level of fraud was an isolated event. I look forward to discussing with our witnesses' innovative ideas on how to catch fraud early and ensure hard-earned taxpayer dollars are being used for their intended purpose. This could mean greater use of data matching tools and proving interagency collaboration or mandating more strict standards for identity verification in any program that gives out taxpayer dollars. Additionally, we must find a better way to recover stolen funds on the back end. There will always be fraudsters and criminals looking to take advantage of any government program that is giving our money but we must have the ability to catch these bad actors and bring them to justice so they will not be able to continue defrauding the American people. Regardless of what solutions are brought to the table, it is clear we cannot continue with business as usual. Too many times in government we hear that something can't be done or that isn't how it was done in the past. Well, the private sector does not think like this. They encounter a problem; they immediately go to work and then they fix it. I am excited to hear from our witnesses today on new ways we can work to prevent and detect fraud moving forward. I thank all our witnesses for being here, and I look forward to this discussion. With that I will now yield to the distinguished Ranking Member from New York, Ms. Velazquez. Ms. VELAZQUEZ. Thank you, Mr. Chairman. We are here today to discuss the SBA's efforts in recovering fraudulent loans and preventing future fraud. Over the past 3 years, this Committee has played an integral role in examining the pandemic relief programs which helped millions of small businesses stay afloat in unprecedented times. Approximately $1.2 trillion of economic aid was dispersed through SBA's pandemic relief programs over the course of the pandemic, with much of that originating in the first 9 months of the pandemic under the Trump administration. While there may be disagreement on the actual estimates of fraud, it is clear we need to work together to protect the integrity of SBA programs from bad actors. The SBA under the leadership of Administrator Guzman has taken strong steps to root out fraud in the pandemic relief programs and put strong controls in place to prevent future fraud. Earlier this year we heard testimony from Administrator Guzman that SBA is doing just that. In 2022, SBA established a Fraud Risk Management Board aligning its practices with GAO's oversight policies. A new role was also created-the SBA's Special Counsel for Enterprise Risk to advise the Administrator on fraud and risk management activities. The agency continues to work collaboratively with the SBA Inspector General, the interagency COVID-19 Fraud Enforcement Task Force, and the Department of Justice to recover stolen funds. With that said, we must be clear. The SBA is not an investigative agency, and it does not have a team of auditors, investigators and attorneys, or state-of-the-art data analytics technology to root out and prosecute fraud. That is the role of the Inspector General. It is important that we understand the difference between the missions of the SBA and the Office of the Inspector General if we are going to effectively develop policies to prevent and recover fraud. To that end, the single, most important action we can take to combat fraud is to fully fund the Inspector General's budget request. Unfortunately, their budget for fiscal year 2024 was slashed from 47.7 million to 32 million in the House Financial Services and General Government Appropriations Bill. We are just days away from a government shutdown which will limit the OIG's and law enforcement efforts to recover fraudulent funds. Put simply, this is unacceptable. We must take our responsibilities seriously. In the last Congress, I joined with Representative Luetkemeyer to sponsor legislation to extend the statute of limitations for fraud in PPP and EIDL to 10 years. These two bills which became law sent a strong message that unscrupulous behavior would not be tolerated and that those who commit fraud will be held accountable in the years to come--but it is all for not if we do not give the Inspector General the resources it needs. I look forward to hearing from our witnesses today, and I am certainly open to new, creative ideas provided we are committed to fully funding the Office of the Inspector General and the law enforcement community. Thank you, Mr. Chairman. I yield back. Chairman WILLIAMS. Thank you very much. And I will now introduce our witnesses. The first witness here with us today is Mr. Richard Breeden. Mr. Breeden is the Chairman of Breeden Capital Management, LLC, located in Greenwich, Connecticut. Mr. Breeden founded Breeden Capital Management in 2005 focused on taking concentrated investment stakes in mid-cap companies and supporting staffs to improve shareholder value. In addition to serving as the Chairman of Breeden Capital Management, he also serves as Chairman of the Nominating and Governance Committee of the Board of Steris PLC and is a trustee of the George H. W. Bush Presidential Library. Prior to starting his company, Mr. Breeden served as the 24th Chairman of the U.S. Securities and Exchange Commission, as well as several positions under Presidents Reagan, Bush, and Clinton. Mr. Breeden attended Stanford University where he received his B.A. and went on to attend Harvard Law School where he earned his J.D. Mr. Breeden, thank you for being with us today, and we look forward to the conversation that is ahead with you. Our next witness with us today is Mr. JT Taylor. Mr. Taylor is a senior director of Fraud Investigations and Operations at ID.me located in McLean, Virginia. ID.me allow individuals to securely verify their identity online, helping to prevent fraud and abuse. Prior to his time at ID.me, Mr. Taylor worked for the U.S. Secret Service as a special agent, as a supervisory intelligence operations officer for the Office of the Director of National Intelligence, and as an intelligence officer for the U.S. Navy. Mr. Taylor went to West Virginia. They play TCU this Saturday. I did not know if you knew that or not. Where he earned his bachelor of science in management information systems, as well as Norwich University where he earned his master of science, and Louisiana State University where he earned his master of business administration. Mr. Taylor, thank you for joining us today, and we look forward to our conversation. The next witness with us today is Mr. Dean Zerbe. Mr. Zerbe is the national managing director of Alliantgroup located in Houston, Texas. At Alliantgroup, Mr. Zerbe is responsible for monitoring tax-related legislative activities here in Washington to keep clients and staff informed and help direct Alliantgroup service offerings to ensure client needs are met. Prior to his time at Alliantgroup, Mr. Zerbe was senior counsel and tax counsel to the Senate Committee on Finance where he worked with the Chairman of the Finance Committee, Senator Grassley on tax legislation. During this time on the Finance Committee, he was involved with almost every piece of tax legislation signed into law including the 2001 and 2003 tax reconciliation bills among others. Mr. Zerbe holds an LLM in taxation from NYU and J.D. from George Mason University. Mr. Zerbe, thank you for joining us today. We look forward to our conversation that is ahead. And I now recognize the Ranking Member from New York, Ms. Velazquez, to briefly introduce our last witness appearing before us today. Ms. VELAZQUEZ. Thank you, Mr. Chairman. Linda Miller served as the Deputy Director of the Pandemic Response Recovery Committee. She is one of our country's foremost experts on preventing and detecting fraud. Prior to launching her own consulting business, she was a Principal at Graham Thornton where she led the firm's fraud and financial crimes practice. She was also the Assistant Director in the forensic audits and investigative service group at the Government Accountability Office. She has a wealth of experience and has dedicated her career to helping organizations identify and manage fraud. Welcome, Ms. Miller, and I look forward to your testimony. Thank you. Chairman WILLIAMS. Thank you. And again, I appreciate all of you being here today. Real quickly, just as a reminder, before recognizing the witnesses I would like to remind them that their oral testimony is restricted to 5 minutes in length. And if you see the light turn red in front of you it means your 5 minutes has concluded and you should wrap up your testimony. If you go too long I will give it a little of this (gavel tapping). You will hear that. Okay? I now recognize Mr. Breeden for your 5 minute opening remarks. STATEMENTS OF RICHARD BREEDEN, CHAIRMAN, BREEDEN CAPITAL MANAGEMENT, LLC; JT TAYLOR, SENIOR DIRECTOR OF FRAUD INVESTIGATIONS AND OPERATIONS, ID.ME; DEAN ZERBE, NATIONAL MANAGEMENT DIRECTOR, ALLIANTGROUP; LINDA MILLER, CEO, AUDIENT GROUP, LLC STATEMENT OF RICHARD C. BREEDEN Mr. BREEDEN. Thank you very much, Chairman Williams, Ranking Member Velazquez, Members of the Committee. I am honored to be here and appreciate your invitation. For about 35 years, perhaps a little more, about half my life, I have been involved in efforts to combat fraud, to help victims of fraud overcome the ravages of the crimes committed against them, and in many cases to try and recover money that has been stolen from the public. I have done that in a variety of settings in both the public sector and the private sector. I worked in the White House under Presidents Reagan and George H. W. Bush, 41, and during the time working in the White House for 41 I was very actively involved. One of the principal draftsmen of the legislation known as FARIA that helped solve the savings and loan crisis, which has involved a great deal of fraud and the legislation contained quite a few provisions intended to help recover the monies that had been involved in fraudulent loans. I was Chairman of the SEC for just under 4 years, and every single day involved fighting fraud. That is what the SEC does among other things but it is a never ending struggle and in any marketplace there are people who will abuse the market. And the SEC, for every day I was there, we were involved in antifraud efforts. And for the last 20 years I have administered a series of funds for victims of fraudulent activity. The last few years I have served as head of the Madoff Victim Fund on behalf of the Justice Department, and my firm works for both the Department of Justice and the SEC in administering funds for victims. A big part of that work is making sure to help make sure that the money in these funds makes it to the intended victims is to make sure that we identify and block false claims. So your topic today is very important. It is near and dear to my heart but it is important to taxpayers, to the SBA and its work and to faith in our institutions. So it could not be more important. About 11.4 million loans were made in the pandemic programs. In our work over the last 35 years, I have never seen a program with fraud incidents lower than roughly 30 percent. If government puts up a billboard that says, ``free money, apply here,'' lots of people will come. And unfortunately, not all of them are entitled to participate. So I think the estimates, we will never know the total amount of fraud but the estimates even at the high end of 200 billion could be conservative. That is just the world we live in. And I think it is important as was mentioned to remember the time pressure that we were under and the great, great good that these programs accomplished. And nothing in the later efforts should take away from that. The amount of fraud, the SBA has estimated 25 billion; GAO, 200 billion. It could be 400 billion. We will never know. There was an ocean of fraud and now the question is how much of the improper funds can we get back? There are a lot of ideas. My written testimony lays out a number of ideas as do the other witnesses. But I think overall the 100 years of fraud and 100 years' worth of investigations that I certainly have no problem. When I was at the SEC, we were always trying to make sure we had enough resources. And making sure that OIG has enough resources is an important question. But we do not have 100 years. And if we give them more resources, and it takes 3 to 5 years to train somebody to know what they are looking for, our time, and even on an extended statute of limitations will run out. So the goal to me should not be let's figure out how to get 100 years to 93 years or 86 or 72l; it is how do we accomplish the most we can possibly accomplish over the next 5 years. To do that I would say we have to supplement the resources that exist, whether at current levels or enhance levels, but find ways to break up the caseload, bring other people onto the playing field, and use the private sector to go after some of the bad actors. I suggest in my testimony forming small groups, private sector contractors. Medicare and Medicaid do something similar. The SEC does it. The DOJ does it. Other agencies do it so I am not certainly having something totally innovative but in this area I think it could pay great dividends. Most importantly is to have a mentality of an outrageous sense of urgency here to get after this problem and get as much done as possible. Thank you, sir. Chairman WILLIAMS. Thank you. And I now recognize Mr. Taylor for his opening remarks. STATEMENT OF JT TAYLOR Mr. TAYLOR. Thank you, Mr. Chairman. Chairman Williams, Ranking Member Velazquez, and Members of the Small Business Committee, I am honored to be here today. My name is JT Taylor, and I serve as the senior director of fraud at ID.me. Before this role I dedicated a significant portion of my professional career to the U.S. intelligence community and the U.S. military, serving in both as an intelligence operations officer. Later, I served as a special agent with the United States Secret Service, where I led a series of pivotal domestic and international fraud and cybercrime investigations. My tenure in intelligence operations and my investigative endeavors have granted me a comprehensive and nuanced perspective on the challenges inherent to digital fraud and cyberthreats. When the pandemic gripped our world, governmental bodies like the Small Business Administration and the Department of Labor stood on the frontlines swiftly allocating relief funds. However, haste led to vulnerabilities in security and identify verification. The SBA's Office of Inspector General identified worry signs. Numerous IP anomalies pointed towards foreign intrusions and coordinated fraud attempts. The misuse of employer identification number was rampant with multiple PPP loans under single EINs. Furthermore, there was a starting discovery of businesses declaring post-deadline establishment dates and recurring use of identical contact details across different applications. The funding system supporting these initiatives are intrinsically linked with the broader business ecosystem. Conventional practices involve businesses contributing to benefit funds calibrated on their workforce size. But the massive, unexpected unemployment claims threaten this balance. State debts have increased and there is now an impending risk of businesses, particularly smaller ones, facing escalating per employee taxes. This is a multi-dimensional problem with repercussions for the entire U.S. economy. The pandemic served as a double-edge sword. On one side is unveiled resilience and adaptability of our institutions. On the other it exposed areas where we were woefully unprepared, chiefly in the arena of cybersecurity and fraud detection. In these challenging times, states sought robust, scalable solutions. Twenty-seven states turned to ID.me which is not just another tech company but a leading credential service provider. Independently certified against rigorous standards set by the National Institute of Standards of Technology, ID.me embodies the pinnacle of digital identify verification. Supporting a user base exceeding 113 million, the impact of ID.me on fraud prevention has been profound. Partner states witnessed transformative results. Fraud rates drastically diminished. Authentic claims experienced seamless processing and financial savings were substantial. Beyond the monetary gains, the rejuvenation of public trust in an era when faith in public institutions is fragile is invaluable. In this digital era, standards like this curated by NIST are not optional but foundational. Overlooking these guidelines as seen sporadically during the pandemic leads to compromising security. In today's digital world, data has emerged as a prime commodity. Amid this landscape, data brokers who amass, refine, and frequently monetize user information have risen in prominence. Although they often work within current legal constraints, their vast data repositories offer a Goldeneye for malicious entities. The financial drain due to digital fraud during the pandemic serves as a testament to the perils posed by easily accessible data. There is an urgent need for our defense mechanisms to adapt considering this threat landscape. A comprehensive strategy that merges the strengths of both the private and public sectors is imperative. The Macomb School of Business from the University of Texas at Austin revealed that a concerning 11 percent of PPP loans exhibited suspicious traits. Notably, the top 12 lenders with the highest rates of suspicious loans are all Fintech lenders. Given the disparity between the statute of limitations for bank fraud and wire fraud, it is imperative that Congress takes action to address the inconsistency, particularly in the context of the PPP loans. In addressing the multifaceted nature of fraud, a dual pronged approach is essential. First, we bolstered the collaboration of data sharing across agencies. By harnessing the capabilities of the Pandemic Analytic Center of Excellence and fostering deeper ties within the private sector, we can integrate data matching earlier in the benefit payment cycle. Simultaneously, it is crucial to democratize data validation tools. The Social Security Administration's electronic consent based Social Security Number verification tool, currently exclusive to financial institutions, should be extended to approve credential service providers. Such an expansion would ensure equitable access benefitting a broader demographic and further strengthening our antifraud measures. Agencies should adopt digital identity solutions such as those perfected at ID.me with strict adherence to the NIST 800- 63-3 guidelines. This ensures robust identity proofing minimizing fraudulent access and upholding the integrity of public portals. In our collective journey--and the challenges of the pandemic, it is imperative that we absorb its lessons. Our trials and triumphs underscore the essence of teamwork, innovation, and unwavering commitment to establish identity verification protocols. Whether it is the commendable work by organizations like ID.me or the diligent oversight by entities like SBA OIG, we have seen the potency of dedicated efforts. We are urged to build on this momentum, reinforce our defenses, honing our strategies and equipping ourselves better. The American people deserve benefit programs that prevent, detect, and recoup fraudulent payments. I thank the Committee for this platform, and I am happy to answer any questions you may have. Chairman WILLIAMS. Thank you very much. And let me just say this. You are going to see people coming and going. They are not leaving. We have got other hearings. They will come, they will leave, and so forth, so if that is something you were wondering about that will happen. Next, I want to recognize Mr. Zerbe for his 5 minute opening remarks. STATEMENT OF DEAN ZERBE Mr. ZERBE. Thank you, Mr. Chairman. Thank you, Ranking Member, for having me today at this important hearing about how to recover funds that were put forward in the SBA COVID Relief Program. I am coming forward today to talk about a specific bipartisan solution that has had bipartisan results over the years recovering billions of dollars in other government agency programs, namely basically rewarding and incentivizing whistleblowers to come forward and lay out the details of fraud that they are seeing. Just as a quick background on me, Mr. Chairman. You laid it but specific to this you said I worked for Chairman Grassley on the Senate Finance Committee. I wrote the IRS whistleblower law that then served as the model for the SEC whistleblower law and the CFTC and other government programs. And I now also practice as an attorney in this area representing whistleblowers. I would just say that the benefits of a whistleblower program are pretty straightforward. First of all, you have to understand in fraud, fraud is purposely being hidden. It is hidden in the nature of it. If you want to get it, you have got to get insiders with informed, knowledgeable detailed information. That is how you uncover fraud, and study after study has shown that. And we have seen that, for instance, in the IRS programs. They did not know beans about what was going on with offshore accounts until a whistleblower came in and blew it all out for them. The whistleblowers give you the keys to the kingdom in terms of what is going on. So they are a proven way to do it. I think in particular that it is useful for the SBA to consider this because of the resource limitations and where they are going. The idea of the whistleblower is that they are going to help the government agency, whichever it is, better target and package and go after the bad actors. In other words, when I am filing a whistleblower complaint, I can assure you it is with a bow on it and on a T-ball in terms of what I am trying to do because I want to provide a narrative of what is going on. I want to provide all the documents. I want to provide everything from teeth to tail of what is happening. Why? Because I want to get the agency to move so that my client can get paid. So you are doing a lot of the lift for the agency in terms of assisting them in terms of the work. You are also doing a better job for the agency of helping them target the bad actors. Even the best government agency has a difficult time identifying, okay, who is really here? You have the whistleblower coming in. They know who the bad actor is. They have got the goods on them and they are much better at identifying, which actually is the positive of leaving the honest folks out there alone. So you are better targeting resources as well, too, with that. So I think with the SBA that is good. I think another thing that is helpful here is in reading the SBA IG's reports, they clearly have a culture of embracing whistleblowers and that is terrific. Clearly, they are bringing folks in. They are taking that. One of their biggest cases that they mentioned in the white paper was hundreds of millions of dollars from one whistleblower. And what you are trying to do is build that out and encourage more whistleblowers to come forth, particularly well placed, knowledgeable, informed insider whistleblowers that are coming forward. So I think you are benefitting from the fact that the SBA already has got a welcome mat forward and you are trying to expand beyond that in terms of it. One thing I think will be music to ears--since the time from being a staffer on the Senate side is CBO should score this. They should score this as a revenue raiser. They have scored other money. I am sorry, other whistleblower programs. The AML bill that just passed scored $4 million. I think all these scores are low by the way. For instance, my program, they scored it out at I think a few hundred million dollars joint tax. It has brought in billions of dollars since it came in. But they will score it and your staff will work with them and I am sure get that there. The other thing I want to mention is the deterrent ability of whistleblowers. Look, when you are out there as a fraudster and all you are thinking is, well, I have just got to get it by those folks over at the agency, that is one calculation. If you have got a whistleblower program they have got to say, okay, well, now I have got to trust everybody else in this room. I have got to trust my banker, my secretary. Any of them can dime me out. And so it changes dramatically the way the equations go of can I get away with it? It also affects their behavior. What we find in tax is that they are constricting who is involved. They try to limit what it is so it has an impact on their behavior. It has a deterrent impact as well, too. The last thing I would just note just on a highlight, my written goes into it more, I think four hallmarks for a good whistleblower program, one having a mandatory award program, not discretionary. Have a floor and a ceiling based on the amount recovered broadly defined. You want a dedicated payment so that the funds are there. You are not having to go run to the approp boys to get dollars for it. And these are standard by the way. What I am laying out is what we have in all the whistleblower award programs. Have an established office within OIG that wakes up thinking about the whistleblowers and is putting out the welcome mat for them. And then you have independent review. The whistleblower, look, when you are getting very good whistleblowers I am getting not just, you know, Billy in the dark room. I am getting the vice president of Tax coming forward. They are putting their life at risk in terms of doing this. They need to have confidence. It does not mean they are going to be guaranteed a payment but if their provided information is used and it ends up collecting money, they are going to get a fair shake and that somebody independently is going to look at that. It is not just to the whim. So I thank you, Mr. Chairman, having me here today. I appreciate it very much. Chairman WILLIAMS. Thank you very much. And now we recognize Ms. Miller for her 5 minute opening remarks. STATEMENT OF LINDA MILLER Ms. MILLER. Thank you, Chairman Williams, and Ranking Member, Ms. Velazquez, and Members of the Committee. I sit here today as a former Olympic athlete, a former government executive, a former partner at a large accounting firm, and a small business owner. And I am bringing all of those perspectives to my comments today. I spent my career working to help the government fight fraud. I led the development of the GAO framework for managing fraud risks in federal programs, and worked with Congress to draft the Fraud Reduction and Data Analytics Act of 2016. When I was the partner at Grant Thornton, my team led the development of the Treasury Antifraud Playbook. I sat on the task force that developed the COSO Fraud Risk Management Guide which governs the private sector. I serve on the Advisory Panel of U.K. Public Sector Fraud Authority. And I sit as a Member of the Identity Theft Resource Centers Biometric Working Group. As soon as PPP and COVID EIDL programs were unveiled, those of us in the fraud world saw this as a field day for fraud actors. We did not have to think about it to see how much fraud was going to happen in these programs. An example, the COVID EIDL grant program was essentially money that was known to not need to be repaid back. Anybody that applied for that money got it without having to provide any eligibility information. And you know, at that point the only thing keeping somebody from stealing that money was their own moral compass. And that is not exactly a good fraud control. At that time, the fear and desperation of America's small business was such that the decision to get this money out with few, if any controls to verify the eligibility of the information provided by borrowers was widely accepted. Speed was the goal. From celebrities stealing PPP loans and buying luxury cars to adversarial nation state actors executing coordinated and elaborate schemes, there were staggering levels of fraud in these programs. The finger of blame can be pointed in several different directions and it has been over the last 3 years. SBA had not seriously considered fraud risks prior to the pandemic and it was unprepared for the breadth and the sophistication of the adversary. Congress created program rules and time pressure that made it nearly impossible for the SBA to verify the eligibility of applicants. And unscrupulous lenders looked for ways to game the system and pocket outrageous profits and fees. Today, the work of clawing back the stolen pandemic loan funds is left to the SBA OIG and its law enforcement partners. As the deputy executive director of the PRAC, I worked closely with Mike Ware, SBA's Inspector General. IG Ware and his team have worked tirelessly to investigate and prepare for prosecution thousands of fraud cases and the work has only begun. Thanks to this Committee, Congress has recently extended the statute of limitations on pandemic fraud to 10 years. And given the caseload, the IG is going to need at least that long to bring fraud actors to justice. For the past 3 years, the SBA Inspector General's work has yielded a 200 percent return on investment. But its backlog is enormous and the office is stretched thin. This is not the time to cut the Inspector General's budget. Funding the IG at his requested levels will ensure this exceptionally productive work can continue. But the backlog is not just with investigators. Bringing fraud actors to justice requires prosecutors to try those cases. The U.S. attorneys are also stretched thin, and there is no shortage of high quality cases to prosecute. Innovation in recouping pandemic loan fraud must require more than simply putting good cases on the U.S. attorneys' desks. Today's hearing is also exploring the role of identity theft in pandemic loan programs, so it is important to note that identity theft plays a role in loan fraud, but it was not the largest driver of fraud in PPP or COVID EIDL. Front end identity verification technology, including remote biometrics, is but one tool in SBA's toolset and it is by no means a panacea. Fraud actors created shell companies, often using stolen information to apply for loans. But this type of identity theft base fraud is uncovered through conducting due diligence on the information in those applications and SBA has done quite a bit more of this due diligence to date. They now require tax transcripts of loan applicants. They use vendor information to verify a bank account. And they flag certain EIN prefixes, none of which was done at the start of the pandemic. Despite these improvements, SBA does have more work to do. They have to continue to mature their preventative antifraud capabilities. They must adopt a culture that is conducive to fraud risk management and they have to collaborate with the OIG to ensure that lessons learned are incorporated into their antifraud controls. I was a rower in the 2000 Olympics, and as such I know a thing about teamwork. My career has straddled the public and private sectors for a reason. Because I believe that the government and the private sector make a powerful team. The government relies on the private sector innovation, and the private sector requires services like main street saving loan programs that only the government can provide. I look forward to discussing the productive ways the private sector can assist the government in recovering loans and preventing fraud going forward. Thank you. Chairman WILLIAMS. Thank you very much. And good job on the 5-minute rule. It is great. I will now recognize myself for 5 minutes. When I first heard about the 200 billion dollars in potential fraud in the SBA pandemic lending programs, it made me think about how a business owner would act in this situation. They would have to decide whether they do all they can to collect the $200 billion that is on their books as a receivable, or to write it off as a loss. No private entity has the luxury of writing off such a massive number, so I think it is our duty to be good stewards of the taxpayers and find ways to give this money back which we have already begun to talk about. The SBA's Inspector General told us that they currently have over 100 years of casework if they are going to investigate all the loans that have been flagged for fraud. This is obviously an impossible task and there must be a better way to help them get this money back. So Mr. Zebre, during your time as senior counsel to the Senate Finance Committee, you crafted legislation under Senator Grassley to overhaul the IRS whistleblower program as you said and my team and I are exploring the idea of creating a similar, self-sustaining program which will allow any citizen to collect a commission if they report COVID fraud that results in money returned to the Treasury. So the question is, do you think it would be possible to create this type of program that would empower every day Americans to report fraud? And what are some of the things we should be aware of as we look to create this program? Mr. ZERBE. I think that is an excellent question, Mr. Chairman. I have seen it. A number of government agencies have created these whistleblower award programs. And so I think very much SBA is a good possibility in terms of also looking at creating a whistleblower award program. You already have the Qui Tam False Claims Act where they are bringing a few cases in right now from attorneys from whistleblowers and that has had some success. But I think having in parallel with that an in- house whistleblower award program will very much be a way to, as you say, commission to bring in the energy of the whistleblowers that are attorneys, that are advisors, to help the SBA move forward. So yes, I think it is a very good candidate for the SBA to look at doing. Absolutely. Chairman WILLIAMS. Great. Thank you. Mr. Breeden, you are currently working as special master for the victims of Bernie Madoff's Ponzi scheme. This requires you and your team to go through massive data sets to find out what claims are legitimate and which ones are fraudulent. So the question is, can you speak on how massive financial recovery is possible when there is such a large quantity of data to go through? Mr. BREEDEN. Yes, sir. It is definitely a challenge. In the Madoff Victim Trust which I administer we have had about 70,000 claims covering $80 billion in claimed losses. We have approved about 10 billion of that. So there is always a significant difference. And some of it is legitimate, and some not between what gets originally claimed and what you end up approving after you have reviewed it very carefully. We have had data documents, brokerage statements and so on from victims going back 20 years. Millions of pages of documents covering hundreds of thousands of transactions. And I love technological systems. Our company, our victim trust, we use systems to scan things all the time. But the most effective tool is an experienced person sitting looking at the analytics and deciding that there is a problem that needs greater follow up. So big data can do a lot of things but it is not going to haul crooks in to identify and have someone go after them. So it is a mix of systems and trained people. And one of the problems we have today is starting now to bulk up investigative resources in the SBA, for example, that is great but it takes 3 to 5 years to mint somebody that really knows what they are looking at. And so you have got to lag ineffectiveness. I think it is still possible. We have done the Madoff work and identified thousands and thousands of improper loans, and some that were referred for prosecution and that have generated recoveries but that is not our principal role, with a relatively small group of people. And that is why I think the combination of mini-SWAT teams that are focused on recovering money and focused on reading the, you know, out of 12 million loan files. All right. Suppose you took the 100,000 largest loans and have people who know what they are looking at read the files and look at where are the cases that are best cases to prosecute? Chairman WILLIAMS. Thank you. My time is up and I now recognize the Ranking Member for 5 minutes of questions. Ms. VELAZQUEZ. Thank you, Mr. Chairman. Ms. Miller, we have established that the Inspector General and law enforcement are the lead organizations to investigate and recover fraudulent monies. What is the most important action that we can take to help recover stolen funds? Ms. MILLER. Well, if we want to recover stolen funds, the action needs to be focused at the IG because the IG and the law enforcement partners of the IG are the only entities who have the authority to do investigations and prepare cases for prosecution. Ms. VELAZQUEZ. In your opening statement, you mentioned the fact that we passed the law to extend to 10 years to go after the bad actors. Through the legislation we gave them, OIG, more time but now they need the resources. If the OIG is not fully funded we will not be able to capitalize on these two new laws; correct? Ms. MILLER. Correct. Ms. VELAZQUEZ. Mr. Zerbe, IG Ware testified before our Committee that their HUD line produced 90,000 actionable leads that will take more than 100 years to examine. The law enforcement community has said they need more resources to investigate, prosecute, and recover fraudulent monies. How does your proposal meet the needs of the law enforcement community and improve prosecutorial outcomes? Mr. ZERBE. Thank you for that. Just one quick note. When you are talking about Mr. Madoff, I cannot help but note that it was a whistleblower, Mr. Markopolos, that revealed Mr. Madoff. Just as an aside. I think that is an excellent question. I think it is twofold. When you are incentivizing whistleblowers, it is one thing to get a tip that they may get at SBA that is of some use but these tips kind of tend to be, hey, I saw a guy at a bar and he had a fancy car. I mean, they are not that useful a lot of them. And when you are incentivizing a whistleblower and encouraging, they are going to come in with a full package. They are going to come with a lot more detail, much more robust assistance in terms of what is going on. So really helping the agency do its work. So helping them expand their work. But to your point, too, and one thing to consider, maybe this is a way to split the baby is that a number of the whistleblower award programs do allow for a partial recovery of the funds for the IG shop itself. In other words, HHS IG with the Qui Tam program. They basically get reimbursement for their investigations. CFTC similarly with their whistleblower program, they get to reimburse their costs for their expenses for these whistleblower programs. So it kind of aligns everyone's behavior. So something maybe for the Committee to think about of a way to finesse the issue. But that would be now it is. Primarily, it is allowing the agency to work more expeditiously, ma'am. Ms. VELAZQUEZ. Thank you. Ms. Miller, in your view, would this proposal be a more cost-effective way to recover fraudulent funds as opposed to fully funding the Office of Inspector General and the law enforcement community? Ms. MILLER. I mean, I would not say that we should do that instead of fully funding the Office of Inspector General. I could not speak to how much that is going to improve prosecutorial outcomes but it is possible. It will cost money. You will have to create an office, and you will have to pay those people salaries. And so the scoring could come back. Ms. VELAZQUEZ. Here we are at the brink of a government shutdown over the budget; right? Ms. MILLER. Right. Exactly. Ms. VELAZQUEZ. Okay. Mr. Taylor, privacy advocates have concerns about the large amount of data ID.me collects to verify users' identities--data like Social Security numbers, military records, bank and credit card records, biometric data, and government documents. Does your company share this data with third parties? Mr. TAYLOR. Thank you for the question, Ranking Member Velazquez. I appreciate it. Our privacy policy is one of the most robust in the industry. I would counter that our privacy policy is actually even more stronger than the average grocery store that you visit on a daily basis. We do not do any type of selling or trading of personal data. Additionally, from a standpoint---- Ms. VELAZQUEZ. To be clear, you do not sell or share this data with third parties? Mr. TAYLOR. That is correct, ma'am. Ms. VELAZQUEZ. Okay. Mr. TAYLOR. No selling or trading---- Ms. VELAZQUEZ. Does ID.me benefit monetarily from the data provided by American citizens? Mr. TAYLOR. ID.me makes money via the actual identity verification itself and successful transactions, meaning successful identity verifications versus transaction based. Ms. VELAZQUEZ. Thank you. Mr. Breeden, based on your experience overseeing the Madoff Victim Fund, could you please share any lessons learned from your experience that could help law enforcement recover from pandemic fraud? Mr. BREEDEN. Well, thank you. In addition to Madoff I did WorldCom and Enron and British Petroleum and a couple of JPMorgan cases. And so I have actually reviewed, my staff and I, about 150 people all told over 20 years. Have reviewed over 4 million claims to these victim funds. Chairman WILLIAMS. Time is up. Ms. VELAZQUEZ. Thank you. Chairman WILLIAMS. Time is up and we can put that in writing if need be. Okay. I now recognize Representative Alford from Missouri for 5 minutes. Mr. ALFORD. Thank you, Mr. Chairman and Ranking Member, for holding this important, very important hearing today. And thank you for our witnesses, all of you, for being here. We are here for one reason and one reason only. In the words of Jerry Maguire, ``Show me the money.'' This is taxpayer money we are talking about here. Congress knew that this money had to get out the door fast. We had an economic crisis from the pandemic. So the House and the Senate came together to do just that. Some fraud was expected but not $400 billion worth of fraud on the American taxpayers. I am still disgusted that Administrator Guzman would not bother to come down here and talk to us about her lower projects of fraud and what she is doing about it to get that money back for the American people. That is why we introduced 3 weeks ago the CAB Act. We cannot get inside the Small Business Administration to go visit Ms. Guzman. We want to change that. The Congressional Access to Bureaucratic Officers. According to the Inspector General's report, 33 percent of all EIDL loans were estimated to be fraudulent. These loans were administrated solely through the Small Business Administration. And I know that Administrator Guzman released a report contradicting that but let's stick to the fraud, abuse, and misuse expert, the IG. This is in stark contrast to the PPP loans which are only 8 percent estimated to be fraudulent. These were loans administrated through lending partners, private businesses who could get it done right. The first step in solving any problem is recognizing that there is one and addressing the issues. Clearly, there are problems. We are here today to find answers. Mr. Breeden, I want to start with you. You talked about in your testimony a couple of quotes. Remember the good in this program at the time that we had it, up to $400 billion as we are now recognizing. You call it an ocean of fraud which I think is very apt. Does the good outweigh the bad in this program? Mr. BREEDEN. I do not know that I am qualified to answer that. I think we were faced with a crisis the likes of which in my lifetime I have never seen. It would have been nice to be tighter in how we handled it. We did not. That is water over the dam from my perspective. The question is how do we go after the money that was taken improperly? I have spent 20 years doing that for the SEC, for the Justice Department, and you do not do it by writing reports. You do it by taking the largest transactions, going through them, putting knowledgeable people reviewing it, and where you find problems, refer it, get teams and prosecutors to go after it. And we have to remember that iceberg of stolen money a few years from now will be an ice cube. Time is of the essence. Mr. ALFORD. Well, clearly we do not have the resources to do this right now with the Inspector General's office. You are proposing the private sector fill in the gaps. Could this work with the whistleblower program? Put everyone on commission and lets get this $400 billion back. Mr. BREEDEN. Yes, sir. I think you could. That is what I am suggesting that other agencies supplement their internal sources with people on the outside. I have for the last 10 years worked for the Department of Justice. I am not a government employee but under contract we work for them. Every day we try and find fraud and refer it to prosecutors. Mr. ALFORD. Are there any prosecutorial risks once we get to court with these when the private sector is involved versus someone with the government? Mr. BREEDEN. None whatsoever. Mr. ALFORD. There you go. What do we learn from this now? Really quickly, can you give me one thing that we can improve on next time, God forbid we have another emergency like this? Mr. BREEDEN. A little slower. A better pace. Systems knowing ahead of time you are going to have a lot of fraud and that you have to go through the data as you make each and every loan. It is way better for the taxpayers to stop the fraud before it happens then to go after it later. Mr. ALFORD. Thank you, sir. Ms. Miller, quick question. You said you worked with the Inspector General on this. Have you met with the Inspector General? Ms. MILLER. Yes. Many times. Mr. ALFORD. Have you met with Administrator Guzman on this topic? Ms. MILLER. No. Mr. ALFORD. Why not? Ms. MILLER. I worked for the Pandemic Response Accountability Commitmtee, so Mike Ware, the IG is a Member of that Committee. So I worked closely with him. I did not have a reason to meet with---- Mr. ALFORD. If you happen to talk to her would you tell her we would really like for her to come down here and explain the differences between her number and the number of the IG and what we are going to do to get this back? Would you do that for me? Thank you very much. Ms. MILLER. Yeah, I have some ideas about the differences, too, I could share. Mr. ALFORD. Well, thank you very much. I yield back. Chairman WILLIAMS. Thank you. I now recognize Representative Davids from the great state of Kansas for 5 minutes. Ms. DAVIDS. Thank you, Chairman. And thank you to you and to the Ranking Member for holding this hearing today. As several of our witnesses have already pointed out, combatting waste, fraud, and abuse of government dollars should be something that we are all interested in. The Small Business Administration's COVID-19 relief programs, like the Paycheck Protection Program and the Economic Injury Disaster Loans certain saved countless small businesses from closing. But unfortunately, American taxpayers and many other small businesses were victimized by fraudulent actors that stole those desperately needed funds, a total of which is estimated to be over $200 billion. And to date the SBA and Office of Inspector General have successfully recovered about $30 billion in fraudulent COVID-19 funds. But certainly, there is more work to be done. Given the unprecedent scope of these pandemic programs, we have a lot ahead of us. But I know we are currently responding to pandemic-related fraud. But we also need to be prepared to properly mitigate widespread fraud during future emergencies. And that means ensuring that our government oversight resources are prepared in utilizing the best practices that we have learned during the COVID-19 pandemic. I do think that everyone here today shares a common goal of protecting American taxpayer dollars and ensuring that we are being fiscally responsible while doing that. So before I dive into my question I do want to thank all of our witnesses for sharing your perspectives, for your service, and making sure that we have a better stewards of the taxpayers' dollars. So the first question, Ms. Miller, I would like to ask you. Given the SBA OIG has shared this concept of 100 years' worth of pandemic-related casework to properly review, review the cases, I am curious how you--maybe you can share some of the insights you have about how we can better prevent the fraud, waste, and abuse going forward as we look at--not if, but when we face future emergencies. Ms. MILLER. Yes. And I think that is a really important point because we are talking about recovering pandemic stolen funds today, but it is water over the dam. And it is really important to prepare agencies for the future. SBA had not implemented many, if any, of the practices of the GAO framework for managing fraud risk in federal programs which GAO issued in 2015. The comptroller general has made comments publicly in several hearings about his disappointment that agencies did not take that document more seriously and follow those practices. And so going forward, SBA has begun to take some steps. They have established a Fraud Risk Management Board, which is a good, centralized entity that shows some commitment. But they need to continue to build, and all agencies, especially SBA and anybody that is administering a lot of direct funding to the public, preventative antifraud controls that use data. And that is really important. SBA has begun that work but there is much more work for SBA to do in the future if they want to make sure that they can be prepared for the next. And I want to make a point about recovering funds. A lot of the funds that were stolen were identity theft funds. Those were nation state actors. We are not going to get those back from whistleblowers or anybody else. They are gone. We are not going to get that money back, unfortunately. Ms. DAVIDS. So one of the things that I did want to ask you about as well as the suggestion of incentivizing whistleblowers. I am curious in your view with the SBA OIG in their current capacity housing some sort of whistleblower management office what, really quickly, if you could tell me what your thoughts are on that. Ms. MILLER. Yeah. I mean, they are going to have to add staff to fund that office. And so, you know, given that the IG is already stretched, you know, it could be. I am really not qualified to weigh in on the cost benefit of it but it would definitely add resources, and the SBA OIG has mentioned that he needs more resources than he already has now. So that has to be considered. Ms. DAVIDS. I am low on time. Mr. ZERBE. If I could add to the conversation. Ms. DAVIDS. Oh, yeah. Mr. ZERBE. The only thing I would just say to that is I do not know the details either but I would say it may be minimal because they are already dealing with folks coming in with tips and resources in the thousands. So I do not know if it is going to need a big expansion. I am sorry. Ms. DAVIDS. No, I appreciate that. In the limited time I have left, I might follow up with all of you with some of the additional questions I have but I do want to highlight a couple of things, particular from the voices from the private sector. One of the things that I have noticed is that some of our systems of data management and vetting probably need to be updated and upgraded. And that might also be something that the private sector could be helpful with SBA on. From this Committee's perspective I might follow up questions on that as well. Thank you. Chairman WILLIAMS. I now recognize Representative Bean from the great state of Florida for 5 minutes. Mr. BEAN. A very good morning to you, Mr. Chairman. And good morning, Small Business Committee. I have been cheering over the weekend so my voice is here but I got just enough to get through 5 minutes of questions. Panelists, it is very good to see you this morning. Here is the biggest thing. We do not agree on much but we do agree that there is fraud. We all agree that there is fraud. Here is the numbers. Here is the discrepancy of disagreement. Secretary Guzman says there is only 36 billion in fraud; yet, Inspector Ware says maybe there is 200 to 600 billion. Which is it? Ms. Miller, do you want to start us off? Ms. MILLER. Yeah, well, I think that it really depends on how you define it. So the SBA believes that certain EIDL loans and certain PPP loans should not be considered fraudulent because, for example, if an EIDL loan is in repayment the SBA believes that a loan that is in repayment, it is illogical to consider that that loan would be fraudulent. The SBA IG does not agree. So they do not agree on the terms. Mr. BEAN. Gotcha. But that number is bigger than 36 billion you think? Ms. MILLER. We do not know. I mean, I do think it is bigger than 36 billion. Mr. BEAN. Let me go to Mr. Breeden. You say that number is bigger than 36 billion? Mr. BREEDEN. Massively bigger. Mr. BEAN. It is. I think that is the correct answer that it is bigger than 36 billion. Mr. BREEDEN. In 35 years I have never seen a program with less than 30 percent roughly false claims. So that puts you at a much, much higher number. Mr. BEAN. They come out. One of the hardest things that I have had to deal with, I guess, and maybe you are familiar with it. And it deals with Barbie. I do not know if you are familiar with Barbie. You know about Malibu Barbie or Presidential Barbie, but we now have Swindler Barbie. And I want to show you some of the actual logins that our vendors accepted as real people. And you can see behind me right now. Mr. Taylor, are you familiar with this? Are you familiar with the scam that was run? Mr. TAYLOR. I am, sir. What you are looking at is a mess that made it through Fintech platforms. Mr. BEAN. I gotcha. Now, what can we do in the future so that Barbie or Ken--he got in on this action, too, by the way-- what can we do to prevent Barbie and Ken from getting in on the fraud? Mr. TAYLOR. At ID.me, we deal with Ness 1:00:43xx quite regularly. We stop them in their tracks through something called Presentation Attack Detection, sir. PAD. Mr. BEAN. So there is software that we just did not employ or did not use? Mr. TAYLOR. That is correct, sir. Whenever we get somebody on camera we ensure that they are a live person. Mr. BEAN. Very good. Would it shock any of you, I just read an article this morning that Tencent, a big Chinese company that is a major investor in Womply, which is one of our vendors, we paid them $2 billion to administer this fraud. Would that shock anybody that we paid Beijing to make sure that this fraud happens? Mr. Breeden, does that shock you? Mr. BREEDEN. No, sir. Mr. BEAN. Yeah. We call this Crazy Town for a reason a little bit. Here is just a toss up question I have. The frustrating thing is there was talk of just letting smaller loan frauds go. Just saying, you know what? We will just let that go. But I say no. I say no, and I think everybody up here says no. I filed the ``We Want Our Money Back Act,'' which says we want our money back and we are not going to let it go. And so I have that bill. There are other bills that say lets extend the statute of limitations to go after it. There is another bill that says anybody that is suspected of fraud shall be prohibited from any government program until it is worked out. I think that is a great bill, too. What else do we need to do? What else do we need to do to get our money back? Ms. Miller, jump in. Ms. MILLER. Yeah, well, one thought is that you can offer amnesty to those people who pay back the money. Amnesty from prosecution for those individuals that are willing to voluntarily give the money back. I suspect there are a number of people who have the money and they know that they got it erroneously. They got it fraudulently. And if they thought they were protected from prosecution they might give it back. Mr. ZERBE. Can I--I am sorry. Go ahead. Mr. BEAN. No, go ahead. Go. Mr. ZERBE. I would add that the IRS is facing the same level of fraud in the Employee Retention Credit Program. And the amnesty is something that they are basically putting out there to say why don't you come in and meet Jesus and get right. So that may be something to consider as well. Mr. BEAN. Ten-four. Thoughts, Mr. Breeden? Mr. BREEDEN. Wanted dead or alive posters probably have a long history in reward programs, whether you call them whistleblowers or something else are certainly part of the solution. But I go back to if you have got a problem that you think you might have had 3 or 4 million bad loans, you cannot wait 100 years. So put together teams of people, parcel those out, and start looking. Mr. BEAN. Thank you very much. Mr. Chairman, I have run out of voice and I have run out of time. I yield back. Chairman WILLIAMS. Thank you very much. I now recognize Representative Scholten from the great state of Michigan for 5 minutes. Ms. SCHOLTEN. Thank you so much, Mr. Chair. And thank you to the witnesses for coming here to testify today about this truly important topic. I want to start by saying that the 1.2 trillion in aid that the SBA has distributed over the course of the pandemic was truly essential, a lifeline to so many businesses in keeping their doors open. And in the context of this important discussion today I do not want to lose sight of that. You know, I think that there is a lot of agreement here today about the frustration over the inability to pinpoint how much fraud there was because a lot of our constituents, many of our constituents were struggling to make ends meet during the pandemic, and their hard-earned tax dollars were going to fund these programs. Ms. Miller, in your testimony you state that the truth most likely lies somewhere in the middle. I am a future-oriented, problem-solving individual. You recommend that Congress establish a well-funded--more taxpayer dollars--centralized antifraud office. Can you elaborate on how this would allow the federal government to prepare for the next emergency and how we might be able to avoid this type of situation in the future? Ms. MILLER. Sure. Yeah, cross governmental, intergovernmental agency issues are notoriously difficult to solve because every individual agency is focused on its mission and its budget. And so getting them to coordinate their activities is always very difficult. We knew this when I was at GAO. We talked about this a lot. This is an intergovernmental problem. It crosses all of government, both federal, state, and local. You need a centralized entity within the federal government that is not the Inspector General. The IG's job is to get the money back after it has been fraudulently obtained. The agencies, like the SBA, are the ones that are responsible for preventing the fraud to begin with. But each individual agency, if working together, can do things like sharing data. Like, for example, it may not be known that the ``Do not pay,'' the Treasury ``Do not pay'' portal currently today does not have access to the Social Security Death Master File as we speak, 3-1/2 years after the pandemic. I mean, that is a problem of data sharing and collaboration and creating data use agreements. The Pandemic Analytic Center of Excellence has created over 95 data use agreements between agencies. That is a model for what the government should do but not in the IG community; in the management side of the House. Ms. SCHOLTEN. And as these recovered funds are coming back in to the Treasury, how does the government track these funds? Are there any transparency measures in place so that the public can watch and know the efficacy of recovering these funds and where they go? Ms. MILLER. Yeah. The Treasury has an Office of Recovery Program and they also have an Office of Payment Integrity. And both of those offices coordinate the systems that provide that information to the public. So really it is the Department of Treasury that tracks that information. Ms. SCHOLTEN. And how is that released to the public? Can we find that online? On the Treasury's Twitter account? Ms. MILLER. Yeah. Ms. SCHOLTEN. Is it a report? Ms. MILLER. I think the Department of Treasury is actually really working right now in its Office of Payment Integrity to improve that transparency in the public-facing websites. And those are happening as we speak. I think that in the next year to 2 years we are going to see a lot of improvement in the information that is shared to the public. The PRAC also has a pretty great website that provides a lot of that transparency. Ms. SCHOLTEN. Okay. I know I speak for many constituents that proactive communication about this and connecting that information to the public so that they can have confidence in this would be, you know, would be key. Ms. MILLER. Agreed. Ms. SCHOLTEN. Additionally, you know, in my last minute, I wonder if you might be able to pinpoint any steps that we might be able to take not only in preventing fraud or cracking down on it once it occurred but even putting steps in place to close the gaps to keep it from happening in the first place, are there more point to point contacts that we can ensure that the money is getting directly where it needs to go? You know, disseminating to local governments or nonprofit organizations first. Any and all of the above. Or if you have any insights as well. Ms. MILLER. Yeah. I think that maintaining integrity of the funding that is going to citizens, whether that is through federally funded state administered programs, like SNAP or, you know, some of these benefit programs that go through the states or directly to the citizens from a federal agency. The importance is to identify quickly before the payment is made, and we have talked about this a bit today, whether or not the individual who is applying for that benefit is who they say they are and they are entitled to it. And that is going to require data. Data sharing. Data analytics. Advanced analytics that can use artificial intelligence and other tools and it is very vital that agencies get those tools to be able to prevent fraud, waste, abuse in the future. Ms. SCHOLTEN. Thank you. I yield back. Chairman WILLIAMS. The gentlelady yields back. I now recognize Representative Meuser from the great state of Pennsylvania for 5 minutes. Mr. MEUSER. Thank you very much, Mr. Chairman. Certainly, thank you to all of our witnesses here today. A very important subject. Very troubling subject. I do not think the American people or taxpayers really have an understanding of the level of fraud that has just come out of a relatively small agency like the SBA. It certainly makes you think what levels of fraud occur elsewhere. You know, CMS. You name it. So we have a big problem with this $5 trillion company of ours known as the United States federal government and the $6 trillion of spending that takes place. So your ideas, your backgrounds, experiences are very helpful to us. So we had the EIDL, the PPP, and the ERTC. EIDL had a wildly unacceptable level of fraud, almost insane what occurred there. So the investigations need to take place. PPP was a lot less, particularly on a percentage basis. PPP needed to be rushed. EIDL needed to be rushed. So it is not necessarily about assigning blame or which administration but a lot of times you have got to focus on where the problem occurred in order to fix it. ERTC, I do not have the data in front of me on what type of fraud existed there. I do not think the Employee Retention Tax Credit, which is pretty important and it is still going out in important ways. And I agree with my colleagues on both sides of the aisle that these were very important. I mean, we could have gone into a depression if we shut down businesses and did not fund them to keep their employees. I mean, we would have had serious problems. But on the same note, the level of fraud. So you know, they say that an acceptable level of fraudulent activity could be 2 to 3, even 4 percent. You know, in my business, and I probably had no business being in charge of our credit department, but we had AR at any given time at about $50, $60 million and we did not write off bad debt. It was never higher than 1 percent. And we were not all that sophisticated. So the idea that this occurs is crazy. So I think crazy. Now, on the same note we have the IG coming in telling us that there is, what was it? I forget his numbers right now, $240 billion in fraud? And then the SBA administrator tells us it is, no, it is $50 billion. I mean, well, that is a pretty wide spread of discrepancy. So that is also highly troubling. So back to Ms. Miller, your idea of the centralized antifraud. Look, the credit card companies, the banks do it. Why can't the SBA do it? Mr. Breeden, I will start with you and just go right down the line. What should we be doing? Can we put you in charge perhaps? Mr. BREEDEN. I am not sure I would. Mr. MEUSER. It is worth the money by the way; right? With the type of billions and billions that we are talking about. Mr. BREEDEN. Certainly having someone in charge of going after it, going after the monies that have been stolen is a great idea. I do not know that it ought to be any one person as opposed to a lot of people's job. It is a task too big for any one person. I am not sure creating a new bureaucracy in government is really going to solve the problem. The ones that we have already have not solved it. So we have to understand that if you are going to have free markets, if you are going to have a capitalist economy there is going to be fraud. If you have a socialist economy there will be fraud, too. So we have to build antifraud protections into everything we do and be aware that there have to be limits on how many businesses we shut down, how fast we want to help people, things like that if we do not want the fraud to get out of control. But right now we have a problem of getting after the people before the money is all gone. Mr. MEUSER. All right. So collections enforcement. And what about prevention, Mr. Taylor? Mr. TAYLOR. Thank you, Congressman. It is about identify verification at the front end before these types of benefit programs go out. Implementing the IAL2 standard issued out by NIST is the first step. And being the fact that that is a government solution that should be a nonpartisan issue. Mr. MEUSER. Absolutely. Down the line? Thank you. Mr. ZERBE. Congressman, I want to reemphasize something that has kind of been lost. Let me make sure you all understand a couple of facts about fraud. The IRS does root canal audits on people. When they do root canal audits they only find offshore accounts in 7 percent-- legal offshore accounts in 7 percent of those audits. The number one way the IRS finds fraud in offshore accounts is whistleblowers. Study after study shows the number one way that you find fraud is whistleblowers. And with all due respect to just say, well, we are going to depend on the SBA folks, they are doing good work, but if you want to find fraud, the way the private sector finds fraud is they have whistleblowers. The way the government is finding fraud is through whistleblowers. Mr. MEUSER. I yield back, Mr. Chairman. Chairman WILLIAMS. The gentleman's time is up. I now recognize Representative Gluesenkamp Perez from the great state of Washington for 5 minutes. Ms. GLUESENKAMP PEREZ. Thank you, Mr. Chair. Mr. Zerbe, I appreciate those sentiments. You know, I think that people want to build a government. You cannot legislate good behavior. Good behavior comes from the heart. You can penalize bad behavior. You can incentivize good behavior. And I think we have really in the Committee hearing today sort of beat to death this thing of we need to go after the bad guys. And it is costing us to not do that. But I really appreciated in your testimony, Congressman Breeder that--Breeden, excuse me--that normal people, small business owners not having the time and the capacity to understand the bureaucracy of a government that is no longer operating at a human scale. So you just walk into this pit and fall through a problem and then there goes your livelihood. And so I really appreciated your pointing out putting things in plain English. What are the eligibility criteria? Can you read this if you have a reading disability? Or you know, and who is doing that work? So I wondered if you could speak to how that was built in. Yes, sir. Thank you. Ms. BREEDEN. Thank you, Congressman. I think that is terribly important. One of the things that we focus on as part of antifraud protections in every victim trust we do is to make sure that the communication of eligibility standards is as clear as you can make it. All Madoff Victim Trust. The plan was not written by a bunch of lawyers and a bunch of boilerplate. It is in frequently asked questions plain English because there are a lot of people who might file a mistaken application or one that they are not eligible for but they do not understand that. So take that part of it off the equation. Ms. GLUESENKAMP PEREZ. Right. And it is who is at the table when these rules are being written. You do not have normal people. You have a Congress built out of a bunch of frankly lawyers and people who have grown up in it and not the people who might be applying for these programs. And I think that is a real flaw. Mr. BREEDEN. Yes. But the laws can be complicated. But when you have a program that is going to make loans that has eligibility standards that is where either an agency itself or in cases we do, the private sector, you spend a lot of time trying to write very clearly so people understand what is required and what is not allowed. It does not mean people will not go ahead and violate it. Ms. GLUESENKAMP PEREZ. Sure. Mr. BREEDEN. There will be some. Ms. GLUESENKAMP PEREZ. But we need to make it as easy as possible for people to do the right thing. Mr. BREEDEN. I completely agree. Ms. GLUESENKAMP PEREZ. So thank you for that. And you know, Ms. Miller, I also likewise appreciated your testimony. We had Inspector General Ware come in and testify a few months ago about the incredible work his office is doing to investigate these cases of potential fraud and recoup the stolen money. At the same time he shared that his office had identified 90,000 actionable leads and that his office needs more resources to investigate these leads and the DOJ needs more funding for attorneys to prosecute these fraudsters. Ninety thousand sure feels like a lot to me. It feels like he has got a lot on his plate. And I am wondering, you know, we are staring down the face of a shutdown here, so how is that going to affect the oversight in law enforcement communities' ability to crack down on fraud? And is the government losing out on money that we could be recouping would you say? Ms. MILLER. I mean, for sure. In short, he is going to lose the time of all the people who could be doing those investigations when the government shuts down. Ms. GLUESENKAMP PEREZ. Yeah. Yeah. Thank you so much to all of our witnesses for being here. And thank you, Mr. Chair. I yield back. Chairman WILLIAMS. All right. Next, I want to now recognize Representative Stauber from the great state of Minnesota for his 5 minutes. Mr. STAUBER. Thank you very much and to all the witnesses, thanks for being here. Ms. Miller, congratulations on being a Member of our Olympic team. I was an aspiring Olympic athlete. I was not good enough to make the Olympic hockey team but I gave it my best shot. I always wanted to be an Olympic athlete. That was a goal of mine. I will say this, Mr. Taylor, Mr. Meuser just asked you what is the biggest thing to stop fraud and your answer was identity verification; correct? Mr. TAYLOR. That is correct, Congressman. Mr. STAUBER. Just changing gears here and then I am going to get back to our subject. Would that be considered in the same light for our national elections? Mr. TAYLOR. Identify verification could go for any type of program, Congressman. Mr. STAUBER. Thank you. Ms. Miller, with your experience, what do you think is the monetary amount of fraud that someone should go to prison for? Ms. MILLER. I do not have experience to make that decision. Mr. STAUBER. Any idea? Any guess? Ms. MILLER. No. Mr. STAUBER. Would it be 50,000, 100,000? The reason I am asking this is, this fraud was put on the American people. And there are people that did not get EIDL loans that should have got it. And there are people that struggled to get PPP loans in a faster timeframe and did not. And it was taxpayer money that went out. Does anybody have an idea? Any of the other three witnesses to my question to Ms. Miller? What should be the amount somebody should go to prison for, for stealing the taxpayers' money? What is it? Mr. Breeden? Mr. BREEDEN. Sir, I think the threshold of what can be prosecuted should be fairly low. The theory of broken windows in law enforcement that just because somebody only broke one window, if that happens across an entire city it can have a very bad effect. So the level ought to be low. Then you have to have prosecutorial discretion where prosecutors have to look at it and say is this an egregious fraud or is it not? Mr. STAUBER. The broken windows theory as a former police officer I subscribe to that theory. Absolutely. You know, in Minnesota we had Feeding our Future. It was a nonprofit meant to feed people. There were over $250 million of COVID-19 federal funds that were stolen. And these fraudsters bought luxury cars, real estate, and other unlawful futures. The Small Business Administration, I think, and our government, and our Inspector General, we need to hold these people to task. If we are talking about millions and millions of dollars, and Ms. Miller mentioned earlier in her testimony that some of these identify theft folks, we are not going to get the money back. To me, I understand, I mean, the broad spectrum of the fraud. But we need to make a statement as a country. This is taxpayer money. And I guess a certain percentage is expected but we have to go after it. We have to go after it to make the statement. Nobody should steal the U.S. taxpayers' money. And they did it during a pandemic when our nation was brought to her knees. That is just simply wrong. And so the experience that you all have shared with us, there is so much knowledge here. Mr. Breeden, I think that you being in the private sector, you had mentioned a couple minutes ago that you are not a government employee and you are doing really good work. I do not necessarily subscribe to another government group or another Committee. The private sector here has shown the way. We just have to listen and give you the authority and the ability and the staff to do what you do best. Obviously, the SBA has failed here. There is no question about it. I want to thank you for your testimony and just your years of experience. We need more of this. And this is a bipartisan issue that we need to work on. Mr. Chair, I yield back. Chairman WILLIAMS. The gentleman yields back. I now recognize Representative LaLota from New York, the great state of New York, for 5 minutes. Mr. LALOTA. Thank you, Mr. Chairman. The great state of New York, sir. Chairman WILLIAMS. Got it. Mr. LALOTA. Two hundred billion dollars. Two hundred billion dollars. Lets put that in perspective. If Congress had that $200 billion back we could give the average taxpayer a $2,000 tax cut. Or we could defer conflict with China by buying four new aircraft carriers, eight new submarines, and 27 new Navy destroyers. Or we could fully fund the state and local tax deduction which a lot of my constituents would like. Two hundred billion dollars. Approximately one in five COVID loans were potentially fraudulent. Thank you, Chairman, for hosting this important meeting and shining a spotlight on this important issue that my constituents care a heck of a lot about. And for our witnesses for being here to help inform our Committee on this issue. Despite the widespread fraud, the SBA has downplayed the fraud stolen from our fellow taxpayers and has given a free pass to anyone who has stolen less than $100,000 by refusing to investigate those smaller loans. The SBA's disregard for this issue is exemplified by the administrator's failure to testify before this Committee's July hearing with the Inspector General. It is our job on this Committee to fight waste, fraud, and abuse in the Small Business Administration, and that job is made much more difficult when the SBA administrator does not show up. That leads me to my first question. Mr. Taylor, sir, in an effort to expedite funds, the SBA did not check the ``do not pay'' lists before sending money out. Is that a normal procedure? Mr. TAYLOR. The self-certification allowed by SBA at the beginning of the pandemic was totally uncalled for and unprecedented. Mr. LALOTA. And what is the effect on not doing that diligence? Mr. TAYLOR. The massive fraud that we are seeing today. Mr. LALOTA. Mr. Breeden, you have quite the impressive resume, sir. I looked it up. Harvard Law, Chairman of the SEC, and you are a native Long Islander most importantly. So that well qualifies you to be on this panel. My question, sir, is what effect does the SBA's decision to not investigate those smaller loans have on future behavior? Mr. BREEDEN. I think it is very deleterious, sir. It sends a message that, okay, you can play around the edges and people just will not bother. And I think the principle that if you steal from your neighbors, you steal from your fellow citizens, that will always be a matter worthy of government's attention is the right message to send. Mr. LALOTA. It is a behavioral thing, right, that if folks know there are consequences to their negative behavior they are less likely to conduct that negative behavior; no? Mr. BREEDEN. Yes, sir. Mr. LALOTA. Mr. Taylor, back to you, sir. I know that we talked a little bit about Barbie before. We are going to do it just shortly once again. How can the private sector help to identify, to do identify verification better to help prevent fraud? Mr. TAYLOR. Thank you, Congressman. Getting back to the Presentation Attack Detection that I was mentioning to the previous congressman about, that would have stopped those types of attacks on those Fintech platforms. The fraud that was experienced specifically around the PPP, the top 12 lenders around that were all Fintech platforms. They would have allowed something like that to go through. Currently, identity verification, whenever you implement liveness detection at the IAL2 that is approved by NIST, it stops that in its tracks. Additionally, SBA OIG, specifically IG Ware talked about it the last time that he was here, talked about the overlapping of IP addresses and suspicious IP address activity, if this was 5 years ago that is an effective way to go about doing an investigation. It no longer holds that value at the IP address level. You have a to get into the big data that is associated with that IP address as well as the device intelligence associated with it. Mr. LALOTA. So doing things like that obviously come at a cost; right? That it takes more to invest in better technology, better process. That comes at a cost. Would you assess that as positive ROI, is the return on that investment positive for the taxpayers? If we go through that diligence, raise the bar, do better identify verification, do we have less fraud? And is the less fraud worth * does it give us extra money to pay for those costs, sir? Mr. TAYLOR. Yes, sir. As a matter of fact, everywhere that ID.me has been implement across 27 states during the pandemic, fraud rates went down. The pass rates went up. So it is a matter of inclusivity in these programs. It is a matter of stopping the fraud in its tracks. And also, the false positives associated with misidentifying an individual, which you can do if you are just targeting an IP address. We are not allowed, at ID.me, we have a policy. We keep the false positive rates very low. Well below 1 percent. The fraud rates, the same thing. The fact that we are talking about programs that have 18-21 percent in the fraud rate is unheard of in the private sector. So with that being said, I would be very cautious that any type of program that is concentrated only on the IP address. Additionally, in Puerto Rico, we took the pass rates from 23 percent up to 78 percent at a cheaper cost. Mr. LALOTA. Thank you very much. My time is expired. Thank you, Chairman. Chairman WILLIAMS. The gentleman yields. I now recognize Representative Salazar from the great state of Florida for her 5 minutes. Ms. SALAZAR. Thank you, Mr. Chairman. The great state of Florida indeed. And thank you for coming to explain to us your knowledge and everything, all the steps that you have taken. Mr. Taylor, I hear that in the state of Florida you are able to establish a very good technique that we could replicate in the rest of the country. Could you please explain for my constituents what did we do right in Florida versus other states? Mr. TAYLOR. Thank you, Congressman. The relationship with Florida has been an absolutely fantastic one. Ms. SALAZAR. Okay. Mr. TAYLOR. We have implemented the IAL2 policy there that I spoke about previously. So the fact that when you have identify verification gating a lot of the public benefit programs there---- Ms. SALAZAR. And how does that work in particular so I can understand. I do not have a criminal mind so I am not sure what people think. Shat do you need to do in order to defraud the government? So why the facial identification is important? Mr. TAYLOR. Less about the facial recognition side and more about the actual Liveness detection. The fact that a person is a real individual. The mask that made it through and the Barbie Swindler. Those do not make it through ID.me in the State of Florida. Because we have that Liveness detection built into the platform. Additionally, we have unsupervised sites. So if a person cannot get through, let's say that there is a language barrier, we support over 200 languages on that side. So the person can come through, talk to a trusted referee. And we are talking about wait times that are less than 5 minutes to get onto those platforms. Lastly, I would turn your attention to Hurricane Ian last year. The devasting impacts with that, obviously in the billions dollars and loss. We have a thread intelligent cell that lives out on the Dark Web that looks for fraudsters going after these types of benefit programs. We actively go out and look for the bad guys going after these public benefits, and we did that in the state of Florida. So much so that whenever Hurricane Ian occurred, we had the in-person terminals that the IME has, and the people were able to verify their identity, get their FEMA funds right there in the spot instead of having to wait in line to go to a state office or something like that. Ms. SALAZAR. So the facial identification could be the answer for the federal government to stop future fraud across the board or across the nation. Would you consider---- Mr. TAYLOR. It is one part of an entire fraud suite of tools that we would recommend. Ms. SALAZAR. Explain to my constituents why after the pandemic we had so much fraud. I would imagine that people were claiming that they could not find work or that they did not have a job. Explain to me the scenario after COVID. Mr. TAYLOR. During the first 9 months of the pandemic you had self-certification of these benefit programs. Combine that with the speed at which they were decimated, you are talking about an unprecedented amount of capital that went out into the economy. That incentivized a lot of nation state actors, as well as your traditional domestic fraudster to go after these benefit programs. Ms. SALAZAR. Okay. Mr. TAYLOR. Your constituents have not only suffered from the standpoint of losing your identity, possibly for tax purposes or filing for unemployment but also they may have inadvertently had their identity used in a credit scheme that would target a small business. Ms. SALAZAR. Okay. So we know that the SBA, there is a dispute of the amount of money that went to the wrong hands through the PPP program. Do we have a figure of how much money went to the wrong hands? Or how many millions of dollars were lost after the pandemic for claims from people that did not deserve or were not the right beneficiaries of these monies for unemployment benefits? Mr. TAYLOR. Thank you, Congressman. I would agree with IG Ware that the likely fraud is somewhere in that realm of $650 billion. The fraud number right now that he is planning on going and prosecuting at 200 billion. Ms. SALAZAR. Two hundred billion dollars. And this money that we are talking about is included in that figure of 200 billion? Mr. TAYLOR. That is correct, Congressman. Ms. SALAZAR. Okay. Thank you. I yield back. Chairman WILLIAMS. Next, I now recognize Representative Phillips from the great state of Minnesota for 5 minutes. Mr. PHILLIPS. Thank you, Mr. Chairman. Thank you for holding this hearing, and to all of you for being with us. Let me just start by saying I share every one of my colleagues' disgust by the scale of fraud that took place during the pandemic, and we have got to do everything we can to investigate and most importantly recoup billions of dollars that were literally stolen from American taxpayers. Stolen during what I consider a tragic moment in our history. The good news in my estimation is that we have got a clear roadmap, and that is to give the SBA Inspector General the resources that his office needs to go after these fraudsters. I come from a business background myself, like the Chairman, where return on investment is the name of the game. The IG's office has requested $47 million in discretionary funding for its operations in fiscal year 2024. Unfortunately, the House Appropriations Committee underfunded that request by about $15 million. Yet, over the past 2 years, OIG's efforts have yielded over $9 billion in financial accomplishments, recoveries, fines, and forfeitures. Considering these numbers, an extra $15 million in my estimation seems like a heck of a good return on investment to me. Inspector General Hannibal Ware has proven that his office delivers results for taxpayers and Congress simply needs to give him the tools to do his job. So I would welcome suggestions from our witnesses today. And we ought to consider them fairly, but we cannot lose sight of the fact that the number one thing we can do to recoup fraud is to fund the Inspector General's office fully. Let me just start with you, Mr. Zerbe. I really appreciate the bipartisan tone in your testimony. I think you are right, that eliminating fraud, waste, and abuse of the SBA is a bipartisan exercise. Must be bipartisan. In the same way that small business relief was. I am intrigued by your proposal to establish a whistleblower program at the SBA. It has proven successful at other agencies, of course. But one of my concerns is that the IG currently lacks resources to actually investigate what I think are about 90,000 actionable leads that it has already identified. So what do you make of this concern? Mr. ZERBE. Thank you for that, Congressman. I think a couple of thoughts for you. One is that I agree they have got kind of a fire hydrant drinking moment right here but I still think that the whistleblowers will be able to: (a) better target the most important fraud cases, and also just so you understand, when you are submitting, particularly when you have an award program, it is not just a tip and things like that. The whistleblower and his attorney, they are providing a whole package for the agency. I mean, we are putting in the documents, the material, a view of the law, a narrative. We want it on a T-ball for them to be able to just do it. So it is making the agency much more time efficient and effective in terms of what they are doing. One thing, too, to consider and you might think about as you are looking at legislation in this area, it is not uncommon for the whistleblower award programs and the Qui Tam programs in other agencies to allow for a reimbursement of the costs the agency has with their investigation as well, too. In other words, yes, we recovered these funds, and yes, you know, we are going to reward the whistleblower. But we are also going to reimburse the SBA for its costs as well, too. So it may be something to consider to address the concern you have got about limited agency resources to say, great, we are going to in a sense incentivize not only the private sector to come forward and assist the SBA through the whistleblowers but we are also going to incentivize the SBA to embrace those whistleblowers and work with them because then they will basically be able to have their costs met. So that may be a way to address your concerns, Congressman. Mr. PHILLIPS. And based on that absurdly high number, 90,000 leads, are there alternatives concerning the resources, levers, tools we have available to us? In your estimation, are there other mechanisms we should be considering to reduce that workload and ensure that every one of those leads is investigated? Mr. ZERBE. Well, I think that is where it is going to help not to repeat. But I think having seen a lot of these kind of tips, particularly more from my IRS work, a lot of them tend to be pretty thread bare. I mean, just, well, you know, Jimmy has got a fancy car and you guys should go look at him. I think, you know, when you are getting the whistleblower you are getting an insider informed and you are getting the big fish. So the SBA---- Mr. PHILLIPS. Okay. So quality, not quantity? Mr. ZERBE. Yeah. And the IG white paper highlighted one. They had one whistleblower who came forward and it was over $600 million that they had identified thanks to this one whistleblower. So you are right. It is able to get the big fish and the worst actors, if you will, and target them better on that. Yes, Congressman. Mr. PHILLIPS. Okay. I appreciate it. I have only got about 20 seconds left. I just want to refer to a letter that I plan to send to both the House and Senate Appropriations Committees requesting that they fulfill the OIG's full request of $47 million in discretionary funding because holding these bad actors accountable should be bipartisan goals, and I surely invite my colleagues on both sides of the aisle to join me in that endeavor. With that, Mr. Chair, I yield back with exactly 1 second left. Chairman WILLIAMS. Great job. I would like to thank our witnesses today for their testimony and for appearing before us. Without objection, Members have 5 legislative days to submit additional materials and written questions for the witnesses to the Chair which will be forwarded to the witnesses. I ask the witnesses to please respond promptly. So if there is no further business, without objection the Committee is adjourned. Thank you all very much. [Whereupon, at 11:35 a.m., the committee was adjourned.] A P P E N D I X [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] [all]