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Opinion Covid-19 relief was plagued by fraud. Here is the right response.

The offices of the nonprofit Feeding Our Future in St. Anthony, Minn., were raided by FBI agents in January. Federal authorities charged 47 people in Minnesota with conspiracy and other counts as part of a massive scheme that took advantage of the covid-19 pandemic to steal $250 million from a federal program that provides meals to low-income children. (Shari L. Gross/Star Tribune via AP)

Brazen.” That’s the key word in the Justice Department’s indictment of 47 defendants in Minnesota, alleging they siphoned nearly $250 million from a federal program meant to provide food to needy children during the pandemic. Though the accused conspirators claimed to have provided up to 125 million meals, prosecutors said they used federal dollars to buy jewelry, luxury cars, real estate and more.

The case is the largest such scheme uncovered to date — and that is just the tip of the iceberg. A Labor Department watchdog report released last week estimates that fraudsters might have stolen $45.6 billion in unemployment insurance during the pandemic. That’s on top of tens of billions of dollars potentially defrauded from the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan program (EIDL), among others.

To be clear, the existence of fraud does not mean the programs were failures. But these cases offer important lessons for how governments should manage aid and loan programs going forward.

When the covid-19 pandemic began, lawmakers and officials raced to provide more than $5 trillion in aid to citizens and businesses. From the outset, they understood that delivering relief at the scale and speed necessary would lead to some opportunism and theft. They also believed, rightly, that this was an acceptable price to pay to keep businesses and households afloat during an unprecedented crisis.

To reach the most people without red tape and delays, relief programs were broadly targeted and did not include rigorous documentation and verification requirements. Congress did establish some guardrails, including reporting requirements for larger payouts, but the Trump administration resisted this oversight. Authorities instead bet on retrospective enforcement — a costly and inefficient approach.

The Biden administration has wisely expanded resources for investigations and prosecutions, and the president recently signed legislation to extend the statute of limitations for PPP and EIDL fraud from five to 10 years. Yet officials already acknowledge they might never get to cases involving smaller amounts: Though the government has charged more than 1,500 people so far, millions of other potentially fraudulent transactions are awaiting review.

As Post columnist Catherine Rampell argued last month, the saga highlights the importance of modernizing the country’s archaic, fragmented technology infrastructure. Better systems could help agencies verify application data with information from payroll taxes and other filings, allowing officials to catch fraudulent activity earlier. In addition, new ID verification technology could reduce the possibility of identity theft, while machine-learning algorithms could quickly flag suspicious patterns in data.

Another takeaway — especially for national programs involving vast sums of money — is that oversight cannot be an afterthought. The Cares Act, to its credit, established the Pandemic Response Accountability Committee, a body of inspectors general overseeing pandemic aid. The committee has endeavored to share data with the public, though some of its tools are difficult to navigate. But watchdogs need funding that is commensurate with the programs they scrutinize. Dedicating a small but steady percentage of spending to these offices could help reduce waste in the long run.

Covid-19 relief spending was a godsend for struggling businesses and families. It was also, unfortunately, a boon for scammers seeking an easy payday. The right response would be to acknowledge the importance of these programs during a national emergency — and start building a more nimble, responsive and resilient system for the future.

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Editorials represent the views of The Washington Post as an institution, as determined through debate among members of the Editorial Board, based in the Opinions section and separate from the newsroom.

Members of the Editorial Board and areas of focus: Editorial Page Editor David Shipley, Deputy Editorial Page Editor Karen Tumulty; Associate Opinion Editor Stephen Stromberg (elections, the White House, Congress, legal affairs, energy, the environment, health care); Associate Editor Jonathan Capehart (national politics); Lee Hockstader (immigration; issues affecting Virginia and Maryland); David E. Hoffman (global public health); Charles Lane (foreign affairs, national security, international economics); Heather Long (economics); Associate Editor Ruth Marcus; and Molly Roberts (technology and society).

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