The Trump administration’s standard operating procedure for running the covid-19 disaster relief effort must be: “Put the money on the stump and run like crazy.” It’s hard to draw other conclusions following the release of the Small Business Administration inspector general’s report on potential fraud in the government’s emergency loan and grant program.

Let’s put it this way. If something akin to this purportedly fraud-riddled program had materialized on President Barack Obama’s watch, Republicans in Congress would be calling it a high crime and misdemeanor.

Yes, it’s just that bad.

Inspector General Hannibal “Mike” Ware kicked off his investigation after getting complaints regarding more than 5,000 instances of suspected fraud from financial institutions receiving SBA economic injury loan deposits. After a preliminary review, the IG found “strong indicators of widespread potential fraud.”

With more than $200 billion left in the SBA’s lending kitty, Ware decided to blow the whistle and publicly call for the SBA to take action immediately “to reduce fraud risk and prevent further losses.”

Taxpayers ought to thank goodness for the government’s watchdogs. The loans were approved and disbursed by the SBA under authority provided in the emergency Coronavirus Aid, Relief and Economic Security Act (Cares Act), passed by Congress and signed into law by President Trump in March. The substantial money freed up was intended to serve as a lifeline for small-business owners and their workers across the country reeling in an economy getting pummeled by the coronavirus pandemic.

Among the IG’s initial investigative findings:

$250 million in SBA economic injury loans and advance grants were given to potentially ineligible recipients.

●$45.6 million in economic injury loans that were approved for nearly 300 businesses were potentially duplicate.

The duplicate payment problem was a real mess. Of the 275 duplicates, according to the report, one business was approved four times and got four loans and six businesses were approved for three loans. The other 268 businesses were approved for two.

Ware’s watchdogs, digging into the banks’ complaints, discovered all kinds of suspicious activities. They found accounts had been established using stolen identities, and that some account holders tried to transfer funds to investment accounts.

The investigations also found that some economic injury loans made to agricultural businesses were being deposited in accounts of unrelated third parties in states different from the business locations.

And they learned of suspected fraud. For instance, the report noted that “a London-based international money-transfer business claims to have identified $1.9 million in pending SBA deposits being made to accounts to be transferred internationally.”

Investigators also learned that a federal credit union reported — to its credit — to the Justice Department’s criminal division that “it has received $15 million in SBA deposits in recent weeks. The credit union audited 60 of the transactions and determined that 59 appeared to be fraudulent.”

Alarming to you, taxpayer? Alarming to the IG, as well.

Would it be fair to say the SBA lending program is under the management of Kiddie Klubhouse preschoolers? Or in the hands of bighearted but reckless bureaucrats? Both are probably unfair. But performance-wise, either may be close.

SBA Administrator Jovita Carranza probably would take strong issue with my characterizations. She would likely contend, as does Trump whenever he is apprised of his administration’s performance, that the SBA is doing a great job.

In her July 23 response to the IG’s July 15 draft “Management Alert,” which was titled “Serious Problems and Deficiencies in Internal Controls Over Economic Injury Disaster Loan Program Pertaining to the Response to COVID-19,” Carranza maintained that her agency has a “robust set of internal controls” for the lending program for which the IG failed to account.

She cited her deployment of “sophisticated technology” designed to deal with the kind of complaints filed by financial institutions.

Carranza stated her strong commitment to safeguarding taxpayer funds to mitigate risks of waste, fraud and abuse. And she asked to meet with the IG about the specific concerns presented in the filed complaints “before the Draft Management Alert is finalized.”

And well they should.

It is astonishing that Carranza’s response described financial complaints as “unexpected.” How can an agency engaged with financial institutions be unaware of so many complaints of suspected fraud with these economic injury loan deposits?

Nearly 3,800 instances of suspected fraud complaints came from only six financial institutions.

What is going on here? Is the Trump administration, besieged by a recession and visions of an Election Day disaster, hoping to flood the country with SBA cash by putting money on the stump and running like hell?

Ah, banish, but don’t bury, the thought.

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