Legislation Rewards Whistleblowers to Combat Pandemic Loan Fraud

Amid the flurry of relief efforts that sprang up as a result of the economic impact of COVID-19, governments worldwide provided relief grants and loan programs for citizens and businesses alike. However, nobody could have imagined the scale of fraud that would later occur as a result of this massive disbursal of taxpayer funds, as well as how malevolent individuals and businesses would potentially exploit the system. 

With the benefit of hindsight and careful legislation, Congress can now use its oversight and lawmaking authority to develop mechanisms to reduce fraud in the future, and that incentivizes the people working in fraudulent organizations to speak out against the misuse of essential taxpayer resources. 

What Is Pandemic Loan Fraud, and How Bad Is It?

In unprecedented times, unfortunately, bad actors committed equally unprecedented federal fraud. With the immense amount of money spent during the COVID-19 pandemic and economic shutdown, Congress now has a huge opportunity to ensure that American tax dollars can be tracked from start to finish - with consequences for those who decide to misuse them.

Over the course of the pandemic, approximately $4.6 trillion has been allocated to different federal agencies, with 148 billion going toward unreported agencies. This runaway spending has created a problem with enforcement that the executive branch was simply not able to handle, which has led to spiraling amounts of pandemic loan fraud. 

In the rush to provide relief during the emergency, guardrails and oversight of taxpayer funds were basically an afterthought. The sheer scale of the fraud and abuse that has been uncovered is alarming. A study by the Government Accountability Office has found that out of this spending, the estimated amount of fraud ranges between $100 billion and $135 billion - a staggering amount. 

How Can the Put America on Commission Act Help?

Representative Roger Williams (R-TX) introduced the Put America on Commission Act, H.R. 7129, to help the Small Business Administration (SBA) identify and prosecute the misuse of taxpayer COVID funds. This bill has two significant changes that it makes to the previously existing Small Business Act:

First, the bill creates a new SBA Office of Whistleblower Awards. The Office would create a reward system for those who report pandemic loan fraud, incentivizing individuals with knowledge of criminal activity to reduce the costs and surveillance needed for investigations. The best tips to take down criminal enterprises come from those with direct knowledge, and this new reporting system allows whistleblowers to receive rewards of 10-15 percent for their assistance in identifying fraudulent activities. 

The second part of the bill specifies the funding mechanisms for the new office. For this reward system, the bill provides that instead of dipping further into taxpayer dollars, the rewards will be paid using the money that was stolen by the person who committed the fraud in the first place. Penalties assessed on convicted individuals will also be used to fund the whistleblower awards. These accountability mechanisms will ensure that no more money goes to waste, which is a commendable provision for taxpayers.


Rewarding whistleblowers when bad actors misuse taxpayer dollars is crucial to ensuring that fraudsters are punished. With robust implementation and diligent oversight, the SBA will be better equipped to root out fraud and what we can do to enhance guardrails on emergency programs in the future.