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Smith, Crapo Seek Basic Information on Labor Department’s Fund to Combat Unemployment Insurance Fraud

July 20, 2023

WASHINGTON, DC – U.S. House of Representatives Ways and Means Committee Chairman Jason Smith (R-MO) and U.S. Senate Finance Committee Ranking Member Mike Crapo (R-ID) are asking the U.S. Department of Labor (DOL) for a detailed accounting of how it has utilized the $2 billion initially awarded to it under the American Rescue Plan Act (ARPA) to supposedly help prevent unemployment insurance (UI) fraud. The members note that while the DOL’s Inspector General has estimated taxpayers are on the hook for at least $191 billion in misspent pandemic UI funds, the funding allocated to combat fraud and prevent further taxpayer dollars from being misspent lacks critical metrics, with vague goals and no timeline for obligating funds.

From the letter:

“We write to express serious concerns about the lack of transparency in how the funds have been spent, including diversion of taxpayer dollars for ‘promoting equity’, and specifically how the Department prioritized use of these critical funds for fraud prevention, identification, and recovery.

“More than two years have passed, and, to date, the Department has yet to provide adequate explanation as to how this money has been used or any results of the Department’s efforts to fight fraud. In fact, the Department reports having recovered less than $5 billion in fraudulent pandemic unemployment payments.”

Smith and Crapo request that DOL provide basic information on how the money has been spent; the progress being made on the UI projects funded via ARPA at the state level; and DOL’s oversight of the contractors administering the funds, among other information.

Read the full letter here.

READ: Chairman Smith Applauds Bipartisan Passage of the Protecting Taxpayers and Victims of Unemployment Fraud Act