Obama stimulus watchdog: ‘Bad guys’ will make play for COVID-19 relief cash

bad guys
Image by Gerd Altmann from Pixabay
bad guys
Image by Gerd Altmann from Pixabay

WASHINGTON — Earl Devaney is feeling déjà vu.

Devaney, a former longtime federal watchdog, was hired in 2009 to police the distribution of $840 billion in federal stimulus spending for the Obama administration. He had previously worked for the U.S. Secret Service, the U.S. EPA’s environmental enforcement division and as the Interior Department’s inspector general.

Now happily retired and living in Fort Lauderdale, Fla., Devaney has nonetheless been offering guidance to House and Senate committees as they’ve hammered out the details of a far more ambitious spending package to respond to the COVID-19 pandemic. The U.S. Senate late Wednesday night passed a $2 trillion spending bill that could be signed into law as early as this week.

“It’s an awful lot of money,” Devaney said. “It seems a little bit like déjà vu, that’s for sure.”

Democrats have pressed to ensure that an inspector general and congressionally appointed board monitor the funds loaned out to industries under the program.

Devaney, who led such an effort in the past, said fraudsters will undoubtedly try to game the system.

“As you and I are talking right now, hundreds of bad guys are forming LLCs in various states … with the intent of applying for this money as soon as it becomes available,” Devaney said. “You put $2 trillion on the table, every self-respecting fraud artist in the world is going to show up for it.”

Watchdogs may not be able to get their oversight operations up and running as quickly as some lawmakers are promising to dole out cash, Devaney said. It took his team about six months to set up an analytical platform to watch where the money was going.

If another inspector general is brought on to monitor the cash spent by this bill, Devaney said their job will be like “straddling barbed wire.” If they fail, they will be in “big trouble.”

And sometimes problems exposed by watchdogs can be embarrassing for politicians. “It works both ways,” Devaney said, noting that the Obama administration was “not happy” when his team began to show that some of the American Recovery and Reinvestment Act funds went to companies that “went belly up” after they took the money.

The Obama administration came under intense scrutiny when the California-based solar company Solyndra went bankrupt after it received a $535 million loan from the government, leaving taxpayers on the hook.

“That was embarrassing for the administration,” Devaney said. “On the other hand, the public deserves this kind of transparency. It’s an enormous amount of money and you’d like to think that they could guard it somehow.”

Robin Bravender
Robin Bravender is the Washington, D.C., bureau chief for States Newsroom, a network of state-based nonprofit news outlets that includes Nevada Current.