Elon Musk and President Donald Trump say they’ve uncovered large “fraud” within the US federal authorities.
Throughout Oval Workplace remarks on February 11, Trump mentioned their efforts to chop spending had turned up “billions and billions of {dollars} in waste, fraud and abuse”.
Trump added: “We discovered fraud and abuse, I’d say these two phrases versus the third phrase that I normally use, however on this case, fraud and abuse.”
Trump and Musk used the phrase “fraud” or “fraudster” mixed a few dozen instances throughout their Oval Workplace question-and-answer session.
To date, neither Musk nor the Trump White Home has proven proof of this alleged legal exercise that they’ve discovered.
On February 12, throughout a White Home information convention, a reporter requested Press Secretary Karoline Leavitt for proof of fraud.
“I like to deliver the receipts,” Leavitt mentioned. She cited three contracts for $36,000 for variety, fairness and inclusion [DEI] programmes at US Citizenship and Immigration Companies, $3.4m for the Council for Inclusive Innovation on the US Patent and Trademark Workplace, and $57,000 associated to local weather change in Sri Lanka.
“I’d argue that each one of this stuff are fraudulent,” Leavitt mentioned. “They’re wasteful and they’re an abuse of the American taxpayer’s greenback.”
When PolitiFact requested about these claims, the White Home press workplace pointed to an April 2024 Authorities Accountability Workplace report that discovered the “federal authorities loses an estimated $233 billion to $521 billion” yearly to fraud.
The White Home additionally despatched an inventory of dozens of Division of Authorities Effectivity “wins”, together with cancelled media outlet subscriptions and contracts for DEI initiatives, consulting and administrative bills.
“Nothing they’ve recognized is, to my data, proof of ‘fraud’ or ‘corruption’. Fraud and corruption are crimes,” mentioned Jessica Tillipman, affiliate dean for presidency procurement legislation at George Washington College. “This administration merely has totally different spending priorities than the final administration. However to label all of it as fraud or corruption is extraordinarily deceptive.”
Trump has torn down governmental fraud-finding instruments. He fired greater than a dozen inspectors common whose job was to ferret out fraud and inefficiencies. He paused the Overseas Corrupt Practices Act, which prohibits companies from taking bribes from overseas officers.
Authorities stories present that fraudulent spending is a measurable downside for the federal authorities. However the proof that DOGE has uncovered new examples has but to be proved.
Right here’s an outline of how the federal government offers with waste, fraud and abuse.
Fraud just isn’t the identical as waste or abuse
Waste, fraud and abuse will not be interchangeable phrases.
The Authorities Accountability Workplace (GAO) says waste is “utilizing or expending sources carelessly, extravagantly or to no function”. Abuse is “behaviour that’s poor or improper”. Fraud “entails acquiring one thing of worth by means of wilful misrepresentation” and is labelled after a authorized course of.
“Fraud is a really excessive authorized commonplace,” mentioned David M Walker, who serves on the federal authorities’s Protection Enterprise Board, which advises the Protection Division on enterprise administration.
To qualify as fraud, an exercise must be unlawful with proof of intent, which is “essentially the most troublesome factor to show”, he mentioned.
Walker, the previous US authorities comptroller who led the GAO underneath Democratic and Republican administrations, mentioned a lot of the examples he has heard from DOGE may very well be characterised as waste and abuse. Walker provided the Paycheck Safety Program, which Congress handed in March 2020 to assist small companies cowl payroll early within the COVID-19 pandemic, for example of a programme that had fraudulent funds that the federal government later caught. The US Small Enterprise Administration inspector common later estimated $64bn in fraud.
The Authorities Accountability Workplace is staffed with auditors, and federal inspectors common workplaces have auditors and legislation enforcement on employees. Each refer suspected fraud to investigators.
“Anytime somebody appears at information (spending information, for instance), you will note anomalies that catch your consideration and warrant evaluate,” mentioned Robert Westbrooks, the Pandemic Response Accountability Committee government director who labored in authorities oversight roles throughout Democratic and Republican administrations. “That doesn’t essentially imply the transaction is fraudulent or wasteful.”
Westbrooks reviewed the White Home record of DOGE “wins” and mentioned he noticed no proof of an intent to deceive.
“Waste is within the eye of the beholder,” he mentioned. “Fraud, alternatively, is set by a courtroom.”
Earlier than Trump, inspectors common discovered legal exercise
Congress handed the Inspector Basic Act of 1978 in response to anticorruption efforts that began after the 1972 Watergate break-in and cover-up that led to President Richard Nixon’s resignation. An company inspector common’s mission is to conduct impartial and goal audits, investigations and inspections, and stop and detect waste, fraud and abuse.
Solely the president can take away inspectors common. Trump fired 17 inspectors common on January 25, prompting a lawsuit by many searching for to get their jobs again. The lawsuit says Trump didn’t observe the legislation that requires him to inform Congress 30 days earlier than he removes inspectors common. (Trump additionally pushed out a handful of inspectors common in spring 2020.)
Trump later fired US Company for Worldwide Improvement (USAID) Inspector Basic Paul Martin following a February 10 advisory that the federal authorities’s pause on overseas help posed monetary dangers. (The unsigned discover got here from the USAID inspector common.) The discover mentioned the federal government’s pause on overseas help put greater than $489m of meals help liable to spoilage or diversion and restricted officers’ capability to answer fraud and waste allegations.
Previously, many inspectors common have discovered fraud.
The Council of the Inspectors Basic on Integrity and Effectivity issued an annual report for 2023 that highlighted federal efforts to fight fraud, waste and abuse. The report confirmed that the work of inspectors common led to greater than 4,000 prosecutions and recognized practically $93.1bn in potential financial savings.
The findings resulted in about 3,000 suspensions, reprimands and terminations for federal contractors and federal, state and native staff.
Inspectors common in recent times have discovered fraudulent exercise in COVID-19 reduction programmes, together with $5.4bn in pandemic reduction loans obtained through fabricated Social Safety numbers.
Inspectors common at different companies have additionally discovered wrongdoing that prompted prosecutions, together with a bid-rigging scheme associated to NGO contracts funded partly by USAID.
One other probe led to a $6.9m settlement with a global nongovernmental organisation over inflated invoices. The inspector common additionally suspended or prevented some organisations from doing enterprise with USAID.