The editorial goes on to recommend that a small percentage of the funds should be set aside to prevent fraud and abuse. Unless funds are given to support the accounting for and the prevention of fraud in these funds, a large chunk will go to undeserving fraud perpetrators. It's already happening. For example,
The Obama administration—and state and local governments—should brace themselves for fraud on an Olympic scale as hundreds of billions of taxpayer dollars continue to pour into job creation efforts.
Where there are government handouts, fraud, waste and abuse are rarely far behind. The sheer scale of the first and expected second stimulus packages combined with the multitiered distribution channel—from Washington to the states to community agencies to contractors and finally to workers—are simply irresistible catnip to con men and thieves.
A tenfold increase in funding for an obscure federal program that installs insulation in homes has state attorneys general quietly admitting there is little hope of keeping track of the money.Earlier this week, U.S. Attorney General, Eric Holder, announced the creation of a task force to fight fraud. The task force will include numerous government agencies from the SEC to the FBI, HUD and everything in between. Holder recognizes the potential for fraud in the stimulus funds as he announced that one of the four purposes of this task force is to focus on:
Recovery Act and rescue fraud —including the theft of federal stimulus funds and the illegal use of taxpayer dollars intended to shore up our financial institutionsHowever, a task force may be too little too late if they don't put some controls in place quickly! The goal is not to create jobs (see this post) but to use the funds for the purpose they were intended. Unfortunately, as Aaron pointed out yesterday, when money is used to do good, there are scammers who are trying to take it for selfish pursuits.