Trump SBA chief Kelly Loeffler says Biden ignored anti-fraud safeguards in $14B Covid grant rollout

WASHINGTON, DC: President Donald Trump's Small Business Administration (SBA) chief Kelly Loeffler accused the Biden administration of knowingly bypassing federal fraud safeguards during the Covid-era grant rollout, claiming SBA staff were ordered to ignore the US Treasury’s “do not pay list” even after “70 pe rcent” of the payments were later flagged as fraudulent in a GAO report.

Loeffler framed the alleged conduct as deliberate government misconduct tied to billions in taxpayer money. “This is criminal,” she told Fox News in an interview, amplifying outrage around the massive fraud claims and the Biden administration’s handling of pandemic funds.

Loeffler targets Biden fraud safeguards

The Trump SBA chief alleged the Biden administration pushed grants out the door at breakneck speed while sidelining fraud protections that could have blocked suspicious payments.

“Trump SBA chief Kelly Loeffler just revealed the Biden admin ORDERED their staff to ignore the US Treasury's ‘do not pay list’ for grants — and 70 PER CENT WERE FLAGGED FOR FRAUD,” the viral X post stated.

Loeffler said SBA employees were under strict instructions to move applications quickly instead of closely vetting recipients.

“They ordered SBA employees to take 4 hours per applicant and not any more,” she said.

She argued the rushed process helped fuel massive losses tied to fraudulent claims.

“That’s how $14 BILLION got out the door so quickly!” the post added while highlighting Loeffler’s accusations against Biden-era officials.

Loeffler also pointed directly to a government report to support her claims about the scale of the alleged abuse.

“Then we come to find out in the GAO report that 70 percent of it was fraudulent!” she said.

SBA crackdown becomes political flashpoint

Loeffler contrasted the alleged Biden-era handling of the grants with what she described as a much tougher anti-fraud approach under the Trump administration.

“Now we, from day one at the SBA, have come in with a zero-tolerance policy on fraud. And so we began cracking down on it right away,” she said.

She added that the agency has already begun trying to recover taxpayer funds tied to the disputed grants.

“We've already sent out 1,000 demand letters demanding that those who took the money — now these were not loans. These were grants. These were the federal government writing checks of taxpayer money!” Loeffler said.

Her comments landed as Republicans continue hammering Democrats over pandemic-era spending and oversight failures tied to Covid relief programs.

The remarks pointed to broader concerns over fraud during the pandemic.

Beth Van Duyne vows to help recover stolen funds 

Rep Beth Van Duyne also said that “fraudsters exploited the COVID-19 pandemic to steal hundreds of millions of dollars from taxpayers and to commit rampant identity theft”.

Van Duyne also said she introduced the ‘Recover COVID Unemployment Fraud in Banks Act’ with Rep Tom Suozzi as “a bipartisan solution to help recover these stolen funds by providing a pathway to return funds to the federal government.”

Loeffler’s allegations now add another layer to the growing political fight over who bears responsibility for the massive fraud tied to pandemic relief spending and whether safeguards were intentionally ignored while billions in taxpayer dollars were distributed.

“A recent investigation by @DOLOIG found nearly $1 billion in COVID-era UI funds tied to fraud being held by financial institutions. Without action from Congress, hundreds of millions in funds may go uncovered,” she wrote on her X account.

She added that "Today, @WaysandMeansGOP advanced the Recover COVID Unemployment Fraud in Banks Act, bipartisan legislation to establish a federal task force to facilitate the cost-effective recovery of the payments and return them to the federal government.”