’Fraud’ is four-letter word in SBA loan investigations

    The Small Business Administration, facing mounting scrutiny over how it doled out checks from a $212 billion pandemic relief program, has privately directed employees not to use the word “fraud” in writing if they spot suspicious applications, Bloomberg reports. 

    Workers reviewing requests for the SBA’s COVID-19 Economic Injury Disaster Loan program have instead been told by managers to use alternative phrases such as “duplicate,” according to four people who received the instructions and asked not to be identified. 

    The rationale given to some employees: Aid documents could be targeted by public records requests.

    The directive threatens to make it harder for the SBA to gauge the scope of abuse of the EIDL program as the agency faces congressional calls to explain how it will identify any grants and loans sent to scammers and recover taxpayer money. U.S. Rep. Judy Chu, D-Calif., who heads the House Small Business Committee’s panel on oversight, has said she plans to hold a hearing on those efforts.

    While the guidance hasn’t stopped employees from flagging applications they view as needing more scrutiny, the lack of consistent language has led to confusion as workers try to relay their concerns to colleagues, the people said. Read the full story.