Eye On Illinois: Pandemic loan fraud offers real-time lessons in loopholes, accountability and vigilance

You may not know the name Jorge Augustín Nicolás Ruiz De Santayana, perhaps because he mostly went by George.

Familiarity with the Spanish-American philosopher often comes through either his inclusion in the second verse of Billy Joel’s “We Didn’t Start the Fire” or for authoring a concept so commonly paraphrased as to obscure its origin.

In the 1905 first volume of “The Life of Reason: The Phases of Human Progress,” Santayana wrote: “Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained, as among savages, infancy is perpetual.

“Those who cannot remember the past are condemned to repeat it.”

Far be it from me to disagree with a brilliant writer, but I would humbly suggest a corollary, especially relevant to public officials: often the most effective method of remembering is noticing the object lesson in real time.

This mindset is appropriate context for processing last week’s Medill Illinois News Bureau headline: “State watchdog uncovers at least $7.2M in PPP fraud by state employees.”

The report details ongoing work from the Office of the Executive Inspector General indicating more than 275 times where a state employee inaccurately applied for relief under the federal Paycheck Protection Program.

The Small Business Administration, which has its own inspector general, said there was “unprecedented fraud” involved with the $786 billion in loans issued from the onset of COVID-19 into October 2022.

The OEIG is looking at state employees across 13 agencies who took roughly $20,000 or more from the program – a figure that required reporting $100,000 of net profit or gross income.

“The vulnerabilities that led to the issues with PPP fraud weren’t really attributable to things at the state level. I would say that the issues had far more to do with the unaccountable nature of the program itself,” said state Rep. Mike Kelly, D-Chicago, who co-sponsored House Bill 3304. Enacted in May 2023, the law gives authorities up to five years from discovering COVID relief fraud to begin criminal prosecution.

That means the issue is ongoing. We’re not to the point of remembering the past, we’re living the first draft of history. Actions like passing HB 3304 show a commitment to learning from mistakes. Many of the involved Illinois employees have quit or lost their state jobs, which at least helps their agencies move forward.

To Kelly’s point, it’s fair to imply the feds have more to learn than Springfield, but state leaders also can take lessons about loopholes, accountability and vigilance, pandemic or otherwise. As investigations and prosecutions mount, perhaps so will taxpayer confidence in justice eventually being served.

• Scott T. Holland writes about state government issues for Shaw Local News Network. Follow him on X @sth749. He can be reached at sholland@shawmedia.com.