GAO Report: State-Level Fraud Costing Taxpayers Hundreds of Billions Yearly

This month, a report by the Government Accountability Office (GAO) finds that state-level fraud is exploding, not just in Maine and Minnesota but nationwide. The remedy is a return to integrity.

GAO:  “Twenty federal programs that route $1.1 trillion through state governments – including Medicaid, SNAP and disaster relief – are vulnerable to fraud because of how the money is distributed… through states… contractors and subcontractors.”

GAO “reaffirms the agency’s  estimate that the government loses between $233 billion and $521 billion a year to fraud …” The findings are at once a shock and not a shock, since oversight at the state level – and even at the federal level – has been perennially weak, with few checks.

In Maine, a state audit found $2.1 billion in potential fraud, contracts being cut to friends, family, and Democratic party-affiliated groups, and no oversight. In the last legislative session, a bill to force the state’s Department of Health and Human Services to give up files on 152 Maine children who died in state custody – to the Democrat-controlled oversight committee – was stunningly defeated.

In short, the three monkeys are in play: see no evil, hear no evil, and say no evil – from Maine and Minnesota to other low-integrity state governments, an epidemic of corruption is being normalized. GAO’s report affirms the impact: as large sums are sent to the states, corruption follows.

While Maine’s governor, those around her, and other one-party state leaders have become passive, “who-cares?” spenders of taxpayer money, in effect careless non-custodians of state and federal tax dollars, using it for political advantage, the taxpayers have paid a terrible price and lost trust.

All this flies in the face of a tradition – shared by Democratic and Republican leaders – that historically prioritized, until recently, the importance of integrity in state and federal government.

Wrote Democratic presidential nominee Adlai Stevenson in 1952: “Public confidence in the integrity of the Government is indispensable to faith in democracy; and when we lose faith in the system, we have lost faith in everything we fight and stand for.”

Similarly, the Republican General and presidential nominee who beat Adlai Stevenson, Dwight Eisenhower, wrote: “In order to be a leader, a man must have followers. And to have followers, a man must have their confidence. Hence, the supreme quality of a leader is unquestionably integrity. Without it, no real success is possible, no matter whether it is on a section gang, on a football field, in an army, or in an office.”

Ike continued: “If a man’s associates find him guilty of phoniness, if they find that he lacks forthright integrity, he will fail. His teachings and actions must square with each other. The first great need, therefore, is integrity and high purpose.”

Two decades later, Ronald Reagan spoke similar words and laid out the stakes, stating: “If we have the integrity to do what is right, freedom will not only survive, it will triumph… Freedom to think, freedom to imagine and create, these are not privileges, but the very source of our life’s bread and the hope of mankind’s future.”

Without integrity in government at the state level, we lose confidence. We lose trust. We lose our commitment to the ideals that underpin the entire Republic. We cannot do that. We need to restore high-integrity state-level leadership, real oversight of tax dollars, and end normalized corruption.