Senator Joni Ernst

(Washington, D.C.) -- Iowa Senator Joni Ernst is among the members of Congress calling on the Small Business Administration to launch an investigation into fraudulent lending during the pandemic.

Ernst co-led a hearing Tuesday by the Senate Committee on Small Business and Entrepreneurship, which focused on lending practices by SBA and its administration of COVID-19 relief programs. Ernst says more needs to be done to get a full handle on how much money was loaned out due to fraud.

"As the rush of pandemic aid went out the door, bad actors took advantage of the American taxpayers' generosity," said Ernst. "We now know fraudsters bilked millions and millions from SBA in fraudulent loans from this program. As it transitions from supporting small businesses to servicing loans, I am concerned about the SBA's lack of attentiveness to ensuring law enforcement has everything it needs to pursue those who have defrauded the taxpayers."

Additionally, Ernst says the SBA needs to open an investigation specifically into COVID-19 relief funds making their way to entities affiliated with Planned Parenthood.

"The SBA has unlawfully approved nearly $100 million in forgivable PPP loans to Planned Parenthood affiliates," said Ernst. "To make matters worse, the SBA forgave 34 of these loans, despite it being a clear violation of affiliation rule. Yet to date, the SBA has not launched an investigation into this issue or made any effort to recoup the ineligible funds."

Ernst also says federal spending has reached record levels, which has caused inflationary pressures on small businesses around the country.

"Small businesses are the backbone of the American economy," said Ernst. "Despite being told otherwise, small business owners know the impact of inflation on their businesses is not transitory and it is proving not to be short-term. This inflation crisis has created a hidden value-added tax that has deeply impacted their economic security."

During the hearing, Ernst pressed the SBA for an update on recovery of funds that were fraudulently loaned out and for a plan to prevent future fraud in their lending programs.

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