SBA watchdog says pandemic grant probes are embarrassingly few

The Small Business Administration’s inspector general told a Senate hearing on Wednesday that his office has just six open investigations into two pandemic-era grant programs worth roughly $43 billion. William Kirk called that caseload “underwhelming” and “embarrassing,” according to Business Insider, as lawmakers debate extending the statute of limitations before key deadlines in April and May.

The programs—$28.6 billion in Restaurant Revitalization Fund grants and $14.6 billion in Shuttered Venue Operators Grants—were designed to move money quickly to businesses hit by lockdowns. They did. The after-action work is where the system appears to have stalled. Kirk said his office has received hundreds of complaints and referrals about potential abuse but lacks the time and resources to investigate them all under the existing clock, urging Congress to give prosecutors more time.

The gap between distribution speed and recovery capacity is not an accounting footnote; it shapes behaviour. When grants are written broadly and paid out rapidly, the practical question becomes not whether misuse is forbidden but whether it will ever be reviewed. Business Insider has previously reported that some recipients used venue grants for private jets, lavish parties and large personal bonuses—spending that may have been legal under the programs’ permissive rules, even if it violated the public’s expectations of “relief.” If the boundary between permissible and punishable is unclear, and the odds of scrutiny are low, the rational response is to optimise the application rather than the underlying business.

Congress has already extended the statute of limitations for fraud tied to larger pandemic programs such as the Paycheck Protection Program and Economic Injury Disaster Loans, adding five years to the normal five-year window. The push now is to apply similar extensions to the restaurant and venue funds. Senator Joni Ernst has led the effort; at the hearing, Senator Ed Markey signalled movement after earlier procedural fights that, according to the report, had entangled the bill with disputes over other small-business research programs.

Even if Congress extends the deadline, the hearing underscored a second constraint: investigative bandwidth. Kirk said his investigators and auditors had been focused on other fraud areas in recent years, leaving these two programs with minimal coverage despite the volume of complaints. That creates a familiar pattern in emergency spending: the state can scale up payouts instantly because it controls the payment rails, but it cannot scale up verification and enforcement with the same speed because those functions rely on staffing, casework and courts.

For legitimate restaurants and venues, the incentives cut both ways. Broad eligibility and light oversight mean honest applicants compete with aggressive ones for finite pools of money. When questionable claims are rarely clawed back, the cost is spread: through higher taxes, higher borrowing, or inflation that dilutes everyone’s purchasing power. The grant recipient keeps the upside; the public shares the downside.

Kirk’s testimony offered a concrete measure of that imbalance: a $43 billion grant footprint, and six investigations still open years later.