[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
INVESTIGATING PANDEMIC FRAUD: PREVENTING HISTORY FROM REPEATING ITSELF
=======================================================================
HEARING
before the
SUBCOMMITTEE ON OVERSIGHT
OF THE
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
OCTOBER 19, 2023
__________
Serial No. 118-OS03
__________
Printed for the use of the Committee on Ways and Means
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
______
U.S. GOVERNMENT PUBLISHING OFFICE
54-909 WASHINGTON : 2024
COMMITTEE ON WAYS AND MEANS
JASON SMITH, Missouri, Chairman
VERN BUCHANAN, Florida RICHARD E. NEAL, Massachusetts
ADRIAN SMITH, Nebraska LLOYD DOGGETT, Texas
MIKE KELLY, Pennsylvania MIKE THOMPSON, California
DAVID SCHWEIKERT, Arizona JOHN B. LARSON, Connecticut
DARIN LaHOOD, Illinois EARL BLUMENAUER, Oregon
BRAD WENSTRUP, Ohio BILL PASCRELL, Jr., New Jersey
JODEY ARRINGTON, Texas DANNY DAVIS, Illinois
DREW FERGUSON, Georgia LINDA SANCHEZ, California
RON ESTES, Kansas BRIAN HIGGINS, New York
LLOYD SMUCKER, Pennsylvania TERRI SEWELL, Alabama
KEVIN HERN, Oklahoma SUZAN DelBENE, Washington
CAROL MILLER, West Virginia JUDY CHU, California
GREG MURPHY, North Carolina GWEN MOORE, Wisconsin
DAVID KUSTOFF, Tennessee DAN KILDEE, Michigan
BRIAN FITZPATRICK, Pennsylvania DON BEYER, Virginia
GREG STEUBE, Florida DWIGHT EVANS, Pennsylvania
CLAUDIA TENNEY, New York BRAD SCHNEIDER, Illinois
MICHELLE FISCHBACH, Minnesota JIMMY PANETTA, California
BLAKE MOORE, Utah
MICHELLE STEEL, California
BETH VAN DUYNE, Texas
RANDY FEENSTRA, Iowa
NICOLE MALLIOTAKIS, New York
MIKE CAREY, Ohio
Mark Roman, Staff Director
Brandon Casey, Minority Chief Counsel
------
SUBCOMMITTEE ON OVERSIGHT
DAVID SCHWEIKERT, Arizona, Chairman
BRIAN FITZPATRICK, Pennsylvania BILL PASCRELL, New Jersey
GREG STEUBE, Florida JUDY CHU, California
CLAUDIA TENNEY, New York BRAD SCHNEIDER, Illinois
MICHELLE FISCHBACH, Minnesota SUZAN DelBENE, Washington
BETH VAN DUYNE, Texas GWEN MOORE, Wisconsin
RANDY FEENSTRA, Iowa
NICOLE MALLIOTAKIS, New York
C O N T E N T S
----------
OPENING STATEMENTS
Page
Hon. David Schweikert, Arizona, Chairman......................... 1
Hon. Bill Pascrell, New Jersey, Ranking Member................... 2
Advisory of October 19, 2023 announcing the hearing.............. V
WITNESSES
Linda Miller, Founder and CEO, Audient Group..................... 5
Amy Simon, Principal, Simon Advisory............................. 17
Rebecca Shea, Director of Audits, Forensic Audits and
Investigative Services, U.S. Government Accountability Office.. 27
Robert Asaro Angelo, Commissioner, New Jersey Department of Labor
and Workforce Development...................................... 54
MEMBER QUESTIONS FOR THE RECORD
Member Questions for the Record to and Responses from Linda
Miller, Founder and CEO, Audient Group......................... 83
Member Questions for the Record to and Responses from Rebecca
Shea, Director of Audits, Forensic Audits and Investigative
Services, U.S. Government Accountability Office................ 88
PUBLIC SUBMISSIONS FOR THE RECORD
Public Submissions............................................... 114
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
INVESTIGATING PANDEMIC FRAUD:
PREVENTING HISTORY FROM
REPEATING ITSELF
----------
THURSDAY, OCTOBER 19, 2023
House of Representatives,
Subcommittee on Oversight,
Committee on Ways and Means,
Washington, DC.
The subcommittee met, pursuant to call, at 10:03 a.m., in
Room 1100, Longworth House Office Building, Hon. David
Schweikert [Chairwoman of the Subcommittee] presiding.
Chairman SCHWEIKERT. Good morning, and welcome to today's
oversight hearing on the investigating pandemic fraud and
preventing history from ever repeating itself again.
We have all seen the headlines: biggest fraud in a
generation. Easy money. The great grift. These terms were used
to describe the historic amount of fraud that has plagued the
government assistance program during the COVID-19 pandemic. It
is my hope today that we will deliver deep--that we will dive
deeper into how. And this is the key point. Walk us through not
only your fixes, particularly the technology discussion some of
you have, but how was it done?
I think, for many of us, the visualization in our heads of
how do you move billions of dollars, how--in some of the
details we are going to hear, how so much of it ended offshore.
In many ways, this is not partisan; we are actually trying to
understand how American people that needed the help and
governments who are struggling to finance it, where did the
money go and how was it stolen?
The goal of the hearing is to--is not to cast blame on one
side of the aisle or the other. Rather, my hope is in this
hearing we will help identify and--identify corrective action
needed to prevent massive fraud from happening when resources
are pushed out in the future.
There was a great sense of urgency to get a massive amount
of resources out the door into the pockets of Americans who
were in need. For example, in the first 14 days of the Paycheck
Protection Program, the Small Business Administration
distributed over $300 billion of loans. The unprecedented
amount of spending naturally made benefit programs more
susceptible to bad actors. We know the unemployment insurance
fraud totaled at least--and we are having a running dispute,
and all of you, I will ask to speak to this if you think you
have a more accurate number--100 to $135 billion, and the IRS
now has issued a moratorium on the Employer Retention Tax
Credit due to its fears of significant fraud.
There are too many stories of pandemic fraud in today's
media. Can I give you one example? For one instance--and you
will love this one--the FBI discovered a Nigerian state
government official who was in possession of stolen bank credit
card and tax information of numerous Americans and used these
identities to obtain $350,000 worth of unemployment benefits
from several states. But he is just one example of scores of
foreign fraudsters that use stolen identification to loot the
aid intended to help Americans.
In other cases, a man from Michigan who was on parole when
he filed dozens of fraudulent unemployment claims using the
identity of federal and state inmates who were not eligible to
receive the benefits,--he obtained their personal information
using the website off the dark web by falsely claiming he could
help improve their credit ratings. This man has since pled
guilty to wire fraud and aggravated identity theft.
And those examples only start to scratch the surface. We
must understand how the fraud was committed so we can stay
ahead of the criminals and use whatever--the most advanced
technology available to stop this in the future.
I will encourage that the Pandemic Response Accountability
Committee formed by an--the committee formed an initiative by
data scientists using artificial intelligence and a risk model
to analyze pandemic spending and identify abnormalities. This
type of data sharing can help law enforcement agencies pursue
fraud investigations. It is my hope that using tools like this
will not only help hold criminals accountable for their actions
in the past but will also guide the future efforts of Congress.
We recognize three things. There is a dispute over the
dollar amounts. We have already spent some time trying to blame
each other, whether it be on the partisan facts--that is not
the goal of this committee. But the third thing, it is the
single thing I think is most important to Mr. Pascrell and
myself: how did they do it; what do we implement so it never
happens again?
Chairman SCHWEIKERT. And with that I yield to the ranking
member, Mr. Pascrell.
Mr. PASCRELL. Thank you, David. Good morning, everybody. It
is good when you see bipartisanship. It happens so infrequently
up here. And David, thank you for your selection of the
witnesses today.
I want to welcome our witness, Rob Asaro-Angelo, New
Jersey's labor commissioner. He is a very good friend, hard
worker, relentless, and he has done a great job, even under
your estimates----
Chairman SCHWEIKERT. Do you know everyone in New Jersey?
[Laughter.]
Mr. PASCRELL [continuing]. In administering and modernizing
our state's unemployment insurance program during the worst
employment crisis in generations.
So, Congress acted decisively in the face of historic
adversity to keep Americans safe. And I think you heard the
chairman reiterate that. Our unemployment aid kept families
together, and it saved lives. More than 1.5 million Garden
Staters received unemployment from March the 20th to September
2021. It stopped mortgage defaults, kept the electricity on,
put food on tables and in children's stomachs.
Then, in March of 2021, we passed the American Rescue Plan
because the crisis was not over. It included unemployment aid,
strong enforcement protections--we thought--to fight fraud and
recover taxpayer dollars. President Biden used those
protections to prosecute frauds. States have recovered nearly
$1.2 billion so far, so enforcement is working.
As Rob will testify, New Jersey put these dollars to
excellent use, bringing our system into the 21st century with a
focus on accessibility and security. In the Federal Government,
we have not even done that. I don't care whether there is a
Democratic president or is a Republican president, we have
failed the Nation by not keeping up to the times.
The majority claims to care about misuse. I believe they
are--in their souls. But the other side sought to rescind
unspent American Rescue Plan money funding allocated to crack
down on fraud, to recover overpayments, and improve
unemployment insurance security.
Our pandemic measures exceeded expectations. We emerged
stronger than any other country in the world. Every job lost
during the pandemic was recovered. All our economic output loss
is regained. Job growth is at a 40-year high. Unemployment is
at a 54-year low. I think the economy is booming, and I think
there is a long way to go. And they are not contradictory.
I am happy to work together with our chairman to ensure
Federal dollars are well spent. Fraudsters must be held
accountable, period. Our witness from New Jersey deeply
understands this, Mr. Chairman, the unemployment insurance
fraud, has ideas on how we could prevent this in the future.
It is imperative that, when seeking solutions, we refrain
from shaming our workers and lying about our strong economy.
And what is, is. The truth is our actions during the pandemic
saved lives and saved the American economy.
Mr. PASCRELL. Mr. Chairman, thank you for putting us
together this morning, and I look forward to the--hearing from
the witnesses.
Chairman SCHWEIKERT. Thank you, Mr. Pascrell.
Would you like a vanilla cappuccino? [Laughter.]
Mr. PASCRELL. Thank you very much, Mr. Chairman.
Chairman SCHWEIKERT. And now to the big chairman, Chairman
Smith.
Mr. PASCRELL. Do you have a nomination? [Laughter.]
Chairman SMITH. ``The big chairman'' just kind of makes me
nervous. But I would like a cappuccino, if I could have one. I
am just kidding. More like a monster drink. [Laughter.]
Chairman SMITH. But thank you, Chairman Schweikert, Ranking
Member Pascrell. It is always a pleasure to be with you all.
Part of our oversight responsibilities here in Congress is
to assess when the fraudulent use of tax dollars occurs, and
account for what has been lost. But the American taxpayer also
expects us to put an end to as much of that fraud as--that we
can to hold the fraudsters accountable and, better yet, stop
the illegal activity before it happens. That is why I
appreciate that today's hearing is forward looking. We are
focusing on not just the when and where, but on the how and why
fraud occurs, because that is how we get to the solutions that
will protect the taxpayer and the rightful beneficiaries of
these programs.
The numbers are staggering. A recently-released Government
Accountability Office report pegs the cost of fraud in the
pandemic-era unemployment insurance program at 100 billion to
135 billion, doubling GAO's previous estimate that the
Comptroller General shared with this committee in February.
Some outside experts put the level of improper payments as high
as 400 billion. And that is just in the UI programs. As I noted
in our hearing on this issue back in February of this year,
this is the greatest theft of taxpayer dollars in American
history.
We also know the Employee Retention Tax Credit program has
been an easy and convenient target for criminals seeking to
defraud the government as well as small businesses to such an
extent that, as we discussed at our oversight hearing in July,
the ERTC program is on the IRS's Dirty Dozen list of worst
scams in the country. In fact, as of the end of July the IRS
has initiated 252--252--investigations covering over 2.8
billion of potentially fraudulent ERTC claims from 2020 to
2022.
To be clear, the type of criminals we are talking about are
not just homegrown fraudsters or lone wolves looking to prey on
unsuspecting beneficiaries. We are talking about transnational
organized criminal enterprises. Moreover, we have found that,
in cities that were able to crack down on the UI fraud they saw
occurring, violent crime in those same localities went down,
meaning these were more violent criminals committing this
fraud. In Baltimore, they found that 60 percent of violent
criminals were also committing some type of COVID-19 fraud.
When they started prosecuting COVID-19 fraud cases, they saw a
20 percent reduction in homicides--20 percent reduction in
homicides.
I appreciate the fact that we have witnesses today from
both within government and outside of government. With an
estimated $280 billion in stolen COVID-19 relief funds, we need
to be seeking input from as many experts as we can to bring as
many perspectives as we can to build a more robust defense
against fraud. I look forward to the solutions that will come
from today's discussions.
Chairman SMITH. And I yield back to you, Mr. Chairman.
Chairman SCHWEIKERT. Thank you, Chairman Smith. One last
bit of business to do. I have two vanilla cappuccinos left.
Raise your hand if you want one of them. I got one sold and--no
one else? They are really good. Okay, I got the two sold.
All right. Linda Miller is the founder and CEO of Audient
Group. Did I say that right?
Ms. MILLER. Audient Group.
Chairman SCHWEIKERT. Audient Group, okay. Well, it is a
weird spelling.
She also serves as the executive director of the Pandemic
Response Accountability Committee and spent 10 years working
for the Government Accountability Office.
Amy Simon is a principal for Simon Advisors. She is--
previously served as the acting deputy secretary for employment
and training administration at the U.S. Department of Labor.
Rebecca Shea, which is a famous name in the Scottsdale
Phoenix area, so she says, not related to the name, is the
director of audits and forensic audits and investigative
services at the U.S. Government Accountability Office.
And Robert Angelo is the commissioner of the New Jersey
Department of Labor and Workforce Development.
Thank you for joining us today. You each have five minutes.
Also, to--last thing, I want to echo Mr. Pascrell's--you
are a terrific panel. We are here to do something a little
different than we often do; we are here to listen.
Ms. Miller, start to educate us.
STATEMENT OF LINDA MILLER, FOUNDER AND CEO, AUDIENT GROUP
Ms. MILLER. Thank you so much. It is a real pleasure to be
here today in this forward-looking hearing with this committee.
I am really excited.
My name is Linda Miller, and I have, as Chairman Schweikert
mentioned, started my own consultancy working on fraud risk
management. But I have spent my entire career in the government
fraud space, including serving as deputy executive director of
the Pandemic Response Accountability Committee.
In talking about what happened during the pandemic when it
comes to fraud, there was a combination of inadequate oversight
and internal controls, large-scale organized fraud rings, and
antiquated data and information systems that contributed to the
widespread and massive fraud that we saw during the pandemic.
Going forward, two significant problems must be solved.
One, fraud prevention is simply not a priority for Federal
and state agencies. The pandemic highlighted this critical gap.
And two, the use of data in government is broken. Data is
an essential tool, and the fight against fraud and sharing data
and using it to prevent fraud is simply not working.
My written statement today outlines five key actions
Congress can take to help ensure history doesn't repeat itself.
Today, I am going to highlight a couple of those.
First, a dedicated anti-fraud office with senior-level
authority should be created. Agencies struggle with competency
and fraud and data analytics. They struggle with data sharing,
and they struggle with a lack of incentives to allocate
resources to these activities. An all-of-government strategy
should be established and implemented by a well-funded,
centralized entity with the authority to effect real change.
Such an office would have the necessary skills and resources to
work solely on addressing the data, accountability, and
technology challenges agencies face at every level of
government.
As part of this office Congress should direct the creation
of a fraud analytic center of excellence modeled on the PRAC's
Pandemic Analytic Center of Excellence. A centralized analytics
hub in the management side of government would create an
economy of scale, and would place a data-driven emphasis on
fraud prevention, where it can be the most effective.
Second, we must adopt approaches that are used in the
private sector. Conventional wisdom today holds that you can
promote citizen access to government services or you can
prevent fraud, but you cannot do both. This trade-off doesn't
exist in the private sector, and it shouldn't in government.
Banks effectively balance the competing business imperatives of
attracting and retaining customers and preventing fraud every
day. Both are vitally important to their bottom line.
Part of the challenge lies in outdated laws, and--that
limit agencies' ability to use data and prevent fraud,
especially given the rise of data breaches and the epidemic of
identity theft that we are seeing today.
Developing innovative projects in partnership with the
private sector can help mature the government's capacity to
prevent fraud. For example, the Senate Appropriations
Committee's fiscal year 2024 financial services bill contains
language directing Treasury to lead a public-private
partnership to counter the increasing threats of financial
fraud, which will facilitate information sharing between
government and private sector, develop best practices, and
encourage innovations in fraud prevention.
Another approach Congress should consider is the creation
of a regulatory sandbox that would allow the private sector to
work with agencies on data-driven fraud prevention approaches
with a degree of assurance that those won't run afoul of
statutory and regulatory requirements such as privacy laws that
limit the use of data for fraud prevention.
Third, agency leaders need incentives to prevent fraud.
Company CEOs respond to the demands of their customers and
their shareholders. As citizens, we are government's customers
and its shareholders, and we do not demand fraud prevention, we
demand timely access to services. Agency leaders need
incentives to prevent fraud. Congress can incentivize agency
leaders by holding regular hearings to discuss actions to
prevent fraud, building fraud prevention into the performance
metrics of those leaders, and measuring their activities
against an established benchmark.
A word of caution, though, on incentives. The hidden nature
of fraud makes it easy to ignore. If agencies are only measured
on the amount of fraud they have, they will establish
meaningless fraud indicators and then give the false impression
that fraud is controlled. Incentives in fraud prevention should
be focused on the actions that agencies are taking and the
rigor with which they are measuring the effectiveness of those
actions.
And finally, we need dedicated funding set aside for fraud
prevention and large spending bills. The Bipartisan
Infrastructure Law and the Inflation Reduction Act both
contained enormous grant and loan programs but provided no
funding or requirements for safeguarding the integrity of those
funds. Fraud actors will target those programs with the
coordinated fraud schemes that they did during the pandemic.
Data and analytics can be a game changer. Massive amounts
of third-party data can be mined and leveraged to identify
suspicious indicators. Establishing dedicated funding for fraud
prevention in these spending bills will provide the focus and
resources needed.
When it comes to fighting fraud, an ounce of prevention
really is worth a pound of cure. We must put fraud prevention
tools in the hands of government leaders and hold them
accountable to prevent history from repeating itself. Thank
you.
[The statement of Ms. Miller follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman SCHWEIKERT. Ms. Miller, that was remarkably
helpful.
Ms. Simon.
STATEMENT OF AMY SIMON, PRINCIPAL, SIMON ADVISORY
Ms. SIMON. Chairman Schweikert, Ranking Member Pascrell,
thank you for the opportunity and invitation to testify today.
As a former leader in the U.S. Department of Labor's
Employment and Training Administration during the pandemic, I
was a firsthand witness to both the economic devastation of the
pandemic and to the extraordinary legislative policy and
operational responses contained in multiple pieces of
legislation, starting with the CARES Act. And later, as an
unemployment insurance claimant and victim of identity theft, I
was a firsthand witness to the system's flaws and operational
weaknesses. And so I believe this question of what do we do
next and how do we move forward is incredibly timely, and I
appreciate the committee's attention.
My prepared remarks highlight the incredible scale of both
the pandemic benefits and the scale of fraud. And due to this
hearing's focus on fraud, I did not address the many adjacent
and substantive policy issues in unemployment insurance. That
would certainly need to be part of a more comprehensive
conversation. Instead, in my opening statement, I would like to
highlight just two themes.
First, I often sense an inherent tension that fraud
detection and prevention and benefit accessibility are opposing
goals. This is a false dichotomy. It was often eligible
claimants who waited for months on end, while fraudsters easily
stole millions. It was often eligible claimants who found out
that their benefit accounts had been drained when fraudsters
socially engineered access. It was often eligible claimants who
found out that they couldn't get benefits because a fraudster
had already applied in their name. These claimants are the
heart of the program's mission to provide temporary partial
income replacement for workers out of a job for no fault of
their own. If you care about the program, you need to care
about fraud. It does not have to be one or the other.
Second, I think that unemployment insurance pandemic fraud
lessons are broader than just unemployment insurance. Three
quick examples.
Fraud is constantly evolving, targeted, and agile.
Unemployment insurance fraudsters repeatedly went to public
sources for tutorials and help on how to more effectively
accomplish their fraud schemes. Government's response was not
evolving, targeted, or necessarily agile, especially at the
beginning of the pandemic. Static solutions to dynamic threats
are not going to move the needle quickly enough in this
environment.
Second, pandemic fraud did not stay in the pandemic.
Fraudsters are paying attention, and we do not have the luxury
of returning to pre-pandemic norms. Mission success and program
performance metrics must reflect the extent to which benefit
programs are or are not managing fraud risks effectively.
And third, there are potential national security
implications for domestic benefit programs when billions of
fraudulent dollars flow through them to unfriendly
international or even state-sponsored cyber crime groups. I
believe there are active roles for Congress to play on each of
these fronts.
I appreciate the opportunity to testify and look forward to
your questions.
[The statement of Ms. Simon follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman SCHWEIKERT. Thank you, Ms. Simon.
Ms. Shea.
STATEMENT OF REBECCA SHEA, DIRECTOR OF AUDITS, FORENSIC AUDITS
AND INVESTIGATIVE SERVICES, U.S. GOVERNMENT ACCOUNTABILITY
OFFICE
Ms. SHEA. Good morning, Chairmen Smith, Schweikert, and
Ranking Member Pascrell, and members of the subcommittee. Thank
you for inviting me to discuss some of GAO's resources and
recommended actions to better prevent fraud in normal
operations after the unprecedented levels of fraud in COVID
relief programs.
GAO's goal in general, and my goal in particular as a
director in our forensic audit group, is to encourage agencies
to prevent fraud in order to avoid the very costly pay-and-
chase approach. The importance of prevention is the cornerstone
of GAO's fraud risk framework. Requirements have been in place
for many years for agencies to manage fraud risk. But, as GAO's
comptroller general testified earlier this year, agencies' lag
in implementing these requirements led to significant fraud in
COVID programs.
Yes, agencies across the Federal Government acted quickly
to stand up new programs and greatly scale up existing programs
to combat the effects of the pandemic. And yes, that made for
an unusually attractive target to fraudsters. But the nature of
COVID relief schemes was not dissimilar from fraud schemes that
occurred in years prior.
Some schemes were simple and benefited a simple--a single
fraudster, like a case where an individual received a quarter
million dollars from the Coronavirus Food Assistance Program
for claimed loss of livestock at a commercial farming
operation, despite not owning or operating a farm. Others used
technology or brought others along to scale up the impact of
the fraud, like a case where the owner of a tax preparation
business recruited people to prepare fraudulent tax returns and
COVID EIDL loan applications. She charged her clients up to 50
percent of the fraudulent proceeds and paid her employees a
flat fee for each application that received funding, and she
also claimed fraudulent EIDL, PPP, and unemployment benefits
for herself.
Regardless of scale, misrepresentations of eligibility and
identity are primarily at the core of these schemes. Had
agencies been better prepared to prevent and detect identity
and eligibility representations in normal operations, they
would have been better prepared for the emergency, which leads
us to the question of why agencies weren't prepared and what is
needed to get them there.
Based on my audit experience, I would put the root causes
for this in two buckets: mindset and direction. The mindset
issue I have seen is that program managers often don't think
fraud is a problem, at least not in their programs, or they
don't think fraud is their problem, particularly when the
program is administered through grants, contracts, or other
third parties. And if agencies don't think there is a problem,
or that it is theirs to manage, they aren't going to spend time
and resources on it. The unprecedented scope and scale of COVID
relief fraud has put a dent in that mindset, but we need
sustained focus on accountability to eliminate that mindset
once and for all, and that is where GAO resources and
congressional action can provide direction.
In addition to our audits and recommendations to address
specific fraud vulnerabilities, GAO has developed resources
like our conceptual fraud model, our fraud risk framework, our
anti-fraud resource, and, most recently, our framework for
managing improper payments, all of which provide a roadmap for
fraud prevention. Providing this direction was a key driver for
developing our conceptual fraud model that lays out the who,
what, how, why, and where of fraud schemes so agencies can
better understand what fraud looks like and how it happens in
order to respond to those vulnerabilities.
GAO has also suggested actions Congress can take, including
reinstating requirements for agencies to report on their
progress with fraud prevention, making permanent the data
analytics function in the oversight community, and making
permanent Treasury's access to Social Security's full death
data to help prevent payments to deceased individuals.
In addition to these efforts, GAO has work underway to
identify possible incentives for fraud risk management such as
funding options, ways to measure prevention activities, and
enhance data sharing and analytic programs.
Unfortunately, not everyone's moral compass points due
north. Fraud will happen, and bad actors will be creative in
finding vulnerabilities and exploiting opportunities for their
personal gain. But with a better understanding of how fraud
happens, by leveraging available resources to prevent fraud,
and by taking actions GAO has recommended to agencies and to
Congress, the Federal Government as a whole will be better
positioned to prevent fraud in any environment.
I thank you for this opportunity and look forward to your
questions.
[The statement of Ms. Shea follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman SCHWEIKERT. Thank you, Ms. Shea.
Mr. Asaro-Angelo.
STATEMENT OF ROBERT ASARO-ANGELO, COMMISSIONER, NEW JERSEY
DEPARTMENT OF LABOR AND WORKFORCE DEVELOPMENT
Mr. ASARO-ANGELO. Good morning, Chairman Schweikert,
Chairman Smith, and Ranking Member Pascrell, members of the
Subcommittee on Oversight, and to all your hard-working members
of your staff. Thank you for inviting New Jersey to this
important conversation. I can assure my colleagues to my right
that anti-fraud measures have always been a priority in New
Jersey.
In the winter of 2020, we were in great shape, with record
numbers of people working. Nobody could have predicted the
economic and personal chaos of the global COVID-19 crisis. From
February to April, in just 2 months, our state lost over
730,000 jobs, more than 1 in 6. On April 1, we saw a 2,700
percent increase in UI claims from that same week the prior
year--2,700 percent.
With Congress's quick action through the Families First
Coronavirus Response Act and the CARES Act, we provided
lifelines to those who needed help staying afloat when they
lost their jobs. In just 21 months, we distributed close to $40
billion to 1.6 million workers. But, unfortunately, there are
those who took advantage of the situation as an opportunity for
ill-gotten gain.
Since New Jersey has a higher-than-average benefit rate, we
have always taken fraud very seriously. We have instituted
aggressive measures and applied several anti-fraud processes.
We rely on this layered approach, from analytics to third-party
identity-proofing, to both catch suspicious claims and act as a
deterrent, greatly reducing fraud attempts to begin with.
Prior to the pandemic, UI fraud generally meant someone was
illegally collecting benefits while working, or otherwise being
dishonest on their application or weekly certification.
Identity theft had been a long-time but manageable issue. But
now, with the vast amounts of personally identifiable
information--or PII--available on the dark web, fraudsters were
ready to weaponize it.
To be clear, I am not just talking about domestic attacks.
There are global fraud rings, as mentioned earlier, who share
vulnerabilities of various state systems and cherry pick the
ones easiest to deceive.
With a dramatic increase in claimants and a dramatic
increase in benefits, there is a dramatic increase in
fraudulent claims. Fraudsters saw the pandemic as the perfect
time to attack, as--and they saw almost--an almost perfect
target: Pandemic Unemployment Assistance, or PUA. While enacted
with the best of intentions, PUA added a whole new population
of beneficiaries to our system that we had never had before. We
simply did not have the mechanism and, more importantly, the
statutory authority to verify their employment.
For PUA, eligibility was based solely on self
certification, and states were prohibited by law from
confirming this information: the perfect recipe for fraud.
Unlike regular UI, where every individual claim is verified or
contested by an employer, a crucial backstop for fraud, states
didn't have the ability to check this information until the end
of 2020 with passage of the Continued Assistance Act. The
constantly changing rules, along with the pressure to get these
payments out as quickly as possible, made every state all the
more vulnerable.
So the challenge during the height of the pandemic and
still to this day has been balancing our efforts to get
payments out quickly to the claimants who deserve them while
safeguarding our trust fund from cheaters and criminals. And
these steps take time.
During the pandemic our anti-fraud efforts were challenged
like never before, battling dark web tutorials on how to commit
fraud, caches of stolen PII, and tutorials on social media with
step-by-step instructions on how to commit fraud to get
benefits. But our seasoned professionals rose to the occasion,
identified risks, acted swiftly, and went above and beyond
their traditional fraud prevention and risk management
operations.
Our Cyber Fraud Investigations team was created out of
necessity during the pandemic due to the tremendous and
relentless attacks. They teamed up with our IT division to
combat the cyber-fraud attempts, with a focus on technology to
support their efforts. Partnering with ID.me, a federally-
credentialed security vendor, New Jersey became the first state
to offer three ways to digitally verify claimant identity that
all meet heightened Federal security standards: self-service,
live video chat, and in-person. During the pandemic, New Jersey
halted hundreds of thousands of fraudulent payments, protecting
billions of dollars.
Although claims have slowed overall, including false ones,
we are always shoring up our defenses. Through the National
Association of State Workforce Agencies, or NASWA, we are
collaborating with other states to share findings, trends, and
best practices. The funding we have received through the
American Rescue Plan to modernize our unemployment system has
been critical. Building a newer, more modern system improves
equity of access and security, which go hand in hand with
fighting fraud.
It is vitally important we continue supporting efforts for
national improvements to create overarching systems that work
with each other, instead of having each state operate
independently. Fraudsters love nothing more than having 53
separate systems to pick through to see which can be hit the
easiest and the hardest.
There is no silver bullet to completely eradicate fraud
from our benefit system, but we can combat it in every way
possible, continually learning and training so we stay one step
ahead. We look forward to working with our Federal partners
across multiple agencies to combat fraud, apply lessons
learned, solidify policies, and see concrete action at the
national level to ensure we never see such widespread UI fraud
ever again.
I am grateful for this time to speak with you all. I am
happy to address any questions you may have to the extent that
I can without revealing any of our trade secrets to the
fraudsters who are most certainly watching this hearing. Thank
you.
[The statement of Mr. Asaro-Angelo follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman SCHWEIKERT. Thank you, Mr. Asaro-Angelo.
All right, as the chairman I guess I get to ask the
questions first. Yay.
I still remember when the pandemic started off, and have--
how many of you had this family experience where you pick up
the phone and it is your wife, and your wife is going, ``You
know, I am here handling all these unemployment requests'' at
the surgery center she ran, and a lot of it were people who had
never worked there, people who hadn't worked there in years.
But the best one was when she was getting unemployment requests
or the verifications for herself. And the phone call was, ``Do
you want me to quit now? Because apparently I am already asking
for the unemployment.'' And okay, a small surgery center, I
think they may have had 20 to 30 employees. And she said they
added up over that year--hundreds of these came in.
I have a board here, and this is sort of going on the
theme--and forgive me, I am going to do something a little
awkward, but I don't have a better way to do this. We are
trying to not only--and this is going to go to you
substantially, Ms. Miller, because you have actually touched on
things that everyone else also touched on. We were trying to
get our heads around if we had a national data exchange for the
verification as our friend from New Jersey just spoke about.
Does it stop it where the identities--the identities are
out there, they have been stolen. We have actually, as Members
of Congress, had our identities stolen not too long ago. Does
it stop it where the actual applying--where in this process--
because we have been tracking some crazy stories of UI fraud
that was converted to gift cards, that got moved into buying
cars, and then the cars were shipped to North Africa as a way
to wash the money.
Let's say we had your data exchange. Where do I break the
fraud loop, the information, the ability to make the requests?
Ms. MILLER. Yes, well, thank you. The data is the way to
address this significant problem, which is identity theft that
you are talking about. And we saw unprecedented identity theft
because of the vast number of data breaches that we have
experienced.
Every single American's information is available for sale
on the dark web today. You can buy Social Security numbers for
about $0.25 a piece now. They have gone down. There were about
$1 a piece about a year ago. And so, as a result of having so
much information available for so little money and fraud actors
being able to monetize that information, what agencies need at
the Federal and the state level is the ability to identify
quickly those indicators that would suggest that somebody who
is applying for a benefit is, in fact, a stolen identity,
things like the device geolocation.
So, in the UI fraud, for example, if somebody was applying
for pandemic benefits and they lived in Nigeria, and you were
sitting in the UI office in Iowa, you did not have any kind of
IP address tracking to know that.
Chairman SCHWEIKERT. But, Ms. Miller, can I bust that by
using, you know, a VPN?
Ms. MILLER. Yes. You can--most of these tools to steal--to
use--to effectively use stolen identities can be circumvented,
especially in the age of generative AI. So now we have even got
much more sophisticated tools than we did at the beginning of
the pandemic that they are using and exploiting right now.
And so, as a result, as Amy mentioned, the concept of, you
know, a dynamic and a static, we have got a dynamic adversary,
and we have very, very static processes that address them.
Agencies need to be able to use the kinds of tools that banks
use, that technology companies use, that--you know, where they
can very quickly identify these patterns. And that is a data
problem. And we have a data problem in government.
We are very protective of the privacy of citizen data. And
I am not saying we shouldn't be, but in--today, when every
single one of our identities are being stolen on the dark web,
but the government is protecting our information to the degree
that the adversaries can use the data, but the government can't
use it to stop them.
Chairman SCHWEIKERT. Okay, and I have a handful of
questions, but I want to finish one last with Ms. Miller.
In your testimony, what do I have to change statutorily or
redefine statutorily so I don't run into the constant excuse
that we often, as Members of Congress--``Well, that has a
privacy concern, or that is over there.''
Ms. MILLER. Yes.
Chairman SCHWEIKERT. At the same time that these people's
privacy has long since been violated.
Ms. MILLER. You know, honestly, I am for privacy. I am a
good--I believe in privacy. But the privacy--there is a very,
very robust protection of privacy sort of lobby and group on
one side, who has gone so far--and it is--we need to consider
that we live in a different world now. The Privacy Act and the
Computer Matching Act were written at a time that we are in--
this environment that we are living in is changing monthly.
Literally, it is changing every month. And we have got laws
that we haven't changed in years.
So the Privacy Act, the Computer Matching Act, and the Fair
Credit Reporting Act, the FCRA, all three of those need to be
considered on the basis of how we can better use data to
prevent fraud across the government.
Chairman SCHWEIKERT. Okay.
Mr. ASARO-ANGELO. Chairman Schweikert----
Chairman SCHWEIKERT. New Jersey----
Mr. ASARO-ANGELO [continuing]. Back to your original
question on that chart--and Mr. Fitzpatrick, I don't want to
hurt--with bringing it up again, but, you know, this is where I
think we need to marry technology and policy because on that
chart you had, you know, the stolen identities, then the
applying for unemployment, and then getting the benefits.
Right now, under statute, we have to let everybody apply
for UI benefits, no matter if we know that they are stolen in
advance. The way this current statute is that we have to let
everybody apply----
Chairman SCHWEIKERT. Okay, so----
Mr. ASARO-ANGELO [continuing]. And then do the security
check afterward.
Chairman SCHWEIKERT. Say that sentence again. So even when
it hits your door, you still have to----
Mr. ASARO-ANGELO. We have to process that application. Now,
clearly, the identity verification and all the other checks can
be part of that process afterwards. But we can't deny anybody
the ability to apply for unemployment benefits at this time.
Chairman SCHWEIKERT. Okay. Ms. Shea--and this is one-off--
but I--for my own sanity, I need to ask. Have you seen any
research done on how many bad actors around the world this
fraud may have helped finance? Because, you know, think about,
you know, what is going on in the Middle East right now, and we
have had some things come to our office saying some of these
organized international criminal cartels were washing the money
for violence. Any place I can go to chase that down?
Ms. SHEA. Well, so no specific numbers and amounts, but we
did look at some of that information through the Department of
Justice press releases on cases. And so, we have some
information about foreign actors exploiting the various
pandemic programs--in different programs, not just unemployment
insurance.
But I do want to get back to this issue of addressing
unemployment insurance fraud issues. In 2020, there is an
integrity data hub that provides services to states to check
the verification of whether or not there is an application
across states if somebody applies in multiple states. The bank
account verification--it will do a validation of the bank
account. It will check to see whether their identity flags on a
particular application. In 2020, 34 states participated in that
integrity data hub, and the other states did not.
Chairman SCHWEIKERT. For the 34, how effective was it?
Ms. SHEA. Well, notwithstanding some of the issues Rob
mentioned about prohibitions against certain checks, it
provides information to the states about where there are flags,
where there are areas of concern where the payment should not
be made. Now, Department of Labor has since been able to get
all 50 states and 3 territories signed up for that service. It
is a free service. It is available to them.
So I think, as we are thinking about resources and, you
know, additional data sources and new technologies that we can
be--that can be applied, it is also important to think about
what is already available to federally-funded programs and to
Federal programs to prevent fraud.
Chairman SCHWEIKERT. Okay, my very last question. Could I
take that data hub and enhance it with Ms. Miller's AI and
other database touches?
Is there a way that this isn't reinventing the wheel, but
making the wheel much more efficient?
Ms. SHEA. I----
Chairman SCHWEIKERT. Now I forced the two of you to talk to
each other. [Laughter.]
Ms. SHEA. Yes, that is what really needs to get done. I
mean, if we want to fix this, we have to think about the states
working together. And so there is this hub that does have--it
is--it provides an opportunity for those--for them to share
data across the states. If they augment that with third-party
data, they are going to have a whole lot more robust data sets
to be able to share information and identify fraud schemes much
quicker and more effectively.
Chairman SCHWEIKERT. Okay, thank you, witnesses. It is
actually appreciated.
Mr. Pascrell.
Mr. PASCRELL. Thank you, Mr. Chairman.
Ms. Miller, we can't legislate directly identity theft.
That is my contention. So, we need to work from the front end,
and put into legislation reasonable--and unreasonable,
sometimes--as you pointed out, we are in a different world--but
basically, reasonable attempts to prevent the fraud or the
possibilities of fraud from ever happening. That is not only
true here, unemployment insurance. We talked about it
yesterday, every Federal program.
I am not a--never met anybody on this panel, this
committee, on either side--now, no one is privy to virtue in
politics. Let's get that straight. But we can't be helpless to
the problem, knowing it is going to get worse. The chairman has
pointed that out vividly. But everybody on this panel doesn't
simply send their support for legislation because so what?
Somebody gets it that doesn't deserve it, so what? No, no, that
undermines the credibility of the program. You know that better
than I do. So, we need to take a very close look at this, and
it is a serious, serious problem dealing with serious, serious
money.
Mr. Commissioner, the title of this hearing is ``Keeping
History from Repeating Itself.'' What are the top things we
here can do to keep this criminal activity--this is criminal,
what we are talking about here--from happening again? Because
there are going to be programs in the future that are ripe for
those who wish to deceive. And those who wish to deceive are
taking money from their peers who are getting the advantage of
the programs.
So I don't want to hear generally about the poor. The poor
are many times crooks. Really? Are you serious?
So what do you think we can do about it?
Mr. ASARO-ANGELO. Well, hopefully, we never have to have a
situation like COVID ever again. But if one does arise, if some
kind of national emergency, don't ever pass a program like PUA
again. PUA was primarily for independent contractors and self-
employed. It should have been in Treasury or SBA. The 1099
workers, the self-employed are inherently small businesses. PUA
was the main cause of UI fraud during COVID, and sort of got
the camel's nose under the tent, as they say. In regular UI the
employers of the workers are the crucial part of the anti-fraud
process.
Congressman Schweikert, you talked about your wife working
at the surgery center. That is how we stop fraud. Very often we
hear from the employers who say, ``Hey, I got a filing for this
person, and they don't--one, they don't exist, or two, they
don't work for us, or three, they are still employed.'' That is
one of our most important ways to fight fraud.
Mr. PASCRELL. The specifics that you are talking about,
would you please, at your leisure, put them down in very
specific order in terms of the--being in parallel to what you
testified today, and get it to everybody on this panel? I would
ask you to do that. Is that asking too much?
Mr. ASARO-ANGELO. Not at all, Congressman.
And to answer Congressman Schweikert's question of before--
--
Mr. PASCRELL. And let me ask----
Mr. ASARO-ANGELO [continuing]. He does know everybody in
New Jersey, yes.
Mr. PASCRELL. Thank you. Every Democratic member on this
panel worked very closely with the President to include $2
billion. Correct me if I am wrong, anybody--for unemployment
insurance fraud-fighting measures in the landmark the American
Rescue Plan was not that long ago.
Can you provide some examples of how New Jersey spent these
Federal dollars to modernize its UI program in support of
workers to prevent fraud?
Mr. ASARO-ANGELO. There is a lot. I will try to keep it
really brief.
We have increased staff, fraud staff specifically, with the
creation of our cyber fraud investigations unit. We contracted
with an identity credentialing vendor. We have--now we have a
dark web monitoring service. We procured IT services to enhance
an existing data analytical tool, which allowed us to ingest
numerous data elements like Ms. Miller talked about to identify
fraud trends and patterns. Supported our pilot, along with
Arkansas from U.S. DOL, our claimant experience pilot, which
informed much of our current research and best practices on our
new application, which we will launch in just a couple of
weeks. We established our Office of Unemployment Modernization
to deliver a UI system built with smaller modular pieces, not
one big chunk all at one time. That usually leads to failure.
And all other forms of our UI modernization, which is always
going to make our systems more secure.
Mr. PASCRELL. Go ahead.
Chairman SCHWEIKERT. Mr. Pascrell, are you telling me I
have things to learn from New Jersey?
Mr. PASCRELL. Yes.
Chairman SCHWEIKERT. We are going to go to two-to-one on
this, just because we are running into some interesting
conference time.
Mr. Fitzpatrick.
Mr. FITZPATRICK. Thank you, Chairman Schweikert, for
holding the hearing. My first question is for Ms. Miller.
In December of 2022, the Secret Service announced that
hackers linked to the Chinese Government stole at least 20
million in U.S. COVID relief benefits, including UI funds in
over a dozen states. A former assistant U.S. attorney who
indicted these hackers from this Chinese criminal group in both
2019 and 2020 said that the hackers have ``tens of thousands of
machines'' going at one time to obtain personally identifiable
information and generate criminal profits.
Even more concerning, officials and experts told one media
outlet that other Federal investigations of pandemic fraud seem
to point back to foreign state-affiliated hackers. So, my
question, Ms. Miller, American officials have blamed Chinese
hackers for the breaches of OPM, of Anthem Health, and Equifax.
And it is clear that COVID fraud is not just a domestic issue;
this is a matter of national security.
So, based on your experience working with the Pandemic
Response Accountability Committee, which is a member of, of
course, of DOJ's International Organized Crime Intelligence and
Operations Center, what are the national security implications,
in your view, of foreign state-affiliated hackers stealing
taxpayer funds that were intended to be for COVID relief
benefit programs?
Ms. MILLER. Yes, we--data on this is still being evaluated.
But there are some estimates that half of the Pandemic
Unemployment Assistance fraud went to adversarial nations, and
that is pretty problematic when you consider that people, when
they think about fraud, they think, oh, it is just a little
rounding error, it is a problem. These are--this was fraud that
is funding our adversaries. That is what happened during the
pandemic, and that is why there is so much attention on it,
which is valid.
These hackers--and they--there is a full underground market
of fraud actors today. We call it fraud as a service. And it is
a full--those fraud actors, they have at their disposal really
sophisticated artificial intelligence tools. They have the
flexibility and agility to be able to move. If something is not
working, they can just take something down and put it back up.
We have seen where the DOJ has taken down a malware site, and
it has been back up two months later, and it is even more
effective.
So we cannot fight this adversary the way that we are
currently fighting this adversary, because this adversary is
serious, and they are looking to steal money to create not just
a financial problem, but a national security problem.
Mr. FITZPATRICK. Thank you, Ms. Miller.
Ms. Shea, what are the existing tools that agencies can be
using to prevent money that is fraudulently claimed from going
out the door?
Ms. SHEA. So GAO is dedicated to helping agencies enhance
their strategic approach to fraud risk. You know, we are always
going to come back to what it is that the program managers can
do. And, you know, you are hearing a lot about the risk
involved.
And so trying to encourage them to better understand that
risk so that they can strategically plan for it, identify what
the best solutions are. And we do that through things like our
fraud risk framework, which lays out 38 leading practices, a
roadmap for agencies to understand how best to strategically
manage risk. We have developed an anti-fraud resource, which is
a web-based, interactive, user-friendly guide that lays out the
who, what, when, where, why, and how of, you know, how fraud
happens, so that they can understand and take action.
There are other tools and resources like Treasury's Anti-
Fraud Playbook, which helps agencies figure out how to best
manage their risk and understand them, so--in addition to a
couple of matters that we have recommended to Congress to take
to help address these issues.
Mr. FITZPATRICK. And in your position of director of
forensic audits, you made recommendations to Federal agencies
on how to improve their fraud prevention.
So, number one, have the agencies agreed with those
recommendations?
And number two, have they implemented those
recommendations?
Ms. SHEA. So we have made a number of recommendations in,
you know, normal operations and, of course, in the COVID
programs. And I would say about 27 overall, 28 overall related
to COVID-specific fraud risk management, and there are still, I
think, about 18 of those left open.
So agencies do not always agree, and that is true in normal
operations. We don't always get agreement. And that relates
back to the mindset issue. They aren't always appreciating the
risk that exists.
Mr. FITZPATRICK. Thank you. Thanks to the panel for being
here.
I yield back.
Chairman SCHWEIKERT. Thank you, Mr. Fitzpatrick.
Mr. Steube.
Mr. STEUBE. Thank you, Mr. Chairman.
The COVID-19 pandemic and the resulting shutdowns imposed
tremendous costs on our nation. Unfortunately, criminals
exploited our dysfunctional Federal Government to steal
American taxpayer funds intended to alleviate the suffering.
This resulted in the fraudulent transfer of over $280 billion
to criminals, according to an Associated Press analysis.
American taxpayers were fleeced, and their government failed in
its duty to protect their tax dollars.
GAO has estimated the unemployment fraud during the
pandemic may reach as high as 135 billion. That figure
represents 15 percent of all unemployment insurance benefits
paid out during the pandemic. Meanwhile, criminals further
victimize American citizens through identity theft schemes. The
Federal Trade Commission reported a 3,000 percent increase in
identity theft claims related to government benefits in 2020.
This caused difficulty in accessing benefits for many law-
abiding Americans.
The sad fact is that much of this could have been
prevented. The Federal Government should be better stewards of
the hard-earned dollars American families pay in taxes. Law
enforcement must track down these criminals and recover the
illegally-obtained funds, but we also need to plan for the
future to ensure this never happens again. The tools exist for
the Federal Government to prevent this kind of fraud, we just
need to make sure that the tools are actually used.
Ms. Miller, the Pandemic Response Accountability Committee,
where you served as the deputy executive director, developed an
analytics tool called the Pandemic Analytics Center of
Excellence, which used analytic technology to uncover patterns,
anomalies, and red flags that point to potential fraud. This
tool has been used by numerous law enforcement agencies to open
over 500 investigations into 6,000 subjects, representing an
estimated potential fraud loss of 500 million.
Can you comment on the development of the PACE tool, as
well as other ways that technology can be used to address fraud
in the future?
Ms. MILLER. Yes, thank you. The PACE is one of the bright
spots in government anti-fraud activities that is in the
history of American government. The PACE has created a center
of excellence, a center, a hub. They--and they negotiated 95
data use agreements. Honestly, that is probably the biggest
accomplishment of the PACE.
It is--I can't overstate how challenging it is for agencies
to share data. They actually usually just stop trying because
of how hard it is to put a data use agreement in place. But
because the PACE's whole focus was on trying to gather a lot of
data in one place in order to use it to prevent fraud, they
were able to get those 95 data use agreements in place. They
also have FinCEN data, they have suspicious activity reports
data. They are using a lot of third-party data, and they are
using really impressive artificial intelligence tools. This
should be the model going forward.
And--but my--the important point I want to make, though, is
that is only for investigations. We know that we recover about
$0.50 on every dollar of fraud that has been stolen. And with
identity theft it is even less than that. We need a PACE inside
of the management side of government, so that these kinds of
tools can be used prior to making a payment, which is why I
have been advocating for the creation of a management-side
center of excellence. Where that sits is open to discussion.
Treasury could be one area that you could put it in, but it
needs to have the same capabilities, and it needs to have that
dedicated focus because, again, the people at the PACE, that is
their entire job is negotiating data sharing agreements,
acquiring data, pulling data scientists in.
The other thing the PACE did was create a data science
fellowship, and they were able to get recently-graduated data
scientists from different universities to come and work on
these projects. It is very difficult to get the data science
resources within the Federal Government. And so such an
analytic center of excellence sitting on the management side
should also look at that as a model in order to acquire the
data science expertise that is needed.
Mr. STEUBE. So you are proposing the creation of a
dedicated anti-fraud office for basically the entire Federal
Government. What is preventing agencies from using these
existing tools to protect against fraud instead of creating
that?
Ms. MILLER. So agencies, number one, most of them don't
have--they will tell you--I am not there, but they will tell
you that they don't have the resources. They will say, hey,
our--and this is--this gets back to this whole incentives
piece. They will say, ``Our job is to get a benefit out. That
is our job. Our mission is benefit delivery. Our mission is not
prevention of fraud. That is the IG's mission.'' And the focus,
what we have been trying to do at GAO, and when I was at GAO
and ever since, is trying to get agencies to understand that
their job is to prevent fraud.
But until they don't--so they will say they don't have the
resources, they will say that they don't have the ability to
get the data. They will tell you that the data is the problem.
The problem is partly because they can't negotiate these data
sharing agreements, it is partly because they think privacy
laws and FCRA requirements limit them from using that data. So
they will tell you all kinds of things. But really, the
challenge is that they are not sitting in this hearing today.
And, you know, typically we weren't having hearings about fraud
until the pandemic happened. Once they sit in the hot seat, I
think you will start to see them take this more seriously.
Mr. STEUBE. All right, thank you. I have seven seconds.
So, Ms. Simon, are--can you just explain quickly some cases
which COVID relief benefits were stolen and subsequently used
for criminal activity?
Ms. SIMON. Certainly. Just one quick P.S. on Linda's point.
When I was in the Department of Labor and we tried to get data
on incarcerated individuals at the Federal level during the
pandemic, which, as you know, would have been very helpful, we
ran straight into a brick wall of legal and financial
obstacles. And so I just want to say, from experience, that is
an incredibly real reality.
Yes, pandemic fraud is effectively a vertical for many
criminal organizations, and it is an income source. And there
was a recent DOJ indictment, I believe, in Michigan that was a
sprawling scheme that was funded by multiple kinds of pandemic
fraud, including unemployment, that had murder for hire as one
of its services. So these are not run-of-the-mill, someone down
the street claimed a few extra weeks that they shouldn't have
claimed. This is serious street crime.
Mr. STEUBE. Thank you for being here today.
I yield back.
Chairman SCHWEIKERT. Thank you, Mr. Steube.
Ms. Chu.
Ms. CHU. Yes, I would like to start by reminding my
colleagues that the Pandemic Unemployment Assistance program
was authorized by the CARES Act and extended by the
Consolidated Appropriations Act of 2021, both in overwhelmingly
bipartisan votes.
Additionally, Ways and Means Democrats secured funding to
fight fraud and recover taxpayer dollars in the American Rescue
Plan.
The pandemic was an unprecedented disruption of our
economy, and we hope that this does not happen again. But what
was clear was that there was necessity for benefits,
unemployment benefits, and that is why Democrats and
Republicans acted together to expand unemployment benefits as
quickly as possible to assist American families who, through no
fault of their own, suddenly found themselves without a way to
provide for their family's basic needs. This was a success,
which is why the U.S. has had a stronger economic recovery than
any of our peers.
From my district, I have heard from many individuals that
federal pandemic unemployment benefits were a lifeline for
providing for basic necessities like food and lifesaving
medications. That includes Gretchen from Altadena, California,
who has been in the film and television industry for the last
30 years, and is a cancer survivor whose medical coverage is
predicated on the number of hours worked; and Mary from
Pasadena, California, a nursery school teacher whose employer's
doors closed and had to file for unemployment for the first
time in her 26-year career; and May, the primary breadwinner
for her family living in Sierra Madre, trying to stay afloat,
all while distance learning with her three kids. The swift
action of Congress mitigated the hardship that jobless workers
and their families suffered, and it was essential in
stabilizing an economy that lost a staggering 22 million jobs
in just 2 months in early 2020.
We know that there are lessons to be learned from these
efforts that can strengthen and sustain the UI system for
future emergencies, and I hope that it is the goal of the
hearing to not neglect our duties to protect our workers in the
midst of a global pandemic.
So, Mr. Asaro-Angelo, I do want to note that Democrats took
the issue of fraud seriously as part of the American Rescue
Plan Act, or ARPA. Democrats provided the Department of Labor
with $2 billion to strengthen the integrity and preparedness of
state UI systems, as well as to provide grants to states for
fraud detection and prevention and overpayment recovery
efforts. However, earlier this year, the Fiscal Responsibility
Act of 2023 rescinded ARPA funding for UI programs and reduced
the total funding for UI programs from 2 billion to $1 billion.
So, in your testimony, you mentioned that New Jersey used
these funds to modernize your unemployment system. Can you talk
about how these modernization efforts are critical to
preventing fraud, and what would be the impact on fraud
mitigation by cutting these funds?
Mr. ASARO-ANGELO. Thank you for your question,
Congresswoman.
Yes, as I mentioned earlier, these funds have been critical
because modernization is key to fighting fraud as well. And the
important part of this is that modernization doesn't end, and I
think it has been a real problem for our systems for far too
long that a state would spend millions of dollars--sometimes
hundreds of millions of dollars--to go get a procurement for a
new system that may or may not have included anti-fraud
measures. Then years later, they would be delivered this system
that is already out of date, and any changes they want to make
to that system they need to go back and get change orders, get
a new contract. I don't think I need to tell anybody here
government procurement is not fast or agile.
But what we have done is used the agile method using the
GSA contract, where we are working with a team, a vendor team
that is working together about building this product, about
building small modular parts, which was considered in ARPA, by
the way. That way, not only can we be more agile about putting
new programs in, we can share them with other states.
And the funding that came out of the ARP for modernization
specifically states that states who use these funds have to be
able to share that with other states, because right now, when
you go to the vendor, they own the code, for the most part, and
sharing amongst states on this stuff is very difficult. So I am
really thrilled that the U.S. DOL put that in their grant
writing for the modernization. We were very proud to receive
one of the $11.35 million grants. Because of that rescission,
though, not every state could receive it. It became a
competitive process, as opposed to every state receiving those
dollars. So--but it was very smart how they wrote that--
whenever dollars are being used out of that, we have to be able
to share that product and those victories with other states, as
well.
Ms. CHU. Very good.
I yield back.
Chairman SCHWEIKERT. Thank you, Ms. Chu.
Ms. Tenney.
Ms. TENNEY. Thank you, Mr. Chairman and Ranking Member, and
thank you to the witnesses. Great testimony, lots of great
documents in here. I really appreciate it.
And I come from New York State, which got a tremendous
amount of money for unemployment insurance and a tremendous
amount of fraud. And I just wanted to address this first, I
think, to either--well, first I will go to Ms. Miller. Maybe
Ms. Simon first, and then, Ms. Miller, have you comment.
The previous Department of Labor OIG report provided
oversight on the Unemployment Insurance Program stated that
some internal controls had traditionally been used or
recommended by--to the states but were not used. So, I cite
back to a recent committee hearing that we had with the Office
of the Inspector General wherein they cited the State of New
York was warned back in 2010 that they did not have adequate
controls in place to handle the existing unemployment insurance
claims that they had.
And I will just give you a--pre-pandemic, an improper
payment amount was roughly about 10.34 percent. After the
pandemic it was almost 30 percent. The fraud rate of 4.5
percent--and this is before pandemic, with poor controls in
place--it went to almost 18 percent. The claims before the
pandemic in 2019, the quarter before, there were $530 million
in claims went to--in 2021, after the first quarter of 2021,
went to 6.5 billion, from 530 million to 6.5 billion, an 1,124
percent increase in claims because of the lack of New York
State to have controls.
And while my colleague wants to make this partisan, all of
this information is coming from Democratic Comptroller Tom
DiNapoli, who has provided numerous reports on warning New York
on what is happening to taxpayer money.
And the reason I am so concerned about this is we have
created this huge burden on our unemployment insurance trust
fund and that our small employers, who were forced to lay off
during the pandemic, are now paying for this, as are New York
State taxpayers, because the funds were squandered that came
through either the American Rescue Plan or other CARES Act
monies.
What can we do to get New York up to speed, and really
being a true, sound steward of taxpayer dollars that have been
wasted?
And, you know, you mentioned, you know, ring--international
rings up to 50 percent of the monies. What can we do? What can
New York do today to protect its small businesses and its
taxpayers in preventing this colossal fraud that we have seen,
largely due to the inability of the Department of Labor in New
York State to properly implement programs?
What can we do, like today, in the next few months, to curb
the costs that we are seeing to prevent this fraud?
And, Ms. Simon, I think I will address it to you first, and
then maybe Ms. Miller.
Ms. SIMON. Certainly. I think the one thing that--
specifically about this hearing and the question that you asked
is that the questions I have started asking when I look at a
state's posture is, are the use cases across the fraud life
cycle being addressed? So----
Ms. TENNEY. Is your microphone on?
Ms. SIMON. I think so. Should I----
Ms. TENNEY. Yes, talk right----
Ms. SIMON. Can you hear me? Okay.
Chairman SCHWEIKERT. You have to be really close.
Ms. SIMON. Okay, perfect. One of the questions I ask is, if
you think about the use cases across the fraud life cycle and
ask hard, specific, clear questions of the New York Department
of Labor before a claimant applies, ``What tools do you have,
what information are you getting, what are you doing with that
information as the claimant is applying, how are you verifying
their identity, what do you do with high-risk identities,'' and
then, after they have applied, ``When you see suspicious
activity, how do you handle that? What tools do you have in
place? What processes, how many fraud investigators do you
have? How many cases are going to prosecution?''
But those kinds of questions have not traditionally been
asked to state departments of labor, certainly not by Federal
counterparts. And often folks like the state auditor are the
ones asking those questions.
So I am happy to have a conversation also offline, and give
you specific advice. But I think one of the questions is to get
very, very specific about the entire life cycle. What is the
state doing? What tools does it have in place? And what is it
doing with the information it gathers?
Ms. TENNEY. Thank you.
Ms. Miller, if you could just------
Ms. MILLER. Yes, I would just------
Ms. TENNEY. Just a plan.
Ms. MILLER. Sure. I mean, I just think------
Ms. TENNEY. To start.
Ms. MILLER [continuing]. One of the things is, though, is
when no one else is looking.
So who calls one of you guys? Someone who says they didn't
get a benefit, right? Nobody really calls and says, ``Oh my
God, there is a ton of fraud in the UI program.'' That only
happens later, when the IG puts out a report and everyone gets
alarmed. And so when this is done, and when this blows over,
they are still going to go back to worrying about getting that
benefit out quickly, because that is who they are going to hear
from. They are going to hear from a congressperson when a
constituent is saying, ``I am not getting my benefit.''
So I am going back to incentives to fraud prevention.
Internal controls is not exciting stuff. They don't want to
worry about internal controls until there is a hearing. And so
we have to--you, Congress, has to incentivize them and build
this into their performance metrics: ``We are glad you are
getting benefits out the door quickly, but we also want to make
sure that you are doing things to make sure only eligible
benefits--beneficiaries are getting those benefits, and not
just worrying about the squeaky wheel, which is did I get my
benefit and did I get it quickly?''
Ms. TENNEY. Right, yes. We keep flooding these agencies
with billions of dollars in taxpayer money, and we are hurting
our small business community.
So, thank you so much for your expertise, I appreciate it.
Chairman SCHWEIKERT. Thank you, Ms. Tenney.
Ms. TENNEY. I yield back.
Chairman SCHWEIKERT. Those are terrific questions.
Mr. Feenstra.
Mr. FEENSTRA. Thank you, Chairman Schweikert and Ranking
Member. Thank you very much.
I want to also thank our witnesses, and for all your
information that you have given. To me, it is all about
solutions. We have got to figure out solutions. We have got to
really dig down and understand. Obviously, we know what is
happening and we have improper payments, we have fraud, we have
waste. We have criminals trying to take advantage of our
taxpayers. So here is my question to Ms. Miller and Ms. Simon.
We have AI. We have private companies that deal with this
all the time. When it comes to credit card companies, they do a
great job. We have bank companies that are also doing the same
thing. What can we take from them, as a Federal Government and
say, hey, let's apply this to what we are doing and to reduce
this fraud?
And Ms. Miller, first, how can we handle this? I mean, how
can we identify the fraud with these new techniques, and then
how can we apply it?
Ms. MILLER. Sure, yes. We--the private sector has really,
really advanced tools that they use at the front of what they
call the front of the sale, so at the very beginning, right? So
when someone is applying for a new benefit, if they are opening
an account at a bank, or if they are looking to make a
transaction, the bank can very quickly, in what they call in
their words as a low-friction technology, right?
They can take a ton of data about me when I apply and say
this looks like Linda's--we have seen this Social Security
number and this address associated with Linda, but we have
never seen it coming from that IP address. Or, you know, this
person says that they are applying for this benefit here, but
we have information that shows that that bank account is
actually in an entirely different state, or maybe even a
different country.
Mr. FEENSTRA. Right.
Ms. MILLER. And so they are able to take all that kind of
information and triangulate it.
They are also able to say, oh, this new applicant for this
loan is actually affiliated with four other people, all of whom
have been indicted with--for fraud. This looks like this person
might be a shell company associated with a number of--in a
fraud ring.
These are the things that the private sector can do. The
government has very little, if any, ability to use that kind of
data to make those determinations. And that is why the------
Mr. FEENSTRA. Why not?
Ms. MILLER [continuing]. Fraud actors are------
Mr. FEENSTRA. Well, why can't we use that data?
Ms. MILLER. Well, partly it is that most agencies don't
even--honestly, most of them don't even know that these are
capabilities they can have. There needs to be a lot more
education of agency leadership, of what kinds of tools could
they put in place.
But again, it gets back to no one is really telling them
this is an important priority. So when they get a budget, their
budget is focused on getting benefits out the door, it is not
focused on preventing fraud. If instead there is built in this
money here, we are going to give you this $10 million, but we
expect you to use 1 million of that to build in fraud
prevention tools using data------
Mr. FEENSTRA. Yes.
Ms. MILLER. And if they are told that, then they can go and
find those. But right now they are not even looking for it.
And so you see things like the Inflation Reduction Act or
the Infrastructure Act, where money is going out to states and
local governments all across the country. There is very likely
enormous fraud in those programs, and there is very little
fraud prevention tools being used today.
Mr. Feenstra. So it is the dollars and it is the
technology. And that is why I am saying------
Ms. MILLER. Exactly.
Mr. FEENSTRA [continuing]. This is ripe for AI.
Ms. MILLER. Yes.
Mr. FEENSTRA. I mean, absolutely, we--I mean, we have to
look at the private sector and solve our problems with what
they have been experts on.
Ms. MILLER. Yes, and you can use large language models
like------
Mr. FEENSTRA. Yes.
Ms. MILLER [continuing]. Generative AI, like a ChatGPT to--
within seconds you could take applications to a program and
identify anomalies.
Mr. FEENSTRA. I understand.
Ms. MILLER. You could identify text that is duplicative
that indicates that someone is using the same information.
Mr. FEENSTRA. Agreed.
Ms. MILLER. This could be done in seconds if agencies could
adopt those technologies.
Mr. FEENSTRA. Thank you.
Ms. Simon, if you could, add on to this. I mean, and what
are your thoughts on--I mean, I just don't see this as rocket
science. It is just a matter of getting the tools to our
Federal Government.
Ms. SIMON. Absolutely. So I think two things.
One, to underscore both of your points, I had a vendor call
me. This was after I left government. This is a vendor that is
used by most of the large banks for that front-end piece sort
of intelligence. And he said, ``I have been calling state
workforce agencies and I can't get people to call me back. I
want to help. I want to be part of the solution.''
So, I think, on one side, there is--that is an issue.
However, it would be unfair to say workforce agencies if we
didn't acknowledge the administrative funding struggles that
they have. There is not a dedicated line of funding for fraud.
I think there should be, quite frankly. The------
Mr. FEENSTRA. So the cost--it is really the------
Ms. SIMON. But------
Mr. FEENSTRA. I mean there are not dollars to do this. Is
that a fair statement?
Ms. SIMON. That--the dollars are not prioritized to do
that, so the trade-offs are extremely steep for states.
Mr. FEENSTRA. Got you.
Ms. SIMON. And so I think thinking about the funding that,
if we want fraud to be part of the mission, then the funding--
the mission funding needs to involve fraud-specific funding.
Mr. FEENSTRA. Right. And I would like to see the ROI on
this.
Ms. SIMON. Yes.
Mr. FEENSTRA. I mean, return on investment of saying, all
right, if we put X amount of dollars for prevention, what do we
get back in return? And not only that, you are protecting your
taxpayers. So I just think this is not hard to solve, but we
just, as a government, got to do it.
With that I yield back. Thank you.
Chairman SCHWEIKERT. Thank you, Mr. Feenstra.
Mr. Pascrell would like to touch base on something you were
speaking of.
Mr. PASCRELL. I have no problem with what you just
produced, I really don't. However, if you turn to what I think
is a parallel example: the IRS, in terms of the debates we had
over that. Again, neither side is privy to virtue.
But the point is, some folks use the data that you talk
about to destroy the program. And I am very fearful of that.
You may say, well, you are too fearful, but that is my thought
in my mind.
Mr. FEENSTRA. And there has got to be protections for that,
100 percent.
Mr. PASCRELL. Well, I hope they stand up.
Mr. FEENSTRA. Yes, that is right.
Chairman SCHWEIKERT. Okay. For both of you, let's have a
side conversation, because I think there is a simple technology
solution that actually fixes for both of your concerns.
Ms. Moore.
Mr. PASCRELL. Thank you.
Ms. MOORE. Well, thank you so much, Mr. Chairman, for
convening this hearing, and I do want to thank our panel for
their patience and their extraordinary testimony, extraordinary
efforts to stop fraud and abuse.
I do want the chairman to know that I had my very first
vanilla cappuccino. [Laughter.]
Ms. MOORE. I am not going to become a latte liberal.
[Laughter.]
Ms. MOORE. I am from the Midwest. We just drink plain old
coffee all the time. But I do appreciate your effort.
Having said that, I just want to join everyone on this
panel to say we are against fraud and abuse. We are against
taxpayers footing the bill.
And just to look through some of this extraordinary
testimony, I am just looking, for example, with Ms. Simon, with
your testimony, I mean, who knew identity theft, synthetic
identity, account takeover, phishing schemes, benefit cards,
skimming, bribery schemes, self-dealing, document fraud, bot
attacks--I mean, not to mention places like Wisconsin, where
our technology for unemployment--and I think you made this
point, Mr. Asaro-Angelo, was from 1970. I don't even think you
have to be all that bright to figure out how to breach
something like that.
That being said, you know, at the beginning of the
pandemic, 22 million people lost their jobs due to no fault of
their own. And just looking at the material here, it seems like
we had a surge of like 33 million extra unemployment claims.
And one of the things that I guess I want to hear from the
panel is we had a hearing earlier on this committee--on the
full committee--on unemployment fraud, and it seemed that there
was a tremendous effort going to be put into going after fraud
for people who may not even know that they got an overpayment.
I mean, it might have been somebody who got an overpayment of
$1,200 they didn't deserve, but we had expanded unemployment
benefits. They may not have even known.
And so, I just want to hear from you, maybe Ms. Miller, Ms.
Simon, maybe Mr. Asaro-Angelo--I am running out of time--what
were the benefits versus the losses that we had in rescuing
people from poverty, making sure that some people could pay
their mortgages, keep up with their bills, continue consumer
spending?
And what message does it send for us to expend government
resources running after, you know, Joanne Smith, who got $1,500
she didn't deserve and may not have even known that she didn't
deserve it?
Ms. Miller.
Ms. MILLER. Yes, I mean, I think what you are raising is a
really, really good point about risk. And when we talk about
fraud--and certainly GAO is the expert in this area--focusing
on risk is really important. We are not going to get back all
the dollars, and they are not all equal. When we are talking
about organized crime rims and nation state actors, that is who
we need to be focusing on, not someone who got an extra $1,500.
And it is really important, because we don't have the
resources anyways, right, to go back and try to go after that
money. And we don't want to send that message that it is--you
know, we are turning the United States into some sort of police
state, where we are trying to make sure that everybody only
gets exactly what they are entitled to. That is why we want to
use risk, and that is why we want to use data and technology so
that we can focus those efforts on those most serious, most
egregious actors that are operating rings, and we can do that
using technology.
And then, you know, when we have additional resources, the
priorities need to be set by the agencies, but the priorities
should not be on the small-dollar frauds. The priority should
be on the large nation state and organized crime rings. And
that is where, I think, all of us up here are in agreement that
that should be the focus.
Ms. MOORE. Mr. Asaro-Angelo.
Mr. ASARO-ANGELO. Thank you for your question.
First of all, as far as the overpayments, I am proud that
NASWA, which I mentioned before, which includes my counterparts
across the country, voted in a unanimous and bipartisan manner
to urge Congress to waive all non-fraudulent pandemic-related
unemployment compensation overpayments. The amount of time and
staff needed to pursue these non-fraud overpayments with a very
low return absolutely undermines our efforts at fighting
current and future fraud.
Just real quick, I also want to mention we keep talking
about as if there is one unemployment system. There are 53
different systems. I mean, if we want to solve or have a way
better handle on the fraud, combine such--have more tools from
the Department of Labor, where all states can be talking to
each other, where there is one set of applications, one set of
security procedures, one set of anti-fraud measures. By these
fraudsters being able to pick and choose, they couldn't be
happier.
And to--whatever we can do to be talking more--and we do a
lot of this through NASWA, and I am very proud of our work on
these efforts. The IDH was mentioned before. I must say,
though, even though there were only 36 in 2020, it wasn't as
important then because it was only regular UI. So we always had
the employers as the backstop. PUA made the IDH really
important.
So I think if whatever we do can consolidate our efforts
across the states and in the Federal Government, that we should
be able to do.
Ms. MOORE. Thank you. My time has expired.
Thank you for your indulgence, Mr. Chairman.
Chairman SCHWEIKERT. Thank you.
Ms. MOORE. I yield back.
Chairman SCHWEIKERT. Mr. Davis.
Mr. DAVIS. Well, thank you, Mr. Chairman and Ranking
Member, for giving me the opportunity to waive on to this
hearing.
Although I am not a member of the subcommittee, my state of
Illinois, which is a rather large state, as a matter of fact,
had tremendous challenges and problems. But I also remember the
great work that the state employment agency did in terms of
fielding questions, all the requests that came through.
And so, when we discovered that this kind of fraud was
taking place, we were outraged, quite frankly, that criminal
rings stole unemployment insurance benefits during the
pandemic, which is the reason that we Democrats worked so hard
to make sure that we would provide the resources to do
something about it. And I can't help but recall that not a
single Republican voted for these anti-fraud funds. So we also
are proud of the work that we and all of you in the states did
to keep workers afloat during the pandemic, which led to the
fastest economic recovery in our history.
Commissioner Asaro-Angelo, would forgiving overpayments and
you have partially answered that a moment ago, but would
forgiving overpayments made to workers who were completely
without fault free up resources that your state would need to
improve benefit access and prevent future fraud?
Mr. ASARO-ANGELO. There is no doubt about it. The going
after overpayments, as I mentioned before, is a really low
return on investment. And we also need to remember that during
the time of the COVID--the Pandemic Unemployment Assistance,
all those programs, the rules were changing, literally, day by
day for us and for claimants.
So to have a claimant be in a position where, if you apply
in March the rules are different than when you apply in
December, or the guidance we are getting from the U.S. DOL,
through no fault of their own--very clear, you know, things are
changing very quickly--our rules were different almost from
week to week. So being able to be eligible one week and not
eligible the next week, it was very difficult for our claimants
and for our staff, who are newly trained up, newly implementing
programs.
So certainly, as I mentioned before, we are all in favor of
waiving all non-fraudulent overpayments that came from the
pandemic programs.
Mr. DAVIS. And what happened when the pandemic hit to the
number of requests for benefits in New Jersey?
Mr. ASARO-ANGELO. Well, during the week of March--ending
March 6, we had 7,900 claims; 2 weeks later, during--March 21,
we had 155,000 people applied for UI. New claims increased to
205,000 the following week. Within five weeks, we had one
million claims in new Jersey.
Mr. DAVIS. Well, I know that you and your staff worked hard
to get the benefits out as quickly as you could. What effect
did this have on the workers?
Mr. ASARO-ANGELO. Well, I would say the benefits served
their purpose, as laid out in statute and regulation and--
desire to provide workers with an income during loss of
employment and, most importantly, keep them on their feet so
that they can look for work while still supporting themselves,
their families, and their communities.
The system also helped sustain our economies by sustaining
the purchasing power of millions of workers, as Congressman
Pascrell mentioned earlier. And so, over the past few years,
even with COVID, we have had a remarkable increase in the
number of small businesses in New Jersey, and I think largely
because of the investment that came through to help workers
during this trying time.
Mr. DAVIS. Thank you very much.
And Mr. Chairman, after your treatment of giving me the
opportunity to waive on, and also the refreshments that you
served, maybe I will waive on----
Chairman SCHWEIKERT. I have a coffee problem, Mr. Davis. I
hope everyone else will. But thank you for joining us. And
forgive the tyranny of our schedule and our clock.
Mr. Pascrell and I have a running agreement here as part of
the discussion that, in many ways, this is shorter than we
would like it to be, but one of the more interesting hearings
we have ever had. You did something unique as a group, all of
you. You actually gave us a path where we think we can do
something positive, and maybe make the future more robust,
everything from things we are going to need to know how to--New
Jersey--meet the privacy standards and the security standards
of the Federal Government to the ability--could we actually
take what Ms. Miller spoke about, the AI, and Ms. Simon touched
on, the--what is available out there, and how it changes so
rapidly, and could we ever wrap that around some of the
services that Ms. Shea spoke about that already exist?
It is traditional, as the chairman, at the end I need to
tell you that you are subject to potential written requests
from members that will be made part of the permanent record.
Please be prepared also for maybe more than just two weeks
of asking for your help as staff speaks to staff of what could
we do to never go through this again.
And with that, this hearing is over.
[Whereupon, at 11:31 a.m., the subcommittee was adjourned.]
MEMBER QUESTIONS FOR THE RECORD
=======================================================================
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
PUBLIC SUBMISSIONS FOR THE RECORD
=======================================================================
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]