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Epic Fail: Fraud and Waste [1]

['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.']

Date: 2025-01-06

Fourth of five posts.

In January 2022, Musings of a Nobody ran a series of posts about the Trump administration’s historic failure in its handling of the coronavirus as detailed in a report from the House Select Subcommittee on the Coronavirus Crisis.

As we approach Trump’s inauguration, we’re running the series again. The goal is to remind people of the corrupt, politically driven mismanagement that led to hundreds of thousands of unnecessary deaths and the accompanying financial crisis, to serve as a warning of the type of administration we may be seeing during the next four years, and to illustrate the kind of damage and suffering that it’s corruption and incompetence is capable of creating.

***

The Trump administration’s questionable management of pandemic relief programs left the federal government vulnerable to fraud and profiteering, while failing to effectively and equitably deliver relief, according to a report by the House Select Subcommittee on the Coronavirus Crisis.

For example, the subcommittee found that the Farmers-to-Families Food Box Program wasted taxpayer dollars and was used as a partisan tool to secure political advantages for former PresidentDonald Trump.

Let’s look at the details from the report:

Background

*Department of AgricultureSecretary Sonny Perdue created the Farmers-to-Families Food Box Program to provide food for people in need. It was authorized under the Families FirstCoronavirus Response Act.

*The USDA selected distributors to purchase food, package it into family-sized boxes, and deliver these packages to food banks and other nonprofits.

*During the program’s first round -- from May 15, 2020 to June 30, 2020 -- multiple reports questioned the qualifications of certain distributors that had received multi-million-dollar awards.

*In August 2020, the subcommittee launched an investigation into reported mismanagement of the program, focusing on three distributors awarded large first-round contracts that had been the subject of press reports -- Yegg Inc., CRE8AD8, and Ben Holtz Consulting. They had been awarded a combined $95.7 million in contracts by the Trump administration.

Unqualified Vendors

*The Trump administration granted multimillion-dollar contracts to unqualified distributors with limited food distribution experience that had submitted applications with serious red flags.

*USDA personnel admitted to subcommittee staff that they did not contact the professional references that bidders provided on their applications to confirm that the bidders were experienced, capable, and reputable.

*Yegg Inc. was awarded contracts worth $16.5 million. The company was a self-described “export management, trading, and trade finance company” that listed its most recent annual sales as $250,000.

*CRE8AD8 was awarded contracts worth $39 million. It specialized in wedding and event planning.

*In the references section of Ben Holtz’s bid proposal, the contractor had simply written: “I don’t have any.”

Fraud

*After awarding massive contracts to unqualified contractors, the Trump administration failed to adequately monitor those contracts for possible fraud.

*In one egregious example, the Trump administration continued payments to Yegg despite evidence that the company provided misleading documentation to the USDA and may have engaged in self-dealing.

*The Trump administration sanctioned $3.8 million in payments to Yegg for purported deliveries after learning that some of the food in question had not yet left the producers or had even been ordered.

*The Trump administration also reimbursed Yegg for over $2.85 million for food boxes purportedly delivered to “Helping Feet,” a real estate-focused nonprofit operated by Yegg’s co-owner, who was also the wife of Yegg’s CEO.

*The Trump administration paidY egg another $584,400 for a delivery that was not received by the reported recipient and that the subcommittee was unable to trace.

Food Waste

*The Trump administration also failed to structure or administer the Food Box Program to meet its stated goals of feeding Americans and eliminating food waste.

*In some cases, contractors selected were in fact contributed to food waste by failing to provide timely deliveries, delivering food in unsafe packaging, and pressuring recipients to accept more food than they could reasonably distribute or store.

*One nonprofit director recalled that Yegg once delivered 2,500 more gallons of milk than planned, adding: “I had to pay for that refrigeration out of my own pocket.”

*Another recipient said ofCRE8AD8: “They didn’t understand that you couldn’t send us bad food and expect us to take it.”

*Recipient nonprofits also told subcommittee staff that contractors delivered “rotten food and wet or collapsing boxes,” provided large amounts of commercially packaged meat inappropriate for family consumption, or delivered produce at temperatures that presented a “food safety issue.”

Big Profits

*CRE8AD8, which was ultimately paid $31.5 million in taxpayer funds, acknowledged to the subcommittee that it collected profits between 10 and 25 percent -- a total of $3.1 million to $7.75 million for one month of deliveries.

*CRE8AD8 also confirmed that --with taxpayer dollars -- they paid farmers and producers up to ten times the price those same producers would normally receive from grocery stores.

*Yegg repeatedly charged taxpayers a 50 percent markup on the amount that it paid to a dairy for milk boxes, despite acting as little more than a middleman.

Playing Politics

*The Trump administration manipulated the Food Box Program for political advantage.

*Vendors were informed six weeks before the presidential election that they were required to include in all outgoing boxes a letter signed by Trump in which he took credit for sending out the food, despite the fact that the boxes were to be distributed through apolitical nonprofit organizations. Nonprofit organizations distributing the boxes said that the letters created frustration among the people they served.

*Trump also announced an extension of the program at an official event in a battleground state that coincided with the opening of the Republican National Convention, without previously notifying the USDA, which was responsible for administering the program.

*At that official government event, Perdue engaged in overt political activity that the Office of Special Counsel found to violate the Hatch Act, as the Secretary’s “first words were not about USDA, but about the president’s 2016 and 2020 campaigns.”

*USDA announced another extension of the program less than two weeks before the presidential election, despite Perdue’s suggestion the previous month that he instead planned to allow the program to expire.

***

Thank you for reading my post. You can see my other writings on my blog: Musings of a Nobody. Please share and subscribe for free via email on its home page.

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