Congress Passes $2T CARES Act to Aid COVID-19 Recovery
On March 27, the President signed the Coronavirus Aid, Relief and Economic Security Act (the CARES Act), a $2 trillion package of relief measures designed to boost business and economic activity, provide health care resources to treat COVID-19, and help unemployed workers.
In addition to allocating $560 billion to individuals, the CARES Act will provide billions of dollars in government funds to industry sectors that have been the subject of False Claims Act litigation. This includes:
- $130 billion to hospitals, nursing homes and other health care facilities;
- $10.5 billion for defense spending;
- $25 billion to the Food and Nutrition Service for child nutrition programs;
- $9.5 billion to the U.S. Department of Agriculture in emergency funding to support agricultural producers;
- $349 billion loan program for small businesses, including non-profits and physician practices – loans that can turn into grants if companies retain employees;
- $29 billion for the airline industry; and
- $17 billion in loans for businesses that are crucial to national security.
The enormous reach and complexity of the CARES Act is unprecedented and, accordingly, creates an unparalleled risk that the billions of dollars designated for economic recovery and health care will be diverted through fraud, waste and abuse. While the Act contains provisions designed to oversee how these funds are actually spent, the extent and effectiveness of these provisions is currently unclear.
Whistleblowers will be more important than ever to identify fraud schemes and ensure that swift enforcement action is taken where and when it is needed.