Watchdog finds no money has flowed out of agency tasked by Trump admin to fight pandemic

A government watchdog issued a report on Wednesday that found an agency tasked by the Trump administration with helping fight the pandemic has not allocated any of the $100 million it was given to help address COVID-19 supply chain issues.

The Trump administration in May 2020 ordered the International Development Finance Corporation (DFC) to distribute $100 million in loans of Pentagon funds through the CARES Act to “finance the domestic production of strategic resources needed to respond to the COVID-19 outbreak, and to strengthen any relevant domestic medical supply chains,” according to DFC’s website.

As part of that effort, companies were prompted to apply for loans for projects that would help generate goods and services that were needed during the pandemic and “sustain industries critical to the healthcare and public health sector.”

According to a new report from the Government Accountability Office (GAO), since the Pentagon-funded loan program started in June 2020, the DFC has not allocated any money, despite receiving 178 applications within that time frame.

The portal for the agency’s loan applications has been paused, according to NBC News, and its ability to make loans related to the pandemic reportedly expires on March 26.

NBC News also noted that Adam Boehler, who was for a short time a college roommate of former President Trump’s son-in-law and adviser Jared Kushner, headed the DFC from fall 2019 through Jan. 20, the day Trump left office. The agency was established in 2018 to help oversee private investments for government-funded projects in the developing world.

When COVID-19 started spreading in the U.S. and health officials were on the hunt for personal protective equipment, however, the agency reportedly expanded its domain to include bolstering the supply chain in the U.S. through an executive order signed by Trump.

The GAO said the DFC informed it that the loan review process had been taking longer than expected, which prompted the group to revise its procedures and start prioritizing applications for medical-related projects.

Specifically, the agency said it had a difficult time trying to review the complex proposals, some of which required environmental assessments, according to NBC News.

Chelsa Kenney, the author of the GAO report, told the network that the absence of loans generated an “expectations gap” when it came to performance. She also said that she believes the agency has narrowed the pool of 175 applications down to eight but funds have still not been allocated.

The watchdog has recommended that the agency, in consultation with the Pentagon, create a plan to evaluate the effectiveness of the loan program and “complete its methodologies for accounting for all reimbursable” costs from the plan.

The GAO said the agency has concurred with the second recommendation but not the first.

DFC spokesperson Pooja Jhunjhunwala told The Hill in a statement that the agency “has been providing loan support services for the DPA program,” including processing applications and underwriting, but noted that the Pentagon “manages the program funding,” while the loans are ultimately approved by a board of U.S. government interagency representatives.

“DFC is neither the lead agency nor provides the loan disbursements to companies,” Jhunjhunwala said.

Jhunjhunwala also noted that the application processing time could take up to 18 months for “complex transactions.”

In a letter from the DFC in response to the draft GAO report cited by NBC News, sitting DFC CEO Dev Jagadesan said the “most key programmatic authorities, including budget authority over transactions and administrative costs and approval on project eligibility and technical requirements, reside with the interagency partners for this program: DOD [the Department of Defense] and HHS [the Department of Health and Human Services].”

Tags CARES Act COVID-19 relief Donald Trump Gao Government Accountability Office Jared Kushner

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