Trump, Musk claim government 'fraud' without showing proof. How common is federal fraud, abuse?

Elon Musk and President Donald Trump said they have uncovered massive "fraud" in the federal government.

During Oval Office remarks Feb. 11, Trump said that their efforts to cut spending turned up  "billions and billions of dollars in waste, fraud and abuse." 

Trump added: "We found fraud and abuse, I would say those two words as opposed to the third word that I usually use, but in this case, fraud and abuse." 

Trump and Musk used the word "fraud" or "fraudster" combined about a dozen times during their Oval Office question-and-answer session. 

So far, neither Musk nor the Trump White House has shown evidence of criminal activity.

On Feb. 12, during a White House press conference, a reporter asked White House Press Secretary Karoline Leavitt for evidence of fraud. 

"I love to bring the receipts," Leavitt said. She cited three contracts for $36,000 for diversity, equity and inclusion programs at U.S. Citizenship and Immigration Services, $3.4 million for the Council for Inclusive Innovation at the U.S. Patent and Trademark Office, and $57,000 related to climate change in Sri Lanka. 

"I would argue that all of these things are fraudulent," Leavitt said. "They are wasteful and they are an abuse of the American taxpayers dollar."

When PolitiFact asked about these claims, the White House press office pointed to an April 2024 Government Accountability Office report that found the "federal government loses an estimated $233 billion to $521 billion" every year to fraud. 

The White House also sent a list of dozens of Department of Government Efficiency "wins," including canceled media outlet subscriptions and contracts for DEI initiatives, consulting and administrative expenses. 

"Nothing they have identified is, to my knowledge, evidence of ‘fraud’ or ‘corruption.’ Fraud and corruption are crimes," said Jessica Tillipman, associate dean for government procurement law at George Washington University. "This administration simply has different spending priorities than the last administration. But to label all of it as fraud or corruption is extremely misleading."

Trump has torn down governmental fraud-finding tools. He fired more than a dozen inspectors general whose job was to ferret out fraud and inefficiencies. He paused enforcement of the Foreign Corrupt Practices Act, which prohibits businesses from taking bribes from foreign officials.

Government reports show that fraudulent spending is a measurable problem for the federal government. But the evidence that DOGE has uncovered new examples has not yet been proved.

Here’s an overview of how the government deals with waste, fraud and abuse.

Waste, fraud and abuse are not interchangeable terms.

The Government Accountability Office says waste is "using or expending resources carelessly, extravagantly, or to no purpose." Abuse is "behavior that is deficient or improper." Fraud "involves obtaining something of value through willful misrepresentation" and is labeled after a legal process.

"Fraud is a very high legal standard," said David M. Walker, who serves on the federal government’s Defense Business Board, which advises the Defense Department on business management. 

To qualify as fraud, an activity has to be illegal with evidence of intent, which is "the most difficult thing to prove," he said.

Walker, the former U.S. government comptroller who led the GAO under Democratic and Republican administrations, said most of the examples he has heard from DOGE could be characterized as waste and abuse. Walker offered the Paycheck Protection Program, which Congress passed in March 2020 to help small businesses cover payroll early in the COVID-19 pandemic, as an example of a program that had fraudulent payments that the government later caught. The U.S. Small Business Administration inspector general later estimated $64 billion in fraud.

The Government Accountability Office is staffed with auditors, and federal inspectors general  offices have auditors and law enforcement on staff. Both refer suspected fraud to investigators. 

"Anytime someone looks at data (spending data for example), you will see anomalies that catch your attention and warrant review," said Robert Westbrooks, the Pandemic Response Accountability Committee executive director who worked in government oversight roles during Democratic and Republican administrations. "That does not necessarily mean the transaction is fraudulent or wasteful."

Westbrooks reviewed the White House list of DOGE "wins" and said he saw no evidence of an intent to deceive.

"Waste is in the eye of the beholder," he said. "Fraud, on the other hand, is determined by a court."  

Congress passed the Inspector General Act of 1978 in response to anti-corruption efforts that started after the 1972 Watergate break-in and cover-up that led to President Richard Nixon’s resignation. An agency inspector general’s mission is to conduct independent and objective audits, investigations and inspections and prevent and detect waste, fraud and abuse.

Only the president can remove Inspectors general. Trump fired 17 inspectors general Jan. 25, prompting a lawsuit by many seeking to get their jobs back. The lawsuit says Trump did not follow the law that requires him to notify Congress 30 days before he removes inspectors general. (Trump also pushed out a handful of inspectors general in spring 2020.)

Trump later fired U.S. Agency for International Development Inspector General Paul Martin following a Feb. 10 advisory that the federal government’s pause on foreign assistance posed financial risks. (The unsigned notice came from the USAID inspector general.) The notice said the government’s pause on foreign aid put more than $489 million of food assistance at risk of spoilage or diversion and limited officials’ ability to respond to fraud and waste allegations.

In the past, many inspectors general have found fraud.

The Council of the Inspectors General on Integrity and Efficiency issued an annual report for 2023 that highlighted federal efforts to combat fraud, waste and abuse. The report showed that inspectors general work led to more than 4,000 prosecutions and that inspectors general identified nearly $93.1 billion in potential savings. 

The findings resulted in about 3,000 suspensions, reprimands and terminations for federal contractors and federal, state and local employees.

Inspectors general in recent years have found fraudulent activity in COVID-19 relief programs, including $5.4 billion in pandemic relief loans obtained via fabricated Social Security numbers. 

Inspectors general at other agencies have also found wrongdoing that prompted prosecutions, including a bid-rigging scheme related to NGO contracts funded in part by the U.S. Agency for International Development. 

Another probe led to a $6.9 million settlement with an international nongovernmental organization over inflated invoices. The inspector general also suspended or prevented some organizations from doing business with USAID.

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UPDATE, Feb. 18: This story was updated to clarify Trump's actions regarding the Foreign Corrupt Practices Act.