The government’s response to the COVID-19 pandemic pushed an astonishing number of businesses into bankruptcy. But there’s no denying that there have been some winners in the federal government’s $5 trillion federal spending spree. That figure included $745 billion in direct aid to state and local governments.
Just ask Amy Gentry, an executive assistant to Illinois Emergency Management Agency Director Alicia Tate-Nadeau, who billed the agency more than $1 million since 2020 before abruptly resigning last week. The Chicago Sun-Times reports that between February and August of this year alone, Gentry accounted for some $240,000 in billings, twice the amount earned by her boss. The revelation that an executive assistant had billed the agency as much as $60,000 in a single month appears to have been a source of embarrassment for Illinois officials.
In response to the Sun-Times report, Kevin Sur, spokesman for Tate-Nadeau’s agency, announced that Gentry was leaving and a state employee previously hired for the role would return to her $84,000-a-year post. Normally, a political assistant billing the state $156 an hour to tap relief funds would be quite a scandal. But this is Illinois, where the bar is set a bit higher. Four of Illinois' last ten governors have landed in prison, and the former House Speaker is set to go on trial.
Perhaps because of this, Tate-Nadeau and Gentry have decided to clam up. Both refused to be interviewed by the Sun-Times, no doubt hoping the story blows over. The Sun-Times doesn’t appear interested in going away, however. "It sure sounds like a grift to us," the paper’s editorial board commented Tuesday.
The story also demonstrates a gloomy reality: Congress’s $5 trillion spending spree has been riddled with fraud and abuse from the start. Precisely how much money the feds have lost due to fraud since the pandemic began is unknown. Cases of fraud are too numerous to enumerate. But just a year into the pandemic, it was estimated that $200 billion in unemployment benefits went to fraudsters — "more than triple the official government estimate of $63 billion based on the 10% pre-pandemic fraud rate."
High-profile scams included a Nigerian crime ring that made off with as much as $850 million through bogus unemployment claims and crafty prison inmates who found a way to fleece the state of Pennsylvania of $200 million through bogus unemployment benefit claims.
Less attention has been given to COVID-19 spending abuse and waste. Whether the massive payments to Gentry qualify as corruption is unclear (though I agree with the Sun-Times that it sure looks like a grift). But few would disagree that paying an executive assistant $60,000 a month is a clear misallocation of taxpayer funds.
There’s a deeper lesson on the opportunity cost of the government’s spending spree. Every dollar the government spends is a dollar taken from someone else, ultimately through taxation, the economist Henry Hazlitt observed. Economics is known as the dismal science in large part because it refuses to ignore the realities of scarcity and opportunity costs. And make no mistake, spending $5 trillion — much of which was digitally printed by the Federal Reserve — comes with enormous opportunity costs.
It’s becoming increasingly difficult to deny that lawmakers, during a period of panic, diverted resources from more valuable into less valuable activities, creating mass amounts of waste in the process. If you doubt this, consider that Illinois is still spending vast amounts of COVID-19 "emergency" funds on a pandemic Americans have long since moved on from. An executive assistant who was paid a million dollars over a few years for an $84,000-a-year job is just one example of the misallocation of resources.
The fact that Illinois bureaucrats are actually trying to defend it — the pay is "reflective of her work," Sur told the Sun-Times — also serves as an important reminder that as economic freedom ebbs, political corruption often flows.