It starts with a warning: Seamus Bruner says the fraud isn’t small, and it isn’t subtle. It’s woven into federal programs that fly under the banner of “DEI” and “disadvantaged” initiatives.
Bruner, the Government Accountability Institute’s Director of Research, points to the SBA’s 8(a) program. It was built to lift genuinely disadvantaged small businesses. Instead, he says, it has morphed into a multibillion-dollar pass-through machine.
“The devil is in the details with this,” Bruner says. “It’s a multibillion-dollar pass-through scheme that rewards minority contractors or any ‘disadvantaged’ person, which has a very loose definition.”
“And it turns out, many are not disadvantaged at all,” Bruner adds.
Wealthy groups slip through the door. Some Native American–controlled firms qualify as “disadvantaged,” then link arms with major corporations. The result: no-bid federal contracts routed through partners who were never the intended beneficiaries.
Bruner says the Biden administration’s quota expansions poured fuel on the fire. Fraud surged. He describes bribes, inflated contracts, and projects where little work was performed at all.
“The program has been around for decades, but only under the Biden administration did the quotas triple,” Bruner says. “And so it really exploded. Just in the last several years, there was a USAID program. The contracting officials at USAID were taking bribes, over $1 million in bribes. We’ve also seen a $100 million contract. The minority contractor got 65% of that 100 million, so well over $50 million.”
“They only did a small fraction of the work.”
Bruner stresses it’s only the beginning. Defense contractors are learning how to exploit the same openings. The iceberg is large, he warns — and we’re only seeing the part above the waterline.
“The Pentagon has not yet ordered a full audit, but there are many. We are going through the USA spending.gov contracts now, and we’re finding a lot of Pentagon contractors, defense contractors who partner with these minority groups to get no-bid contracts. So I think the Pentagon is going to be really where a lot of these billions are hiding out.”
Listen to Bruner’s appearance on The Morning Wire above.
