I have spent more than a decade testifying about fiduciary duty in federal and state courtrooms. The standard is not complicated. If you hold someone else’s money, you owe that person undivided loyalty, prudent judgment, and, at a minimum, your presence when the subject is how their money got stolen. Miss that standard as an investment manager, and you get sued. Miss it as a United States senator, evidently, nobody docks your pay.
That is the lesson from last Wednesday’s Senate Homeland Security and Governmental Affairs Committee hearing, titled “Exposing Fraud in America.” Chairman Rand Paul (R-KY) opened by noting that the debt clock in his office stood at nearly $40 trillion that morning. A bank confirms an account exists before it wires money, he said. A credit card company flags suspicious charges in seconds. An insurance company verifies a patient exists before paying a claim. Washington pays first and asks questions later, if it asks them at all.
Independent investigator Nick Shirley testified about touring supposed daycare centers in Minneapolis that had collected millions in taxpayer money. He found industrial buildings with blacked-out windows, no playgrounds, no children, and no one answering the door. He told the committee that California’s Medicaid program had ballooned from $108 billion to $222 billion, while enrollment rose by less than 1%, and called the state functionally bankrupt.
James O’Keefe presented undercover footage of a California scheme in which homeless men and women were reportedly offered cash and marijuana for signatures on petitions and voter registration forms. Prosecutors have since charged 15 people in Minnesota for fraud schemes exceeding $90 million, including a $46.6 million autism-therapy scam the Justice Department calls the largest Medicaid autism fraud case it has ever charged. Two defendants allegedly billed Medicaid for children who never received services, then spent the proceeds on luxury vehicles and jewelry, wiring some funds overseas.
Every credit committee I have sat on asks the same three questions before releasing a dollar: Does the counterparty exist, can it perform, and does the paper trail hold up? Those questions are the baseline of competent stewardship, whether you are running a family office or a federal agency. Congress could apply that same discipline to entitlement spending tomorrow if it wanted to. The fact that it has not, decade after decade, is a failure of will, not complexity.
Here is the part that should bother every taxpayer, regardless of party. Only one Democrat on the committee, ranking member Gary Peters (D-MI), showed up for opening statements, and he left before the witnesses finished testifying. By the time Sen. Bernie Moreno (R-OH) asked whether a Democrat wanted to question the witnesses next, Paul had a one-line answer: “If there were a Democrat here, yes.” One side of the dais was full. The other side was furniture.
I do not buy the excuse that fraud hearings are political theater unworthy of a senator’s calendar. A dollar stolen from an autistic child’s therapy account is stolen whether the thief votes red or blue, a point Shirley himself made under oath. But committee attendance reveals priorities. The same lawmakers who found time last year to fly to El Salvador and lobby for the release of a man with a documented gang-affiliation finding, an episode that earned the nickname “margarita-gate” after a staged photo of salt-rimmed glasses made the rounds, could not find 90 minutes to sit through testimony on $90 million in stolen Medicaid funds.
AMERICA’S DEADLIEST PRODUCTS ARE LEGAL. THE SAFER ONES ARE IN COURT
A scheduling conflict might explain one absence. It does not explain an entire dais. Justice Louis Brandeis said sunlight is the best disinfectant. Eight Democrats on that committee chose darkness.
Vince Lombardi built a career on one idea: Show up, do the job, or get out of the way for someone who will. The senators who skipped Wednesday’s hearing took an oath, drew a salary, and accepted a seat built to protect the people who fund the government. Nobody forced them to leave. Voters in Michigan and everywhere else with a senator on that committee should remember the empty chairs the next time that name appears on a ballot. Fraud steals from Democrats and Republicans alike. So does silence.
Jay Rogers is a financial professional with more than 30 years of experience in private equity, private credit, hedge funds, and wealth management. He has a Bachelor of Science in criminal justice from Northeastern University and has completed postgraduate studies at UCLA, the University of Pennsylvania, and Harvard. He writes about issues in finance, constitutional law, national security, human nature, and public policy.