Business

(NEW YORK) — Amid much back-and-forth between Starbucks and some of its workers who claim the company stopped Pride decorations from being displayed in some locations, some union employees have gone on strike to try to send a louder message.

Starbucks Workers United (SWU) announced in a press release Monday, sent to ABC News, that baristas from over 150 stores in the U.S. will strike through June 30 to demand a “fair contract and respect for LGBTQIA+ workers.”

The union campaign kicked off its nationwide week of action on Friday at Starbucks’ flagship roastery in Seattle, Washington on the heels of reports that some Starbucks stores were allegedly removing or banning the use of Pride decor, which Starbucks has vehemently denied.

A representative for Starbucks media relations confirmed to ABC News’ Good Morning America on Monday that “a subset of partners at the Seattle Roastery were the first to walk off the job on Thursday evening, an hour before close. The Roastery has been able to stay open through the weekend, though some partners remained on strike through the weekend.”

In addition to what the union representatives hailed a “successful shutdown” of the Seattle operations, the group said its workers “disrupted operations at dozens of stores” closing nearly 40 over the weekend.

“We have seen an average of 12 stores impacted by strike activity per day, at this time,” Starbucks told GMA. “That scope is currently reflected by operator reports today, as well.”

The representative told GMA that strike activity has been “limited to stores represented by Workers United, and at those stores where partners have petitioned for union representation.”

According to the SWU press release, “over 150 stores that represent 3,500 workers” have gone on strike since Friday.

“Workers United continues to spread false information about our benefits, policies and negotiation efforts — a tactic used to seemingly divide our partners and deflect from their failure to respond to bargaining sessions for more than 200 stores,” Starbucks told GMA.

Moe Mills, a shift supervisor who identifies as non-binary and has worked at Starbucks in Richmond Heights outside St. Louis, Missouri for over three years, spoke to GMA Monday via telephone while outside the storefront on strike.

“The whole point of this strike is to let [Starbucks] know that they can’t cancel Pride,” they said. “We take pride in ourselves and our partners and we take pride in our union.”

Mills continued, “we as the partners, and specifically of the union partners, are what makes Starbucks what it is and we want people to know what Starbucks isn’t — that’s what strike with Pride is about.”

On the morning of June 13, 2023, SWU put out a now-viral Twitter thread stating that Starbucks was banning Pride decorations in stores across the U.S.

Two representatives for Starbucks corporate media relations team immediately retorted what they characterized as the union group’s “false assertion,” telling ABC News in a phone interview and written emailed statement that the company is “deeply concerned by false information that is being spread especially as it relates to our inclusive store environments, our company culture, and the benefits we offer our partners.”

“We unwaveringly support the LGBTQIA2+ community. There has been no change to any policy on this matter and we continue to encourage our store leaders to celebrate with their communities including for U.S. Pride month in June,” the company stated. “For Starbucks, U.S. Pride Month in June is just one of the moments we support and celebrate our LGBTQIA2+ partners and the community, and it’s our own partners who inform the commitments and actions we have continued to take for more than four decades.”

“Starbucks has a history that includes more than four decades of recognizing and celebrating our diverse partners and customers – including year-round support for the LGBTQIA2+ community,” the statement concluded.

Later that same evening, SWU released an official response to the coffee company’s earlier statement about Starbucks’ decoration policies.

GMA obtained an internal memo with the subject, “Pride decorations in stores” sent by Starbucks SVP of Talent & Inclusion, Mark Brown on June 13, that reiterated the company’s longstanding guidelines and support for the LGBTQIA2+ community.

“There has been no change to any guidance on this matter. Our retail leaders continue to work with store teams to find ways to authentically celebrate year-round with their communities. This includes how stores decorate for heritage months, including U.S. Pride month in June – keeping in our mind our safety standards, Siren’s Eye guidance, and retail dress code,” the memo stated.

Jack Savin, a shift supervisor who has worked at the State Street Starbucks location in Madison, Wisconsin for over four years, told GMA that their newly unionized location first attempted to put up Pride decorations in May before a district manager later demanded it be removed.

“As someone who identifies as transgender, what I have observed is absolutely heartbreaking and disappointing,” Savin said. “There was no written notice, nor anything put in writing in regards to taking down our pride decorations. We had put up a pride flag at the beginning of May. The location of it was kind of a centerpiece to our community board, which is an area all Starbucks [stores] have. We continued to put up decorations around our store after the first of June, including some rainbow lights in a corner of our cafe, and put up some streamers in a rainbow pattern.”

Savin told GMA their store’s District Manager “came in” on Sunday, June 11 and “told us to take down our decorations.”

Savin said the manager’s reasoning was as follows: “We can’t decorate for pride because it might be offensive and we want to be ‘welcoming for everyone’; that decor for pride or Christmas isn’t ‘welcoming.'”

“I have never heard this reasoning before and [it] completely goes against what Starbucks has said they stand for in the past,” Savin said. “We have been able to decorate before. Us as employees have been able to symbolize and celebrate our queer identities before. So this is not only heartbreaking and disappointing, but also contradictory and weird.”

Savin shared this information with the store’s union representative immediately as more reps across the country and the SWU reported more claims on Twitter about issues with pride decorations in other states.

“Today we’re out here standing in solidarity with other stores who have had horrible experiences with store managers and district managers just ripping down their pride displays,” Mills said.

They added that their store manager, who wished to remain anonymous for safety reasons, wanted “to celebrate his queer employees and put up a Pride display,” that has remained up, which Mills said “was kind of a workaround” because the manager “used very specific Starbucks language and made a Starbucks-themed Pride display. It’s like a very small sign. And that’s the most that we could do safely.”

Alyssa Bingham, a shift supervisor who works with Mills and is currently on strike outside the same location, told GMA on the phone that this is their store’s third strike.

“I think Starbucks’ plan was to wait us out and that hasn’t worked, we have just gained support and power,” she said.

“We managed to close our store completely. They have not reopened at all and that feels wonderful,” Bingham said. “We have a lot of supportive customers. We have music going and it’s a party. It’s a celebration of really our only piece that we have to play in this game, which is our labor and we will spend it as we choose.”

Their colleague Max Yusen, a barista at the same location, told GMA that Monday would probably be “their only day on strike” due to the wave rollout across the country.

“The energy has been really positive and fun,” he said of their first strike that their cafe has been “fully shut down the entire time,” adding that they “don’t really have to worry about managers scabbing or borrowed workers from other stores coming in to work or customers crossing the picket line.”

When GMA attempted to call the location closed due to the workers’ strike, the phone line rang until a recorded message played, asking for a remote access code, before the call ended.

In addition to picket lines, workers protested Starbucks by marching in pride parades across the country, including New York City where they marched alongside the Starbucks corporate float.

“We are striking with pride because it is important for Starbucks to remember that the LGBTQIA+ community makes up a large part of their workforce and happens to a majority of those leading union efforts nationwide,” Jackie Zhou, a New York City-based employee of five years, said in a statement. “On top of this, we are striking for a contract which encompasses protections not only for the LGBTQ+ community but for everyone.”

Starbucks said in its statement Monday: “We apologize to our customers who may experience an inconvenience at these locations and encourage customers to find any of our more than 9,000 stores open nearby.”

CEO Laxman Narasimhan sent a letter to Starbucks Partners on June 23, obtained by GMA, to make clear the company’s support of the LGBTQIA2+ community.

“Despite today’s public commentary, there has been no change to any of our policies as it relates to our inclusive store environments, our company culture, and the benefits we offer our partners,” he stated in the letter. “As Sara Trilling and I recently stated, we continue to encourage our store leaders to celebrate with their communities including for U.S. Pride month in June, as we always have. We must ALL have the same vision for how all people, including LGBTQIA2+ people, should be treated – with respect, support and allyship, because belonging is a core value.”

He continued, “As such, we strongly disapprove of any person or group, seeking to use our partners’ cultural and heritage celebrations to create harm or flagrantly advance misinformation for self-interested-goals.”

As a follow up to that note, EVP and U.S. president Sara Trilling sent a memo titled “Reaffirming Our Commitment to Inclusivity” to U.S. Starbucks partners late Monday night to further clarify the company’s “current guidelines around visual displays and decorations.”

“We intend to issue clearer centralized guidelines, and leveraging resources like the Period Planning Kit (PPK) and Siren’s Eye, for in-store visual displays and decorations that will continue to represent inclusivity and our brand,” she said, referencing their CEO’s previous letter to employees that “there has been no change to any of our policies as it relates to our inclusive store environments, our company culture, and the benefits we offer our partners.”

This issue for Starbucks comes as other companies have come under fire for support of LGBTQ issues. Target recently faced criticism from artists involved in its Pride month products after it made the decision to remove Pride products following a boycott when anti-LGBTQ backlash nationwide boiled over, including employee harassment and bomb threats at stores in Utah, Ohio and Pennsylvania.

In a statement last month, Target said it removed some products from this year’s Pride collection because the company “experienced threats impacting our team members’ sense of safety and well-being while at work.”

“Our focus now is on moving forward with our continuing commitment to the LGBTQIA+ community and standing with them as we celebrate Pride Month and throughout the year,” the company said in the statement.

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(NEW YORK) — Natasha Jackson faced what she says was pregnancy discrimination 13 years ago. She was three months pregnant with her third child when she was put on leave from her job as an account manager at a local furniture store in Charleston, South Carolina.

Jackson told ABC News that her workplace placed her on a 12-week unpaid Family and Medical Leave Act (FMLA) leave because her doctor recommended she avoid lifting anything over 20 pounds, a medical recommendation commonly made to pregnant women. At the end of the unpaid leave, Jackson said she was ready to come back to work but was told she had to wait until the baby was delivered and could come back if her position was still available. She received a letter two months after giving birth telling her she was terminated.

Jackson says she brought a pregnancy discrimination claim against the company, which took two years and she eventually lost in arbitration. She told ABC News she was the primary source of income for her family at the time, and her termination set her and her family on a course toward homelessness.

“It was a downward spiral from there for years. I got a divorce because of the financial strain it put on my marriage,” Jackson told ABC News. “That one day changed the course of my life.”

Jackson eventually used her voice to fight back and help other pregnant women. She shared her story publicly, including in legislative testimony, which led her to advocacy work. It’s because of stories like hers that experts say that this new federal law has come to fruition.

On Tuesday, Jackson was among the women celebrating the Pregnant Workers Fairness Act (PWFA) going into effect. The new law requires employers to provide reasonable accommodations to workers for known limitations related to pregnancy, childbirth or related medical conditions.

“No postpartum worker will lose her job at a critical time in her growing family’s finances for needing time to recover from childbirth,” Dina Bakst, co-founder and co-president of Better Balance, an organization dedicated to advancing justice for working families in the U.S. said.

“No longer will women nationwide face the impossible choice between maintaining a healthy pregnancy and their economic security,” she added.

Signed by President Joe Biden at the end of 2022, this new federal law will, according to experts, close an existing loophole that has left pregnant and postpartum workers without the legally protected ability to request accommodations.

“The gap that exists means too many women were forced to choose between keeping themselves and their pregnancy healthy or making a paycheck [to] support their families,” Laura Narefsky, counsel at The National Women’s Law Center, one of the organizations that has been working for close to a decade on pushing through this legislation, said.

While the Pregnancy Discrimination Act of 1978 prohibited employers from discriminating against workers on the basis of pregnancy, childbirth, or related medical conditions, experts like Narefsky say that it never created a “robust affirmative right to create accommodations to keep working.”

“The problem came when a pregnant worker needed a reasonable accommodation for her pregnancy. Without this law, it required workers to prove that others have gotten similar accommodations; the burden of proof was too large,” Elizabeth Gedmark, vice president at Better Balance, explained.

Examples of reasonable accommodations under PWFA include time off to recover from childbirth, pregnancy loss and postpartum depression; additional breaks to drink water, eat, or use the bathroom; flexible scheduling to attend prenatal or postnatal appointments; light duty or help with manual labor; a transfer away from dangerous chemicals; the ability to work remotely; and new equipment like a stool to sit on or a maternity uniform.

“Now it’s a new day. This law closes those gaps, and we now have additional protections, especially for low-wage workers in physically demanding jobs,” Gedmark added.

This law comes into play at a time when the U.S. has fallen behind its counterparts in women’s labor force participation. According to data from the Organisation for Economic Co-operation and Development, the percentage of American women participating in the labor market is 69% versus 77% in Canada, 75.1% in the UK, and 75.7% in Germany.

Experts say this is likely due to a combination of the lack of federal parental leave policy and accessible and affordable childcare.

“The U.S. lags behind every other nation as wealthy and as developed as ours, not only for women but for any caregivers. This law is a long overdue step to protect women in the workplace,” Narefsky said.

For Jackson, a law like this would have “meant the world because I saw my job as a career. I saw myself having my own furniture store. If I had this, it would have saved me a lot of trauma and heartache; it would have saved me from financial stress, from having an unhappy pregnancy.”

“Moving forward, my hope is that people let go of their fear. I have people reach out to me all the time, afraid. They are still hiding their pregnancies; they don’t want to tell employers. Use your voice — there is help out there, and there are resources now,” Jackson, who is now a community advocate with Better Balance, said.

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(NEW YORK) — The average cost of a 4th of July cookout is slightly down, but families are still feeling the pinch of inflation and other cost catalysts on groceries.

According to The American Farm Bureau’s annual marketbasket survey, the average cost for a 4th of July cookout will cost about $67.73 to feed 10 people, down just 3% or $2.27 per person from last year.

Although the organization’s survey indicates that prices have decreased slightly from the record highs of 2022, the cost of a holiday weekend cookout is still up significantly from 2021 with the grocery bill approximately 14% higher than prices from that time.

2023 comes in as the second-highest cost breakdown in a decade, since AFBF began the survey in 2013.

Cookout favorites that shoppers purchased for the survey included cheeseburgers, chicken breasts, pork chops, homemade potato salad, strawberries and ice cream, among other products.

“The slight downward direction in the cost of a cookout doesn’t counter the dramatic increases we’ve seen over the past few years. Families are still feeling the pinch of high inflation along with other factors keeping prices high,” AFBF Chief Economist Roger Cryan said. “Don’t assume farmers come out as winners from higher prices at the grocery store either. They’re price takers, not price makers, whose share of the retail food dollar is just 14%. Farmers have to pay for fuel, fertilizer and other expenses, which have all gone up in cost.”

The AFBF also pointed to a year-to-year increase in the cost of hamburger buns, which are up 17%, ground beef prices for 2 pounds rose 4%, and homemade potato salad will cost 5% more than last year.

The federation said a number of factors are to blame for those rising prices, including drought conditions that sent the cost of animal feed higher and reduced the number of cattle available. Plus, potato production is down due to poor weather, so consumer spending on spuds will be up for everything from fries to side dishes.

But the survey did find some drops in the cost of chicken breasts, lemonade and cookies.

Thanks to a reduced number of avian flu cases, that plagued the record-high poultry prices in 2022, chicken breasts and eggs are both lower this year.

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(NEW YORK) — Costco Wholesale is cracking down on customers sharing membership cards at the self-service checkout.

The big box retailer will require shoppers at the self-checkout kiosks show their membership cards with their photo before they can begin scanning after the company noticed non-members were borrowing the non-transferrable cards to get in the warehouse.

“Those Costco memberships equal revenue and profits for Costco, the retailer. So when that membership gets shared, Costco ends up losing money and losing profits,” Hitha Herzog, chief research officer at H Squared Research, told GMA.

“Costco is able to keep our prices as low as possible because our membership fees help offset our operational expenses,” the company wrote in a statement. “We don’t feel it’s right that non-members receive the same benefits and pricing as our members.”

The policy is not new for Costco, where employees regularly scan a membership card at traditional checkout. The company is reinforcing the policy as more self-checkout lanes have opened up across the country.

Over 69 million households have an annual Costco membership, the least expensive of which is priced at $60 a year and lets you add on one extra person who lives at the same address.

“Costco is able to give members deep discounts on products because they know based on their purchasing profile what they are going to buy weekly or monthly,” Herzog continued. “It becomes a numbers game, and those numbers get completely skewed because there are multiple people using that membership.”

Costco’s competitor big box stores, BJ’s and Sam’s Club, have their own non-transferrable membership policies.

Costco isn’t the only major business to get stricter about membership sharing of late: Streaming giant Netflix has limited account sharing to use in one household only, shutting down the service for people attempting to use the account at different locations.

Customers made their feelings heard when Netflix first announced the changes, but they spent money on new subscriptions that hit a record high in the first days after the announcement — higher than they did in the early onset of the pandemic. Netflix stock jumped 15%.

ABC News’ chief business and technology correspondent Rebecca Jarvis says we don’t know if Costco or other companies cracking down will see the same boom.

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(NEW YORK) — Airlines have canceled more than 5,200 flights since Saturday in the U.S. and United Airlines CEO claimed the Federal Aviation Administration staffing and inexperience is partly to blame.

United CEO Scott Kirby sent a letter to United employees on Monday, blaming the FAA for travel disruptions this past weekend at Newark Airport, one of United’s busiest hubs and in the center of the nation’s most congested air corridor.

“As you know, the weather we saw in EWR is something that the FAA has historically been able to manage without a severe impact on our operation and customers. This past Saturday, however, was different,” Kirby said in an internal memo to employees Monday.

Following bad weather, United canceled 293 flights at Newark and delayed 251 on Monday alone. As of 12:40 ET Tuesday, United canceled 251 flights and delayed 125 others.

“The FAA reduced the arrival rates by 40% and the departure rates by 75%. That is almost certainly a reflection of understaffing/lower experience at the FAA. It led to massive delays, cancellations, diversions, as well as crews and aircraft out of position,” Kirby wrote. “And that put everyone behind the eight ball when weather actually did hit on Sunday and was further compounded by FAA staffing shortages Sunday evening.”

The FAA responded in a statement, saying, “We will always collaborate with anyone seriously willing to join us to solve a problem.”

The series of cancellations started Sunday with weather on the East Coast and an FAA computer failure at a control center outside Washington, D.C.

The FAA said it “paused” departures to Washington, D.C., airports Sunday due to “repairs” being made to a communications system at an air traffic control facility in the region. The pause impacted flights across the Northeast, contributing along with weather to almost 10,000 flights delayed and 1,400 canceled across the US Sunday.

United’s public airing of grievances against the FAA is the latest in a long series of clashes between the airline and the agency.

In a company earnings call this year, Kirby told analysts, “All companies, including airlines and the FAA, need to staff at higher levels.”

In September last year, Kirby said at a conference in Washington, D.C., the FAA was “by far the No. 1” cause of flight delays. Hours later, the FAA released data showing that airlines were the No. 1 cause.

The latest spat also comes just after DOT’s Office of Inspector General found the FAA continues to face staffing shortages for air traffic controllers, and has made “limited efforts” to ensure adequate staffing at critical ATC facilities.

The OIG’s report found that 20 of 26 critical ATC facilities are staffed below the FAA’s 85% threshold. The FAA’s Certified-Professional-Controller workforce has decreased by 10% over the last decade, the audit found.

The problem was exacerbated by the pandemic, the audit found, when training was paused for nearly two years.   

Throughout its probe, officials interviewed managers at various ATC facilities who said their towers were not adequately staffed, and that controllers were working mandatory overtime and 6-day work weeks to cover the shortages.

The FAA said in response to the report it recently completed a comprehensive review of the distribution of its controllers and submitted a Controller Workforce Plan to Congress in May.

Additionally, the agency said it’s implementing the Air Traffic Operations Management System — a comprehensive system that will track controller timekeeping and various work assignments.

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(WASHINGTON) — The federal government squandered more than $200 billion in potential fraud in its aggressive rush to prop up small businesses as the COVID-19 pandemic threatened to shatter the U.S. economy, according to a report published Tuesday by the inspector general of the Small Business Administration.

The hefty sum, which amounts to approximately 17% of the $1.2 trillion dispersed by SBA, updates previous estimates from the inspector general, Hannibal “Mike” Ware, as investigators from several federal agencies continue to trace and recover millions of dollars lost to fraud, waste and other abuses that occurred during the pandemic.

So far, nearly $30 billion of those fraudulent funds — about 15% of the fraud that’s been calculated as of May — has been reclaimed through collaboration between the inspector general’s office, the SBA, the U.S. Secret Service and other federal agencies, the report said.

Officials said the government watchdog report represents the first comprehensive estimate of fraud to date.

The report focuses on two programs created at the advent of the pandemic to support small businesses, both under the SBA’s purview: the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loans (EIDL).

According to the report, there was a higher potential fraud in the EIDL program, which was a low-interest disaster loan that would later require repayment. The inspector general’s office estimated there was $136 billion of potential fraud in the EIDL program, representing 33% of the total funds dispersed to businesses.

For PPP, which gave money to businesses that would later be forgiven — similar to a grant — the estimate of potential fraud was lower: around $64 billion, representing 8% of the total funds sent out.

The programs flooded businesses with easy access to cash that likely rescued the economy, experts say. But for all the jobs they helped rescue, these programs’ legacies may be tarnished by unprecedented amounts of fraud — a turn of events that experts fear may impair efforts to pass future emergency relief programs.

All government programs suffer some amount of fraud, experts have said. But emergency programs are even more susceptible, due to the inherent tension between the pressure to approve loans quickly and the need to screen applications and maintain other fraud-prevention measures that may prolong the process.

In an October 2020 report, Ware’s office found that “to expedite the process, SBA ‘lowered the guardrails’ or relaxed internal controls, which significantly increased the risk of program fraud.”

“A decision was made at the outset of the pandemic: speed was the key,” Michael Horowitz, the chairman of the Pandemic Response Accountability Committee (PRAC), a federal watchdog charged with tracking how much money was defrauded from the government during the pandemic, told ABC News in an interview on March 22. “It was a bad choice. It was the wrong choice. It never should have happened.”

Ware predicted in a 2021 interview with ABC News that, “in terms of the monetary value, the amount of fraud in these COVID relief programs is going to be larger than any government program that came before it.”

The latest estimate — $200 billion in fraudulent funds — puts the PPP and EIDL programs on track for such a record.

But the SBA, in a response included in the report, pushed back on that sum, saying that it welcomed the review but thought the report “contains serious flaws that significantly overestimate fraud and unintentionally mislead the public to believe that the work we did together had no significant impact in protecting against fraud.”

The inspector general’s review allowed for “a high percentage of false positives,” or potential fraud cases that, upon further inspection, were not fraud, Bailey DeVries, Acting Associate Administrator of the SBA, said in the response.

The administration used its own investigation of fraud, which landed on a much lower estimate of fraud, as evidence: The SBA’s own review, DeVries said, found over $400 billion “worthy of further investigation,” but further review “revealed that the body of loans likely to be fraudulent is approximately $36 billion across PPP and COVID-EIDL.”

DeVries also said the watchdog report “only minimally acknowledges a critical aspect of SBA’s fraud controls — the material fact that SBA’s fraud controls improved dramatically over time.”

“SBA acknowledges the prior administration made decisions to prioritize speed and unnecessarily deflated the control environment for PPP and COVID-EIDL for the first several months of the programs. However, SBA introduced additional fraud controls over time and implemented a strengthened anti-fraud control framework in 2021,” DeVries wrote.

For its part, the inspector general’s office said it holds firm in its estimate of $200 billion.

Ware will appear before Congress in July to discuss his findings under oath. Pandemic relief fraud has attracted attention from lawmakers across the political spectrum.

Many of those who defrauded the pandemic relief programs also victimized individual Americans in the process. Thousands of fraudsters who applied for funds used social security numbers stolen from innocent people, according to the PRAC. The committee wrote in a recent report that nearly 70,000 potentially suspect Social Security numbers were used to successfully apply for EIDL or Paycheck Protection Program (PPP) funds.

Both the SBA and the White House have pledged to offer better assistance to victims in the future, and to improve fraud reporting systems by using multi-factor authentication and a new process to pause billing once someone has reported identity theft, SBA spokesperson Christina Carr said in a statement earlier this year.

Many of those reforms will be guided by an expected executive order from President Joe Biden, who pledged over a year ago to sign an order in the “coming weeks” that would direct “new actions to support the victims of identity fraud.”

Administration officials told ABC News that the action is still expected to come soon, though they didn’t provide concrete timing.

All told, the government has doled out an estimated $5 trillion in relief funds since the beginning of the pandemic, across several programs. The Justice Department has brought charges against more than 2,230 defendants for pandemic-related fraud crimes, the Associated Press recently reported, and the inspector general’s report specifies that at least 1,011 of those charges have been for EIDL and PPP fraud, as of May 2023.

Of those charges, there have been 803 arrests and 539 convictions, the inspector general’s report said.

Copyright © 2023, ABC Audio. All rights reserved.

(WASHINGTON) — The federal government squandered more than $200 billion in its aggressive rush to prop up small businesses as the COVID-19 pandemic threatened to shatter the U.S. economy, according to a report published Tuesday by the inspector general of the Small Business Administration.

The hefty sum, which amounts to approximately 17% of the $1.2 trillion dispersed by SBA, updates previous estimates from the inspector general, Hannibal “Mike” Ware, as investigators from several federal agencies continue to trace and recover millions of dollars lost to fraud, waste and other abuses that occurred during the pandemic.

Officials said the government watchdog report represents the first comprehensive estimate of fraud to date.

At the advent of the pandemic, government agencies pushed through several program meant to support small businesses, including the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loans (EIDL).

The programs flooded businesses with easy access to cash that likely rescued the economy, experts say. But for all the jobs they helped rescue, these programs’ legacies may be tarnished by unprecedented amounts of fraud — a turn of events that experts fear may impair efforts to pass future emergency relief programs.

All government programs suffer some amount of fraud, experts have said. And emergency programs are even more susceptible, due to the inherent tension between the pressure to approve loans quickly and the need to screen applications and maintain other fraud-prevention measures that may prolong the process.

In an October 2020 report, Ware’s office found that “to expedite the process, SBA ‘lowered the guardrails’ or relaxed internal controls, which significantly increased the risk of program fraud.”

“A decision was made at the outset of the pandemic: speed was the key,” Michael Horowitz, the chairman of the Pandemic Response Accountability Committee (PRAC), a federal watchdog charged with tracking how much money was defrauded from the government during the pandemic, told ABC News in an interview in March 2022. “It was a bad choice. It was the wrong choice. It never should have happened.”

Ware predicted in a 2021 interview with ABC News that, “in terms of the monetary value, the amount of fraud in these COVID relief programs is going to be larger than any government program that came before it.”

Ware will appear before Congress in July to discuss his findings under oath. Pandemic relief fraud has attracted attention from lawmakers across the political spectrum.

Many of those who defrauded the pandemic relief programs also victimized individual Americans in the process. Thousands of fraudsters who applied for funds used social security numbers stolen from innocent people, according to the PRAC. The committee wrote in a recent report that nearly 70,000 potentially suspect Social Security numbers were used to successfully apply for EIDL or Paycheck Protection Program (PPP) funds.

Both the SBA and the White House have pledged to offer better assistance to victims in the future, and to improve fraud reporting systems by using multi-factor authentication and a new process to pause billing once someone has reported identity theft, SBA spokesperson Christina Carr said in a statement earlier this year.

Many of those reforms will be guided by an expected executive order from President Joe Biden, who pledged over a year ago to sign an order in the “coming weeks” that would direct “new actions to support the victims of identity fraud.”

Administration officials told ABC News that the action is still expected to come soon, though they didn’t provide concrete timing.

All told, the government has doled out an estimated $5 trillion in relief funds since the beginning of the pandemic, across several programs. A Secret Service official told Congress that its investigators had recovered more than $1.43 billion in wrongfully obtained funds.

Copyright © 2023, ABC Audio. All rights reserved.

(NEW YORK) — With less than one week to go until the Fourth of July holiday weekend, here’s what you need to know before hitting the highway or heading to the airport.

The roads

About 43.2 million people are expected to hit the road for the July 4th holiday — up 2.4% from 2022 and up 4% from 2019, according to AAA.

The quietest days to travel by car are anticipated to be Sunday, July 2, and Monday, July 3, according to transportation analytics company INRIX.

If you’re heading for the highway on Friday, June 30, the worst traffic is forecast to be from 10 a.m. to 5 p.m., according to INRIX.

If you’re driving home on Wednesday, July 5, the worst traffic may hit from 3 p.m. to 6 p.m.

Rental cars are averaging $47 per day, down 25% from the same time last year, according to Hopper.

The skies

More than 24 million are expected to fly out of U.S. airports from June 29 to July 5, with June 29 and June 30 expected to be the busiest travel days, according to Hopper.

But flight prices are dropping. Hopper said domestic tickets are more than $100 cheaper than they were last year.

American Airlines said it expects to fly nearly 3 million passengers from June 30 to July 4, with July 2 as its busiest day.

United Airlines said it’s planning to carry nearly 5 million passengers from June 30 to July 9, with June 30 as its busiest day.

United said its bookings are up 12% from 2022 and are now “nearly equal” to pre-pandemic levels.

The most popular U.S. destinations for the holiday are New York City, Los Angeles and Orlando, Florida, according to Expedia.

The most crowded airports are anticipated to be Hartsfield-Jackson Atlanta International Airport, Dallas/Fort Worth International Airport and Los Angeles International Airport, according to Hopper.

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(NEW YORK) — 3M announced Thursday it has agreed to pay $10.3 billion in settlements in response to allegations in polluted water in towns and cities across the United States with toxic chemicals.

The company, which makes several consumer products, including Command strips, Scotch tape and Ace bandages, said the settlement would be paid over the course of 13 years after public water suppliers detected PFAS in drinking water.

PFAS, which stands for per- and polyfluoroalkyl substances, are man-made chemicals that were first used in manufacturing in the 1940s, according to the Environmental Protection Agency.

These chemicals are omnipresent and can be found in several everyday items such as personal care products, food packaging, cleaning supplies and nonstick cookware, according to the agency.

PFAS can be found in soil, water and air and — because of their widespread use — are often found in the blood of people and animals, such as fish, the EPA said.

People can be exposed to PFAS by breathing in, eating, drinking or ingesting the chemicals, according to the Centers for Disease Control and Prevention.

They can remain in the body for days or months and can potentially lead to increased cholesterol, liver damage, birth defects and a higher risk of kidney or testicular cancer, the CDC said.

Earlier this year, the EPA proposed the first-ever national standards on levels of PFAS found in drinking water to levels so low they cannot easily be detected.

3M has been the defendant in thousands of lawsuits over the past several years over claims it knew PFAS in its products could cause health issues, but continued to manufacture them anyway, resulting in a contaminated water supply.

The company said the settlement is not an admission of liability and that if the court does not approve the settlement agreement, it will defend itself in ongoing litigation.

“This is an important step forward for 3M, which builds on our actions that include our announced exit of PFOA and PFOS manufacturing more than 20 years ago, our more recent investments in state-of-the-art water filtration technology in our chemical manufacturing operations, and our announcement that we will exit all PFAS manufacturing by the end of 2025,” 3M chairman and CEO Mike Roman said in a statement.

In December 2022, 3M said it would stop manufacturing products with PFAS by the end of 2025.

3M’s settlement comes just a few weeks after three companies, Chemours, Corteva and DuPont, agreed to pay more than $1 billion to settle claims that they also allegedly tainted drinking water with PFAS.

In the press release announcing that settlement agreement the companies said if the settlement is not approved, they “will continue to assert their strong legal defenses…deny the allegations in the underlying litigation and reserve all legal and factual defenses.”

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(NEW YORK) — Over seven million Baby Shark bath toys are being recalled due to a risk of injuries for kids, according to the Consumer Product Safety Commission.

The CPSC and Zuru, the toys’ manufacturer, have issued a voluntary recall of Baby Shark and Mini Baby Shark Bath Toys with hard plastic top fins.

The top fins on the shark toys pose a risk of “impalement, lacerations and punctures,” according to the CPSC.

The agency said that Zuru, a California-based company, has received 12 reports of kids “falling or sitting onto the recalled full-size Baby Shark bath toy,” resulting in injuries, nine of which required stitches or medical attention.

“There have been no reported incidents or injuries involving the Mini Baby Shark bath toys,” the CPSC said in the recall announcement.

Consumers are advised to “immediately” stop using the recalled toys and contact Zuru for a full refund.

Zuru has instructions on its website to register for the recall.

The bath toys, which retail for between $6 to $20, were sold nationwide at stores including Walmart, CVS Pharmacy, Dollar General Corp., Family Dollar Services, HEB Grocery Company, Meijer, Target, TJX Companies, Ross, and Walgreens, and online at websites including Target.com, Walmart.com and Amazon.com, according to the CPSC.

There are around 7.5 million units of the two products combined currently on the market, according to the CPSC.

Zuru notes on its website that starting in March, it has sold full-size Baby Shark Bath Toys with a silicone top fin. That version of the product is not being recalled.

“If the top fin of your shark is softer to the touch than the body of the shark and there is a visible line separating the silicone and plastic portions of your top fin, then your top fin is silicone and is not being recalled,” the company states online.

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