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Pandemic watchdog calls the number of investigations into arts and restaurant bailouts ‘underwhelming’ and ’embarrassing’

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A top federal pandemic-aid investigator said the number of investigations into $43 billion in emergency grants to restaurants and entertainment businesses has been “embarrassing” and “underwhelming.”

William Kirk, the new inspector general for the Small Business Administration, urged Congress to give prosecutors more time to bring charges against people for defrauding two lesser-known pandemic aid programs: the $28.6 billion Restaurant Revitalization Fund and the $14.6 billion Shuttered Venue Operators Grant.

“There is no possible way that our office would be able to investigate all of the outstanding referrals and cases that we’ve received in the SVOG and the RRF program,” he said at a Senate hearing on Wednesday. “The scope of the work is such that we would need much more time.”

Business Insider reported in 2023 and 2024 on hundreds of millions of dollars that flowed from SVOG to artists like Lil Wayne, Post Malone, Marshmello, and Nickelback. While those grants may have been legal under the extremely broad language passed by Congress, records showed that some artists spent their taxpayer grants on lavish parties, private jets, and multimillion-dollar bonuses for themselves.

Senator Joni Ernst has pushed to extend the window for bringing charges related to SVOG and RRF fraud. Ernst previously said her Democratic counterpart, Senator Ed Markey, wasn’t letting the bill advance, though Markey’s comments at the hearing suggested the logjam might be breaking.

“I am committed to passing this legislation as part of a comprehensive set of reforms and look forward to working with the chair to advance it, along with other bipartisan priorities,” Markey said. “That said, our efforts to fight against fraud should not be limited to going after small restaurants and theaters, especially when President Trump is letting off fraudsters left and right.”

The bill had been caught up in a larger dispute about other small-business programs that provide research funds to early-stage tech companies. Markey said in a statement that a deal had been reached to extend them for five years.

Kirk, who was sworn in early January, said in prepared testimony that while hundreds of complaints have poured in about potential abuse of the Shuttered Venues program, his office has six open investigations. He said that while his office’s investigators and auditors are “dedicated professionals,” they were focused on other areas of fraud in recent years.

In response to questions from Ernst, who leads the Senate small business committee, about whether Kirk’s office would have time to bring charges before time runs out in April or May, Kirk called the office’s work on those programs “underwhelming.”

“The handful of investigations — quite honestly, it’s an embarrassing number — of investigations we currently have underway, those would probably time out,” he added.

Congress has already extended the statute of limitations to charge some fraud related to the Paycheck Protection Program and Economic Injury Disaster Loans, two larger and better-known programs, tacking on another five years to the normal five-year window to bring charges.

Some Democrats at the hearing pressed Kirk to investigate the activities of the White House’s Department of Government Efficiency at the SBA.

Asked by Senator Jeanne Shaheen if he was concerned about the office’s activities, Kirk said, “Not currently, no.”




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The EU’s privacy watchdog is investigating X over sexualized AI images

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X is facing mounting criticism from foreign watchdogs over its generative AI chatbot, Grok.

The Irish Data Protection Commission said Tuesday that it had opened an inquiry into Elon Musk’s X, formerly known as Twitter.

The commission said in a press release that the inquiry was linked to the creation and publication of non-consensual, sexualized images of European Union residents on X using Grok’s generative AI functions. This included pictures of children.

The commission, which is responsible for enforcing the EU’s General Data Protection Regulation, said in the release that it notified X of the investigation on Monday.

X did not respond to a request for comment from Business Insider.

Grok is a chatbot developed by Musk’s xAI, now a subsidiary of his aerospace company SpaceX.

The commission’s investigation follows several weeks of controversy around Grok and X. The platform came under fire worldwide in January after reports emerged of Grok users generating sexualized images of real people, including minors.

Countries like Indonesia, Malaysia, and the Philippines temporarily suspended access to Grok. The European Commission launched an investigation into Grok, while India’s information technology ministry voiced its opposition via a letter to the chief compliance officer of X’s India operations.

California’s Attorney General, Rob Bonta, also said in early January that he had launched a probe into Grok’s AI deepfakes.

In response, X made Grok’s AI image generation tool a premium feature limited to paying subscribers and later stopped it from generating sexualized images altogether. However, a Business Insider report found that it was still possible to trigger these images in Grok’s web and mobile applications.

In response to backlash over Grok, Musk said in an X post on January 3, “Anyone using Grok to make illegal content will suffer the same consequences as if they upload illegal content.”




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The US military’s drone-defense confusion is leaving its bases vulnerable, Pentagon watchdog finds

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A Pentagon watchdog report is warning that gaps in Pentagon policy are leaving some US military bases vulnerable to drone threats.

The report, released Tuesday by the Pentagon’s Inspector General, said that the military lacks consistent guidance for defending sensitive “covered assets” — US-based sites legally authorized to use certain counter-drone defenses — against offensive uncrewed aircraft, a problem exacerbated by jumbled, contradictory policies across the services.

While the Defense Department has issued multiple counter-UAS policies — rules governing how the military can detect, disrupt, or disable uncrewed aerial systems — those directives are not standardized, leaving some base leaders unaware that their installations qualify as “covered assets.” The term refers to locations within the US that deal with sensitive missions like nuclear deterrence, missile defense, presidential protection, air defense, and “high yield” explosives.

That lack of awareness derived from confusing policy risks leaving bases exposed to uncrewed threats, a growing concern.

The Inspector General report examines 10 military installations where drone incursions have occurred. The watchdog assessment found multiple examples of “covered assets” left uncovered due to unclear policies.

The Air Force base in Arizona where most F-35 pilots are trained, for instance, is not authorized to defend against UAS incursions because pilot training does not qualify as a “covered” activity under Pentagon policy, despite the Air Force describing the F-35 as “an indispensable tool in future homeland defense.”

Another Air Force facility in California that manufactures aircraft repair parts, conducts aircraft maintenance, and makes the Global Hawk, an ultra-advanced large surveillance drone that costs more than the F-35A, has also been left vulnerable, and the site experienced a series of drone incursions in 2024, the report said.

“Air Force officials told us that the government-owned, contractor-operated facility was denied coverage during the active incursions,” in 2024, the IG report says.

The problem extends beyond determining whether a site is covered. The process for obtaining counter-drone systems — and securing rapid legal approval to use them when needed — is complex and slow, reflecting legal restrictions on using electronic jamming or force inside the US, the report found.


A contractor hand-launches a drone at a counter-UAV training site in California in January 2020.

A contractor hand-launches a drone at a counter-UAV training site in California in January 2020.

PFC Gower Liu/US Army



The growing counter-drone problem

Concerns about drone threats to military installations have grown in recent years as small, inexpensive commercial drones have become dramatically more popular and easy to use. Such systems lower the barrier to entry on surveillance and precision strike from the state level to non-state actors and can create challenges for security personnel who are often constrained in their response options, or improperly trained and equipped to react.

In 2024, multiple bases within the US and abroad experienced strings of drone incursions, events that can involve one or more unmanned aircraft entering restricted airspace or operating close enough to installations to trigger alarms, even when the drones are not linked to foreign adversaries.

“In recent years, adversary unmanned systems have evolved rapidly,” a Department of Defense counter-drone strategy released in the final months of the Biden administration said. “These cheap systems are increasingly changing the battlefield, threatening US installations, and wounding or killing our troops.”

Efforts to address the drone problem have been in the works for years, though a Center for New American Security report released last September said the military’s efforts were “hindered by insufficient scale and urgency.”

Some units have received counter-drone tools such as portable “flyaway kits” — deployable systems meant to be moved quickly between sites — and the “Dronebuster,” a handheld electronic-warfare device that emits a signal to disrupt or disable an offending drone. The Army secretary recently questioned the latter system’s effectiveness, underscoring broader uncertainty about how best to defend US bases from the growing drone threat.

The US military is trying to catch up with the threat, to develop defenses as fast or faster than drone technology is currently developing, driven in large part by the drone-dominant Ukraine war. As he announced the creation of Joint Interagency Task Force 401 last August, Secretary of Defense Pete Hegseth said “there’s no doubt that the threats we face today from hostile drones grow by the day.”

“The challenge for airspace management is how to deter or defeat such incursions without endangering the surrounding civilian communities or legitimate air traffic. That rules out everything kinetic,” Mark Cancian, a defense expert and retired US Marine Corps colonel, told Business Insider in late 2024 during a series of incursions.

“This has become a huge problem for both military and civilian airfields and will get worse and drone usage proliferates further,” he said.




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Watchdog sounds the alarm that PJM’s approval of data centers could leave other customers in the dark

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The nation’s largest grid operator is facing a choice — between serving more data centers or keeping the lights on for all its existing customers.

In a complaint filed on November 25 with the Federal Energy Regulatory Commission, Monitoring Analytics, LLC, an independent market monitor for PJM, requested that the regulator mandate that the energy wholesaler only add large data centers to its system if all customers can be reliably served.

“PJM is currently proposing to allow the interconnection of large new data center loads that it cannot serve reliably and that will require load curtailments (black outs) of the data centers or of other customers at times,” the complaint read.

“That result is not consistent with the basic responsibility of PJM to maintain a reliable grid and is therefore not just and reasonable,” the complaint added.

PJM serves over 65 million people, including households and other consumers, across all or parts of 13 states and the District of Columbia. While it is not a utility provider, it helps move electricity across a service area of about 369,000 square miles.

According to the complaint, large data centers are responsible for higher transmission costs, as well as energy and capacity prices. Monitoring Analytics added that existing and expected data center loads already increased PJM’s capacity revenues in its last two capacity auctions by $16.6 billion, and the figure would only “continue to grow.”

The complaint also described a “Critical Issues” meeting among PJM’s Board of Managers to address the issue of data centers, but the board ultimately could not come to an agreement since “most stakeholders simply assume that PJM must agree to add large loads to the system.”

The purpose of the complaint, wrote Monitoring Analytics, is to make the board’s job “significantly more manageable” if a regulator could clarify that PJM does have the authority to “require that the loads can be served reliably before allowing the loads to be added to the system.”

A spokesperson of PJM told Business Insider that the company is still “going through the complaint” and would not comment at this time. The spokesperson added that the Board of Managers is “expected to act on the large load issues raised” in the meeting and “should provide an indication of its next steps over the next few weeks.”

Large data centers have been driving up utility costs nationwide, particularly in states like Virginia, where the “data center alley” is located. The North American Electric Reliability Corporation wrote in a November report that data centers are one of the leading causes of a rise in energy demand this winter, which increases the risk of blackouts.

The Trump administration plans to invest $500 billion to build AI infrastructure in collaboration with OpenAI, Oracle, and Softbank. OpenAI CEO Sam Altman told the White House Office of Science and Technology Policy in a letter in October that the US should add 100 gigawatts of new power capacity annually to stay competitive in the AI race.




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