Is the SBA the Next Scandal?

suggestions that SBA mismanaging 9/11 funds, concealing a bad audit

According to the Associated Press, Bush's Small Business Administration not only mismanaged the disbursement of funds meant for small businesses harmed by September 11, but publicized one audit while concealing another in order to make their record appear better than it actually was.   

Republican Senator Olympia Snowe calls the situation "nothing short of an outrage."  And  what did SBA head Hector Barretoo do before he got this job?   Why, he raised a lot of money for Republican campaigns.   Obviously the SBA doesn't play the same life-saving role FEMA does, but there are echoes of the FEMA scandal in the mismanagement of funds meant to relieve those who suffered from a disaster.

From the AP:

Facing a congressional inquiry, the Small Business Administration said Tuesday it believes it followed the law during its nearly $5 billion lending effort to help small companies recover from the Sept. 11, 2001, attacks.

To make its case, the agency distributed one audit that praised some of its work while omitting a second report by the same congressional auditing agency that criticized the SBA's post-Sept. 11 relief work.

The SBA's original foul-up, according to reports, is that it gave out 9/11 relief money to businesses that weren't affected by the disaster:

AP reported companies hundreds of miles from the devastation of ground zero - from a Utah motorcycle dealer to an Ohio Subway sandwich shop - had received SBA-backed loans without being aware they had been drawn from the Sept. 11 relief programs.

According to Hispanic Business, Barreto was one of the GOP's top ten Hispanic fundraisers in the 2000 campaign.    Prior to his appointment, Barreto was a California insurance executive.  His private sector background is typical of the job, unlike the Mike Brown/FEMA mismatch.   But the possible mismanagement of funds could be ... interesting.  Unlike Katrina, nobody died, but if the story's true it's certainly a black mark.  Stay tuned for further details.

UPDATE:  Pamela Leavey of The Democratic Daily has been following John Kerry's ongoing criticism of Barreto's management in his role as ranking member of the Senate Small Business Committee.  She cites a number of other concerns that have been raised about the SBA.    She quotes Kerry's statement on these recent revelations:

“This was a deliberate attempt to cover up White House budget gimmicks that left the SBA’s largest loan program underfunded and on the brink of shutting down,” Kerry said. “The administration asked SBA employees to bend the rules and steer regular loans through the program aimed at helping businesses impacted by 9/11.”

Comments

[Nominal Chtulu]

I have this horrible itchy feeling, right down between my scales, that even if we are fortunate enough to be rid of Chimp and his ilk, we'll all be living with the continuing eruption of a string of scandals like this, for years, with the expectation that the taxpayers will wipe it all up with handfulls of money...