Landrieu, Kerry say SBA must be accountable for how money is allocated

By Ned Randolph

Two of the U.S. Small Business Administration’s ardent critics have asked the SBA administrator to furnish their Senate committee with daily reports of how billions of dollars of disaster loan money is being allocated and to copy the committee on supplemental funding requests by the Bush administration.

The SBA has been inundated with 381,000 disaster loan applications for homes and businesses in the hurricane-stricken Gulf region, with even more expected before the March 11 deadline.

Last month, the agency twice sought emergency action by Congress to keep its disaster loan program solvent, which incensed Sens. Mary Landrieu, D-La., and John Kerry, D-Mass., who sit on the Senate Committee on Small Business and Entrepreneurship.

Landrieu and Kerry were upset that SBA administrator Hector Barreto, a Bush appointee, neglected to inform the committee during his two appearances in February that the agency was seeking an emergency reallocation of $100 million for its disaster loan program.

Congress approved the request. Two weeks later, President Bush, in his supplemental bill, also requested a $1 billion reallocation to the agency’s disaster loan program from the Federal Emergency Management Agency.

Sens. Landrieu and Kerry posted a letter dated Tuesday to Barreto saying: “We are very concerned that the SBA’s disaster loan program was in danger of running out of funding twice this month.”

“As detailed in a letter to the President on February 10, 2006, it is troubling that the SBA reported it did not see the problem developing, waited until the eleventh hour to notify the Congress of a need for emergency funding … and did not disclose to the Committee on Small Business & Entrepreneurship in its budget briefings on February 6th or 7th that it had a funding shortage in the disaster loan program.”

The two senators have given Barreto until March 10 to begin furnishing daily reports by e-mail to the committee.

“Hopefully they will understand the need for this oversight, and comply,” Landrieu spokesman Brian Richardson said. “If the SBA does reply by the 10th, we will review options, including possible legislation, as it is imperative that SBA fulfill their duties, and be held accountable when they do not.”

SBA spokesperson Anne Marie Fawley said Wednesday afternoon that the agency had not officially received the letter and could not comment on it.

However, she said Congress receives daily updates on the number and amounts of loans processed as well as disbursement levels.

“They do get daily updates on number of loans and dollars approved,” she said.

Six months after Katrina, 137,000 disaster loans have yet to be processed.

Landrieu and Kerry have been at loggerheads with the SBA since Katrina. The two coauthored bipartisan legislation to get the SBA to streamline its loan processing and allow states to offer short-term bridge loans while waiting for SBA disaster loans.

The legislation has been blocked by the administration.

On Tuesday, Barreto unveiled a plan largely modeled after one of their suggestions to solicit private banks and entities to help process and close loans.

In the latest letter, the pair has requested a number of disclosures, including:

• Daily and weekly averages of loans awarded, dollar amounts and the percent each has increased or decreased.

• The amount of funding spent each day for loans, in appropriations and program level, and the percent that each category has increased or decreased.

• The amount of funding available for loans, both in appropriations and program level, footnoting the source of any additional funding, such as through a reprogramming or supplemental funding.

• A date estimating how long the funding for loans will last.

• The amount of funding spent daily for staff, along with the number of staff.

• The amount of funding spent each day for administrative costs and salaries, noting the source of any additional funding, such as through a reprogramming or supplemental funding.

• A date estimating how long the funding for salaries and expenses will last.