The U.S. Senate Committee on Small Business and Entrepreneurship approved President Obama's pick for SBA chief on Wednesday, but some small business advocates remain skeptical.

The American Small Business League voiced their concern over the appointment of Karen Gordon Mills to the position leading the SBA, citing her alignment with venture capitalists and her intentions to funnel contracts intended for small businesses to these types of firms.

This is not the first time the ASBL has called into question the Obama administration's actions toward small businesses. Earlier this year the group accused the president of flip-flopping on his message of support toward small business owners.

However, a number of committee members fully support Mills. Committee chair Mary Landrieu was glowing in her praise of the new leader.

"Karen Mills is the right person to lead the Small Business Administration during these tough economic times," said Landrieu. "After suffering enormous budget cuts and being relegated to obscurity during the previous Administration, the SBA needs a strong leader who will fight for small businesses throughout the nation."

Source:  http://capitalsolutionsbancorp.com/news/small-business-advocates-concerned-over-sba-nod-20090402

Karen Gordon Mills of Brunswick received the unanimous support of the Senate Small Business and Entrepreneurship Committee following a public hearing Wednesday on her nomination to head the U.S. Small Business Administration.

Mills, a venture capitalist who served on President Barack Obama's SBA transition team, was a founding partner of Solera Capital, a New York-based equity firm. She also served as the chairwoman of Gov. John Baldacci's Council on Competitiveness and the Economy. Her husband, Barry Mills, is president of Bowdoin College.

U.S. Sen. Olympia Snowe said she and Mills are "fast friends" who always talk about small business.

"Over time, she became more involved at the state level," Snowe said. "She brings the in-depth knowledge and practical experience, which is often missing in government."

Snowe, the top Republican on the Senate Small Business Committee, and her Maine colleague, Sen. Susan Collins, a former SBA New England Administrator, recommended Mills for the job of SBA administrator.

The Small Business Administration is charged with protecting the interests of small business by guaranteeing loans and providing additional assistance to businesses recovering from natural disasters.

Though funding for the SBA was cut by more than 25 percent under the Bush administration and was demoted from the Cabinet status it enjoyed under the Clinton administration, small businesses will play a large role in the country's economic recovery, Mills said during the hearing.

"There are over 26 million small businesses in this country and they create 70 percent of the new jobs," she said. "This means that to find our way out of the current economic crisis, we have to find ways to help small businesses stay in operation, and even expand."

Mills said taking advantage of the provisions for small businesses written into the massive economic stimulus package would be a top priority.

"(The stimulus) reduces fees to both borrowers and lenders, increases the guarantee percentage on SBA loans and works to unfreeze the secondary markets," she said. "In addition, many viable but struggling businesses will get a $35,000 lifeline to bridge them for six months of interest and principal payments - which the SBA will fully guarantee."

One of the few critics of Mills' nomination is Lloyd Chapman, president of the American Small Business League, a group he founded to improve oversight of federal small business contracting programs.

Chapman said real flaws exist with how government contracts are awarded to small businesses, and that should be the first issue a new SBA administrator addresses.

Chapman, who has been campaigning against the SBA as an entity for years, said he didn't know Mills and hadn't met her.

"But I don't think she cares about small business," he said Wednesday. "She has zero experience working with companies with less than 20 employees."

Snowe said Mills gained an understanding of the challenges facing rural small businesses while researching and working with the Brookings Institution to compose the 2006 report "Charting Maine's Future."

Mills also spent years directly overseeing the restructuring of several small manufacturing businesses during the early 1990s while working for a private equity firm, Snowe said.

Baldacci said he was impressed with how Mills was able to relate to dairy farmers, fishermen and top executives of multimillion-dollar companies while working on the report.

"She didn't just sit on a board; she went out and met with everyone and listened to what they had to say," Baldacci said. "She's able to engage people and to her credit, she did it on her own initiative."

Baldacci said it would help Maine to have another voice speaking to, and for, the Obama administration.

"She'll be sitting with the president and the rest of his economic team, and that is important," he said.

Source:  http://www.sunjournal.com/story/310724-3/MaineNews/Mainer_in_line_to_head_Small_Business_Administration/

The Senate Committee on Small Business and Entrepreneurship unanimously confirmed Karen Gordon Mills, a venture capitalist and Tootsie Roll heiress, as the administrator of the Small Business Administration last night. The full Senate is expected to swiftly confirm President Obama’s nominee for the SBA post, as soon as today.

“Karen Mills is the right person to lead the Small Business Administration during these tough economic times,” says Mary Landrieu, D-La., the Senate Small Business Committee Chair, in a statement before the confirmation vote. “After suffering enormous budget cuts and being relegated to obscurity during the previous administration, the SBA needs a strong leader who will fight for small businesses throughout the nation. Ms. Mills has an outstanding record both in growing new businesses and in her community.”

At her confirmation hearing, Ms. Mills revealed what her first priorities would be as SBA head and was asked several questions about the small-business initiatives President Obama wants accomplished this year. Highlights below:

– First question out of the gate came from Ms. Landrieu, who told Ms. Mills that she and her colleague Sen. Olympia Snowe, R-Maine, have already sent two letters to President Obama, strongly urging him to elevate the SBA administrator post to a Cabinet position within the first 100 days. Yesterday was Day 72, she says, “we have 28 days left.” Does Ms. Mills intend to talk to President Obama about it?

“It is the president’s decision about who he wants in his Cabinet,” Ms. Mills responded. “He has assured me that, as you know, I’ll be part of the NEC, the National Economic Council. I’d very much be a part of all these discussions, and small business will be a part of the agenda.”

Ms. Mills was later asked the same question by Sen. Evan Bayh, D-Ind., but also gave a similar non-answer.

– Ms. Mills was asked details about how she plans to unfreeze the secondary market, crucial to small-business lending. She said that the details have not been announced, but the Treasury is working with the SBA on the issue. But she did reveal that the SBA has already implemented key provisions to Obama’s Recovery Act plan, such as the 90% guarantee on SBA loans and reduced fees. Since March 16, the SBA has already made $1.4 billion in loans under the revised program, Ms. Mills says.

– Sen. Snowe urged Ms. Mills to set a more aggressive deadline in implementing small-business provisions in the Recovery Act, instead of delaying them a month or two after confirmation. Ms. Mills agreed.

– A key question in her hearing had to do with what her views were on whether venture-backed small businesses be allowed to receive SBA-backed money. Ms. Mills says that the most promising businesses should not be excluded, although she worries about crowding out other small businesses in the process. “I don’t have a fixed view” on what percentage should be allocated to venture-capital majority-owned businesses, she says.

– With health care becoming the No. 1 or No. 2 issue in most small-business surveys, Ms. Mills says the administration has taken a look at several suggestions that would benefit small-business owners, mainly the ability to pool money to buy health care and to receive tax relief for small businesses that do provide health-care benefits to their employees. “The president sees this as…an important priority,” she told the committee.

– In her testimony, Ms. Mills indicated three issues she plans to tackle first: implement the small-business provisions in the stimulus package and get capital flowing to core SBA loan programs; hire staff and buy technology that’ll help the agency; and be an active liaison among other agencies, such as Commerce, Labor and Energy, whose programs affect small business.

“I am a believer in American small business,” she told the committee. ” … If confirmed I pledge to pursue these tasks with the utmost energy, and to be your partner in giving small businesses the help they need to thrive, to grow and put Americans back to work.”

Small business groups are already strongly suggesting what Ms. Mills should focus on first.

“As a first order of business at the SBA, Karen Mills should immediately remove all Fortune 500 firms, large businesses and their subsidiaries from any and all government databases of firms claiming status as small businesses,” the American Small Business League said in a statement. “This would once and for all bring an end to the ‘miscoding’ that has plagued the SBA for the last eight years.”

What should the new SBA administrator do first? What do you expect to happen in her first 100 days?

Source:  http://blogs.wsj.com/independentstreet/2009/04/02/karen-gordon-mills-set-to-lead-sba/

It's been a rough decade for the Small Business Administration. The Bush administration slashed its budget by more than half, and many of its most experienced and knowledgeable employees were let go. To make matters worse, multiple investigations have found evidence of waste, fraud, and abuse at the agency, which is supposed to help small businesses drive economic growth. On Wednesday, the embattled agency was dealt another blow when the Government Accountability Office revealed that the SBA's $8 billion program designed to funnel government contracts to small businesses in poor areas gave millions to companies that did not meet the legal requirements, including one that was "headquartered" in a trailer home occupied by someone unrelated to the company. Some of the owners of the "small businesses" in question admitted straight-out to the GAO that they were defrauding the SBA's HUBZone program by funnelling money to big businesses or businesses outside the zones.

In total, the GAO found 19 businesses that did not meet the HUBZone requirements received some $30 million in federal contracts despite their non-compliance. One firm that collected $900,000 was particularly egregious in its rulebreaking:

[O]ur investigation found that the purported principal office was in fact a residential trailer occupied by someone not associated with the company. The company had represented its office as located in “suite 19,” when in reality, the address was associated with trailer 19 in a residential trailer park. The two employees of the firm—a father and a son—lived in non- HUBZone areas that are located about 90 miles from the trailer park. This firm also subcontracted most of its HUBZone work to non-HUBZone firms.

Chris Gunn, a spokesman for the American Small Business League, has been bird-dogging the SBA for years. He says that since the underfunded and overwhelmed agency was gutted by the Bush administration, "it's not necessarily surprising that we see this amount of fraud and abuse."

Rep. Nydia Velasquez (D-NY), the chair of the House small business committee, has talked of shutting down the HUBZone program entirely. But Gunn says far more drastic measures need to be taken. "If the best they can come up with is to end the program then we're all in trouble," Gunn says. His organization is working on legislation with Rep. Hank Johnson (D-Ga.) to preclude publicly-traded companies from being counted towards the government's small business procurement goals. That move that would keep companies like Raytheon, Honda and 3M (and their subsidiaries), which have received federal small business contracts in the past, from receiving them in the future.