House Democrat Calls on SBA Head to Quit

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House Democrat Calls on SBA Head to Quit

By Frank Bass
Associated Press
October 9, 7200

WASHINGTON -- Citing enormous backlogs and high rates of declined loans for hurricane victims, a House Democrat on Wednesday called on the head of the Small Business Administration to quit immediately.

Rep. Nydia Velazquez, the top Democrat on the House Small Business Committee, said a flood of missteps by the SBA this year make it clear that Hector Barreto isn't capable of leading the agency. Barreto, said the New York congresswoman, "has simply run SBA straight into the ground."

Velazquez said that since the hurricanes roared ashore in August and September, the agency has declined 80 percent of disaster loans related to Hurricane Katrina and Rita and has a backlog of more than 200,000 requests for relief. She said the agency also has cost small businesses more than $1.4 billion in contract opportunities by letting big companies win SBA contracts.

The Associated Press reported earlier this year that a substantial amount of nearly $5 billion in SBA terrorism recovery loans was given to companies that neither wanted nor knew they were receiving money earmarked for economic victims of the Sept. 11 attacks.

In a statement released late Wednesday, the agency said it has cleared more than 20,000 loans worth $1.4 billion to Gulf Coast homeowners, renters and businesses.

"Unfortunately, the current political environment in Washington, D.C., is not lacking for individuals who are anxious to throw stones," said Raul Cisneros, an agency spokesman. "This administration is focused on helping the people of the Gulf Coast rebuild after these devastating hurricanes."

Sen. John Kerry, the top Democrat on the Senate panel that oversees the agency, blasted the White House's response to the hurricanes earlier this week.

"The SBA has ignored Gulf Coast small businesses," he said. "Over the past three months, the SBA has failed to get loan dollars into the hands of small business. This administration is turning its back on Katrina's victims."

A White House spokeswoman, however, indicated the administration supports Barreto.

"We appreciate the work Administrator Barreto is doing to help small business owners achieve success and create jobs," said Erin Healy.





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