New Small-Business Chief Has Critics Already


New Small-Business Chief Has Critics Already

By Elizabeth Olson
New York Times
August 21, 2008

WASHINGTON — Santanu K. Baruah, a former Commerce Department official, began serving this week as acting administrator of the Small Business Administration.

President Bush appointed Mr. Baruah on Aug. 15 as acting administrator under the Federal Vacancies Reform Act of 1998, which allows him to remain in the post through the end of the current administration.

He was nominated on June 26 but his confirmation ran into bipartisan concerns over several issues at the agency, particularly a multimillion-dollar provision for government contracts for female-owned businesses.

Last December, the agency issued a rule narrowly defining the women’s government contracting program, which set off protests on Capitol Hill and among women’s groups.

Senator John F. Kerry, Democrat of Massachusetts, who is chairman of the Senate Committee on Small Business and Entrepreneurship, accused President Bush on Thursday of circumventing the confirmation process and of undercutting efforts to open government contracting opportunities for women.

“This nominee and the administration know that I am vehemently opposed to them moving forward with the unconstitutional women’s procurement rule that makes it harder for women to access federal contracts,” Mr. Kerry said.

Lawmakers were further irked because the Small Business Administration sent a final draft of the women’s contracting rule to the Office of Budget and Management. Its contents will not be officially released until October.

Opponents fear that despite having received some 1,600 comments since the rule was published in the Federal Register earlier this year, the agency has retained the narrow definition that elicited the protests in the first place. Critics say they believe that would flout Congress’s 2000 mandate that female-owned businesses receive at least 5 percent of the $435 billion in annual government contracts.

Senator Olympia J. Snowe, Republican of Maine, who is the ranking minority member on the committee, tried to extract a pledge from Mr. Baruah on the issue at a meeting last month. Ms. Snowe said she “demanded Mr. Baruah make a commitment to either withdraw this proposed rule or defer action on this issue until the next administration.”

Mr. Baruah, who was assistant secretary for economic development at the Commerce Department, did not make a commitment. Even so, Ms. Snowe this week issued a statement welcoming his designation but urging him to “rectify the administration’s recent failure to implement a meaningful women’s contracting rule.”

Although little known in the small-business community, Mr. Baruah spent more than two years at the Economic Development Administration, which gives development grants to communities that have suffered job losses for reasons like the movement of manufacturing overseas. Before joining the Bush administration, he worked for seven years as a senior consultant at the Performance Consulting Group in Portland, Ore., which had some big-name clients like Walt Disney and Intel. The firm closed in 2000.

Mr. Baruah, 43, also served in the administration of George H. W. Bush, working as a legislative affairs officer in the Labor Department and as a confidential assistant for the Interior secretary.

Several small-business groups said it was beneficial to have an administration-selected agency head because the hurricane season was beginning, and a firm hand was needed to oversee the agency’s disaster loan program. The program was overwhelmed after Hurricane Katrina, and the former administrator, Steven C. Preston, made overhauling the program a top priority.

Karen A. Kerrigan, president and chief executive of the Small Business and Entrepreneurship Council, a small-business association, said Mr. Baruah’s appointment would put the agency on solid footing.

Ms. Kerrigan also said Mr. Baruah’s economic development service gave him experience “working with local communities and local businesses so he understands government interaction with communities.”

The American Small Business League, which has locked horns with the Small Business Administration over the awards of small-business contracts to large corporations, has been critical. Its president, Lloyd Chapman, has publicly worried that Mr. Baruah’s goal is to either eliminate the Small Business Administration or fold it into the Commerce Department.

Mr. Chapman also said Mr. Baruah’s lack of small-business experience meant he was not qualified for the job.

When he took up the post last week, Mr. Baruah said in a statement that he planned to “help S.B.A. carry on its mission as it navigates the height of hurricane season and deals with the current economic challenges and tightening credit opportunities for small business.”

He said, through a spokeswoman, that he was too busy learning his new job for an interview, but the S.B.A.’s announcement emphasized that he “has worked for small businesses, helped small businesses grow, and was raised by a mother who ran her own small business.”

That would be Ranee Baruah, who owned Ranee’s Imported and Domestic Foods, a coffee, tea and spices store in Salem, Ore. It closed in the early 1990s, Mr. Baruah said.




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