In a sea of governmental incompetence, the agency overseeing business loan disbursements following the Sept. 11, 2001, terrorist attacks bobs prominently on the surface.
A review of two federal Small Business Administration programs that issued Sept. 11 recovery loans found the government provided, approved or guaranteed nearly $4.9 billion in loans and took credit for saving 20,000 jobs. These are those often-cited "low-interest loans" businesses are urged to apply for in the wake of a disaster, and were designed in this case for hard-hit firms in the travel, retail and tourism sectors, especially in the primary target cities. Of the 19,000 loans, however, fewer than 11 percent went to companies in New York City and Washington.
Apparently, the SBA found out about this major discrepancy when an Associated Press reporter called to ask about it. Oops. Turns out, the SBA admitted it allocated too few resources to oversee the congressionally approved programs. Instead, the agency allowed banks to determine who should get loans intended to ameliorate the impact of terror, even if those businesses were hundreds of miles away from the site of the attacks.
Neither the type of business, nor its location in relation to the attacks seemed to matter in this irresponsible oversight. Just about anyone could apply for a piece of the $5 billion disaster-relief fund the SBA administered. Imagine the relief the owner of a food-catering business in Rochester must have felt when she discovered the SBA approved her terror recovery loan for $153,500 in June 2002.
Americans are currently riveted by the disaster Hurricane Katrina wreaked on New Orleans, and the fumbling incompetence of the Federal Emergency Management Agency, only to be delivered the news of yet another agency under water. The SBA is reportedly "weighing" whether an investigation is needed. Isn't it obvious?
Plus, as Congress approves what might be ultimately as much as $300 billion in aid for Katrina's victims, taxpayers need to be reassured that all the money goes to those who really need it.