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Congress will investigate
the "flagrant abuse" of a federal loan program
designed to help business recover from the Sept.
11 attacks and make sure such problems don't
occur with Hurricane Katrina relief, a key
Senate Republican announced Friday.
Sen. Olympia Snowe, R-Maine,
chairwoman of the Senate Small Business and
Entrepreneurship Committee, announced the
investigation in response to an Associated Press
story Thursday that showed the federal program
was so loosely managed that it gave low-interest
loans to companies that didn't need terrorism
relief or even know they were getting it.
"The apparent widespread
abuse of loans provided through the Supplemental
Terrorist Activity Relief Act is nothing short
of an outrage," Snowe said.
The committee chairwoman
said she would demand answers from both the
banks that gave the loans and the Small Business
Administration, which supervised the program.
"Congress must seek and find
answers when confronted with a situation that
represents a possible betrayal of the public
trust, especially at a time when the people of
the Gulf Region need every resource available to
recover," Snowe said. "I intend to exert my
oversight power to determine how such flagrant
abuse could happen and to ensure that Small
Business Administration loans truly go to those
who need them."
Sen. John Kerry of Massachusetts, the
committee's top Democrat, joined in the call for
an investigation.
"This was a deliberate attempt to cover up White
House budget gimmicks that left the SBA's
largest loan program underfunded and on the
brink of shutting down," Kerry said. "The
administration asked SBA employees to bend the
rules and steer regular loans through the
program aimed at helping businesses impacted by
9-11." The AP
reported Thursday that businesses as diverse as
Dunkin' Donuts shops and motorcycle dealers far
from New York and Washington got loans drawn
without their knowledge by their banks from the
Sept. 11 program.
AP quoted several business owners as saying they
hadn't been hurt by the attacks and were
embarrassed to learn their loans came from the
program. And banking officials and SBA documents
show the SBA encouraged lenders to give out the
low-interest, government guaranteed loans using
the loosest interpretation of the rules.
Meanwhile, a poll taken
shortly before the story was published showed
that nearly three-quarters of Americans believe
the government did a good job helping the
economy recover fro Sept. 11.
An AP-Ipsos poll found there
was general satisfaction with the economic
relief efforts from Congress and the Bush
administration among people in all gender, race,
educational and age categories.
When last week's poll
participants were interviewed and told about
AP's findings about the loan program, some said
the program seemed misguided to give away
valuable aid so broadly.
"It's not necessarily what I
would have done," said Nancy Hannaford, a Santa
Clara, Calif., tutor and Web designer. "Nobody
bailed everyone here out during the dot-com
bust." Overall, 27
percent of those surveyed said the government
had done a very good job, and 45 percent said a
somewhat good job, on the recovery. Twenty-seven
percent said they believed it had done a
somewhat poor or very poor job on the economic
recovery. Young
Americans, unmarried people and Democrats were
less approving of the response, while older
Americans, married people and Republicans were
more likely to approve.
The poll of 998 adults was
conducted Aug. 30-Sept. 1 by Ipsos, an
international polling firm, and has a margin of
sampling error of plus or minus 3 percentage
points. The
economic toll from the Sept. 11 suicide
hijackings has been estimated to be as high as
$639 billion and to have cost 2 million jobs,
according to a New York Senate panel study. The
federal government responded with billions of
dollars in loans and grants from numerous
programs and agencies.
It also launched the largest
federal reorganization in a half century,
merging 22 agencies to create the Department of
Homeland Security, which will spend
approximately $47 billion this year.
David Serratto, an Orange
County animal control officer, said one of the
government's better responses to the attacks was
taking over security at all U.S. airports,
returning confidence to flying.
"You're safer when you're
flying now," he said. "It's inconvenient, but
it's a necessary inconvient." |