Following Shocking Video, Ernst Demands Transparency at SBA
WASHINGTON – In a new video, a senior advisor to the chief of staff at the U.S. Small Business Administration (SBA) is shown claiming Administrator Guzman is actively participating in politically motivated travel with taxpayer dollars and hiding controversial small business policy decisions from members of Congress.
In light of the SBA’s recent announcement that it finalized the agency’s “first-ever voter registration agreement with the Michigan Department of State” and contemplation of misguided rule changes, U.S. Senator Joni Ernst (R-Iowa), Ranking Member of the Senate Small Business Committee, is calling on the SBA to provide all calendar records, emails, memos, and documents regarding Guzman’s travel and efforts to restart the 7(a) direct lending program.
Ernst wrote to Guzman: “The senior advisor claims you are ‘the most traveled member of the cabinet’ and that your official travel is purposefully targeted to ‘indirectly campaign for Joe Biden’ in a way that attempts to circumvent the Hatch Act. Using taxpayer dollars in an attempt to engage in federal campaign activities is a gross abuse of official agency resources and needs to be further investigated. Your alleged travel is particularly questionable in light of the SBA’s recent announcement that it finalized the agency’s ‘first-ever voter registration agreement with Michigan Department of State.’
“The SBA’s mission is to aid the interests of small businesses, not to swing votes. What value is it to America’s small business owners when the SBA spends taxpayer dollars to create new marketing materials, use official social media, and buy new signage at SBA offices and events throughout the country in order to promote voter registration?
“While you have been off traveling, I am left wondering who is running the agency. During your tenure, the SBA has published several controversial rules, including loosening the 7(a) loan guarantee underwriting standards and allowing new lenders without sufficient capital to participate in SBA’s traditional loan partnership programs. Further, I am deeply concerned about allegations you have lacked candor in your testimony to Congress. President Biden’s FY25 budget request suggests you have been contemplating directly competing with private banks to make small dollar loans. However, the senior advisor in the media report describes how you are trying to avoid talking about your secretive plans to restart a direct lending program when testifying under oath before Congress. As you know, the Clinton administration stopped the direct lending program because of mounting loan losses footed by the taxpayer. During your appearance in front of this Committee on March 20, 2024, you directly stated you are not going to restart direct lending without additional congressional authority. However, this media report seems to suggest you and your team continue to try to find ways to restart this flawed program.”
Read the letter here.
Background:
Ernst has long fought to bring accountability to the SBA and safeguard taxpayer dollars.
In May 2023, Ernst asked the SBA to delay the implementation of lending rules until permanent leadership can be established at the SBA Office of Capital Access. Her bipartisan, bicameral letter has gone unanswered by the administration.
In June 2023, Ernst renewed her calls for the SBA to strengthen lending standards. In November 2023, Ernst released her Small Business COVID-19 Fraud: Three Years Later State of Play report, where she outlined the Biden SBA’s effort to discount the full extent of COVID-era fraud and cast doubt on the legitimate estimates made by expert investigators.
In December 2023, Ernst exposed that Biden’s SBA is utilizing just nine percent of its headquarters maintained on the taxpayer’s dime and called on Administrator Guzman to increase the transparency of SBA’s telework policies, locality pay, unused office space, and taxpayer-funded union time payments. In April 2024, after Guzman fumbled over her agency’s ongoing telework abuses, Ernst demanded the SBA’s Office of Inspector General launch a new investigation.
In March 2024, Ernst called out negligent bureaucrats at the SBA for failing to comply with an Ernst-authored transparency law. She also questioned Administrator Guzman on the SBA’s decision to give financial technology companies, or fintechs, unlimited access to a key SBA program while reducing the loan underwriting requirements that protect American taxpayers.
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