SBA Nominee Pledges Commitment to Disaster Relief
BY Angus Loten
During his Senate confirmation hearing, Steven Preston deflected questions about his lack of experience as an entrepreneur.
With business owners in the Gulf Coast still waiting on federal aid from last year's hurricanes, the man poised to take over the Small Business Administration told lawmakers on Wednesday that fixing the agency's disaster loan program will be "job number one."
"I need to get in there and kick the tires," Steven Preston, 45, a former lawn-care company executive, told members of the Senate Committee on Small Business and Entrepreneurship at his confirmation hearing.
To date, the agency has disbursed less than half of the 57,000 disaster loans approved for small businesses since Hurricane Katrina struck last August. More than 125,000 small and midsize businesses were disrupted by the storm, and others in the weeks that followed, the U.S. Chamber of Commerce estimates.
Preston, who said he toured the devastated region earlier this year, plans to foster stronger partnerships with private-sector lenders to speed up rebuilding efforts, while putting in place in a comprehensive disaster response strategy for this year's storm season.
Echoing complaints from business owners that testified before Congress early this year, Preston said the multi-step process involved in applying for federal disaster loans has become "highly complex," with the risk of costly delays at every step.
"I need to get very deep to understand this problem," he said.
Sen. Olympia Snowe (R-Maine), the committee chair, said she was confident Preston had the skills to remedy "any and every problem that prevented or delayed the agency's front-line employees working in the disaster zoning from aiding victims."
The committee's ranking Democrat, Sen. John Kerry (D-Mass.), called Preston a "serious nominee who brings business acumen and a wealth of management experience to an agency woefully in need of better management."
Still, Preston stopped short of specifics on how to achieve these goals amid ongoing cutbacks, which have seen the SBA's budget drop by nearly 40% in just five years. Pressed on whether he would commit to pushing the Bush administration for more funding, Preston replied only that he would have to look into the figures.
Beyond that, he said he will also tackle sagging morale within the agency, which he said was brought on by a lack of resources and a widely perceived failure to respond effectively to Katrina, among other shortcomings.
To do this, he pledged to re-open channels of communications between SBA departments, as well as with members of Congress and the private sector.
"Ninety percent of the good ideas to improve an organization are already out there and just need to be captured and crystallized," Preston said.
Preston also fired back at criticism over his corporate-world pedigree and lack of small-business experience. "When I'm confirmed and I walk through that door, I am the chief advocate of small business. Period," said Preston, who served most recently as an executive at The ServiceMaster, a $3 billion, publicly traded lawn-care company with more than 5,000 small franchise locations.
He also vowed to ensure better oversight for federal prime contracting set-asides for small businesses -- an issue that often plagued outgoing SBA administrator Hector Barreto, who was forced to defend the agency against charges that contracts intended for small businesses were actually going to larger ones.
Preston expressed support for other small-business programs, including microfinance and rural development.
Committee members have until the end of the week to submit further questions to the nominee. A committee vote on the nomination could come as early as next week, before proceeding to a full Senate vote later in the summer.