Sunday, July 29, 2007

Heckuva Job, SBA

A reader thought this story merits attention. Over at, Keith Girard describes how the federal Small Business Administration (SBA) failed to deliver help to thousands of business owners affected by Hurricane Katrina, and deliberately set out to cover its tracks:
Thousands of Katrina victims were summarily denied loans, often without even being told. SBA procedures were violated wholesale; employees were threatened or offered cash payments to clean up the backlog. In order to disburse billions of dollars in backlogged loan assistance, the SBA dished out money to thousands of unqualified recipients, often without the requisite collateral and documentation. More astonishingly, the SBA wrote checks to thousands of people who never finished a loan application and didn't want the money. In some cases, the SBA hadn’t heard from the recipients in months.
"These numbers represent individuals and families who have faced a tragedy most of us cannot imagine," said SBA Inspector General Eric M. Thorson in disturbing testimony. His office conducted two audits of the program. The reports are in draft form and have not been released to the public. But Thorson provided the details in testimony this week before the Senate small business committee.
When management at the SBA must have realized things weren't going well, whey swung into action:
As the scandal dragged on and public outrage grew, the Bush administration was desperate to break the logjam and get relief to the region. So, in the fall of 2006, the SBA launched a campaign to contact every borrower (some 90,000 in all) within 45 days "to properly and rapidly disburse funds" to the victims of Hurricanes Katrina, Rita, and Wilma, according to a Government Accountability Office (GAO) report. Hence, the program was called "Operation 90 in 45."
Gale B. Martin, at the time an SBA loan officer in the Office of Disaster Assistance, was part of the effort. She told lawmakers she was shocked and stunned by what happened next. Instead of a humanitarian effort to get aid to the region, SBA officials became hell-bent on clearing the books of unprocessed loans at all costs. "We were being forced by management to cancel, decline, and withdraw [loan] applications unnecessarily and unjustly in order to make the numbers look good to the public, the press, and Congress," she testified.
It seems like a long time ago that we were being subjected to stories on the virtues of our first MBA president. That's right, President Sluggo was awarded a Master of Business Administration from Harvard Business School. Perhap he came away with the idea that he graduated with the credentials to think big strategic thoughts, not to be confused with a real life understanding of operations management.
I have to wonder: Is there any significant function of our national government that is better run than it was seven years ago?


Blogger a most peculiar nature said...

Answer to your question: Definitely no.

The question is, how do we stop the rampant irresponsibility and mismanagement? It seems to have a life of its own.

I work in a quasi-governmental agency and I see how "things are done". After nearly 13 years, and coming from private industry, it still frustrates me.

5:43 PM, July 30, 2007  
Blogger Tom Noyes said...

I've worked in the public, private and non-profit sectors. I don't see any inherent reason why a government agency can't be effectively and efficiently managed.

6:44 PM, July 30, 2007  

Post a Comment

<< Home