WASHINGTON, D.C. – Today, Vice Chairman Blaine Luetkemeyer (R-MO) led a full Committee on Small Business hearing titled “Conducting Oversight: Testimony from the Small Business Administrator.” Vice Chairman Luetkemeyer issued the following statement after today’s hearing.

“Today’s hearing was critically important in conducting oversight of the SBA,” said Vice Chairman Luetkemeyer. “The SBA’s sole purpose is to help small businesses, but unfortunately, they have strayed from that mission. I, along with my colleagues on this panel, will continue to hold the SBA accountable to the American taxpayers and ensure it is functioning as intended. We look forward to working with Administrator Guzman going forward to improve the agency.”

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Watch the full hearing here.

Below are some key excerpts from today’s hearing:

Vice Chairman Luetkemeyer: “I can tell you I was very strenuous in my concerns about lending, allowing the fintech companies in who do not have the controls in place. And that's where about 95%, according to the IG, and they testified in that chair right over there that that's where most of the fraud occurred in the PPP program. And I was very strenuous also in my remarks with regard to EIDL, knowing that there's basically none, zero, anything in place by the SBA to keep the money in place without having to be fraudulent accessed, especially at the amounts that was the program was allowed to grow to. That aside, you jumped into this program knowing where it was at. So now your responsibility is to clean it up. And that's the concern we have this morning. That's where we're coming from, with our questions. Why have you not gone out and sold part of the portfolio? And as Ms. Van Duyne talked about, in a way that alleviates the need for more money for your agency as well as recover some of the money.” Administrator Guzman: “We have evaluated this and at this point are still collecting successfully within SBA own collection efforts…” Vice Chairman Luetkemeyer: “I don't know how you can say you're adequately doing it. According to the IG, you told the IG that in October 23, $47.7 billion of the EIDL loans were written off. Is that not correct?” Administrator Guzman: “The EIDL portfolio, though, is performing better than what Congress expects.” Vice Chairman Luetkemeyer: “That’s not my question. My question my question is, I didn't say that we could even validate the information, but you told him that you've got $47.7 billion, that you have charged off of EIDL loans. Is that correct?” Administrator Guzman: “I would have to double check those numbers.”

Rep. Van Duyne: “So you hired a consultant in 2021 to analyze the whole COVID EIDL portfolio and to make recommendations. They recommended that you sell either all or parts of the portfolio, potentially getting as much as $0.50 on the dollar. But you didn't sell. Why?” Administrator Guzman: “That was one of four studies and we take the collections very seriously at the SBA, as you alluded to that stated two in collections at the ninth step…” Rep. Van Duyne: “But I'm asking, why didn't you take the advice of someone that you actually paid taxpayer dollars to do an analysis?” Administrator Guzman: “There were four analysis…” Rep. Van Duyne: “Did any of them suggest that you not sell?” Administrator Guzman: “Yes, the first study, which under DCIA, I engaged my authority to not refer to Treasury in the first time. However, the subsequent studies did suggest that there could potentially be upwards of $100 million...” Rep Van Duyne: “Just a few months after you received the recommendation to sell, you said that the under hundred thousand portfolio was not collectible… So every day that passes the value on these loans diminished. Selling the portfolio could have gotten as much as $0.50 on the dollar, which is a lot better than the nearly zero that your April 22 memo actually said you expected to collect.”

Rep. Stauber: “The SBA announced on Tuesday that it has entered a memorandum of understanding with the Michigan Department of State to collaborate on voter registration. In its announcement, the SBA grasped at straws to connect the Small Business Administration's mission to elections. What is the Small Business Administration's mission statement are?” Administrator Guzman: “We serve small businesses and help impacted communities post disasters.” Rep. Stauber: “Would it be ‘help Americans start grow and build resilient businesses?” Administrator Guzman: “That’s correct.” Rep. Stauber: “That's the mission statement, right? What does that have to do with elections?” Administrator Guzman: “The president's executive order directed federal agencies to…” Rep. Stauber: “With all due respect, you are the voice of our small businesses. They're saying they're not a part or partaking in the election. They want to grow their business and be resilient in America. How do you connect elections to servicing and promoting small businesses?” Administrator Guzman: “I think we can all agree that we want small businesses to vote and be active in this democracy and of course, providing information on how they can do that is a simple process on our website.” Rep. Stauber: “I'll ask another question. Articulate for me where on the SBA's congressional mandate or its mission statement that election work is part of the SBA's responsibility.” Administrator Guzman: “This is not election work.”

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