    [Senate Hearing 117-156]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 117-156

                           NOMINATION OF DILAWAR SYED
                         TO BE DEPUTY ADMINISTRATOR OF
                     THE U.S. SMALL BUSINESS ADMINISTRATION

    =======================================================================

                                    HEARING

                                   BEFORE THE

                          COMMITTEE ON SMALL BUSINESS
                              AND ENTREPRENEURSHIP

                                     of the

                              UNITED STATES SENATE

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 APRIL 21, 2021

                                   __________

        Printed for the Committee on Small Business and Entrepreneurship

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

            Available via the World Wide Web: http://www.govinfo.gov

                                ______

                 U.S. GOVERNMENT PUBLISHING OFFICE
     46-628PDF            WASHINGTON : 2022

                COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                  ----------
                     BENJAMIN L. CARDIN, Maryland, Chairman
                      RAND PAUL, Kentucky, Ranking Member
    MARIA CANTWELL, Washington           MARCO RUBIO, Florida
    JEANNE SHAHEEN, New Hampshire        JAMES E. RISCH, Idaho
    EDWARD J. MARKEY, Massachusetts      TIM SCOTT, South Carolina
    CORY A. BOOKER, New Jersey           JONI ERNST, Iowa
    CHRISTOPHER A. COONS, Delaware       JAMES M. INHOFE, Oklahoma
    MAZIE K. HIRONO, Hawaii              TODD YOUNG, Indiana
    TAMMY DUCKWORTH, Illinois            JOHN KENNEDY, Louisiana
    JACKY ROSEN, Nevada                  JOSH HAWLEY, Missouri
    JOHN HICKENLOOPER, Colorado          ROGER MARSHALL, Kansas
                     Sean Moore, Democratic Staff Director
                  William Henderson, Republican Staff Director

                                C O N T E N T S

                                  ----------

                               Opening Statements

                                                                       Page

    Cardin, Hon. Benjamin L., Chairman, a U.S. Senator from Maryland.     1
    Paul, Hon. Rand, Ranking Member, a U.S. Senator from Kentucky....     4
    Kaine, Hon. Tim, a U.S. Senator from Virginia....................    12

                                    Witness

    Syed, Mr. Dilawar, of California, Nominated to be Deputy
      Administrator, U.S. Small Business Administration..............     5

              Alphabetical Listing and Appendix Material Submitted

    Cardin, Hon. Benjamin L.
        Opening statement............................................     1
    Kaine, Hon. Tim,
        Opening statement............................................    12
    Paul, Hon. Rand
        Opening statement............................................     4
    Syed, Mr. Dilawar
        Testimony....................................................     5
        Prepared statement...........................................     8
        Responses to questions submitted by Ranking Member Paul and
          Senators Cantwell, Duckworth, Rosen, Rubio, Risch, and
          Young......................................................    48
    U.S. Chamber of Commerce
        Letter dated April 20, 2021..................................     3
    U.S. Small Business Administration
        SBA Form 3501 COVID-19 Economic Injury Disaster Loan
          Application................................................    18

                           NOMINATION OF DILAWAR SYED

                         TO BE DEPUTY ADMINISTRATOR OF

                     THE U.S. SMALL BUSINESS ADMINISTRATION

                                  ----------

                           WEDNESDAY, APRIL 21, 2021

                          United States Senate,
                            Committee on Small Business
                                          and Entrepreneurship,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 2:40 p.m. via
    Webex and in Room 301, Russell Senate Office Building, Hon. Ben
    Cardin, Chairman of the Committee, presiding.
        Present: Senators Cardin, Cantwell, Shaheen, Booker,
    Hirono, Rosen, Paul, Scott, Ernst, Inhofe, Young, Hawley, and
    Marshall.

    OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, CHAIRMAN, A U.S.
                         SENATOR FROM MARYLAND

        Chairman Cardin. The Small Business Committee will come to
    order.
        Let me acknowledge that Senator Paul and I saw Senator
    Kaine on the way in. He is here to introduce the nominee. He
    went over to cast his vote. As you know, the vote just started
    on the floor of the Senate. Senator Paul and I voted and came
    here. So we will interrupt where we are when Senator Kaine
    returns, to allow him to make his introductory remarks to our
    nominee.
        I want to recognize Dilawar Syed, our nominee for the
    Deputy SBA Administrator. Thank you very much for your
    willingness to serve our country during these extremely
    challenging times. It is not easy to serve in public life, just
    ask the members of the Senate right now. And it is not easy to
    take a position in the Executive Branch. So we appreciate your
    willingness.
        We know you are a successful businessperson so we thank you
    for this sacrifice. And we know it is not just your sacrifice,
    but a sacrifice of your family.
        Welcome to our committee.
        The Deputy Administrator of SBA is responsible for the day-
    to-day management of the Agency, so this position is vital to
    SBA's success. And yet, this position has been vacant for the
    past three years due to the previous Administration's failure
    to put forward a nominee.
        Filling the position with a qualified nominee is more
    important than ever because Congress has tasked the SBA with
    tremendous responsibilities as part of the Federal Government's
    COVID-19 relief effort.
        In the past year, SBA's has delivered more than $970
    billion in aid to small businesses through the Paycheck
    Protection Program, EIDL, the EIDL Advance grants program, and
    the Small Business Debt Relief program. In the coming days and
    weeks, SBA will begin accepting applications for the $16
    billion Shuttered Venue Operators Grant program, as well as $28
    billion for the Restaurant Revitalization Fund. So we have a
    lot of activity that is taking place within the Small Business
    Administration.
        In total, Congress has charged SBA with distributing more
    than $1 trillion in COVID-19 small business aid, more than 10
    times the SBA's annual budget during the fiscal year before the
    pandemic.
        SBA must continue to be a lifeline to small businesses for
    the remainder of the pandemic and the Agency will be key to
    ensuring an equitable economic recovery.
        I am confident that Mr. Syed's experience as a business and
    civic leader has prepared him to lead SBA at this pivotal
    moment. Mr. Syed's decades of building and scaling companies
    will help SBA as it continues to implement new small business
    relief programs.
        SBA will also benefit from Mr. Syed's many years as an
    advocate for underserved entrepreneurs, including his service
    as Chair of the White House Initiative on the AAPI's Economic
    Growth Committee during the Obama administration; founder of
    the California Entrepreneurship Task Force; and leader of
    California's Rapid Response engagement with underserved small
    businesses during the pandemic.
        Because of Mr. Syed's broad experience and commitment to
    uplifting underserved entrepreneurs he has been endorsed by
    more than a dozen business organizations, including the
    National Association of Pacific Islanders, American Chamber of
    Commerce, Small Business Majority and the U.S. Black Chambers.
        Without objection, I will put the full list of the
    endorsements to the nominee into the record.
        [The information referred to follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Cardin. The disproportionate impact of the COVID-
    19 pandemic on minority-owned businesses has only highlighted
    the pervasive historic disparities in access to capital,
    technical training, and mentorship. That is why the Committee's
    top priority is improving SBA's program to better meet the
    needs of small businesses in Black, Latino, Asian, Native,
    rural, and other underserved communities to ensure an equitable
    recovery and prepare for future crises.
        Mr. Syed, if confirmed, we will need your insight into how
    to improve these programs. So I am asking for your commitment
    to operating SBA in a transparent manner and to maintain open
    lines of communication.
        I want to again thank you for stepping forward to serve our
    Nation during these very difficult, unprecedented times and I
    look forward to hearing your testimony.
        With that, let me turn it over to the ranking member,
    Senator Paul.

       OPENING STATEMENT OF HON. RAND PAUL, A U.S. SENATOR FROM
                                KENTUCKY

        Senator Paul. Thank you, Mr. Chairman.
        I began my tenure as ranking member of this Committee by
    supporting Administrator Guzman's nomination in a good faith
    effort to establish an honest and transparent working
    relationship with the Biden administration and my colleagues
    across the aisle.
        It seems that this goodwill, though, is not being
    reciprocated. As we proceed with this hearing of the nomination
    of the Deputy Administrator of the SBA, as we began the process
    of vetting the nominee as required by the Committee rules, we
    became aware that Mr. Syed had applied for SBA's PPP and EIDL
    COVID relief programs on behalf of his company. He did not
    disclose this taxpayer assistance voluntarily. We found this
    information on our own, as part of our internal vetting
    process.
        Given that the position to which Mr. Syed has been
    nominated is responsible for overseeing all SBA programs,
    including the trillion dollars of taxpayer money Congress
    appropriate for small businesses, it is imperative that this
    Committee have complete information regarding any SBA programs
    Mr. Syed participated in.
        The Committee has a Constitutional obligation to evaluate
    nominees for Senate confirmed positions such as the one to
    which Mr. Syed has been nominated. Some would say that the
    failure of an SBA nominee to be transparent about taxpayer
    funded programs under this Committee's jurisdiction would be
    disqualifying in and of itself.
        I have made repeated requests for this information from
    both Mr. Syed and SBA. As of today, the Committee still does
    not have his complete information related to the SBA COVID-19
    loan applications that Mr. Syed signed on behalf of his
    company.
        Despite my request that the Committee not proceed with this
    hearing until it has received all of the requested information,
    here we are.
        I look forward to hearing from Mr. Syed. I still have an
    open mind on the nomination, but I hope that he will today
    provide some clarity and transparency on the information that
    has been repeatedly denied to the Committee. This is the only
    way we can allow the Committee to make a full and informed
    determination of his eligibility for the position so I hope we
    will get to some transparency today.
        Chairman Cardin. Thank you, Senator Paul.
        If I could ask Mr. Syed, if you would please rise and raise
    your right hand. We have a tradition in our Committee to swear
    in our witnesses that we have Senate confirmation with.
        Do you solemnly swear to tell the truth, the whole truth,
    and nothing but the truth, so help you God?
        Mr. Syed. I do.
        Chairman Cardin. You can have a seat.
        Should you be confirmed as administrator, are you willing
    to appear and testify before any duly constituted committee of
    Congress when requested to do so?
        Mr. Syed. I do.
        Chairman Cardin. Are you willing to provide such
    information as is requested by any such committee?
        Mr. Syed. I do.
        Chairman Cardin. Thank you.
        We will go to your opening statement right now but when
    Senator Kaine arrives, we might interrupt it to allow him an
    opportunity to properly introduce you to the Committee.
        So please excuse the informality here, but I think it is a
    better use of our time.

       STATEMENT OF DILAWAR SYED, OF CALIFORNIA, NOMINATED TO BE
        DEPUTY ADMINISTRATOR, U.S. SMALL BUSINESS ADMINISTRATION

        Mr. Syed. Thank you, Chairman Cardin, Ranking Member Paul,
    and members of the Committee for the opportunity to appear here
    today.
        I am deeply honored to be nominated by President Biden to
    serve as Deputy Administrator of the Small Business
    Administration.
        America's 30 million small businesses are the lifeblood of
    our economy. SBA's mission of supporting these entrepreneurs is
    more critical today than at any point in its history.
        The economic challenge created by the COVID-19 pandemic has
    claimed millions of American livelihoods, and so many of its
    small businesses. In the wake of this crisis, we have a once-
    in-a-lifetime opportunity to build a more supportive,
    equitable, and resilient environment for small business owners
    in every community across our great country.
        I am an entrepreneur who has navigated a company through
    these difficult times. During the past year, like many other
    small businesses, we have had to make critical decisions to
    save jobs and preserve livelihoods.
        I also know full well that there are many small businesses
    that have been impacted to a far greater degree. Entrepreneurs
    in Black and Brown communities, rural and underserved regions
    need our commitment and support more than ever.
        For over two decades, I have built early stage businesses
    and run companies in software, consumer, health care, and
    artificial intelligence. I am proud to have led teams that have
    built digital tools used by thousands of Main Street businesses
    across America. Today, I guide a team of scientists and
    engineers to help improve health outcomes. I have learned how
    to build passionate teams that tackle intractable challenges;
    how to foster an empowering culture; and how to create products
    that serve millions.
        While my business career has been gratifying, it is my work
    as a civic entrepreneur that I value most, and what has driven
    me to serve.
        My civic journey spans a decade of serving communities that
    have too often been left behind. I have spent time in Central
    Valley of California, Detroit, Philadelphia, and Atlanta
    advising entrepreneurs in regions that many people would fly
    over or drive through, but they are brimming with talent,
    promise, and aspiration.
        After the Great Recession, as a White House AAPI
    Commissioner I led engagement with Asian American entrepreneurs
    across the country, hosting listening sessions with small
    businesses, regional SBA teams, and resource partners.
        In my home State, which has over 4 million small
    businesses, I co-founded the California Entrepreneurship Task
    Force to bridge regions like the San Joaquin Valley with
    networks in Silicon Valley. I partnered with chambers of
    commerce, incubators, and universities to drive inclusive
    entrepreneurship and innovation in the rural heartland of our
    State.
        During the pandemic, I led a campaign to raise awareness of
    resources, including the Paycheck Protection Program, reaching
    more than 20,000 businesses. Our startup, like millions of
    small businesses, received critical help through the PPP and
    the EIDL programs. I am grateful for the assistance which
    allowed the company to keep all its employees, stabilize, and
    then repay the PPP and EIDL loans.
        During these challenging times, I saw firsthand the heart,
    skill, and resilience of our amazing team. Through it all, they
    persevered.
        I believe that my experience as a business leader and civic
    entrepreneur can help serve the SBA and all those who rely on
    it.
        If confirmed, I commit to leading the SBA--in partnership
    with Administrator Guzman and its committed public servants--
    with urgency and purpose.
        I will provide hands-on leadership to continue
    implementation of COVID relief for small businesses and help
    rebuild those most affected by the pandemic.
        And I absolutely share Administrator Guzman's commitment to
    be transparent, accessible, and responsive to this Committee.
        I want to thank my family for their support in this
    endeavor. I am a proud dad and I know my wife and kids are
    watching. And I am really sorry that they could not be here
    today.
        In closing, I am an immigrant. I came to America 30 years
    ago as a young student in pursuit of education and opportunity.
    At that time, I never could have imagined that I would sit in
    this chamber with this committee having been called to serve by
    the President of the United States at this critical juncture. I
    am deeply humbled and honored.
        This moment calls me like it should call all of us,
    including those in the business world, to roll up our sleeves
    to build a better future.
        What we do next will matter for generations of Americans. I
    welcome this challenge and the opportunity to work alongside
    all of you.
        Thank you and I look forward to your questions.
        [The prepared statement of Mr. Syed follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Cardin. Mr. Syed, thank you very much for your
    comments.
        We are now honored to be joined by our colleague from
    Virginia, Senator Kaine. Senator Kaine, welcome and we look
    forward to hearing from you.

       STATEMENT OF HON. TIM KAINE, A U.S. SENATOR FROM VIRGINIA

        Senator Kaine. To Chairman Cardin and Ranking Member Paul,
    thank you for the opportunity to speak a little bit out of
    order to this committee today.
        I am so honored to be here to introduce, you have already
    heard from him, but really to vouch for my friend, Dilawar
    Syed, who is an ethical and innovative businessperson but also
    has the heart of a public servant.
        Before I say a word about him, I do want to just
    congratulate the Committee and the members of the Committee.
    Like many of you, during the Easter recess, I spent time
    traveling around my State and spent a lot of time meeting with
    small businesses. And just a report from the road, here is what
    I heard again, and again, and again: it has been the toughest
    year of our entire business existence. To get through it, we
    have had to be incredibly creative and resilient and think of
    new ways of doing virtually everything. We could not have done
    it without loyal employees and our customer base rallying
    around us. And thank Congress, thank you to Congress for
    prioritizing the needs of small businesses, not only in
    programs like the Paycheck Protection Program and the EIDL loan
    program, but what I found that surprised me a little is
    virtually every local government that received CARES Act
    funding used a portion of that funding to help small businesses
    in their jurisdictions, maybe businesses that did not quality
    for CARES or that had opened during the pandemic and could not
    demonstrate lost revenue from the years before.
        So that is the first thing I just want to say to the
    Committee is that the work that you have done in CARES and now
    the American Recovery Plan is making a difference and I wanted
    to report that.
        The Small Business Administration plays a very important
    role in advocating for the backbone of the American economy.
    And in choosing administrators, choosing the leaders of the
    Small Business Administration, because of the critical nature
    of these businesses to the American economy, you want people
    with a particular skillset.
        Dilawar Syed, to me, his resume is just almost the job
    description of what you would want in a leadership position of
    this kind. He is an innovative, as he pointed out, American
    immigrant entrepreneur who has started not just one but
    multiple businesses in California.
        Interestingly enough, he has had the experience of a small
    business owner and the strains and stresses and anxieties of
    starting something and growing it. But his particular business
    is serving other businesses. That is what he does.
        And so it is a business that puts him in touch with other
    small businesses. That has given him significant insight into
    their challenges, as well.
        He has also had the advantage of working as a commissioner
    in the Obama administration and then in governmental and public
    service efforts in California to help small businesses.
        So to conclude, small business owner and innovator, serving
    other small businesses, and doing so in tandem with
    governmental agencies and philanthropies.
        He also mentioned in his opening statement that he,
    himself, had the experience of benefiting from actions of
    Congress, his own businesses, through the CARES Act and knows
    how those programs work and how they did not, and how future
    programs could work even better.
        He has much to offer the United States and I was so happy
    when I heard that President Biden had nominated him for the
    position and very happy to be here today to vouch for him.
        Chairman Cardin. Senator Kaine, thank you very much for
    that introduction. We always appreciate having you with us in
    this Committee, so thank you for your being here and we
    recognize that you have other obligations so thank you very
    much.
        Mr. Syed, I want to start the questioning. We are going to
    have 5 minute rounds based upon arrival from the members.
        I want to go into the point that you raised during your
    opening statement that Senator Paul has acknowledged during his
    opening statement. And that is that you, as the CEO of an early
    stage health care startup company in April 2020 applied for a
    PPP loan, an EIDL loan, and an EIDL Advance.
        My understanding is that your company received a loan, a
    PPP loan, in May of $563,513 and an EIDL loan of $67,500, and
    an EIDL Advance of $10,000.
        You have indicated in your testimony that that was
    essential in order to maintain your payroll. I believe your
    payroll was 24 employees at the time. Let me just ask you a
    couple of direct questions.
        When you applied for the PPP loan and the EIDL loan were
    you eligible to receive funding from those two programs?
        Mr. Syed. Thank you, Senator Cardin, for the question. The
    answer is yes.
        Chairman Cardin. Was that funding necessary for you in
    order to be able to maintain your payroll during that period of
    time?
        Mr. Syed. Yes.
        Chairman Cardin. Were the funds under the PPP program used
    principally for payroll?
        Mr. Syed. Exclusively.
        Chairman Cardin. Exclusively for payroll.
        And then, you were then able, as I understand it, to get
    outside financing in order to deal with your financial needs. I
    take it, if you were eligible, your revenues were less during
    COVID-19 than they were prior to COVID-19?
        Mr. Syed. Correct.
        Chairman Cardin. Then you made a decision to get outside
    financing and you made a decision to repay the PPP loan and the
    EIDL loan, if I understand correctly, in January 2021?
        Mr. Syed. That is correct.
        Chairman Cardin. Were you eligible for the loan forgiveness
    under the PPP program, considering that you used the money for
    payroll?
        Mr. Syed. Senator Cardin, I believe we obviously did not
    apply, we made a business decision to clear all our debt
    including the PPP and EIDL after raising a new round of
    funding. But based on where the money was spent, my
    understanding is we would have been eligible.
        Chairman Cardin. So why did you decide to repay the loan?
    After all, you have responsibilities to your company. You are
    entitled to have it forgiven, the PPP loan. Why did you decide
    to repay the PPP loan?
        Mr. Syed. Senator, we did not have the need. We believed
    that, having raised outside financing, at that point we made a
    business decision to clear all of our debt. And we considered
    the PPP and EIDL loan to be a debt. And we believed that that
    should be paid back and we made a business decision to pay back
    the loans.
        Chairman Cardin. I just want to compliment you on that.
    Obviously, you could have sought forgiveness and have been
    eligible for forgiveness under the terms that we set up. But
    you made a decision that, from the point of view of the
    appropriate judgment on the appropriateness of keeping the
    money that you felt better returning the money.
        I thank you. I am sure there are other businesses that are
    in your category but you are in the minority of the businesses
    in regards to the forgivable PPP loans.
        As the Deputy Administrator, you are going to be
    responsible for a lot of the administrative issues dealing with
    the implementation of these programs. I am going to just
    mention one as an example. In the most recent statute, the
    American Rescue Plan, we extended eligibility to PPP for local
    media companies. Part of that was to waive the affiliation
    rules and to use a size standard based upon per location. We
    have been informed that there has been a challenge in getting
    eligibility for the media companies because they have the same
    EIN numbers, which bounces it out from the application process
    even though they are eligible.
        My point to you in raising that example is that from day
    one we are going to need your attention to working in a very
    transparent way with us and the stakeholders to deal with the
    administrative challenges of implementing the PPP law. As you
    know, the administration changed the eligibility on the self-
    employed. We have the larger non-profits that are now eligible.
    We are starting into the shuttered venue, certainly we will be
    in the restaurant program.
        All of that is going to require total transparency and
    working with us in a very close, open manner as you try to
    carry out congressional intent. We need to make sure that you
    will keep us totally informed and work with our offices.
        Do we have that commitment?
        Mr. Syed. Absolutely, Senator Cardin. And let me say that I
    think obviously the scale at which the SBA is operating and
    just the diverse set of programs it has to stand up, there is a
    lot going on. So if confirmed, I will partner with the
    Administrator to make sure that I am doing my best and also
    providing information as requested by this Committee.
        Chairman Cardin. And we have another bill passed. Senator
    Lankford has worked with several of us to clarify some of the
    provisions in the PPP. There is comparable legislation in the
    House that is now moving through the hotline. So there might be
    some additional challenges that we are going to throw on you
    and we would appreciate a very open process with you.
        The last one I am just going to raise, that you and I had a
    chance to talk about. Our highest priority is to make sure that
    our programs are targeted to the small businesses of greatest
    need, that we deal with the underserved community in the PPP
    program, the underbanked community, minority community, low-
    income communities.
        Do we have your commitment to work with this Committee and
    members of this Committee as we look at the existing tools of
    the SBA to better target them to need as well as additional
    recommendations that have been made by members of this
    Committee, including myself, that deal with partnerships with
    the HBCUs, that deals with dealing with emerging markets, for
    minority small businesses getting access to venture capital,
    those types of programs. Will you work with us so that we can,
    in fact, live up to our commitment to serve all businesses in
    this country?
        Mr. Syed. Senator, absolutely I do, and a lot of my work
    that I have done in the underserved communities in rural parts
    of California, with communities of color, demonstrates my
    personal passion to focus on those communities. And so I
    absolutely will commit to doing this if I am confirmed.
        Chairman Cardin. Thank you very much.
        Senator Paul.
        Senator Paul. Mr. Syed, when you submitted your nominating
    materials to the Committee, you chose not to disclose that you
    had had PPP loans. That was found through our vetting of your
    candidacy but it was not voluntarily given to us. Since then,
    we have asked for more information and there has been some
    response but there has been an incomplete response.
        One of the specific questions we have asked and not yet got
    an answer for us the amount, in U.S. dollars, of the estimated
    loss that was required for one of the forms for the COVID-19
    Economic Injury Disaster Loan. What was the amount, in U.S.
    dollars, of estimated loss?
        Mr. Syed. Senator Paul, thank you for your question and let
    me first say, at the outset, I appreciate the importance of
    sharing of information that is necessary to confirm me and it
    is important, especially with this role of this agency at this
    time.
        With all due respect, I would like to clarify that I filled
    the questionnaire, the Senate questionnaire. When asked about
    whether the company had received COVID relief, this was
    supplemental information I provided, yes. So I have been
    transparent, forthcoming in sharing as various requests were
    made of me via the supplemental information that came in. And I
    think on multiple occasions I did that.
        The questions that we received yesterday, many of them
    pertain to information that is proprietary for the company. It
    is a private company. We are in a competitive environment, an
    AI company. It is a globally competitive environment. And we
    have to protect the company, even as I commit to you that when
    it comes to myself I will continue to work with this Committee
    to be transparent and forthcoming.
        Senator Paul. So let the record show that you will not
    answer the question and you will not tell us the amount that
    you put on the application that you signed your name to for
    your company on how much U.S. dollars were estimated you were
    going to lose.
        The problem with that is you just say oh, believe me. Oh
    yes, we were eligible. But that is self-policing. Give us the
    information so we can trust you. I am willing to vote for you
    but not if you stonewall us and say we are not going to give
    you the information.
        I mean, we deserve to know that because you are going to be
    in charge of these. You got $14 million in the midst of this.
        The other question that really still boggles my mind is it
    is forbidden to be involved with expansion when you get these
    loans. And yet, within three weeks of you getting your loan, we
    have your tweeting out about new hiring in Guadalajara and
    welcoming the expansion of your tech team in Guadalajara. So it
    sounds like you are in the midst of an expansion when you are
    getting the money.
        Mr. Syed. Senator Paul, these are contractors. We are not
    expanding the company elsewhere in a full-time manner. All the
    assistance we received for PPP and EIDL was used exclusively in
    the United States. It preserved jobs, 24 jobs. The company
    would not exist today, would not be in a place where it was
    able to raise financing and be able to innovate as we speak.
    So----
        Senator Paul. Eleven days after you got the money you
    tweeted out, your words, ``We welcome the newest member of our
    tech team in Guadalajara.'' Most people would read that and it
    sounds to them like you are expanding into Guadalajara, that
    you have new enterprises and new partners--or actually not even
    partners, newest member in Guadalajara.
        So the thing is you are not going to tell us what you put
    down, as far as your economic loss. You were in the middle of
    an expansion but you are saying it was a contractor and not an
    expansion.
        What was your generating revenue, how much revenue did you
    generate, did Lumiata generate in 2020?
        Mr. Syed. Senator, as I mentioned earlier, this is
    proprietary information. This is a public hearing. I am not
    going to be able to share company----
        Senator Paul. So let the record show that we have these
    questions in writing. It is not as if you were not prepared.
    You have made the decision not to divulge the information.
        And so you know, you have made it hard on me. I mean, the
    thing is I supported the Democrat pick to be the administrator.
    I would support your pick but I am not going to support it if
    you are stonewalling us on the information. You applied for a
    large amount of money from a Government entity. You did not
    tell us about it. We found out about it by searching through
    the data, and then we asked you. Then you admitted that you had
    the loan.
        But you did not volunteer that. We had to drag that out of
    you when we had evidence that you had the loan. Now you will
    not tell us about how you got the loan. And then all of a
    sudden you pop up with $14 million. For struggling restaurants
    around the country that might have gotten a PPP loan, they will
    scratch their head and say some guy with $14 million in angel
    investors got a PPP loan. He could not have survived and yet he
    got $14 million in loans. It does not pass the smell test.
        And if you are not going to give us the information, how do
    you expect me to support your nomination?
        Mr. Syed. Senator Paul, let me just reiterate this. I have
    been forthcoming with this information. I shared these loans at
    the very start of my vetting process with the SBA, with the
    Office of Government Ethics, as part of the agreement to
    determine whether there was any conflict or not.
        So I have shared this information voluntarily----
        Senator Paul. The staff informs me that you were asked for
    it and that it was not shared.
        Mr. Syed. I am sorry, could you repeat the question?
        Senator Paul. The staff informs me that you were asked for
    the information and then you revealed it but you did not share
    it voluntarily. You gave it when you were asked for it.
        So the thing is--and that is beside the point. We now know
    you had the PPP loan, you paid it back. This hearing could be
    easy and we could be saying exactly what Senator Cardin says,
    that you should be congratulated for paying it back and for
    being an upstanding citizen. But not if you say well, we are
    not going to put down how much our estimated loss. There is
    nothing proprietary about what your estimated loss was to the
    government, unless maybe there is something fishy about the
    number that you do not want to divulge.
        Nothing in that estimate, because your company is
    completely transformed now. You got $14 million. So people have
    already believed and bought into you. They are not going to
    change their decision based on your application for PPP. You
    paid it back. You have got good things you can say about
    yourself. But you are hiding some number. And when you hide it,
    that is not transparency. That is the opposite of transparency
    and it makes us doubt you.
        Mr. Syed. Senator, with all due respect, my understanding
    is that the EIDL application for COVID relief did not include,
    at the time, your projected loss. We had financially a more
    challenging year than the year 2019. Again, this is proprietary
    information that----
        Senator Paul. So you are saying the application you filled
    out, you did not put down an estimated loss?
        Mr. Syed. To my best knowledge, I do not believe that that
    information was required as part of those applications at the
    time. We have shared with you information that is part of the
    applications that were submitted for both PPP and EIDL.
        Senator Paul. We would like to provide, for the record, the
    rules for the application at the time when his application was
    made to show that the estimated loss was a requirement at the
    time, and we will be submitting that for the record.
        [The information referred to follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Paul. So this is a point of fact and we should
    figure this out. If you are right and I am wrong, that is fine
    and you did not have to provide it.
        But there still is the question of why you are unwilling to
    sort of divulge anything about this. And I do not think any of
    it is proprietary. I think it appears to us as if you are
    hiding something about the loan. So the more transparent you
    are, the more we believe in the things you are saying. But when
    you tell us you are not going to divulge things because of
    proprietary reasons it, frankly, makes us suspicious.
        But we will look into the facts and I will retract the
    question on the estimated loss or I will retract the accusation
    if we find out you were not required to do it.
        But this is something we can check by facts. And this will
    have to be pursued. If we find the facts of the matter are that
    that was a line and it was required, show us your application,
    you know. We are happy to show you the application in private,
    where it does not have to be read out in front of the public.
        I said to Senator Cardin on the way over here, I would
    prefer not to say the company's name, Lumiata. I would prefer
    not to say that we have doubts about your application. But that
    is why you need to give us information and not try to hide
    things from us.
        Mr. Syed. Thank you, Senator and I have shared information
    about the application through multiple requests. I absolutely
    appreciate the fact that we have to be transparent,
    forthcoming, and I have been through multiple requests.
        Again, both of these COVID loans, I declared them with the
    SBA team when the vetting process started. This was----
        Senator Paul. But your first response to me was you were
    not going to give me the estimated loss. And then your backup
    response, two minutes later, is oh, we do not think we were
    required to. You could have said that from the beginning. You
    could have said oh, we were not required to put estimated loss.
    That almost sounds like that is an evolving answer because you
    first told me I cannot give you the estimated loss. And then
    you tell me it is not on the form and was not required.
        So we are left with a lot of questions and we are going to
    have to research this further. And I am not saying absolutely I
    will not vote for you but, the thing is that our side will be
    very concerned with a trillion dollar program with someone who
    used it to a significant degree and is unwilling to give us the
    information on how you got the loan.
        Mr. Syed. Senator, thank you for the question.
        This, in a sense, saved the company's job. I appreciate
    your questions and will continue to work with the Committee.
    Thank you.
        Chairman Cardin. And I am sure Senator Paul will work
    together on this and I think there has been certain information
    that has been made available.
        I agree with you that much of this should be done in a
    closed setting when we are dealing with sensitive information.
        Senator Paul. And if he is willing to do that, I am happy
    to look at it in private. I think there are things that should
    be private. But I think there is some burden to prove----
        Chairman Cardin. We will work together to try to resolve
    this issue.
        I do want to make one observation on this. It is my
    understanding that the PPP loan was more of a self-
    certification and not specific information. The EIDL loan is
    different, I grant you that.
        Senator Paul. I think that is what we think. The
    requirement for the estimated loss, we think, comes from the
    EIDL loan application.
        Chairman Cardin. So we will work on those two issues and, I
    must tell you, I stand by the statement I made during my
    questioning and that is I applaud Mr. Syed's voluntarily
    repaying the PPP loan when he was eligible for forgiveness
    because of his view that it was not the purpose of the PPP loan
    to be forgiven if you had the capital to pay off those loans.
        I think that was an exemplary conduct and I just really
    want to acknowledge that. But I understand Senator Paul's point
    and I assure you we will work together to try to get you the
    information.
        Senator Paul. And we are happy to keep an open mind.
        Chairman Cardin. I appreciate that very much.
        Senator Hirono, by video.
        Senator Hirono. Thank you, Mr. Chairman.
        And thank you for enlightening us on the fact that Mr. Syed
    paid back the loan. Yes, I agree with you that that is
    exemplary behavior.
        Mr. Syed, based on your experience as a business owner and
    entrepreneur and your time working with businesses and
    entrepreneurs in the Obama administration and more recently in
    California and elsewhere, it is clear that you have a lot of
    relevant experience to bring as the Deputy Administrator of
    SBA. So can you talk a little bit about how your experiences as
    a business owner and entrepreneur will enable you to help other
    businesses and entrepreneurs as a Deputy Administrator? And
    particularly minority businesses.
        Mr. Syed. Senator Hirono, thank you for the question.
        First of all, I think, as we discussed in previous
    questions, these recent months and year or so has been one of
    the most challenging times for small businesses and
    entrepreneurs all over the country. Both in my own running the
    company, going through some really, really difficult times. A
    year ago we were just starting to see the horrible effects of
    the pandemic, both on lives and livelihoods and businesses.
        And so it has given me, frankly, a deeper reservoir of
    empathy. What someone who has to sometime go through sleepless
    nights to think about payroll goes through. And if confirmed, I
    will bring that perspective, Senator, to my job.
        Secondly, I think to your point about communities of color
    and underserved regions, it is absolutely true that we have a
    disparity there and we need to make an intentional effort,
    intentional effort to reach out to those communities. I have
    done that in my own civic advocacy, as I have mentioned
    earlier. And I would bring that lens, as well.
        And third, I just want to add to the point that my
    operating background also prepares me to be a value-add to the
    SBA team as it stands up programs that are an unprecedented
    scale and breadth.
        Senator Hirono. One of the minority-owned businesses in
    Hawaii are the Native Hawaiian-owned businesses. And as with a
    lot of minority businesses, they have suffered
    disproportionately because of this pandemic. And so I would
    like to have a commitment from you that you will work to
    understand the needs of the Native Hawaiian businesses, the
    8(a) businesses, and to work with me to address their concerns
    going forward because they certainly could use the kind of
    empathetic leadership that you talked about.
        Senator Syed. Absolutely, Senator. And I will do so. After
    the Great Recession, as part of my role at the White House AAPI
    Commission, I spent significant time engaging with communities.
    So I will do so.
        Senator Hirono. Have you ever been to Hawaii, Mr. Syed?
        Mr. Syed. I have not. My kids and wife have been telling me
    so I will certainly do so if I am confirmed, and help these
    businesses there.
        Senator Hirono. I am not just saying that because I would
    like you to come and visit with us but Hawaii is--we have some
    very unique challenges. We are definitely not connected to the
    rest of the country, as with Alaska. And so there are some very
    unique challenges to small businesses in Hawaii. Things cost
    more to bring in. There are various issues that are unique to
    Hawaii small businesses.
        I certainly want to ask for your support in understanding
    the unique challenges that particularly Hawaii small
    businesses, and I would say the same for Alaska small
    businesses, that they face. So I would certainly like your
    commitment to do that.
        Mr. Syed. I commit to do so if I am confirmed, Senator.
        Senator Hirono. If you are confirmed, what is the first
    thing that you would want to do as the Deputy Administrator?
        Mr. Syed. That is a good question, Senator.
        You know, this will be my first job in government if I am
    confirmed. The first thing you go into any place that has
    complexity and scale, especially at this time, I want to listen
    and learn but very quickly understand where I can be a value
    add. We have an incredible team of public servants who have
    been at this agency for decades and, especially in the last
    year, put their heart and soul into standing up programs.
        I would like to understand what is working? Where is an
    area where we can do things better, whether it is the systems
    or processes or to quality infrastructure. But I would go in,
    and this is just my management style, with an open mind and try
    to learn and understand and see where we can help, where we can
    build capacity, where we can move the needle forward.
        Senator Hirono. Thank you very much, Mr. Chairman. Thank
    you, Mr. Syed.
        Chairman Cardin. Thank you, Senator Hirono.
        Senator Hawley.
        Senator Hawley. Thank you, Mr. Chairman.
        Nice to see you in person, Mr. Syed. I enjoyed our
    conversation yesterday. Thank you for your time. I look forward
    to getting into a little bit of what we discussed.
        Let me start though by asking you this: on April 15th, not
    even quite a week ago, the Republican members of the Committee,
    including me, sent a letter to the SBA Administrator, to Ms.
    Guzman, requesting that the Agency initiate an investigation
    into whether Planned Parenthood affiliates made knowingly false
    certifications on applications for PPP assistance last year
    during the height of the pandemic.
        The letter also requested that the SBA provide the
    Committee with the following information: a detailed
    explanation regarding how three separate Planned Parenthood
    affiliates were approved for a second draw PPP loans, despite
    SBA's determination they were ineligible; all forgiveness
    information associated with loans to PPPFA entities; and
    thirdly, a description of any and all actions SBA has taken to
    recover those PPP funds unlawfully provided to the Planned
    Parenthood affiliates.
        Here is my question to you: will you commit to us that if
    you are confirmed, you will work with us to make sure that we
    get the information that we requested in our letter of April
    15th?
        Mr. Syed. Senator, first of all, thank you for your
    questions. It is good to see you in person, as well.
        If confirmed--well, first of all, I think we will apply
    rules as we should for all businesses, all non-profits. I have
    read about this. I do not know, I am not aware of the
    intricacies of what is involved here. But to the extent that
    the information that you need to do your oversight, I commit to
    doing that, obviously, in partnership with the Administrator
    and our staff at the SBA.
        Senator Hawley. Good. I will hold you to that.
        And will you also commit to ensuring that the non-profit
    affiliation rule is followed as it applies to Planned
    Parenthood, and as it applies to all non-profits?
        Mr. Syed. Senator Hawley, I am not obviously up to speed on
    the non-affiliate rule. The affiliate rule is for non-profits.
    If confirmed, I will understand this and will make sure that
    the rules are applied consistently.
        One of the things that you learn in business is process is
    sanctimonious. That should be your guiding light. And I will do
    my part to make sure that, as leadership, we do that.
        Senator Hawley. Let me ask you about one of the topics we
    discussed yesterday. We talked a little bit about the Economic
    Injury Disaster Loan Program. I shared with you some of the
    struggles that businesses, small business folks, in my State
    had accessing that program. This is something I have raised in
    this forum with other folks up before us.
        And at the same time, we also discussed the fact that the
    Inspector General's report recently came back and found quite a
    lot of waste, fraud, and abuse in that program which, of
    course, is deeply frustrating because you have got people who
    are qualified who cannot access the funds. You have got people
    who should not be getting the funds and did.
        We also talked about the Shuttered Venue Operators Grant
    Program which Congress established in December but still is not
    really operable.
        Here is my point on this: SBA's track record in standing up
    these programs and administering them is not the best, to be
    frank. It needs to be better going forward. We have asked the
    SBA to do a lot during the midst of this pandemic.
        Share with us your view and your own experience from the
    private sector in how SBA can get better at implementing these
    vital programs, in making sure that there is appropriate
    oversight and controls for these programs and just, in general,
    doing its job more efficiently.
        Mr. Syed. Senator Hawley, that is a very important question
    and thank you. I appreciate the question.
        I think we all can agree that the scope of responsibility
    that SBA has, it is unprecedented. And that is one of the
    things that I am really excited about, if I am confirmed, to go
    in and be a value-add to the team.
        I think you have to look at overall what is the capacity,
    whether it is human, whether it is technology, or whether they
    are processes or people? And where do we need to make sure that
    we are--if you are upgrading, to be able to meet the moment, if
    you will.
        Obviously, I am not in the job. It would be presumptuous
    for me to opine on what we can do there. Once I am confirmed,
    if I am confirmed, I absolutely commit to you that I will work
    with the Administrator and also would like to work with you, as
    well. You are passionate about this and this is important. I
    mean, these are all of our businesses, that we do everything
    possible to make sure that we are responding in this moment
    with all our might and resources.
        Senator Hawley. If you are confirmed, when you come to look
    and review programs, like let us just say the EIDL program, the
    Economic Injury Disaster Loan Program, what sort of--as you are
    thinking about its success, about its efficiency, what sort of
    principals will you take? What sort of benchmarks will you
    apply? What will you look for? In other words, to evaluate how
    well it is done and what can be improved going forward?
        Mr. Syed. Right. It is a good question, you actually asked
    me as well yesterday. I think the first order of business would
    be, again not knowing exactly how we track things as data, how
    are these programs instrumented? What data can you look at?
    Where we are succeeding? Where we can do better? Where there is
    a gap?
        There is a whole breadth of information that we should have
    at our fingertips and we should work to do that, given just the
    scale of what you are doing.
        Obviously, I am not aware of what those things are. I am
    not in the job. Once I am there, if I am confirmed, I will make
    it a point to work with the Administrator and the staff to see
    how we can track things and make sure that we are doing better
    and, of course, sharing as appropriate with this committee.
        Senator Hawley. Very good. Thank you. Congratulations on
    your nomination.
        Mr. Syed. Thank you.
        Senator Hawley. Thank you, Mr. Chairman.
        Chairman Cardin. Thank you, Senator Hawley.
        Senator Shaheen.
        Senator Shaheen. Thank you, Mr. Chairman.
        Mr. Syed, congratulations on your nomination. I look
    forward to working with you if confirmed.
        I just want to followup a little bit on the previous
    question because since the beginning of this pandemic, it has
    been the SBA programs that have really kept so many of our
    small businesses alive during the last year with COVID. I have
    heard from so many in New Hampshire who say that it is the PPP
    loan program that has really saved them.
        I recognize, as you have said, that we are not there yet.
    But the SBA really does face two new challenges in looking at
    how to implement the new restaurant grant program, as well as
    the Shuttered Venue Grant Program.
        We appropriated, in the last package, $1.325 billion in new
    funding to help SBA administer these programs. So again,
    recognizing that you are not there yet, do you have thoughts
    about how the agency could best spend that money in a way that
    is efficient and that addresses some of the challenges that it
    has had with the previous PPP and EIDL programs?
        Mr. Syed. Senator Shaheen, thank you for the question.
        Again, unfortunately, I do not have a lot of the detail as
    to where the gaps are. The reality is this, when we have such
    an incredible resource that is being made available thanks to
    the work of this Committee and the staff, obviously I am sure
    everybody at the SBA as well would want this to be rolled out
    very soon because the sooner this gets into the small
    businesses--and having been part of the process myself, I know
    how critical that is.
        A year ago, we were going through this ourselves and it was
    very, very challenging. And I was working with communities all
    across California in the rural heartland, as we talked about,
    Senator, and saw every day matters. If you can quickly get--so
    I get that. I am deeply empathetic to that.
        Now, I also want to be careful to make any judgment to see
    what we can do since I do not have the context. What I can tell
    you is that I will bring that energy and passion and commitment
    to making sure that we do not even waste a second. And I am
    pretty sure Administrator Guzman, I worked with her in
    California, she shares that commitment, as well. That is the
    lens I will take.
        But I do think this is an opportunity for us to take the
    moment and see what are some of the things that we can do
    better in terms of our internal ops and processes and
    technology and so forth. Again, I do not have the stock of
    that. Fortunately, I have been in business where I have stood
    up infrastructure and I have scaled companies, and often in the
    face of unprecedented growth. I will bring that lens if I am
    confirmed in this job.
        Senator Shaheen. Well, I appreciate that and I look forward
    to revisiting this issue after you are confirmed.
        One of the real frustrations that I have had, and I know it
    is shared by members of this Committee during the last year,
    has been trying to get accurate information about SBA programs
    and their performance, about how much money has been lent? Who
    it has gone to? On the EIDL, again, how much money has already
    been provided to people.
        And so, recognizing that you are not there at SBA, but you
    have been a business owner. You have been a customer of SBA.
    Can you talk about how the Agency currently shares information
    with stakeholders? And what steps you would like to see taken
    to improve sharing of that information with customers of the
    SBA?
        Mr. Syed. Senator Shaheen, that is a good question and I am
    glad you asked that question.
        Again, my perspective is what I have seen, what I have
    observed. The reality is the Agency is operating at a level--I
    think we mentioned earlier--which is multiples of where it was.
        Frankly, any organization that has to go through that kind
    of a change, you have to get to the right point of
    understanding where you need to go in terms of sharing data,
    instrumenting metrics, and so forth.
        I will commit to you that that is one of the priorities we
    will make, in partnership with the Administrator but as an
    operator, if you would, in the Agency to make sure that we are
    able to track and share things that are appropriate that you
    need as the oversight committee. And that will be something
    that I commit to you that I will do as a matter of priority.
        Senator Shaheen. Thank you. We have a lot of small
    businesses in New Hampshire who are very frustrated because
    they could not get an answer from the SBA on their EIDL loans
    and what the status is. And so, I think that communication is
    critically important.
        Thank you. Thank you, Mr. Chairman.
        Chairman Cardin. Thank you, Senator Shaheen.
        Let me just followup with one point on Senator Shaheen's
    point. Yes, it is important that the stakeholders know how the
    programs are working. And if we are going to evaluate a
    program, it is not only making information available to us that
    you have. It is having that information to make it available to
    us.
        We found out the previous administration, they were not
    asking the questions that allowed us to be able to determine
    whether our intent of reaching all communities was, in fact,
    taking place. So I would just urge you to understand, you have
    got to also get granular information available so that we can
    evaluate it, and that requires an affirmative action on your
    part to make sure that information is accumulated.
        Senator Marshall.
        Senator Marshall. Thank you so much, Chairman.
        Mr. Syed, again it is good to meet you in person. I enjoyed
    our phone call. So welcome.
        You come from a technology, an AI background. How do you
    see, what are the opportunities in the SBA to use that
    background to improve the services, as well as to better
    measure what we do, leading to better management?
        Mr. Syed. It is wonderful to see you in person, Senator
    Marshall. I enjoyed the conversation, as well.
        You know, I think again, AI is early in its deployment, if
    you will, in various industries. But just from the outside and,
    again, I do not have--obviously, I am not privy to the internal
    operations.
        I think when we are generating so much data at the scale at
    which we are doing right now, with the $1 trillion that is
    working through the SBA, there are opportunities potentially in
    the area of fraud, waste, and abuse. You can look at patent
    recognition. You can see where we can actually catch things
    earlier, right? So again, I will have to dive in. I am sure
    there is some machine learning the team may already be
    deploying and I will bring that, if you will, acumen in the job
    if I am confirmed.
        So that is just probably one of the areas that one can look
    at, which I understand is a priority. It is a priority for the
    President. It is a priority for the Administrator, and also for
    this Committee.
        Senator Marshall. Great. We are certainly very proud of our
    relationship with the SBA in Kansas, our office working with
    them, and we look forward to continuing to implement new
    technology.
        Mr. Syed, are you familiar with the Hyde Amendment?
        Mr. Syed. I am at a higher level.
        Senator Marshall. So it is a law that says you cannot use
    Federal funds for abortion. Planned Parenthood is the largest
    abortion provider in America. So just using some common sense,
    does it not seem like giving money through the PPP program to
    Planned Parenthood is a violation of American law?
        Mr. Syed. Sir, I understand this is an important question,
    it is important to you. And I hear you.
        I am not in a position to comment on violation of any
    amendment because one, as I shared with you right now that I am
    not entirely familiar with the amendment. And secondly, again
    the rules pertaining to this particular entity.
        As I mentioned earlier in the question and response to
    Senator Hawley's question, if confirmed I will work with the
    Administrator to make sure that we are applying the rules
    consistently for all position, for-profit, non-profit. And that
    is what I can commit to you.
        Senator Marshall. We talked briefly about CDFI, Community
    Development Financial Institutions, and this is just something
    that I learned about at the last meeting. I think that there is
    a great opportunity for them to be more visible and better
    implemented, as well. And one piece of the puzzle that I
    discovered, as I sat down with people that could not get a PPP
    loan, and even went to different banks trying to say what can
    you do to help these people? And there are certainly reasons
    why banks were shying away from them, probably had something to
    do with their credit score.
        But it was even just their knowledge, business knowledge,
    the inability to fill out a financial statement even, just some
    real simple basic facts. I just would ask you, as you look into
    what the role of CDFIs are, if there is not an opportunity to
    help educate people so that we can bring them into the fold and
    help these--they may be great entrepreneurs but just not
    financial wizards, so to speak.
        Do you see any role for that education from the SBA?
        Mr. Syed. Absolutely. Actually, that is very close to my
    heart, Senator Marshall. Actually, pretty much a year ago, when
    the pandemic's effects were coming out, I was with a community
    in California, walking folks through various things, how to
    access PPP and so forth. And we noticed that the communities of
    color, underserved regions, rural communities, they were
    clamoring for information. They did not even know where to go,
    to your point, and especially if you are underbanked and
    unbanked.
        So I actually commit to you, this is an area that I will
    personally be very energized to help with.
        Senator Marshall. I would love that, after you are there
    three or four months, to kind of have a conversation about the
    CDFIs and how you feel they are doing and where they can
    improve.
        Thank you so much and I appreciate you coming.
        I yield back.
        Mr. Syed. Thank you.
        Senator Shaheen. Mr. Chairman.
        Chairman Cardin. Senator Shaheen?
        Senator Shaheen. Can I just make a clarification for the
    record?
        The questions that Senator Hawley and Senator Marshall are
    raising about support for Planned Parenthood under the PPP
    program. That was done under the Trump administration, under
    SBA Administrator Carranza. So I would suggest that those are
    questions that maybe should have been put to them, as opposed
    to the current Administration.
        Thank you.
        Chairman Cardin. Senator Cantwell.
        Senator Marshall. If I could just make a point, as well.
        Chairman Cardin. Senator Marshall.
        Senator Marshall. Certainly, there is a new tranche of
    money that was just recently given out by the current
    Administration, as well, just for the record.
        Chairman Cardin. Senator Cantwell.
        Senator Cantwell. Thank you, Mr. Chairman.
        Mr. Syed, thank you so much for your willingness to serve
    and thank you for the conversation we had yesterday to talk
    about many things related to the SBA administration.
        You have already heard from many of my colleagues about the
    operations of the programs that are underway or not as
    successfully underway, so just to add my comments to the
    Shuttered Venue Operations Grant, we need to make that
    successful. Obviously, we do not want the Restaurant
    Revitalization Grant to be kludgy like that. We want it to be
    successful.
        I had to step out for a minute but I think that is what the
    Chairman was asking you, to make sure that that--let us know
    anything that is necessary for us to make that restaurant
    program move successfully.
        I wanted to bring up two issues. One, there was a program
    related to the newspapers, and part of the PPP application when
    newspapers were owned by a large entity apply separately with
    the same EIN of their parent company. So some of the
    applications are being held.
        And so this is really, I think, a technical problem in the
    application form. So I hope that you would look at this and
    make sure that we are resolving these problems as it relates to
    newspapers and that the set-aside for local news networks, that
    they also fix any technical barriers.
        Mr. Syed. Senator Cantwell, thank you for those questions
    and good to see you in person. I appreciate your time for the
    call yesterday.
        So I totally agree with some of the things that you
    mentioned here. If confirmed, I will look into these things.
        You know, having gone through the process myself and seeing
    sometimes just some of the fears that are there, there is the
    opportunity to probably do better. And especially when we
    expand the program for so many different types of entities,
    right? And this has not been done----
        Senator Cantwell. But I think these are more like technical
    issues in the way that somebody asked for information that does
    not quite fit with the specificity.
        But here is another example that is very challenging. So
    the SBA lenders have denied Paycheck Protection Program loans
    to Native-owned small businesses because they do not meet the
    SBA's documentation requirement. So we have 20-plus recognized
    Tribes in the Pacific Northwest and more than 1,000 Native-
    owned businesses. So these are individuals that have fishing
    rights but they have not been able to get COVID relief because
    they do not file tax returns because they do not have that
    obligation under the treaty rights. So they do not have an
    employment identification number.
        So we need to figure out how to fix this. So I hope that
    you will commit to fixing this. I mean, create a pilot program,
    figure out another way to do it. But you have 1,000 people--at
    least in my State, there would be more in Oregon and Alaska and
    California, and other places. You know, figuring out exactly
    how to make the program fit the mold for the uniqueness that
    tribal businesses represent in their tax status structure.
        It is almost like okay, come up with some other identifier,
    if that is what you are looking for, so that you know and
    understand these businesses meet the standard. They just do not
    have an EIN number.
        Mr. Syed. Thank you, Senator.
        I think it is a great example of the kind of things we need
    to put an eye toward and I commit to you that I will have that
    operating view on things in partnership with the team at the
    SBA and will work with your office, as well, to make sure that
    those potential pilot programs are being explored, given that
    the need is there and somehow they are not being addressed
    properly.
        Senator Cantwell. It is not the need. It is that they are
    being treated inequitably under the law just because of a
    previous right that they already have. So it is just the
    program did not entail thinking about people who do not have an
    EIN. So we just need to fix it.
        So thank you for your commitment to fixing it.
        Thank you, Mr. Chairman.
        Mr. Syed. Thank you, Senator.
        Chairman Cardin. Thank you, Senator Cantwell.
        Senator Inhofe, are you ready?
        Senator Inhofe. Yes.
        Thank you, Mr. Chairman. My timing is perfect. I was
    delayed on the floor, but I definitely wanted to get in here.
        I have a couple of things to talk to Mr. Syed, is that it?
    Does that sound good to you?
        Mr. Syed. That is right.
        Senator Inhofe. All right, Mr. Syed. The CARES Act included
    funding to allow the SBA to provide debt relief payments for
    regular SBA loans. Now this problem was extended through
    December 2021, the Omnibus allowing SBA to make up to eight
    additional monthly debt relief payments.
        Now businesses in my State of Oklahoma have benefited
    greatly from this program, but there are concerns that once the
    program ends businesses will be unprepared to resume regular
    loan payments. Now the SBA should consider providing banks with
    increased flexibility with payments and loans to date.
        So are you aware of these concerns? Is this something you
    have run into before?
        Mr. Syed. Senator Inhofe, I am aware of the payment relief,
    just really from outside and some friends who were able to get
    payment relief for the 7(a), 8(a), and 504 programs.
        Senator Inhofe. If you are confirmed, can you commit to
    proactively helping businesses to begin making regular loan
    payments? Because this has grown to be a problem in Oklahoma.
    Can you do that for me?
        Mr. Syed. Senator, if confirmed, I will work with the
    Administrator to explore options to see what levers can be
    applied.
        Senator Inhofe. Okay, that is good.
        Now the other thing that I was interested in is information
    keeps coming to light, because it is a pretty toxic subject,
    that Planned Parenthood has illegally received the PPP loans
    despite SBA's affiliate rules. Now their affiliate rules
    provide that, first of all, it has to be under 500, and they
    count the affiliates in with this.
        Now, with the affiliates, Planned Parenthood is some 16,000
    people. So I cannot imagine that it would not be disqualified
    just on those lines.
        What is your opinion about that?
        Mr. Syed. I am sorry, Senator, could you repeat the
    question?
        Senator Inhofe. Yes. What is your feeling about the fact
    that Planned Parenthood, we understand, has received some of
    the PPP loans, I contend are illegal because, first of all,
    just the size limit of 500. They are a group of some 16,000. So
    would you believe that they would not qualify for the PPP loans
    because of size and affiliate size alone?
        Mr. Syed. So Senator, it is an important question and we
    had an earlier discussion as well.
        I, obviously, am not familiar with the rules as applied to
    this particular entity. If confirmed, what I can commit to you
    is that I will work with the Administrator to make sure that we
    are applying rules consistently for all organizations as laid
    out in the law.
        Senator Inhofe. Yes, I am not sure it would be necessary to
    do that because you do have a hard fast rule on the number 500
    and this falls way outside of that. And so the only question I
    have is is there a loophole I do not know about, where this
    would be a legal and appropriate application of the PPP
    program?
        Mr. Syed. Senator, with all respect, I am not obviously
    familiar with the application of this particular entity, what
    was applied. Again, what I am committing to you, with absolute
    certainly, is that we will work to apply the rules consistently
    across and make sure that there is a proper eligibility review.
        Senator Inhofe. Well, do you know of any exceptions that
    are in the rules in this case that would provide to exceed the
    500 limitation for appropriate programs?
        Mr. Syed. Senator, I am obviously not privy to the rules. I
    am not in the job yet. So I am not able to comment on that.
    Again, I hear your concern, and it was brought up earlier as
    well. I commit to you that I will work with the Administrator
    and the staff to make sure that we are applying rules
    consistently for all entities.
        Senator Inhofe. All right. Well, I will be checking back at
    the appropriate time then.
        Thank you very much.
        Mr. Syed. Thank you, Senator.
        Senator Inhofe. Thank you, Mr. Chairman.
        Chairman Cardin. Thank you, Senator Inhofe.
        Senator Inhofe. Did you have any comments to make about my
    inquiry here? Because I thought that the hard fast rule was it
    had to be under 500 to apply for and be granted the PPP
    program?
        Chairman Cardin. I know this issue has come up during the
    drafting of the PPP loans and I think there has been a
    consistent interpretation of the rules as to whether the
    affiliate rules apply or not. It may not be an exception to the
    affiliate rules, it is whether the affiliate rules apply.
        This was done under the Trump administration, I would
    remind you of that. And I know that there was some displeasure
    on how the rules were adopted. There were some efforts made to
    change the legislation. Those efforts did not succeed.
        Senator Inhofe. I see. Okay well, I will have to look into
    that.
        Chairman Cardin. And I appreciate, our Committee wants to
    make sure that the rules are being applied uniformly and is
    consistent with the legislative instructions and the practice
    of the SBA. And there is some historic practice on affiliation
    rules.
        Senator Inhofe. Yes, I think there is. All right, thank
    you, Mr. Chairman.
        Chairman Cardin. Senator Rosen is with us vis-a-vis the
    web.
        Senator Rosen. Thank you, Chairman Cardin. I appreciate it.
    And thank you, Mr. Syed, for being here with us today, for your
    commitment to serving our Nation.
        I look forward to learning more about your plans to support
    our Nation's small businesses. Of course, they are continuing
    to struggle to keep their doors open, and I want to hear about
    your vision and how the Agency can better serve them as they
    begin their path to recovery.
        So I want to talk a little bit about lifting the caps on
    EIDL grants. Last month, I was pleased that Administrator
    Guzman announced that the Agency will lift the caps on EIDL
    loans from $150,000 to $500,000. And just last week, she wrote
    to me to let me know the caps would move to $2 million. So all
    of them would be removed. That was what was originally mandated
    by Congress. This is a policy change I have been calling for
    since last year. It is going to provide much needed support to
    99 percent of businesses in Nevada that are small businesses.
        However, given the prior Administration's actions to cap
    the EIDL Advance Grants to $1,000 per employee, our smallest
    businesses--including many minority-owned small businesses--did
    not receive the $10,000 grants that Congress had promised and
    passed into law.
        So in her letter last week to me, Administrator Guzman
    stated that SBA does not have the statutory authority or the
    funding to provide $10,000 grants to all eligible small
    businesses, regardless of size or location. But she indicated
    that she would not have capped the original EIDL program, as
    the last Administration had.
        That being the case, if confirmed, will you commit to
    working with my office to advance legislation that provides the
    Agency with the authority and the funding to provide all of our
    small businesses with the $10,000 EIDL Advance Grants and not
    only those that happen to be in low-income areas?
        Mr. Syed. Senator Rosen, thank you for the question and I
    totally appreciate the importance of this topic. If confirmed,
    I will work with the Administrator to work with your office and
    partner as appropriate to make sure that there is more resource
    available to small businesses.
        Senator Rosen. Thank you.
        I want to move on quickly to technology, and I know that is
    something you know a lot about. Of course, I am a former
    computer programmer, systems analyst, and early on in my career
    I learned the importance of using updated software systems, the
    latest technologies, to improve processes and provide timely
    and accurate information.
        During the COVID-19 pandemic the SBA was delegated the
    difficult task of managing a multi-billion dollar emergency
    loan and grant program, programs that have provided critical
    aid to our small business community. However, some of our
    constituents small business owners have complained they have
    waited a long time, sometimes even months. And the Agency seems
    to be requiring them to resubmit the same documents multiple
    times, delaying the process. Of course, you know, small
    businesses do not have the capital reserves to survive for many
    months.
        So given your experience in the private sector, what can
    the Agency, in your opinion, incorporate from the private
    sector to improve its internal controls and technology, thus
    speeding up the process of these loans and grants so that
    people can get the timely help they need to stay in business?
        Mr. Syed. Absolutely, Senator Rosen. This is a very
    important question and I appreciate that you understand these
    demands since your own background in technology earlier.
        As I mentioned earlier, in previous comments, there is a
    significant scale at which SBA is operating with just the
    breadth of programs and how fast they have to be stood up.
    There is obviously infrastructure, based on my reading from the
    outside, that is decades old.
        Once I go in, the first order of business for me would be
    to learn and understand what the infrastructure looks like
    before suggesting and making any changes. The reality is, we do
    have an opportunity, given the moment, to be able to see how we
    can improve capacity of this infrastructure. I, fortunately,
    bring that background. I have built and scaled infrastructure
    in technology companies at all levels.
        And I commit to you that I will work with the team to make
    sure that we are meeting the moment, while at the same time
    making sure that we do not break things that are working, given
    just the importance of delivering services as we speak.
        Senator Rosen. I think this is another area for us, as
    Congress, to consider IT modernization, creating platforms that
    are easily accessible across all State front-ends that they can
    use, and modify the back-ends in ways that they need to. And so
    we hope that we can work with you on upgrading all of your
    systems.
        Thank you.
        Thank you, Mr. Chairman.
        Mr. Syed. Thank you, Senator.
        Chairman Cardin. Thank you, Senator Rosen, appreciate that
    very much.
        I just want to followup one point with Senator Paul, and I
    know that we are going to followup in regards to the
    information that he is seeking.
        I have been informed by my staff that estimated losses was
    not required on the application when the company applied for
    the loan, and that revenue loss is now on the application
    because of the EIDL Advance Program. The EIDL application does
    ask for total revenue during the 12-months prior to the
    disaster, in this case prior to January 2020. It is my
    understanding that information was made available by Mr. Syed.
        Also, there is no question on the Committee questionnaire
    or the financial disclosure statement which would have required
    he disclose the PPP or EIDL loans. The funds were for the
    company, not for Mr. Syed personally.
        I just really wanted that to be put on the record, just so
    we had that information. But we will followup with you, Mr.
    Syed, and with Senator Paul and staff to try to resolve any
    open issues so that we can try to move your nomination as
    smoothly as possible.
        Mr. Syed. Thank you, Senator.
        Chairman Cardin. We will keep the Committee record open
    until Monday close of business for any additional questions
    that might be asked by any of the members. We would ask that
    you respond to those questions promptly that are asked.
        And with that, I see no further member and no further
    business. The Committee will stand adjourned.
        Thank you very much, Mr. Syed.
        Mr. Syed. Thank you.
        [Whereupon, at 3:56 p.m., the Committee was adjourned.]

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