    [Senate Hearing 118-87]
    [From the U.S. Government Publishing Office]

                                                             S. Hrg. 118-87

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

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

                                    HEARING

                                   BEFORE THE

                          COMMITTEE ON SMALL BUSINESS
                              AND ENTREPRENEURSHIP

                                     OF THE

                              UNITED STATES SENATE

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 FIRST SESSION
                                   __________

                                 MARCH 8, 2023
                                   __________

          Printed for the use of the Committee on Small Business and
                                Entrepreneurship

                      [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

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

                                   __________

                        U.S. GOVERNMENT PUBLISHING OFFICE

    53-223                     WASHINGTON : 2024

                COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
                        ONE HUNDRED EIGHTEENTH CONGRESS

                                  ----------

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

                                C O N T E N T S

                                  ----------

                               OPENING STATEMENTS

                                                                       Page
    Benjamin L. Cardin, Chairman, U.S. Senator from Maryland.........     1
    Joni Ernst, Ranking Member, U.S. Senator from Iowa...............     3

                                    WITNESS

    Mr. Dilawar Syed of Virginia.....................................     5
        Prepared Statement...........................................     7

                  ADDITIONAL LETTERS/STATEMENTS FOR THE RECORD

    National Association for the Self-Employed (NASE)
        Statement dated March 8, 2023................................    34
    U.S. Chamber of Commerce
        Letter dated March 7, 2023...................................    35
    American Jewish Committee (AJC)
        Statement dated July 7, 2021.................................    36

                            QUESTIONS FOR THE RECORD

    Mr. Dilawar Syed of Virginia
        Responses to questions submitted by Ranking Member Ernst and
          Senators Hickenlooper, Risch, Young, Kennedy and Hawley....    38

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

                                  ----------

                            WEDNESDAY, MARCH 8, 2023

                                   U.S. Senate,
                            Committee on Small Business
                                          and Entrepreneurship,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 2:30 p.m., in
    Room 428A, Russell Senate Office Building, Hon. Benjamin
    Cardin, Chairman of the Committee, presiding.
        Present: Senators Cardin [presiding], Cantwell, Shaheen,
    Markey, Coons, Hirono, Duckworth, Rosen, Hickenlooper, Ernst,
    Kennedy, Hawley, and Budd.

                  OPENING STATEMENT OF SENATOR CARDIN

        Chairman Cardin. The Small Business and Entrepreneurship
    Committee will come to order. This is our first public hearing
    of this Congress, and we are here to consider the nomination of
    Dilawar Syed to be the Deputy Administrator of the Small
    Business Administration.
        Before we get started I really want to welcome Senator
    Ernst as the Ranking Member on the Small Business Committee.
    She has been a valuable member of this Committee since, I
    think, 2015. Many of the best ideas of our Committee have come
    out of Senator Ernst, and we appreciate that very much. I am
    really looking forward to working together to help America's
    small businesses. I think we share the same passion towards the
    small business agenda, and I am looking forward to this
    Committee being actively engaged.
        I think actually the climate is right for us to take the
    leadership on this. We recognize that we have to have a
    bipartisan product, and it has got to be one that can be shared
    and supported within the House. So I am hopeful that we will be
    able to find that spot. We have been looking to reauthorize a
    lot of the SBA programs for many Congresses. We used to do it
    regularly. And I am hopeful that the two of us will be able to
    work together in order to be able to accomplish that.
        I would also welcome Senator Ted Budd of North Carolina. We
    are very happy that he is a part of the Committee. I had a
    chance, at the last meeting, when we were voting on the
    organizational issues, to welcome him to the Committee, but we
    look forward to his participation in our Committee.
        I also want to thank Senator Ernst for the help in the
    organizational work, the adoption of our rules and budget. We
    were able to get that done in a very expedited way.
        So we are off to a great start in this Congress and I am so
    pleased to welcome back to the Committee Dilawar Syed. It has
    been more than 2 years since Mr. Syed was first nominated for
    the position of Deputy Administrator. During his previous
    hearing before the Committee back in April 2021, I commended
    Mr. Syed for his willingness to serve our nation in public
    service.
        Today I want to add my appreciation for his patience and
    perseverance during this confirmation process that has been
    marked by unacceptable delaying tactics, spurious accusations,
    and unrelated controversies. It was correct for the Biden
    administration to nominate Mr. Syed for a third time earlier
    this year, and principled and noble for Mr. Syed to accept. We
    thank you for that.
        The position of Deputy Administrator has been vacant for
    nearly 5 years. This is a disservice to the small business
    owners throughout our nation that have suffered tremendously
    due to COVID-19 pandemic. Since 2020, the SBA has provided
    unprecedented amount of aid to small businesses, more than $1
    trillion in funding, far exceeding any efforts in the past.
    While the SBA has been working tirelessly to provide the
    assistance, the pandemic also exposed a clear need for
    modernization, technical upgrades, new resources and reforms at
    the SBA.
        That is why the need of a deputy administrator today is
    more important than ever, and the skills and qualifications
    possessed by Mr. Syed are a perfect fit for the needs of the
    Small Business Administration. Dilawar Syed has a proven track
    record of scaling startups and meeting market demands. He has
    had leadership roles in business, entrepreneurship, and public
    service, and in his most recent position as the State
    Department's Special Representative for Commercial and Business
    Affairs, he has broadened his knowledge on matters related to
    trade and export.
        He has the support of dozens of small business
    organizations that understand the need to help the growing
    number of entrepreneurs in this country. The Small Business
    Investment Alliance recently told the Committee that, and I
    quote, ``The Deputy Administrator is one of the most important
    positions at the SBA, serving as the chief operations officer.
    With the position being vacant for the majority of the past 14
    years, the SBA has been less efficient and less effective in
    serving the taxpayer public than it could have been. No
    business would leave a critical leadership position like this
    open for so long. Filling it with an accomplished executive
    such as Mr. Syed is a meaningful taxpayer protection that
    ensures SBA can prevent waste, fraud, and abuse going forward.
    Leaving this position vacant prevents reforms and invites
    inefficiencies,'' end quote.
        I could not agree more. The sole justification of this
    Committee, under the standing rules of the Senate, is to
    consider matters related to the Small Business Administration.
    It is our collective responsibility as members of the Senate
    Small Business and Entrepreneurship Committee to ensure that
    the agency is working to its full potential to serve the 33
    million small businesses in this country. Filling the position
    of Deputy Administrator with a dedicated and accomplished
    nominee, as Dilawar Syed would be, is an important step towards
    that goal. It is past time that we got this done.
        With that let me yield to the Ranking Member, Senator
    Ernst.

                   OPENING STATEMENT OF SENATOR ERNST

        Senator Ernst. Thank you, Chairman Cardin. Having served on
    the Committee for several years now I recognize the importance
    of this Committee's work to support and protect the interests
    of small businesses in Iowa and all across the United States. I
    am truly honored, I am humbled, and excited to serve as Ranking
    Member of the Senate Small Business Committee, and I look
    forward to working with you, Chairman Cardin. I appreciate your
    support as we have had many discussions over this Congress'
    activities, and look forward to passing meaningful legislation
    that will support small businesses and allow them to do what
    they do best, which is to create jobs and support our local
    communities.
        I want to welcome Mr. Dilawar Syed, who is once again here
    before us as the nominee to be the Deputy Administrator of the
    U.S. Small Business Administration. The Deputy Administrator is
    often referred to as the DOO of the SBA, with the critical job
    of overseeing the day-to-day operations of the agency. From
    addressing fraud to improving the agency's responsiveness, to
    actually enforcing the laws that are meant to protect small
    businesses from drowning in unnecessary red tape, there is a
    lot of work that needs to be done to improve the SBA's most
    basic functions. And I look forward to today's hearing and
    learning more from you, Mr. Syed, about how you will address
    these issues and more.
        A critical component of this Committee's work is to
    establish policies that promote rather than discourage
    entrepreneurship in this country. I believe it is both this
    Committee's and the SBA's responsibility to ensure that they
    are not hamstrung by unnecessary red tape, and right now that
    is not happening. Steep regulatory costs and the sheer volume
    of regulations that come from Federal agencies year after year
    too often prevent a would-be entrepreneur from ever taking the
    first step toward creating their business or their invention.
        Federal regulations now span hundreds of thousands of
    pages, with Federal agencies imposing over 3,000 or more new
    regulations every single year. Just last week, Federal agencies
    issued 71 final regulations, the equivalent of a new regulation
    every 2 hours and 22 minutes. How can any small business keep
    up? The answer is, unfortunately, they simply cannot.
        As I am crisscrossing Iowa, small businesses continuously
    list overregulation as a top issue, keeping them from growing,
    and in too many cases, simply surviving. I look forward to
    hearing from Mr. Syed on how he would modernize our regulatory
    system to make good on his statements over the past year to
    promote rather than discourage entrepreneurship and innovation.
        I also look forward to hearing from Mr. Syed on how he
    would address the internal control issues highlighted by the
    SBA's inspector general in his most recent report on the top
    management and performance issues facing the agency. At the top
    of all concerns raised by the OIG was the fact that internal
    control weaknesses limited SBA's ability to actively reduce
    fraud and instead increased the risk of fraud in the Paycheck
    Protection Program. Addressing this abuse by holding
    individuals accountable and recovering taxpayer dollars
    provided to ineligible businesses must be a top priority for
    Mr. Syed and the SBA.
        I also want to address the ongoing concerns with the SBA's
    consistent failure in responding to Republican requests for
    data and information in both a timely and thorough manner. This
    Committee cannot serve its mission unless the agency it
    oversees is committed to being transparent and responsive, and
    that starts at the top.
        This nomination has been delayed due to the SBA's failure
    to give Committee members details of how and when the Biden
    administration reversed the agency's determination that Planned
    Parenthood affiliates were ineligible for PPP loans due to
    their affiliation with their national organization. This
    Committee has asked several times for the documentation and
    communications made to Planned Parenthood-affiliated
    organizations. So did the Biden administration give Planned
    Parenthood kind of a nod and wink or was there reversal
    communicated by letter or email or by phone? I will not rest
    until this Committee has that necessary information.
        And so as you can see, we have got a lot of work to do, and
    simply put, the SBA is in dire need of reform in many areas,
    and I look forward to hearing Mr. Syed's thoughts on how to
    address these issues should he be confirmed.
        And thank you very much for joining us. Your persistence is
    commended, and thank you very much, Mr. Chairman, for holding
    this hearing.
        Chairman Cardin. Thank you very much, Senator Ernst.
        Now let me formally welcome Senator Budd to the Committee.
    It is wonderful to have you here. We look forward to your
    participation for America's small businesses.
        Senator Budd. Thank you, Chairman. It is an honor to be
    here.
        Chairman Cardin. Mr. Syed, we have a tradition in our
    Committee that we ask you to take an oath. We ask all nominees
    that we are responsible for to do that. So if you would rise
    and raise your right hand I will administer that oath. Thank
    you.
        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. Thank you. Please have a seat. I have two
    questions we ask all nominees, and I am going to have you do
    that before your presentation to us.
        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. Yes.
        Chairman Cardin. Are you willing to provide such
    information as is requested by any such committee?
        Mr. Syed. Yes.
        Chairman Cardin. Thank you. You may now proceed, and again,
    we thank you very much for your persistence, we thank you for
    your public service, and we thank your family for putting up
    with all these issues.

                 TESTIMONY OF DILAWAR SYED OF VIRGINIA

        Mr. Syed. Thank you, Chairman Cardin, thank you, Ranking
    Member Ernst, and distinguished committee members, for this
    opportunity. It is an honor to be here as President Biden's
    nominee to be Deputy Administrator at the SBA.
        I have spent the bulk of my career in private sector. I
    have launched and scaled ventures in software, AI, health care,
    and consumer media. I have also run large business operations
    at companies such as Yahoo!.
        My teams and I have created good American jobs, delivered
    innovation in health care, and modernized customer service
    software used by thousands of Main Street businesses all across
    the country.
        As an immigrant who made America home some 32 years ago as
    a young college student, I have lived the American dream. I
    have also worked to bring that Dream into reach for others. I
    learned early on that being a successful entrepreneur requires
    hard work, grit, and dedication to the mission. The path to
    success is almost never straightforward, never without
    challenges. And I have faced down many share of challenges and
    have navigated small businesses through difficult times,
    including the COVID pandemic.
        I know what it is like to feel the burden and
    responsibility for making that next payroll for my employees.
    When the pandemic suddenly crushed demand, I remember feeling
    the uncertainty about what was happening in the economy and
    wondering how we would recover.
        It is not an understatement to say that SBA was absolutely
    essential to keeping our nation's economy afloat during those
    very challenging times, providing critical relief for small
    businesses. For many entrepreneurs, this was their first time
    working with the agency. Now, as we rebuild, SBA has a unique
    opportunity to deepen these new customer relationships and help
    these small businesses grow and thrive.
        Currently, as State Department's Special Representative for
    Commercial and Business Affairs, I lead America's commercial
    diplomacy, helping level the playing field for U.S. companies
    to compete and win all over the world. It is a privilege of a
    lifetime to represent the United States on the global stage.
        In more than 60 bilateral meetings this past year, I have
    expanded fair market access for U.S. businesses, increased
    protection of our IP, and promoted roughly $90 billion worth of
    commercial deals that are creating jobs across America while
    very importantly protecting our vital national security
    interests.
        I am especially proud of our efforts to democratize access
    to State Department resources to underserved areas here in the
    United States. I traveled to meet small and mid-size exporters
    in Atlanta, Boise, and Frederick, Maryland. Innovative
    solutions I see being built in these communities can help us
    tackle some pressing global challenges.
        My civic journey began long before my work at the State
    Department. As I built my career in Silicon Valley, I saw
    venture capitalists investing around the world but, frankly,
    ignoring their own backyard. Why did nearby Fresno or Modesto
    lack the same entrepreneurial ecosystem we see in the San
    Francisco Bay Area and all the economic gains that come with
    it?
        Working to bridge this divide and promote inclusive growth,
    I co-founded, at my own initiative, the California
    Entrepreneurship Task Force to connect rural regions such as
    the San Joaquin Valley with networks and resources in Silicon
    Valley. When the pandemic hit, we launched rapid response
    support for small businesses. This campaign to raise awareness
    of resources reached more than 20,000 small businesses.
        This experience was informed by the work as President
    Obama's AAPI Commissioner after the Great Recession, when I led
    engagement with the AAPI businesses across the nation.
        While we still face economic headwinds, small businesses
    today are showing hope. More than 10 million people have
    applied to start a business since President Biden took office.
    The Bipartisan Infrastructure Law is starting to put shovels in
    the ground across America, and thanks in part to the CHIPS and
    Science Act, U.S. manufacturing is coming back with the
    potential to bring our nation's industrial towns with it.
        These historic investments build prosperity that reaches
    deep into Main Streets and bolsters our startup ecosystems.
        And for the millions of new small businesses, those ``acts
    of hope,'' as the President put it, SBA can be an enabler of
    success. I am energized to serve all of America's entrepreneurs
    in partnership with Administrator Guzman and the team of
    mission-driven public servants at the SBA.
        If confirmed, I will bring my operating experience of
    building organizations and businesses, scaling processes,
    systems, technology, and culture to SBA so it can more
    effectively, and more efficiently execute its mission.
        In closing, I want to thank my family and so many amazing
    leaders across the country for their heart and support.
        Thank you. I look forward to your questions.
        [The prepared statement of Mr. Syed follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Cardin. Thank you, Mr. Syed. I must tell you, I
    think the numbers over the last 2 years are extremely
    impressive. We have seen record numbers of small business
    startups. In my state of Maryland we have seen an incredible
    growth in women-owned small businesses and minority-owned small
    businesses, and it has been a very healthy situation, and I
    appreciate you acknowledging that.
        But there is one area that we always need to improve on and
    that is customer service. It is not easy for a small business
    to be able to get through the bureaucracies of dealing with
    government agencies or dealing with the tools at the Small
    Business Administration.
        On Monday I was in Westminster, Maryland, with a group of
    veterans, talking about veteran entrepreneurship opportunities.
    We talked about Veterans Business Outreach Center, which is
    incredibly valuable in our state. And we have now four Women's
    Business Centers. We know about the Small Business Development
    Centers. We have the MBDA programs.
        Tell me how we can improve the service levels so that we
    can help particularly the smaller small businesses, the startup
    entrepreneurs to be able to access the help and partnership
    that we offer at the SBA and not overburden them with the
    bureaucratic issues.
        Mr. Syed. Well, Senator, thank you for that question. You
    know, earlier in my career I built a software company that
    focused on customer support and customer service. And as I
    mentioned in my opening statement, during the pandemic the
    majority of the stakeholders who engaged with SBA, this was
    their first experience with the agency in the middle of the
    pandemic. So we had this opportunity to build on those first
    customer touchpoints and make sure that we can support those
    businesses as they look to grow and thrive.
        So I hear you, and as someone who actually engaged with the
    SBA as a customer myself during the pandemic, there are
    certainly improvements that we can make in the process. The
    technology, we want to make sure that we are reaching our
    businesses where they are, understand what their needs are. We
    are using technology processes.
        Obviously I am not in the job yet. Once I am confirmed, I
    am fortunate enough to be confirmed, if I am confirmed, I will
    work with the team and see what does our workflow look like.
    What are our processes? What is the internal capacity when it
    comes to data on small businesses? How can we be more effective
    in reaching these various constituents we are serving, all
    across the country?
        Because one of the things that I observed in my experience
    at State as well, as I engage with businesses domestically, the
    awareness of our programs actually goes down as you go farther
    away from Washington, D.C. We want to serve these businesses in
    the heartland. We want to serve these businesses in rural
    communities. And I think there is an opportunity for us to do
    more.
        So I am looking forward to, if I am confirmed, sitting down
    with the team, understand what our customer service process
    looks like, what our capacity is, also what our human capacity
    is to take these calls and reach the touchpoints we have with
    the customer. It has to be a customer experience-first agency.
    We are serving potentially millions of small businesses, and
    not just for extra financing but also for access to mentorship
    and advice and other resources.
        Chairman Cardin. Thank you. I mentioned in my opening
    statement about the unprecedented increase in services we
    provided during COVID-19 and help through all the programs that
    were created. It started under the previous administration, and
    Senator Rubio, who chaired the Committee, we worked together
    and created the different programs that helped during COVID-19
    that continued during the Biden administration.
        And I will just give you my assessment. I think the
    programs were very successful. I think we got the money out
    quickly, and we saved a lot of small businesses from closing.
    Because we had to do it quickly there were some who abused the
    system.
        So my question to you is, what are the lessons learned from
    the programs we started up during the COVID-19 and are you
    committed to going after those who abused the system to make
    sure they are held accountable for their actions?
        Mr. Syed. Senator, obviously I have seen and read about the
    instances of fraud with SBA programs. You know, we have to
    really be very intentional in protecting taxpayer dollars, and
    I saw despair in small businesses that I was helping with as an
    advocate during the pandemic. And to see that criminals were
    able to deprive these small businesses for the money that was
    really intended for them, that is obviously very disturbing.
        If I am confirmed, I commit to you that I will make it one
    of my top priorities to work with the Administrator, who I know
    has put in place new, enhanced controls. But there could be
    additional ways that we could improve things. I want to
    obviously study and evaluate what the state of our controls
    are, what we can do to bolster those controls. This would be,
    obviously, zero tolerance.
        You know, as a businessperson, and I have run businesses,
    including consumer businesses, I have zero tolerance for fraud.
    So we need to go in with a very strong intention to ensure that
    all the resources that Congress, the goodwill of Congress, is
    making available for small businesses are used by them and are
    not defrauded by criminals.
        Chairman Cardin. Thank you. Senator Ernst.
        Senator Ernst. Yes. Thank you, Chairman, and thank you
    again, Mr. Syed, for joining us today.
        And I want to start my questions off by addressing the
    issues from the last Congress, and where so many of us got
    really concerned with some of the loans that were made. The
    Committee had trouble receiving timely information from the
    Small Business Administration on a number of issues, including
    the Planned Parenthood loans, despite multiple requests.
        If confirmed, will you commit to changing the SBA's culture
    of unresponsiveness and starting on day one will you work to
    ensure the Committee receives responses to its request for
    communications between the Biden administration and Planned
    Parenthood affiliates?
        Mr. Syed. Ranking Member Ernst, thank you for that
    question. Let me first of all acknowledge that this has been
    obviously an issue. I have tracked it on the outside, and I
    understand and I hear it is important to you and to your
    constituents. If I am confirmed, I will work with the
    Administrator and ensure that we are responsive to the
    requests.
        You know, one of the things that I have understood is that
    part of the job of the Deputy Administrator is to help with the
    oversight. If I am confirmed and I am fortunate to be
    confirmed, I will be able to augment the capacity of the agency
    to help with the oversight function and provide to you
    information that you are seeking.
        Senator Ernst. Thank you, and I really appreciate that.
    This has been an ongoing conflict. We would like to see the end
    of this and determine were those loans through PPP given
    correctly or not, and if so, we need to make sure that we are
    following up. If fraud was committed, we need to recapture
    those dollars. So I appreciate that answer.
        And as I mentioned in my opening statement, you spoke
    regularly in your role at the State Department that you hoped
    to harness the unrivaled entrepreneurship and innovation--and I
    love that--of the U.S. private sector and increase U.S.
    businesses' competitiveness globally, because we are in a
    global economy.
        Do you believe that overregulation stifles innovation and
    entrepreneurship and that the red tape that exists out there
    often discourages those would-be innovators and job creators
    from ever getting into the marketplace?
        Mr. Syed. Senator Ernst, I bring a perspective of a
    businessman to this job, if I am confirmed, and an entrepreneur
    who has had his share of [unclear]. So I hear you. I am someone
    who will work with the Administrator and our team to always
    look for ways to optimize for our entrepreneurs' success.
        There is an appropriate place for regulation, but we want
    to make sure that we are evaluating and studying things that
    will make it easier for our businesses to succeed and thrive.
        To your point, I believe our private sector is one of our
    most strategic and important assets as a country, and it is
    more competitive now than it was. You are no longer the only
    game in town when you go abroad and vie for those deals. And we
    want to help the next generation of U.S. companies and
    entrepreneurs, the next GE, the next Google, and that is coming
    from the heartland.
        I have actually spent some time with folks at the Greater
    Des Moines Partnership and understanding, in your state, what
    an incredible energy is for entrepreneurship.
        So we want to make sure that we bring all our tools, and at
    the same time look for ways that we can make it easier to do
    business.
        So you have my commitment that if I am confirmed for this
    role I will work with the Administrator and our team to
    evaluate where we can actually improve things. Now again, there
    is a proper place for regulation, to protect consumers and
    businesses, but overall we are advocates for businesses and we
    should be making it easier to do business, not harder to do
    business.
        Senator Ernst. That is great. We have talked a lot about
    fraud this afternoon. I want to go back into that. Senator
    Cardin brought this up, making sure that dollars are recouped
    from fraudulent loans, those that took advantage of the COVID
    situation. We want to make sure we are recapturing those
    dollars.
        So will you commit to investigate all PPP loans flagged by
    the SBA OIG as potentially fraudulent and work to recoup those
    funds from the fraudulent loans, regardless of size, even those
    that are under $100,000?
        Mr. Syed. Senator Ernst, I have read the IG report. If I am
    confirmed I will address some of the recommendations, the
    recommendations that have been made by the IG. I obviously need
    to understand better, and I will work with the Administrator
    and the team to study all these cases, what the determination
    is, and what is the proposal that the team has to address the
    concerns.
        Again, as I said earlier, I am committed to doing
    everything we can to fight fraud. It is, frankly, unacceptable
    that so much resource went wasted, and we have to recover
    those. So you have my commitment to work with you and this
    Committee as well, and the Administrator, to ensure that we are
    making sure that every dollar that was set aside for deserving
    small businesses reaches them.
        Senator Ernst. Yeah, thank you very much. Thank you, Mr.
    Chair.
        Chairman Cardin. And let me just reinforce the Ranking
    Member's comments. I am committed to making sure that we work
    together on requests for information, and we expect any request
    made by this Committee to be honored.
        I do want to point out that Mr. Syed, during the last
    confirmation process, made personal information available about
    himself that went beyond the customary disclosures that are
    made by nominees. He voluntarily made that information
    available to our Committee, and it helped us get through some
    of the hurdles we had at that time.
        And let me also assure you that there has been information
    in regard to any entity that participates in an SBA program,
    there is certain information that we will make sure is always
    available. There is some proprietary information we have to
    protect, but within that confine any organization that
    participates in the SBA is subject to oversight. I may disagree
    somewhat with the way the Ranking Member characterized the
    response, but we will work together to make sure that that
    information is made available to the Committee.
        Senator Ernst. Thank you.
        Chairman Cardin. Senator Hirono.
        Senator Hirono. Thank you very much, Mr. Chairman. And Mr.
    Syed, it is very good to see you. Do you have family members
    here today?
        Mr. Syed. I do. My wife and my son are right behind me.
        Senator Hirono. Very good. Thank you so much, because as
    far as I am concerned you should have been confirmed a long
    time ago, and I am glad that we now have this opportunity to do
    the right thing because it is really crazy that at a time when
    small businesses are in need of the support of the SBA that
    this position has been vacant for many years. And you are very,
    very highly qualified, to say the least, to take this position
    and to move the SBA.
        I am really glad, also, that the SBA Administrator,
    Isabella Guzman, did come to Hawaii. She spent an entire day
    meeting our small businesses and to be introduced to the
    entrepreneurs who really helped to move Hawaii's economy along.
        You are an immigrant, right?
        Mr. Syed. I am.
        Senator Hirono. So you are also an entrepreneur and you
    started your own business. Was part of the impetus for wanting
    to start your own business and be an entrepreneur part of your
    immigrant experience? Can you talk a little bit about what
    motivated you?
        Mr. Syed. That is a great question, Senator Hirono. You
    know, immigrants have a drive in the outside and they are
    always looking to see how they can go forward. And clearly
    having that energy, that I got to make the most of this
    incredible opportunity to make American home, plays a big role.
        And I will say, Senator, my story is only possible in the
    United States of America. I was born in Pakistan. I came here
    as an international student, to the College of Wooster in rural
    Ohio, so very close to that part of the state, and here I am,
    sitting in this room with incredible leaders for this
    opportunity.
        But clearly the path to entrepreneurship is tied to
    immigration. If you look at the San Francisco Bay Area, which
    is home to our innovation, and now we know it is spreading
    around the country, almost half of all founders who have
    founded startups were born outside the United States. And
    again, you can see this in all businesses of types, whether it
    is in Iowa or North Carolina, that immigrants play a big role.
        So part of my immigrant roots, that has been an extra sort
    of push for me, but at the end of the day it has also been
    about solving a business problem, creating jobs, supporting the
    communities that we serve. And I have had a civic track from
    the very early days, including from when I was in business
    school.
        So yes, it has played a role, but it has also been about
    solving business problems.
        Senator Hirono. Well, you have hands-on experience in doing
    that, and I completely agree with you that immigrants to come
    to this country--and I know that you know that I am one too--
    that you have a deep appreciation for the opportunities that
    this country affords, opportunities that would not have been
    available had we not come to this country with usually very
    little. I do not know about you but I think you come from
    humble beginnings as do I. But it is a major imperative to give
    back to a country that provided opportunities that we would not
    have had otherwise.
        So I have no doubt that you have a commitment to the SBA,
    and the fact that you stuck it out for the last 2 years, as you
    were prevented from being confirmed, is also a testament to
    your commitment.
        The last time you were here we did have a chat about how
    important it is to reach out to minority businesses. In Hawaii,
    that would be the Native Hawaiian businesses. And at that time
    I asked you whether you would be committed to work with me to
    support the various programs for Native Hawaiians, and I would
    say to the indigenous small businesses throughout the country,
    the Alaska Natives and the American Indian business people.
    Will you have that commitment?
        Mr. Syed. Absolutely, Senator, I will.
        Senator Hirono. Thank you.
        The SBA Office of the Inspector General OIG published its
    annual report focused on the top management and performance
    challenges facing the SBA. Many of those challenges would
    require the attention of the Deputy Administrator who is
    responsible for the day-to-day management of the agency. And
    yet with that kind of an important responsibility this position
    was left open for 5 years.
        Can you speak to how you would work to address these
    management challenges as Deputy Administrator, very briefly
    because my time is running out.
        Mr. Syed. So, Senator, I am an operator. I come to this
    job, if I am so lucky to be confirmed, from the business
    experience of building of relations, running organizations.
    First, like I always do when I start a new job, you want to
    evaluate, what the current state is. So I will spend some time
    understanding what are some of those challenges that we need to
    overcome and then work with the Administrator to address them.
        This is an agency that is in the front line of supporting
    small businesses. It is the most critical time as we are still
    undergoing this recovery. And so we need to make sure that we
    build the capacity, the muscle, the processes, our systems, use
    technology where it is appropriate, to make sure that have the
    back of our small businesses. So I am looking forward to doing
    that, if I am confirmed, and leverage all my operating
    experience as a businessman and bring that to the agency.
        And as you mentioned, this role has not been filled. In
    fact, my understanding is for most of 14 years it has not been
    filled. And I work at the State Department and I see the
    incredible support we get from our deputies.
        So there are a lot of thoughts I have. I am going to
    reserve the judgment until I actually get in the job. But
    absolutely, my focus will be to make sure we build the capacity
    of the organization.
        When you talk about modernizing, there is an opportunity
    for us to learn some lessons during the pandemic and see what
    we can improve as we move forward.
        Senator Hirono. Thank you very much. I look forward to
    working with you.
        Mr. Syed. Thank you, Senator Hirono.
        Chairman Cardin. Thank you, Senator Hirono. Senator Budd.
        Senator Budd. I thank the Chair for your kind welcome
    earlier, and the Ranking Member as well. Mr. Syed, welcome
    again. It is good to meet you and good to see your family here
    with you. I appreciate your background as an entrepreneur and a
    small business person and the job creation that you have done.
        Some concerns I have are about the potential impact of ESG
    policies on small businesses, which I think they could increase
    costs, regulatory burdens for hard-working entrepreneurs. I
    think these policies are often based on misguided science
    driven by political ideology rather than sound economic
    principles.
        So could you talk to us a bit about your views on the ESG
    and how you believe the government should approach this issue
    in regard to small business in particular.
        Mr. Syed. Senator, thank you for that question. You know,
    the way I look at this role and the agency's mission is to
    support small businesses. I will always optimize for that.
        You know, there is clearly an equity lens we need to have,
    and the equity lens is also about serving the underserved
    businesses, both about the regions, but as rural parts of the
    country or certain communities.
        But at the end of the day we are focusing on ensuring that
    we are helping small businesses succeed. That is where I would
    always optimize for, working with the Administrator.
        Senator Budd. So let me follow up on that. When you talk
    about equity or equality--I do not want to conflate the two;
    they are very different linguistically--but are you talking
    about equality of opportunity or equality of outcome?
        Mr. Syed. What I am referring to, Senator, is that
    everybody has a fair shot at succeeding. You know, we want to
    make sure that a rural business in North Carolina has as much
    access to the opportunity to, let us say, work with us and our
    programs as a business in the DMV area.
        I was, earlier in my statement, referring to the fact that,
    you know, I spent most of my time in the San Francisco Bay
    Area. If you drive 3 hours south of San Francisco, you go to
    Fresno, that place looks very different from Silicon Valley.
    And why is that? We have got to close the gap. That is the
    rural part of our state. A third of our state is the Central
    Valley.
        And so I feel very passionate that we have got to make sure
    that when you go out of the metro regions, you have got to help
    them rise. And there is so much opportunity for potential for
    us to get those businesses off the ground.
        So my view of equity is not just, obviously, communities,
    minority, Black and Brown communities, but also rural regions,
    veteran-owned businesses, women-owned businesses. Today is
    International Women's Day. We still have some ways to go to
    support women-owned businesses.
        So that is a much broader view. We are a diverse country
    and we have got to make sure that all boats rise.
        Senator Budd. Thank you. And I want to shift gears. I think
    the Chair and the Ranking Member have both mentioned the
    concerns with fraud, and especially the one that has been
    reported with many of the SBA's lending programs, in particular
    the COVID-era programs like PPP or EIDL. A May 2022 OIG report
    found more than 70,000 loans, totaling more than $4.6 billion,
    in potentially fraudulent PPP loans.
        The IG also found SBA did not have an organizational
    structure with clearly defined roles, responsibilities, and
    processes to manage and handle potentially fraudulent PPP
    loans, nor did they establish a sufficient fraud risk
    framework. A more recent estimate found that 1.4 million PPP
    loans, totaling over $64 billion, were likely fraudulent. A
    huge amount of dollars.
        Meanwhile, the SBA continues to move forward with proposed
    rules that would remove prudent underwriting standards,
    including weakening affiliation rules around the SBA's 7(a)
    loan.
        Mr. Syed, will you commit to work on rescinding the current
    lending proposed rules and ensure that adequate guardrails are
    in place to prevent future fraud and risky loans in SBA's core
    lending programs?
        Mr. Syed. Senator, as I said earlier in response to Senator
    Ernst's questions, I am committed to ensuring that we do
    everything in our power to fight fraud. It is unacceptable that
    so much of the public resource is not going to the deserving
    folks.
        I am not in the job yet. If I am confirmed, I look forward
    to evaluating, studying these things, understanding where we
    can improve things. I know that the Administrator has put in
    place more anti-fraud measures, but there could be more
    opportunities for us to do better.
        So that is what I will commit to you. Obviously, we look
    forward to addressing the IG concerns, again if I am confirmed.
        As I mentioned earlier, as a businessman who has often done
    consumer businesses, I have zero tolerance for fraud. It is
    just something we can do better. There is the role of
    technology. There is the role of processes, workflows. And
    again, the agency had to stand up at a very difficult time, but
    we can certainly evaluate where we can do better.
        Senator Budd. Thank you.
        Mr. Syed. Thank you, Senator.
        Senator Budd. Mr. Chair, I yield back.
        Chairman Cardin. Thank you, Senator Budd. Senator Coons.
        Senator Coons. Thank you so much, Chairman Cardin and
    Ranking Member Ernst. It is great to be back, to have a quorum,
    to be holding a confirmation hearing, God willing, to be able
    to move forward. The American people expect us, on the Small
    Business Committee, to work together to resolve our
    differences. This has been one of the most productive
    committees I have served on in my dozen years here, both
    legislatively and substantively, and Mr. Syed, I am very
    hopeful that we will at long last see you confirmed to be the
    Deputy Administrator. I think your personal story, as you said,
    is one that could only happen in America. Your experience as an
    entrepreneur and a business executive, someone with IT skills
    and capabilities makes you, in my view, unquestionably
    qualified for the job.
        The SBA needs help. I mean, it needs, as you have heard
    from my colleagues, oversight, engagement, advocacy. We have
    asked the SBA, in recent years, to do things it has never done
    before, at a scale and speed it has never done before, and the
    data that I see about small businesses saved, business
    closures, job loss avoided, are really impressive. Was it all
    perfect? No, because we knowingly agreed that what we needed
    was speed of response in the face of a once-in-a-century
    pandemic that shut down most of our economy.
        I did want to just ask you a few questions if I could. As
    the Special Representative for Commercial and Business Affairs
    now, at the State Department, you help our businesses export.
    Every one of our states, our businesses, small, medium, and
    large, look to be able to export, whether it is chickens from
    Delaware, perhaps other--Maryland and Delaware, big chicken
    exports. I can imagine that the Senator from Iowa might be
    passionate about pork. Maybe some other elements of the
    barnyard. You know, there is technology. There are services.
    There is manufacturing. There is agriculture.
        How will that experience that you are currently having help
    inform your work supporting small businesses in all our states
    as we seek to continue to grow our exports?
        Mr. Syed. Absolutely. Senator, thank you for that.
        You know, I represent the U.S. [unclear] Department, and I
    have done a lot of work in helping advance deals. What I have
    seen is commercial diplomacy a lot of times is focused on
    larger companies. While I am proud of United States companies
    that are large creators of jobs, but there is an opportunity
    for us to do more for the next envision of large companies. And
    the lens that I would bring to the job, if I am lucky enough to
    be confirmed, is how do we steer some of those resources more
    towards midscale companies?
        I am reminded of one story, if I may briefly share. I
    traveled to just outside Boise, and I met this company called
    IVI Systems. They make storage technology for root produce, for
    onions and potatoes--speaking of vegetables. And they have had
    a business that does very well in the Northwest and they are
    looking to export, and with Russia's aggression in Ukraine and
    the resultant food insecurity challenges now they can supply
    this equipment in India and Africa to extend shelf life for
    produce. And they are seeing their business rise. It is
    absolutely conceivable a company like that can become a
    powerhouse globally.
        Now they do not know the resources that exist today in
    various agencies, including at State. So we have been really
    trying to democratize access to these resources and our
    programs that those kind of companies.
        Today, less than 1 percent of small businesses export. We
    want to make sure that we succeed in the nation's private
    sector, which is the biggest exporter in the world, and we have
    to bolster that and make sure more companies are doing that.
        So I will bring the global lens of global marketplace and
    the opportunity that exist there. In most of our allies and
    places, people still want to do business with U.S. companies.
    We have got to show up. And there is a role for agencies to
    play here, whether it is SBA--of course we work with Commerce
    very closely and FCS and State. You know, my team does a great
    job as well.
        So I look forward to bringing that perspective to this
    role, if I am so lucky to be confirmed.
        Senator Coons. Thank you. I was just on a bipartisan codel
    to Zambia, South Africa, Botswana. Vibrant, rapidly growing
    economies that want American businesses. There is a small
    bridge manufacturer in southeastern Pennsylvania. They started
    building the bridges for Patton's Army in the Second World War,
    so they have small, modular bridges that can be used for minor
    tributaries. They do their zinc galvanizing in Delaware. They
    export out of New Jersey. They are manufactured in
    Pennsylvania. They have gotten contract after contract, 300
    bridges in DRC, 150 bridges in Ghana. We have enormous
    opportunities on the continent of Africa. I would love to work
    you on that.
        I had another question about IT upgrades, but I think I
    should yield my time, Mr. Chairman, in the interest of
    advancing your nomination. Delightful to be with you today. I
    look forward to reinvigorating Committee.
        Chairman Cardin. Thank you, Senator Coons. Senator
    Hickenlooper.
        Senator Hickenlooper. Great to see you again and finally be
    able to move forward on your nomination and get you confirmed.
    Obviously, after spending decades of advocating and helping
    grow underserved entrepreneurs, you are in many ways uniquely
    suited for the job that is waiting for her, and has been
    waiting for you.
        Immigrants like yourself have helped start almost one-fifth
    of the Fortune 500 companies, which is an amazing statistic.
    They have founded more than half of America's billion-dollar
    startups. And yet research indicates that immigrants really do
    not understand, are not aware of what is available, of what
    resources are available.
        What can you do at the SBA to make sure that that
    information is conveyed?
        Mr. Syed. Yeah. Senator, what you said about awareness of
    our programs, that is something that I feel we can always do
    more when it comes to a program. We have incredible resources.
    We have programs. We have amazing public servants. And I find
    that there is a lack of awareness in many communities. It is
    for sure the case with immigrants, and it is also the case with
    underserved regions. Folks just do not know.
        And one of the things that I have done at State in my
    current role is we just took what we have but we doubled down
    on telling the story of all that we had. And I have gone around
    the country saying there are 1,500 economic officers at our
    missions and embassies around the world. Part of their job is
    to help our companies succeed. Most people do not know that. We
    have to keep talking about this. We talked about customer
    experience, make sure we communicate.
        So if I am lucky enough to be confirmed, I will make sure
    that we are telling the story, the Administrator is out, and
    she is getting the message out as well, on the road. But we do
    need to raise awareness, and there are tools now where we can
    do that.
        Senator Hickenlooper. Great. Perfect.
        Today is International Women's Day. It feels like an
    important day to note that women-led startups received only 1.9
    percent of venture capital funding last year, 1.9 percent. It
    is appalling. Entrepreneurs in rural and urban communities also
    struggle to get their fair share. They are completely ignored
    in many venture circles.
        What can the SBA do to offer these folks more affordable
    access to capital for these underserved borrowers?
        Mr. Syed. So, Senator, obviously, like you just said, less
    than 2 percent of the VC dollars go to women firms. I mean, we
    saw in Silicon Valley, in my own experience, we had a long way
    to go to ensure equity when it comes to women entrepreneurs and
    founders.
        SBA does have some programs. I am looking forward to
    understanding better what we can do more there.
        But one of the things I feel strongly about is that we have
    to be more intentional in connecting with those stakeholders.
    So we are hearing from them. You know, one of the things that I
    was lucky enough to do in the last couple of years is get to
    know a lot of our resource partners, the various organizations,
    and there is some good feedback that they provided us that can
    inform our outreach and our engagement with these communities.
        We serve a very, very diverse set of stakeholders, and we
    have to be all our ears open to get the feedback and see that
    we are, frankly, reaching them where they are, modernizing that
    approach. I mean, just in the last few years, after the
    pandemic, the country has changed. It has shifted, to whether
    it is women entrepreneurs or immigrant entrepreneurs, it is an
    opportunity for us to think fresh about our approaches to the
    outreach and engagement with these communities.
        Senator Hickenlooper. Great. I am going to ask another
    question but I am going to let you respond to it--I will just
    submit it because I want to make sure that we get everybody's
    questions in. But digital workflows using artificial machine
    learning, these techniques can make routine processes more
    efficient and help identify fraud, improve customer service. So
    when you get time, I think it is important to note out how can
    we integrate some of those new technologies to make sure that
    the SBA is more successful and more efficient.
        But do not answer it now because I am going to yield my
    time back to the Chair.
        Chairman Cardin. Senator Rosen.
        Senator Hickenlooper. Good luck.
        Senator Rosen. Well, thank you, Mr. Chair, and thank you,
    Ranking Member Ernst. It is nice to be back, I agree. And I
    appreciate Senator Coons for mentioning trade and export
    because I am Chairwoman of the Tourism, Trade, and Export
    Subcommittee on Commerce, so we have a lot to do. But today we
    are going to focus on Families First, because it is
    International Women's Day, and we know that women are the
    primary caregivers.
        But I am going to make one last plug. Nevada-owned women
    businesses, we have led the nation in women startups for the
    last 10 years, so I am pretty proud of that.
        But one thing the SBA does, and Ranking Member Ernst and I
    have a bill here, we want to be sure that we are expanding the
    loan eligibility for childcare providers, because in Nevada
    parents of nearly 75 percent of children under the age of 5 do
    not access to a licensed childcare provider, whether it is
    because of long waitlists, lengthy distances, high costs. There
    are so many things that can make childcare unavailable or
    unaffordable. And really, in many cases in my state childcare
    is more expensive than a year of college tuition.
        And so currently only for-profit childcare providers have
    full access to SBA's loan products, while nonprofit providers
    only have access to SBA's microloan program, which is capped,
    of course, at $50,000. Other loan products such as the 7(a) or
    504 loan programs, they are just off limits to these
    businesses.
        So this is really blocking access to capital for nonprofit
    childcare providers to establish those affordable facilities or
    expand existing ones. There are childcare deserts all across
    this nation, urban and rural. It is something the Ranking
    Member and I are passionate about. So it is why yesterday we
    reintroduced the bipartisan Small Business Childcare Investment
    Act. It is going to allow these nonprofit small businesses, the
    childcare providers, to participate in SBA loan programs.
        And so, Mr. Syed, if confirmed, will you commit to working
    with our offices to advance this effort to provide nonprofit
    childcare providers access to all the SBA services so we can
    find good ways to care for our families?
        Mr. Syed. Senator Rosen, thank you for sharing that. If I
    am confirmed, I look forward to working with you and Senator
    Ernst. I know this has been an important subject, and I hear
    you. There is clearly a need for that, so we will do.
        Senator Rosen. Thank you. We are going to move on to, of
    course, small businesses while you are here. And for those who
    do not know, over 99 percent of businesses in Nevada are small
    businesses, and entrepreneurs face numerous hurdles in starting
    a business, developing a business plan, registering the
    business, understanding compliance requirements. Depending on
    what that is you have to maybe get permits, licenses, and more.
    I have heard more and more from Nevadans about the complex
    process of getting their business off the ground and just not
    knowing really how to navigate what they need to do.
        So it is critical, I believe, that the Federal Government
    create a more streamlined process to cut through this red tape,
    make it easier for those entrepreneurs to start their business
    more easily. So I introduced the bipartisan One Stop Shop for
    Small Business Licensing Act with Senator Capito, and that is
    going to require SBA to create a centralized website for state
    and local licensing and business permitting information,
    materials for small businesses that they can really just have
    that one-stop shop to go to so they can do what their passion
    is. This is really building on the success of similar
    legislation setting up a portal for Federal regulations that
    passed last year.
        So, Mr. Syed, if confirmed, what actions do you plan to
    take to ensure it is easier for entrepreneurs to navigate the
    bureaucracy and the hurdles to get their businesses up and
    running?
        Mr. Syed. Senator Rosen, as an entrepreneur myself I can
    tell you when you are starting a business, yeah, you are often
    in the dark about some of the basics, like where do you go. And
    that information is not readily available, even though the
    information exists. So it is a matter of communicating.
        I obviously am not in the job yet. If I am confirmed, I
    will study, assess, evaluate the proposal that you have here
    and see how we can streamline this. Some of this stuff sounds
    pretty simple. It should be doable. And again, the broader
    theme here is it about raising awareness of what we already
    have, making it simpler to access information with the tools
    and technology we have today. It should be something we should
    be doing more of.
        Senator Rosen. Yes, I agree. Using the front-end technology
    to point somebody to one space. We are used to using apps and
    doing all this, so we should be able to make it easy for people
    to navigate. Thank you.
        Mr. Syed. Thank you, Senator.
        Chairman Cardin. Senator Duckworth.
        Senator Duckworth. Thank you, Mr. Chairman, and thank you,
    Ranking Member Ernst, for this hearing. Mr. Syed, it is good to
    see you, and I am glad that we are finally moving your
    nomination once again.
        One of my top priorities is helping small businesses,
    especially those in historically underserved communities, and I
    want to make sure they can access resources and capital to grow
    their businesses.
        As you know, the SBA should plan an important role in
    helping make sure Federal resources reach these communities
    that have traditionally been overlooked and ignored. The
    agency, with the help of Congress, has made progress in this
    effort. However, I know that more can be done to make sure that
    Federal resources are successfully reaching the entrepreneurs
    and small businesses who truly need them the most.
        Given your experience in the Obama administration
    conducting outreach to communities of color through your role
    on the Advisory Commission on AAPI, how do you plan on
    improving SBA's outreach to underserved communities and
    communities of color, especially where SBA's resources have
    traditionally struggled to reach?
        Mr. Syed. Senator Duckworth, thank you, and thank you for
    your support.
        You know, this has been a passion of mine. You see the
    theme that I have shown up in places that I often drive by. I
    have also shown up in communities that often are ignored.
        You know, I served on the President's AAPI Commission,
    President Obama's AAPI Commission after the Great Recession,
    and one of the stats that stayed with me forever--and just
    speak of the Asian American community--that when an AAPI lost a
    job she or he took the longest than anyone else to be able to
    get back into the workforce, because the networks were insular.
        And so every community has their fair share of challenges,
    and we have to see them, and we have to think about how do we
    address. Again, we have the resources. We have the programs. We
    have the heart. And this is something we all can agree on, this
    Committee and obviously the [unclear], and we need to just make
    sure that we are leaning in more. If I am confirmed, I would
    look forward to what the programs are. I bring the experience.
    I bring that network, as you know very well from the AAPI
    community, from the Black and Brown communities. Many of them I
    have gotten to know, during my work as an advocate in
    California for small businesses. Also, in my job today at the
    State Department we have a pretty strong outreach to business
    communities that are somewhat disadvantaged.
        So that will be a priority for us. It is the President's
    agenda as well, and that is core to his policies.
        So again, I think we need to recognize that every community
    has their set of challenges, and they are unique at times.
    Again, whether it is women, whether it veteran-owned
    businesses, AAPI-owned businesses, Black and Brown communities.
    So I commit to you that if I am in the job I will work with the
    Administrator to be very alive to that reality and do our best
    to address those communities' concerns.
        Senator Duckworth. Thank you. And building on that, I am
    also interested in strengthening these businesses and their
    relationships across the world, not just here domestically. I
    would like to hear a little bit about your recent role serving
    at the Department of State as the Special Representative for
    Commercial and Business Affairs, and if you have taken anything
    away from that position that could particularly help in shaping
    SBA's role in assisting American small businesses' access
    overseas markets or to build stronger supply chains with allied
    partners who may not be domestic partners.
        Mr. Syed. Absolutely, Senator. Less than 1 percent of U.S.
    small businesses export, and we were just talking earlier that
    there is so much opportunity. I see these gems in communities
    around the country who can be really solving major problems in
    the world exporting.
        I also see a role of diaspora communities. You know, AAPI
    is one community that roughly half of the AAPIs [unclear] out
    to the United States. They still maintain networks for the
    critical business relationship. In Southeast Asia we see that.
    When I was at APAC we talked about the role of diaspora in
    bridging that potential for companies to export, leveraging
    their business networks, familiar networks, and so forth.
    Again, there is incredible opportunity. I bring that lens to
    this job if I am so fortunate to be confirmed, to make sure
    that we are leveraging all these assets we have, relationships
    we have in the communities, to be able to do more business
    abroad. We have to show up.
        You know, one I say all the time--and I get feedback from
    our allies when I go around the world promoting business--I
    say, ``What can we do more?'' They say, ``You have to show up
    more. You have to be more aggressive.'' Because sometimes we
    are getting out-competed, and so we have to be more mindful as
    a nation to build up our sector for the next generation.
        Senator Duckworth. Thank you. Very quickly while I still
    have time, I want to express my concern over SBA's proposed
    rule on small business lending companies. Specifically I am
    concerned that allowing fintech or financial technology
    companies to participate in SBA lending without any additional
    oversights or safeguards could threaten the longstanding
    integrity of SBA's loan programs.
        I hope that if you are confirmed to this new role you will
    work with my office and the Committee here to address our
    concerns with this new policy allowing fintechs access to the
    loan programs.
        And thank you, Mr. Chairman, and I yield the remainder of
    my time. Actually, I am over time.
        Chairman Cardin. Thank you, Senator Duckworth.
        Senator Ernst and I have jointly sent a letter to the SBA
    concerning the proposed rule, so we join you in that concern
    and we will certainly share the information we get from the
    SBA. I just wanted you to know that.
        I just really want to follow up, for the Committee briefly,
    on the concerns about going after those who have committed
    fraud or those who have made mistakes in regards particularly
    to those programs established during the COVID-19 pandemic.
        I just want everyone to understand there is joint
    responsibility here between Congress and the SBA. We
    intentionally made decisions during the creation of these
    programs to allow the money to get out quickly. I will just
    give you a couple of examples.
        We were using the 7(a) lenders for getting the money out
    under the PPP program, and we knew that a lot of the smaller
    businesses did not have existing relations with banks. If we
    are going to be able to get that money out quickly, all of the
    regulatory requirements of the banks would make it very
    difficult for those loans to get out. So we intentionally--this
    was a decision that we made in this Committee, to relax
    dramatically the requirements for the banking community in
    order to make loans and held them harmless from areas if they
    did not have the information that later proved that the
    borrower, for example, that anti-laundering and those types of
    provisions. We eased up on that a little bit.
        The second thing, if I remember correctly, is that we did
    not require documentation for the needs requirements in most
    cases. We just allowed it to be self-determined by the
    applicant. And a lot of the applicants were using third-party
    sources that did not bother even asking the applicant about the
    needs criteria, and we ran into challenges there. That was an
    intentional decision we made, Democrats and Republicans. We
    haggled a little bit because we argued as to what level the SBA
    should be reviewing the loans. Some of us took a lower level
    than others, but we reached a compromise, and it was a
    bipartisan compromise.
        I just mention that because the SBA--these programs were
    administered, I think, very, very well in achieving the
    objective of keeping small businesses alive during the
    pandemic. And if fraud was committed we want to go after the
    people who committed fraud. There is no justification for
    fraud.
        So we want to make sure the SBA has all the resources and
    tools they need in order to go after those who abused the
    system. And you will find that I think every member of this
    Committee will be wanting to give you the power and tools and
    resources you need in order to be able to go after those who
    have committed fraud.
        But I just really want to make it clear that the SBA was
    working with a different set of rules during the COVID-19 than
    would have normally been applied, and new programs, and it was
    a challenge on administration.
        Senator Shaheen.
        Senator Shaheen. Well thank you, Mr. Chairman and Senator
    Ernst, and thank you to Mr. Syed for your willingness to
    continue to be considered for this position.
        As Senator Cardin pointed out, small businesses across this
    country have had a very challenging last 3 years, as you
    appreciate, and in New Hampshire it has been no different. One
    of the things that has helped our small businesses get through
    this last period has been the district office in New Hampshire,
    which has been critical in providing support to our small
    businesses and ensuring that they know where to look for
    resources.
        Will you commit to supporting district offices with the
    resources, information, and clear communication that they need
    in order to best serve their local communities?
        Mr. Syed. Senator Shaheen, we have talked about the
    importance of engaging with small businesses in communities,
    rural communities, and communities that are far from metro
    areas. So I share your priority in making sure that we are
    present.
        I commit to you, if I am confirmed, to look at what our
    country's sourcing is for SBDCs and how we can be supportive.
        Senator Shaheen. Okay. Not just the SBDCs but I am talking
    about the district office.
        Mr. Syed. Sorry. My apologies. The district offices, yes.
        Senator Shaheen. I think there have been some
    communications from SBA in Washington that have been confusing
    to district offices over the last couple of years and have
    raised concerns that the operating budgets that they need to
    continue to reach out to the small business community and
    states may not be there because of changes in the way
    Washington views the role of the district offices.
        So as the Deputy Administrator who would be focused on
    operations of the SBA, will you commit that this is something
    that we need to do and ensure that our district offices have
    the resources they need?
        Mr. Syed. Senator, I commit to you that if I am confirmed,
    I will review this work with the Administrator and the SBA team
    to see that those district offices are providing the proper
    resources.
        Senator Shaheen. Okay. That sounded a little bit like a
    caveat to me, so I am going to come back to you after you have
    had a chance to review the situation and ask you what the
    commitment is to ensure that those district offices get the
    support they need.
        Mr. Syed. Thank you, Senator.
        Senator Shaheen. One of the other areas that I have been
    very focused on that has been important in New Hampshire is
    exports, and the STEP program has been very important in
    supporting our small businesses as they try and export. In
    2021, New Hampshire saw a 14 percent increase in our exports,
    and I attribute the STEP program to helping with that. It is
    legislation that I introduced way back when, and I think there
    is tremendous interest in the program. But there are some
    concerns about how to make it work better. One of those is a
    concern that I hear from some of our small businesses about a
    lack of flexibility in using the STEP funds.
        So I know that you have been spending some time in this
    interim working on trade at the SBA. Can you talk about what
    your experience has been with the STEP program, and how you
    think we might make it work better for small businesses?
        Mr. Syed. Senator, we had a discussion today quite a bit
    about export potential. You know, less than 1 percent of small
    businesses export, and there is so much opportunity for us to
    get those businesses to be solving major challenges in the
    world with their products and services.
        I have not had any experience with the STEP program in my
    role at the State Department. We have our own set of commercial
    resources that we have, which are pretty tremendous. And I do
    think the SBA can be part of the intergovernmental partnership.
    It is not as active as it should be.
        You know, we talked earlier about there are 1,500 economic
    officers around the world. If I am confirmed, I want to make
    sure they are educated about what SBA's programs are, how could
    STEP grants actually be part of the tools we can use to promote
    small businesses exporting.
        That is something I am very passionate about. I think that
    is probably one of our most untapped growth potentials as a
    country. We just need to do more there, and I look forward to
    learning more about what are some of the options there are with
    existing resources and how we can also work together with this
    Committee to, frankly, explore whether there are more
    opportunities for us to get more resources to support these
    companies.
        In general, what I see is just a lack of awareness on the
    part of small businesses to even know that there are these
    opportunities that they can get to get help for a trade
    delegation, or to get on a delegation. They do not even know
    where to go. And I have shown up in some of these communities.
    I went to Atlanta, Georgia. I went to Boise. I went to
    Frederick, Maryland. And folks are surprised to hear that there
    are all these programs that exist. That is a common theme I
    hear, in general, and I think we just need to close that gap as
    quickly as we can, you know, especially as we are going through
    this recovery. And there is definitely an energy, especially in
    the underserved areas, for these businesses to go abroad, and
    we see massive need where we can plug in as a small business
    community.
        Senator Shaheen. So do you see a willingness on the part of
    the commercial service state to work with SBA on this kind of
    outreach and making businesses more aware of what is available?
        Mr. Syed. So, Senator, I can speak for the economic
    officers at the State Department. FCS obviously is a Commerce
    Department entity. But I can also say that we work with them
    very closely. They all would be happy to get more support from
    more colleagues in Washington. I mean, that is just the
    reality. And I go to some of these posts, and by the way, many
    of these countries are now smaller posts that are punching
    above their weight in terms of how much business there is to be
    done in these smaller countries, or erstwhile smaller
    countries.
        So they would welcome more support from more agencies from
    our Federal Government, where we can partner, whether it is FCS
    or State Department's economic officers.
        Senator Shaheen. Thank you. Thank you, Mr. Chairman.
        Chairman Cardin. Thank you, Senator. Senator Markey.
        Senator Markey. Thank you, Mr. Chairman, very much. Thank
    you, Ranking Member Ernst. And thank you, Mr. Syed, for your
    patience with the senatorial confirmation process. It is a
    tribute to your ongoing commitment to public service that you
    are sticking with this process, and we need people of your
    superb professional training, background, experience to be
    serving our government, so we thank you so much. You are
    extraordinarily well qualified for this job, and my hope is
    that we can get you a vote as quickly as possible.
        You know, we need you on the job, especially at this time
    in our country, and my hope is that we can get that done. With
    record numbers of people applying for small business loans, we
    need the full team on the floor because our economy is driven
    by small businesses, so we need you there.
        On the issue of women and minority businesses, I am sure
    you have already discussed it in the course of this hearing,
    but I would love to have your views on it. You know, through
    the leadership of this Committee we really did try to make sure
    that there would be funding there for minority and women
    businesses during the COVID crisis. So how do you see the
    terrain right now, from your perspective, and what would you
    recommend that we do in order to make sure that not only keep
    them in the game but enhance their overall role?
        Mr. Syed. Senator Markey, a lot of my work as a small
    business advocate has been in communities that are underserved,
    in Black and Brown communities. I feel, in this day and age, so
    many fellow Black Americans or Hispanic Americans are often not
    getting access to the resources. There is an awareness gap, but
    there is also--we just have not been as aggressive in our
    outreach and understanding what the particular needs are.
        I have had the opportunity to get to know some great
    organizations who are present in the ecosystem and understand
    some of the concerns that we can hopefully address. But I will
    work with the Administrator. I know this has been a priority
    for her. It is also a priority for the President, to ensure
    that at this moment, which is a unique moment for our country,
    when we are going through this incredible recovery--and we also
    saw the disparities in these communities frankly exposed during
    the pandemic.
        We saw some of the businesses that are in underserved areas
    never came back. You know, one stat I read that almost a fourth
    or a fifth of Black-owned businesses that were just down, they
    just never came back after the pandemic. That is just
    phenomenal to hear that.
        We also heard about the state of entrepreneurship in rural
    communities in the areas with about 20 percent----
        Senator Markey. Let us hear that again. Let us say that
    number again, so everyone can hear it.
        Mr. Syed. I mean, again, if I am not mistaken, the number
    that I have seen is that almost one-fourth of Black-owned small
    businesses just would never come back from this pandemic. They
    disappeared.
        And again, we saw this challenge in all communities, where
    some communities were impacted more. So again, it is a reminder
    for us, as a country, that we have got to do more, and there
    are resources available. There is obviously the great work of
    this Congress. I, myself, engaged with those resources as a
    small business owner, and I think we need to be more
    intentional. We need to continue to prioritize that this is a
    priority for the Administrator, it is for the President, and if
    I am lucky enough to be confirmed, I will augment that capacity
    to make sure we engage with the communities.
        Senator Markey. Thank you. And I want to move on--I do not
    have much time--but to the Small Business Innovation grants and
    the Small Business Technology Transfer grants, SBIR and STTR.
    Massachusetts has received 25,000 of these innovation grants,
    and it has helped us to create hundreds of thousands of jobs in
    the state. Just last year we received 615 grants, valued at
    $373 million, going into entrepreneurial companies, creating
    thousands of additional jobs. And it happens in states all
    across the country. I mean, this is the program that targets
    those small business people, and it creates an ecosystem of
    innovation for Massachusetts and the other 49 states.
        So will you commit to fighting to continue to protect and
    enhance those two programs?
        Mr. Syed. So Senator, obviously I come from the innovation
    ecosystem. I am a product of that track as a career. And there
    is a role that SBIR and STTR programs have played in spurring
    innovation. If I am confirmed, we will continue to make sure
    that we are supporting these programs and their implementation
    as well around the country.
        Senator Markey. Yeah, and I will just finish up by saying
    that there is increasing concern, which we should have about
    monopolies across the board, concentration of power, which
    ultimately harms smaller businesses. It is the greatest warning
    that Adam Smith had in his works, just talking about monopolies
    and what they did to innovation, small businesses. So I just
    think we have to keep an eye on that, and if confirmed, I would
    hope that you would do so as well, sounding the warning.
        Thank you, Mr. Chairman.
        Chairman Cardin. Thank you, Senator Markey. Senator Ernst.
        Senator Ernst. Yes, thank you, Mr. Chair, and we have
    covered a lot of different topics today, everything from
    childcare with Senator Rosen, a lot of fraud topics. The
    Chairman had stated we have joined together on a letter to SBA
    concerned about the lending programs and the involvement of
    fintech, a lot of concerns there.
        But one thing I wanted to come back to, when we talk about
    the underserved communities as well is that we also have those
    underserved communities that are located in our rural areas,
    and oftentimes the focus does tend to be on more urban centers.
    I come from a very, very rural, economically challenged
    community.
        And so there are a lot of deserving rural communities that
    we should be focusing on, so I do hope that moving forward,
    whether it is small business government contracting
    opportunities, lending programs, whatever it might be, that we
    also not only look at our communities of color, maybe in more
    urban settings, but that we also look towards those
    economically challenges areas all across the United States in
    our rural communities.
        So hopefully you will have the opportunity to, if
    confirmed, to come out and visit some of these rural
    communities and see the challenges that they face as well.
        Mr. Syed. Senator, if I may say very quickly, I look
    forward to that. I am passionate about it. My work in
    California has been in the Central Valley, which is the rural
    part of our state, very similar to parts of Iowa. So that is
    something that is very near and dear to my heart, and I
    certainly look forward to working with you, if I am fortunate
    to be confirmed.
        Senator Ernst. Thank you very much. And thank you, Mr.
    Chair. This was a very productive discussion, I think, today,
    and I look forward to serving in this next Congress with you.
        Chairman Cardin. Well, thank you. I believe one of our
    members is on his way here, so I am going to hold for a moment
    or two. But let me let you know, Mr. Syed, that this Committee
    would like to get the input from the Deputy Administrator, or
    once you are confirmed, on what additional legislative tools
    you might need in order to deal with enforcement and going
    after those who have misused the system. So if there are
    additional tools that you need, we would want that information
    made available to this Committee.
        Secondly, Senator Ernst and I are looking at some of the
    programs that have not been authorized for some time, and would
    appreciate a rather prompt review by the SBA as we consider
    legislation. In this Congress, we know that you are always
    running into an election cycle, so the sooner legislation can
    be put together, the better chance we have of moving it along.
        And the good news about small business is we think we can
    work in a bipartisan manner on the small business legislation.
    So we appreciate your prompt review of the different resource
    partners--we have already talked about that--the certification
    programs that are handled under SBA, the offramps that are
    available there. We hear concerns all the time about whether
    the offramps are adequate enough to allow transition. We have
    certification issues in regard to the women-owned businesses,
    8(a) businesses, et cetera. Those are issues that would be of
    interest to us.
        We have the financial tools themselves that are not all
    consistent, as we know now, on some of the underwriting issues
    under the rule that has been proposed. But we also had the
    Community Advantage, which is still a pilot program, extended
    for 2 years by the Administration.
        We are going to need input as quickly as possible on a lot
    of these programs, so we would appreciate you giving prompt
    attention to those matters so that we have an opportunity to
    legislate where it is needed in this Congress. So please
    understand that. That would be an important part for us.
        Mr. Syed. Senator, obviously if I am lucky enough to be
    confirmed, and obviously the timing is also going to be a
    factor there, I will be prompt in providing you with that
    review, working with the Administrator closely.
        Chairman Cardin. Now after all the requests that we have
    all made for you to do, do you still want to go forward with
    this thing? [Laughter.]
        Chairman Cardin. That was a rhetorical question.
        Mr. Syed. Well, I chose not to say more on that.
        Chairman Cardin. If you do not mind, we are going to pause
    for a moment and see if Senator Hawley is on his way. If he is
    then I think we will hold and give him a chance.
        I will point out--and I would do this at the end of the
    hearing--that Senator Ernst and I have arranged for a tight
    schedule in an effort to try to expedite the Committee's
    consideration. We will ask that all questions for the record be
    due by 6 p.m. tomorrow. That is Thursday, March 9th. And we
    would request that responses be due back to the Committee by
    Tuesday, March 14th.
        So, Mr. Syed, I hope we are not interrupting any of your
    weekend plans, but hopefully these are not going to be that
    difficult, but we would ask that you give these responses by
    next Tuesday so that we can try to accommodate consideration of
    your nomination in the Committee.
        [Pause.]
        Chairman Cardin. It reminds me of a story, when I first got
    to the United States Senate, about a Senator who had called the
    Democratic cloak room to say that he was on his way, would they
    please hold the vote open so that he could make the vote. And
    they asked where he was and he said he was at the airport. So
    we all assumed he was at the D.C. airport, at the Reagan
    Airport. He was at the Boston airport. So it took a little time
    for Senator Kennedy to get there. I will not tell you who it
    was.
        I think Senator Hawley is a little bit closer than that.
        [Pause.]
        Chairman Cardin. Senator Hawley, at your convenience, the
    floor is yours for as long as you would like to take it.
        Senator Hawley. Thank you very much, Mr. Chairman, and
    thank you to the Ranking Member, Senator Ernst. Thanks to the
    witness too. I apologize. I have come from another hearing
    where I was the Ranking Member.
        Let me, Mr. Syed, say thanks for being here again today. It
    has been a while since we talked last, and a lot has happened
    since then. I imagine you have been asked about a number of
    these questions, but I just want to make sure that we have
    covered the waterfront on this. Let us talk about Emgage Action
    and the statements they made regarding the State of Israel, so
    we can get this satisfied, these questions fully answered. And
    again, I will take a look at what you have said to other
    citizens.
        As you know, Emgage Action made a number of statements
    about the State of Israel. You have served on their board. What
    would you say about the statements that this organization, on
    whose board you served, made, and how would you separate
    yourself from them?
        Mr. Syed. Senator, good to see you. You know, my
    relationship with the Jewish community, my work with Israel as
    a partner, both at the State Department and as a businessman
    all my life, I think speaks for my take on this issue. I have
    worked with Israel-based companies. I mentored Israel
    entrepreneurs my entire life. In my current role as a public
    servant I am advancing U.S. commercial interests around the
    world, including partnering with Israeli entrepreneurs. And so
    I think that is what I stand for.
        I am not going to be able to speak for Emgage's position on
    this. I have clearly shared with the board--I am sorry, with
    the Committee--in the previous process as well as to where I
    stood on the questions that were asked of me.
        Senator Hawley. So you say you cannot speak for Emgage
    Action, so let me just ask you your own view. Emgage Action has
    said that Israel is an apartheid state. You do not believe
    that, do you?
        Mr. Syed. Senator, I have been very clear about my
    positions. I have not spoken--my position on Israel is I have
    engaged with Israel. At the State Department, I am engaging
    with Israel as a senior----
        Senator Hawley. Can I just get a yes or no? This should be,
    I think, pretty easy. Is Israel an apartheid state?
        Mr. Syed. It is a specific term. I do not believe it is an
    apartheid state. And so that is--again, my work and how I work
    with Israeli businesses and entrepreneurs speaks for how I am
    treating that ally of ours.
        Senator Hawley. Okay. Emgage Action issued a statement of
    support after a House member equated Israel and the United
    States to Hamas and Taliban terrorist organizations. Do you
    think that Israel is a moral equivalent of a terrorist
    organization?
        Mr. Syed. Senator, as I said earlier, I am not speaking for
    the organization.
        Senator Hawley. No. I am asking you.
        Mr. Syed. Those are not my views.
        Senator Hawley. Good. I am just looking for a yes or no.
    These are meant to be easy questions, super easy.
        Mr. Syed. Those are not my views.
        Senator Hawley. Okay. So the answer is no?
        Mr. Syed. The answer is no.
        Senator Hawley. Okay. Good.
        Emgage Action has issued a statement calling for a
    ceasefire in which they said that the current state of affairs
    is not a case of both sides being responsible. The State of
    Israel is an occupier when it comes to the Palestinians. Do you
    agree with that?
        Mr. Syed. Senator, let me just say this, and I am happy to
    clarify further. But my entire career is I have engaged with
    the Jewish community, as I mentioned earlier. I have engaged
    with Israel as a business person. That speaks for my record.
        Senator Hawley. Yeah, but can we just answer my question? I
    mean, I heard all that, but my question is, do you think that
    the State of Israel is an occupier?
        Mr. Syed. Could you elaborate, ``occupier''?
        Senator Hawley. No. I am reading to you from Emgage Action,
    quote, ``This state of affairs is not a case of both sides''--
    they have that in quotation marks--``not when Palestinians are
    occupied and the State of Israel is the occupier,'' end quote.
        Mr. Syed. Senator, I am going to speak for what I believe
    in, what my values are.
        Senator Hawley. Okay. Yeah.
        Mr. Syed. My values are that I have worked with Israel, I
    have advanced the commercial interests with Israel----
        Senator Hawley. But do you agree with that statement? Just
    a yes or no. I just trying to give you an opportunity to----
        Mr. Syed. That is an Emgage statement, Senator.
        Senator Hawley. I know that. That is why I am asking you if
    you agree with it or not.
        Mr. Syed. Senator, I am not going to be able to speak for
    Emgage's statements. I am just not going to speak for all my
    views, and again, my views on Israel and my work with the
    Jewish community in the United States and around the world, I
    have made that abundantly clear. And a lot of the allies that I
    have in this room also reflect on that incredible support I
    have in the Jewish community.
        Senator Hawley. Well, my time has expired and I have sorely
    tried the patience of the Chairman and Ranking Member, who have
    been very gracious to hold this hearing open. So I think what I
    am going to do is I will give you some questions for the
    record. I mean for this to be easy. I thought your position was
    that you did not agree with any of those things. I just wanted
    to get that on the record. Maybe I misunderstood. If I have
    misunderstood then I am really concerned.
        But I will give you some questions for the record and we
    can just put it in writing, and that way we will allow you to
    go. I think you have been here a long time.
        Thank you, Mr. Chairman, and thank you, Senator Ernst.
        Chairman Cardin. Thank you, Senator. I will put into the
    record the statement from the AJC, the American Jewish
    Committee, on this subject. It starts by saying they normally
    do not take positions on nominees, but due to the innuendos
    concerning Mr. Syed's nomination--this was from the last
    Congress, not this Congress--they issued that statement,
    underscoring the support that Mr. Syed has been in regards to
    the Muslim and Jewish community, and that his association with
    the organization mentioned are not his views. I will put that
    into the record so we have it in the record.
        And if there is no further business the Committee, again,
    if we can get those answers to the questions timely--there is a
    deadline of tomorrow night on questions for the record--the
    Committee will stand adjourned. Thank you.
        Whereupon, at 4:01 p.m., the hearing was adjourned.

                          APPENDIX MATERIAL SUBMITTED

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                     [all]