[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:] 

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    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.
      

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