[Congressional Record Volume 143, Number 64 (Thursday, May 15, 1997)]
[Senate]
[Pages S4618-S4619]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    THE SMALL BUSINESS ADMINISTRATION--AN EFFECTIVE VOICE FOR SMALL 
                               BUSINESS?

 Mr. BOND. Mr. President, I rise today to call on the Small 
Business Administration (SBA) to fulfill its role as advocate for the 
hardworking men and women who have made small business the backbone of 
our nation's economy. As Chairman of the Committee on Small Business, I 
have heard countless hours of testimony from small businesses who look 
to the SBA for information assistance and advocacy.
  The SBA's role as an effective voice for small business within the 
executive branch recently came under fire during the final days of the 
Office of Management and Budget's (OMB) review of an Environmental 
Protection Agency (EPA) regulation to expand the number of industries 
covered by the Toxic Release Inventory (TRI) reporting requirements. 
The proposed inclusion of two industries, comprised predominantly of 
small businesses, was brought into question by the SBA and numerous 
Members of Congress. The affected small businesses had data to support 
their case for exclusion, and some of the data on which EPA had based 
its proposed rule was inaccurate. Despite the strength of their case, 
these small businesses found their views unwelcome at EPA. They 
appropriately turned to SBA to articulate the small business views to 
the administration.
  As the Chairman of the Senate Committee on Small Business, I was 
dismayed when effective advocacy by the SBA on behalf of small business 
was criticized as improper. In a letter sent to SBA Administrator Aida 
Alvarez, efforts to communicate the small business perspective were 
characterized as ``elements within [SBA] . . . actively working to 
undermine [the TRI] initiative.'' The important working relationship 
between SBA and its small business constituency was alleged to be an 
improper use of ``taxpayer funds to conduct lobbying efforts on behalf 
of private lobbyists. . . .'' In response to this criticism, the SBA 
temporarily removed staff from working on TRI and asked the Inspector 
General to review the matter.
  The Ranking Minority member on the Committee, Senator Kerry, joined 
me in sending a letter to the Administrator of the SBA, expressing our 
support for the Office of Advocacy and the SBA's role on behalf of 
small businesses. I ask that the text of our letter and the response I 
recently received from James F. Hoobler, Inspector General for the SBA, 
be printed in the Record. I am delighted to say that the role of the 
SBA, the Office of Advocacy and the individual staff member, whose 
dedication to the cause of small business was unfairly criticized, were 
found to have ``acted properly and ethically.'' The Inspector General 
added, ``SBA is statutorily mandated to support and speak up for the 
interests of small business. . . . To do otherwise would be contrary to 
its mandated responsibilities.''
  The SBA worked closely with the affected small businesses in an 
effort to ensure that their side of the story was heard. The SBA's 
voice apparently caught the ear of OMB, which prolonged its 
consideration of the rule beyond the usual 90-day review period. The 
debate that ensured on the merits of the rule and the basis for 
regulating the small employers is exactly the type of policy discussion 
the SBA should facilitate. In fact, during her confirmation hearing 
before the Committee on Small Business, SBA Administrator Aida Alvarez 
announced her commitment to being an effective voice for small business 
within the Administration. Ms. Alvarez pledged to carry the views and 
concerns of small business to the agencies involved and to be an 
advocate for small business at the Cabinet table and in her 
interactions with the President. I sincerely hope Administrator Alvarez 
will keep to her word.

[[Page S4619]]

On the TRI rule, however, the Clinton administration did not. No 
accommodation, such as a threshold for reporting to cover only those 
sectors of the industry that arguably merited coverage, was made for 
the small businesses in the affected industries.
  Mr. President, it is well known that federal regulations have 
historically imposed a disproportionate burden on small business. Last 
year, we enacted the Small Business Regulatory Enforcement Fairness 
Act--better known to small businesses as the Red Tape Reduction Act--to 
provide tools to ensure that small businesses get a fair shake in 
agency rulemakings and enforcement actions. As the author of the Red 
Tape Reduction Act and Chairman of the Committee on Small Business, I 
am committed to ensuring that small businesses have the opportunity to 
use the tools provided by Congress, including access to and effective 
representation by SBA. The SBA and its Office of Advocacy has an 
important advocacy role to play on behalf of the hardworking men and 
women whose entrepreneurial spirit makes the small business sector so 
vibrant. In addition to providing information and assistance, the SBA 
must rededicate itself to being an effective voice for small business.
  The material follows:
                                                      U.S. Senate,


                                  Committee on Small Business,

                                   Washington, DC, April 16, 1997.
     Hon. Aida Alvarez,
     Administrator, U.S. Small Business Administration, 
         Washington, DC.
       Dear Administrator Alvarez: Questions have been raised 
     regarding the activities of the Small Business 
     Administration's Office of Advocacy. As the Chairman and 
     Ranking Member of the Senate Committee on Small Business, we 
     would agree that any credible allegations of improper conduct 
     should be looked into. We are equally convinced, however, 
     that being a determined advocate for the concerns of small 
     businesses is not improper conduct by the Chief Counsel of 
     Advocacy or his employees. The statutory role of SBA as the 
     voice for small business within the executive branch, a role 
     that has been enhanced after last year's passage of the Small 
     Business Regulatory Enforcement Fairness Act, must not be 
     compromised.
       As the Administrator of SBA, you are keenly aware that the 
     Office of Advocacy is expected to work with and on behalf of 
     small business and their representatives as an essential part 
     of its statutory mission. The effectiveness of SBA on behalf 
     of our nation's small entrepreneurs and employers depends on 
     communication with individual small businesses, their trade 
     associations and other representatives. We trust that as SBA 
     Administrator you will reject any attempt to chill proactive 
     advocacy for small businesses by the Chief Counsel and others 
     at SBA. To do otherwise would send a clear and alarming 
     signal to small businesses, and would call into question the 
     ability of SBA to carry out the critical responsibilities 
     given to it under SBREFA and other laws.
       We hope you share our commitment to ensuring that the 
     unique concerns and interests of small businesses are given 
     appropriate consideration by executive branch agencies. We 
     look forward to learning what efforts you will take to 
     support the important role historically played by the SBA and 
     its Office of Advocacy as an effective voice for small 
     business.
           Sincerely,
                                              Christopher S. Bond,
     Chairman.
                                  ____



                           U.S. Small Business Administration,

                                   Washington, DC, April 29, 1997.
     Hon. Christopher S. Bond,
     Chairman, Committee on Small Business, U.S. Senate, 
         Washington, DC.
       Dear Chairman Bond: Thank you for your and Senator Kerry's 
     supportive letter of April 16, 1997, to SBA Administrator 
     Alvarez. In view of your strong conviction in the role of the 
     SBA as a voice for small business, I believe you should be 
     aware of the results of a recent investigation conducted by 
     my office.
       Subsequent to receipt of a complaint about possible 
     improper activity by SBA's Office of Advocacy in connection 
     with proposed expansion of the Toxic Release Inventory, my 
     Investigations Division conducted a thorough inquiry into the 
     allegations. We found that the Office of Advocacy acted 
     properly and ethically. Moreover, as you pointed out, SBA is 
     statutorily-mandated to support and speak up for the 
     interests of small business. During the matter in question, 
     the Office of Advocacy was carrying out its mission in 
     support of small business. To do otherwise would be contrary 
     to its mandated responsibilities.
       Again, thank you for the vote of confidence, and, rest 
     assured, my office would not hesitate to take action if SBA 
     activities were improper. Should you, or your staff, have any 
     questions, please contact Assistant Inspector General for 
     Investigations Steve Marica at (202) 205-6220 and refer to 
     Office of Inspector General file number 07-0497-03.
           Sincerely,
                                                 James F. Hoobler,
     Inspector General.

                          ____________________