And Tancredo thinks disaster aid $ shouldn't be run thru local NO pols cause they are known to be crooked. Yeah, control it at the federal level. They do shuc a swell job
Unaffected companies were given 9/11 loans
Friday, September 09, 2005
DIRK LAMMERS and FRANK BASS
The Associated Press
The government's $5 billion effort to help small businesses recover from the Sept. 11, 2001, attacks was so loosely managed that it gave low-interest loans to companies that didn't need terrorism relief - or even know they were getting it, The Associated Press has found.
While some at New York's Ground Zero couldn't get assistance they desperately sought, companies far removed from the devastation, including a South Dakota country radio station, a Virgin Islands perfume shop, a Utah dog boutique and more than 100 Dunkin' Donuts and Subway sandwich shops, had no problem winning the government-guaranteed loans.
Dentists and chiropractors in numerous cities, as well as an Oregon winery that sold trendy pinot noir to New York City restaurants, also got assistance.
"That's scary. 9/11 had nothing to do with this," said James Munsey, a Virginia entrepreneur who described himself as "beyond shocked" to learn his nearly $1 million loan to buy a special-events company in Richmond was drawn from the Sept. 11 program.
"It would have been inappropriate for me to take this kind of loan," he said, noting that the company he bought suffered no ill effects from the terror attacks.
Arvind "Andy" Patel, 50, said he used his $350,000 loan in fall 2002 to remodel his Dunkin' Donuts shop in western New York state and never knew it was drawn through the Sept. 11 program.
Government officials said they believe banks assigned some loans to the relief program without telling borrowers. Neither the government nor its participating banks said they could provide figures on how many businesses got loans that way.
But The Associated Press' nationwide investigation located businesses in dozens of states who said they did not know their loans were drawn from the Sept. 11 programs, suggesting at least hundreds of millions of dollars went to unwitting recipients.
The Small Business Administration, which administered the two programs that doled out the recovery loans, said it first learned of the problems through the AP's review and was weighing whether an investigation was needed. But officials also acknowledged they intended to spread the post-Sept. 11 aid broadly because so many unexpected industries were hurt.
"We started seeing business (needing help) in areas you wouldn't think of - tourism, crop dusting, trade and transportation. ... So there were a lot of examples you wouldn't think of, at first blush," SBA Administrator Hector Barreto said.
In all, the government provided, approved or guaranteed nearly $4.9 billion in loans, and took credit for saving 20,000 jobs.
Of the 19,000 loans approved by the two programs, fewer than 11 percent went to companies in New York City and Washington, according to a computer analysis of loan records obtained under the Freedom of Information Act.
"I had nothing here," said Shirla Yam, who runs a clothing store in the shadows of the former twin towers that got a $20,000 grant from a local advocacy group but no federal aid after Sept. 11. "I don't know if I'll be here next month."
Under one of the programs, SBA lent money directly to companies that provided detailed statements on how they were hurt. The other program provided incentives, and guaranteed loans from default, so banks could lend money to companies they determined were hurt by the post-Sept. 11 economic downturn.
Most loans were well below market rates - as low as 4 percent, documents show.
Honor system for banks:
SBA officials acknowledged the second program, the Supplementary Terrorism Activity Relief, left banks on an honor system to determine worthy loan recipients.
"One lender could have been really strict and specific about the borrower providing the documentation to prove that they were affected by the Sept. 11 attacks, and another banker may not have, or may have had ulterior motives for approving loans," said SBA spokeswoman Carol Chastang.
SBA documents show banks had a strong incentive to approve as many loans as possible from the terror program. The banks profited from the interest while incurring little risk because the government guaranteed 75 percent to 85 percent of each loan.
The annual fee the lenders paid to SBA to get the government guarantee was slashed from 0.5 percent to 0.25 percent - meaning lenders saved an additional $5,000 a year for every $2 million they loaned under STAR
Our tax money hard at work. But not necessarily for us.
Yea I'm still ticked but this add more fuel to the fire.
It's only going to get worse
I hate to tell you, but as far as I can tell, ALL small businesses were affected by the 9-11 attacks.
My company went into a tailspin, and didn't start back until the end of 02.
It was very tough times indeed, and alot of companies didn't make it.
While I didn't get any .gov loans......I did have to take out loans to survive. Everyone I know did.
I can imagine how seeing this crap first hand is worse than reading about it in the paper.
"Focus on your quiet place."
Or have a couple of belts.
I can't imagine how much of the $50+ billion, so far approved, will go to people and companies who don't do a damn thing. Then add in the aforementioned markup on goods and services used in the recovery...
We'll probably spned $10 billion to get $1 billion worth of actual recovery.