Nomination of Dilawar Syed to Be Deputy Administrator of the Small Business Administration (Senate Small Business Committee hearing, March 8, 2023)
Summary
Transcript of the March 8, 2023 hearing of the Senate Committee on Small Business and Entrepreneurship on the nomination of Dilawar Syed to be Deputy Administrator of the Small Business Administration, S. Hrg. 118–87. Chairman Benjamin L. Cardin presided, and he and Ranking Member Joni Ernst gave opening statements before testimony from Syed. Material submitted includes a statement from the National Association for the Self-Employed dated March 8, 2023, a U.S. Chamber of Commerce letter dated March 7, 2023 and an American Jewish Committee statement dated July 7, 2021. The transcript closes with Syed's responses to questions from Ernst and Senators Hickenlooper, Risch, Young, Kennedy and Hawley.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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“Nomination of Dilawar Syed to Be Deputy Administrator of the Small Business Administration (Senate Small Business Committee hearing, March 8, 2023).”
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S. HRG. 118–87
NOMINATION OF DILAWAR SYED TO BE DEPUTY
ADMINISTRATOR OF THE SMALL BUSINESS AD-
MINISTRATION
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
(
Available via the World Wide Web: http://www.govinfo.gov
U.S. GOVERNMENT PUBLISHING OFFICE
53–223 WASHINGTON : 2024
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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
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CONTENTS
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 Sen-
ators Hickenlooper, Risch, Young, Kennedy and Hawley .......................... 38
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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, Mar-
key, Coons, Hirono, Duckworth, Rosen, Hickenlooper, Ernst, Ken-
nedy, 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 Busi-
ness 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 for-
ward to working together to help America’s small businesses. I
think we share the same passion towards the small business agen-
da, and I am looking forward to this Committee being actively en-
gaged.
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
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his participation in our Committee.
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I also want to thank Senator Ernst for the help in the organiza-
tional 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 be-
fore 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 perse-
verance 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 nomi-
nate 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 through-
out 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 ex-
posed a clear need for modernization, technical upgrades, new re-
sources and reforms at the SBA.
That is why the need of a deputy administrator today is more im-
portant than ever, and the skills and qualifications possessed by
Mr. Syed are a perfect fit for the needs of the Small Business Ad-
ministration. 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 Representa-
tive 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 entre-
preneurs in this country. The Small Business Investment Alliance
recently told the Committee that, and I quote, ‘‘The Deputy Admin-
istrator 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 re-
lated to the Small Business Administration. It is our collective re-
sponsibility as members of the Senate Small Business and Entre-
preneurship Committee to ensure that the agency is working to its
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full potential to serve the 33 million small businesses in this coun-
try. Filling the position of Deputy Administrator with a dedicated
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and accomplished nominee, as Dilawar Syed would be, is an impor-
tant 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 be-
fore 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 over-
seeing the day-to-day operations of the agency. From addressing
fraud to improving the agency’s responsiveness, to actually enforc-
ing 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 re-
sponsibility 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 inspec-
tor general in his most recent report on the top management and
performance issues facing the agency. At the top of all concerns
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raised by the OIG was the fact that internal control weaknesses
limited SBA’s ability to actively reduce fraud and instead increased
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the risk of fraud in the Paycheck Protection Program. Addressing
this abuse by holding individuals accountable and recovering tax-
payer dollars provided to ineligible businesses must be a top pri-
ority for Mr. Syed and the SBA.
I also want to address the ongoing concerns with the SBA’s con-
sistent failure in responding to Republican requests for data and
information in both a timely and thorough manner. This Com-
mittee 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 ad-
ministration reversed the agency’s determination that Planned Par-
enthood affiliates were ineligible for PPP loans due to their affili-
ation 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 ad-
ministration 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 sim-
ply 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 com-
mended, 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 participa-
tion 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 Com-
mittee 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 ap-
pear 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
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your public service, and we thank your family for putting up with
all these issues.
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TESTIMONY OF DILAWAR SYED OF VIRGINIA
Mr. SYED. Thank you, Chairman Cardin, thank you, Ranking
Member Ernst, and distinguished committee members, for this op-
portunity. 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 con-
sumer media. I have also run large business operations at compa-
nies such as Yahoo!.
My teams and I have created good American jobs, delivered inno-
vation 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 busi-
nesses 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 es-
sential 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 deep-
en these new customer relationships and help these small busi-
nesses grow and thrive.
Currently, as State Department’s Special Representative for
Commercial and Business Affairs, I lead America’s commercial di-
plomacy, helping level the playing field for U.S. companies to com-
pete 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 ex-
panded 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 Depart-
ment. As I built my career in Silicon Valley, I saw venture capital-
ists investing around the world but, frankly, ignoring their own
backyard. Why did nearby Fresno or Modesto lack the same entre-
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preneurial ecosystem we see in the San Francisco Bay Area and all
the economic gains that come with it?
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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 engage-
ment 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 na-
tion’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 partner-
ship with Administrator Guzman and the team of mission-driven
public servants at the SBA.
If confirmed, I will bring my operating experience of building or-
ganizations 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 lead-
ers 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 Adminis-
tration.
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 incred-
ibly valuable in our state. And we have now four Women’s Busi-
ness 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 entre-
preneurs 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 stake-
holders who engaged with SBA, this was their first experience with
the agency in the middle of the pandemic. So we had this oppor-
tunity 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 for-
tunate 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 aware-
ness 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 commu-
nities. 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
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calls and reach the touchpoints we have with the customer. It has
to be a customer experience-first agency. We are serving potentially
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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 state-
ment 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 cre-
ated 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 com-
mitted 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 in-
stances of fraud with SBA programs. You know, we have to really
be very intentional in protecting taxpayer dollars, and I saw de-
spair in small businesses that I was helping with as an advocate
during the pandemic. And to see that criminals were able to de-
prive these small businesses for the money that was really in-
tended 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 bol-
ster those controls. This would be, obviously, zero tolerance.
You know, as a businessperson, and I have run businesses, in-
cluding 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 avail-
able 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 con-
cerned with some of the loans that were made. The Committee had
trouble receiving timely information from the Small Business Ad-
ministration on a number of issues, including the Planned Parent-
hood 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 affili-
ates?
Mr. SYED. Ranking Member Ernst, thank you for that question.
Let me first of all acknowledge that this has been obviously an
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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,
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12
I will work with the Administrator and ensure that we are respon-
sive 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 over-
sight. 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 regu-
larly in your role at the State Department that you hoped to har-
ness the unrivaled entrepreneurship and innovation—and I love
that—of the U.S. private sector and increase U.S. businesses’ com-
petitiveness globally, because we are in a global economy.
Do you believe that overregulation stifles innovation and entre-
preneurship and that the red tape that exists out there often dis-
courages those would-be innovators and job creators from ever get-
ting 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 op-
timize 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 stra-
tegic 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 in-
credible 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
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loans, those that took advantage of the COVID situation. We want
to make sure we are recapturing those dollars.
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13
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 con-
firmed I will address some of the recommendations, the rec-
ommendations 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 re-
source 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 Mem-
ber’s comments. I am committed to making sure that we work to-
gether 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 confirma-
tion 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 with-
in 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 to-
gether 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 busi-
nesses are in need of the support of the SBA that this position has
been vacant for many years. And you are very, very highly quali-
fied, 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
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small businesses and to be introduced to the entrepreneurs who
really helped to move Hawaii’s economy along.
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14
You are an immigrant, right?
Mr. SYED. I am.
Senator HIRONO. So you are also an entrepreneur and you start-
ed 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 inter-
national 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 busi-
nesses of types, whether it is in Iowa or North Carolina, that immi-
grants 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 solv-
ing 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 coun-
try 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 pre-
vented from being confirmed, is also a testament to your commit-
ment.
The last time you were here we did have a chat about how im-
portant 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?
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Mr. SYED. Absolutely, Senator, I will.
Senator HIRONO. Thank you.
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15
The SBA Office of the Inspector General OIG published its an-
nual report focused on the top management and performance chal-
lenges 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 manage-
ment 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 ca-
pacity, 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 business-
man 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 ap-
preciate 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 poli-
cies 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 re-
gard to small business in particular.
Mr. SYED. Senator, thank you for that question. You know, the
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way I look at this role and the agency’s mission is to support small
businesses. I will always optimize for that.
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16
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 op-
portunity 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 op-
portunity to, let us say, work with us and our programs as a busi-
ness 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, minor-
ity, 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, includ-
ing 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
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place to prevent future fraud and risky loans in SBA’s core lending
programs?
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17
Mr. SYED. Senator, as I said earlier in response to Senator
Ernst’s questions, I am committed to ensuring that we do every-
thing 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 eval-
uating, studying these things, understanding where we can im-
prove 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 Busi-
ness 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 con-
firmed to be the Deputy Administrator. I think your personal story,
as you said, is one that could only happen in America. Your experi-
ence 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 Spe-
cial 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 tech-
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nology. There are services. There is manufacturing. There is agri-
culture.
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18
How will that experience that you are currently having help in-
form 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 cre-
ators 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 po-
tatoes—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 insecu-
rity 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 de-
mocratize 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 op-
portunity 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 econo-
mies that want American businesses. There is a small bridge man-
ufacturer 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 Jer-
sey. 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
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nomination. Delightful to be with you today. I look forward to rein-
vigorating Committee.
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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 em-
bassies 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 get-
ting 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. En-
trepreneurs in rural and urban communities also struggle to get
their fair share. They are completely ignored in many venture cir-
cles.
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 found-
ers.
SBA does have some programs. I am looking forward to under-
standing 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
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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
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20
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 ques-
tion 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 tech-
niques 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 appre-
ciate 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 ac-
cess to SBA’s loan products, while nonprofit providers only have ac-
cess to SBA’s microloan program, which is capped, of course, at
$50,000. Other loan products such as the 7(a) or 504 loan pro-
grams, 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
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about. So it is why yesterday we reintroduced the bipartisan Small
Business Childcare Investment Act. It is going to allow these non-
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21
profit 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 pro-
viders 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 busi-
nesses, and entrepreneurs face numerous hurdles in starting a
business, developing a business plan, registering the business, un-
derstanding 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 get-
ting 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 busi-
nesses 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 regula-
tions 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 infor-
mation 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.
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Senator DUCKWORTH. Thank you, Mr. Chairman, and thank you,
Ranking Member Ernst, for this hearing. Mr. Syed, it is good to see
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22
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 suc-
cessfully 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 out-
reach to underserved communities and communities of color, espe-
cially 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, Presi-
dent 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 ad-
dress. 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 got-
ten 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 some-
what 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, wheth-
er 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 relation-
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ships across the world, not just here domestically. I would like to
hear a little bit about your recent role serving at the Department
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23
of State as the Special Representative for Commercial and Busi-
ness Affairs, and if you have taken anything away from that posi-
tion 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 domes-
tic 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 ex-
porting.
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 busi-
ness relationship. In Southeast Asia we see that. When I was at
APAC we talked about the role of diaspora in bridging that poten-
tial for companies to export, leveraging their business networks, fa-
miliar networks, and so forth. Again, there is incredible oppor-
tunity. I bring that lens to this job if I am so fortunate to be con-
firmed, 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 get-
ting 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 con-
cerning 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 pro-
grams 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 deci-
sions during the creation of these programs to allow the money to
get out quickly. I will just give you a couple of examples.
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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
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24
did not have existing relations with banks. If we are going to be
able to get that money out quickly, all of the regulatory require-
ments 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 harm-
less 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 re-
quire 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, Demo-
crats 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 ad-
ministered, 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 appre-
ciate, 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 en-
suring 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 impor-
tance of engaging with small businesses in communities, rural com-
munities, and communities that are far from metro areas. So I
share your priority in making sure that we are present.
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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.
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25
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 of-
fices 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 of-
fices.
So as the Deputy Administrator who would be focused on oper-
ations 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 experi-
ence 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 busi-
nesses to be solving major challenges in the world with their prod-
ucts 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 re-
sources 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 offi-
cers 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
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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
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26
about what are some of the options there are with existing re-
sources 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, Geor-
gia. 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 busi-
nesses, 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
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funding there for minority and women businesses during the
COVID crisis. So how do you see the terrain right now, from your
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27
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 ac-
cess to the resources. There is an awareness gap, but there is
also—we just have not been as aggressive in our outreach and un-
derstanding what the particular needs are.
I have had the opportunity to get to know some great organiza-
tions 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 com-
munities 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 busi-
nesses just would never come back from this pandemic. They dis-
appeared.
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, my-
self, 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 aug-
ment 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 mil-
lion, 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.
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So will you commit to fighting to continue to protect and enhance
those two programs?
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Mr. SYED. So Senator, obviously I come from the innovation eco-
system. I am a product of that track as a career. And there is a
role that SBIR and STTR programs have played in spurring inno-
vation. 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 monopo-
lies 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 Sen-
ator Rosen, a lot of fraud topics. The Chairman had stated we have
joined together on a letter to SBA concerned about the lending pro-
grams 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 under-
served communities that are located in our rural areas, and often-
times 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 simi-
lar 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 con-
firmed, on what additional legislative tools you might need in order
to deal with enforcement and going after those who have misused
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the system. So if there are additional tools that you need, we would
want that information made available to this Committee.
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29
Secondly, Senator Ernst and I are looking at some of the pro-
grams that have not been authorized for some time, and would ap-
preciate a rather prompt review by the SBA as we consider legisla-
tion. 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 ap-
preciate 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 con-
sistent, 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 atten-
tion 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 con-
firmed, 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 week-
end 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
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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
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30
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 ques-
tions, but I just want to make sure that we have covered the water-
front on this. Let us talk about Emgage Action and the statements
they made regarding the State of Israel, so we can get this satis-
fied, 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 your-
self 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. commer-
cial 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 Com-
mittee—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 Ac-
tion, 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
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States to Hamas and Taliban terrorist organizations. Do you think
that Israel is a moral equivalent of a terrorist organization?
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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 com-
munity 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
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put it in writing, and that way we will allow you to go. I think you
have been here a long time.
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32
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 nomi-
nation—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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APPENDIX MATERIAL SUBMITTED
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File and source
- File
- CHRG-118shrg53223.pdf
- Size
- 4,127,498 bytes
- SHA-256
- b3b22a29f9405e0a5a02c9cf654c7ab48d248ebb22b2be3840588bc64b106c43
- Our copy
- CHRG-118shrg53223.pdf
- Original
- www.govinfo.gov