Nomination of Dilawar Syed to Be Deputy Administrator of the U.S. Small Business Administration (Senate Small Business Committee hearing, April 21, 2021)
Summary
Transcript of the April 21, 2021 hearing of the Senate Committee on Small Business and Entrepreneurship on the nomination of Dilawar Syed to be Deputy Administrator of the U.S. Small Business Administration, S. Hrg. 117–156. Chairman Benjamin L. Cardin presided, with opening statements from Cardin, Ranking Member Rand Paul and Tim Kaine, followed by testimony from Syed. Material submitted includes a U.S. Chamber of Commerce letter dated April 20, 2021 and SBA Form 3501, the COVID-19 Economic Injury Disaster Loan Application. The transcript closes with Syed's responses to questions from Paul and Senators Cantwell, Duckworth, Rosen, Rubio, Risch, and Young.
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 U.S. Small Business Administration (Senate Small Business Committee hearing, April 21, 2021).”
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S. HRG. 117–156
NOMINATION OF DILAWAR SYED
TO BE DEPUTY ADMINISTRATOR OF
THE U.S. SMALL BUSINESS ADMINISTRATION
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
AND ENTREPRENEURSHIP
OF THE
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
APRIL 21, 2021
Printed for the Committee on Small Business and Entrepreneurship
(
Available via the World Wide Web: http://www.govinfo.gov
U.S. GOVERNMENT PUBLISHING OFFICE
46–628 PDF WASHINGTON : 2022
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COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
ONE HUNDRED SEVENTEENTH CONGRESS
BENJAMIN L. CARDIN, Maryland, Chairman
RAND PAUL, Kentucky, Ranking Member
MARIA CANTWELL, Washington MARCO RUBIO, Florida
JEANNE SHAHEEN, New Hampshire JAMES E. RISCH, Idaho
EDWARD J. MARKEY, Massachusetts TIM SCOTT, South Carolina
CORY A. BOOKER, New Jersey JONI ERNST, Iowa
CHRISTOPHER A. COONS, Delaware JAMES M. INHOFE, Oklahoma
MAZIE K. HIRONO, Hawaii TODD YOUNG, Indiana
TAMMY DUCKWORTH, Illinois JOHN KENNEDY, Louisiana
JACKY ROSEN, Nevada JOSH HAWLEY, Missouri
JOHN HICKENLOOPER, Colorado ROGER MARSHALL, Kansas
SEAN MOORE, Democratic Staff Director
WILLIAM HENDERSON, Republican Staff Director
(II)
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C O N T E N T S
OPENING STATEMENTS
Page
Cardin, Hon. Benjamin L., Chairman, a U.S. Senator from Maryland .............. 1
Paul, Hon. Rand, Ranking Member, a U.S. Senator from Kentucky .................. 4
Kaine, Hon. Tim, a U.S. Senator from Virginia .................................................... 12
WITNESS
Syed, Mr. Dilawar, of California, Nominated to be Deputy Administrator,
U.S. Small Business Administration .................................................................. 5
ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED
Cardin, Hon. Benjamin L.
Opening statement ........................................................................................... 1
Kaine, Hon. Tim,
Opening statement ........................................................................................... 12
Paul, Hon. Rand
Opening statement ........................................................................................... 4
Syed, Mr. Dilawar
Testimony .......................................................................................................... 5
Prepared statement .......................................................................................... 8
Responses to questions submitted by Ranking Member Paul and Senators
Cantwell, Duckworth, Rosen, Rubio, Risch, and Young ............................ 48
U.S. Chamber of Commerce
Letter dated April 20, 2021 ............................................................................. 3
U.S. Small Business Administration
SBA Form 3501 COVID-19 Economic Injury Disaster Loan Application .... 18
(III)
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NOMINATION OF DILAWAR SYED
TO BE DEPUTY ADMINISTRATOR OF
THE U.S. SMALL BUSINESS ADMINISTRATION
WEDNESDAY, APRIL 21, 2021
UNITED STATES SENATE,
COMMITTEE ON SMALL BUSINESS
AND ENTREPRENEURSHIP,
Washington, DC.
The Committee met, pursuant to notice, at 2:40 p.m. via Webex
and in Room 301, Russell Senate Office Building, Hon. Ben Cardin,
Chairman of the Committee, presiding.
Present: Senators Cardin, Cantwell, Shaheen, Booker, Hirono,
Rosen, Paul, Scott, Ernst, Inhofe, Young, Hawley, and Marshall.
OPENING STATEMENT OF HON. BENJAMIN L. CARDIN,
CHAIRMAN, A U.S. SENATOR FROM MARYLAND
Chairman CARDIN. The Small Business Committee will come to
order.
Let me acknowledge that Senator Paul and I saw Senator Kaine
on the way in. He is here to introduce the nominee. He went over
to cast his vote. As you know, the vote just started on the floor of
the Senate. Senator Paul and I voted and came here. So we will
interrupt where we are when Senator Kaine returns, to allow him
to make his introductory remarks to our nominee.
I want to recognize Dilawar Syed, our nominee for the Deputy
SBA Administrator. Thank you very much for your willingness to
serve our country during these extremely challenging times. It is
not easy to serve in public life, just ask the members of the Senate
right now. And it is not easy to take a position in the Executive
Branch. So we appreciate your willingness.
We know you are a successful businessperson so we thank you
for this sacrifice. And we know it is not just your sacrifice, but a
sacrifice of your family.
Welcome to our committee.
The Deputy Administrator of SBA is responsible for the day-to-
day management of the Agency, so this position is vital to SBA’s
success. And yet, this position has been vacant for the past three
years due to the previous Administration’s failure to put forward
a nominee.
Filling the position with a qualified nominee is more important
than ever because Congress has tasked the SBA with tremendous
responsibilities as part of the Federal Government’s COVID–19 re-
lief effort.
(1)
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In the past year, SBA’s has delivered more than $970 billion in
aid to small businesses through the Paycheck Protection Program,
EIDL, the EIDL Advance grants program, and the Small Business
Debt Relief program. In the coming days and weeks, SBA will
begin accepting applications for the $16 billion Shuttered Venue
Operators Grant program, as well as $28 billion for the Restaurant
Revitalization Fund. So we have a lot of activity that is taking
place within the Small Business Administration.
In total, Congress has charged SBA with distributing more than
$1 trillion in COVID–19 small business aid, more than 10 times
the SBA’s annual budget during the fiscal year before the pan-
demic.
SBA must continue to be a lifeline to small businesses for the re-
mainder of the pandemic and the Agency will be key to ensuring
an equitable economic recovery.
I am confident that Mr. Syed’s experience as a business and civic
leader has prepared him to lead SBA at this pivotal moment. Mr.
Syed’s decades of building and scaling companies will help SBA as
it continues to implement new small business relief programs.
SBA will also benefit from Mr. Syed’s many years as an advocate
for underserved entrepreneurs, including his service as Chair of the
White House Initiative on the AAPI’s Economic Growth Committee
during the Obama administration; founder of the California Entre-
preneurship Task Force; and leader of California’s Rapid Response
engagement with underserved small businesses during the pan-
demic.
Because of Mr. Syed’s broad experience and commitment to up-
lifting underserved entrepreneurs he has been endorsed by more
than a dozen business organizations, including the National Asso-
ciation of Pacific Islanders, American Chamber of Commerce, Small
Business Majority and the U.S. Black Chambers.
Without objection, I will put the full list of the endorsements to
the nominee into the record.
[The information referred to follows:]
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Chairman CARDIN. The disproportionate impact of the COVID–
19 pandemic on minority-owned businesses has only highlighted
the pervasive historic disparities in access to capital, technical
training, and mentorship. That is why the Committee’s top priority
is improving SBA’s program to better meet the needs of small busi-
nesses in Black, Latino, Asian, Native, rural, and other under-
served communities to ensure an equitable recovery and prepare
for future crises.
Mr. Syed, if confirmed, we will need your insight into how to im-
prove these programs. So I am asking for your commitment to op-
erating SBA in a transparent manner and to maintain open lines
of communication.
I want to again thank you for stepping forward to serve our Na-
tion during these very difficult, unprecedented times and I look for-
ward to hearing your testimony.
With that, let me turn it over to the ranking member, Senator
Paul.
OPENING STATEMENT OF HON. RAND PAUL,
A U.S. SENATOR FROM KENTUCKY
Senator PAUL. Thank you, Mr. Chairman.
I began my tenure as ranking member of this Committee by sup-
porting Administrator Guzman’s nomination in a good faith effort
to establish an honest and transparent working relationship with
the Biden administration and my colleagues across the aisle.
It seems that this goodwill, though, is not being reciprocated. As
we proceed with this hearing of the nomination of the Deputy Ad-
ministrator of the SBA, as we began the process of vetting the
nominee as required by the Committee rules, we became aware
that Mr. Syed had applied for SBA’s PPP and EIDL COVID relief
programs on behalf of his company. He did not disclose this tax-
payer assistance voluntarily. We found this information on our
own, as part of our internal vetting process.
Given that the position to which Mr. Syed has been nominated
is responsible for overseeing all SBA programs, including the tril-
lion dollars of taxpayer money Congress appropriate for small busi-
nesses, it is imperative that this Committee have complete infor-
mation regarding any SBA programs Mr. Syed participated in.
The Committee has a Constitutional obligation to evaluate nomi-
nees for Senate confirmed positions such as the one to which Mr.
Syed has been nominated. Some would say that the failure of an
SBA nominee to be transparent about taxpayer funded programs
under this Committee’s jurisdiction would be disqualifying in and
of itself.
I have made repeated requests for this information from both Mr.
Syed and SBA. As of today, the Committee still does not have his
complete information related to the SBA COVID–19 loan applica-
tions that Mr. Syed signed on behalf of his company.
Despite my request that the Committee not proceed with this
hearing until it has received all of the requested information, here
we are.
I look forward to hearing from Mr. Syed. I still have an open
mind on the nomination, but I hope that he will today provide
some clarity and transparency on the information that has been re-
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peatedly denied to the Committee. This is the only way we can
allow the Committee to make a full and informed determination of
his eligibility for the position so I hope we will get to some trans-
parency today.
Chairman CARDIN. Thank you, Senator Paul.
If I could ask Mr. Syed, if you would please rise and raise your
right hand. We have a tradition in our Committee to swear in our
witnesses that we have Senate confirmation with.
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. You can have a seat.
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. I do.
Chairman CARDIN. Are you willing to provide such information
as is requested by any such committee?
Mr. SYED. I do.
Chairman CARDIN. Thank you.
We will go to your opening statement right now but when Sen-
ator Kaine arrives, we might interrupt it to allow him an oppor-
tunity to properly introduce you to the Committee.
So please excuse the informality here, but I think it is a better
use of our time.
STATEMENT OF DILAWAR SYED, OF CALIFORNIA, NOMINATED
TO BE DEPUTY ADMINISTRATOR, U.S. SMALL BUSINESS AD-
MINISTRATION
Mr. SYED. Thank you, Chairman Cardin, Ranking Member Paul,
and members of the Committee for the opportunity to appear here
today.
I am deeply honored to be nominated by President Biden to serve
as Deputy Administrator of the Small Business Administration.
America’s 30 million small businesses are the lifeblood of our
economy. SBA’s mission of supporting these entrepreneurs is more
critical today than at any point in its history.
The economic challenge created by the COVID–19 pandemic has
claimed millions of American livelihoods, and so many of its small
businesses. In the wake of this crisis, we have a once-in-a-lifetime
opportunity to build a more supportive, equitable, and resilient en-
vironment for small business owners in every community across
our great country.
I am an entrepreneur who has navigated a company through
these difficult times. During the past year, like many other small
businesses, we have had to make critical decisions to save jobs and
preserve livelihoods.
I also know full well that there are many small businesses that
have been impacted to a far greater degree. Entrepreneurs in Black
and Brown communities, rural and underserved regions need our
commitment and support more than ever.
For over two decades, I have built early stage businesses and run
companies in software, consumer, health care, and artificial intel-
ligence. I am proud to have led teams that have built digital tools
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used by thousands of Main Street businesses across America.
Today, I guide a team of scientists and engineers to help improve
health outcomes. I have learned how to build passionate teams that
tackle intractable challenges; how to foster an empowering culture;
and how to create products that serve millions.
While my business career has been gratifying, it is my work as
a civic entrepreneur that I value most, and what has driven me to
serve.
My civic journey spans a decade of serving communities that
have too often been left behind. I have spent time in Central Valley
of California, Detroit, Philadelphia, and Atlanta advising entre-
preneurs in regions that many people would fly over or drive
through, but they are brimming with talent, promise, and aspira-
tion.
After the Great Recession, as a White House AAPI Commissioner
I led engagement with Asian American entrepreneurs across the
country, hosting listening sessions with small businesses, regional
SBA teams, and resource partners.
In my home State, which has over 4 million small businesses, I
co-founded the California Entrepreneurship Task Force to bridge
regions like the San Joaquin Valley with networks in Silicon Val-
ley. I partnered with chambers of commerce, incubators, and uni-
versities to drive inclusive entrepreneurship and innovation in the
rural heartland of our State.
During the pandemic, I led a campaign to raise awareness of re-
sources, including the Paycheck Protection Program, reaching more
than 20,000 businesses. Our startup, like millions of small busi-
nesses, received critical help through the PPP and the EIDL pro-
grams. I am grateful for the assistance which allowed the company
to keep all its employees, stabilize, and then repay the PPP and
EIDL loans.
During these challenging times, I saw firsthand the heart, skill,
and resilience of our amazing team. Through it all, they per-
severed.
I believe that my experience as a business leader and civic entre-
preneur can help serve the SBA and all those who rely on it.
If confirmed, I commit to leading the SBA—in partnership with
Administrator Guzman and its committed public servants—with
urgency and purpose.
I will provide hands-on leadership to continue implementation of
COVID relief for small businesses and help rebuild those most af-
fected by the pandemic.
And I absolutely share Administrator Guzman’s commitment to
be transparent, accessible, and responsive to this Committee.
I want to thank my family for their support in this endeavor. I
am a proud dad and I know my wife and kids are watching. And
I am really sorry that they could not be here today.
In closing, I am an immigrant. I came to America 30 years ago
as a young student in pursuit of education and opportunity. At that
time, I never could have imagined that I would sit in this chamber
with this committee having been called to serve by the President
of the United States at this critical juncture. I am deeply humbled
and honored.
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This moment calls me like it should call all of us, including those
in the business world, to roll up our sleeves to build a better fu-
ture.
What we do next will matter for generations of Americans. I wel-
come this challenge and the opportunity to work alongside all of
you.
Thank you and I look forward to your questions.
[The prepared statement of Mr. Syed follows:]
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Chairman CARDIN. Mr. Syed, thank you very much for your com-
ments.
We are now honored to be joined by our colleague from Virginia,
Senator Kaine. Senator Kaine, welcome and we look forward to
hearing from you.
STATEMENT OF HON. TIM KAINE, A U.S. SENATOR
FROM VIRGINIA
Senator KAINE. To Chairman Cardin and Ranking Member Paul,
thank you for the opportunity to speak a little bit out of order to
this committee today.
I am so honored to be here to introduce, you have already heard
from him, but really to vouch for my friend, Dilawar Syed, who is
an ethical and innovative businessperson but also has the heart of
a public servant.
Before I say a word about him, I do want to just congratulate the
Committee and the members of the Committee. Like many of you,
during the Easter recess, I spent time traveling around my State
and spent a lot of time meeting with small businesses. And just a
report from the road, here is what I heard again, and again, and
again: it has been the toughest year of our entire business exist-
ence. To get through it, we have had to be incredibly creative and
resilient and think of new ways of doing virtually everything. We
could not have done it without loyal employees and our customer
base rallying around us. And thank Congress, thank you to Con-
gress for prioritizing the needs of small businesses, not only in pro-
grams like the Paycheck Protection Program and the EIDL loan
program, but what I found that surprised me a little is virtually
every local government that received CARES Act funding used a
portion of that funding to help small businesses in their jurisdic-
tions, maybe businesses that did not quality for CARES or that had
opened during the pandemic and could not demonstrate lost rev-
enue from the years before.
So that is the first thing I just want to say to the Committee is
that the work that you have done in CARES and now the American
Recovery Plan is making a difference and I wanted to report that.
The Small Business Administration plays a very important role
in advocating for the backbone of the American economy. And in
choosing administrators, choosing the leaders of the Small Busi-
ness Administration, because of the critical nature of these busi-
nesses to the American economy, you want people with a particular
skillset.
Dilawar Syed, to me, his resume is just almost the job descrip-
tion of what you would want in a leadership position of this kind.
He is an innovative, as he pointed out, American immigrant entre-
preneur who has started not just one but multiple businesses in
California.
Interestingly enough, he has had the experience of a small busi-
ness owner and the strains and stresses and anxieties of starting
something and growing it. But his particular business is serving
other businesses. That is what he does.
And so it is a business that puts him in touch with other small
businesses. That has given him significant insight into their chal-
lenges, as well.
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He has also had the advantage of working as a commissioner in
the Obama administration and then in governmental and public
service efforts in California to help small businesses.
So to conclude, small business owner and innovator, serving
other small businesses, and doing so in tandem with governmental
agencies and philanthropies.
He also mentioned in his opening statement that he, himself, had
the experience of benefiting from actions of Congress, his own busi-
nesses, through the CARES Act and knows how those programs
work and how they did not, and how future programs could work
even better.
He has much to offer the United States and I was so happy when
I heard that President Biden had nominated him for the position
and very happy to be here today to vouch for him.
Chairman CARDIN. Senator Kaine, thank you very much for that
introduction. We always appreciate having you with us in this
Committee, so thank you for your being here and we recognize that
you have other obligations so thank you very much.
Mr. Syed, I want to start the questioning. We are going to have
5 minute rounds based upon arrival from the members.
I want to go into the point that you raised during your opening
statement that Senator Paul has acknowledged during his opening
statement. And that is that you, as the CEO of an early stage
health care startup company in April 2020 applied for a PPP loan,
an EIDL loan, and an EIDL Advance.
My understanding is that your company received a loan, a PPP
loan, in May of $563,513 and an EIDL loan of $67,500, and an
EIDL Advance of $10,000.
You have indicated in your testimony that that was essential in
order to maintain your payroll. I believe your payroll was 24 em-
ployees at the time. Let me just ask you a couple of direct ques-
tions.
When you applied for the PPP loan and the EIDL loan were you
eligible to receive funding from those two programs?
Mr. SYED. Thank you, Senator Cardin, for the question. The an-
swer is yes.
Chairman CARDIN. Was that funding necessary for you in order
to be able to maintain your payroll during that period of time?
Mr. SYED. Yes.
Chairman CARDIN. Were the funds under the PPP program used
principally for payroll?
Mr. SYED. Exclusively.
Chairman CARDIN. Exclusively for payroll.
And then, you were then able, as I understand it, to get outside
financing in order to deal with your financial needs. I take it, if you
were eligible, your revenues were less during COVID–19 than they
were prior to COVID–19?
Mr. SYED. Correct.
Chairman CARDIN. Then you made a decision to get outside fi-
nancing and you made a decision to repay the PPP loan and the
EIDL loan, if I understand correctly, in January 2021?
Mr. SYED. That is correct.
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Chairman CARDIN. Were you eligible for the loan forgiveness
under the PPP program, considering that you used the money for
payroll?
Mr. SYED. Senator Cardin, I believe we obviously did not apply,
we made a business decision to clear all our debt including the PPP
and EIDL after raising a new round of funding. But based on
where the money was spent, my understanding is we would have
been eligible.
Chairman CARDIN. So why did you decide to repay the loan?
After all, you have responsibilities to your company. You are enti-
tled to have it forgiven, the PPP loan. Why did you decide to repay
the PPP loan?
Mr. SYED. Senator, we did not have the need. We believed that,
having raised outside financing, at that point we made a business
decision to clear all of our debt. And we considered the PPP and
EIDL loan to be a debt. And we believed that that should be paid
back and we made a business decision to pay back the loans.
Chairman CARDIN. I just want to compliment you on that. Obvi-
ously, you could have sought forgiveness and have been eligible for
forgiveness under the terms that we set up. But you made a deci-
sion that, from the point of view of the appropriate judgment on
the appropriateness of keeping the money that you felt better re-
turning the money.
I thank you. I am sure there are other businesses that are in
your category but you are in the minority of the businesses in re-
gards to the forgivable PPP loans.
As the Deputy Administrator, you are going to be responsible for
a lot of the administrative issues dealing with the implementation
of these programs. I am going to just mention one as an example.
In the most recent statute, the American Rescue Plan, we extended
eligibility to PPP for local media companies. Part of that was to
waive the affiliation rules and to use a size standard based upon
per location. We have been informed that there has been a chal-
lenge in getting eligibility for the media companies because they
have the same EIN numbers, which bounces it out from the appli-
cation process even though they are eligible.
My point to you in raising that example is that from day one we
are going to need your attention to working in a very transparent
way with us and the stakeholders to deal with the administrative
challenges of implementing the PPP law. As you know, the admin-
istration changed the eligibility on the self-employed. We have the
larger non-profits that are now eligible. We are starting into the
shuttered venue, certainly we will be in the restaurant program.
All of that is going to require total transparency and working
with us in a very close, open manner as you try to carry out con-
gressional intent. We need to make sure that you will keep us to-
tally informed and work with our offices.
Do we have that commitment?
Mr. SYED. Absolutely, Senator Cardin. And let me say that I
think obviously the scale at which the SBA is operating and just
the diverse set of programs it has to stand up, there is a lot going
on. So if confirmed, I will partner with the Administrator to make
sure that I am doing my best and also providing information as re-
quested by this Committee.
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Chairman CARDIN. And we have another bill passed. Senator
Lankford has worked with several of us to clarify some of the provi-
sions in the PPP. There is comparable legislation in the House that
is now moving through the hotline. So there might be some addi-
tional challenges that we are going to throw on you and we would
appreciate a very open process with you.
The last one I am just going to raise, that you and I had a
chance to talk about. Our highest priority is to make sure that our
programs are targeted to the small businesses of greatest need,
that we deal with the underserved community in the PPP program,
the underbanked community, minority community, low-income
communities.
Do we have your commitment to work with this Committee and
members of this Committee as we look at the existing tools of the
SBA to better target them to need as well as additional rec-
ommendations that have been made by members of this Com-
mittee, including myself, that deal with partnerships with the
HBCUs, that deals with dealing with emerging markets, for minor-
ity small businesses getting access to venture capital, those types
of programs. Will you work with us so that we can, in fact, live up
to our commitment to serve all businesses in this country?
Mr. SYED. Senator, absolutely I do, and a lot of my work that I
have done in the underserved communities in rural parts of Cali-
fornia, with communities of color, demonstrates my personal pas-
sion to focus on those communities. And so I absolutely will commit
to doing this if I am confirmed.
Chairman CARDIN. Thank you very much.
Senator PAUL.
Senator PAUL. Mr. Syed, when you submitted your nominating
materials to the Committee, you chose not to disclose that you had
had PPP loans. That was found through our vetting of your can-
didacy but it was not voluntarily given to us. Since then, we have
asked for more information and there has been some response but
there has been an incomplete response.
One of the specific questions we have asked and not yet got an
answer for us the amount, in U.S. dollars, of the estimated loss
that was required for one of the forms for the COVID–19 Economic
Injury Disaster Loan. What was the amount, in U.S. dollars, of es-
timated loss?
Mr. SYED. Senator Paul, thank you for your question and let me
first say, at the outset, I appreciate the importance of sharing of
information that is necessary to confirm me and it is important, es-
pecially with this role of this agency at this time.
With all due respect, I would like to clarify that I filled the ques-
tionnaire, the Senate questionnaire. When asked about whether
the company had received COVID relief, this was supplemental in-
formation I provided, yes. So I have been transparent, forthcoming
in sharing as various requests were made of me via the supple-
mental information that came in. And I think on multiple occasions
I did that.
The questions that we received yesterday, many of them pertain
to information that is proprietary for the company. It is a private
company. We are in a competitive environment, an AI company. It
is a globally competitive environment. And we have to protect the
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16
company, even as I commit to you that when it comes to myself I
will continue to work with this Committee to be transparent and
forthcoming.
Senator PAUL. So let the record show that you will not answer
the question and you will not tell us the amount that you put on
the application that you signed your name to for your company on
how much U.S. dollars were estimated you were going to lose.
The problem with that is you just say oh, believe me. Oh yes, we
were eligible. But that is self-policing. Give us the information so
we can trust you. I am willing to vote for you but not if you stone-
wall us and say we are not going to give you the information.
I mean, we deserve to know that because you are going to be in
charge of these. You got $14 million in the midst of this.
The other question that really still boggles my mind is it is for-
bidden to be involved with expansion when you get these loans.
And yet, within three weeks of you getting your loan, we have your
tweeting out about new hiring in Guadalajara and welcoming the
expansion of your tech team in Guadalajara. So it sounds like you
are in the midst of an expansion when you are getting the money.
Mr. SYED. Senator Paul, these are contractors. We are not ex-
panding the company elsewhere in a full-time manner. All the as-
sistance we received for PPP and EIDL was used exclusively in the
United States. It preserved jobs, 24 jobs. The company would not
exist today, would not be in a place where it was able to raise fi-
nancing and be able to innovate as we speak. So——
Senator PAUL. Eleven days after you got the money you tweeted
out, your words, ‘‘We welcome the newest member of our tech team
in Guadalajara.’’ Most people would read that and it sounds to
them like you are expanding into Guadalajara, that you have new
enterprises and new partners—or actually not even partners, new-
est member in Guadalajara.
So the thing is you are not going to tell us what you put down,
as far as your economic loss. You were in the middle of an expan-
sion but you are saying it was a contractor and not an expansion.
What was your generating revenue, how much revenue did you
generate, did Lumiata generate in 2020?
Mr. SYED. Senator, as I mentioned earlier, this is proprietary in-
formation. This is a public hearing. I am not going to be able to
share company——
Senator PAUL. So let the record show that we have these ques-
tions in writing. It is not as if you were not prepared. You have
made the decision not to divulge the information.
And so you know, you have made it hard on me. I mean, the
thing is I supported the Democrat pick to be the administrator. I
would support your pick but I am not going to support it if you are
stonewalling us on the information. You applied for a large amount
of money from a Government entity. You did not tell us about it.
We found out about it by searching through the data, and then we
asked you. Then you admitted that you had the loan.
But you did not volunteer that. We had to drag that out of you
when we had evidence that you had the loan. Now you will not tell
us about how you got the loan. And then all of a sudden you pop
up with $14 million. For struggling restaurants around the country
that might have gotten a PPP loan, they will scratch their head
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and say some guy with $14 million in angel investors got a PPP
loan. He could not have survived and yet he got $14 million in
loans. It does not pass the smell test.
And if you are not going to give us the information, how do you
expect me to support your nomination?
Mr. SYED. Senator Paul, let me just reiterate this. I have been
forthcoming with this information. I shared these loans at the very
start of my vetting process with the SBA, with the Office of Gov-
ernment Ethics, as part of the agreement to determine whether
there was any conflict or not.
So I have shared this information voluntarily——
Senator PAUL. The staff informs me that you were asked for it
and that it was not shared.
Mr. SYED. I am sorry, could you repeat the question?
Senator PAUL. The staff informs me that you were asked for the
information and then you revealed it but you did not share it vol-
untarily. You gave it when you were asked for it.
So the thing is—and that is beside the point. We now know you
had the PPP loan, you paid it back. This hearing could be easy and
we could be saying exactly what Senator Cardin says, that you
should be congratulated for paying it back and for being an up-
standing citizen. But not if you say well, we are not going to put
down how much our estimated loss. There is nothing proprietary
about what your estimated loss was to the government, unless
maybe there is something fishy about the number that you do not
want to divulge.
Nothing in that estimate, because your company is completely
transformed now. You got $14 million. So people have already be-
lieved and bought into you. They are not going to change their deci-
sion based on your application for PPP. You paid it back. You have
got good things you can say about yourself. But you are hiding
some number. And when you hide it, that is not transparency. That
is the opposite of transparency and it makes us doubt you.
Mr. SYED. Senator, with all due respect, my understanding is
that the EIDL application for COVID relief did not include, at the
time, your projected loss. We had financially a more challenging
year than the year 2019. Again, this is proprietary information
that——
Senator PAUL. So you are saying the application you filled out,
you did not put down an estimated loss?
Mr. SYED. To my best knowledge, I do not believe that that infor-
mation was required as part of those applications at the time. We
have shared with you information that is part of the applications
that were submitted for both PPP and EIDL.
Senator PAUL. We would like to provide, for the record, the rules
for the application at the time when his application was made to
show that the estimated loss was a requirement at the time, and
we will be submitting that for the record.
[The information referred to follows:]
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Senator PAUL. So this is a point of fact and we should figure this
out. If you are right and I am wrong, that is fine and you did not
have to provide it.
But there still is the question of why you are unwilling to sort
of divulge anything about this. And I do not think any of it is pro-
prietary. I think it appears to us as if you are hiding something
about the loan. So the more transparent you are, the more we be-
lieve in the things you are saying. But when you tell us you are
not going to divulge things because of proprietary reasons it, frank-
ly, makes us suspicious.
But we will look into the facts and I will retract the question on
the estimated loss or I will retract the accusation if we find out you
were not required to do it.
But this is something we can check by facts. And this will have
to be pursued. If we find the facts of the matter are that that was
a line and it was required, show us your application, you know. We
are happy to show you the application in private, where it does not
have to be read out in front of the public.
I said to Senator Cardin on the way over here, I would prefer not
to say the company’s name, Lumiata. I would prefer not to say that
we have doubts about your application. But that is why you need
to give us information and not try to hide things from us.
Mr. SYED. Thank you, Senator and I have shared information
about the application through multiple requests. I absolutely ap-
preciate the fact that we have to be transparent, forthcoming, and
I have been through multiple requests.
Again, both of these COVID loans, I declared them with the SBA
team when the vetting process started. This was——
Senator PAUL. But your first response to me was you were not
going to give me the estimated loss. And then your backup re-
sponse, two minutes later, is oh, we do not think we were required
to. You could have said that from the beginning. You could have
said oh, we were not required to put estimated loss. That almost
sounds like that is an evolving answer because you first told me
I cannot give you the estimated loss. And then you tell me it is not
on the form and was not required.
So we are left with a lot of questions and we are going to have
to research this further. And I am not saying absolutely I will not
vote for you but, the thing is that our side will be very concerned
with a trillion dollar program with someone who used it to a sig-
nificant degree and is unwilling to give us the information on how
you got the loan.
Mr. SYED. Senator, thank you for the question.
This, in a sense, saved the company’s job. I appreciate your ques-
tions and will continue to work with the Committee. Thank you.
Chairman CARDIN. And I am sure Senator Paul will work to-
gether on this and I think there has been certain information that
has been made available.
I agree with you that much of this should be done in a closed
setting when we are dealing with sensitive information.
Senator PAUL. And if he is willing to do that, I am happy to look
at it in private. I think there are things that should be private. But
I think there is some burden to prove——
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34
Chairman CARDIN. We will work together to try to resolve this
issue.
I do want to make one observation on this. It is my under-
standing that the PPP loan was more of a self-certification and not
specific information. The EIDL loan is different, I grant you that.
Senator PAUL. I think that is what we think. The requirement
for the estimated loss, we think, comes from the EIDL loan applica-
tion.
Chairman CARDIN. So we will work on those two issues and, I
must tell you, I stand by the statement I made during my ques-
tioning and that is I applaud Mr. Syed’s voluntarily repaying the
PPP loan when he was eligible for forgiveness because of his view
that it was not the purpose of the PPP loan to be forgiven if you
had the capital to pay off those loans.
I think that was an exemplary conduct and I just really want to
acknowledge that. But I understand Senator Paul’s point and I as-
sure you we will work together to try to get you the information.
Senator PAUL. And we are happy to keep an open mind.
Chairman CARDIN. I appreciate that very much.
Senator Hirono, by video.
Senator HIRONO. Thank you, Mr. Chairman.
And thank you for enlightening us on the fact that Mr. Syed paid
back the loan. Yes, I agree with you that that is exemplary behav-
ior.
Mr. Syed, based on your experience as a business owner and en-
trepreneur and your time working with businesses and entre-
preneurs in the Obama administration and more recently in Cali-
fornia and elsewhere, it is clear that you have a lot of relevant ex-
perience to bring as the Deputy Administrator of SBA. So can you
talk a little bit about how your experiences as a business owner
and entrepreneur will enable you to help other businesses and en-
trepreneurs as a Deputy Administrator? And particularly minority
businesses.
Mr. SYED. Senator Hirono, thank you for the question.
First of all, I think, as we discussed in previous questions, these
recent months and year or so has been one of the most challenging
times for small businesses and entrepreneurs all over the country.
Both in my own running the company, going through some really,
really difficult times. A year ago we were just starting to see the
horrible effects of the pandemic, both on lives and livelihoods and
businesses.
And so it has given me, frankly, a deeper reservoir of empathy.
What someone who has to sometime go through sleepless nights to
think about payroll goes through. And if confirmed, I will bring
that perspective, Senator, to my job.
Secondly, I think to your point about communities of color and
underserved regions, it is absolutely true that we have a disparity
there and we need to make an intentional effort, intentional effort
to reach out to those communities. I have done that in my own
civic advocacy, as I have mentioned earlier. And I would bring that
lens, as well.
And third, I just want to add to the point that my operating
background also prepares me to be a value-add to the SBA team
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35
as it stands up programs that are an unprecedented scale and
breadth.
Senator HIRONO. One of the minority-owned businesses in Ha-
waii are the Native Hawaiian-owned businesses. And as with a lot
of minority businesses, they have suffered disproportionately be-
cause of this pandemic. And so I would like to have a commitment
from you that you will work to understand the needs of the Native
Hawaiian businesses, the 8(a) businesses, and to work with me to
address their concerns going forward because they certainly could
use the kind of empathetic leadership that you talked about.
Senator SYED. Absolutely, Senator. And I will do so. After the
Great Recession, as part of my role at the White House AAPI Com-
mission, I spent significant time engaging with communities. So I
will do so.
Senator HIRONO. Have you ever been to Hawaii, Mr. Syed?
Mr. SYED. I have not. My kids and wife have been telling me so
I will certainly do so if I am confirmed, and help these businesses
there.
Senator HIRONO. I am not just saying that because I would like
you to come and visit with us but Hawaii is—we have some very
unique challenges. We are definitely not connected to the rest of
the country, as with Alaska. And so there are some very unique
challenges to small businesses in Hawaii. Things cost more to bring
in. There are various issues that are unique to Hawaii small busi-
nesses.
I certainly want to ask for your support in understanding the
unique challenges that particularly Hawaii small businesses, and
I would say the same for Alaska small businesses, that they face.
So I would certainly like your commitment to do that.
Mr. SYED. I commit to do so if I am confirmed, Senator.
Senator HIRONO. If you are confirmed, what is the first thing
that you would want to do as the Deputy Administrator?
Mr. SYED. That is a good question, Senator.
You know, this will be my first job in government if I am con-
firmed. The first thing you go into any place that has complexity
and scale, especially at this time, I want to listen and learn but
very quickly understand where I can be a value add. We have an
incredible team of public servants who have been at this agency for
decades and, especially in the last year, put their heart and soul
into standing up programs.
I would like to understand what is working? Where is an area
where we can do things better, whether it is the systems or proc-
esses or to quality infrastructure. But I would go in, and this is
just my management style, with an open mind and try to learn and
understand and see where we can help, where we can build capac-
ity, where we can move the needle forward.
Senator HIRONO. Thank you very much, Mr. Chairman. Thank
you, Mr. Syed.
Chairman CARDIN. Thank you, Senator Hirono.
Senator HAWLEY.
Senator HAWLEY. Thank you, Mr. Chairman.
Nice to see you in person, Mr. Syed. I enjoyed our conversation
yesterday. Thank you for your time. I look forward to getting into
a little bit of what we discussed.
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Let me start though by asking you this: on April 15th, not even
quite a week ago, the Republican members of the Committee, in-
cluding me, sent a letter to the SBA Administrator, to Ms.
Guzman, requesting that the Agency initiate an investigation into
whether Planned Parenthood affiliates made knowingly false cer-
tifications on applications for PPP assistance last year during the
height of the pandemic.
The letter also requested that the SBA provide the Committee
with the following information: a detailed explanation regarding
how three separate Planned Parenthood affiliates were approved
for a second draw PPP loans, despite SBA’s determination they
were ineligible; all forgiveness information associated with loans to
PPPFA entities; and thirdly, a description of any and all actions
SBA has taken to recover those PPP funds unlawfully provided to
the Planned Parenthood affiliates.
Here is my question to you: will you commit to us that if you are
confirmed, you will work with us to make sure that we get the in-
formation that we requested in our letter of April 15th?
Mr. SYED. Senator, first of all, thank you for your questions. It
is good to see you in person, as well.
If confirmed—well, first of all, I think we will apply rules as we
should for all businesses, all non-profits. I have read about this. I
do not know, I am not aware of the intricacies of what is involved
here. But to the extent that the information that you need to do
your oversight, I commit to doing that, obviously, in partnership
with the Administrator and our staff at the SBA.
Senator HAWLEY. Good. I will hold you to that.
And will you also commit to ensuring that the non-profit affili-
ation rule is followed as it applies to Planned Parenthood, and as
it applies to all non-profits?
Mr. SYED. Senator Hawley, I am not obviously up to speed on the
non-affiliate rule. The affiliate rule is for non-profits. If confirmed,
I will understand this and will make sure that the rules are ap-
plied consistently.
One of the things that you learn in business is process is sanc-
timonious. That should be your guiding light. And I will do my part
to make sure that, as leadership, we do that.
Senator HAWLEY. Let me ask you about one of the topics we dis-
cussed yesterday. We talked a little bit about the Economic Injury
Disaster Loan Program. I shared with you some of the struggles
that businesses, small business folks, in my State had accessing
that program. This is something I have raised in this forum with
other folks up before us.
And at the same time, we also discussed the fact that the Inspec-
tor General’s report recently came back and found quite a lot of
waste, fraud, and abuse in that program which, of course, is deeply
frustrating because you have got people who are qualified who can-
not access the funds. You have got people who should not be get-
ting the funds and did.
We also talked about the Shuttered Venue Operators Grant Pro-
gram which Congress established in December but still is not really
operable.
Here is my point on this: SBA’s track record in standing up these
programs and administering them is not the best, to be frank. It
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needs to be better going forward. We have asked the SBA to do a
lot during the midst of this pandemic.
Share with us your view and your own experience from the pri-
vate sector in how SBA can get better at implementing these vital
programs, in making sure that there is appropriate oversight and
controls for these programs and just, in general, doing its job more
efficiently.
Mr. SYED. Senator Hawley, that is a very important question and
thank you. I appreciate the question.
I think we all can agree that the scope of responsibility that SBA
has, it is unprecedented. And that is one of the things that I am
really excited about, if I am confirmed, to go in and be a value-add
to the team.
I think you have to look at overall what is the capacity, whether
it is human, whether it is technology, or whether they are proc-
esses or people? And where do we need to make sure that we are—
if you are upgrading, to be able to meet the moment, if you will.
Obviously, I am not in the job. It would be presumptuous for me
to opine on what we can do there. Once I am confirmed, if I am
confirmed, I absolutely commit to you that I will work with the Ad-
ministrator and also would like to work with you, as well. You are
passionate about this and this is important. I mean, these are all
of our businesses, that we do everything possible to make sure that
we are responding in this moment with all our might and re-
sources.
Senator HAWLEY. If you are confirmed, when you come to look
and review programs, like let us just say the EIDL program, the
Economic Injury Disaster Loan Program, what sort of—as you are
thinking about its success, about its efficiency, what sort of prin-
cipals will you take? What sort of benchmarks will you apply?
What will you look for? In other words, to evaluate how well it is
done and what can be improved going forward?
Mr. SYED. Right. It is a good question, you actually asked me as
well yesterday. I think the first order of business would be, again
not knowing exactly how we track things as data, how are these
programs instrumented? What data can you look at? Where we are
succeeding? Where we can do better? Where there is a gap?
There is a whole breadth of information that we should have at
our fingertips and we should work to do that, given just the scale
of what you are doing.
Obviously, I am not aware of what those things are. I am not in
the job. Once I am there, if I am confirmed, I will make it a point
to work with the Administrator and the staff to see how we can
track things and make sure that we are doing better and, of course,
sharing as appropriate with this committee.
Senator HAWLEY. Very good. Thank you. Congratulations on your
nomination.
Mr. SYED. Thank you.
Senator HAWLEY. Thank you, Mr. Chairman.
Chairman CARDIN. Thank you, Senator Hawley.
Senator SHAHEEN.
Senator SHAHEEN. Thank you, Mr. Chairman.
Mr. Syed, congratulations on your nomination. I look forward to
working with you if confirmed.
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I just want to followup a little bit on the previous question be-
cause since the beginning of this pandemic, it has been the SBA
programs that have really kept so many of our small businesses
alive during the last year with COVID. I have heard from so many
in New Hampshire who say that it is the PPP loan program that
has really saved them.
I recognize, as you have said, that we are not there yet. But the
SBA really does face two new challenges in looking at how to im-
plement the new restaurant grant program, as well as the Shut-
tered Venue Grant Program.
We appropriated, in the last package, $1.325 billion in new fund-
ing to help SBA administer these programs. So again, recognizing
that you are not there yet, do you have thoughts about how the
agency could best spend that money in a way that is efficient and
that addresses some of the challenges that it has had with the pre-
vious PPP and EIDL programs?
Mr. SYED. Senator Shaheen, thank you for the question.
Again, unfortunately, I do not have a lot of the detail as to where
the gaps are. The reality is this, when we have such an incredible
resource that is being made available thanks to the work of this
Committee and the staff, obviously I am sure everybody at the SBA
as well would want this to be rolled out very soon because the
sooner this gets into the small businesses—and having been part
of the process myself, I know how critical that is.
A year ago, we were going through this ourselves and it was
very, very challenging. And I was working with communities all
across California in the rural heartland, as we talked about, Sen-
ator, and saw every day matters. If you can quickly get—so I get
that. I am deeply empathetic to that.
Now, I also want to be careful to make any judgment to see what
we can do since I do not have the context. What I can tell you is
that I will bring that energy and passion and commitment to mak-
ing sure that we do not even waste a second. And I am pretty sure
Administrator Guzman, I worked with her in California, she shares
that commitment, as well. That is the lens I will take.
But I do think this is an opportunity for us to take the moment
and see what are some of the things that we can do better in terms
of our internal ops and processes and technology and so forth.
Again, I do not have the stock of that. Fortunately, I have been in
business where I have stood up infrastructure and I have scaled
companies, and often in the face of unprecedented growth. I will
bring that lens if I am confirmed in this job.
Senator SHAHEEN. Well, I appreciate that and I look forward to
revisiting this issue after you are confirmed.
One of the real frustrations that I have had, and I know it is
shared by members of this Committee during the last year, has
been trying to get accurate information about SBA programs and
their performance, about how much money has been lent? Who it
has gone to? On the EIDL, again, how much money has already
been provided to people.
And so, recognizing that you are not there at SBA, but you have
been a business owner. You have been a customer of SBA. Can you
talk about how the Agency currently shares information with
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stakeholders? And what steps you would like to see taken to im-
prove sharing of that information with customers of the SBA?
Mr. SYED. Senator Shaheen, that is a good question and I am
glad you asked that question.
Again, my perspective is what I have seen, what I have observed.
The reality is the Agency is operating at a level—I think we men-
tioned earlier—which is multiples of where it was.
Frankly, any organization that has to go through that kind of a
change, you have to get to the right point of understanding where
you need to go in terms of sharing data, instrumenting metrics,
and so forth.
I will commit to you that that is one of the priorities we will
make, in partnership with the Administrator but as an operator, if
you would, in the Agency to make sure that we are able to track
and share things that are appropriate that you need as the over-
sight committee. And that will be something that I commit to you
that I will do as a matter of priority.
Senator SHAHEEN. Thank you. We have a lot of small businesses
in New Hampshire who are very frustrated because they could not
get an answer from the SBA on their EIDL loans and what the sta-
tus is. And so, I think that communication is critically important.
Thank you. Thank you, Mr. Chairman.
Chairman CARDIN. Thank you, Senator Shaheen.
Let me just followup with one point on Senator Shaheen’s point.
Yes, it is important that the stakeholders know how the programs
are working. And if we are going to evaluate a program, it is not
only making information available to us that you have. It is having
that information to make it available to us.
We found out the previous administration, they were not asking
the questions that allowed us to be able to determine whether our
intent of reaching all communities was, in fact, taking place. So I
would just urge you to understand, you have got to also get granu-
lar information available so that we can evaluate it, and that re-
quires an affirmative action on your part to make sure that infor-
mation is accumulated.
Senator MARSHALL.
Senator MARSHALL. Thank you so much, Chairman.
Mr. Syed, again it is good to meet you in person. I enjoyed our
phone call. So welcome.
You come from a technology, an AI background. How do you see,
what are the opportunities in the SBA to use that background to
improve the services, as well as to better measure what we do,
leading to better management?
Mr. SYED. It is wonderful to see you in person, Senator Marshall.
I enjoyed the conversation, as well.
You know, I think again, AI is early in its deployment, if you
will, in various industries. But just from the outside and, again, I
do not have—obviously, I am not privy to the internal operations.
I think when we are generating so much data at the scale at
which we are doing right now, with the $1 trillion that is working
through the SBA, there are opportunities potentially in the area of
fraud, waste, and abuse. You can look at patent recognition. You
can see where we can actually catch things earlier, right? So again,
I will have to dive in. I am sure there is some machine learning
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the team may already be deploying and I will bring that, if you
will, acumen in the job if I am confirmed.
So that is just probably one of the areas that one can look at,
which I understand is a priority. It is a priority for the President.
It is a priority for the Administrator, and also for this Committee.
Senator MARSHALL. Great. We are certainly very proud of our re-
lationship with the SBA in Kansas, our office working with them,
and we look forward to continuing to implement new technology.
Mr. Syed, are you familiar with the Hyde Amendment?
Mr. SYED. I am at a higher level.
Senator MARSHALL. So it is a law that says you cannot use Fed-
eral funds for abortion. Planned Parenthood is the largest abortion
provider in America. So just using some common sense, does it not
seem like giving money through the PPP program to Planned Par-
enthood is a violation of American law?
Mr. SYED. Sir, I understand this is an important question, it is
important to you. And I hear you.
I am not in a position to comment on violation of any amendment
because one, as I shared with you right now that I am not entirely
familiar with the amendment. And secondly, again the rules per-
taining to this particular entity.
As I mentioned earlier in the question and response to Senator
Hawley’s question, if confirmed I will work with the Administrator
to make sure that we are applying the rules consistently for all po-
sition, for-profit, non-profit. And that is what I can commit to you.
Senator MARSHALL. We talked briefly about CDFI, Community
Development Financial Institutions, and this is just something that
I learned about at the last meeting. I think that there is a great
opportunity for them to be more visible and better implemented, as
well. And one piece of the puzzle that I discovered, as I sat down
with people that could not get a PPP loan, and even went to dif-
ferent banks trying to say what can you do to help these people?
And there are certainly reasons why banks were shying away from
them, probably had something to do with their credit score.
But it was even just their knowledge, business knowledge, the in-
ability to fill out a financial statement even, just some real simple
basic facts. I just would ask you, as you look into what the role of
CDFIs are, if there is not an opportunity to help educate people so
that we can bring them into the fold and help these—they may be
great entrepreneurs but just not financial wizards, so to speak.
Do you see any role for that education from the SBA?
Mr. SYED. Absolutely. Actually, that is very close to my heart,
Senator Marshall. Actually, pretty much a year ago, when the
pandemic’s effects were coming out, I was with a community in
California, walking folks through various things, how to access PPP
and so forth. And we noticed that the communities of color, under-
served regions, rural communities, they were clamoring for infor-
mation. They did not even know where to go, to your point, and es-
pecially if you are underbanked and unbanked.
So I actually commit to you, this is an area that I will personally
be very energized to help with.
Senator MARSHALL. I would love that, after you are there three
or four months, to kind of have a conversation about the CDFIs
and how you feel they are doing and where they can improve.
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Thank you so much and I appreciate you coming.
I yield back.
Mr. SYED. Thank you.
Senator SHAHEEN. Mr. Chairman.
Chairman CARDIN. Senator Shaheen?
Senator SHAHEEN. Can I just make a clarification for the record?
The questions that Senator Hawley and Senator Marshall are
raising about support for Planned Parenthood under the PPP pro-
gram. That was done under the Trump administration, under SBA
Administrator Carranza. So I would suggest that those are ques-
tions that maybe should have been put to them, as opposed to the
current Administration.
Thank you.
Chairman CARDIN. Senator Cantwell.
Senator MARSHALL. If I could just make a point, as well.
Chairman CARDIN. Senator Marshall.
Senator MARSHALL. Certainly, there is a new tranche of money
that was just recently given out by the current Administration, as
well, just for the record.
Chairman CARDIN. Senator Cantwell.
Senator CANTWELL. Thank you, Mr. Chairman.
Mr. Syed, thank you so much for your willingness to serve and
thank you for the conversation we had yesterday to talk about
many things related to the SBA administration.
You have already heard from many of my colleagues about the
operations of the programs that are underway or not as success-
fully underway, so just to add my comments to the Shuttered
Venue Operations Grant, we need to make that successful. Obvi-
ously, we do not want the Restaurant Revitalization Grant to be
kludgy like that. We want it to be successful.
I had to step out for a minute but I think that is what the Chair-
man was asking you, to make sure that that—let us know anything
that is necessary for us to make that restaurant program move suc-
cessfully.
I wanted to bring up two issues. One, there was a program re-
lated to the newspapers, and part of the PPP application when
newspapers were owned by a large entity apply separately with the
same EIN of their parent company. So some of the applications are
being held.
And so this is really, I think, a technical problem in the applica-
tion form. So I hope that you would look at this and make sure
that we are resolving these problems as it relates to newspapers
and that the set-aside for local news networks, that they also fix
any technical barriers.
Mr. SYED. Senator Cantwell, thank you for those questions and
good to see you in person. I appreciate your time for the call yester-
day.
So I totally agree with some of the things that you mentioned
here. If confirmed, I will look into these things.
You know, having gone through the process myself and seeing
sometimes just some of the fears that are there, there is the oppor-
tunity to probably do better. And especially when we expand the
program for so many different types of entities, right? And this has
not been done——
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Senator CANTWELL. But I think these are more like technical
issues in the way that somebody asked for information that does
not quite fit with the specificity.
But here is another example that is very challenging. So the SBA
lenders have denied Paycheck Protection Program loans to Native-
owned small businesses because they do not meet the SBA’s docu-
mentation requirement. So we have 20-plus recognized Tribes in
the Pacific Northwest and more than 1,000 Native-owned busi-
nesses. So these are individuals that have fishing rights but they
have not been able to get COVID relief because they do not file tax
returns because they do not have that obligation under the treaty
rights. So they do not have an employment identification number.
So we need to figure out how to fix this. So I hope that you will
commit to fixing this. I mean, create a pilot program, figure out an-
other way to do it. But you have 1,000 people—at least in my
State, there would be more in Oregon and Alaska and California,
and other places. You know, figuring out exactly how to make the
program fit the mold for the uniqueness that tribal businesses rep-
resent in their tax status structure.
It is almost like okay, come up with some other identifier, if that
is what you are looking for, so that you know and understand these
businesses meet the standard. They just do not have an EIN num-
ber.
Mr. SYED. Thank you, Senator.
I think it is a great example of the kind of things we need to put
an eye toward and I commit to you that I will have that operating
view on things in partnership with the team at the SBA and will
work with your office, as well, to make sure that those potential
pilot programs are being explored, given that the need is there and
somehow they are not being addressed properly.
Senator CANTWELL. It is not the need. It is that they are being
treated inequitably under the law just because of a previous right
that they already have. So it is just the program did not entail
thinking about people who do not have an EIN. So we just need
to fix it.
So thank you for your commitment to fixing it.
Thank you, Mr. Chairman.
Mr. SYED. Thank you, Senator.
Chairman CARDIN. Thank you, Senator Cantwell.
Senator Inhofe, are you ready?
Senator INHOFE. Yes.
Thank you, Mr. Chairman. My timing is perfect. I was delayed
on the floor, but I definitely wanted to get in here.
I have a couple of things to talk to Mr. Syed, is that it? Does that
sound good to you?
Mr. SYED. That is right.
Senator INHOFE. All right, Mr. Syed. The CARES Act included
funding to allow the SBA to provide debt relief payments for reg-
ular SBA loans. Now this problem was extended through December
2021, the Omnibus allowing SBA to make up to eight additional
monthly debt relief payments.
Now businesses in my State of Oklahoma have benefited greatly
from this program, but there are concerns that once the program
ends businesses will be unprepared to resume regular loan pay-
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ments. Now the SBA should consider providing banks with in-
creased flexibility with payments and loans to date.
So are you aware of these concerns? Is this something you have
run into before?
Mr. SYED. Senator Inhofe, I am aware of the payment relief, just
really from outside and some friends who were able to get payment
relief for the 7(a), 8(a), and 504 programs.
Senator INHOFE. If you are confirmed, can you commit to
proactively helping businesses to begin making regular loan pay-
ments? Because this has grown to be a problem in Oklahoma. Can
you do that for me?
Mr. SYED. Senator, if confirmed, I will work with the Adminis-
trator to explore options to see what levers can be applied.
Senator INHOFE. Okay, that is good.
Now the other thing that I was interested in is information keeps
coming to light, because it is a pretty toxic subject, that Planned
Parenthood has illegally received the PPP loans despite SBA’s affil-
iate rules. Now their affiliate rules provide that, first of all, it has
to be under 500, and they count the affiliates in with this.
Now, with the affiliates, Planned Parenthood is some 16,000 peo-
ple. So I cannot imagine that it would not be disqualified just on
those lines.
What is your opinion about that?
Mr. SYED. I am sorry, Senator, could you repeat the question?
Senator INHOFE. Yes. What is your feeling about the fact that
Planned Parenthood, we understand, has received some of the PPP
loans, I contend are illegal because, first of all, just the size limit
of 500. They are a group of some 16,000. So would you believe that
they would not qualify for the PPP loans because of size and affil-
iate size alone?
Mr. SYED. So Senator, it is an important question and we had
an earlier discussion as well.
I, obviously, am not familiar with the rules as applied to this
particular entity. If confirmed, what I can commit to you is that I
will work with the Administrator to make sure that we are apply-
ing rules consistently for all organizations as laid out in the law.
Senator INHOFE. Yes, I am not sure it would be necessary to do
that because you do have a hard fast rule on the number 500 and
this falls way outside of that. And so the only question I have is
is there a loophole I do not know about, where this would be a legal
and appropriate application of the PPP program?
Mr. SYED. Senator, with all respect, I am not obviously familiar
with the application of this particular entity, what was applied.
Again, what I am committing to you, with absolute certainly, is
that we will work to apply the rules consistently across and make
sure that there is a proper eligibility review.
Senator INHOFE. Well, do you know of any exceptions that are in
the rules in this case that would provide to exceed the 500 limita-
tion for appropriate programs?
Mr. SYED. Senator, I am obviously not privy to the rules. I am
not in the job yet. So I am not able to comment on that. Again, I
hear your concern, and it was brought up earlier as well. I commit
to you that I will work with the Administrator and the staff to
make sure that we are applying rules consistently for all entities.
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Senator INHOFE. All right. Well, I will be checking back at the
appropriate time then.
Thank you very much.
Mr. SYED. Thank you, Senator.
Senator INHOFE. Thank you, Mr. Chairman.
Chairman CARDIN. Thank you, Senator Inhofe.
Senator INHOFE. Did you have any comments to make about my
inquiry here? Because I thought that the hard fast rule was it had
to be under 500 to apply for and be granted the PPP program?
Chairman CARDIN. I know this issue has come up during the
drafting of the PPP loans and I think there has been a consistent
interpretation of the rules as to whether the affiliate rules apply
or not. It may not be an exception to the affiliate rules, it is wheth-
er the affiliate rules apply.
This was done under the Trump administration, I would remind
you of that. And I know that there was some displeasure on how
the rules were adopted. There were some efforts made to change
the legislation. Those efforts did not succeed.
Senator INHOFE. I see. Okay well, I will have to look into that.
Chairman CARDIN. And I appreciate, our Committee wants to
make sure that the rules are being applied uniformly and is con-
sistent with the legislative instructions and the practice of the
SBA. And there is some historic practice on affiliation rules.
Senator INHOFE. Yes, I think there is. All right, thank you, Mr.
Chairman.
Chairman CARDIN. Senator Rosen is with us vis-à-vis the web.
Senator ROSEN. Thank you, Chairman Cardin. I appreciate it.
And thank you, Mr. Syed, for being here with us today, for your
commitment to serving our Nation.
I look forward to learning more about your plans to support our
Nation’s small businesses. Of course, they are continuing to strug-
gle to keep their doors open, and I want to hear about your vision
and how the Agency can better serve them as they begin their path
to recovery.
So I want to talk a little bit about lifting the caps on EIDL
grants. Last month, I was pleased that Administrator Guzman an-
nounced that the Agency will lift the caps on EIDL loans from
$150,000 to $500,000. And just last week, she wrote to me to let
me know the caps would move to $2 million. So all of them would
be removed. That was what was originally mandated by Congress.
This is a policy change I have been calling for since last year. It
is going to provide much needed support to 99 percent of busi-
nesses in Nevada that are small businesses.
However, given the prior Administration’s actions to cap the
EIDL Advance Grants to $1,000 per employee, our smallest busi-
nesses—including many minority-owned small businesses—did not
receive the $10,000 grants that Congress had promised and passed
into law.
So in her letter last week to me, Administrator Guzman stated
that SBA does not have the statutory authority or the funding to
provide $10,000 grants to all eligible small businesses, regardless
of size or location. But she indicated that she would not have
capped the original EIDL program, as the last Administration had.
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That being the case, if confirmed, will you commit to working
with my office to advance legislation that provides the Agency with
the authority and the funding to provide all of our small businesses
with the $10,000 EIDL Advance Grants and not only those that
happen to be in low-income areas?
Mr. SYED. Senator Rosen, thank you for the question and I to-
tally appreciate the importance of this topic. If confirmed, I will
work with the Administrator to work with your office and partner
as appropriate to make sure that there is more resource available
to small businesses.
Senator ROSEN. Thank you.
I want to move on quickly to technology, and I know that is
something you know a lot about. Of course, I am a former computer
programmer, systems analyst, and early on in my career I learned
the importance of using updated software systems, the latest tech-
nologies, to improve processes and provide timely and accurate in-
formation.
During the COVID–19 pandemic the SBA was delegated the dif-
ficult task of managing a multi-billion dollar emergency loan and
grant program, programs that have provided critical aid to our
small business community. However, some of our constituents
small business owners have complained they have waited a long
time, sometimes even months. And the Agency seems to be requir-
ing them to resubmit the same documents multiple times, delaying
the process. Of course, you know, small businesses do not have the
capital reserves to survive for many months.
So given your experience in the private sector, what can the
Agency, in your opinion, incorporate from the private sector to im-
prove its internal controls and technology, thus speeding up the
process of these loans and grants so that people can get the timely
help they need to stay in business?
Mr. SYED. Absolutely, Senator Rosen. This is a very important
question and I appreciate that you understand these demands since
your own background in technology earlier.
As I mentioned earlier, in previous comments, there is a signifi-
cant scale at which SBA is operating with just the breadth of pro-
grams and how fast they have to be stood up. There is obviously
infrastructure, based on my reading from the outside, that is dec-
ades old.
Once I go in, the first order of business for me would be to learn
and understand what the infrastructure looks like before sug-
gesting and making any changes. The reality is, we do have an op-
portunity, given the moment, to be able to see how we can improve
capacity of this infrastructure. I, fortunately, bring that back-
ground. I have built and scaled infrastructure in technology compa-
nies at all levels.
And I commit to you that I will work with the team to make sure
that we are meeting the moment, while at the same time making
sure that we do not break things that are working, given just the
importance of delivering services as we speak.
Senator ROSEN. I think this is another area for us, as Congress,
to consider IT modernization, creating platforms that are easily ac-
cessible across all State front-ends that they can use, and modify
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the back-ends in ways that they need to. And so we hope that we
can work with you on upgrading all of your systems.
Thank you.
Thank you, Mr. Chairman.
Mr. SYED. Thank you, Senator.
Chairman CARDIN. Thank you, Senator Rosen, appreciate that
very much.
I just want to followup one point with Senator Paul, and I know
that we are going to followup in regards to the information that he
is seeking.
I have been informed by my staff that estimated losses was not
required on the application when the company applied for the loan,
and that revenue loss is now on the application because of the
EIDL Advance Program. The EIDL application does ask for total
revenue during the 12-months prior to the disaster, in this case
prior to January 2020. It is my understanding that information
was made available by Mr. Syed.
Also, there is no question on the Committee questionnaire or the
financial disclosure statement which would have required he dis-
close the PPP or EIDL loans. The funds were for the company, not
for Mr. Syed personally.
I just really wanted that to be put on the record, just so we had
that information. But we will followup with you, Mr. Syed, and
with Senator Paul and staff to try to resolve any open issues so
that we can try to move your nomination as smoothly as possible.
Mr. SYED. Thank you, Senator.
Chairman CARDIN. We will keep the Committee record open until
Monday close of business for any additional questions that might
be asked by any of the members. We would ask that you respond
to those questions promptly that are asked.
And with that, I see no further member and no further business.
The Committee will stand adjourned.
Thank you very much, Mr. Syed.
Mr. SYED. Thank you.
[Whereupon, at 3:56 p.m., the Committee was adjourned.]
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OPDS05-437224 with DISTILLER Insert offset folio 026 here 46628.026
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OPDS05-437224 with DISTILLER Insert offset folio 027 here 46628.027
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OPDS05-437224 with DISTILLER Insert offset folio 028 here 46628.028
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OPDS05-437224 with DISTILLER Insert offset folio 029 here 46628.029
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OPDS05-437224 with DISTILLER Insert offset folio 030 here 46628.030
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OPDS05-437224 with DISTILLER Insert offset folio 031 here 46628.031
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OPDS05-437224 with DISTILLER Insert offset folio 032 here 46628.032
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OPDS05-437224 with DISTILLER Insert offset folio 033 here 46628.033
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OPDS05-437224 with DISTILLER Insert offset folio 034 here 46628.034
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OPDS05-437224 with DISTILLER Insert offset folio 035 here 46628.035
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OPDS05-437224 with DISTILLER Insert offset folio 036 here 46628.036
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OPDS05-437224 with DISTILLER Insert offset folio 037 here 46628.037
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OPDS05-437224 with DISTILLER Insert offset folio 038 here 46628.038
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OPDS05-437224 with DISTILLER Insert offset folio 039 here 46628.039
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OPDS05-437224 with DISTILLER Insert offset folio 040 here 46628.040
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OPDS05-437224 with DISTILLER Insert offset folio 041 here 46628.041
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OPDS05-437224 with DISTILLER Insert offset folio 042 here 46628.042
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OPDS05-437224 with DISTILLER Insert offset folio 043 here 46628.043
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OPDS05-437224 with DISTILLER Insert offset folio 044 here 46628.044
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OPDS05-437224 with DISTILLER Insert offset folio 045 here 46628.045
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OPDS05-437224 with DISTILLER Insert offset folio 046 here 46628.046
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Æ
OPDS05-437224 with DISTILLER Insert offset folio 047 here 46628.047
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File and source
- File
- CHRG-117shrg46628.pdf
- Size
- 2,779,479 bytes
- SHA-256
- 4421bf37d7bfbbcc47d34882fa29322e26f0bc8c8a19d5864fe1eb5e79ee23d6
- Our copy
- CHRG-117shrg46628.pdf
- Original
- www.govinfo.gov