AP Exclusive: Sept. 11 Recovery Loans Went to Many Who Didn't Need Them

[NNN0LHI]

http://ap.tbo.com/ap/breaking/MGBNLLRBDDE.html

The government's $5 billion effort to help small businesses recover from the Sept. 11 attacks was so loosely managed that it gave low-interest loans to companies that didn't need terrorism relief - or even know they were getting it, The Associated Press has found.

And while some at New York's Ground Zero couldn't get assistance they desperately sought, companies far removed from the devastation - a South Dakota country radio station, a Virgin Islands perfume shop, a Utah dog boutique and more than 100 Dunkin' Donuts and Subway sandwich shops - had no problem winning the government-guaranteed loans.

"That's scary. Nine-11 had nothing to do with this," said James Munsey, a Virginia entrepreneur who described himself as "beyond shocked" to learn his nearly $1 million loan to buy a special events company in Richmond was drawn from the Sept. 11 program.

"It would have been inappropriate for me to take this kind of loan," he said, stating the company he bought suffered no ill effects from Sept. 11.

Arvind "Andy" Patel, 50, said he used his $350,000 loan in fall 2002 to remodel his Dunkin' Donuts shop in western New York state and never knew it was drawn through the Sept. 11 program.

[whistle]

1. Just how did all of that work?

[vptpt]

2. What about this...

"a Virginia entrepreneur who described himself as 'beyond shocked' to learn his nearly $1 million loan to buy a special events company in Richmond was drawn from the Sept. 11 program"

Uh huh. So uh...what do you think he'll do? Will he send that money back? Donate it to a good cause?

[WCGreen]

3. It's not his fault they couldn;'t keep track of the funding..

Just another in a long line of fuck ups from the party that "knows how to run things" cause they have all played at being bidness men,,,,

[vptpt]

4. True

I don't blame him for it, but it would be nice if he could maybe send some of it down to help out.

[WCGreen]

5. He probably already spent it....

[eeper69]

6. And they're paying off the Katrina victims

with $2,000 debit cards :mad:

[Career Prole]

7. "Loosely managed", they said. Horseshit! We were robbed again!

SBA documents obtained by AP show banks had a strong incentive to approve as many loans as possible from the terror program. The banks profited from the interest while incurring little risk because the government guaranteed 75 percent to 85 percent of each loan.

And the annual fee the lenders paid to SBA to get the government guarantee was slashed from 0.5 percent to 0.25 percent — meaning lenders saved an additional $5,000 a year for every $2 million they loaned under STAR.

"There was definitely an advantage to the lender to get that reduced fee," said Christopher Chavez, an SBA official in Colorado. He said he suspects lenders might not always have talked to businesses about damage from Sept. 11 before moving loans into STAR.

http://tinyurl.com/ajat2

And of course, no one remembers a thing...

"Government officials said they believe banks assigned some loans to the terror relief program without telling borrowers. Neither the government nor its participating banks said they could provide figures on how many businesses got loans that way."

Ri-i-i-ight...but a bank has no trouble remembering that sixteen years ago Career Prole was late on a payment for Mrs. Career Prole's engagement ring.

Wonder when the investigation will be?

Answer: When capitalist pigs fly.

[anotherdrew]

8. who cares? they were LOANS. but still, repubs can't run any government.

get them out of all jobs in the fed (elected, appointed or just civil service) and you'd see government efficiency skyrocket.

[Roy]

9. Arn't these government backed loans?

If the borrower defaults, doesn't the government take respobsibility.

This would guarantee that the bank collects interest but bears 0 (zero) risk. Not bad, huh?

[beyond_the_pale]

10. An "incentive to approve as many loans as possible"

I am so glad that these loans are under scrutiny. In 2001 my employer, a convention services related business, qualified for more than double the amount they originally requested. The principals applied on-line, forwarded some tax returns and personal financial statements. We were shocked when the loan was approved in a few weeks. This company did need financial help, but the problem existed well before 9-11. I just couldn't believe it. These were my tax dollars being given out with very little care in my opinion and based on this story, much worse than I imagined.

[Jade Fox]

11. Fight terrorists--buy donuts?

[bribri16]

12. Just in time to make people wary of giving all those poor blacks any loans

Just damn wonderful how they time these so-called 'revelations.'
yeah my head is lop-sided from the tin-foil hat I've been wearing.