SBA Nominee Is Big-Business Executive President Bush’s nominee to head the Small Business Administration, Steven Preston, is a corporate executive with no record of entrepreneurial experience. Hector Barreto resigned April 25 after more than four-and-a-half years as SBA administrator. The president immediately named Preston, executive vice president of ServiceMaster and a former investment banker. He has not served in government before, but published reports said he is an active Republican. White House officials said Preston’s financial background makes him well suited to manage SBA, with its large loan and investment programs. But some small business advocates raised questions. “Mr. Preston would be coming to the agency from a Fortune 500 company whose issues are nothing like those faced by the average small business owner,” said Rep. Nydia Velazquez (NY), ranking Democrat on the House Small Business Committee. In an e-mail to members, the National Black Chamber of Commerce branded ServiceMaster “a small business killer.” It said the company has lobbied to limit small business set-asides in the lawn-care industry. ServiceMaster owns TruGreen ChemLawn, among other businesses. Several ServiceMaster brands, including Merry Maids and Terminix, are franchises. “We don’t need another unqualified SBA administrator,” said Lloyd Chapman, president of the American Small Business League. “Hector Barreto’s dismal track record is a clear indication of what happens when you appoint someone that has no qualifications to run an important federal agency. I’m afraid this nomination signals a continuation of the Bush administration’s intention to continue to dismantle the agency.” But the chairman of the House Small Business Committee, Rep. Don Manzullo (R-IL), said, “Mr. Preston has accumulated a wealth of experience in executive leadership and financial management that will serve him well at the SBA.” A Senate confirmation hearing for Preston has not been scheduled. Barreto owned a Southern California financial services company before he joined the administration in 2001. His tenure was marked by several continuing controversies. He drew heavy criticism for the agency’s slow response to loan applications after Hurricane Katrina. Investigators found many SBA disaster loans after the Sept. 11 terrorist attacks went to companies that were nowhere near the scene of the attacks. In the procurement arena, the U.S. Women’s Chamber of Commerce sued Barreto over the five-and-a-half year delay in implementing the set-aside contracting program for woman-owned businesses. The lawsuit is still pending and the set-aside program has not yet been implemented. SBA has hired the RAND Corporation to study how to structure the program. GAO investigators found widespread examples of large businesses receiving contracts set-aside for small ones. Barreto said that was the result of sloppy record keeping or the acquisition of small firms by large ones, rather than fraud. The Bush administration reduced the SBA budget by 36% over the past five years, but Barreto proudly said the agency was doing more with less by taking advantage of new technology and shifting the cost of SBA loan programs from taxpayers to borrowers. The February issue of Inc. magazine labeled Barreto “The Disappointment.” “In the last five years, we have seen the complete and utter abandonment of our small businesses courtesy of the Bush administration,” said Sen. John Kerry (MA), ranking Democrat on the Senate Small Business Committee. “Since George Bush took office, the SBA’s budget has been slashed by more than 40 percent, critical lending and counseling programs have been on the chopping block, and we have witnessed the most abysmal response to the needs of Gulf Coast victims devastated by Hurricanes Katrina, Rita and Wilma.” But House Small Business Chairman Manzullo said, “Hector Barreto has been a good friend and a tremendous leader for the Small Business Administration.” Barreto’s resignation was one of several at high levels of the administration. But an SBA spokesman said Barreto was not forced out. Barreto said he will become chairman of the Latino Coalition, a Washington-based advocacy group.