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U.S. Loan Deal," and "Woman found Guilty of Investment Fraud," to name only a few. Millions of taxpayers' dollars wasted for illegal and questionable purposes.
A close scrutiny of the SBA's fiscal 1981 and 1982 budgets reveal no direct funds available to veterans. Funding comes from various sources and is manipulated on the basis of district needs.
Mr. Chairman, the American Legion is very concerned that the SBA fully implement special considerations for veterans. Our National Commander, Michael J. Kogutek, has accepted an invitation to sit on the SBA's Advisory Council, which recommends policy and procedure to the SBA. He will undoubtedly provide important input to improve veterans programs. Unlike the past, when many State departments of the Legion simply gave up on the SBA, attitudes are presently changing.
As previously stated, nearly 25 Legion State departments reported some involvement with the SBA. This indicates several important factors: First, a willingness to cooperate with the SBA on veterans programs; second, increased demand for veterans programs on small business; and, third, a greater sensitivity on the part of local VAO's to the business needs of veterans, especially Vietnam-era veterans.
We believe now is the prime opportunity for the new Administrator to seize the moment and build a meaningful veterans program. If not, what little confidence the American Legion now has in the SBA will be dashed and a potential friend may be transformed into a formidable foe.
We are respectfully recommending to the new Administrator that he issue a strong directive to be included in all field manuals that special consideration be given veterans. However, we are also first recommending that the SBA establish a small 90-day committee to study and clarify special consideration as the term now is only replete with vague and misleading connotations, fostering a sense of confusion and, thus, avoidance.
Most of all, the new Administrator must insure that veterans have separate, direct funds available. Nothing else will suffice.
Mr. Chairman, the American Legion is not unreasonable in its request. Impatient, yes. We are working very hard to simply see that the SBA complies with the law in a meaningful way, nothing
We also fully understand the problems facing the new Administrator and, again, pledge our assistance.
Mr. Chairman and members of this subcommittee, the American Legion thanks you for allowing us to present our views.
[The prepared statement on behalf of the American Legion appears on p. 35.]
Mr. MONTGOMERY. Thank you for your good testimony, right to the point.
Let me ask you, do you think that the bill that we've introduced H.R. 1139, would improve the situation? Have you had a chance to study this piece of legislation?
Mr. BOURIE. Mr. Chairman, I haven't had an opportunity to study it in depth, but I appreciate the intent behind it. Something must be done. I think there may be some problems with the VA running this program. You establish, or propose to establish, a $25
million fund. Well, startup costs and running the program may exceed three times that amount, and in the time of budget restraint, we might run into some problems. Offhand, I would probably feel a little more comfortable if the SBA were running it, only because they have the personnel and the expertise and it would be very easy to integrate this program to it. But my fear there, and that may sound like quite a mouthful, is that given their past experience in the veterans' programs, that money is going elsewhere.
Mr. MONTGOMERY. I wish I would have asked the SBA what their percentage is on collection of direct loans and secured loans. I don't think they have that good a record either, do they?
Mr. BOURIE. No, sir, Mr. Chairman. It is the proverbial “which came first, the chicken or the egg" with veterans, since they never really had a program. Where do veterans fit in in their scheme. They can sit here and give us all the statistics in the world.
No. 1, as Mr. Jeffries pointed out, they are counted twice, and veterans are counted twice, or perhaps three times. By their own admission, it totals up beyond 100 percent. And so it depends on who is placing the heat on them-our veterans, our minorities, our women? Let's count the groups up. The basis of this whole thing is that they just do not have a veterans' program. It is fragmented; it operates in a vacuum; money is shuffled around from district' to district. I speak to the district people once a week, and what they tell me is far different.
There are no funds available for veterans, nothing at all. We have nothing in our field manual, the bible for the SBA, on special consideration. They don't know what the heck it means. What does "special consideration" mean?
Mr. MONTGOMERY. Well, you have stated it well. Are any SBA people still in the room?
[Affirmative response from audience.]
Mr. MONTGOMERY. You are, OK. I certainly hope you will carry this back.
I think you have really stated it well, Mr. Bourie. You've pinned it down. You've gotten to the bottom line.
The Chair will be glad to recognize any other Members at this time.
I think you pointed out the question-we have some problems and SBA is just not geared to working with the veteran. I think you are right; I think pressures are coming from other areas which is the way it works up here in this town. Who puts on the most pressure is the one that comes out better.
So, I think these hearings are certainly worthwhile; do you agree with that?
Mr. BOURIE. Absolutely, and I hope to see more in the future and gage their progress as time goes on.
Mr. MONTGOMERY. Thank you very much.
Mr. DANIELSON. Mr. Chairman, I just want to echo my chairman's concern and echo what I previously said. I'm glad to know that the gentleman is still here from SBA and I hope he is a good message carrier. I think he probably is.
I don't know that we have a statutory mandate for SBA, maybe there is. I'm just pleading ignorance. I don't know that there's a statutory mandate for "loans to the disadvantaged,” for “loans to women,” for “loans to handicapped.” I'll bet there is no such category for “loans to others,” and “other” is one of the categories here.
I just think that when the Congress says you must give special consideration to veterans, they ought to at least open up a new sheet in the ledger and call it veterans. That is my comment.
Mr. MONTGOMERY. Thank you very much.
Mr. MONTGOMERY. We would like to call Mr. Thomas Wincek, chairman, and Mr. Robert Sniffen, vice chairman, of the Vietnam Veterans Foundation.
I'd like to welcome these gentlemen. You've been by to see me and I know you are sincere in your efforts. You may proceed in the manner you would like.
Your statement will be put in the record in full. STATEMENTS OF THOMAS WINCEK, CHAIRMAN, AND ROBERT SNIFFEN, VICE CHAIRMAN, VIETNAM VETERANS FOUNDATION
Mr. WINCEK. Thank you, Mr. Chairman. I'd like to start off by introducing our advisory board chairman, Mr. Woody Erdman. Mr. Erdman has joined the foundation approximately a year ago because of his concern as a World War II combat veteran that Vietnam veterans weren't getting the same opportunities in business as was afforded the World War II veteran.
By way of background, Mr. Erdman started his career as a sportscaster for the New York Giants, later he became chairman of the board of two banks, a publisher, owner and operator of over 20 radio and TV stations, and owner of the world champion Boston Celtics. The California Seals has recently nominated him SBA man of the year.
Mr. Erdman heads a team of bankers, lawyers, and senior business people across the country that have really taken on this issue as something that is really relevant to Vietnam veterans: To be able to give the same opportunities to go into free enterprise as was afforded veterans of other eras.
So for the first 4 or 5 minutes, I would like to turn it over to Mr. Erdman, our advisory board chairman of the Vietnam Veterans Foundation.
Mr. MONTGOMERY. We are certainly glad to have Mr. Erdman here. The Chair would like to say that this meeting will probably have to be over probably around 9:55. If the witnesses could summarize their remarks, as I requested the other witnesses, we would certainly appreciate that. It is nice to see Mr. Erdman again. His interest not only in trying to make money, but in trying to help the veteran, is certainly commendable by the Chair.
Mr. ERDMAN. Thank you, Mr. Chairman and members of the committee. My responsibility, as Tom has mentioned, as advisory board chairman of the Vietman Veterans Foundation is to point out clearly the myth of the war to end all wars and its relationship to small business in this Nation, and to enlist the support of the entire business, professional, and educational community.
See p. 67.
We of World War II believed we had won the war to end all wars. We have since been, as we know, involved in Korea, Cuba, Vietnam, Iran, and so on.
In short, it has become apparent that to feel it will never happen again is for us to create and to cultivate a dangerously false sense of security that could one day bring about the end of all freedom as we have known it since our country came into being.
The question facing us is apparent. Are we aware of the myth in our thinking that there has not been, nor will there be as much as we would pray it to be such a condition in the United States of America, as the war to end all wars.
How are we then to protect ourselves? The obvious answer: by recognizing the importance of the warrior. What have we done wrong?
World War II veterans returned to loud cheers and benefits. World War II veterans, myself included, received benefits by the shovelful literally. Indeed, it would have been necessary to be several people to utilize all World War II benefits.
The successes in business that have been my privilege to enjoy came as a direct result of World War II veteran benefits. I submit respectfully to this committee that records reflect that the imbalance between the loan and other business-related benefits of veterans of World War II and those in the Vietnam veteran is so great, there is shockingly no comparison.
There is, in fact, limited opportunity for the Vietnam veteran to realize the American dream of owning one's own business. Indeed, as one of many millions of World War II veterans who served in the South Pacific and the European theater, I'm appalled, I'm ashamed, and I am certainly apologetic to all Vietnam veterans for the shabby treatment which to this very day confronts them since their return not many years ago from serving this country during the Vietnam era when they offered their lives at the bidding of our country as we did in World War II.
We have a gigantic wrong which we must right. We must return to the Vietnam veteran the dignity, the pride which is inherently their right as citizens, most particularly, as citizens who offered their lives to fulfill the laws effected by those of us who demanded that they serve.
It is imperative that we implement the small business privileges which have been and are still due Vietnam veterans under the laws of our land.
This must be effected immediately if we are to bring into focus the importance of having the Vietnam veteran realize the potential this Nation needs so greatly now on small-business work front.
The advisory board of directors of the Vietnam Veterans Foundation is made up of businessmen, bankers, professionals and Members of Congress and other prominent citizens across the country.
Our goal, the prompt bringing to balance an unbelievable imbalance of benefits to the Vietnam veteran which are mandatory for the well-being of this Nation now, and yes, in the years that lie ahead.
Mr. Chairman, as you mentioned earlier, our President of the United States and others who have served beside him at this very moment lie in a hospital-victims of gunshot wounds inflicted yesterday apparently by one individual, and it has shaken the world.
We have experienced, again, the clear illustration of why this Nation must remain strong if freedom is to prevail on earth.
The manner with which our Commander in Chief stood tall yesterday facing an unknown outcome of his physical condition gives this country reason to be extremely proud. He, and those wounded beside him have our prayers and deep genuine respect.
May I submit, Mr. Chairman, that it is now-now, we must grant the Vietnam veteran absolute dignity and pride. Now, we must elevate the Vietnam veteran from a poor relative warrior to a warrier with honor so that this Nation may achieve what it cannot achieve without the approximately 10 million Vietnam veterans.
We feel the SBA and the entire business and Government community must give the Vietnam veteran the opportunity to own a small business. Proud to have served in the military, proud to be a part of the American free enterprise system. Proud to be a small business entrepreneur.
Thank you, Mr. Chairman.
Mr. Wincek, you are going to have to summarize your remarks. You have 4 minutes left.
Mr. WINCEK. Thank you, sir.
Mr. Chairman, I would like to get down to some specifics that were mentioned this morning.
The foundation still remains with its present position that I guess this is our sixth appearance on this very issue over the last 8 months—that Public Law 93-237 has yet to be implemented, and primarily the personnel that's required in the regulations, a veterans' affairs officer, a veterans' procurement officer, and one or more veterans' loan officers. To this day, these people do not exist. There has been an appointment of a veterans' affairs officer, but these people are not full time and this leads to the fact of lack of services when a veteran walks into the local SBA offices.
I think the most important thing to keep in perspective is looking at their financial data that they gave this morning.
The claim in fiscal year 1980, they gave 1,471 loans to Vietnam veterans. Now, if you break this over their 100 field offices where people go into, that's roughly 14 loans to Vietnam veterans in each office, and that's hardly a significant figure. And, also, when they talked about the direct loans, there were 451 given to Vietnam veterans and breaking that over 100 field offices, that's an average of four loans for the entire year going to veterans.
In fiscal year 1981, they've talked about 1,913 loans have gone in the first 4 months of this fiscal year, and, again, that didn't break down to Vietnam veterans, but that isn't very many loans. 19 loans per office for a 4-month period and that was for the whole constituency of the 30 million veterans.
I think it is also imperative that these very—the SBA came before this committee on September 10 and said that they had a minimum goal of 15 percent of all direct and guaranteed loans to go to veterans.