WASHINGTON, Dec. 29, 2005
Billions In 9/11 Loans Botched
Some Businesses Unaware They Were Getting Terror-Recovery Cash
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Play CBS Video Video 9/11 Loans Scrutinized The Small Business Administration is trying to explain how places like a winery thousands of miles from New York came to receive millions of dollars in government-backed loans. Jim Stewart reports.
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(CBS/AP)
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Port Authority police officers are seen reflected in a World Trade Center sign as they stand guard outside a WTC train station, Thursday, July 7, 2005 in New York. (AP)
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In a program to help businesses after Sept. 11, a high percentage of government-backed loans went to recipients who appeared to be unqualified, some of them unaware they were receiving terrorism-recovery money, investigators report.
The Small Business Administration's inspector general said Wednesday that agency officials were at fault for telling lenders in the program that their determinations would not be questioned.
The inspector general concluded that only nine loan recipients in the 59 cases sampled appeared to be qualified for disaster loans.
The program in question was launched shortly after the Sept. 11 attacks on the theory that small businesses especially would be hurt by the disruption to the nation's economy, CBS News correspondent Jim Stewart reports. In fact, President Bush repeatedly cited small business recovery in speeches to the public in the aftermath of the attacks.
On Oct. 26, 2001, Mr. Bush said: "We've got SBA, the Small Business Administration, helping small businesses in the areas impacted by the attacks from the evil ones."
But lenders who handed out billions of dollars in loans failed, 85 percent of the time, to document that recipients were actually hurt by the terrorism attacks and therefore eligible for the aid under the law, the report found.
The investigative report substantiates key findings of an Associated Press story in September that found similar problems with the SBA's Supplementary Terrorist Activity Relief program.
The report found:
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