SBA administrator Barreto steps down

Embattled Small Business Administration Administrator Hector Barreto resigned Tuesday following a five-year tenure that was marked by criticism from members of Congress and small business advocates.

Minutes after Barreto's resignation was announced, President Bush nominated Steven Preston to be his successor. Preston, a long-time businessman, currently serves as executive vice president of strategic sources at the ServiceMaster Co., Downers Grove, Ill. The company owns home and land care companies, including TruGreen ChemLawn and Terminix. The appointment requires Senate confirmation.

Barreto is becoming national chairman of the Latino Coalition, a Hispanic advocacy organization based in Washington.

Most of the recent criticism of Barreto revolved around SBA's response to last summer's hurricanes that ravaged the Gulf Coast. SBA, in a statement, said it has doled out more than $8 billion in disaster relief loans along the Gulf Coast since the hurricanes hit, though roughly $1.7 billion of that went to small businesses, while the bulk of the money went to homeowners and renters.

Rep. Nydia M. Velazquez (D-N.Y.), the ranking Democrat on the House Small Business Committee, first called for Barreto's resignation in December, citing SBA's response to the hurricanes and what Velazquez perceived as a lack of pushback on budget and program cuts the Bush administration has proposed for various small business programs in the 2007 budget.

The proposed budget cuts roughly $6 billion in discretionary and non-discretionary funding for federal small business programs across all government agencies.

Velazquez charged that under Barreto's leadership, SBA did not fight enough for the small business programs. Many of the programs slated for funding reductions or outright elimination were created to spur investment, research and development of IT products by small businesses. Velazquez called Barreto's resignation, "the right decision."

"New leadership that is truly dedicated to small business is just what this agency needs today," Velazquez said in a statement.

American Small Business League president Lloyd Chapman, a longtime Barreto critic, said he had been awaiting news of the SBA chief's resignation for some time.

"Federal investigations have documented fraud, abuse, loopholes and a dramatic lack of oversight in small business contracting programs, yet he has done nothing to stop it," Chapman said in a statement.