[Senate Hearing 117-156] [From the U.S. Government Publishing Office] S. Hrg. 117-156 NOMINATION OF DILAWAR SYED TO BE DEPUTY ADMINISTRATOR OF THE U.S. SMALL BUSINESS ADMINISTRATION ======================================================================= HEARING BEFORE THE COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP of the UNITED STATES SENATE ONE HUNDRED SEVENTEENTH CONGRESS FIRST SESSION __________ APRIL 21, 2021 __________ Printed for the Committee on Small Business and Entrepreneurship [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Available via the World Wide Web: http://www.govinfo.gov ______ U.S. GOVERNMENT PUBLISHING OFFICE 46-628PDF WASHINGTON : 2022 COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP ONE HUNDRED SEVENTEENTH CONGRESS ---------- BENJAMIN L. CARDIN, Maryland, Chairman RAND PAUL, Kentucky, Ranking Member MARIA CANTWELL, Washington MARCO RUBIO, Florida JEANNE SHAHEEN, New Hampshire JAMES E. RISCH, Idaho EDWARD J. MARKEY, Massachusetts TIM SCOTT, South Carolina CORY A. BOOKER, New Jersey JONI ERNST, Iowa CHRISTOPHER A. COONS, Delaware JAMES M. INHOFE, Oklahoma MAZIE K. HIRONO, Hawaii TODD YOUNG, Indiana TAMMY DUCKWORTH, Illinois JOHN KENNEDY, Louisiana JACKY ROSEN, Nevada JOSH HAWLEY, Missouri JOHN HICKENLOOPER, Colorado ROGER MARSHALL, Kansas Sean Moore, Democratic Staff Director William Henderson, Republican Staff Director C O N T E N T S ---------- Opening Statements Page Cardin, Hon. Benjamin L., Chairman, a U.S. Senator from Maryland. 1 Paul, Hon. Rand, Ranking Member, a U.S. Senator from Kentucky.... 4 Kaine, Hon. Tim, a U.S. Senator from Virginia.................... 12 Witness Syed, Mr. Dilawar, of California, Nominated to be Deputy Administrator, U.S. Small Business Administration.............. 5 Alphabetical Listing and Appendix Material Submitted Cardin, Hon. Benjamin L. Opening statement............................................ 1 Kaine, Hon. Tim, Opening statement............................................ 12 Paul, Hon. Rand Opening statement............................................ 4 Syed, Mr. Dilawar Testimony.................................................... 5 Prepared statement........................................... 8 Responses to questions submitted by Ranking Member Paul and Senators Cantwell, Duckworth, Rosen, Rubio, Risch, and Young...................................................... 48 U.S. Chamber of Commerce Letter dated April 20, 2021.................................. 3 U.S. Small Business Administration SBA Form 3501 COVID-19 Economic Injury Disaster Loan Application................................................ 18 NOMINATION OF DILAWAR SYED TO BE DEPUTY ADMINISTRATOR OF THE U.S. SMALL BUSINESS ADMINISTRATION ---------- WEDNESDAY, APRIL 21, 2021 United States Senate, Committee on Small Business and Entrepreneurship, Washington, DC. The Committee met, pursuant to notice, at 2:40 p.m. via Webex and in Room 301, Russell Senate Office Building, Hon. Ben Cardin, Chairman of the Committee, presiding. Present: Senators Cardin, Cantwell, Shaheen, Booker, Hirono, Rosen, Paul, Scott, Ernst, Inhofe, Young, Hawley, and Marshall. OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, CHAIRMAN, A U.S. SENATOR FROM MARYLAND Chairman Cardin. The Small Business Committee will come to order. Let me acknowledge that Senator Paul and I saw Senator Kaine on the way in. He is here to introduce the nominee. He went over to cast his vote. As you know, the vote just started on the floor of the Senate. Senator Paul and I voted and came here. So we will interrupt where we are when Senator Kaine returns, to allow him to make his introductory remarks to our nominee. I want to recognize Dilawar Syed, our nominee for the Deputy SBA Administrator. Thank you very much for your willingness to serve our country during these extremely challenging times. It is not easy to serve in public life, just ask the members of the Senate right now. And it is not easy to take a position in the Executive Branch. So we appreciate your willingness. We know you are a successful businessperson so we thank you for this sacrifice. And we know it is not just your sacrifice, but a sacrifice of your family. Welcome to our committee. The Deputy Administrator of SBA is responsible for the day- to-day management of the Agency, so this position is vital to SBA's success. And yet, this position has been vacant for the past three years due to the previous Administration's failure to put forward a nominee. Filling the position with a qualified nominee is more important than ever because Congress has tasked the SBA with tremendous responsibilities as part of the Federal Government's COVID-19 relief effort. In the past year, SBA's has delivered more than $970 billion in aid to small businesses through the Paycheck Protection Program, EIDL, the EIDL Advance grants program, and the Small Business Debt Relief program. In the coming days and weeks, SBA will begin accepting applications for the $16 billion Shuttered Venue Operators Grant program, as well as $28 billion for the Restaurant Revitalization Fund. So we have a lot of activity that is taking place within the Small Business Administration. In total, Congress has charged SBA with distributing more than $1 trillion in COVID-19 small business aid, more than 10 times the SBA's annual budget during the fiscal year before the pandemic. SBA must continue to be a lifeline to small businesses for the remainder of the pandemic and the Agency will be key to ensuring an equitable economic recovery. I am confident that Mr. Syed's experience as a business and civic leader has prepared him to lead SBA at this pivotal moment. Mr. Syed's decades of building and scaling companies will help SBA as it continues to implement new small business relief programs. SBA will also benefit from Mr. Syed's many years as an advocate for underserved entrepreneurs, including his service as Chair of the White House Initiative on the AAPI's Economic Growth Committee during the Obama administration; founder of the California Entrepreneurship Task Force; and leader of California's Rapid Response engagement with underserved small businesses during the pandemic. Because of Mr. Syed's broad experience and commitment to uplifting underserved entrepreneurs he has been endorsed by more than a dozen business organizations, including the National Association of Pacific Islanders, American Chamber of Commerce, Small Business Majority and the U.S. Black Chambers. Without objection, I will put the full list of the endorsements to the nominee into the record. [The information referred to follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairman Cardin. The disproportionate impact of the COVID- 19 pandemic on minority-owned businesses has only highlighted the pervasive historic disparities in access to capital, technical training, and mentorship. That is why the Committee's top priority is improving SBA's program to better meet the needs of small businesses in Black, Latino, Asian, Native, rural, and other underserved communities to ensure an equitable recovery and prepare for future crises. Mr. Syed, if confirmed, we will need your insight into how to improve these programs. So I am asking for your commitment to operating SBA in a transparent manner and to maintain open lines of communication. I want to again thank you for stepping forward to serve our Nation during these very difficult, unprecedented times and I look forward to hearing your testimony. With that, let me turn it over to the ranking member, Senator Paul. OPENING STATEMENT OF HON. RAND PAUL, A U.S. SENATOR FROM KENTUCKY Senator Paul. Thank you, Mr. Chairman. I began my tenure as ranking member of this Committee by supporting Administrator Guzman's nomination in a good faith effort to establish an honest and transparent working relationship with the Biden administration and my colleagues across the aisle. It seems that this goodwill, though, is not being reciprocated. As we proceed with this hearing of the nomination of the Deputy Administrator of the SBA, as we began the process of vetting the nominee as required by the Committee rules, we became aware that Mr. Syed had applied for SBA's PPP and EIDL COVID relief programs on behalf of his company. He did not disclose this taxpayer assistance voluntarily. We found this information on our own, as part of our internal vetting process. Given that the position to which Mr. Syed has been nominated is responsible for overseeing all SBA programs, including the trillion dollars of taxpayer money Congress appropriate for small businesses, it is imperative that this Committee have complete information regarding any SBA programs Mr. Syed participated in. The Committee has a Constitutional obligation to evaluate nominees for Senate confirmed positions such as the one to which Mr. Syed has been nominated. Some would say that the failure of an SBA nominee to be transparent about taxpayer funded programs under this Committee's jurisdiction would be disqualifying in and of itself. I have made repeated requests for this information from both Mr. Syed and SBA. As of today, the Committee still does not have his complete information related to the SBA COVID-19 loan applications that Mr. Syed signed on behalf of his company. Despite my request that the Committee not proceed with this hearing until it has received all of the requested information, here we are. I look forward to hearing from Mr. Syed. I still have an open mind on the nomination, but I hope that he will today provide some clarity and transparency on the information that has been repeatedly denied to the Committee. This is the only way we can allow the Committee to make a full and informed determination of his eligibility for the position so I hope we will get to some transparency today. Chairman Cardin. Thank you, Senator Paul. If I could ask Mr. Syed, if you would please rise and raise your right hand. We have a tradition in our Committee to swear in our witnesses that we have Senate confirmation with. Do you solemnly swear to tell the truth, the whole truth, and nothing but the truth, so help you God? Mr. Syed. I do. Chairman Cardin. You can have a seat. Should you be confirmed as administrator, are you willing to appear and testify before any duly constituted committee of Congress when requested to do so? Mr. Syed. I do. Chairman Cardin. Are you willing to provide such information as is requested by any such committee? Mr. Syed. I do. Chairman Cardin. Thank you. We will go to your opening statement right now but when Senator Kaine arrives, we might interrupt it to allow him an opportunity to properly introduce you to the Committee. So please excuse the informality here, but I think it is a better use of our time. STATEMENT OF DILAWAR SYED, OF CALIFORNIA, NOMINATED TO BE DEPUTY ADMINISTRATOR, U.S. SMALL BUSINESS ADMINISTRATION Mr. Syed. Thank you, Chairman Cardin, Ranking Member Paul, and members of the Committee for the opportunity to appear here today. I am deeply honored to be nominated by President Biden to serve as Deputy Administrator of the Small Business Administration. America's 30 million small businesses are the lifeblood of our economy. SBA's mission of supporting these entrepreneurs is more critical today than at any point in its history. The economic challenge created by the COVID-19 pandemic has claimed millions of American livelihoods, and so many of its small businesses. In the wake of this crisis, we have a once- in-a-lifetime opportunity to build a more supportive, equitable, and resilient environment for small business owners in every community across our great country. I am an entrepreneur who has navigated a company through these difficult times. During the past year, like many other small businesses, we have had to make critical decisions to save jobs and preserve livelihoods. I also know full well that there are many small businesses that have been impacted to a far greater degree. Entrepreneurs in Black and Brown communities, rural and underserved regions need our commitment and support more than ever. For over two decades, I have built early stage businesses and run companies in software, consumer, health care, and artificial intelligence. I am proud to have led teams that have built digital tools used by thousands of Main Street businesses across America. Today, I guide a team of scientists and engineers to help improve health outcomes. I have learned how to build passionate teams that tackle intractable challenges; how to foster an empowering culture; and how to create products that serve millions. While my business career has been gratifying, it is my work as a civic entrepreneur that I value most, and what has driven me to serve. My civic journey spans a decade of serving communities that have too often been left behind. I have spent time in Central Valley of California, Detroit, Philadelphia, and Atlanta advising entrepreneurs in regions that many people would fly over or drive through, but they are brimming with talent, promise, and aspiration. After the Great Recession, as a White House AAPI Commissioner I led engagement with Asian American entrepreneurs across the country, hosting listening sessions with small businesses, regional SBA teams, and resource partners. In my home State, which has over 4 million small businesses, I co-founded the California Entrepreneurship Task Force to bridge regions like the San Joaquin Valley with networks in Silicon Valley. I partnered with chambers of commerce, incubators, and universities to drive inclusive entrepreneurship and innovation in the rural heartland of our State. During the pandemic, I led a campaign to raise awareness of resources, including the Paycheck Protection Program, reaching more than 20,000 businesses. Our startup, like millions of small businesses, received critical help through the PPP and the EIDL programs. I am grateful for the assistance which allowed the company to keep all its employees, stabilize, and then repay the PPP and EIDL loans. During these challenging times, I saw firsthand the heart, skill, and resilience of our amazing team. Through it all, they persevered. I believe that my experience as a business leader and civic entrepreneur can help serve the SBA and all those who rely on it. If confirmed, I commit to leading the SBA--in partnership with Administrator Guzman and its committed public servants-- with urgency and purpose. I will provide hands-on leadership to continue implementation of COVID relief for small businesses and help rebuild those most affected by the pandemic. And I absolutely share Administrator Guzman's commitment to be transparent, accessible, and responsive to this Committee. I want to thank my family for their support in this endeavor. I am a proud dad and I know my wife and kids are watching. And I am really sorry that they could not be here today. In closing, I am an immigrant. I came to America 30 years ago as a young student in pursuit of education and opportunity. At that time, I never could have imagined that I would sit in this chamber with this committee having been called to serve by the President of the United States at this critical juncture. I am deeply humbled and honored. This moment calls me like it should call all of us, including those in the business world, to roll up our sleeves to build a better future. What we do next will matter for generations of Americans. I welcome this challenge and the opportunity to work alongside all of you. Thank you and I look forward to your questions. [The prepared statement of Mr. Syed follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairman Cardin. Mr. Syed, thank you very much for your comments. We are now honored to be joined by our colleague from Virginia, Senator Kaine. Senator Kaine, welcome and we look forward to hearing from you. STATEMENT OF HON. TIM KAINE, A U.S. SENATOR FROM VIRGINIA Senator Kaine. To Chairman Cardin and Ranking Member Paul, thank you for the opportunity to speak a little bit out of order to this committee today. I am so honored to be here to introduce, you have already heard from him, but really to vouch for my friend, Dilawar Syed, who is an ethical and innovative businessperson but also has the heart of a public servant. Before I say a word about him, I do want to just congratulate the Committee and the members of the Committee. Like many of you, during the Easter recess, I spent time traveling around my State and spent a lot of time meeting with small businesses. And just a report from the road, here is what I heard again, and again, and again: it has been the toughest year of our entire business existence. To get through it, we have had to be incredibly creative and resilient and think of new ways of doing virtually everything. We could not have done it without loyal employees and our customer base rallying around us. And thank Congress, thank you to Congress for prioritizing the needs of small businesses, not only in programs like the Paycheck Protection Program and the EIDL loan program, but what I found that surprised me a little is virtually every local government that received CARES Act funding used a portion of that funding to help small businesses in their jurisdictions, maybe businesses that did not quality for CARES or that had opened during the pandemic and could not demonstrate lost revenue from the years before. So that is the first thing I just want to say to the Committee is that the work that you have done in CARES and now the American Recovery Plan is making a difference and I wanted to report that. The Small Business Administration plays a very important role in advocating for the backbone of the American economy. And in choosing administrators, choosing the leaders of the Small Business Administration, because of the critical nature of these businesses to the American economy, you want people with a particular skillset. Dilawar Syed, to me, his resume is just almost the job description of what you would want in a leadership position of this kind. He is an innovative, as he pointed out, American immigrant entrepreneur who has started not just one but multiple businesses in California. Interestingly enough, he has had the experience of a small business owner and the strains and stresses and anxieties of starting something and growing it. But his particular business is serving other businesses. That is what he does. And so it is a business that puts him in touch with other small businesses. That has given him significant insight into their challenges, as well. He has also had the advantage of working as a commissioner in the Obama administration and then in governmental and public service efforts in California to help small businesses. So to conclude, small business owner and innovator, serving other small businesses, and doing so in tandem with governmental agencies and philanthropies. He also mentioned in his opening statement that he, himself, had the experience of benefiting from actions of Congress, his own businesses, through the CARES Act and knows how those programs work and how they did not, and how future programs could work even better. He has much to offer the United States and I was so happy when I heard that President Biden had nominated him for the position and very happy to be here today to vouch for him. Chairman Cardin. Senator Kaine, thank you very much for that introduction. We always appreciate having you with us in this Committee, so thank you for your being here and we recognize that you have other obligations so thank you very much. Mr. Syed, I want to start the questioning. We are going to have 5 minute rounds based upon arrival from the members. I want to go into the point that you raised during your opening statement that Senator Paul has acknowledged during his opening statement. And that is that you, as the CEO of an early stage health care startup company in April 2020 applied for a PPP loan, an EIDL loan, and an EIDL Advance. My understanding is that your company received a loan, a PPP loan, in May of $563,513 and an EIDL loan of $67,500, and an EIDL Advance of $10,000. You have indicated in your testimony that that was essential in order to maintain your payroll. I believe your payroll was 24 employees at the time. Let me just ask you a couple of direct questions. When you applied for the PPP loan and the EIDL loan were you eligible to receive funding from those two programs? Mr. Syed. Thank you, Senator Cardin, for the question. The answer is yes. Chairman Cardin. Was that funding necessary for you in order to be able to maintain your payroll during that period of time? Mr. Syed. Yes. Chairman Cardin. Were the funds under the PPP program used principally for payroll? Mr. Syed. Exclusively. Chairman Cardin. Exclusively for payroll. And then, you were then able, as I understand it, to get outside financing in order to deal with your financial needs. I take it, if you were eligible, your revenues were less during COVID-19 than they were prior to COVID-19? Mr. Syed. Correct. Chairman Cardin. Then you made a decision to get outside financing and you made a decision to repay the PPP loan and the EIDL loan, if I understand correctly, in January 2021? Mr. Syed. That is correct. Chairman Cardin. Were you eligible for the loan forgiveness under the PPP program, considering that you used the money for payroll? Mr. Syed. Senator Cardin, I believe we obviously did not apply, we made a business decision to clear all our debt including the PPP and EIDL after raising a new round of funding. But based on where the money was spent, my understanding is we would have been eligible. Chairman Cardin. So why did you decide to repay the loan? After all, you have responsibilities to your company. You are entitled to have it forgiven, the PPP loan. Why did you decide to repay the PPP loan? Mr. Syed. Senator, we did not have the need. We believed that, having raised outside financing, at that point we made a business decision to clear all of our debt. And we considered the PPP and EIDL loan to be a debt. And we believed that that should be paid back and we made a business decision to pay back the loans. Chairman Cardin. I just want to compliment you on that. Obviously, you could have sought forgiveness and have been eligible for forgiveness under the terms that we set up. But you made a decision that, from the point of view of the appropriate judgment on the appropriateness of keeping the money that you felt better returning the money. I thank you. I am sure there are other businesses that are in your category but you are in the minority of the businesses in regards to the forgivable PPP loans. As the Deputy Administrator, you are going to be responsible for a lot of the administrative issues dealing with the implementation of these programs. I am going to just mention one as an example. In the most recent statute, the American Rescue Plan, we extended eligibility to PPP for local media companies. Part of that was to waive the affiliation rules and to use a size standard based upon per location. We have been informed that there has been a challenge in getting eligibility for the media companies because they have the same EIN numbers, which bounces it out from the application process even though they are eligible. My point to you in raising that example is that from day one we are going to need your attention to working in a very transparent way with us and the stakeholders to deal with the administrative challenges of implementing the PPP law. As you know, the administration changed the eligibility on the self- employed. We have the larger non-profits that are now eligible. We are starting into the shuttered venue, certainly we will be in the restaurant program. All of that is going to require total transparency and working with us in a very close, open manner as you try to carry out congressional intent. We need to make sure that you will keep us totally informed and work with our offices. Do we have that commitment? Mr. Syed. Absolutely, Senator Cardin. And let me say that I think obviously the scale at which the SBA is operating and just the diverse set of programs it has to stand up, there is a lot going on. So if confirmed, I will partner with the Administrator to make sure that I am doing my best and also providing information as requested by this Committee. Chairman Cardin. And we have another bill passed. Senator Lankford has worked with several of us to clarify some of the provisions in the PPP. There is comparable legislation in the House that is now moving through the hotline. So there might be some additional challenges that we are going to throw on you and we would appreciate a very open process with you. The last one I am just going to raise, that you and I had a chance to talk about. Our highest priority is to make sure that our programs are targeted to the small businesses of greatest need, that we deal with the underserved community in the PPP program, the underbanked community, minority community, low- income communities. Do we have your commitment to work with this Committee and members of this Committee as we look at the existing tools of the SBA to better target them to need as well as additional recommendations that have been made by members of this Committee, including myself, that deal with partnerships with the HBCUs, that deals with dealing with emerging markets, for minority small businesses getting access to venture capital, those types of programs. Will you work with us so that we can, in fact, live up to our commitment to serve all businesses in this country? Mr. Syed. Senator, absolutely I do, and a lot of my work that I have done in the underserved communities in rural parts of California, with communities of color, demonstrates my personal passion to focus on those communities. And so I absolutely will commit to doing this if I am confirmed. Chairman Cardin. Thank you very much. Senator Paul. Senator Paul. Mr. Syed, when you submitted your nominating materials to the Committee, you chose not to disclose that you had had PPP loans. That was found through our vetting of your candidacy but it was not voluntarily given to us. Since then, we have asked for more information and there has been some response but there has been an incomplete response. One of the specific questions we have asked and not yet got an answer for us the amount, in U.S. dollars, of the estimated loss that was required for one of the forms for the COVID-19 Economic Injury Disaster Loan. What was the amount, in U.S. dollars, of estimated loss? Mr. Syed. Senator Paul, thank you for your question and let me first say, at the outset, I appreciate the importance of sharing of information that is necessary to confirm me and it is important, especially with this role of this agency at this time. With all due respect, I would like to clarify that I filled the questionnaire, the Senate questionnaire. When asked about whether the company had received COVID relief, this was supplemental information I provided, yes. So I have been transparent, forthcoming in sharing as various requests were made of me via the supplemental information that came in. And I think on multiple occasions I did that. The questions that we received yesterday, many of them pertain to information that is proprietary for the company. It is a private company. We are in a competitive environment, an AI company. It is a globally competitive environment. And we have to protect the company, even as I commit to you that when it comes to myself I will continue to work with this Committee to be transparent and forthcoming. Senator Paul. So let the record show that you will not answer the question and you will not tell us the amount that you put on the application that you signed your name to for your company on how much U.S. dollars were estimated you were going to lose. The problem with that is you just say oh, believe me. Oh yes, we were eligible. But that is self-policing. Give us the information so we can trust you. I am willing to vote for you but not if you stonewall us and say we are not going to give you the information. I mean, we deserve to know that because you are going to be in charge of these. You got $14 million in the midst of this. The other question that really still boggles my mind is it is forbidden to be involved with expansion when you get these loans. And yet, within three weeks of you getting your loan, we have your tweeting out about new hiring in Guadalajara and welcoming the expansion of your tech team in Guadalajara. So it sounds like you are in the midst of an expansion when you are getting the money. Mr. Syed. Senator Paul, these are contractors. We are not expanding the company elsewhere in a full-time manner. All the assistance we received for PPP and EIDL was used exclusively in the United States. It preserved jobs, 24 jobs. The company would not exist today, would not be in a place where it was able to raise financing and be able to innovate as we speak. So---- Senator Paul. Eleven days after you got the money you tweeted out, your words, ``We welcome the newest member of our tech team in Guadalajara.'' Most people would read that and it sounds to them like you are expanding into Guadalajara, that you have new enterprises and new partners--or actually not even partners, newest member in Guadalajara. So the thing is you are not going to tell us what you put down, as far as your economic loss. You were in the middle of an expansion but you are saying it was a contractor and not an expansion. What was your generating revenue, how much revenue did you generate, did Lumiata generate in 2020? Mr. Syed. Senator, as I mentioned earlier, this is proprietary information. This is a public hearing. I am not going to be able to share company---- Senator Paul. So let the record show that we have these questions in writing. It is not as if you were not prepared. You have made the decision not to divulge the information. And so you know, you have made it hard on me. I mean, the thing is I supported the Democrat pick to be the administrator. I would support your pick but I am not going to support it if you are stonewalling us on the information. You applied for a large amount of money from a Government entity. You did not tell us about it. We found out about it by searching through the data, and then we asked you. Then you admitted that you had the loan. But you did not volunteer that. We had to drag that out of you when we had evidence that you had the loan. Now you will not tell us about how you got the loan. And then all of a sudden you pop up with $14 million. For struggling restaurants around the country that might have gotten a PPP loan, they will scratch their head and say some guy with $14 million in angel investors got a PPP loan. He could not have survived and yet he got $14 million in loans. It does not pass the smell test. And if you are not going to give us the information, how do you expect me to support your nomination? Mr. Syed. Senator Paul, let me just reiterate this. I have been forthcoming with this information. I shared these loans at the very start of my vetting process with the SBA, with the Office of Government Ethics, as part of the agreement to determine whether there was any conflict or not. So I have shared this information voluntarily---- Senator Paul. The staff informs me that you were asked for it and that it was not shared. Mr. Syed. I am sorry, could you repeat the question? Senator Paul. The staff informs me that you were asked for the information and then you revealed it but you did not share it voluntarily. You gave it when you were asked for it. So the thing is--and that is beside the point. We now know you had the PPP loan, you paid it back. This hearing could be easy and we could be saying exactly what Senator Cardin says, that you should be congratulated for paying it back and for being an upstanding citizen. But not if you say well, we are not going to put down how much our estimated loss. There is nothing proprietary about what your estimated loss was to the government, unless maybe there is something fishy about the number that you do not want to divulge. Nothing in that estimate, because your company is completely transformed now. You got $14 million. So people have already believed and bought into you. They are not going to change their decision based on your application for PPP. You paid it back. You have got good things you can say about yourself. But you are hiding some number. And when you hide it, that is not transparency. That is the opposite of transparency and it makes us doubt you. Mr. Syed. Senator, with all due respect, my understanding is that the EIDL application for COVID relief did not include, at the time, your projected loss. We had financially a more challenging year than the year 2019. Again, this is proprietary information that---- Senator Paul. So you are saying the application you filled out, you did not put down an estimated loss? Mr. Syed. To my best knowledge, I do not believe that that information was required as part of those applications at the time. We have shared with you information that is part of the applications that were submitted for both PPP and EIDL. Senator Paul. We would like to provide, for the record, the rules for the application at the time when his application was made to show that the estimated loss was a requirement at the time, and we will be submitting that for the record. [The information referred to follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Senator Paul. So this is a point of fact and we should figure this out. If you are right and I am wrong, that is fine and you did not have to provide it. But there still is the question of why you are unwilling to sort of divulge anything about this. And I do not think any of it is proprietary. I think it appears to us as if you are hiding something about the loan. So the more transparent you are, the more we believe in the things you are saying. But when you tell us you are not going to divulge things because of proprietary reasons it, frankly, makes us suspicious. But we will look into the facts and I will retract the question on the estimated loss or I will retract the accusation if we find out you were not required to do it. But this is something we can check by facts. And this will have to be pursued. If we find the facts of the matter are that that was a line and it was required, show us your application, you know. We are happy to show you the application in private, where it does not have to be read out in front of the public. I said to Senator Cardin on the way over here, I would prefer not to say the company's name, Lumiata. I would prefer not to say that we have doubts about your application. But that is why you need to give us information and not try to hide things from us. Mr. Syed. Thank you, Senator and I have shared information about the application through multiple requests. I absolutely appreciate the fact that we have to be transparent, forthcoming, and I have been through multiple requests. Again, both of these COVID loans, I declared them with the SBA team when the vetting process started. This was---- Senator Paul. But your first response to me was you were not going to give me the estimated loss. And then your backup response, two minutes later, is oh, we do not think we were required to. You could have said that from the beginning. You could have said oh, we were not required to put estimated loss. That almost sounds like that is an evolving answer because you first told me I cannot give you the estimated loss. And then you tell me it is not on the form and was not required. So we are left with a lot of questions and we are going to have to research this further. And I am not saying absolutely I will not vote for you but, the thing is that our side will be very concerned with a trillion dollar program with someone who used it to a significant degree and is unwilling to give us the information on how you got the loan. Mr. Syed. Senator, thank you for the question. This, in a sense, saved the company's job. I appreciate your questions and will continue to work with the Committee. Thank you. Chairman Cardin. And I am sure Senator Paul will work together on this and I think there has been certain information that has been made available. I agree with you that much of this should be done in a closed setting when we are dealing with sensitive information. Senator Paul. And if he is willing to do that, I am happy to look at it in private. I think there are things that should be private. But I think there is some burden to prove---- Chairman Cardin. We will work together to try to resolve this issue. I do want to make one observation on this. It is my understanding that the PPP loan was more of a self- certification and not specific information. The EIDL loan is different, I grant you that. Senator Paul. I think that is what we think. The requirement for the estimated loss, we think, comes from the EIDL loan application. Chairman Cardin. So we will work on those two issues and, I must tell you, I stand by the statement I made during my questioning and that is I applaud Mr. Syed's voluntarily repaying the PPP loan when he was eligible for forgiveness because of his view that it was not the purpose of the PPP loan to be forgiven if you had the capital to pay off those loans. I think that was an exemplary conduct and I just really want to acknowledge that. But I understand Senator Paul's point and I assure you we will work together to try to get you the information. Senator Paul. And we are happy to keep an open mind. Chairman Cardin. I appreciate that very much. Senator Hirono, by video. Senator Hirono. Thank you, Mr. Chairman. And thank you for enlightening us on the fact that Mr. Syed paid back the loan. Yes, I agree with you that that is exemplary behavior. Mr. Syed, based on your experience as a business owner and entrepreneur and your time working with businesses and entrepreneurs in the Obama administration and more recently in California and elsewhere, it is clear that you have a lot of relevant experience to bring as the Deputy Administrator of SBA. So can you talk a little bit about how your experiences as a business owner and entrepreneur will enable you to help other businesses and entrepreneurs as a Deputy Administrator? And particularly minority businesses. Mr. Syed. Senator Hirono, thank you for the question. First of all, I think, as we discussed in previous questions, these recent months and year or so has been one of the most challenging times for small businesses and entrepreneurs all over the country. Both in my own running the company, going through some really, really difficult times. A year ago we were just starting to see the horrible effects of the pandemic, both on lives and livelihoods and businesses. And so it has given me, frankly, a deeper reservoir of empathy. What someone who has to sometime go through sleepless nights to think about payroll goes through. And if confirmed, I will bring that perspective, Senator, to my job. Secondly, I think to your point about communities of color and underserved regions, it is absolutely true that we have a disparity there and we need to make an intentional effort, intentional effort to reach out to those communities. I have done that in my own civic advocacy, as I have mentioned earlier. And I would bring that lens, as well. And third, I just want to add to the point that my operating background also prepares me to be a value-add to the SBA team as it stands up programs that are an unprecedented scale and breadth. Senator Hirono. One of the minority-owned businesses in Hawaii are the Native Hawaiian-owned businesses. And as with a lot of minority businesses, they have suffered disproportionately because of this pandemic. And so I would like to have a commitment from you that you will work to understand the needs of the Native Hawaiian businesses, the 8(a) businesses, and to work with me to address their concerns going forward because they certainly could use the kind of empathetic leadership that you talked about. Senator Syed. Absolutely, Senator. And I will do so. After the Great Recession, as part of my role at the White House AAPI Commission, I spent significant time engaging with communities. So I will do so. Senator Hirono. Have you ever been to Hawaii, Mr. Syed? Mr. Syed. I have not. My kids and wife have been telling me so I will certainly do so if I am confirmed, and help these businesses there. Senator Hirono. I am not just saying that because I would like you to come and visit with us but Hawaii is--we have some very unique challenges. We are definitely not connected to the rest of the country, as with Alaska. And so there are some very unique challenges to small businesses in Hawaii. Things cost more to bring in. There are various issues that are unique to Hawaii small businesses. I certainly want to ask for your support in understanding the unique challenges that particularly Hawaii small businesses, and I would say the same for Alaska small businesses, that they face. So I would certainly like your commitment to do that. Mr. Syed. I commit to do so if I am confirmed, Senator. Senator Hirono. If you are confirmed, what is the first thing that you would want to do as the Deputy Administrator? Mr. Syed. That is a good question, Senator. You know, this will be my first job in government if I am confirmed. The first thing you go into any place that has complexity and scale, especially at this time, I want to listen and learn but very quickly understand where I can be a value add. We have an incredible team of public servants who have been at this agency for decades and, especially in the last year, put their heart and soul into standing up programs. I would like to understand what is working? Where is an area where we can do things better, whether it is the systems or processes or to quality infrastructure. But I would go in, and this is just my management style, with an open mind and try to learn and understand and see where we can help, where we can build capacity, where we can move the needle forward. Senator Hirono. Thank you very much, Mr. Chairman. Thank you, Mr. Syed. Chairman Cardin. Thank you, Senator Hirono. Senator Hawley. Senator Hawley. Thank you, Mr. Chairman. Nice to see you in person, Mr. Syed. I enjoyed our conversation yesterday. Thank you for your time. I look forward to getting into a little bit of what we discussed. Let me start though by asking you this: on April 15th, not even quite a week ago, the Republican members of the Committee, including me, sent a letter to the SBA Administrator, to Ms. Guzman, requesting that the Agency initiate an investigation into whether Planned Parenthood affiliates made knowingly false certifications on applications for PPP assistance last year during the height of the pandemic. The letter also requested that the SBA provide the Committee with the following information: a detailed explanation regarding how three separate Planned Parenthood affiliates were approved for a second draw PPP loans, despite SBA's determination they were ineligible; all forgiveness information associated with loans to PPPFA entities; and thirdly, a description of any and all actions SBA has taken to recover those PPP funds unlawfully provided to the Planned Parenthood affiliates. Here is my question to you: will you commit to us that if you are confirmed, you will work with us to make sure that we get the information that we requested in our letter of April 15th? Mr. Syed. Senator, first of all, thank you for your questions. It is good to see you in person, as well. If confirmed--well, first of all, I think we will apply rules as we should for all businesses, all non-profits. I have read about this. I do not know, I am not aware of the intricacies of what is involved here. But to the extent that the information that you need to do your oversight, I commit to doing that, obviously, in partnership with the Administrator and our staff at the SBA. Senator Hawley. Good. I will hold you to that. And will you also commit to ensuring that the non-profit affiliation rule is followed as it applies to Planned Parenthood, and as it applies to all non-profits? Mr. Syed. Senator Hawley, I am not obviously up to speed on the non-affiliate rule. The affiliate rule is for non-profits. If confirmed, I will understand this and will make sure that the rules are applied consistently. One of the things that you learn in business is process is sanctimonious. That should be your guiding light. And I will do my part to make sure that, as leadership, we do that. Senator Hawley. Let me ask you about one of the topics we discussed yesterday. We talked a little bit about the Economic Injury Disaster Loan Program. I shared with you some of the struggles that businesses, small business folks, in my State had accessing that program. This is something I have raised in this forum with other folks up before us. And at the same time, we also discussed the fact that the Inspector General's report recently came back and found quite a lot of waste, fraud, and abuse in that program which, of course, is deeply frustrating because you have got people who are qualified who cannot access the funds. You have got people who should not be getting the funds and did. We also talked about the Shuttered Venue Operators Grant Program which Congress established in December but still is not really operable. Here is my point on this: SBA's track record in standing up these programs and administering them is not the best, to be frank. It needs to be better going forward. We have asked the SBA to do a lot during the midst of this pandemic. Share with us your view and your own experience from the private sector in how SBA can get better at implementing these vital programs, in making sure that there is appropriate oversight and controls for these programs and just, in general, doing its job more efficiently. Mr. Syed. Senator Hawley, that is a very important question and thank you. I appreciate the question. I think we all can agree that the scope of responsibility that SBA has, it is unprecedented. And that is one of the things that I am really excited about, if I am confirmed, to go in and be a value-add to the team. I think you have to look at overall what is the capacity, whether it is human, whether it is technology, or whether they are processes or people? And where do we need to make sure that we are--if you are upgrading, to be able to meet the moment, if you will. Obviously, I am not in the job. It would be presumptuous for me to opine on what we can do there. Once I am confirmed, if I am confirmed, I absolutely commit to you that I will work with the Administrator and also would like to work with you, as well. You are passionate about this and this is important. I mean, these are all of our businesses, that we do everything possible to make sure that we are responding in this moment with all our might and resources. Senator Hawley. If you are confirmed, when you come to look and review programs, like let us just say the EIDL program, the Economic Injury Disaster Loan Program, what sort of--as you are thinking about its success, about its efficiency, what sort of principals will you take? What sort of benchmarks will you apply? What will you look for? In other words, to evaluate how well it is done and what can be improved going forward? Mr. Syed. Right. It is a good question, you actually asked me as well yesterday. I think the first order of business would be, again not knowing exactly how we track things as data, how are these programs instrumented? What data can you look at? Where we are succeeding? Where we can do better? Where there is a gap? There is a whole breadth of information that we should have at our fingertips and we should work to do that, given just the scale of what you are doing. Obviously, I am not aware of what those things are. I am not in the job. Once I am there, if I am confirmed, I will make it a point to work with the Administrator and the staff to see how we can track things and make sure that we are doing better and, of course, sharing as appropriate with this committee. Senator Hawley. Very good. Thank you. Congratulations on your nomination. Mr. Syed. Thank you. Senator Hawley. Thank you, Mr. Chairman. Chairman Cardin. Thank you, Senator Hawley. Senator Shaheen. Senator Shaheen. Thank you, Mr. Chairman. Mr. Syed, congratulations on your nomination. I look forward to working with you if confirmed. I just want to followup a little bit on the previous question because since the beginning of this pandemic, it has been the SBA programs that have really kept so many of our small businesses alive during the last year with COVID. I have heard from so many in New Hampshire who say that it is the PPP loan program that has really saved them. I recognize, as you have said, that we are not there yet. But the SBA really does face two new challenges in looking at how to implement the new restaurant grant program, as well as the Shuttered Venue Grant Program. We appropriated, in the last package, $1.325 billion in new funding to help SBA administer these programs. So again, recognizing that you are not there yet, do you have thoughts about how the agency could best spend that money in a way that is efficient and that addresses some of the challenges that it has had with the previous PPP and EIDL programs? Mr. Syed. Senator Shaheen, thank you for the question. Again, unfortunately, I do not have a lot of the detail as to where the gaps are. The reality is this, when we have such an incredible resource that is being made available thanks to the work of this Committee and the staff, obviously I am sure everybody at the SBA as well would want this to be rolled out very soon because the sooner this gets into the small businesses--and having been part of the process myself, I know how critical that is. A year ago, we were going through this ourselves and it was very, very challenging. And I was working with communities all across California in the rural heartland, as we talked about, Senator, and saw every day matters. If you can quickly get--so I get that. I am deeply empathetic to that. Now, I also want to be careful to make any judgment to see what we can do since I do not have the context. What I can tell you is that I will bring that energy and passion and commitment to making sure that we do not even waste a second. And I am pretty sure Administrator Guzman, I worked with her in California, she shares that commitment, as well. That is the lens I will take. But I do think this is an opportunity for us to take the moment and see what are some of the things that we can do better in terms of our internal ops and processes and technology and so forth. Again, I do not have the stock of that. Fortunately, I have been in business where I have stood up infrastructure and I have scaled companies, and often in the face of unprecedented growth. I will bring that lens if I am confirmed in this job. Senator Shaheen. Well, I appreciate that and I look forward to revisiting this issue after you are confirmed. One of the real frustrations that I have had, and I know it is shared by members of this Committee during the last year, has been trying to get accurate information about SBA programs and their performance, about how much money has been lent? Who it has gone to? On the EIDL, again, how much money has already been provided to people. And so, recognizing that you are not there at SBA, but you have been a business owner. You have been a customer of SBA. Can you talk about how the Agency currently shares information with stakeholders? And what steps you would like to see taken to improve sharing of that information with customers of the SBA? Mr. Syed. Senator Shaheen, that is a good question and I am glad you asked that question. Again, my perspective is what I have seen, what I have observed. The reality is the Agency is operating at a level--I think we mentioned earlier--which is multiples of where it was. Frankly, any organization that has to go through that kind of a change, you have to get to the right point of understanding where you need to go in terms of sharing data, instrumenting metrics, and so forth. I will commit to you that that is one of the priorities we will make, in partnership with the Administrator but as an operator, if you would, in the Agency to make sure that we are able to track and share things that are appropriate that you need as the oversight committee. And that will be something that I commit to you that I will do as a matter of priority. Senator Shaheen. Thank you. We have a lot of small businesses in New Hampshire who are very frustrated because they could not get an answer from the SBA on their EIDL loans and what the status is. And so, I think that communication is critically important. Thank you. Thank you, Mr. Chairman. Chairman Cardin. Thank you, Senator Shaheen. Let me just followup with one point on Senator Shaheen's point. Yes, it is important that the stakeholders know how the programs are working. And if we are going to evaluate a program, it is not only making information available to us that you have. It is having that information to make it available to us. We found out the previous administration, they were not asking the questions that allowed us to be able to determine whether our intent of reaching all communities was, in fact, taking place. So I would just urge you to understand, you have got to also get granular information available so that we can evaluate it, and that requires an affirmative action on your part to make sure that information is accumulated. Senator Marshall. Senator Marshall. Thank you so much, Chairman. Mr. Syed, again it is good to meet you in person. I enjoyed our phone call. So welcome. You come from a technology, an AI background. How do you see, what are the opportunities in the SBA to use that background to improve the services, as well as to better measure what we do, leading to better management? Mr. Syed. It is wonderful to see you in person, Senator Marshall. I enjoyed the conversation, as well. You know, I think again, AI is early in its deployment, if you will, in various industries. But just from the outside and, again, I do not have--obviously, I am not privy to the internal operations. I think when we are generating so much data at the scale at which we are doing right now, with the $1 trillion that is working through the SBA, there are opportunities potentially in the area of fraud, waste, and abuse. You can look at patent recognition. You can see where we can actually catch things earlier, right? So again, I will have to dive in. I am sure there is some machine learning the team may already be deploying and I will bring that, if you will, acumen in the job if I am confirmed. So that is just probably one of the areas that one can look at, which I understand is a priority. It is a priority for the President. It is a priority for the Administrator, and also for this Committee. Senator Marshall. Great. We are certainly very proud of our relationship with the SBA in Kansas, our office working with them, and we look forward to continuing to implement new technology. Mr. Syed, are you familiar with the Hyde Amendment? Mr. Syed. I am at a higher level. Senator Marshall. So it is a law that says you cannot use Federal funds for abortion. Planned Parenthood is the largest abortion provider in America. So just using some common sense, does it not seem like giving money through the PPP program to Planned Parenthood is a violation of American law? Mr. Syed. Sir, I understand this is an important question, it is important to you. And I hear you. I am not in a position to comment on violation of any amendment because one, as I shared with you right now that I am not entirely familiar with the amendment. And secondly, again the rules pertaining to this particular entity. As I mentioned earlier in the question and response to Senator Hawley's question, if confirmed I will work with the Administrator to make sure that we are applying the rules consistently for all position, for-profit, non-profit. And that is what I can commit to you. Senator Marshall. We talked briefly about CDFI, Community Development Financial Institutions, and this is just something that I learned about at the last meeting. I think that there is a great opportunity for them to be more visible and better implemented, as well. And one piece of the puzzle that I discovered, as I sat down with people that could not get a PPP loan, and even went to different banks trying to say what can you do to help these people? And there are certainly reasons why banks were shying away from them, probably had something to do with their credit score. But it was even just their knowledge, business knowledge, the inability to fill out a financial statement even, just some real simple basic facts. I just would ask you, as you look into what the role of CDFIs are, if there is not an opportunity to help educate people so that we can bring them into the fold and help these--they may be great entrepreneurs but just not financial wizards, so to speak. Do you see any role for that education from the SBA? Mr. Syed. Absolutely. Actually, that is very close to my heart, Senator Marshall. Actually, pretty much a year ago, when the pandemic's effects were coming out, I was with a community in California, walking folks through various things, how to access PPP and so forth. And we noticed that the communities of color, underserved regions, rural communities, they were clamoring for information. They did not even know where to go, to your point, and especially if you are underbanked and unbanked. So I actually commit to you, this is an area that I will personally be very energized to help with. Senator Marshall. I would love that, after you are there three or four months, to kind of have a conversation about the CDFIs and how you feel they are doing and where they can improve. Thank you so much and I appreciate you coming. I yield back. Mr. Syed. Thank you. Senator Shaheen. Mr. Chairman. Chairman Cardin. Senator Shaheen? Senator Shaheen. Can I just make a clarification for the record? The questions that Senator Hawley and Senator Marshall are raising about support for Planned Parenthood under the PPP program. That was done under the Trump administration, under SBA Administrator Carranza. So I would suggest that those are questions that maybe should have been put to them, as opposed to the current Administration. Thank you. Chairman Cardin. Senator Cantwell. Senator Marshall. If I could just make a point, as well. Chairman Cardin. Senator Marshall. Senator Marshall. Certainly, there is a new tranche of money that was just recently given out by the current Administration, as well, just for the record. Chairman Cardin. Senator Cantwell. Senator Cantwell. Thank you, Mr. Chairman. Mr. Syed, thank you so much for your willingness to serve and thank you for the conversation we had yesterday to talk about many things related to the SBA administration. You have already heard from many of my colleagues about the operations of the programs that are underway or not as successfully underway, so just to add my comments to the Shuttered Venue Operations Grant, we need to make that successful. Obviously, we do not want the Restaurant Revitalization Grant to be kludgy like that. We want it to be successful. I had to step out for a minute but I think that is what the Chairman was asking you, to make sure that that--let us know anything that is necessary for us to make that restaurant program move successfully. I wanted to bring up two issues. One, there was a program related to the newspapers, and part of the PPP application when newspapers were owned by a large entity apply separately with the same EIN of their parent company. So some of the applications are being held. And so this is really, I think, a technical problem in the application form. So I hope that you would look at this and make sure that we are resolving these problems as it relates to newspapers and that the set-aside for local news networks, that they also fix any technical barriers. Mr. Syed. Senator Cantwell, thank you for those questions and good to see you in person. I appreciate your time for the call yesterday. So I totally agree with some of the things that you mentioned here. If confirmed, I will look into these things. You know, having gone through the process myself and seeing sometimes just some of the fears that are there, there is the opportunity to probably do better. And especially when we expand the program for so many different types of entities, right? And this has not been done---- Senator Cantwell. But I think these are more like technical issues in the way that somebody asked for information that does not quite fit with the specificity. But here is another example that is very challenging. So the SBA lenders have denied Paycheck Protection Program loans to Native-owned small businesses because they do not meet the SBA's documentation requirement. So we have 20-plus recognized Tribes in the Pacific Northwest and more than 1,000 Native- owned businesses. So these are individuals that have fishing rights but they have not been able to get COVID relief because they do not file tax returns because they do not have that obligation under the treaty rights. So they do not have an employment identification number. So we need to figure out how to fix this. So I hope that you will commit to fixing this. I mean, create a pilot program, figure out another way to do it. But you have 1,000 people--at least in my State, there would be more in Oregon and Alaska and California, and other places. You know, figuring out exactly how to make the program fit the mold for the uniqueness that tribal businesses represent in their tax status structure. It is almost like okay, come up with some other identifier, if that is what you are looking for, so that you know and understand these businesses meet the standard. They just do not have an EIN number. Mr. Syed. Thank you, Senator. I think it is a great example of the kind of things we need to put an eye toward and I commit to you that I will have that operating view on things in partnership with the team at the SBA and will work with your office, as well, to make sure that those potential pilot programs are being explored, given that the need is there and somehow they are not being addressed properly. Senator Cantwell. It is not the need. It is that they are being treated inequitably under the law just because of a previous right that they already have. So it is just the program did not entail thinking about people who do not have an EIN. So we just need to fix it. So thank you for your commitment to fixing it. Thank you, Mr. Chairman. Mr. Syed. Thank you, Senator. Chairman Cardin. Thank you, Senator Cantwell. Senator Inhofe, are you ready? Senator Inhofe. Yes. Thank you, Mr. Chairman. My timing is perfect. I was delayed on the floor, but I definitely wanted to get in here. I have a couple of things to talk to Mr. Syed, is that it? Does that sound good to you? Mr. Syed. That is right. Senator Inhofe. All right, Mr. Syed. The CARES Act included funding to allow the SBA to provide debt relief payments for regular SBA loans. Now this problem was extended through December 2021, the Omnibus allowing SBA to make up to eight additional monthly debt relief payments. Now businesses in my State of Oklahoma have benefited greatly from this program, but there are concerns that once the program ends businesses will be unprepared to resume regular loan payments. Now the SBA should consider providing banks with increased flexibility with payments and loans to date. So are you aware of these concerns? Is this something you have run into before? Mr. Syed. Senator Inhofe, I am aware of the payment relief, just really from outside and some friends who were able to get payment relief for the 7(a), 8(a), and 504 programs. Senator Inhofe. If you are confirmed, can you commit to proactively helping businesses to begin making regular loan payments? Because this has grown to be a problem in Oklahoma. Can you do that for me? Mr. Syed. Senator, if confirmed, I will work with the Administrator to explore options to see what levers can be applied. Senator Inhofe. Okay, that is good. Now the other thing that I was interested in is information keeps coming to light, because it is a pretty toxic subject, that Planned Parenthood has illegally received the PPP loans despite SBA's affiliate rules. Now their affiliate rules provide that, first of all, it has to be under 500, and they count the affiliates in with this. Now, with the affiliates, Planned Parenthood is some 16,000 people. So I cannot imagine that it would not be disqualified just on those lines. What is your opinion about that? Mr. Syed. I am sorry, Senator, could you repeat the question? Senator Inhofe. Yes. What is your feeling about the fact that Planned Parenthood, we understand, has received some of the PPP loans, I contend are illegal because, first of all, just the size limit of 500. They are a group of some 16,000. So would you believe that they would not qualify for the PPP loans because of size and affiliate size alone? Mr. Syed. So Senator, it is an important question and we had an earlier discussion as well. I, obviously, am not familiar with the rules as applied to this particular entity. If confirmed, what I can commit to you is that I will work with the Administrator to make sure that we are applying rules consistently for all organizations as laid out in the law. Senator Inhofe. Yes, I am not sure it would be necessary to do that because you do have a hard fast rule on the number 500 and this falls way outside of that. And so the only question I have is is there a loophole I do not know about, where this would be a legal and appropriate application of the PPP program? Mr. Syed. Senator, with all respect, I am not obviously familiar with the application of this particular entity, what was applied. Again, what I am committing to you, with absolute certainly, is that we will work to apply the rules consistently across and make sure that there is a proper eligibility review. Senator Inhofe. Well, do you know of any exceptions that are in the rules in this case that would provide to exceed the 500 limitation for appropriate programs? Mr. Syed. Senator, I am obviously not privy to the rules. I am not in the job yet. So I am not able to comment on that. Again, I hear your concern, and it was brought up earlier as well. I commit to you that I will work with the Administrator and the staff to make sure that we are applying rules consistently for all entities. Senator Inhofe. All right. Well, I will be checking back at the appropriate time then. Thank you very much. Mr. Syed. Thank you, Senator. Senator Inhofe. Thank you, Mr. Chairman. Chairman Cardin. Thank you, Senator Inhofe. Senator Inhofe. Did you have any comments to make about my inquiry here? Because I thought that the hard fast rule was it had to be under 500 to apply for and be granted the PPP program? Chairman Cardin. I know this issue has come up during the drafting of the PPP loans and I think there has been a consistent interpretation of the rules as to whether the affiliate rules apply or not. It may not be an exception to the affiliate rules, it is whether the affiliate rules apply. This was done under the Trump administration, I would remind you of that. And I know that there was some displeasure on how the rules were adopted. There were some efforts made to change the legislation. Those efforts did not succeed. Senator Inhofe. I see. Okay well, I will have to look into that. Chairman Cardin. And I appreciate, our Committee wants to make sure that the rules are being applied uniformly and is consistent with the legislative instructions and the practice of the SBA. And there is some historic practice on affiliation rules. Senator Inhofe. Yes, I think there is. All right, thank you, Mr. Chairman. Chairman Cardin. Senator Rosen is with us vis-a-vis the web. Senator Rosen. Thank you, Chairman Cardin. I appreciate it. And thank you, Mr. Syed, for being here with us today, for your commitment to serving our Nation. I look forward to learning more about your plans to support our Nation's small businesses. Of course, they are continuing to struggle to keep their doors open, and I want to hear about your vision and how the Agency can better serve them as they begin their path to recovery. So I want to talk a little bit about lifting the caps on EIDL grants. Last month, I was pleased that Administrator Guzman announced that the Agency will lift the caps on EIDL loans from $150,000 to $500,000. And just last week, she wrote to me to let me know the caps would move to $2 million. So all of them would be removed. That was what was originally mandated by Congress. This is a policy change I have been calling for since last year. It is going to provide much needed support to 99 percent of businesses in Nevada that are small businesses. However, given the prior Administration's actions to cap the EIDL Advance Grants to $1,000 per employee, our smallest businesses--including many minority-owned small businesses--did not receive the $10,000 grants that Congress had promised and passed into law. So in her letter last week to me, Administrator Guzman stated that SBA does not have the statutory authority or the funding to provide $10,000 grants to all eligible small businesses, regardless of size or location. But she indicated that she would not have capped the original EIDL program, as the last Administration had. That being the case, if confirmed, will you commit to working with my office to advance legislation that provides the Agency with the authority and the funding to provide all of our small businesses with the $10,000 EIDL Advance Grants and not only those that happen to be in low-income areas? Mr. Syed. Senator Rosen, thank you for the question and I totally appreciate the importance of this topic. If confirmed, I will work with the Administrator to work with your office and partner as appropriate to make sure that there is more resource available to small businesses. Senator Rosen. Thank you. I want to move on quickly to technology, and I know that is something you know a lot about. Of course, I am a former computer programmer, systems analyst, and early on in my career I learned the importance of using updated software systems, the latest technologies, to improve processes and provide timely and accurate information. During the COVID-19 pandemic the SBA was delegated the difficult task of managing a multi-billion dollar emergency loan and grant program, programs that have provided critical aid to our small business community. However, some of our constituents small business owners have complained they have waited a long time, sometimes even months. And the Agency seems to be requiring them to resubmit the same documents multiple times, delaying the process. Of course, you know, small businesses do not have the capital reserves to survive for many months. So given your experience in the private sector, what can the Agency, in your opinion, incorporate from the private sector to improve its internal controls and technology, thus speeding up the process of these loans and grants so that people can get the timely help they need to stay in business? Mr. Syed. Absolutely, Senator Rosen. This is a very important question and I appreciate that you understand these demands since your own background in technology earlier. As I mentioned earlier, in previous comments, there is a significant scale at which SBA is operating with just the breadth of programs and how fast they have to be stood up. There is obviously infrastructure, based on my reading from the outside, that is decades old. Once I go in, the first order of business for me would be to learn and understand what the infrastructure looks like before suggesting and making any changes. The reality is, we do have an opportunity, given the moment, to be able to see how we can improve capacity of this infrastructure. I, fortunately, bring that background. I have built and scaled infrastructure in technology companies at all levels. And I commit to you that I will work with the team to make sure that we are meeting the moment, while at the same time making sure that we do not break things that are working, given just the importance of delivering services as we speak. Senator Rosen. I think this is another area for us, as Congress, to consider IT modernization, creating platforms that are easily accessible across all State front-ends that they can use, and modify the back-ends in ways that they need to. And so we hope that we can work with you on upgrading all of your systems. Thank you. Thank you, Mr. Chairman. Mr. Syed. Thank you, Senator. Chairman Cardin. Thank you, Senator Rosen, appreciate that very much. I just want to followup one point with Senator Paul, and I know that we are going to followup in regards to the information that he is seeking. I have been informed by my staff that estimated losses was not required on the application when the company applied for the loan, and that revenue loss is now on the application because of the EIDL Advance Program. The EIDL application does ask for total revenue during the 12-months prior to the disaster, in this case prior to January 2020. It is my understanding that information was made available by Mr. Syed. Also, there is no question on the Committee questionnaire or the financial disclosure statement which would have required he disclose the PPP or EIDL loans. The funds were for the company, not for Mr. Syed personally. I just really wanted that to be put on the record, just so we had that information. But we will followup with you, Mr. Syed, and with Senator Paul and staff to try to resolve any open issues so that we can try to move your nomination as smoothly as possible. Mr. Syed. Thank you, Senator. Chairman Cardin. We will keep the Committee record open until Monday close of business for any additional questions that might be asked by any of the members. We would ask that you respond to those questions promptly that are asked. And with that, I see no further member and no further business. The Committee will stand adjourned. Thank you very much, Mr. Syed. Mr. Syed. Thank you. [Whereupon, at 3:56 p.m., the Committee was adjourned.] APPENDIX MATERIAL SUBMITTED [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]