Various Measures

All right, the committee will now come to order. A quorum is present, and without objection the chair is authorized to declare a recess of the committee at any time. As required by the House rules, a copy of the legislative measures have been made available to members and the public at least 24 hours in advance. Without objection, the committee will vote electronically in accordance with committee rules and regulations developed by the House Committees on Rules and Administration. I now recognize myself for opening remarks. Today we will mark up three important bipartisan bills that support efforts to combat waste, fraud, and abuse. These bills reflect our continued commitment to ensure transparency and accountability within the SBA and support efforts to root out fraud in the SBA's COVID-era lending programs. The bills will establish an office to help recover taxpayer dollars, prevent conflicts of interest in loan processing, and codify the Office of Native American Affairs. These bills will support the SBA's ability to serve America through small businesses and taxpayers alike. As chairman, I'm proud of the work underway in this committee, particularly our efforts to address systematic failures and support existing SBA programs. The committee has demonstrated our commitment to proactive, responsible oversight and accountability, and for that I say thank you. First, we will consider a bill that targets and prevents potential ethics violations in loan processing. The bill will enhance accountability and oversight of the SBA loan process by requiring conflict of interest certification. Next, we will consider a bill to codify the SBA's Office of Native American Affairs, an office which has been appropriated funds but not yet to be codified. Finally, we will consider my bill to establish the Office of Whistleblower Awards. The office will support the SBA OIG in its efforts to combat fraud. The bill will increase efficiency to fraud recovery by incentivizing public participation. With this additional resource, SBA is strategically positioned to stop bad actors and recover funds. Correcting and mitigating systematic failures is inherently complex and requires a strong bipartisan effort, and I'm proud of the collaborative effort that has resulted in today's markup. These three bills lay the foundation for a better tomorrow. I look forward to continuing to work with my colleagues to make strides in addressing waste, fraud, and abuse by improving internal mechanisms and processes. The SBA is better positioned to serve American small business. With that, I yield to my friend and the distinguished ranking member from New York, Ms. Velázquez, for her opening remarks.

Thank you, Mr. Chairman, for convening this markup today. I plan to lend my support to the three bipartisan bills under consideration. Let me begin by expressing my strong support for H.R. 7396, legislation to codify the Office of Native American Affairs. It is important for our committee to remain focused on its mission: reviewing, evaluating, and improving SBA's programs so they work for our nation's 36 million small businesses. I look forward to future markups that will deliver meaningful improvements to SBA core programs. The other two bills under consideration will give SBA additional tools to combat fraud. One will put important processes in place to help prevent fraud, and the other will provide a mechanism for SBA to recover fraudulent pandemic monies. I'm pleased to lend my support to these two bills. With that said, and I have mentioned this before, SBA needs to be more responsive to the committee. The administration administrator has egregiously ignored congressional oversight letters and requests for meetings, obstructing our ability to conduct meaningful oversight. I hope you will support efforts to hold the agency accountable. Thank you, Mr. Williams, and I look forward to a productive markup. I yield back.

The gentlelady yields back. Does any other member seek recognition for the purpose of making an opening statement? Seeing none, we will now move to consideration of the first bill. The committee now moves to consideration of H.R. 7401, the Small Business Lending Fraud Prevention Act, introduced by Representatives Meuser and Goodlander. The clerk will report the bill.

H.R. 7401, a bill to require employees of the Small Business...

Without objection, H.R. 7401 is considered as read and open for amendment. I now recognize the bill's sponsor, Representative Meuser from the great state of Pennsylvania, for his remarks.

Thank you, Mr. Chairman. Our bipartisan legislation, H.R. 7401, the Small Business Lending Fraud Prevention Act, will strengthen the SBA's conflict of interest rule, adding an important safeguard within the loan process. The bill requires SBA employees involved in the origination, review, or approval of its loans to certify that they have no conflicts of interest in the transaction. It also requires employees to promptly disclose and recuse themselves if a conflict arises and to acknowledge their obligations under federal ethics laws. Though the 7(a) program operates at zero subsidy cost to the taxpayer, there have been instances of SBA employees processing loans to family members or others barred under federal conflict of interest rules and have increased in recent years. Just last August, Reina Barrett, a former SBA loan officer, pled guilty to submitting and approving fraudulent COVID-19 EIDL applications, abusing her position to seek more than $550,000 in pandemic relief funds for herself and family. In addition, Atala Williams, another former SBA loan officer, was charged in January for approving fraudulently submitted EIDL applications in exchange for a share of the proceeds. Congress must root out waste, abuse, and fraud, especially when it's perpetrated by government employees. I'd like to thank Congresswoman Goodlander for co-leading this legislation. I'd also like to thank Chairman Williams for bringing this bill forward for consideration today, and I certainly encourage my colleagues to support this legislation. Thank you, Mr. Chairman, I yield back.

The gentleman yields back, and I now recognize the bill's co-sponsor, Representative Goodlander from the great state of New Hampshire, for her remarks.

Thank you, Mr. Chairman. Small businesses aren't just part of our economy; they are the lifeblood of the economy of my state and our nation. And the loans administered by the Small Business Administration are the lifeblood for so many small businesses in every corner of our country. Conflicts of interest, especially conflicts of interest in people serving in positions of public trust, they are a cancer that undermines public trust, that leads to abuses of taxpayer dollars, and ultimately it is our small businesses and entrepreneurs, good people, hardworking people who are playing by the rules, who pay the price for these conflicts of interest. So that's why I'm really proud to be working alongside Congressman Meuser with this common-sense, straightforward, bipartisan bill that's going to allow us to crack down on conflicts of interest on the front end, so that red flags are raised before problems arise and so that we don't see any more unnecessary red tape or costs for our small businesses in the administration of Small Business Administration loans. This is really about strengthening the prevention, detection, and enforcement of the most basic principles of good government and our democracy. They've always defined us as Americans, and that's why I'm proud that we're coming together as Americans to pass this straightforward, practical, bipartisan bill. So with that, Mr. Chairman, I yield back.

The gentlelady yields back. Are there any other members who wish to be recognized for a statement on this bill? I now recognize the ranking member to speak on the bill.

Thank you, Mr. Chairman. I want to express my support for H.R. 7401, the Small Business Lending Fraud Prevention Act. I applaud Mr. Meuser and Ms. Goodlander for their leadership on this issue. Let me begin by saying this committee has played an integral role in conducting oversight of the pandemic relief programs. Approximately $1.2 trillion of economic aid was disbursed through the SBA pandemic relief programs over the course of the pandemic, providing economic relief to small businesses all over the country. Unfortunately, bad actors took advantage of the programs, and it has become clear we need to work together to recover fraudulent dollars. The previous administration took strong steps to root out fraud and put internal controls in place to prevent it. And the OIG, which has a team of auditors, investigators, attorneys, and state-of-the-art data analytics technology, has been working diligently to uncover fraudulent schemes. And because of their work, an SBA loan officer recently pled guilty to making false statements in connection to applications for more than $550,000 in fraudulent COVID-19 pandemic loans to herself and family members. While I firmly believe the single most important action we can take to combat fraud is to fully fund the IG's budget request, I support this legislation. The bottom line is this: the current process worked. The bad actor at SBA was identified, investigated, and prosecuted. But moving forward, requiring SBA employees to certify there is no conflict of interest before approving a loan will add an extra layer of security and help deter fraud. I urge my colleagues to support the bill. I yield back.

The gentlelady yields back. I now recognize myself for remarks. Last year, the SBA uncovered a disturbing case of fraud. In 2021, a former SBA loan officer used her authority to secure a $170,000 Economic Injury Disaster Loan for one of her family members. And the loan officer submitted a false statement to the SBA as part of the loan application. When it was initially denied, she approved it herself. Before she was caught, the loan officer tried to approve over $500,000 in loans to herself and her relatives while still working at the SBA. Fortunately, in this case, the fraudster was caught. However, it was critical to take serious steps to avoid such cases in the future, and it should not be possible for fraud like this to occur again. H.R. 7401, the Small Business Lending Fraud Prevention Act, moves us in the right direction. This bill requires SBA employees involved in the loan process to certify there are no ties to the loan applicant or recipient for any of the loans they are responsible for processing. The bill requires any employee who has a conflict of interest to inform their supervisor and recuse themselves from the loan review and approval process. There are necessary steps to prevent future fraud at the SBA. It will provide a clear standard against which future fraudsters can be held accountable. I urge my colleagues to vote yes on H.R. 7401, and I yield back. Does anyone wish to offer an amendment? Seeing none, the question now occurs on ordering H.R. 7401 reported favorably to the House. All those in favor say aye. [Chorus of ayes.] All those opposed say no. In the opinion of the chair, the ayes have it. H.R. 7401 is agreed to.

Mr. Chairman, I'd like to request a recorded vote.

A recorded vote has been requested, and a roll call vote is ordered. Pursuant to committee rule 13 and House rule 11, further proceedings on the bill are postponed. The committee now moves to consideration of H.R. 7396, the Native American Entrepreneurial Opportunity Act, introduced by Representatives Davids, Ellzey, Morrison, and Crane. The clerk will report the bill.

H.R. 7396, a bill to establish the Office of Native American...

Without objection, H.R. 7396 is considered as read and open for amendment. I now recognize Representative Morrison from the great state of Minnesota for a statement on the bill.

Thank you, Mr. Chairman, and thanks to my colleagues, Representatives Davids, Ellzey, and Crane, for joining me in introducing this important bipartisan legislation. Native-owned businesses employ over 300,000 people across the country and contribute over $33 billion to the U.S. economy every year. In tribal communities, they are often the backbone of the local economy. That's why it's critical that there's continuity in the Small Business Administration's engagement with Native American entrepreneurs. Codifying the Office of Native American Affairs and establishing an assistant administrator role to oversee its operations will create better government-to-government working relationships with tribes and Native Hawaiian organizations and better address the entrepreneurial capital and contracting needs of tribes and Native businesses. There are nearly 4,000 Native-owned businesses in Minnesota, ranging from independent bookstores to construction companies to local restaurants. I look forward to seeing the Small Business Administration continue to work with Native entrepreneurs in Minnesota and across the country to ensure these businesses have the resources they need to grow and succeed. Thank you, Mr. Chair, I yield back.

The gentlelady yields back. Are there any other members who wish to be recognized for a statement on this bill? Seeing none, I'd like to recognize the ranking member to speak on the bill.

Thank you, Mr. Chairman. I strongly support the Native American Entrepreneurial Opportunity Act. Let me begin by commending Ms. Davids, Dr. Morrison, Mr. Ellzey, and Mr. Crane for their leadership and bipartisan commitment to codifying the Office of Native American Affairs at SBA. Small businesses on tribal reservations often face a mix of challenges, ranging from lack of access to capital to inadequate business training. SBA's office has proved to be a valuable resource to Native American Indians, Alaskan Natives, and Native Hawaiians, supporting approximately 2,000 small businesses every day. Codifying the office will ensure that tribal small businesses have access to SBA's full range of business development tools, regardless of the administration. Importantly, the legislation requires that the assistant administrator report directly to the administrator, making sure that the voices of the tribal communities will be heard at SBA. Native American-owned businesses are economic engines, generating $86 billion in sales, shipments, and revenues every year and employing nearly 364,000 people in their communities. This bill will go a long way into increasing access to federal programs and services and promote economic development. I would also like to thank Chairman Williams for adding this bill to the markup today. With that, I yield back.

The gentlelady yields back. I now recognize myself to speak in support of this legislation. H.R. 7396, the Native American Entrepreneurial Opportunity Act, establishes the Office of Native American Affairs within the Small Business Administration. Economic development programs aim to help small businesses start, grow, and compete in global markets by providing qualifying training, counseling, and access to resources. The SBA's Office of Native American Affairs has been providing these services and tribal consultations for many years. However, the office has yet to be codified into law. This legislation will codify this office and provide Congress with an annual report that includes the number of individuals served, consultations provided, and the trainings held by the office. This report will improve transparency and increase oversight of the office. I urge my colleagues to vote yes on H.R. 7396, and I yield back. Does anyone wish to offer an amendment? Seeing none, the question now occurs on ordering H.R. 7396 reported favorably to the House. All those in favor say aye. [Chorus of ayes.] All those opposed say no. In the opinion of the chair, the ayes have it. H.R. 7396 is agreed to.

Mr. Chairman, I'd like to request a recorded vote.

So moved. A recorded vote has been requested, and a roll call vote is ordered. Pursuant to committee rule 13 and House rule 11, further proceedings on the bill are postponed. The committee now moves to consideration of H.R. 7412, the Put America on Commission Act of 2026, introduced by myself and Representative Olszewski from the great state of Maryland. The clerk will report the bill.

H.R. 7412, a bill to amend the Small...

Without objection, H.R. 7412 is considered as read and open for amendment. I now recognize myself to speak in support of this legislation. H.R. 7412, the Put America on Commission Act of 2026, will maximize the SBA's efforts to recover fraudulent pandemic loan funds by incentivizing everyday Americans to submit credible information on fraudulent loans in exchange for a commission. This bill will establish the Office of Whistleblower Awards within the SBA to receive whistleblower tips from the public and forward credible evidence to the Office of Inspector General. If the information received from a whistleblower results in a final conviction, the office will disburse a monetary award to the whistleblower. The SBA's Office of Inspector General estimates that over $200 billion in taxpayer dollars were given out to bad actors through the SBA's PPP, EIDL, and other COVID-19 relief programs. This accounts for nearly 20 percent of all pandemic funding or lending, and this legislation opens up a new avenue for tracking down the fraudsters. Whistleblowers serve as a key tool in recovering the unprecedented amount of fraud and ensuring fraudsters are brought to justice. The newly established Office of Whistleblower Awards would be led by one staff member who coordinates tips with the SBA Inspector General for investigation. Notably, the office's operations and whistleblower awards are fully funded by recovered fraudulent loan accounts which are deposited into the Whistleblower Award Fund. Under the bill, the SBA may also seek a separate civil monetary penalty against convicted fraudsters, and the income from the penalties will be deposited into the Whistleblower Award Fund. In the private sector, commissions work. The bill utilizes the common practice to help bring more fraudsters to justice. No one should be able to defraud the American taxpayers without consequence. I greatly appreciate the work that the Office of the Inspector General has done to date to uncover the extent of the fraud. This bill will help the Office of Inspector General obtain the information needed to catch fraudsters and do right by American businesses. I'm proud to introduce the legislation to help introduce fraudsters accountable and recover billions of dollars stolen from the American taxpayers. Even the infamous CBO determined the same legislation from last Congress would reduce the deficit by $108 million over 10 years. So I urge my colleagues to vote yes on H.R. 7412, and I yield back. I now recognize the bill's co-sponsor, Representative Olszewski from the great state of Maryland, for a statement on the bill.

Thank you very much, Mr. Chairman, and I do want to begin by thanking you, Chairman Williams, for your partnership and your leadership on this important effort. Likewise, I want to echo your sentiments and lift up the important work of the Inspector General. I am very proud to lead this bipartisan bill because I believe that we can and should always work harder to ensure tax dollars are being spent as intended and as efficiently as possible. Before coming to Congress, I had the privilege of serving in both state and local elected office, including six years as Baltimore County Executive. In that role, I authored our county's first comprehensive and enterprise-wide efficiency review. In that work, we came up with over 150 recommendations with the potential savings of $771 million for taxpayers, many of which my team and I implemented and are still being used today to save residents millions annually. It's the kind of work government should be leading all the time, and it's why I'm proud to join the chairman to lead this innovative bipartisan legislation that would incentivize Americans to report the potential misuse of federal dollars. My work in Baltimore County made sure we were being efficient in our use of taxpayer funding. This bill aims to save tax dollars by holding people and organizations who commit fraud accountable. During the COVID-19 pandemic, emergency funds were rushed out to keep workers employed, small businesses afloat, and families stable. I was proud to help administer many of these programs as county executive. That money was meant to be a lifeline, and for many it was. But when individuals abused those programs for personal gain, they didn't just break the law and steal from the federal government. They stole from others who were already under tremendous strain. An office dedicated to reporting COVID-19 fraud protects the integrity of all public programs, and it sends a clear message: help is there for those who need it, but exploitation will not be tolerated. This bill will hold criminals accountable and offer multiple pathways for patriotic Americans to report potential fraud and abuse. In turn, it will help us recover funds and restore public trust. I urge a yes vote from my colleagues. Thank you very much, and I yield back.

The gentleman yields back. I now recognize Representative Alford from the great state of Missouri for a statement on the bill.

Well, thank you, Chairman Williams, and Ranking Member Velázquez, for bringing for this important legislation. You know, relief funds were meant to help small businesses survive an unprecedented crisis, not to line the pockets of criminals. Every dollar stolen is a dollar taken from an honest entrepreneur who played by the rules and needed that support to keep their doors open and their employees on payroll. Unfortunately, we don't have to look too far from my district. In Kansas City, Missouri, three men were recently indicted for allegedly fraudulently obtaining more than $447,000 in the Paycheck Protection Program loans using false payroll records. Authorities allege that those loans were later forgiven even though the funds were not used for authorized purposes. Folks, that's half a million dollars. It's nearly half a million dollars diverted away from the small businesses these programs were created to help. Cases like this undermine public trust and disadvantage the very people that these programs were designed to support. And that's just one example. Nationwide, hundreds... and that is why I fully support Chairman Williams' Put America on Commission Act. This bill establishes an Office of Whistleblower Awards with the Small Business Administration to incentivize individuals to come forward with credible information about pandemic loan fraud. Pandemic relief programs like PPP and EIDL were lifelines for millions of small businesses, and if we fail to pursue fraud aggressively, we risk undermining confidence in future emergency programs when Americans need them most. I urge my colleagues to support this common-sense, bipartisan bill so that we can continue recovering stolen funds and send a clear message to the American people that if you defraud the American taxpayer, you will be held accountable. And with that, I yield back.

The gentleman yields back. I now recognize Representative Stauber from the great state of Minnesota for a statement on the bill.

Thank you, Mr. Chairman. I want to start by being very clear. What happened during the pandemic with federal relief dollars and what has happened in states like my home state of Minnesota was not just unfortunate; it was a gross failure of oversight and a betrayal of the American taxpayer. In my home state, we have uncovered billions of dollars in fraud, federal dollars provided by the good people and law-abiding taxpayers in my great state of Minnesota and across this great nation. They were taken by organized fraud rings. This was not just small oversights or mix-ups. This was a systemic abuse, abuse made possible by our failing governor and his administration in my state and by other programs with weak controls and no oversight. We've seen case after case where taxpayer dollars meant to help struggling families and small businesses instead lined the pockets of criminals. And once the money was gone, the government was left without the tools or information needed to recover it. This is unacceptable. Every dollar stolen is a dollar taken away from a legitimate mom-and-pop shop trying to stay open or a family just trying to put food on the table. It is also deeply offensive to the millions of Americans who followed the rules while fraudsters got rich. That's why H.R. 7412, the Put America on Commission Act, is so critical. This bill recognizes a simple truth: the government cannot catch fraud alone. Often, the people who know fraud is happening are the insiders, neighbors, or employees who see it firsthand. But too often they have no incentive or even a clear way to come forward. By creating an Office of Whistleblower Awards within the SBA, this legislation puts real teeth behind fraud enforcement. It incentivizes credible tips, helps uncover hidden fraud schemes, and provides the SBA with the information it needs to recover stolen taxpayer dollars. This is about accountability. It's about deterrence, and it's about sending a message: if you stole from the American people, you will be found and you will be held responsible. I commend Chairman Williams and Congressman Olszewski for bringing forward this bipartisan common-sense solution. If we are serious about stopping fraud, protecting honest businesses, and restoring trust in federal programs, this bill is exactly the kind of action Congress should be taking. I strongly support H.R. 7412 and urge its adoption. And I yield back, Mr. Chair.

The gentleman yields back. Are there any other members who wish to be recognized for a statement on this bill? All right, seeing none, I'd like to recognize the ranking member to speak on this bill.

Thank you, Mr. Chairman. I share your commitment to recovering fraudulently obtained COVID-19 pandemic relief funds. As you may recall, I led efforts to extend the statute of limitations for fraud in the EIDL and PPP programs. This bill, which became law, sent a strong message that unscrupulous behavior will not be tolerated and that those who commit fraud will be held accountable in the years to come. And in this Congress, we came together to extend the statute of limitations in two more pandemic relief programs. While we may never know the exact amount of fraud, there is no doubt that the vast majority of the fraud occurred in the first nine months of the pandemic during President Trump's first term, when the guardrails were lowered to get the money out the door quickly during the crisis. We also know with certainty that the SBA took a number of steps to curtail that fraud, including reinstituting long-standing controls, establishing a fraud risk management board, and creating a special counsel for enterprise risk. Currently, the OIG has more than 130,000 actionable leads that have been submitted to their hotline. The issue before us is not a failure to identify fraud. The OIG has enough credible leads to remain active for decades. The real challenge is ensuring our law enforcement community has the resources it needs to thoroughly investigate and prosecute fraud. I appreciate the efforts of the chairman to come up with a creative solution to help recover fraudulent funds, and I commend Representative Olszewski for leading this bill along with Mr. Williams. Thank you, and I yield back.

Thank you, and the gentlelady yields back. Does anyone wish to offer an amendment? Seeing none, the question now occurs on ordering H.R. 7412 reported favorably to the House. All those in favor say aye.

Aye.

All those opposed say no. In the opinion of the chair, the ayes have it and H.R. 74...

Mr. Chairman.

Yes, sir.

I request a recorded vote, please.

A recorded vote has been requested and a roll call vote is ordered. So pursuant to committee rule 13 and House rule 11, further proceedings on this bill are postponed. Okay, now the committee will stand in recess subject to the call of the chair. Members, please remain in your seats while we set up the voting software. This will be very brief. [Gavel sounds.] [Recess.] The committee will now come to order. We will resume consideration of the bills on which roll call votes were requested and postponed. We will start with H.R. 7401. The question now occurs on ordering H.R. 7401 reported favorably to the House. The clerk will open the vote. [Recess.] Are there any other members who have not voted or wish to change their vote? If not, the clerk will close the vote. The clerk will report.

Mr. Chairman, on this vote, the ayes are 24 and the nos are zero.

H.R. 7401 is ordered reported to the House with a favorable recommendation. The question now occurs on ordering H.R. 7396 reported favorably to the House. The clerk will open the vote. [Recess.] Okay, are there any other members who have not voted or wish to change their vote? If not, the clerk will close the vote. The clerk will report.

Mr. Chairman, on this vote, the ayes are 24 and the nos are zero.

H.R. 7396 is ordered reported to the House with a favorable recommendation. The question now occurs on ordering H.R. 7412 reported favorably to the House. The clerk will open the vote. [Recess.] Are there any other members who have not voted or wish to change their vote? If not, the clerk will close the vote. The clerk will report.

Mr. Chairman, on this vote, the ayes are 24 and the nos are zero.

H.R. 7412 is ordered reported to the House with a favorable recommendation. And if there's no further business, this concludes today's markup. I want to thank all of you for this. Without objection, the committee staff is authorized to make technical and conforming changes, and members have two business days to file additional supplemental, dissenting, and minority views. I want to thank all of you for being here today again. Without objection, the committee stands adjourned. [Gavel sounds.]

Thank you. [Recess.]