The intentions were good. The delivery was pathetic. The results are shameful. Four years ago today, an unthinkable attack on the United States occurred. And while Sept. 11 served as a rallying point that brought out the best in the American people and their government, a federal loan program designed to help small businesses recover from the devastation has turned into a boondoggle.
In an investigation by the Associated Press, reporters learned that low-interest, government-guaranteed loans went to many companies unaffected by the Sept. 11 attacks. In several cases, recipients were unaware that loan money received from their banks was coming from the recovery loan program.
From the AP report:
"From Dunkin' Donuts shops and florists to motorcycle dealers and chiropractors, businesses nationwide said they were unaware their banks had lent them money from the low-interest, government-guaranteed Sept. 11 loan program.
"The records obtained under the Freedom of Information Act also show that many other loan recipients who made cases they were injured by Sept. 11 were far removed from the direct devastation of New York City and Washington, like a South Dakota country radio station, a Virgin Islands perfume shop and a Utah dog boutique."
Meanwhile, some small businesses at ground zero were shorted on their loan requests.
More than 100 Dunkin' Donuts, Subway and Quiznos franchises across the country got loans. So did 14 Dairy Queens. Some of those franchisees are right here in Gwinnett and Barrow counties. Six local businesses - day cares, fast-food restaurants, hotels and gas stations - benefited from more than $8 million in loans.
The Small Business Administration oversaw (for lack of a better word) the two Sept. 11 programs that made 19,000 loans worth nearly $5 billion. As a result of the program, the SBA took credit for saving 20,000 jobs. That comes to about $250,000 per job, the AP points out. And only about one of every 10 loans went to companies in Washington and New York City.
It's a perfect example of a failed public-private partnership. In this case, no one - not the government that issued the cash or the banks that administered the loans - was minding the store.
The good news is that the loan period is over. The bad news is that at least 600 of the loans worth about $1 million are in default. More loan recipients are expected to file bankruptcy or close.
And who is responsible for covering these failed loans? The U.S. taxpayer.