SBA's 'Cookie Jar Capitalism' Still Flourishes in Wake of Scandal
| May 30, 2008 |  View for printing |
Loan fraud has been a long-standing, widespread problem within the Small Business Administration and has cost taxpayers literally hundreds of millions of dollars. But when a senior executive of Business Loan Express (BLX), a subsidiary of Allied Capital, engineered a particularly brazen $76 million loan scam early last year, it was widely thought the SBA had finally learned its lesson.
The caper was dubbed "Cookie Jar Capitalism," but two years later it appears the cookie jar is still wide open and unguarded. Indeed, the agency has done little if anything to protect taxpayers from losses on bad loans, according to a new report by the SBA's Office of Inspector General (OIG), the agency's quasi-independent investigative arm.
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