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[Senate Hearing 115-272]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 115-272



                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                          AND ENTREPRENEURSHIP
                          UNITED STATES SENATE


                             SECOND SESSION


                           FEBRUARY 14, 2018


    Printed for the Committee on Small Business and Entrepreneurship

        Available via the World Wide Web: http://www.govinfo.gov

 30-221 PDF              WASHINGTON : 2018              


                    JAMES E. RISCH, Idaho, Chairman
              BENJAMIN L. CARDIN, Maryland, Ranking Member
MARCO RUBIO, Florida                 MARIA CANTWELL, Washington
RAND PAUL, Kentucky                  JEANNE SHAHEEN, New Hampshire
TIM SCOTT, South Carolina            HEIDI HEITKAMP, North Dakota
JONI ERNST, Iowa                     EDWARD J. MARKEY, Massachusetts
JAMES M. INHOFE, Oklahoma            CORY A. BOOKER, New Jersey
TODD YOUNG, Indiana                  CHRISTOPHER A. COONS, Delaware
MICHAEL B. ENZI, Wyoming             MAZIE K. HIRONO, Hawaii
MIKE ROUNDS, South Dakota            TAMMY DUCKWORTH, Illinois
          Skiffington E. Holderness, Republican Staff Director
                 Sean Moore, Democratic Staff Director
                            C O N T E N T S


                           Opening Statements


Risch, Hon. James E., Chairman, and a U.S. Senator from Idaho....     1
Chabot, Hon. Steve, a U.S. Representative from the State of Ohio.     1
Cardin, Hon. Benjamin L., Ranking Member, and a U.S. Senator from 
  Maryland.......................................................     3


Tryon, David C., Nominee to be Chief Counsel for Advocacy of the 
  Small Business Administration..................................     5
Ware, Hannibal M., Nominee to be Inspector General of the Small 
  Business Administration........................................    10

                          Alphabetical Listing

Cardin, Hon. Benjamin L.
    Opening statement............................................     3
Chabot, Hon. Steve
    Opening statement............................................     1
Risch, Hon. James E.
    Opening statement............................................     1
Tryon, David C.
    Testimony....................................................     5
    Prepared statement...........................................     8
    Responses to questions submitted by Ranking Member Cardin, 
      Senators Shaheen, Cantwell, Hirono, Booker, Heitkamp, and 
      Duckworth..................................................    26
Ware, Hannibal M.
    Testimony....................................................    10
    Prepared statement...........................................    12
    Responses to questions submitted by Ranking Member Cardin, 
      Senators Cantwell, Hirono and Heitkamp.....................    49




                    HANNIBAL M. WARE TO BE INSPECTOR



                      THURSDAY, FEBRUARY 14, 2018

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 3:30 p.m., in 
Room 428A, Russell Senate Office Building, Hon. James Risch, 
Chairman of the Committee, presiding.
    Present: Senators Risch, Ernst, Young, Kennedy, Cardin, 
Cantwell, Shaheen, Heitkamp, and Duckworth.

                       SENATOR FROM IDAHO

    Chairman Risch. The Committee will come to order. I thank 
all of you for coming today. And we are here to consider 
President Trump's nominee to be Chief Counsel of the Office of 
Advocacy of the United States Small Business Administration, 
David Tryon, and the nominee to be Inspector General at SBA, 
Mike Ware.
    So, gentlemen, we want to thank you for being here. We want 
to thank you for coming forward for public service. We always 
appreciate that. What I am going to do is I am going to make a 
brief opening statement and then we are going to have an 
opening statement from Senator Cardin. That will be followed by 
a statement from our witnesses and questions from the Members 
of the Committee.
    First, I would like to recognize Chairman Chabot of the 
House Small Business Committee to introduce a fellow Ohioan. 
Congressman, thank you.

                         STATE OF OHIO

    Mr. Chabot. Thank you very much Chairman Risch, Ranking 
Member Cardin, for the opportunity to appear before you today. 
I know it is a great privilege to work together in Congress on 
behalf of our Nation's small businesses, and that is one of the 
reasons that we are here to join you this afternoon.
    I have the pleasure of introducing a fellow Ohioan, David 
Tryon, who I have enjoyed getting to know during his 
confirmation process to be the next Small Business 
Administration, or SBA's, Chief Counsel for Advocacy.
    As this Committee knows, the SBA Office of Advocacy is the 
independent voice for small business within the Federal 
Government, the watchdog for regulatory flexibility act and the 
source of essential data and small business statistics. The 
Chief Counsel leads this important office and ensures that 
Federal agencies are considering how their proposed regulations 
will affect small businesses.
    Mr. Tryon brings more than 30 years of legal experience to 
the position on a broad range of complex civil cases. He has 
handled disputes over contracts, construction, intellectual 
property, real estate, foreclosure, eminent domain, and U.S. 
constitutional issues, and, in many cases, he has advocated for 
the interests of small businesses. In addition, he has handled 
public interest matters on a pro bono basis. As a result of his 
extensive legal experience, he has first-hand knowledge of the 
many problems that small businesses face and how important they 
are to America's economy.
    If confirmed, Mr. Tryon would be assuming the position at a 
time when Congress has been working to provide regulatory 
relief to the Nation's small businesses, which continue to 
experience a crushing weight of Federal regulations on a daily 
basis. The Office of Advocacy has actively assisted with 
regulatory reform efforts by holding regional regulatory 
roundtables across the country, to hear from small businesses 
facing regulatory burdens.
    However, if the Office of Advocacy had a chief counsel in 
place, these efforts would be enhanced by providing clear 
direction on regulatory reform and appointing regional 
advocates who will assist in outreach efforts in the field.
    I believe Mr. Tryon's experience will serve America's small 
businesses well. I encourage this Committee and the full Senate 
to move swiftly to approve him as the next Chief Counsel for 
Advocacy. By doing so, we can ensure that America's small 
businesses have a powerful voice in the Federal Government 
during the regulatory rulemaking process.
    And again, I want to thank you for giving us the 
opportunity to speak here this afternoon.
    Chairman Risch. Thank you, Chairman Chabot. You are welcome 
to stay if you want. I know how busy you are----
    [Off microphone.]
    Mr. Chabot. Yeah. Thank you very much, Senator.
    Chairman Risch. Thank you.
    Mr. Chabot. Thank you, Senators. Thanks.


    Chairman Risch. Again, welcome, Mr. Tryon. We all know that 
the SBA Office of Advocacy is independent from the SBA but is 
vital for helping the agency achieve its mission. Advocacy is 
charged with advancing the views, concerns, and interests of 
small businesses in government, and we all know how important 
that is when a small business is dealing with the giant Federal 
    Advocacy oversees the Regulatory Flexibility Act and 
related executive orders that require regulators to consider 
the impact of regulations on small businesses. Advocacy also 
produces research on small business and monitors regulatory 
activity across the country with 10 regional advocates.
    I am confident that Mr. Tryon would serve the office well 
as its Chief Counsel and I look forward to supporting his 
    Mr. Tryon graduated from BYU--for those of you who are not 
from our neck of the woods, that is Brigham Young University--
in 1981, and from the University of Michigan Law School in 
1984. After a brief stint at Chapman and Cutler in Chicago he 
returned home to Ohio where has been practicing at Porter 
Wright Morris & Arthur since 1987.
    I would also like to welcome his wife, Sandy, and daughter, 
Lindsay, who have come here today to support him. Welcome.
    We also welcome Mr. Ware. Mr. Ware, your lengthy experience 
in government oversight, particularly your time at the SBA, 
will serve you well in this post, and I believe that you will 
be a great addition to the agency. The SBA Office of Inspector 
General is charged with overseeing the agency to prevent and 
weed out waste, fraud, and abuse. Congress must ensure that 
taxpayer dollars are spent effectively and that the SBA can 
fill the needs of the entrepreneurs and small businesses it 
exists to serve.
    I am confident that Mike Ware is the right person to manage 
the audits and investigations of the Office of Inspector 
General, and I look forward to supporting his confirmation.
    Mr. Ware graduated from the University of the Virgin 
Islands in 1991 with a bachelor's degree in accounting. He 
began working for the Department of Interior's Office of 
Inspector General while still in college, and served there in 
different capacities for 26 years. He has been Acting Inspector 
General at the SBA since 2016.
    I would also like to welcome his wife, Elise, his mother, 
Barbara, his son, Zion, and his pastor, Dr. George Phillips, 
here to support him.
    Before we turn to our nominees I would like to recognize my 
distinguished Ranking Member, Senator Cardin, for his opening 


    Senator Cardin. Well, Chairman Risch, first let me tell you 
what a pleasure it is to join you on the Small Business 
Committee as the Ranking Member to work with you, in the 
tradition of this Committee, on a bipartisan basis, to advance 
the interest of small business.
    Chairman Risch. Senator Cardin, I can tell you it has been 
very bipartisan. To your right are two people that I have 
served with in a management capacity on this, and we have--I 
have enjoyed just an outstanding relationship with them. In 
fact, the press does not cover us because it is so boring. We 
do not fight with each other. We try to pull the wagon 
    Senator Cardin. Well, I agree with you, but I would like to 
make it less boring.
    Chairman Risch. Do not go overboard.
    Senator Cardin. I do want to acknowledge how proud our 
caucus is, and I think the entire United States Senate, of 
Senator Shaheen's service on this Committee as Ranking Member. 
She did an incredible job.
    You know, the work that she did in regards to the women's 
economic empowerment, tackling the gender gap with women 
entrepreneurs' need to thrive, to me that is a blueprint on 
what we need to do as a Nation to close the gender gap, and it 
is very important work of this Committee.
    But Senator Shaheen, also, I think, was responsible for 
bringing a lot of us together to get some good legislation done 
and oversight that is important. I personally thank her for 
some legislation that I worked on, that she found a path 
forward so that we could get that accomplished. I know she is 
very proud of the Invest in Rural Small Business legislation 
that is now law, that she worked on and was able to get 
    So under Senator Shaheen's leadership, the Democratic 
members are very proud of the way that we were able to work 
with our Republican colleagues in the best interest of small 
business, and I am very pleased that she is going to be right 
here on this Committee, but I want her to know that her 
leadership on small business issues is always welcomed, and we 
are going to be relying a great deal on what she was able to 
develop in this Committee.
    Senator Shaheen. Thank you, Mr. Chairman. If I could, thank 
you very much, Senator Cardin. I really appreciate those nice 
words. And let me recognize the minority staff of the Small 
Business Committee, without whom all of that work would not 
have happened. So thank you to everybody.
    Senator Cardin. And I agree. A lot of times our staffs go 
unappreciated for the incredible work that they do, and we come 
up with, we think, simple ways to get things done and then they 
have to deliver. So I thank them very much.
    Mr. Chairman, we do have a lot of work to do in this 
Committee. There are still a lot of issues ahead of us. The 
regulatory issues are there, access to capital to make sure 
that the government procurement is done in the way that we 
intended under statute to the protected groups.
    So we have work ahead of us to do, and I look forward to 
working with all the Members of this Committee in order to 
achieve that agenda.
    Today we have two very important positions in which we are 
holding nomination hearings, the Chief Counsel for Advocacy for 
the Small Business Administration and the Inspector General of 
the Small Business Administration. So, Mr. Tryon, I welcome you 
and your family. Mr. Ware, I welcome you and your family. We 
thank you very much for your willingness to serve your country. 
We know that this is a shared sacrifice with your family, so we 
thank you, the family members, for being willing to allow your 
spouses and family members to serve our country.
    The Inspector General is an important position to hold the 
SBA accountable. Billions of dollars are appropriated in the 
SBA. We want to make sure those funds are going to the intended 
purpose that Congress desires, and we will talk a little bit 
about different issues including whether the disaster relief is 
going as intended, we have had mistake rates, are we doing the 
best that we can. But we rely on the Inspector General to be 
that independent voice working with us, the Congress, with the 
right oversight to make sure taxpayer dollars are going for 
their purpose, so that we can do what is right.
    Mr. Ware, I am telling you, I am very impressed with your 
background on this area, so you bring a wealth of talent to 
that position.
    The Chief Counsel of the Office of Advocacy also needs to 
be an independent voice, an independent voice. The cost of 
regulation on small business is challenging to small business 
owners, and we want to make sure that we have that type of 
advocate at the Small Business Administration. And it must go 
beyond partisan politics. That is not easy in today's 
environment, but we need to make sure that this position is 
filled with someone who is going to be an advocate for small 
businesses in a nonpartisan manner.
    So will you help issues such as net neutrality, which is 
certainly an important issue? But there clearly is a small 
business interest on access to the high-speed internet services 
at reasonable price. And we hope that we would see, from the 
Chief Counsel, that type of interest, to make sure that small 
businesses are treated fairly.
    So during the question-and-answer format I will have a 
chance to ask you some questions in this regard, but again, 
welcome and I look forward to our hearing.
    Chairman Risch. Thank you, Senator Cardin.
    Gentleman, Mr. Tryon and Mr. Ware, would you stand and 
raise your right hand, please?
    Do you solemnly swear to tell the truth, the whole truth, 
and nothing but the truth, so help you God?
    Mr. Tryon. I do.
    Mr. Ware. I do.
    Chairman Risch. Thank you very much. Mr. Tryon, the floor 
is yours.


    Mr. Tryon. Good afternoon, Chairman Risch, Ranking Member 
Cardin, and Members of the Committee.
    Thank you for the opportunity to appear before you today. I 
would like to introduce my wife, Sandy, my daughter, Lindsay, 
and thank them for being with me today and for their support 
during the nomination process.
    I am honored to receive your consideration to serve as 
Chief Counsel for Advocacy of the Small Business 
Administration. I want to thank Chairman Chabot for his kind 
introduction. I also want to thank President Trump for the 
trust and confidence he has placed in me with this nomination. 
I have had the privilege of meeting with many of you and your 
staff. I hope that I will have the opportunity to work with you 
in the future.
    About 15 months ago I was home alone and looking at my 
dad's picture and his veteran's flag given to me about a year 
earlier at his graveside. As I thought back on his life I 
thought about his patriotic service during World War II. I 
thought about the fact that he had encouraged me to go to law 
school and I was reminded of my commitment to him to use my law 
degree to help others. I said to his picture, ``Dad, I have not 
done what I came here to do.'' That day I decided to do more in 
public service to honor my dad. So, when I received a call from 
the White House and was asked if I would be interested in 
serving as Chief Counsel for Advocacy, I immediately said yes.
    I have personally experienced some of the struggles that 
small entities represented by the Office of Advocacy encounter. 
For 10 years, as part of my church volunteer work, I helped 
manage a small not-for-profit apple and strawberry farm with 
one full-time manager. We harvested about 500,000 pounds of 
apples and up to 80,000 pounds of strawberries every year. The 
fruit was used to feed the poor and needy. I, along with two 
others, was in charge of farm oversight, which included 
recruiting over 30,000 hours of volunteer time every year and 
training these volunteers on safety and government regulation 
compliance. I know from first-hand experience the challenges of 
small farmers.
    I am also familiar with small government entities, which 
are within the jurisdiction of Advocacy. As school board 
president, I learned the impact of State and Federal 
regulations on the school district. It was often difficult to 
understand those regulatory requirements and it was unclear if 
they were mandatory and what the consequences were if we failed 
to comply. These mandates often imposed additional costs, which 
sometimes forced the school board to cut back on other 
important programs. During my tenure, the State and the Federal 
regulators never sought input from us on these issues.
    Many of my relatives have owned small businesses. My 
sister, Carol, was a realtor and she and her husband, Kim, 
owned and ran a small Ford dealership in New Mexico. Another 
brother-in-law, Rusty, had a home repair and remodeling 
business in Cleveland, and even my daughter, Lindsay, started a 
business. I have experienced with them their respective 
    From these and other personal experiences, I have learned 
some of the struggles which small entities face every day.
    I am a member of the Ohio Advisory Committee to the United 
States Civil Rights Commission. In 2014 and 2015, we issued a 
report titled ``Civil Rights Issues Regarding Barriers to 
Entrepreneurship in Ohio.'' We learned from minority-owned 
small businesses of the struggles they face, especially with 
respect to access to capital and government regulations.
    In my 32-year legal career I have advocated on behalf of 
business clients and individuals. My most rewarding experiences 
were representing small businesses such as a locksmith with one 
employee, a masonry company with 30 employees, a small 
electrical contractor, a small export company, an independent 
sales representative, and a bank services entrepreneur. I have 
also filed with the Ohio Supreme Court ``Friend of the Court'' 
briefs on behalf of the National Federation of Independent 
Businesses and I have provided free representation to other 
small, non-profit organizations. Sometimes my representation 
involved disputes with other entities and other times it 
involved addressing government rules, regulations, permits, or 
programs. Always, they involved the trials and tribulations of 
a small business that needed help.
    If I am honored to be confirmed as the Chief Counsel for 
Advocacy, I will take the lessons I have learned over the past 
32 years and apply them to advocating for all small businesses. 
I will zealously advocate for veteran-owned, minority-owned, 
and women-owned small businesses. I will collaborate with this 
Committee, the SBA, and other organizations and government 
agencies to help American small businesses thrive and prosper.
    Thank you for your time. I look forward to answering your 
    [The prepared statement of Mr. Tryon follows:]
    Chairman Risch. Thank you very much, Mr. Tryon. Mr. Ware, 
the floor is yours.


    Mr. Ware. Thank you, Chairman Risch, Ranking Member Cardin, 
and Members of the Committee. I am deeply honored to appear 
before you today and to have your consideration to serve as the 
Inspector General of the U.S. Small Business Administration.
    I would like to thank the President for nominating me to 
this position. I can assure you when I began my Federal career 
as a student intern at the Department of Interior's Virgin 
Islands IG field office in 1990, the opportunity to serve as an 
Inspector General was not imagined. I also would like to thank 
the professional staff of the Committee for their time and 
assistance in the confirmation process.
    It has been an honor to serve taxpayers within the 
Inspector General community these 28 years. I am very excited 
about the opportunity to serve as the permanent IG within SBA. 
I would like to take the next few minutes to introduce myself 
to you and to explain why I believe my career in the IG 
community has prepared me to take on the role of Inspector 
General at SBA.
    If I may, I also want to thank my wife, Elise, my mother, 
Barbara, and my children for their love and their support. 
Elise, my mom, my son, Zion, and my pastor, Dr. Phillips, are 
able to be with me here today and have been a source of 
inspiration and pride in my life. I also want to thank my other 
family members, friends, and colleagues for their unwavering 
support of me in my life's endeavors.
    I was born and raised in the U.S. Virgin Islands by a 
strong woman who guided and shaped me into the individual who 
appears before you today. She instilled a sense of right and 
justice within me that propels me in my work every day.
    As a native of the Virgin Islands, I have lived through 
major hurricanes and their aftermath. I offer this to you with 
a profound understanding of SBA's vital role in providing low-
interest loans as a form of disaster assistance to homeowners 
and business owners alike.
    In terms of education and experience, I am a career auditor 
and have served at all levels within an OIG. I hold a bachelor 
of arts degree in accounting from the University of the Virgin 
Islands and I am a graduate of the Senior Executive Service 
Career Development Program. I joined DOI OIG's Virgin Islands 
field office as an auditor in 1990 and later became the Field 
Office Supervisor, leading the very office where I was 
initially hired as a junior in college.
    Throughout my oversight career, I performed increasingly 
challenging and vital roles within the IG community, 
culminating with my appointment to the Senior Executive Service 
as SBA OIG's Deputy Inspector General. I have served as the 
Acting Inspector General since January 9, 2017.
    As Deputy Inspector General and now Acting Inspector 
General, I have seized the opportunity to promote integrity and 
efficiency within the SBA. In this capacity, I have led an 
investigative and audit staff of over 100 employees, and we 
have provided effective oversight over SBA's programs, which 
encompass more than $100 billion in guaranteed loans and nearly 
$100 billion in Federal contracting dollars.
    During my tenure, we have continued to provide a 
significant return on investment to the taxpayer and issued 
impactful reports and conducted complex fraud investigations. 
The men and women of SBA OIG are dedicated professionals, and I 
will support, lead, and champion their efforts to achieve these 
positive outcomes. I believe I have distinguished myself in 
leading OIG through decisive action to improve internal 
processes and to manage our resources. It also has been a 
priority and will continue to be so to strengthen our 
relationship with our oversight and appropriations committees. 
To this end, I appeared as a witness at four congressional 
hearings in 2017, on topics ranging from SBA's disaster 
assistance program to SBA's execution of VERA and VSIP 
authority in 2014.
    To further distinguish myself as a leader, I have executed 
our budget in a manner that has revitalized our disaster 
assistance oversight and bolstered our oversight of SBA 
internal management. Finally, I am proud to share with you 
results of the 2017 Federal Employee Viewpoint Survey as it 
pertains to our office and corresponds directly to my tenure. 
We had 55 strength areas out of a possible total of 71, with 
only 2 challenge areas noted. When the results were presented 
to me, the SBA Office of Human Resources Solutions official 
indicated they had to double-check the figures given the 
unprecedented, single-year increases noted across the key OPM 
indexes. I believe I am leading the office in the right 
direction, and, if confirmed, I will continue to focus on the 
impact of our work and the value of our staff.
    As an auditor, I am driven by criteria to make assessments 
and identify risk. If confirmed, I will continue to focus 
resources on the areas of highest risk to SBA and also against 
areas identified as top management challenges. I also will make 
it a priority to maintain a good working relationship with this 
Committee, Congress as a whole, the Administrator, and others, 
but I also intend to exercise complete independence in regards 
to choosing and pursuing audits and investigations.
    I believe that I have the demonstrated integrity, skills, 
knowledge, judgment, demeanor, and overall track record to 
serve as the SBA Inspector General. Thank you for your 
consideration, and I look forward to your questions.
    [The prepared statement of Mr. Ware follows:]
    Chairman Risch. Thank you very much. We are going to 
proceed to a round of five-minute questioning. We will do it on 
order of appearance. I am going to reserve my time and I am 
going to call on Senator Cardin.
    Senator Cardin. Thank you, Mr. Chairman. Once again, I 
thank both of our nominees.
    The reason why we have a Committee on Small Business is 
because of the importance of small business to our country. It 
is where job growth is. That is where innovation takes place. 
And the Office of Chief Counsel for Advocacy is to be the 
advocate for small business.
    So there are a lot of subjects in which there will be some 
challenges but they are not going to be deep challenges of 
conflicts between different interests. But in some areas there 
is going to be conflict, and I mentioned net neutrality in my 
opening statement.
    I have traveled to all parts of Maryland. I can tell you, 
particularly in our rural areas in western Maryland, Eastern 
Shore, we are dominated by small businesses. That is where the 
jobs are, small businesses. The access to broadband is 
absolutely essential. Access to affordable, high-speed internet 
service is critically important to be competitive. And we know 
there is building conflict between the large entities and 
access by small companies to the internet.
    So, Mr. Tryon, I want to know how you will approach that 
issue, recognizing there is going to be controversy within the 
Trump administration and that there is a small business 
interest here that may be different than the position within 
the Administration itself. How do you see your role in this 
position in representing the interests of small business in 
    Mr. Tryon. Thank you, Senator Cardin, for that question. I 
would say first of all you have mentioned the importance of 
independence, and I agree that the Chief Counsel needs to be an 
independent position. Indeed, when President Trump nominated me 
for this position he nominated me to be an independent voice 
for small businesses and to advocate on their behalf. And as an 
advocate, a trained advocate for the past 30-some years, that 
is exactly what I will do, and act independently on behalf of 
the small businesses.
    As to net neutrality, that is a difficult issue, I 
understand, and I would, if confirmed, want to--it sounds like 
your staff is--has become well versed in it. I would hope to 
have the opportunity to meet with you and/or your staff to 
understand your viewpoint on this, and then to work with other 
small business groups, small businesses themselves, to try and 
understand the impact of those complex rules and that complex 
conversation. And then once I determine what that interest of 
small businesses, advocate for those small businesses to help 
them in any way that I can.
    Senator Cardin. And I will be glad to share with you my 
views, and my staff will certainly work with you. But I think 
it is more urgent to understand the needs of the small business 
community. We will help you understand those issues that are 
brought to our attention.
    But I just need your commitment that you are going to be 
guided by the role of your position and exercise that 
independence, regardless of whether it is popular or not within 
the politics of the issue with the Administration.
    Mr. Tryon. Yes, Senator, I appreciate that, and if I can 
just illustrate my intention to be independent through 
something in my law practice, if I may. And that is sometimes 
in your law practice you are representing a client, but it is 
funded by someone else. For example, an insurance claim. You 
may be representing an individual funded by an insurance--the 
representation is funded by an insurance company. The insurance 
company may say, we want you to do something that you do not 
agree that it is good for your client. You represent the 
client. You tell the insurance company, ``No, this is who I 
represent. I appreciate that you are funding this but I have a 
legal and fiduciary obligation to represent my client.''
    Senator Cardin. Let me point out, in the last 
Administration, the person that held that position, at times, 
was very much against the Obama administration's regulatory 
policies, and we appreciated that independence and we expect 
that from this position.
    Let me mention a second issue which may not become so 
apparent but after you think about it, and that deals with the 
decision made by the Secretary of Interior on opening up 
drilling off the Atlantic coast. Go down to Ocean City, 
Maryland, and you are going to see 95 percent of the businesses 
are small businesses. They are put out of business if there is 
an oil spill on the East Coast of the United States--out of 
business. They will not return.
    We need someone in your position who is going to understand 
the sensitivity to small businesses, what happened in the 2010 
disaster, but what could happen again if we do not protect the 
vulnerabilities of small businesses. Are you prepared to do 
    Mr. Tryon. Senator, thank you. I will commit to working 
with those small businesses, trying to understand their 
interests, and then advocating for their business--for their 
    Senator Cardin. Thank you. Thank you, Mr. Chairman.
    Chairman Risch. Thank you very much. Senator Kennedy, I 
think you were first on our side. You are up.
    Senator Kennedy. Thank you, Mr. Chairman. Mr. Ware, could 
you walk me through, one more time, about the--I think it was 
in terms of the audit or the auditor, the 77 criteria and the 
55 that you scored high on. I was a little confused there.
    Mr. Ware. Yeah. I could definitely do that. So in these 
indices they really are about employee engagement.
    Senator Kennedy. Yes, sir.
    Mr. Ware. So that is what they are about. So there are 71 
different ways in which they break this out, in terms of 
determining whether your employees are happy in a productive 
and safe environment.
    Senator Kennedy. Mm-hmm.
    Mr. Ware. And 55 of those were strength areas, which I 
believe mean that you score above 60 percent in those. We only 
had two challenge areas. Those two challenge areas, I could 
tell you right now, they were the ability to move up in the 
job, so promotion capability, and salaries, I believe, was the 
other one, two things that are----
    Senator Kennedy. You mean somebody was unhappy with his 
    Mr. Ware. Two things that are very tough when you are in a 
small organization. But even that we have been working on, in 
terms of--well, the salary is what the salary is, but in terms 
of providing opportunities for--at least to have an opportunity 
to be promoted.
    Senator Kennedy. And these high marks were under your 
    Mr. Ware. They were definitely under my leadership----
    Senator Kennedy. Right.
    Mr. Ware [continuing]. And the leadership of my executive 
    Senator Kennedy. And you have been Acting for, what, over a 
    Mr. Ware. Yes. Yes, sir.
    Senator Kennedy. Have they been paying you like you were 
there permanently, I hope?
    Mr. Ware. No, sir. No, sir.
    Senator Kennedy. We need to do something now.
    Mr. Ware. Yes, sir.
    Senator Kennedy. That would seem fair to me. Well, 
    Mr. Ware. Thank you very much.
    Senator Kennedy. I am a little more familiar with that than 
I am letting on. That is quite an honor.
    Mr. Ware. Thank you.
    Senator Kennedy. You and your team ought to be very proud 
of that.
    Mr. Ware. Thank you very much. I appreciate it.
    Senator Kennedy. Mr. Tryon--is it Tryon? Am I saying that 
    Mr. Tryon. Yes, Senator. That is correct.
    Senator Kennedy. I read your resume. You have a very 
impressive resume. There were some allegations made way back 
when, when I believe you were a poll-watcher. I have read 
everything about that. Tell me about them, in your own words, 
and what happened, or what allegedly happened.
    Mr. Tryon. Senator, thank you for the opportunity to 
respond to that. So, in 2004, I was acting as an official poll 
observer, appointed by the Cuyahoga County Board of Elections.
    Senator Kennedy. Yes, sir.
    Mr. Tryon. At that time, they were seeking both Democrat 
and Republic poll observers.
    Senator Kennedy. Mm-hmm.
    Mr. Tryon. And I volunteered to do that----
    Senator Kennedy. Mm-hmm.
    Mr. Tryon [continuing]. As I had done four years earlier, 
and visited the polls that I had been assigned to visit, and 
everything went fairly well, as far as I was concerned. And 
then, subsequently, I heard someone make an accusation that I 
had tried to prevent people from voting, and----
    Senator Kennedy. Mr. Chandra--is that his name?
    Mr. Tryon. That is a person who conveyed the accusation.
    Senator Kennedy. Oh, okay.
    Mr. Tryon. And it simply did not happen. I am not sure how 
the information came about or why it was believed that 
happened, but it simply did not happen, and I can say, 
unequivocally, that it not only did not happen but I would 
never do anything like that. I have a very strong reputation in 
the community, with the legal community and the civic 
community, that of integrity and honesty, and I would never do 
anything like that.
    Senator Kennedy. I understand our staff has looked into it, 
have they not, Mr. Chairman?
    Chairman Risch. Senator Kennedy, the staff has looked into 
it, both the minority and the majority, and this happens. 
People get accused of things and it is--it sticks sometimes 
when it should not stick. In Mr. Tryon's case, I can tell you, 
that it was found to be absolutely baseless, and it is 
unfortunate that these accusations have been made, but we have 
found absolutely nothing. Senator Shaheen and I have been poll-
watchers before, in Georgia, and we know how these false 
accusations go at the polls. This was a county in Georgia, by 
the way.
    Anyway, thank you. Thank you for the question, and Mr. 
Tryon, I can tell you, unequivocally, that there was absolutely 
nothing found there at all, so thank you.
    Senator Kennedy. That is certainly good enough for me.
    Mr. Tryon. Thank you, Senator.
    Senator Kennedy. Thank you both, gentlemen. I think you 
will both do an extraordinary job, I am sure, and I hope they 
pay you correctly now.
    Chairman Risch. Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman, and 
congratulations to both of you on your nominations.
    I would like to follow up, Mr. Tryon, with an issue that 
Senator Cardin raised with respect to offshore drilling. An 
alliance of more than 41,000 businesses and 500,000 fishing 
families, from New Hampshire to Florida, has weighed in 
opposing oil and natural gas drilling in their communities. And 
this is a particular concern to us in New Hampshire, where we 
have an 18-mile coastline, the shortest coastline in the 
country, but very important to us.
    But we have a lot of small businesses along that coast that 
depend on the outdoor economy, and just today the Department of 
Commerce released a report pointing out that the outdoor 
economy is as large as the oil and gas sector, that it 
contributes nearly 2 percent of the gross domestic product and 
employs more than 4 million people in the United States.
    And so I believe that it is very important that the 
Department of Interior listens to those small businesses along 
the coast with respect to whether they believe it is in their 
interest to drill offshore, and I wonder if you can tell me if 
you think the Department of Interior should keep the interests 
of small businesses in mind when it comes to the risks of 
offshore drilling.
    That is a gimme question, so----
    Mr. Tryon. Senator Shaheen, thank you. I believe that we 
should always take into consideration those things in the 
office. If I am confirmed as Chief Counsel I would certainly 
advocate on behalf of those small businesses that are impacted 
by any of those decisions.
    Senator Shaheen. Thank you. You talked, in your opening 
statement, about your experience working with small businesses 
that have been harmed by regulations. Do you have any 
experience working with small businesses who believe that 
regulatory rollbacks will hurt them, especially by tilting the 
playing field in favor of large corporations? And I raise this 
because one of the businesses that we have in New Hampshire is 
a farm enterprise called Pete and Gerry's Organic Eggs. You may 
have seen those eggs in the grocery store. They sell at more 
than 9,600 locations across the country.
    And they were very concerned when, in December, the USDA 
overturned a rule that strengthened the organic label, because 
according to Jesse, the owner of Pete and Gerry's, this 
decision is a tragedy for small farmers like those we work with 
every day, who will continue to have to try to absorb the 
actual costs of responsible farming while their giant 
competitors ignore those costs. So he is very concerned that 
what that rule does is change the level playing field for 
organic farms like his.
    So have you experienced small businesses who are concerned 
about that rollback of regulations?
    Mr. Tryon. Senator, thank you. I have not experienced that, 
but it sounds like your office, you and your office have 
experienced that with your constituents. And it would certainly 
be my intention, if confirmed as Chief Counsel, to explore 
those types of issues that might be impacted by any 
deregulations, both with your constituents, that one in 
particular, I suppose, and then any others that have those 
concerns. And after I have the opportunity to learn from small 
businesses on those issues, then I would certainly advocate on 
behalf of their position.
    Senator Shaheen. Good. I appreciate that. I think what we 
have found in New Hampshire, where 99 percent of our employers 
are small businesses, is that regulations can work both ways, 
and that it is important for us to recognize when they are 
harmful and when they are helpful.
    Mr. Ware, the Office of Advocacy recently awarded a Federal 
contract to a company called Interaction Analytics, whose past 
work has been criticized for using unreliable methodology and 
flawed data. The firm's previous study on the relative burden 
of Federal regulations on small businesses included criticism 
that they failed to accurately transfer OMB data on 
environmental regulatory costs, that they potentially doubled 
counting the cost of regulations, that they used the highest 
cost estimate from OMB reports, and that they misinterpreted 
and misused data from the World Bank's regulatory index.
    So, if confirmed as Inspector General, will you investigate 
the process that was used to award this taxpayer-funded study 
and hopefully improve upon how that award is made in the 
    Mr. Ware. As Inspector General, or Acting Inspector General 
now, and if confirmed to be Inspector General, I could tell you 
this, that we are very attentive to the requests that come from 
this Committee or from the individual Members, and if we get a 
request to do so, I would certainly take it under very heavy 
consideration. As a matter of fact, we have created, within--
that was part of shifting of some resources--created, within 
our audit division, a team that is set up to do those type of 
quick dives, based on your requests, and have also added a 
little bit more into our 19 requests, to bolster that up, so we 
should be able to handle requests such as those.
    Senator Shaheen. Thank you very much. Thank you both.
    Chairman Risch. Thank you.
    Senator Ernst.
    Senator Ernst. Thank you, Mr. Chair, and Mr. Tryon, I 
really believe our small businesses, what they need to get 
going is a favorable regulatory environment. And we have heard 
a few examples here today where agencies are impacting small 
business, and, boy, have I got legislation for everybody on the 
    I have introduced legislation that would give small 
businesses a stronger voice in the regulatory process, and it 
is called the Prove It Act. And in the event that there is a 
difference of opinion between an agency and the Office of 
Advocacy on the economic impact of a rule on small businesses, 
like we saw in the Waters of the U.S. rule and others, the 
Prove It Act would give the Office of Advocacy the opportunity 
to request that that other agency take a second look at its 
analysis. So it would give relief to some of these businesses, 
and opportunity to go back and push on those regulatory 
agencies, such as EPA, USDA, Interior, whatever it is, and so 
they would have to take a look and prove that their analysis is 
    This is a good government bill that would encourage Federal 
agencies to carefully consider the impacts of the rules on 
small businesses. And as Chief Counsel for Advocacy, would 
having this tool at your disposal be helpful to you?
    Mr. Tryon. Senator, thank you for that question. I am aware 
of the Prove It Act, and multiple other pieces of litigation 
designed to assist the Office of Advocacy, and I would 
certainly be anxious to review those with you and your office, 
as well as, if confirmed, my office, to go through those things 
and assist you and the Committee in strengthening that--those 
    Senator Ernst. Mm-hmm. I think it would be a very, very 
helpful tool out there, so I hope that we can take a look at 
that together. I am happy to work with you on language and so 
    But beyond the Prove It Act, what are some of the other 
ways Congress then could be helpful to empower the Office of 
Advocacy so that it can better protect our small businesses? 
Have you thought about other ways that you could protect those 
businesses from harmful and excessive regulation?
    Mr. Tryon. Senator, thank you. As I said, I know that there 
are multiple bills out there. Frankly, my last count was, I 
think, it is up to 17. And there are a lot of great ideas in 
those, and I would love to work with you and other members of 
the Committee to try and find the best way, not only which 
particular mechanisms would be most effective but which ones 
are most likely to get through Congress and get a signature 
from the President. So I would really look forward to the 
opportunity to work on that with you, and it sounds like this 
is top of your mind, and so I hope I can.
    Senator Ernst. Yeah. I definitely think we want to look at 
it through the lens of small business.
    And, Mr. Ware, in your testimony you described some of your 
accomplishments, and I know that Senator Kennedy had touched 
upon some of those. But can you go into further detail and just 
describe, maybe, the environment that you created within your 
    Mr. Ware. Right. I am on. Thank you, Senator. Thank you 
very much. One of the things that--well, one of the first 
things I did when I came to SBA OIG as the Deputy was that I 
said we should have an internal survey. We were having some, 
well, quite a bit of turnover in one of our divisions, and I 
wanted to find out what was the reason behind it. And that 
internal survey was very informing.
    Coming on the heels of that, what I decided to do was to 
start an employee engagement council, and started it. So we 
started from the grassroots up, working with leadership to get 
at the root causes of what the morale issues were and 
everything like that. And we did--that group, along with the 
leadership, did an incredible job in turning things around.
    So in terms of specifics, we came up with a more 
collaborative approach to our work, the way that we were doing 
things. We cross-pollinated, cross-collaborated, changed the 
way we were hiring, started to bring in some lower grades--that 
is the way to put that--lower-graded employees, train them up. 
We started to really beef up our training efforts. Put 
forward--set forward quite a bit of new procedures, internal, 
that were missing, procedures that dealt with telework, 
modernizing our workplace, putting a really critical look at 
how we were dealing with our technology, moved our--I think we 
became the first IG and the first platform within SBA to move 
our audit work paper system, TeamMate, into the cloud.
    So those were some of the things that were done, and folks 
latched onto it.
    Senator Ernst. That is very helpful, and the way you 
described that, it almost sounds like you are very much a 
servant leader, someone who is striving to better his employees 
as well. And I very much appreciate that leadership style.
    Thank you, gentlemen, both, for being here today. Thank 
you, Mr. Chairman.
    Mr. Ware. Thank you, Senator Ernst.
    Chairman Risch. Senator Duckworth.
    Senator Duckworth. Thank you, Mr. Chairman. I would like to 
thank you and the Ranking Member for convening today's hearing, 
and thanks to the nominees for coming before this Committee.
    Mr. Tryon, you have extensive experience advocating for 
large corporate interests, and you have touched on that and 
some of my colleagues have as well, whether successfully 
defending corporations in matters such as wrongful death cases 
or helping corporate clients prevail in contract disputes. No 
one can deny your effectiveness in championing industry 
    And this really matters because the key to serving as a 
successful leader of this Office of Advocacy is possessing 
either deep expertise in small business law or real-world 
experience complying with regulations as a small business 
owner. I am somewhat concerned that you do not have those 
experiences from the small business perspective. Can you simply 
confirm that you have devoted your career to being a successful 
corporate lawyer and do not have the expertise or experience 
either serving with SBA or running a small business yourself?
    Mr. Tryon. Senator----
    Senator Duckworth. It gets better than this. This is the 
tough first question.
    Do not get too nervous. It gets better. I just want to 
establish that you do not have the experience.
    Mr. Tryon. No, Senator Duckworth, I feel that I do have 
    Senator Duckworth. Okay.
    Mr. Tryon. I have, as I indicated in my opening statement, 
that I have many family members that have run small businesses, 
and they have consulted with me in how to deal with issues. I 
have had many of my clients that were small businesses, a small 
masonry contractor with about 30 employees, a small locksmith 
contractor. Many of my employees have also been smaller folks, 
smaller businesses. And some of my personal experience, one of 
the organizations that is covered by the Office of Advocacy is 
small government organizations. I was the president of the 
school board. We handled a lot of regulatory issues there. And 
as running a small farm, I dealt with issue handling the small 
rural farmers would be dealing with. So I have had many of 
those experiences.
    Senator Duckworth. What percentage of your professional 
experience do you think has been serving to the benefit of 
small businesses?
    Mr. Tryon. My guess would be 30 percent.
    Senator Duckworth. Thirty percent. Okay. You know, we 
should be looking for common-sense solutions to help small 
businesses without benefiting large corporations or endangering 
workers in environment or public health in the Office of 
    When regulations do not make sense, I am the first to sign 
up to fix it. In fact, last spring, I authored a bipartisan 
bill that repealed a well-intended yet flawed Obama 
administration regulation that was bad for infrastructure 
    I would like to see if you, in that spirit, could identify 
types of small business relief that you would champion if you 
were confirmed to this office. Could you identify a few 
specific Federal regulations that Congress could repeal or 
amend to help small businesses, without jeopardizing vital 
consumer protections or benefiting giant corporations?
    Mr. Tryon. Thank you, Senator Duckworth. I am not prepared, 
at this moment, to identify any specific regulations. I think 
that would be unfair to me--of me to do that without first 
consulting with the small business community and finding out 
their views on this particular--on these particular issues and 
specific regulations and consulting with the staff of the 
Office of Advocacy, as well as perhaps your staff may have some 
sense, as well, as what should be--how those things should be 
    So I commit to you that I will investigate those things and 
work with you and your office in trying to accomplish that.
    Senator Duckworth. Okay. Thank you.
    Mr. Ware, the NDA, the National Defense Authorization Act, 
signed into last this past December, included one of my 
amendments, making it easier for small businesses to get 
Department of Defense contracts. My proposal amends a small 
business act that required that SBA commercial marketing 
representatives are empowered to guide and advocate for small 
business owners within the Department of Defense and its prime 
    If confirmed, will you commit to working with my office to 
support congressional oversight of the implementation of this 
new law and keep my office informed if implementation efforts 
are delayed or ineffective?
    Mr. Ware. Thank you for that question, Senator Duckworth, 
and just as I said before, we have a process in place that if 
you make this request from your office or from the Committee, 
we take them very, very seriously, and we are confirmed to 
making sure that the Small Business Administration is following 
those laws as Congress has intended. So I would definitely be 
committed to doing so.
    Senator Duckworth. Thank you so much. I yield back, Mr. 
    Chairman Risch. Thank you very much, Senator.
    Well, thank you both for your appearance and testimony 
today. I want to thank everyone who attended, and I think this 
was a productive hearing and certainly aired our ability to 
judge your qualifications, and I certainly look forward to 
supporting your nominations. We will move those as rapidly as 
we can.
    The deadline for questions for the record is close of 
business Friday, February 16th. The record will also be kept 
open for two weeks to edit statements, submit letters, and any 
other relevant materials.
    With that, if there is nothing else for the good of the 
order, the hearing is adjourned.
    [Whereupon, at 4:25 p.m., the Committee was adjourned.]