Text: S.Hrg. 115-272 — NOMINATIONS OF DAVID C. TRYON TO BE CHIEF COUNSEL FOR ADVOCACY OF THE SMALL BUSINESS ADMINISTRATION AND HANNIBAL M. WARE TO BE INSPECTOR GENERAL OF THE SMALL BUSINESS ADMINISTRATION
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[Senate Hearing 115-272]
[From the U.S. Government Publishing Office]
S. Hrg. 115-272
NOMINATIONS OF DAVID C. TRYON TO BE CHIEF
COUNSEL FOR ADVOCACY OF THE SMALL
BUSINESS ADMINISTRATION AND HANNIBAL M.
WARE TO BE INSPECTOR GENERAL OF THE
SMALL BUSINESS ADMINISTRATION
COMMITTEE ON SMALL BUSINESS
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
FEBRUARY 14, 2018
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
30-221 PDF WASHINGTON : 2018
COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
ONE HUNDRED FIFTEENTH CONGRESS
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
JOHN KENNEDY, Louisiana
Skiffington E. Holderness, Republican Staff Director
Sean Moore, Democratic Staff Director
C O N T E N T S
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
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
Cardin, Hon. Benjamin L.
Opening statement............................................ 3
Chabot, Hon. Steve
Opening statement............................................ 1
Risch, Hon. James E.
Opening statement............................................ 1
Tryon, David C.
Prepared statement........................................... 8
Responses to questions submitted by Ranking Member Cardin,
Senators Shaheen, Cantwell, Hirono, Booker, Heitkamp, and
Ware, Hannibal M.
Prepared statement........................................... 12
Responses to questions submitted by Ranking Member Cardin,
Senators Cantwell, Hirono and Heitkamp..................... 49
NOMINATIONS OF DAVID C. TRYON TO BE
CHIEF COUNSEL FOR ADVOCACY OF THE
SMALL BUSINESS ADMINISTRATION AND
HANNIBAL M. WARE TO BE INSPECTOR
GENERAL OF THE SMALL BUSINESS ADMINISTRATION
THURSDAY, FEBRUARY 14, 2018
United States Senate,
Committee on Small Business
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.
OPENING STATEMENT OF HON. JAMES E. RISCH, CHAIRMAN, AND A U.S.
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,
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.
STATEMENT OF HON. STEVE CHABOT, A U.S. REPRESENTATIVE FROM THE
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----
Mr. Chabot. Yeah. Thank you very much, Senator.
Chairman Risch. Thank you.
Mr. Chabot. Thank you, Senators. Thanks.
OPENING STATEMENT OF CHAIRMAN RISCH
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
OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, RANKING MEMBER,
AND A U.S. SENATOR FROM MARYLAND
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
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
TESTIMONY OF DAVID C. TRYON, OF OHIO, TO BE CHIEF COUNSEL FOR
ADVOCACY OF THE SMALL BUSINESS ADMINISTRATION
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
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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Risch. Thank you very much, Mr. Tryon. Mr. Ware,
the floor is yours.
TESTIMONY OF HANNIBAL M. WARE, OF THE VIRGIN ISLANDS, TO BE
INSPECTOR GENERAL OF THE SMALL BUSINESS ADMINISTRATION
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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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
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
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
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
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. 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
Senator Duckworth. What percentage of your professional
experience do you think has been serving to the benefit of
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
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.]
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