AP Releases Investigation Into Lax 9/11 Loan Program

By: Jay DeFoore

The Associated Press released an investigative report Thursday looking into the U.S. government’s $5 billion effort to help small businesses recover from the Sept. 11 attacks. Its main finding: the program was so loosely managed that it gave low-interest loans to companies that didn’t need terrorism relief — or even know they were getting it.

The AP’s report, which includes radio, TV, and interactive Web components, originated in March when South Dakota-based reporter Dirk Lammers got wind of a local country radio station receiving one of the Sept. 11 loans administered by the Small Business Administration. Curious as to why a business with a seemingly tenuous relationship to Sept. 11 would get such a loan, Lammers began the initial investigation that led to Thursday’s report.

Once the story was green-lighted, AP writer Frank Bass filed a Freedom of Information Act (FOIA) request to get a list of businesses that had received the low-interest loans.

“While some at New York’s Ground Zero couldn’t get assistance they desperately sought, companies far removed from the devastation — a South Dakota radio station, a Virgin Islands perfume shop, a Utah dog boutique and more than 100 Dunkin’ Donuts and Subway sandwich shops — had no problem winning the government-guaranteed loans,” Lammers wrote Thursday in his national story.

Government officials told AP they believe banks assigned some loans to the terror relief program without telling borrowers. Documents obtained by AP show that banks, with little risk, had a financial incentive to approve as many loans as possible from the terror program because of the government’s substantial guarantee on each loan.

John Solomon, director of multimedia investigative reporting at the AP, says as many as four dozen AP employees worked on the project. The resulting package includes several stories localized by state.

“It’s been a fun and exciting experiment,” Solomon said, referring to the recently established unit that produced the report. In today’s news climate, Solomon says readers expect stories to be “told in more than the traditional two-dimensional way.”

Solomon says the AP sent individual data it had collected to state bureaus in mid-August to help the state wire stories. The advisory then went to members Wednesday, and the localization spreadsheets went to members Thursday so they could further localize beyond the state story.

The report comes at a time when Congress is considering similar aid packages to rebuild New Orleans and the surrounding Gulf region decimated by Hurricane Katrina.

Solomon said AP would release a poll with the Ipsos organization on Friday gauging public opinion on the Sept. 11 relief efforts. And he vowed that AP would keep an eye on any Congressional action that may come as a result of the SBA investigation.

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