U.S. Sen. David Vitter, R-La., dropped his “hold” last week on the nominations of two Securities and Exchange Commission members after the agency recommended that investors with Robert Allen Stanford be able to recoup some of their losses through a fund created under federal law.
Stanford allegedly bilked $7.2 billion from investors, including $1 billion in Louisiana, mostly in the Baton Rouge, Covington and Lafayette areas.
Investors want to capture some of their losses from the Securities Investor Protection Corp., an organization funded by the financial services industry that compensates victims of financial fraud.
The SEC said the corporation should pay investors up to $500,000 each for their losses.
Kim Scullin, a Baton Rouge investor, praised Vitter’s work on the matter. “He really stepped up to the plate,” Scullin said.
Sen. Mary Landrieu, D-La., also was lauded by investors for pressing the SEC through multiple letters, research and contacts from her office over the past two years.
“I will continue to work to ensure the SEC closely monitors corporations that maliciously manipulate hard-working Americans out of their financial savings, so that future scams such as this one may be prevented,” Landrieu said in a statement.
On the House side, Reps. Charles Boustany, R-Lafayette, and Bill Cassidy, R-Baton Rouge, worked with constituents.
“The entire Louisiana congressional delegation had a hand in making this happen,” said Jean Anne Mayhall, founder of the Louisiana Stanford Victims Group.
“Our senators and congressmen all played invaluable roles,” Mayhall said. “This is a prime example of how government and citizens can work together as a team to achieve a nonpartisan goal in order to help so many.”
Social Security probed
Rep. Charles Boustany, R-Lafayette, held a hearing this past week to investigate overpayments by the U.S. Social Security Administration.
Boustany said the administration issued at least $8 billion in improper payments in 2010. A federal investigator testified that in 2009, the administration issued $6.5 billion in wrongful payments, mostly in the supplemental income program for the poor and disabled.
“By any standard the scope of these problems is considerable,” Boustany said. “Regardless of whether a payment occurs because of simple error or outright fraud, improper payments harm Social Security programs in the long term, jeopardizing benefits for those who may need them in the future.”
A representative of the agency said it was improving its payment process. In 2009, 99.5 percent of the $660 billion in retirement, survivor and disability payments were accurate, the investigator said.
Landrieu examines SBA
Landrieu held a hearing this past week examining inefficiencies, duplications and fraud and abuse in the U.S. Small Business Administration.
Landrieu, chairwoman of the Senate Small Business and Entrepreneurship Committee, pointed to a report last year that found that 14 ineligible firms received $325 million in sole source contracts.
SBA Administrator Karen Mills told Landrieu the agency has stepped up its enforcement on bad actors and has disbarred dozens of firms. The agency also has cracked down on unscrupulous SBA loan agents, said Peggy Gustafson, who is the inspector general for the agency.
Landrieu expressed specific concerns about the SBA requesting loans back from disaster victims when they are given federal grants to help them rebuild. Landrieu said the matter might have to be addressed legislatively.
“Unfortunately, we live in an imperfect world, where fraud and waste exist in programs intended to help small businesses, but we still must work to rid these programs of these inefficiencies,” Landrieu said.
Dredging funds get support
Boustany announced last week that he has obtained his 100th House co-sponsor to his legislation to ensure that the Harbor Maintenance Trust Fund will be used for dredging and maintaining coastal ports.
The harbor maintenance tax collects $1.3 billion to $1.6 billion a year from maritime companies. Boustany has pointed to a $5.6 billion surplus in the fund as evidence that it is not being used for its purpose.
Boustany called the co-sponsors important because one-fifth of the nation’s gross domestic product depends on maintaining harbors and navigational channels to provide access by cargo vessels.
“Louisiana is a global leader in trade, and maintenance of our ports is critical for our exports to grow,” Boustany said in a statement.
“I am extremely pleased so many members understand the importance of dredging, especially in light of the recent floods in south Louisiana.”
Compiled by Gerard Shields, chief of The Advocate’s Washington bureau. His email address is GerardShields@aol.com.