Investments of DOT Minority Business Resource Center

The Small Business Administration (SBA) requested reconsideration of a prior decision. In that decision, GAO held that SBA did not have the authority to leverage investments of the Department of Transportation's Minority Business Resource Center in minority enterprise small business investment companies (MESBIC). The decision was based on the Small Business Investment Act which limits leveraging to private money. The Center uses Federal money and no other statute authorizes SBA to leverage the Center's money. SBA pointed out that SBA may leverage Federal money where there is statutory language similar to that in the Community Services Act which provides that money invested under it in MESBIC is to be considered private for leveraging purposes. SBA agrued that the Community Services Act contained the statutory language only because the SBA regulation had not been promulgated when Congress was considering the bill. Since the SBA regulation had been in effect for several years when Congress authorized the Center within the Department of Transportation, SBA reasons, there was no need for similar statutory language in the Center's charter. Rather, SBA contended that Congress was satisfied to indicate its intent through legislative history. GAO did not believe that the congressional inaction constituted approval of the SBA practice of treating Federal funds as private funds for leveraging purposes. More specifically, GAO saw no authority for SBA to leverage Minority Business Resource Center funds. Therefore, the prior decision was affirmed.