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Watchdog attacks SBA limo costs

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WASHINGTON — Former Small Business Administrator Aida Alvarez and her deputy spent $69,526 on limousine service over three years, although the agency had cars and drivers they could have used, according to a federal inspector general.

Missouri Sen. Kit Bond, top Republican on the Small Business Committee, urged Alvarez to "personally reimburse the SBA and the taxpayers for charges that were in excess of funds authorized by Congress."

Bond had sought the review.

Alvarez could not be reached to comment on the report, but the Clinton administration official has said the agency's travel expenses during her tenure were appropriate.

In her report, SBA Inspector General Phyllis K. Fong said the agency paid $30 an hour, plus a 15 percent tip, to hire car service companies, with a three-hour minimum per trip. Most of the time the hired drivers used one of three cars leased by the SBA, Fong said.

Besides the three leased cars, two of which were used mostly by Alvarez and her deputy, Fred Hochberg, the SBA employed two drivers who worked in the mailroom or print shop when they were not driving. One of the drivers quit, and the SBA said it could not find a replacement.

During the inspector general's review, the SBA told investigators it would cost an estimated $64,000 annually to replace the limousine service drivers with two drivers of the agency's own. The inspector general disputed that, saying based on hourly wages, overtime and benefits, the agency would have saved $25,000 in fiscal 1999 and 2000 alone.

Fong also questioned the use of hired drivers to take Alvarez and Hochberg from home to work or work to home on a dozen occasions. But incomplete records meant she could not conclusively say whether the $1,725 in trips was inappropriate.

Alvarez refused to meet with the inspector general's office, Fong said, because the administrator discussed the matter last fall with SBA's general counsel, who was then preparing a response to the senator's questions.

"She also reiterated her view that the hired car services were used appropriately and for official business, and that SBA records documenting such use were not necessarily complete or accurate," Fong said in a letter to the senator.

Hochberg is traveling out of the country and was unavailable to comment.