The announced closing of a veterans’ business resource center in Midtown St. Louis on Tuesday provided the final spark to ignite a Senate investigation into the management of its parent non-profit organization, the National Veterans Business Development Corporation.
Better known as the Veterans Corporation, it was created by Congress in 1999 to foster entrepreneurship among veterans.
Steve Brock, one of many African-American veterans in the St. Louis area who have used the local Veterans Business Resource Center on Lindell Boulevard, described its resources as “second to none.”
“They helped us narrow our target market and learn to network with larger corporations,” Brock said of the VBRC’s benefit to his business Supplied Industrial Solutions, an industrial distributor.
Wally Nieves, an African American on active duty in the U.S. Army Reserves, said the St. Louis VBRC has been helpful in his work on a business plan for a gourmet coffee and ice cream shop.
Nieves said, “The program brought together a group of my peers and gave us the opportunity to discuss the resources we need to go ahead and complete our business plans.”
But on Tuesday the local VBRC announced it would have to close in April due to a funding shortfall. Patrick T. Heavey, a Vietnam veteran who launched the St. Louis VBRC in 2004, wonders where the money went.
Heavey said “the big-salary guys” at the Veterans Corporation – CEO Walt Blackwell and Vice President John Madigan – should have been asked these questions yesterday by U.S. Sen. Kit Bond (D-MO) in his Washington, D.C. office.
Blackwell, a St. Louis native, told the American the meeting with Bond (and other members of Congress) was productive and that he hoped they could salvage funding for the St. Louis center.
In forms filed with the IRS in 2005, Blackwell’s salary was listed as $163,477 and Madigan’s as $126,923.
In fiscal year 2007, the Veterans Corporation was funded at $1.5 million. From these funds, three centers (in St. Louis, Flint, Mich. and Boston, Mass.) received a total of $470,000.
In May 2007, the U.S. House Small Business Subcommittee on Investigations and Oversight examined spending by the Veterans Corporation. After hearings on the matter, the federal agency’s funding was cut by 5 percent over its previous fiscal year funding.
In fiscal year 2008, the Veterans Corporation received $1.4 million, yet only granted a total of $135,000 to the St. Louis and Flint centers – not enough for them to remain operational. Indeed, funding to the VBRC in St. Louis was slashed in February by half, to $67,500.
“This is a sorry legacy for a federally established and taxpayer-funded agency that is supposed to help our veterans start businesses or re-open them after they were called into duty and forced to shut down,” Heavey said.
U.S. Rep. Wm. Lacy Clay (D-MO) agreed.
“At a time when this administration is spending $8 billion a month in Iraq, it’s outrageous that when veterans return home, they are deprived of the support that they have earned,” Clay said.
“There is no excuse for not funding this very worthy program to help veterans start their own small businesses.”
Clay said he would make inquiries with his colleagues on the Small Business Subcommittee “to explore what other sources of funding might be available.” Staffers for U.S. Sen. Claire McCaskill also began to explore avenues of funding for the center once alerted to the situation by the American.
Meanwhile, McCaskill’s colleagues U.S. Sen. John Kerry (D-Mass.) and U.S. Sen. Olympia J. Snowe (R-Maine) have started a formal investigation into what the Veterans Corporation has done with the federal funds it has received.
“Congress created the Veterans Corporation nine years ago to establish and maintain veterans business resource centers that would help our veterans start or expand businesses,” Kerry and Snowe said in a joint statement.
“The closing of the center in St. Louis underscores our deep concern that the Veterans Corporation has abandoned their mission.”
John Cox, a former senior aide for then-U.S. Sen. Jim Talent, agreed. Cox told the American that the management of the Veterans Corporation “did not conduct the corporation within the intentions of the law that created it,” which was “to expand and set up these resource centers for veterans.”
Blackwell told the American, “My Board of Directors would disagree with that. We haven’t lost our sense of mission.”
The members of the Board of Directors for the Veterans Corporation are all presidential appointees. One board member, Jo Ann Webb, resigned on July 10, 2007, citing “two years of corporate mismanagement” and “lack of accountability and transparency of federal funds appropriated by Congress.”
“My attempts to bring these issues to the attention of the (Veterans Corporation) Chairman, the full Board of Directors and the CEO of the (Veterans Corporation) have been repeatedly rebuked, and ignored,” Webb wrote to President Bush in her resignation letter.
“Further, the only measure of success for (the Veterans Corporation) has been the three entrepreneurial training centers located in St. Louis, MO, Boston, MA and Flint, MI. These programs and the veterans served by them are now in jeopardy because of a grant process proposed by the (Veterans Corporation) CEO that is not competitive or open to examination.”
Not without a fight
Allegations of mismanagement in the parent organization emboldened the local VBRC to believe that help might be on the way.
“We are not going down without a fight,” said Darcella Craven, an African American who works as a counselor in the St. Louis office.
Heavey, Craven and their colleagues are fighting to preserve a significant resource center for local veterans, many of whom are black. Through the end of 2007, the St. Louis VBRC had furnished more than 1,600 in-depth counseling sessions to 757 clients; conducted seminars for 2,760 clients, furnishing more than 11,000 hours of instruction; and helped to create 142 new businesses, with many more in the pipeline.
The center just launched a bootstrap grant and training program and was in the process of securing funding for the Veterans Center for New Technologies, which aims to teach wounded veterans how to use identification system technology recently required on all Department of Defense equipment.
The St. Louis center’s annual budget has been $200,00-$250,000, according to Craven.
“The Veterans Business Resource Center was a great help to me as I was getting my microbrew business started,” said Ray Hill, owner of Hill Brewing Co.
“I’m going to miss the advice and contacts that the staff gave me and that were critical to my success.”
Brock, owner of Supplied Industrial Solutions, said the specific mission of helping veterans is what makes the VBRC so valuable.
“Veterans speak in a specific language,” Brock said. “Communication barriers can be a little forbidding for us.”
The three full-time staffers and two full-time staffers at the St. Louis center are all veterans, as are all the members of its Board of Directors.
Veterans account for 14 percent of small businesses nationally, including 7 percent that are operated by service-disabled veterans, according to the House Small Business Subcommittee. Veteran entrepreneurs number more than 5 million.
“It saddens me deeply to find that the U.S. government would allow the withdrawal of vital assistance in a time of war and with so many service men and women returning with injuries from Iraq and Afghanistan,” Heavey said.
Craven urged activism for citizens who would like to see their tax dollars support entrepreneurship programs for veterans.
“We are asking veterans and citizens to call their elected representatives and ask, ‘What’s going on?”” Craven said.
“This program was supposed to fund 50 centers around the country. So far, it has only funded three – and they are starting to close.”