BARRETO RESIGNING AS NATION'S SBA HEAD.

Byline: LISA FRIEDMAN Washington Bureau

WASHINGTON -- Hector V. Barreto announced Tuesday he will step down as head of the Small Business Administration, and critics said they are glad to see the former Southern California businessman go.

President George W. Bush immediately nominated Steven C. Preston, an executive vice president for The ServiceMaster Co., to take over the agency. Barreto said he will stay on until the Senate confirms Preston.

Barreto plans to head the Latino Coalition, a bipartisan Hispanic advocacy group based in the Washington area.

In a telephone interview, Barreto defended his five-year tenure, saying the SBA is ``in the best place that it's ever been in its 53-year history.''

He said criticism that the agency tried to slash key programs, provided inadequate oversight and dragged its feet on loans to small businesses devastated by hurricanes is unfair and not the reason he is leaving.

``I've always planned on returning to the private sector,'' said Barreto, who owned an insurance and financial services company in Glendale and is a former head of the Latin Business Association in Los Angeles.

``There are critics -- and I understand it's a politicized environment here -- but I'm proud of the achievements,'' he said.

Barreto said the agency has approved more than 130,000 disaster loans worth about $8.5 billion in the wake of Hurricane Katrina. That is more than double what was provided after the Northridge Earthquake of 1994, and hurricane victims got the money faster, he said.

Members of Congress and others, however, said the agency inexcusably dragged its feet. By November, the agency had received 18,080 applications for loans but had approved only 472 and distributed 84.

At the time, Senate Small Business Committee Chairwoman Olympia Snow, R-Maine, called the situation ``indefensible and inexcusable.''

On Tuesday Snowe offered faint praise for Barreto: ``Administrator Barreto's previous success in the financial-services industry and his standing in the small-business community has served the president, our nation and small businesses, and I thank him today for that service.''

Of his tenure, Snowe noted only that it was the second-longest of any SBA administrator.

Rep. Linda Sanchez, D-Santa Fe Springs, who sits on the House Small Business Committee, said Congress has been ``less than pleased with his performance.''

She specifically criticized the agency over recent reports that large businesses have been able to obtain loans meant for small businesses.

``Hector Barreto has just been woefully inadequate in trying to get on top of that. Every time he came before the committee, it was: `We're working on it; we're working on it.''

During Barreto's tenure, in which the agency's budget has been slashed by nearly 40 percent, the SBA has stopped federal subsidies of its primary business-loan program and has tried to eliminate microlending that has helped thousands of small businesses. Congress has twice restored funding.

Roberto Barragan, who has known Barreto for more than a decade and previously lavished praise on his performance at the SBA, said Tuesday it is the ``right time'' for Barreto to depart.

``I think he was the best choice for the SBA when he started,'' said Barragan, president of the nonprofit Valley Economic Development Center. But, he added, ``Hector was a small business person. Whether he had the corporate experience or the depth of governing experience to push his agenda, it wasn't apparent.''

Barreto noted that the SBA doubled its loans to small businesses during his tenure, issuing more than 100,000 loans worth $20 billion last year alone. He also cited a steady increase in small businesses obtaining technical assistance, education and counseling, and he said more federal procurement dollars than ever are going to small businesses.

Ruth Lopez Novodor, former head of the Latin Business Association who worked closely with Barreto, called the criticism unfair and praised the administratorss work.

``There's a lot that Hector won't tell you. Hector took on a challenge and he did the best that he could do. He had to make some tough decisions, and he also had to be respectful of his party,'' Novodor said.

She called Barreto a strong advocate for small business and praised his decision to lead the Latino Coalition.

``He represents the Latino community extremely well and always has,'' she said. In the Latino Coaltion, Barreto said, he will continue to work with small businesses to empower Hispanic communities. He left open the possibility of eventually returning to Southern California. ``I think of Los Angeles and Southern California as home,'' he said.

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