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Steve Preston


In office
June 5, 2008 – January 20, 2009
President George W. Bush
Preceded by Alphonso Jackson
Succeeded by Shaun Donovan

Born September 4, 1960 (1960-09-04) (age 49)
Political party Republican

Steven C. Preston (born August 4, 1960) served as the 14th Secretary of the U.S. Department of Housing and Urban Development from 2008 to 2009 and the 22nd Administrator of the U.S. Small Business Administration from 2006 until his appointment as HUD Secretary. Before entering public service, Preston spent nearly 25 years in financial and operational leadership positions in the private sector.

Contents

Early life and business career

Preston grew up in Janesville, Wisconsin and attended Parker High School where he was class valedictorian, president of the student congress, and a varsity wrestler. He earned a B.A. with Highest Distinction in political science from Northwestern University in 1982 and an MBA from the University of Chicago Graduate School of Business in 1985.

During the first half of his private sector career, Preston worked in investment banking and corporate finance. Preston joined Lehman Brothers in 1985, ultimately serving as a Senior Vice President in the Investment Banking Department. [1 ]

In 1993, Preston moved to First Data Corporation where he was Senior Vice President and Treasurer. He managed capital structure strategies, financial risk management, and investor relations during a period of rapid growth. [2]

Preston moved to The ServiceMaster Company in 1997 where he served as Executive Vice President and Chief Financial Officer for seven years before heading the company’s Strategic Services effort. [1 ] In 2000 CFO magazine named him one of the “Next Wave” of financial executives that would make a difference in the next decade. [3]

Administrator of the SBA

Preston was nominated to be the 22nd Administrator of the U.S. Small Business Administration on April 25, 2006. Small business advocates questioned the nomination since Preston had never started or worked for a small business. [4] In his Senate confirmation hearing Preston said SBA is “a big business that supports the needs of small businesses … an organization that requires sophisticated financial management, operational responsiveness, and a customer service culture among the workforce” [5] and SBA leadership must have “a mind for big business but a heart for small business.” [6]

SBA Administrator Preston addresses Minority Enterprise Development Week Conference

Preston was unanimously confirmed by the Senate on June 29, 2006. He took over SBA at a time when the agency was under fire for its disaster loan operation’s response to Hurricanes Katrina, Rita and Wilma. Preston pledged to improve processing and disbursement of SBA disaster loans to storm victims at his confirmation hearing. [7] Ultimately, the agency distributed approximately $6 billion in loans to those victims. [8] Under Preston, SBA completely reworked disaster operations [9], implementing reforms that cut key processing times for disaster loan applications by up to 90 percent. [10]

On the day Preston was sworn in, CBS “Evening News” criticized the agency’s lax enforcement of small business contracting rules, a failure members of Congress said resulted in more than $12 billion in contracts going to large companies like Microsoft and Rolls Royce. [11] Preston attempted to bring transparency to the process by closing loopholes, tightening the small business contract definition, and developing a new scorecard for federal contracting agencies. [12] The SBA ordered agencies to eliminate inaccuracies in the federal small business contracting database and recertify their size status regularly. By correcting erroneous data, the federal government was required to reduce its previously reported small business procurements by $4.6 billion [13], causing total contracts to fall below the 23 percent congressional mandate. [14] Some small business advocates did not think Preston’s reforms went far enough. [15] House Small Business Committee Chairwoman Nydia Velazquez (D-NY) said, “The fact that large businesses are being awarded with small-business contracts, and that there is no system in place with penalties or consequences for this, is extremely concerning.” [16]

In 2006, SBA ranked dead last among federal agencies in the Partnership for Public Service’s Best Places to Work Survey. [17] SBA improved its ranking 30 percent in the 2009 survey, the most improved among large federal agencies. The score for SBA leadership improved 36 percent in the survey. [18]

Preston drove many other operational reforms throughout the agency [19], including changing the loan guaranty program to make it more effective and easier to use. [20] Sen. John Kerry (D-MA) praised the reforms: “Preston is widely credited with correcting major problems at the Small Business Administration … Mr. Preston inherited an agency in disarray, and he’s worked hard to right its course and to improve relationships with Congress … We may have some differences on policy, but he’s always been professional, responsive, and dedicated to the mission.”

Secretary of Housing and Urban Development

HUD Secretary Preston attends a groundbreaking in New Orleans

With less than nine months left in his Administration, President Bush nominated Preston to be HUD Secretary on April 18, 2007.

As his predecessor departed amidst scandal [21], housing advocates and Senate Banking, Housing, and Urban Affairs Committee chairman Chris Dodd (D-CT) criticized Preston for his lack of previous housing policy experience. [22] With the housing crisis unfolding, President Bush said he needed someone with Preston’s background in finance: “I looked for a leader with an impressive background in finance; someone who understands the important role the housing market plays in the broader economy. I sought a reformer who would act aggressively to help Americans obtain affordable mortgages … and be able to keep their homes. I sought a consensus-builder who’s earned the respect of Republicans and Democrats, who can get things done.” [23]

Preston was confirmed by the U.S. Senate by unanimous consent on June 5 and sworn in the same day.

During his tenure, the federal government implemented some of the most sweeping and controversial changes to housing and financial policy since the Great Depression, including: the Housing and Economic Recovery Act of 2008; the Economic Stabilization Act of 2008; the Troubled Asset Relief Program; government takeovers of Fannie Mae and Freddie Mac; and expanded FHA refinancing. [24]

Though he emphasized the importance of government action in crisis by saying “mortgage markets have remained open almost entirely due to government support,” [25] Preston said the private sector should ultimately restore the housing market. He argued too many homeowners who should be getting help were still falling through the cracks, and urged financial institutions to “be bold” [26] in their actions to assist troubled homeowners. Preston warned Congress and state attorneys general would continue to intervene if private financial institutions didn’t act strongly enough, specifically citing a congressional plan to allow bankruptcy judges to modify mortgages. [27]

In responding to criticisms that few financial institutions had enrolled in the Hope for Homeowners program, the cornerstone of the 2008 housing bill, Preston said the program was too expensive and complex for borrowers and lenders to use. [28]

While at HUD, Preston continued to be an outspoken advocate for transparency, effectiveness, and efficiency in government programs. He initiated reforms to enable the Federal Housing Administration to handle its increasing volume of loans [29]; broke ground on two public housing developments in New Orleans that had been stalled due to lack of funding [30]; and finalized regulations that had been stalled since 2002 to help consumers find lower costs mortgages and avoid harmful loan offers. [31]

Future political career

Preston was mentioned as a possible candidate to run for governor of Illinois. [32] Speaking to the Illinois Chamber of Commerce in December 2008, Preston said, “It is a time for vision and committed leadership. … I believe that good government can and does change peoples’ lives.” [33] The Chicago Sun-Times reported, however, Preston would not run. [34]

Personal

Preston currently resides in Virginia with his wife and five children. He has volunteered with many children’s causes, including tutoring children in the Washington Heights neighborhood in New York and serving on various boards. [3]

References

  1. ^ a b Office of the Press Secretary, The White House, Press Release, 4/18/08, http://georgewbush-whitehouse.archives.gov/news/releases/2008/04/20080418-6.html
  2. ^ ServiceMaster, Press Release, 3/24/97
  3. ^ a b Lori Calabro and DeAnn Christinat, CFO.Com, 1/1/00, http://www2.cfo.com/printable/article.cfm/2990712/c_3046535?f=options
  4. ^ Mike Hoffman, Inc., June 2006, http://www.inc.com/magazine/20060601/priority-sba.html
  5. ^ Committee on Small Business and Entrepreneurship, Confirmation Hearing for Steven C. Preston, 6/21/06
  6. ^ Sara Wilson, Entrepreneur, October 2006, http://www.entrepreneur.com/sbaadmin/index.html
  7. ^ Ron Nixon, The New York Times, 6/22/06, http://www.nytimes.com/2006/06/22/business/22small.html?pagewanted=print
  8. ^ Joe Gyan, Jr., [New Orleans] Times-Picayune, 4/26/06
  9. ^ Journal Of Accountancy, May 2008, http://www.journalofaccountancy.com/Issues/2008/May/LendingaHandInterviewWithStevePreston.htm
  10. ^ U.S. Small Business Administration, Press Release, 12/19/08, http://www.sba.gov/news/pressmain/index.html
  11. ^ CBS Evening News, 7/26/06
  12. ^ U.S. Small Business Administration, Press Release, 5/11/07, http://www.sba.gov/news/pressmain/index.html
  13. ^ U.S. Small Business Administration, Press Release, 12/19/08, http://www.sba.gov/news/pressmain/index.html
  14. ^ Angus Loften, Inc., 10/23/08, http://www.inc.com/news/articles/2008/10/small-business-contracts.html
  15. ^ Keith Girard, 7/10/08, http://www.allbusiness.com/government/government-support-business-small-assistance/11381811-1.html
  16. ^ Ron Nixon, The New York Times, 12/27/06, http://www.nytimes.com/2006/12/27/business/27sba.html?pagewanted=print
  17. ^ Partnership for Public Service website, http://bestplacestowork.org/BPTW/rankings/, Accessed 5/12/09
  18. ^ Joe Davidson, Washington Post, 5/20/09; Partnership for Public Service website, http://data.bestplacestowork.org/bptw/overall/large, Accessed 5/25/09
  19. ^ U.S. Small Business Administration, Press Release, 12/19/08, http://www.sba.gov/news/pressmain/index.html
  20. ^ U.S. Small Business Administration, Press Release, 10/25/07, http://www.sba.gov/news/pressmain/index.html
  21. ^ Diana Morero, Milwaukee Journal Sentinel, 11/30/08, http://www.jsonline.com/news/statepolitics/35264499.html
  22. ^ Damian Paletta and Henry J. Pulizzi, The Wall Street Journal, 4/19/09, http://online.wsj.com/article/SB120852362082526131.html?mod=RealEstateMain_1
  23. ^ President George W. Bush, Remarks, 4/18/08, http://georgewbush-whitehouse.archives.gov/news/releases/2008/04/20080418-7.html
  24. ^ Secretary Steve Preston, Remarks, 9/17/08, 10/21/08, and 11/19/08, http://www.hud.gov/news/speeches/archivedspeeches2008.cfm
  25. ^ Steve Preston, Remarks, 11/19/08, http://www.hud.gov/news/speeches/2008-11-19.cfm
  26. ^ Secretary Steve Preston, Remarks, 10/21/08, http://www.hud.gov/news/speeches/2008-10-21.cfm
  27. ^ Secretary Steve Preston, Remarks, 11/19/08, http://www.hud.gov/news/speeches/2008-11-19.cfm
  28. ^ Secretary Steve Preston, Remarks, 11/19/08, http://www.hud.gov/news/speeches/2008-11-19.cfm
  29. ^ Secretary Steve Preston, Remarks, 11/19/08, http://www.hud.gov/news/speeches/2008-11-19.cfm
  30. ^ U.S. Department of Housing and Urban Development, Press Releases, 12/9/08 and 1/7/09, http://www.hud.gov/news/release.cfm?content=pr09-002.cfm and http://www.hud.gov/news/release.cfm?content=pr08-183.cfm
  31. ^ Teresa Dixon Murray, Cleveland Plain Dealer blog, 11/12/08, http://blog.cleveland.com/business/2008/11/mortgage_rules_crack_down_on_f.html
  32. ^ Paul Merrion, Chicago Business, 12/16/08, http://www.chicagobusiness.com/cgi-bin/news.pl?id=32257&seenIt=1
  33. ^ Secretary Steve Preston, Remarks, 12/16/08, http://www.hud.gov/news/speeches/2008-12-16.cfm
  34. ^ Steve Huntley, Chicago Sun-Times, 3/17/09

External links

Political offices
Preceded by
Hector Barreto
Administrator of the United States Small Business Administration
2006 – 2008
Succeeded by
Karen Gordon Mills
Preceded by
Alphonso Jackson
United States Secretary of Housing and Urban Development
Served under: George W. Bush

2008-2009
Succeeded by
Shaun Donovan
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