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Small Business

A Storm Brewing at the SBA?

Steven Preston, President Bush's pick to head the Small Business Administration, can expect a rough confirmation hearing. His foes are already limbering up

Steven Preston, the little-known lawn-maintenance executive the White House tapped Tuesday to replace Hector Barreto at the helm of the Small Business Administration is stirring up some industry advocates. They say the Chicago businessman and Bush loyalist is no friend of theirs.

As executive vice-president, strategic services of Illinois-based ServiceMaster, which operates popular home service brands such as Merry Maids, Terminix, and TruGreen ChemLawn, Preston oversees the company's long-term planning and technology systems, among other areas.

The nominee has also likely strengthened his ties to the Bush Administration during his time there. A self-described "committed Republican," Preston worked at ServiceMaster while Claire Buchan, currently the chief of staff for Commerce Secretary Carlos Gutierrez, was a vice-president for communications at the company. Buchan held a variety of jobs in the Reagan Administration and the first Bush Administration, moving to ServiceMaster when Bill Clinton was elected.


"While ServiceMaster is a large company, it's comprised of many smaller franchises that are mom and pop businesses. So I think he [Steven Preston] really has the right combination of small- and big-business experience," says Buchan. Before coming to ServiceMaster, Preston was senior vice-president and treasurer of First Data Corp., and an investment banker at Lehman Brothers.

But his resume shows he has no experience as an entrepreneur and comes from a company with a reputation as a bully among some small-business owners.

"The small-business community's been fighting ServiceMaster for years," says Harry Alford, president and chief executive of the National Black Chamber of Commerce. Alford says ServiceMaster was active -- and successful -- in getting the government to cap the small-business set-asides in the lawn-care industry. Company spokesperson Bridget Glavaz responds, "Our lobbying efforts have benefited small businesses."


The White House says nominee Preston's management and finance experience is what's needed to turn around the agency, which has been beset by problems and criticized in recent months by Republicans and Democrats alike for mishandling disaster loans after Hurricane Katrina (see BW Online, 1/27/2006, "Is the SBA Hurting Small Business?"). "He's someone with a reputation for improving customer service and working on employee satisfaction and efficiency," says White House spokeswoman Erin Healy (see BW Online, 2/2/2006, "The SBA Chief Comes Out Swinging").

Preston joined ServiceMaster as CFO in 1997. Two years earlier, the company had executed stock trades with Waste Management, then its largest shareholder, that became part of the $1.7 billion Waste Management accounting scandal. Current ServiceMaster executives note the company was not implicated in the fraud.

Kopecki is a correspondent in BusinessWeek's Washington bureau .

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