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Durham Loan Program Is Questioned

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DURHAM — A Durham program with good intentions is in trouble over what the mayor calls bad management. The Small Business Loan Office is under investigation for giving money to several businesses that may not even exist.

Auditors have some questions about the program. Concerns grew when they tried to contact some of these businesses. Only a quarter of the ones that received loans are listed in the Durham white pages.

Durham leaders want to help new businesses get their start in the city's economically depressed areas. So two years ago, the Department of Economic and Employment Development started a small business loan program, using federal money. Since then, Durham has loaned businesses almost $1 million. Now, city leaders are embarassed to say, they do not know where a lot of the money has gone.

"We ought to easily be able to say here's the list of loans, here's the list of where the businesses are, let's go look at them and that's not something we can do today," said Mayor Nick Tennyson.

Bank records show 24 loans made through this program. Half are now delinquent. An audit by the U.S. Department of Housing and Urban Development found incomplete paperwork on every single loan. There are also accusations that some businesses getting loans are not located in Durham -- or do not exist at all.

"I really think once you're in public life, you really wouldn't want to characterize things as being a shock or something to that level. But if something can shock you, this did," said Tennyson.

Durham's mayor wants an auditor to review all city loans to make sure other departments are not making the same mistakes.

"It hurts our credibility because we set out to do one thing we thought we were doing it and it turns out at least at some level, we aren't," said Tennyson.

One of the people at the center of this controversy is Anita Bennett, who helped link up the city with the loan candidates. She could not be reached for comment Thursday.


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