By Will Swaim | Watchdog.org

 

Following our investigative series about a bizarre government lending program, the Small Business Administration threatened Watchdog.org with Department of Justice legal action — for misuse of the SBA logo.

 

"By federal law, the official seal of a federal agency cannot be used in a news publication, online or in print. Neither can our SBA logo be replicated," June Teasley, the SBA’s communications director in Kansas City, Missouri, said Thursday in an email to Watchdog.org. "Please remove the seal from your website. This happens frequently enough that we usually just email when an infraction is noticed, rather than turning cases over to the Department of Justice. Most offending companies comply."

 

Watchdog.org reporters have revealed that so-called small-business loans in several states – including Vermont, Mississippi, Virginia, Wisconsin – went to large financial institutions, luxury golf courses and major hotel chains, and that all were hidden from public inspection.

 

With its 2009 stimulus legislation, "Congress expanded the authorization of the Small Business Administration to license and provide billions of dollars worth of credit to non-traditional lenders, like private equity-style firms," said Adam Andrzejewski, founder of Open the Books, a public research group that partnered with Watchdog.org in the SBA investigation.

 

One firm, Solutions Capital of Arlington, received $150 million — the SBA’s largest outlay in Virginia. But where Solutions Capital put the money is not known. Neither the SBA nor the company would say.

 

Watchdog.org engaged in a lengthy email conversation with Teasley following the SBA’s request to remove any depiction of its logo. Watchdog.org replied:

 

We’re intrigued by your suggestion that photographs of public buildings displaying federal seals are illegal. Can you please cite the governing law?

 

For our story on this subject, we’re wondering if you send infractions of this law to the same Department of Justice whose federal seal is depicted in this picture from Wired magazine. And if by "news publication," you include the State Department newsletter featuring this picture of Russian dignitaries outside an SBA office. That’s your seal around which they’re posed.

 

Does the White House threaten legal action when news organizations reproduce photos of the president speaking – in full view of the presidential seal?

 

Eagerly awaiting your response:

 

Teasley replied:

 

 Sorry, I am just a regional communications director informed of the laws and policies. My next step would be to send the picture of your website, and the direct replication of the seal, as an icon accompanying your story … not as a "picture" accompanying it, to our Office of General Counsel. Our lawyers, like those of every federal agency, have a standard "cease and desist" letter they will send you. I have been in my position for 20 years and this has been the procedure for all of that time.

 

Watchdog.org replied:

 

 Ms. Teasley: Thanks for the response. Your request is a clear attempt to limit free speech – a remarkable and unfortunate move on the part of a federal official. We will not remove the photo."

 

With that response, Teasley turned up the volume on her demand:

 

 Free speech does not extend you the right to represent your web page as an official federal site or communication by using our official seal as an icon. Do you think you have the right to use the official presidential seal, for instance, on a communication intended for ISIS?? Perhaps you believe you also have the right to photoshop any of our official’s signatures as well? I am sad that you do not comprehend, as a journalist, what the law intends to protect.

 

Sources close to Watchdog.org said the organization is indeed "sad."

 

The conversation continued on Friday, when, speaking for Watchdog.org, I told Teasley:

 

Ms. Teasley: If readers confuse our website with a government agency’s official site, then, as a journalist, I have a much bigger problem than you imagine.

 

Unreasonable critics say government bureaucrats are lazy, that they often lack the zeal that characterizes private-sector businesses. But Teasley pursued her case through Friday morning, her next email citing Title 13 of the Code of Federal Regulations and copying two SBA colleagues on the communication. I responded:

 

Ms. Teasley: I’ve read the code, and what’s interesting is that you seem to understand its intent: to prevent the use of the seal to "represent (a) web page as an official federal site or communication." That’s not what we’re up to, of course. On the contrary, Watchdog reporters in several states are taking a deep dive into the SBA’s lending practices. What we’ve uncovered is hardly flattering, and therefore unlikely to confuse anyone about the unofficial status of our site.

 

As for the comparison to ISIS: I know you’re just trying to carry something to its illogical extreme in order to make a point. But a word of advice: don’t compare people to ISIS – unless, of course, they’re mass murderers. Which, you know, we’re not.

 

Also, I feel as though calling you June – and asking you to call me Will – would lower the temperature here.

 

Eric? Miguel? I see you’ve been cc’d. Can I get your opinions here?

 

—Will

 

And with that invitation to parlay, the crisis was apparently resolved. June — I can call her that now — wrote back to say that she had perhaps "overreacted" and to let me know that SBA attorney Eric Benderson had likely already left me a phone message.

 

Despite taking his lunch, revealing Teasleyian energy, Benderson immediately picked up my return call. He apologized for his colleague’s misapplication of the law, and invited us to call him any time.

 

Marveling at the speed with which the SBA resolved this altercation, Watchdog.org Senior Editor Mark Lisheron shook his head. Lisheron has been involved in a 20-month back-and-forth with the IRS over communications between the tax agency and the Department of Labor.

 

Half a year into what he calls his "romance" with the IRS official who regularly – and, mind you, lawfully – postpones any release of the documents, Lisheron wrote, "It is no mean feat for an agency of that size and importance in just six months to change a culture of harassment of political enemies to one of marginalizing political enemies through rulemaking."

 

Comparing that dilatory performance with the SBA’s speedy and ultimately thoughtful handling of the logo affair, Lisheron said, "If only the IRS was this responsive."