Lou Dobbs: ASBL President Lloyd Chapman discusses widespread fraud in SBA's Hubzone program July 2008

The following clip of ASBL President Lloyd Chapman ran on CNN's Lou Dobbs show regarding the fraud and abuse in federal small business contracting programs.

Cavuto: ASBL President Lloyd Chapman discusses the economy

Obama To Create Loopholes for Venture Capitalists

Petaluma, Calif. - President-elect Barack Obama is preparing to create significant changes in federal contracting law that will allow some of the nation's wealthiest investors to receive federal contracts earmarked for small businesses. Under the banner of "increasing access to capital" for small businesses, the policies will allow firms controlled by individual venture capitalist and even large venture capital firms to participate in federal small business contracting programs.

The Obama Administration's new pro-venture capital policy could virtually repeal the Small Business Act for legitimate American small businesses by modifying the longstanding federal definition of a small business as "independently owned."

Under the proposed Obama Administration policy, "independently owned" will be changed to include firms that are not independently owned, but are actually controlled by wealthy investors and possibly some of the nation's largest venture capital firms.

Opponents of the new policy say it appears to be designed more to increase wealthy venture capitalist access to billions of dollars in federal small business contracts as opposed to "increasing access to capital" for legitimate small businesses.

If the policy is successfully implemented it could force the average American small business to compete head-to-head with firms controlled by wealthy investors for even the smallest government orders for goods and services. Thousands of middle class jobs could be lost as billions of dollars in federal small business contracts are diverted to a small number of venture capitalist controlled firms.

The plan will likely include a provision that would exempt the venture capitalist owned firms from capital gains taxes. The Obama-Biden Transition Team website, www.change.gov mentions such a proposal.

The appointment of multi-millionaire venture capitalist Karen Mills to head the Small Business Administration (SBA) is the latest indication that President-elect Obama is moving forward with his plans to divert government small business contracts to venture capital controlled firms.

The National Venture Capital Association (NVCA) and its members have been lobbying for the new loophole in federal contracting law for more than two years. The NVCA and its members have contributed millions of dollars to Obama and key Democratic leaders in Congress such as Nancy Pelosi, John Kerry, Joe Lieberman and Hillary Clinton. (http://www.maplight.org/map/us/interest/F2500)

"The easiest and quickest way to stimulate our nation's failing economy is for the government to spend infrastructure funds with America's 27 million small businesses that create all the new jobs and employ most Americans," American Small Business League President Lloyd Chapman said. "This new Obama policy will do just the opposite and will push our economy closer to a depression by diverting billions of dollars in federal funds away from middle class America and into the hands of small number of wealthy investors that backed Obama."

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Obama Economic Policy Snubs Small Business

Petaluma, Calif. – Considering the dire state of our nation’s economy, President-elect Barack Obama was expected to support existing federal small business programs and propose new policies that would stimulate the middle class economy and create jobs for our nation’s 27 million small businesses.

There appears to be a significant disconnect between President-elect Obama’s campaign promises to American small businesses and the actual policies he is proposing.

In February, Obama released the following statement, “Over half of all Americans work for a small business. Small businesses are the backbone of our nation's economy and we must protect this great resource. It is time to end the diversion of federal small business contracts to corporate giants.” (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)

Any mention of President-elect Obama’s February statement, or specific plans to stop the flow of federal small business contracts to “corporate giants” are conspicuously absent from the Obama-Biden Transition Team website, www.change.gov.

Change.gov and the Obama-Biden campaign website, www.barackobama.com, significantly minimize the importance of our nation’s small businesses, which employ more than 50 percent of all Americans.

Less important topics such as "Rural" and "Service" received major headings under the issues section of the Obama-Biden campaign website while issues relating to America’s small businesses, which create over 80 percent of all new jobs were relegated to the site’s lower priority people section between "Seniors" and "Sportsmen.” (http://my.barackobama.com/page/content/sbhome/)

The American Small Business League (ASBL) is predicting the Obama Administration may be preparing to roll out policies and legislation that could have a severe negative impact on the small businesses he acknowledged were the “backbone of our nation’s economy.”

From January 2001 to October 2008, Obama received more than $1 million in campaign contributions from the venture capital industry, according to Maplight.org. The site also indicates that the venture capital industry contributed heavily to senior Democratic leadership. (http://www.maplight.org/map/us/interest/F2500)

The ASBL predicts President-elect Obama will support H.R. 3567, the Small Business Investment Expansion Act of 2007, which will create a new loophole in federal contracting law that will allow our nation’s wealthiest investors to receive billions of dollars in federal small business contracts. The venture capital industry has spent millions of dollars lobbying Democratic leaders, including House Speaker Nancy Pelosi, to have the legislation passed.

“I predict President-elect Obama will not restore the Small Business Administration’s budget and staffing as he promised during the campaign. I don’t think he will do anything to stop Fortune 500 firms from receiving federal small business contracts,” ASBL President Lloyd Chapman said. “I believe he will sign legislation to create another colossal loophole that will divert billions more in federal small business contracts to billionaire venture capitalists. People need to start noticing the dramatic difference between what Obama said during the campaign and what he is actually doing.”



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Obama Will Allow Fortune 500 Firms to Receive Federal Small Business Contracts

Petaluma, Calif. – President-elect Barack Obama has dropped a campaign promise to end Bush Administration policies that have allowed Fortune 500 firms to receive federal small business contracts.

In February, President-elect Obama released the following statement, “Over half of all Americans work for a small business. Small businesses are the backbone of our nation's economy and we must protect this great resource. It is time to end the diversion of federal small business contracts to corporate giants.” (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)

Just two days after the election, the Obama-Biden Transition Team launched its transition website, Change.gov. Any mention of President-elect Obama's campaign promise to stop Fortune 500 firms from hijacking government small business contracts had vanished without explanation. (http://www.asbl.com/documents/Economy_Change.pdf)

Since 2003, more than a dozen federal investigations have found widespread fraud and abuse in virtually every federal small business contracting program under the Bush Administration. (http://www.asbl.com/documentlibrary.html) Several investigations found Fortune 500 firms and thousands of other large businesses had received billions of dollars in federal small business contracts. Two separate investigations found large businesses had received federal small business contracts illegally through "vendor deception" and "false certifications". (http://www.sba.gov/IG/05-16.pdf)

In July, the Department of the Interior Office of Inspector General found the agency had awarded millions of dollars in federal small business contracts to Fortune 500 firms such as Xerox, John Deere, Sherwin Williams, Dell, World Wide Technology, Home Depot, McGraw-Hill, Ricoh, Starwood Hotels and Weyerhaeuser. (http://www.doioig.gov/upload/2008-G-0024.pdf)

In October, the Washington Post released an independent study which found approximately 40 percent of all federal prime small business contracts had actually gone to Fortune 500 firms. Based on the sample used by the Washington Post, as much as 80 percent of government small business contracts could be going to Fortune 500 firms and thousands of other large businesses. (http://www.asbl.com/showmedia.php?id=1179)

The diversion of billions of dollars in government small business contracts to Fortune 500 firms has been reported by most of the nation’s largest newspapers, over two hundred radio stations and by ABC, CBS and CNN. (ABC, http://www.asbl.com/abc_evening_news.wmv; CBS, http://www.asbl.com/cbs.wmv; CNN, http://www.asbl.com/showmedia.php?id=1170)

Considering the current state of the U.S. economy, Obama's decision to drop his campaign promise to rescue millions of middle class firms and end the diversion of federal small business contracts to "corporate giants" is seen by small business owners and advocates as a clear indication that the Obama Administration will not be pro-American small business.

The American Small Business League (ASBL) predicts that President-elect Obama will enact legislation and policies that will hurt American small businesses and even create more loopholes that will allow some of the nation’s wealthiest investors to take federal contracts earmarked for legitimate small businesses.

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Obama Struggles To Explain Drop of Windfall Profits Tax for Oil and Gas Industry

Petaluma, Calif. - Barack Obama may already be losing credibility over his explanation as to why he dropped the windfall profits tax on the oil and gas industry from his administration's agenda. During his campaign, President-elect Obama promised to enact a windfall profits tax on the oil and gas industry, which would help finance a $1,000 emergency energy rebate for American families.

During the campaign, Obama repeated his commitment to enacting a windfall profits tax on the oil and gas industry hundreds of times. The Obama camp ran national television advertisements touting the windfall profits tax, and used the issue in campaign speeches right up to the election. (http://www.youtube.com/watch?v=QJPo5IGTd0A)

Now, any mention of the windfall profits tax has been quietly removed from the Obama-Biden transition website, www.change.gov, and an anonymous "transition team aide" acknowledged that the windfall profits tax had been dropped.

The Obama camp's explanation as to why the windfall profits tax has been dropped is inconsistent with the facts and the actual series of events.

The main excuse the Obama camp offered was that the price of oil had dropped below $80 per barrel, and as a result there was no need for a windfall profits tax. (http://www.businessweek.com/bwdaily/dnflash/content/dec2008/db2008124_176271.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis) There are several problems with their excuse.

According to OPEC, the price of oil dropped below $80 per barrel in early October, yet Obama continued to campaign on the promise of a windfall profits tax.

The windfall profits tax was the number one issue under "economy" on Obama's transition site, www.change.gov, when it was launched on November 6th and the price of oil was $54.89. It was removed without explanation on November 8th. The price of oil remained relatively stable during that three-day time frame and any minuscule change would not justify the sudden and unexplained elimination of one of Obama's cornerstone campaign promises.

The oil and gas industry has been making excessive profits for several years, even when the price of a barrel of oil was dramatically less than it is now. At the present moment gas prices have decreased, but with no windfall profits tax in place the oil companies are free to arbitrarily increase the price of gas at any point in time.
In 2003, when the average price of a barrel of oil was $30.06, big oil companies reaped record profits. (http://www.eia.doe.gov/emeu/international/crude2.html) According to an Associated Press (AP) article dated January 29, 2004, Exxon-Mobil earned $21.51 billion in profits during fiscal year (FY) 2003. At the time, the mark nearly doubled the company's profit during FY 2002. (http://www.washingtonpost.com/wp-dyn/articles/A60862-2004Jan29_2.html)

"It is difficult to believe President-elect Obama's explanation for dropping one of his most significant campaign promises when you look at the facts," American Small Business League President Lloyd Chapman said.


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Obama Drops Campaign Promise To End Contracting Abuses

Petaluma, Calif. – President-elect Barack Obama has apparently decided to drop a campaign promise to America's 27 million small business owners to stop the diversion of billions of dollars in government small business contracts to Fortune 500 firms. Obama's February 26th pledge to address the problem has been dropped from the Change.gov website.

In February, President-elect Obama issued the following statement, “Small businesses are the backbone of our nation's economy and we must protect this great resource. It is time to end the diversion of federal small business contracts to corporate giants.” (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)

Obama reiterated his pledge to address the problem in his Small Business Emergency Rescue Plan, which was released on October 10th. The Obama Small Business Rescue Plan was included in the Obama-Biden campaign website but was subsequently dropped from the Change.gov website. (http://obama.3cdn.net/d14eb1b3649c4d6745_0evzmv02w.pdf)

Now, any reference to Obama’s campaign promise to “end the diversion of federal small business contracts to corporate giants” has disappeared completely.

Since 2003, over a dozen federal investigations have found that billions of dollars in federal small business contracts have been diverted to Fortune 500 firms, their subsidiaries and other clearly large firms in the United States and even Europe. The story has been covered by nearly every major newspaper in the nation, over a hundred radio stations, and by ABC, CBS and CNN. (ABC, http://www.asbl.com/abc_evening_news.wmv; CBS, http://www.asbl.com/cbs.wmv; CNN, http://www.asbl.com/showmedia.php?id=1170)

Some of the firms that have been exposed as recipients of federal small business contracts include Lockheed Martin, Boeing, Raytheon, General Dynamics, Hewlett-Packard, Dell Computers, Rolls-Royce, Home Depot, Xerox, John Deere and British Aerospace (BAE).

Report 5-16 from the Small Business Administration Office of Inspector General (SBA OIG) found that large businesses had received government small business contracts through, "vendor deception" and "false certifications". (http://www.sba.gov/IG/05-16.pdf)

In 2005, the SBA OIG issued Report 5-15, which stated, “One of the most important challenges facing the Small Business Administration (SBA) and the entire Federal Government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards.” (http://www.sba.gov/IG/05-15.pdf)

“Over 80 percent of the new jobs in this country are created by our nation’s 27 million small businesses, and those small businesses employ over 56 percent of all Americans. If President-elect Obama is serious about helping our nation recover from this economic crisis, he needs to stop Fortune 500 firms from hijacking billions of dollars in federal small business contracts,” American Small Business League President Lloyd Chapman said. “The surprisingly low priority Obama has given small business issues on his websites is a clear indication this is not going to be a pro small business administration.”

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Mother Jones: Did Barack Obama just break his first campaign promise?

Yesterday, Nick Baumann with Mother Jones Magazine published the following blog on Mother Jones’ MojoBlog. Very interesting…


Posted by Nick Baumann | Mother Jones – MojoBlog

Click here to view the Blog: http://www.motherjones.com/mojoblog


Did Barack Obama just break his first campaign promise?

On the campaign trail, Obama railed against big oil companies. He often criticized John McCain for backing tax cuts that would reward ExxonMobil and other top oil manufacturers. But now Obama's proposal to apply a windfall tax on big oil has vanished... at least from his transition website. The President-elect's transition team hasn't explicitly announced it will drop the windfall tax plan, but a transition aide, commenting on the condition he not be identified, backed off the promise in an email. "President-elect Obama announced the [windfall profits tax] policy during the campaign because oil prices were above $80 per barrel," he said. "They are currently below that now and expected to stay below that."

The windfall profits proposal was deleted from the transition website almost three weeks before the eagle-eyed American Small Business League (ASBL), an advocacy group for small businesses, noticed the change and protested in a press release Tuesday. The plan was mentioned in a version (PDF) of the site that existed after Obama's election win. But when the transition website relaunched on November 8, references to a excess profits tax on the oil and gas industry were gone.

Obama talked about a windfall profits tax as early as April. As crude oil prices topped $110 a barrel, Obama promised to "put a windfall profits tax on oil companies and use it to help ... families pay their heating and cooling bills and reduce energy costs." And in August, the Democratic nominee issued a campaign ad that promised "a windfall profits tax on big oil to give families a thousand dollar rebate." The windfall profits tax was a key point of contention between President-elect Obama and McCain in June, when McCain criticized Obama for the plan, calling it "dangerous".

ASBL president and founder Lloyd Chapman says he was "disappointed" and "surprised" that Obama dropped the windfall tax plan. He maintains that a reduction in the price of oil does not justify the policy shift. "There's not always a correlation between the price of a barrel of oil and what we're paying at the pump," Chapman said. "The oil and gas companies are clearly making excessive profits. They've taken advantage of the fact that there's no regulation of that industry and overcharged at the pump and hurt our economy. The excessive profits tax is based on the excessive profits they've made in the last eight years. The tax was to get some of that money back for the American people."

Cathy Landry, a spokeswoman for the American Petroleum Institute, which lobbies for the oil and gas industry, says that her organization hadn't heard any details of the Obama team's change in plans, but that the oil and gas lobby was happy to hear about it. "[API] is pleased that President-elect Obama is reevaluating his position, particularly considering the economic situation," Landry said. "The oil and gas industry has been one of the bright spots in the economy, and this would be a bad time to snuff out bright spots in the economy."

By the way, on October 30, ExxonMobil reported its quarterly earnings. It netted $14.83 billion, setting a national record for quarterly profits. Bright spot, indeed.

Podcast: Obama Drops Windfall Profits Tax for Oil and Gas Industry

Yesterday, the American Small Business League posted the following podcast on its website, www.asbl.com. In the podcast, ASBL's Director of Government Affairs Kevin Baron addresses the dismissal of President-elect Obama's promise to enact a windfall profits tax on the oil and gas industry from the Obama-Biden Transition Team's website, www.change.gov.

Click here to listen: http://www.asbl.com/showmedia.php?id=1209

Obama Drops Windfall Profits Tax for Oil and Gas Industry

Obama Backs Down from Promise to Institute Windfall Profits Tax

Petaluma, Calif. – President-elect Barack Obama has removed any reference of his promise to implement a windfall profits tax on the oil and gas industry from the Obama-Biden Transition Team website, www.change.gov.

During the course of the 2008 presidential election, the Obama campaign called for a windfall profits tax on the oil industry as a means of subsidizing a $1,000 "emergency" rebate for consumers struggling with surging gas prices. However www.change.gov, which houses the Obama-Biden transition agenda, was recently cleansed of any mention of such a tax.

The promise was displayed prominently at the top of the “economy” section of Obama’s campaign website. That same information was transferred to Obama’s transition website, www.change.gov, when it was launched on Thursday, November 6th. However, the language regarding the windfall profits tax was removed on Saturday, November 8th in an unceremonious and abrupt manner. (pre-change, http://www.asbl.com/documents/Economy_Change.pdf ; post-change, http://change.gov/agenda/economy_agenda/ )

While on the campaign trail, Obama made provocative statements regarding the cost of energy and its respective negative impact on American families. On May 6, 2008, Obama stated, “It isn't right that oil companies are making record profits at a time when ordinary Americans are going into debt trying to pay rising energy costs. That's why we'll put a windfall profits tax on oil companies and use it to help Indiana families pay their heating and cooling bills and reduce energy costs.” (http://www.guardian.co.uk/world/2008/apr/25/barackobama.uselections20081)

With the election behind him, President-elect Obama has failed to justify the removal of the windfall profits tax from his tax plan. The subtle and unexplained elimination of this issue from the Obama-Biden agenda should concern Americans from every background. The American Small Business League (ASBL) questions whether the sudden elimination of this issue is a further indication that large corporations are already demonstrating their ability to influence the Obama Administration. (www.asbl.com)

“This is not the only campaign promise the Obama-Biden Transition Team has removed from change.gov; I believe that President-elect Obama owes the American people an explanation as to why these campaign promises have been pulled from his agenda.” American Small Business League President Lloyd Chapman said. “With that in mind, someone from the mainstream media needs to ask President-elect Obama why these policies have been dropped.”

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Lloyd Chapman on CNN: The Diversion of Small Business Contracts to Large Corporations

The following clip ran recently ran on CNN regarding the presidential elections and the diversion of federal small business contracts to large corporations. American Small Business League President Lloyd Chapman is featured on the clip specifically discussing Barack Obama's refusal to acknowledge more than 15 federal investigations, which have found fraud, abuse, loopholes and a lack of oversight in federal small business contracting programs. All of which have led to the diversion of billions of dollars in federal small business contracting opportunities to Fortune 500 corporations, their subsidiaries and other clearly large firms in the United States and Europe.

Corporate Giants Force Obama to Drop Campaign Promises

Obama Drops Campaign Promises to Assist Middle Class

Petaluma, Calif. - During the 2008 presidential election cycle, President-elect Barack Obama made two key campaign promises which would have directed billions of dollars into the middle class economy. With the election behind him, it seems that President-elect Barack Obama has now broken his promise to enact a windfall profits tax on the oil and gas industry which would have provided a $1,000 emergency energy rebate to American families, as well as his promise to end the diversion of federal small business contracts to corporate giants.

Prior to his election, President-elect Obama made a promise to initiate a windfall profits tax on the oil and gas industry to fund a $1000 tax rebate for families. The promise was displayed prominently at the top of the economy section of Obama's campaign website. That same information was transferred to Obama's transition website, www.change.gov, but was recently removed in an unceremonious and abrupt manner. ( Pre-change, http://www.asbl.com/documents/Economy_Change.pdf ; Post-change, http://change.gov/agenda/economy_agenda/ )

In February, President-elect Obama said, "Small businesses are the backbone of our nation's economy and we must protect this great resource. It is time to end the diversion of federal small business contracts to corporate giants." (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)

Since 2003, a series of more than a dozen federal investigations have found that every year billions of dollars in federal small business contracts are diverted to some of the largest corporations in the United States and Europe. Investigative stories by ABC, CBS, and CNN (http://www.asbl.com/media2.php) have all found that billions of dollars in government small business contracts actually went to firms such as Dell, Home Depot, John Deere, Xerox, Lockheed Martin, Boeing, GTSI, General Dynamics, L-3 Communications, Titan Industries, Northrop Grumman, Rolls-Royce and British Aerospace (BAE).

Obama's pledge to end the diversion of small business contracts to corporate giants has now been completely eliminated from the change.gov website.

The sudden elimination of these two issues from change.gov would seem to indicate that large corporations are already flexing their muscles with the Obama Administration and demonstrating their ability to control presidential policy over the will of the American people.

"He hasn't been inaugurated yet and we are already witnessing the elimination of policies that would have greatly benefited the middle class economy in the midst of one of the worst economic downturns in our lifetimes," President of the American Small Business League Lloyd Chapman said. "I endorsed him, I voted for him, and I supported him and now I feel betrayed. He is obviously already going back on campaign promises. I think all small business owners should be concerned. Based upon the extremely low priority that Obama has placed upon small business issues, it would not surprise me if he tried to completely close the Small Business Administration by combining it with the United States Department of Commerce."


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Obama's Change.gov Website Drops Small Business Promise

November 20, 2008

Petaluma, Calif. - President-elect Obama's pre-election promises to end dramatic and well-documented abuses in federal small business contracting programs are conspicuously absent from the "Agenda" on the new Obama-Biden Change.gov website. (www.change.gov)

In February Senator Obama released this statement, "It's time to end the diversion of federal small business contracts to corporate giants." The Obama statement was in response to a series of federal investigations and mainstream media stories that found the Bush Administration had diverted billions of dollars in federal small business contracts to Fortune 500 firms. (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)

Some of the federal investigations found "false certifications" and "vendor deception" were responsible for large businesses receiving government small business contracts. (http://www.sba.gov/ig/05-16.pdf)

The Department of Interior Office of Inspector General released a report on July 1st that found they had awarded millions of dollars in government small business contracts to Fortune 500 firms such as Dell Computer, John Deere, Home Depot and Sherwin Williams. (http://www.doioig.gov/upload/2008-G-0024.pdf)

A recent Washington Post investigative story discovered as much as 38.5% of $89 billion in federal small business prime contracts were actually awarded to Fortune 500 firms. (http://www.washingtonpost.com/wp-dyn/content/article/2008/10/21/AR2008102102989.html?hpid=topnews)

The Small Business Administration (SBA) Office of Inspector General released the results of an extensive investigation into the Bush Administration's diversion of government small business contracts to large businesses in 2005. It stated, "One of the most important challenges facing the Small Business Administration and the entire Federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards." (http://www.sba.gov/ig/05-15.pdf)

Based on the federal investigations and information obtained from a series of successful law suits against the Bush Administration, the American Small Business League (ASBL) projects as much as $100 billion a year in federal small business contracts are diverted from middle class firms to Fortune 500 companies and hundreds of other large businesses.

"We are very disappointed that President-elect Obama appears to have already gone back on his campaign pledge to millions of American small business owners. They supported him expecting the 'change' he promised. Considering the dire state of our nation's economy, I cannot imagine why President-elect Obama has not offered any specific plan to end the dramatic abuses in existing federal programs to assist small businesses and firms owned by women, minorities and veterans," stated ASBL President Lloyd Chapman.


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Washington Post Story Minimizes Government Contracting Scandal - McCain and Obama Ignore It

Petaluma, Calif. - The following is a statement by American Small Business League President, Lloyd Chapman

A recent Washington Post story about the diversion of billions in government small business contracts to Fortune 500 firms looks more like it was written by the White House press office than the newspaper that broke the story on Watergate. (http://www.asbl.com/showmedia.php?id=1179)

The story seems "un-Washington Post-like." Titled, "Agencies Counted Big Firms As Small," with a Bush Administration excuse for a subtitle - "SBA Says It Will Correct Data On Federal Contracts." The first sentence begins with "US government agencies make at least $5 billion in mistakes…"

Just $5 billion in mistakes; the SBA has it under control, no big deal.

Here's the truth. Federal investigators have released a series of investigations since 2003 that found the Bush Administration has diverted hundreds of billions of dollars in government small business contracts to Fortune 500 firms and thousands of other large businesses. (http://www.asbl.com/documentlibrary.html) Several investigations uncovered fraud. (http://www.sba.gov/IG/05-16.pdf) ABC, CBS, CNN (http://www.asbl.com/media2.php) and every major newspaper in the country have covered the issue. ( http://www.asbl.com/showmedia.php?id=1121)

The Washington Post sampled $13 billion of the $89 billion in prime contracts the Bush Administration reported as going to small businesses during 2007. They found at least $5 billion or 38.5% of the $13 billion sample went to Fortune 500 firms.

Using the Washington Post's sample, 38.5% of the $89 billion equals $34.2 billion in small business contracts diverted to Fortune 500 firms for 2007.

Now consider this, the 38.5% number is just for Fortune 500 firms. What about the thousands of other large business? How much did they get, 30%, 40%, 50%?

Lets be conservative and say 30%. If these contracting officials can't tell Fortune 500 firms like Xerox, Home Depot and Rolls Royce from a small business they are certainly going to have trouble differentiating the average large business from small businesses.

What about subcontracts? The Washington Post did not even look at that. The SBA Office of Advocacy says the Bush Administration reports $135 billion a year in prime contracts and subcontracts go to small businesses. That's another $46 billion in subcontracts.

Add the 38.5% for Fortune 500 firms to the 30% for all other large businesses. That is 68.5% of the $135 billion, or $92.4 billion a year.

$92.4 billion a year for the eight years of the Bush Administration, equals $739.2 billion in small business contracts diverted to many of the largest contributors to George W. Bush and Congress, by mistake of course, year after year.

Senators McCain and Obama have never mentioned this staggering problem and no journalist has ever asked them a single question on this issue.


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Why Do Republicans Hate Small Businesses?

Republican Anti-Small Business History Revealed

In 1953 Congress passed the Small Business Act out of the realization that most Americans worked for small businesses, and that these firms were the heart and soul of our great nation's economy.

During 1984 and 1985 President Ronald Reagan tried to close the Small Business Administration (SBA) and bring an end to all federal programs designed to assist small businesses, including small firms owned by woman, minorities, and veterans.

Senator Carl Levin (D - MI), and other Democratic members of Congress were all that stopped Ronald Regan from achieving his goal.

Again in 1996, Republican members of Congress proposed legislation to close the SBA and bring an end to the federal programs established by the Small Business Act to assist America's 27 million small businesses.

As soon as George W. Bush was elected, one of his first acts as President of the United States was to remove the Administrator of the SBA from the President's Cabinet. Additionally, he cut the SBA's budget more than any other federal agency. Today, the SBA's budget is less than half of what it was during the Reagan Administration.

Since 2003, more than a dozen federal investigations have found fraud, bad policies and a blatant lack of proper oversight in nearly every federal small business program. Several investigations found Bush officials had diverted billions of dollars in federal small business contracts to a "who's who" of corporate giants in the United States and Europe. Thousands of small businesses were forced to close their doors as they unknowingly tried to compete head-to-head with Fortune 1000 firms for even the smallest orders of goods and services.

Every major newspaper in the country has published stories on the Bush Administration's diversion of billions of dollars in federal small business contracts to large businesses. Major networks such as ABC, CBS and CNN have all aired investigative stories on the diversion of federal small business contracts to corporate giants.

In an attempt to stop further investigative stories on the issue, in 2006 Bush officials removed all data from the government's Central Contractor Registration (CCR) database that could be used by the media, the public and every federal agency to differentiate large businesses from small businesses.

Bush officials then established a policy, which made it easier for large firms to misrepresent themselves as small businesses by omitting the total number of employees and annual revenue fields from the CCR database.

In 2007, the Bush Administration adopted a policy that will allow Fortune 1000 firms to continue to receive government small business contracts until the year 2012.

In response to hundreds of stories in the media on the diversion of government small business contracts to large businesses, Bush officials launched a public relations campaign to convince the public that the diversion of federal small business contracts to corporate giants was simply a myth. (http://www.sba.gov/idc/groups/public/documents/sba_homepage/news_07-30.pdf)

President Bush has also refused to implement a federal law, which was passed over seven years ago, establishing a 5 percent set-aside goal for woman-owned firms.

Bush closed the SBA office that was established to assist veteran-owned firms and disabled veteran-owned firms. They even disbanded the Veteran's Advisory Committee.

Recently, the Bush Administration began to dismantle the federal program to help minority-owned firms by suspending applications for the government's Small Disadvantaged Business Contracting Program.

The American Small Business League (ASBL) has won a series of Freedom of Information Act (FOIA) lawsuits against the Bush Administration. Information received as a result of the legal victories has proven that hundreds of Fortune 1000 firms are the actual recipients of most federal small business contracts. The ASBL estimates that by the time President Bush leaves office, small businesses will have lost more than $800 billion in federal small business contracts to large businesses.

If Senator John McCain is elected President, he will continue the long Republican history of trying to close the SBA and bring an end to economic programs that were established by the Small Business Act to assist America's 27 million small businesses.

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ASBL Recommendations to End Fraud, Abuse, and Loopholes in Federal Small Business Contracting Programs Will Boost Middle Class Economy Immediately

FOR IMMEDIATE RELEASE
October 27, 2008

Petaluma, Calif. - Since 2003, over a dozen federal investigations have found billions of dollars in federal contracts earmarked for middle class firms have been diverted to Fortune 500 companies. A recent story in the Washington Post found over 40 percent of government small business contracts actually went to Fortune 500 firms. Even though the diversion of government small business contracts was first exposed in 2002, Congress has not passed a single piece of legislation to address the problem.

Now politicians in Washington are talking about creating new economic stimulus packages for the middle class. The American Small Business League (ASBL) believes that it does not make sense to create new programs to boost the middle class when the existing programs that were designed to direct federal contracts to middle class firms have been corrupted.

Congress needs to act now to pass legislation to end the diversion of small business contracts to Fortune 500 companies. The fastest and simplest way to stimulate the middle class economy is to enforce existing laws and end fraud and abuse in the existing federal programs to assist small businesses.

The ASBL makes the following recommendations to address existing problems in federal small business contracting programs, and to bolster the middle class economy:

1. Support the Small Business Fairness and Transparency in Contracting Act:
The ASBL has produced draft legislation with Senator Barbara Boxer (D - CA) that would preclude the federal government from counting publicly traded firms towards the congressionally mandated 23 percent small business procurement goal.

2. Abolish the comprehensive test program:
The comprehensive test program allows contractors to avoid penalties for non-compliance and avoid submitting reports that are used to track compliance with small business sub-contracting goals. As a result, the program allows prime contractors to circumvent small business programs designed to assist small businesses and firms owned by women, minority and veterans.

3. Enforce "Liquidated Damages":
FAR clause at 52.219-16, entitled "Liquidated Damages," created a penalty for prime contractor non-compliance with its small business sub-contracting plans. The law has never been enforced. As a result, most prime contractors never achieve the small business subcontracting goals stated in their government issued prime contracts.

4. Remove any restrictions from the $100,000 small business set-aside:
The FAR Council exempted any acquisition on the General Services Administration (GSA) schedule from the congressionally mandated $100,000 small business set-aside for small businesses. Removing this exemption would provide small businesses with more access to federal small business contracting opportunities.

5. Aggressively prosecute fraud and misrepresentation in federal small business programs:
Misrepresenting the size of a firm in order to illegally receive federal contracts and subcontracts is a felony with penalties of up to 10 years in prison, a fine up to $500,000, cancellation of all contracts and debarment from federal contracting programs. Policy should require the SBA to respond to any protest against any firm that misrepresents its size, regardless of whether or not the contract is a small business set-aside.

6. Require the SBA to publish the previous years contracting data within 90 days of the end of the fiscal year:
The SBA should be required to publish the previous years contracting data in a public forum within 90 days of the end of the fiscal year as a means of maintaining transparency and determining whether or not the federal government was compliant with the congressionally mandated small business procurement goal. The SBA regularly waits 10 months or longer to release the data despite the fact that the data exists in a real time database and could be released following the end of the government fiscal year.

7. Reporting the names of firms coded as small businesses:
As a means of increasing transparency in federal small business contracting programs and ensuring that the federal government is adhering to its congressionally mandated small business procurement goal, each year the Administrator of the SBA should be required to report the names of companies coded as receiving federal small business contracts. The reporting should be released to the public and placed in a prominent position on the SBA's web site. This year, the ASBL was forced to file suit against the SBA in United States Federal District Court as a means of obtaining the names of firms coded as small businesses for 2005 and 2006. Last month, the SBA appealed a federal district court decision in favor of the ASBL to the Ninth Circuit Court of Appeals.

8. Put the Central Contractor Registration (CCR) database back under the control of the SBA:
The SBA is charged with administering all federal programs designed to assist small businesses. We believe that the CCR should be removed from the jurisdiction of the Department of Defense (DoD) and placed back within the jurisdiction of the SBA allowing the agency to monitor compliance with CCR regulations more effectively.

9. Put a warning on CCR:
Currently many of the profiles for firms registered on the CCR are filled with unreliable and fraudulent data. As a result, large businesses are regularly coded as small businesses by contracting-officers government wide. Recently, federal investigations have found that firms intentionally put fraudulent information in the CCR database to illegally receive federal small business contracts. The warning should state clearly: Misrepresentation of a large firm as small for the purposes of obtaining federal small business contracts is punishable under section 16 (d) of the Small Business Act (15 USC §. 645(d)).

10. Restore the fields on the CCR:
As a means of maintaining transparency in federal contracting programs, fields which have been removed from the CCR or made optional such as: capability narrative, primary NAICS code, total number of employees and annual revenue; should be restored as required fields and made available to the public.

11. Require all government contractors claiming small business status to recertify annually:
Current federal policy requires all government vendors to update their information on CCR annually; therefore annual re-certification can be completed at that time simply by updating one box in the database. Annual re-certification will be a simple, easy, quick and efficient way to stop the flow of billions of dollars in federal small business contracts to Fortune 1000 firms and other large businesses. In the past, annual re-certification has already been endorsed by the SBA (prior to the arrival of Steven Preston), the SBA Office of Inspector General, the Office of Federal Procurement Policy, the Senate Small Business Committee and the Office of Management and Budget.

12. Abolish the Alaska Native Program or place the same $3 million contract cap that every other government program for minorities has:
The government is hitting its minority-owned small business procurement goal with no-bid, no ceiling Alaska Native Corporation (ANC) 8(a) contracts. The way to solve the problem is to level the playing field by imposing the same contract ceiling as all other federal programs for minorities on the ANC Program. This would provide small minority-owned businesses with more opportunity to compete for and obtain federal small business contracts.

13. Oppose H.R. 3567, H.R. 5819, S. 3362 and any other legislation that allows billionaire venture capitalists to participate in federal small business contracting programs:
The Small Business Act states that a small business must be "independently owned and operated." H.R. 3567 would allow firms that are controlled by some of the nation's wealthiest investors to be treated as small businesses. This would create a staggering loophole that would result in the diversion of billions of dollars in federal small business contracts away from the average American small business and into the hands of some of the nation's wealthiest investors. That said, the recent series of House and Senate bills designed to reauthorize the Small Business Innovation Research (SBIR) Program would allow firms that are owned and controlled by billionaire venture capitalists to participate in federal programs designed for small businesses. These bills fly in the face of the original intent of the SBIR program and create a dangerous precedent for venture capital participation in all government programs designed for small businesses. We believe this legislation could force thousands of businesses across the United States to close their doors and cause serious damage to an already floundering middle class economy.


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Washington Post Story Ignores Fraud in Small Business Contracting Scandal

Bush Officials Claim Small Business Contracts are Miscoding Errors for the Seventh Consecutive Year


Petaluma, Calif. – For the seventh consecutive year, Bush Administration officials are still claiming that billions of dollars in federal small business contracts have been diverted to Fortune 500 firms through miscoding, human error and computer glitches.

A recent Washington Post story failed to mention 15 federal investigations, which found that blatant abuse and loopholes are rampant within federal small business contracting programs. Several investigations even found fraud.

As early as 1995, the Small Business Administration Office of Inspector General (SBA IG) found fraud in federal small business contracting programs. In its semiannual report to Congress the SBA IG stated, “of a particular fraudulent practice: companies that SBA, after sustaining protests against them, had prohibited from representing themselves as small businesses, under a particular SIC code, were continuing to falsely certify themselves as eligible for small business set-aside contracts.” (http://www.sba.gov/ig/igsemiannual.html)

In 2003, the SBA Office of Advocacy commissioned a report from Eagle Eye Publishers, which found "vendor deception" as one of the reasons large firms received federal small business contracts. (http://www.asbl.com/documents/eagkeeye_report%202002.pdf) The American Small Business League (ASBL) sued the SBA under the Freedom of Information Act (FOIA) forcing the SBA to release the original draft of the report that found fraud to be the cause of the problem. However, the edited version of the report released by the SBA had removed "vendor deception" as a reason for the diversion of federal small business contracts to Fortune 500 firms and other large businesses.

In 2005, based on information provided by ASBL President Lloyd Chapman, the SBA IG issued Report 5-16 which found large firms had received federal small business contracts by making "false certifications" and "improper certifications." (http://www.sba.gov/IG/05-16.pdf)

Based on information provided by Chapman, the SBA IG found that GTSI and Insight Public Sector had misrepresented themselves as small businesses in order to receive federal small business contracts. In one investigation, GTSI was recommended for debarment for misrepresenting themselves as small and in another investigation Insight Public Sector paid a $1 million fine to settle a case in which the firm had misrepresented themselves as a small business to receive federal small business contracts. (http://www.asbl.com/showmedia.php?id=533)

In 2005, the ASBL filed a lawsuit in Federal District Court, Northern District of California, which forced the SBA to release GTSI's name as the firm that had been recommend for debarment. (http://www.asbl.com/showmedia.php?id=530)

This July, the Department of the Interior (DOI) Office of Inspector General released an investigation, which found the DOI had reported millions of dollars in small business awards to Fortune 500 firms. That investigation found Fortune 500 firms had listed themselves as small businesses in the government's Central Contractor Registration (CCR) database. (http://www.asbl.com/showmedia.php?id=1092)

In February, Senator Obama released the statement, “It is time to end the division of federal small business contacts to corporate giants.” Since then, Senator Obama has not mentioned the issue publicly and has not offered any specific solutions as to how his administration plans to address the problem.

Working with Senator Barbara Boxer (D - CA), ASBL President Lloyd Chapman has drafted legislation entitled, “The Small Business Fairness and Transparency in Contracting Act.” The draft legislation is based on the definition of a small business in the Small Business Act of 1953, which states that a small business must be independently owned and operated. The legislation would preclude the federal government from reporting awards to publicly traded firms as small business contracts.

"The GAO first reported this problem in 2003, there have now been over a dozen investigations and hundreds of stories. It is time for Congress to pass legislation to stop small businesses from being cheated by the government," ASBL President Lloyd Chapman said.

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Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn@asbl.com
(707) 789-9575

Bush Dismantles Economic Programs for Small Business as Economy Continues Downward Spiral

Petaluma, Calif. - Ninety-eight percent of all companies in the United States have less than 100 employees. Twenty-seven million firms fall into the category of small business, and small businesses employ 56 percent of our nation's population. These companies are responsible for over 90 percent of the new jobs, over 90 percent of U.S. exports and over 90 percent of innovation in American business. Congress realized America's small businesses were the heart and soul of our nation's economy when they passed the Small Business Act in 1953.

Our nation is in the midst of one of the most dramatic economic downturns in modern history. More than ever, America's 27 million small businesses need the economic benefits the Small Business Act was designed to provide.

None of this seems to matter to President George W. Bush. Although President Bush regularly panders to small businesses in his speeches, his policies paint a different picture. At the same time that President Bush backed the $700 billion dollar Wall Street bailout, he continued to dismantle existing federal programs designed to assist American small businesses.

During his two terms, President Bush has systematically dismantled each and every program established under the Small Business Act to assist American small businesses, especially those firms owned by women, minorities and veterans.

President Bush's anti-small business policies began during his first week as president. The first thing he did to dismantle America's small business programs was to remove the Administrator of the Small Business Administration (SBA) from the President's Cabinet. Then he began to cut the SBA's budget and staffing more than any other federal agency.

Since 2003, over a dozen federal investigations have been released, which have all found rampant and government-wide fraud, abuse, loopholes and a blatant lack of proper oversight in federal small business contracting programs. Several of the investigations found that the Bush Administration has diverted billions of dollars in federal small business contracts to many of the largest corporations in the world.

Current federal law requires that a minimum of 23 percent of the total value of all federal contracts and subcontracts be awarded to small businesses. However, every year the federal government awards billions of dollars in small business contracts to some of the largest corporations in the U.S. and Europe.

Report 5-15 from the SBA Office of Inspector General states, "One of the most important challenges facing the SBA and the entire Federal Government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards."

Several Bush officials have privately acknowledged that at least 50 percent of all federal small business contracts or about $70 billion a year actually go to corporate giants. Based on information obtained in a series of successful Freedom of Information Act (FOIA) lawsuits filed against the Bush Administration, the American Small Business League (ASBL) estimates legitimate small businesses are being cheated out of over $100 billon each year.

Last year, the Bush Administration adopted a policy that will allow Fortune 500 firms to continue to receive government small business contracts until 2012. (http://www.asbl.com/showmedia.php?id=592)

Last month, Bush officials began to dismantle one of the government's only programs to assist minority-owned firms, the Small Disadvantaged Business contracting program.

Senator McCain has never objected to any of the Bush Administration's anti-small business policies. During more than two years of campaigning, not once has Senator McCain mentioned his intention to restore America's small business programs. If Senator John McCain is elected president, he will likely finish what Bush started and completely dismantle all federal programs designed to assist American small businesses.

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Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn@asbl.com
(707) 789-9575

Obama Tries to Retract Statement to End Billions in Contracting Fraud

Petaluma, Calif. – Without explanation, presidential candidate Senator Barack Obama (D – IL) has attempted to retract a statement he made in February of this year pledging to end billions of dollars in fraud and abuse in federal small business contracting programs.

Senator Obama’s original statement was in response to over a dozen federal investigations, which have found that the Bush Administration has diverted billions of dollars in federal small business contracts to Fortune 500 firms. In report 5-15, the Small Business Administration Office of Inspector (SBA OIG) referred to the issue as one of the biggest challenges facing the entire federal government today. (http://www.sba.gov/IG/05-15.pdf)

In February, Senator Obama’s original statement was:

“I am proud to have the support of the American Small Business League and their grassroots efforts to help protect American small business. Helping American small business is part of our movement for change and the end of politics as usual. 98 percent of all American companies have fewer than 100 employees. Over half of all Americans work for a small business. Small businesses are the backbone of our nation’s economy and we must protect this great resource. It is time to end the diversion of federal small business contracts to corporate giants.” (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)

The Obama campaign has now gone so far as to modify the original quote by removing Senator Obama’s statement, “It is time to end the diversion of federal small business contracts to corporate giants.”

Currently, the statement on Obama’s website reads, “Ninety-eight percent of all American companies have fewer than 100 employees. Over half of all Americans work for a small business. Small businesses are the backbone of our nation's economy and we must protect this great resource…..Helping American small business is part of our movement for change and the end of politics as usual.” (http://my.barackobama.com/page/content/sbhome/)

On Tuesday of last week, CNN ran a story on the fact that neither of Senator Obama’s recent rescue plans for small businesses or the middle class made any mention of his February statement calling for the end of the diversion of federal small business contracts to “corporate giants.” There has been absolutely no response from the Obama campaign to the story.

Since making his original statement in February, Senator Obama has refused to mention the issue publicly or include any mention of it in his criticism of the Bush Administration. To date, Senator Obama and his campaign have not released a statement on this issue in any capacity. Additionally, no member of the media has even asked Senator Obama why he has tried to distance himself from his pledge to end fraud and abuses in government small business contracting programs.


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Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn@asbl.com
(707) 789-9575

Obama and McCain Have Policies Joe the Plumber Isn't Going to Like

Obama and McCain Small Business Policies Will Shock Joe the Plumber

Petaluma, Calif. – Joe the Plumber talked about wanting to buy the company he was working for. If he was thinking about getting a Small Business Administration (SBA) guaranteed loan like thousands of small business owners do every year, he had better vote for Senator Obama. Senator McCain will maintain Bush Administration anti-small business policies, close the SBA, and end all federal programs designed for small businesses, and firms owned by women, minorities and veterans, including all the loan programs.

After Joe the plumber starts his own small business, he might want to think about trying to bid on federal small business contracts. The United States government is the largest purchaser of goods and services in the world. He could get a small business contract selling plumbing fixtures and supplies to the government or government contractors. He could get a service contract to do plumbing work on the various federal buildings in the area around Toledo, Ohio.

If Joe does start to try and bid on government small business contracts he is going to be stunned when he finds out that under current Bush Administration policy, he will have to compete head-to-head with Fortune 1000 corporations, their subsidiaries and thousands of other large businesses for even the smallest orders for goods and services. He might even find himself competing with the U.S. subsidiaries of many of the largest corporations in Europe.

I'm not sure who Joe should vote for if he wants to try and land government small business contracts, because neither Senator McCain, nor Senator Obama have come out publicly and said they would do anything to address this problem. There have now been 15 federal investigations released since 2003, which have found that billions of dollars in federal small business contracts have been diverted to Fortune 1000 firms. It has been estimated that up to $100 billion a year in government small business contracts actually go to many of the largest companies in the United States and Europe.

Today, it would be easier for Joe to find Jimmy Hoffa's body than it would be to find anything on either Senator Obama or Senator McCain's websites regarding their plans to stop the diversion of federal small business contracts to corporate giants.


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Obama and McCain Response To One Question Could Redirect Billions Into Middle Class Economy

Mainstream Media Could Save Thousands of Small Businesses With One Question For Obama and McCain


Petaluma, Calif. - The following is a statement from American Small Business League (ASBL) President Lloyd Chapman:

Thousands of small businesses around the country could be saved from bankruptcy if just one mainstream journalist would ask Senator Barack Obama (D - IL) or Senator John McCain (R - AZ) this one question, "If you were elected President, would you allow Fortune 500 firms to continue to receive billions of dollars in federal small business contracts?"

In March of 2005, the Small Business Administration Office of Inspector General (SBA OIG) released the results of an extensive investigation into Bush Administration policies that have diverted billions of dollars in federal small business contracts to Fortune 500 firms. Report 5-15 states:

"One of the most important challenges facing the Small Business Administration (SBA) and the entire Federal Government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards." (http://www.sba.gov/IG/05-15.pdf)

Report 5-15 is one of more than a dozen federal investigations that have found fraud and a multitude of other abuses in federal small business contracting programs.

These investigations have been coming out for more than five years now. This summer the Department of the Interior (DOI) OIG looked at .03 percent of DOI's contracts and found more than a dozen ineligible large businesses had received over $5.7 million in DOI small business contracts. What would they find if they looked at the other 99.7 percent? What would we find if we looked at 100 percent of the Defense Department's contracts?

Four federal officials have expressed to me that between $65 and $100 billion a year in federal small business contracts actually go to large businesses. I have seen more data on this than anyone in the country and I think they're right. That means by the time Bush leaves office, small businesses will have been cheated out of $800 billion in federal contracts.

The Bush Administration claims that the problem is caused by honest mistakes and miscoding errors on the part of contracting officials. They say federal contracting officials are confused and accidentally report contracts to firms like AT&T, Lockheed Martin, Boeing, Wal-Mart, Microsoft, Home Depot, Raytheon, General Dynamics and Rolls-Royce as small business contracts. The Bush Administration has been using that same ridiculous excuse for six consecutive years.

Why is the pattern of miscoding and data entry errors always inflating the Bush Administration's small business contracting statistics and diverting government small business contracts to big businesses? This pattern is not random, so it must be intentional.

So far, not a single journalist has even asked Senator Obama or Senator McCain about this serious problem. One question to the Senators could help bring attention to this important issue and potentially redirect billions of dollars in federal small business contracts to legitimate American small businesses.

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Please click here to visit www.asbl.com.

ASBL President Lloyd Chapman On CNN's American Morning

ASBL President Lloyd Chapman discusses Senator Barack Obama's small business plan on CNN's American Morning



http://www.asbl.com/showmedia.php?id=1170

Obama and McCain Economic Recovery Plans Trumped By Legislation Drafted Eighteen Months Ago

Petaluma, Calif. - While Senators Barack Obama and John McCain are presenting dueling economic recovery bills for the middle class, a bill has been floating around Congress for more than a year that could immediately infuse more money into the middle class economy than anything that has been proposed so far.

Draft legislation that was written by Senator Barbara Boxer (D - CA) and American Small Business League (ASBL) President Lloyd Chapman, could infuse up to $10 billion a month in federal funds back into the hands of middle class firms that are struggling to cope with the current economic catastrophe.

The draft legislation is titled, "the Small Business Fairness and Transparency in Contracting Act," and is based on provisions of the original Small Business Act, which was passed in 1953. The Small Business Act defines a small business as "independently owned" and precludes firms that are publicly owned or publicly traded from being considered small businesses for the purposes of government contracting. Based on the original Small Business Act, today the federal government has a small business-contracting goal of 23 percent or about $135 billion a year.

The new legislation simply states that the federal government can no longer report awards to publicly traded companies as small business awards.

The legislation is in response to over a dozen federal investigations, which have found that the Bush Administration has diverted hundreds of billions of dollars in federal small business contracts to some of the largest corporations in the United States and Europe.

In March of 2005, the Small Business Administration Office of Inspector General (SBA OIG) issued Report 5-15, which stated, "One of the most important challenges facing the Small Business Administration (SBA) and the entire Federal Government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards." (http://www.sba.gov/ig/05-15.pdf)

The General Accounting Office (GAO) first exposed the diversion of billions of dollars in federal small business contracts to corporate giants in 2002. (http://www.gao.gov/new.items/d03704t.pdf) So far, no member of Congress other than Senator Boxer has even proposed legislation to address this problem.

In February, Senator Obama acknowledged the need to address the problem and released this statement, "It is time to end the diversion of federal small business contracts to corporate giants."

This new legislation could solve the diversion of government small business contracts to Fortune 500 firms and return billions of dollars in federal small business contracts back to the middle class economy.

Recently, Congress passed a $700 billion emergency bailout bill for Wall Street, now it's time to pass an emergency bailout bill for the middle class economy. There is no need to reinvent the wheel. This legislation is a free, easy and simple solution to the diversion of over $100 billion a year in federal small business contracts to large corporations and is based on existing federal laws and programs.

If this legislation is passed, we could immediately see up to $10 billion a month in additional federal funds flowing back into the small businesses where most Americans work. This will have a more significant impact on our nation's middle class economy than anything that has been proposed by anyone in Congress including Senator Obama or Senator McCain.

This legislation would have an immediate and significant impact on our nation's middle class economy and there isn't one good reason why Congress shouldn't pass this legislation as soon as possible.


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McCain Would End Federal Programs For Middle Class Firms

Petaluma, Calif. - During the past eight years, the Bush Administration has dismantled virtually every economic program to assist small businesses along with all programs to assist firms owned by woman, minorities and veterans.

To date, Senator John McCain (R - AZ) has not voiced any opposition to the Bush Administration's anti-small business policies or discussed any plans to restore those programs in any of his speeches, press releases or on his website.

President Bush has slashed the Small Business Administration's (SBA) budget more than any other federal agency, down over 50 percent since he took office. (http://www.inc.com/news/articles/200511/sbabudget.html)

Since 2003, more than a dozen federal investigations have been released which have found the Bush Administration has diverted billons of dollars in federal small business contracts to Fortune 500 firms. (http://www.asbl.com/documentlibrary.html) CBS, ABC and CNN have all aired investigative reports that confirmed the findings of the federal investigations. (http://www.asbl.com/media2.php)

Bush officials responded to the investigations by establishing a policy that allows Fortune 500 firms to continue to receive federal small business contracts until the year 2012 and by removing information from the government's vendor database that could be used to determine if a large business is misrepresenting itself as a small business. (http://www.asbl.com/showmedia.php?id=596)

Bush officials have closed the office at the SBA specifically designed to assist veteran-owned firms, (http://www.targetgov.com/Content.asp?id=2313) dismantled the Small Disadvantaged Business contracting program for minority-owned firms (http://www.hispanicbusiness.com/politics/2008/10/3/more_groups_react_to_bailout_bill.htm) and refused to implement a federal law passed more than seven years ago establishing a 5 percent contracting goal for woman-owned firms. (http://kansascity.bizjournals.com/extraedge/washingtonbureau/archive/2008/10/06/bureau1.html?market=kansascity)

Bush officials also included language in the Wall Street bailout bill in Section 107 that allows the Secretary of the Treasury to waive any provisions of the Federal Acquisition Regulation (FAR) requiring contracting opportunities for woman-owned firms and minority-owned firms. (http://www.asbl.com/showmedia.php?id=1166)

Senator McCain regularly panders to middle class voters and gives lip service to the vital role small businesses play in our nation's economy. In reality, in over two years of campaigning, he has never once mentioned his plans to restore the budget and staffing of the only federal agency established with the sole purpose of assisting America's 27 million small businesses, the Small Business Administration (SBA).

Senator McCain's website doesn't contain a single word on restoring the SBA's budget and staffing or the economic programs administered by the agency to assist middle class small businesses and firms owned by women, minorities and veterans.

If elected, Senator McCain will almost certainly continue with Bush Administration and Republican Party plans to eliminate government economic programs to assist small business or try to close the SBA completely by combining it with the U.S. Department of Commerce.


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New Obama Small Business Rescue Plan Ignores Abuses In Government Contracting Programs

Petaluma, Calif. – Senator Barack Obama's new small business emergency rescue plan is being criticized for ignoring a series of federal investigations that found the government has diverted billions of dollars in federal small business contracts to many of the largest firms in the United States and Europe. (http://www.asbl.com/obamasmallbusinessrescueplan.pdf)

In March of 2005, the Small Business Administration (SBA) Office of Inspector General issued Report 5-15, which stated, "One of the most important challenges facing the Small Business Administration (SBA) and the entire Federal Government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards." (http://www.sba.gov/IG/05-15.pdf)

Since 2003, more than a dozen federal investigations have found hundreds of billions of dollars in federal small business contracts have been diverted to some of the largest corporations in the world. (http://www.asbl.com/documentlibrary.html) During that time, CBS, ABC, Associated Press and CNN have aired investigative stories which found federal small business contracts actually went to firms such as: Lockheed Martin, Boeing, Raytheon, Rolls-Royce, General Dynamics, John Deere, Microsoft, Wal-Mart, Hewlett-Packard, Buhrmann NV a Dutch conglomerate and British Aerospace Engineering (BAE).

The American Small Business League (ASBL) projects that middle-class firms are losing over $100 billion a year in federal small business contracts to Fortune 500 firms and other large businesses. Estimates from federal officials have ranged from $65 billion to over $100 billion a year.

In February of this year, Senator Obama issued the following statement, "98 percent of all American companies have fewer than 100 employees. Over half of all Americans work for a small business. Small businesses are the backbone of our nation's economy and we must protect this great resource. It is time to end the diversion of federal small business contracts to corporate giants." (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)

In stark contrast to this bold statement, which was issued in February of 2008, Senator Obama is now refusing to even mention the diversion of billions of dollars in federal small business contracts to Fortune 500 firms. He has declined to discuss it publicly, or to mention the issue on his web site.

Small business owners are concerned that pressure, and or political contributions from Fortune 500 firms, which are currently receiving a lion's share of federal small business contracts, may have contributed to Senator Obama's decision to distance himself from his pledge to end the diversion of small business contracts to corporate giants.

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Obama Middle Class Bailout Bill Passed 55-Years Ago

Middle Class Bailout Bill That Can Rescue The Economy Was Passed In 1953

Petaluma, Calif. - The following is a statement from ASBL President Lloyd Chapman:

In Tuesday's Presidential debate, Senator Barack Obama (D - IL) called for a bailout bill for the middle class. Yesterday, Senator Obama said he would also make sure that tax dollars are spent wisely. Today, there exists a great piece of legislation that would accomplish both of Senator Obama's goals. It would infuse billions of tax dollars back into the firms where most Americans work, create thousands of new jobs and help middle class families pay for their health care and mortgages.

It's called the Small Business Act, and it became law in 1953. Today, based on the original Small Business Act, the federal government is supposed to insure that a minimum of 23 percent of the total value of all federal contracts and subcontracts are awarded to small businesses. Twenty-three percent of the federal government's total acquisition budget amounts to roughly $150 billion a year in federal contracts and subcontracts that should by law go to the middle class small businesses where approximately 56 percent of our nation's population is employed.

What better place to spend tax dollars than with the 27 million small businesses where most Americans work, and where most of our nation's tax revenue is generated?

The Small Business Act is the perfect vehicle to rescue our nation's middle class economy, and boost the segments of the American economy that were completely ignored by the $700 billion Wall Street bailout bill.

There are a couple of hurdles that need to be addressed before the Small Business Act can help lead our nation out of one of the worst economic disasters in modern history. First, since 2003, 15 federal investigations have found that Fortune 500 firms are the actual recipients of most federal small business contracts. It has been estimated that large businesses receive over $100 billion a year in federal small business contracts. ABC, CBS and CNN have all aired investigative reports which have found firms like: Rolls Royce, Wal-Mart, Microsoft, Raytheon, IBM, Xerox, Dell, John Deere, General Dynamics, GTSI, Home Depot, Titan Industries, Hewlett Packard, Battelle and British Aerospace Engineering (BAE) have all received millions of dollars in federal small business contracts.

Second, the Bush Administration has systematically dismantled virtually every single federal program the Small Business Act established to help small businesses, woman-owned firms, minority-owned firms and veteran-owned firms. The Small Business Act established the Small Business Administration (SBA), and during the past eight years President Bush has cut that agency's budget more than any other agency. Today, the SBA budget is less than half of what it was when President Bush took office.

Neither Barack Obama, nor John McCain have even mentioned any aspect of the Small Business Act in their small business plans. Neither candidate has pledged to restore the SBA's budget and staffing. Most surprising is that neither Obama, nor McCain have proposed any specific solutions to the diversion of up to $100 billion a year in government contracts that by law should be going to our nation's middle class, but instead are being diverted to Fortune 500 firms. Senator Obama even seems to be trying to distance himself from a statement he made in February of 2008, "It is time to end the diversion of federal small business contracts to corporate giants." I would guess that he received a call from the "corporate giants" the following day regarding some new fund raising ideas.

Senator Obama was right though; we definitely need a bailout bill for the middle class. The good news is it was passed in 1953. If Senator Obama and Senator McCain are serious about helping middle class families pay their health care and their mortgages, it's going to take more than just campaign rhetoric and pandering.

America's middle class deserves some help from the government in these difficult economic times, and the Small Business Act is a free and easy solution. It's time to fully implement the Small Business Act and restore the budget and staffing of the only federal agency established to assist America's 27 million small businesses, the SBA. It's also time to stop the diversion of federal small business contracts to corporate giants and get that money back into the hands of the small businesses that are the heart and soul of this nation's economy.


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Obama Flip-Flops on Pledge to 'End Diversion of Federal Small Business Contracts to Corporate Giants'

Petaluma, Calif. – On February 26, 2008, in the midst of his campaign to become the Democratic nominee for President of the United States, Senator Barack Obama (D - IL) issued the statement, “It is time to end the diversion of federal small business contracts to corporate giants.”

Senator Obama's statement was in response to 15 federal investigations that have been released since 2003, which have found the Bush Administration has diverted hundreds of billions of dollars in federal small business contracts to some of the largest corporations in the United States and Europe.

Federal investigators found hundreds of large businesses have received billions of dollars in government small business contracts. Large firms that received federal small business contracts included: Rolls Royce, Office Depot, Dell, Xerox, Hewlett-Packard, Raytheon, Oracle, Archer Daniels Midland, John Deere, General Dynamics, Titan Industries, L-3 Communications, Northrop Grumman and British Aerospace Engineering (BAE).

Now that Senator Obama has clinched the Democratic nomination, and is the most likely presidential candidate to win the election in November, he has backed away from his pledge to America's 27 million small businesses to stop the blatant and ongoing abuses in federal small business contracting programs. The Obama campaign went so far as to modify his original complete quote on the issue and to remove his original statement, “It is time to end the diversion of federal small business contracts to corporate giants.”

Despite the fact that over 99 percent of voters would obviously agree that Fortune 500 firms should not be able to receive federal small business contracts, Senator Obama has refused to mention the issue in public speeches and has declined to include any mention of the issue on his website or in his small business plan.

American Small Business League (ASBL) President Lloyd Chapman has encouraged the Obama Campaign to include the issue in its small business plan during a series of conference calls and e-mails. Thus far, they have consistently declined.

“I cannot imagine why Senator Obama has now decided to flip-flop on his pledge to end these blatant abuses against middle class firms. We are in a severe recession and American businesses need political leaders they can count on,” Chapman said. “I think Senator Obama's handling of this issue could be a real glimpse of his true character. We'll see if he can deliver on his promise of ‘change we can believe in’ or if he is just another overly ambitious politician that is willing to say or do anything to get elected.”


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Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn@asbl.com
(707) 789-9575

Bailout Bill Needs New Language to Stop Billions in Contracting Abuses

Bailout Bill Needs New Provisions to Redirect Billions To Middle Class Firms

Petaluma, Calif. - In March of 2005, the Small Business Administration (SBA) Office of Inspector General issued Report 5-15, which stated, "One of the most important challenges facing the Small Business Administration (SBA) and the entire Federal Government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards."

Since the purpose of the "bailout bill" is to bolster our nation's economy, wouldn't it make sense to include a simple and easy provision that would solve a major and longstanding problem within the federal contracting system and redirect up to $100 billion a year in federal small business contracts back into the hands of legitimate and hardworking middle class firms?

The Small Business Act defines a small business as a firm that is "independently owned." Legally, the term independently owned is defined as a firm that is not publicly owned or traded. The addition of a single sentence to the bailout bill could redirect billions of dollars in federal small business contracts back to the very middle class firms the bill is supposed to ultimately rescue. This single sentence would also finally bring an end to years of abuses in federal small business contracting programs.

The sentence should read, "As of January 1st, 2009, the federal government will no longer report awards to publicly traded firms as small business awards."

The addition of this sentence would be a simple and easy solution to the diversion of hundreds of billions of dollars in federal small business contracts to large corporations, and it would provide small businesses and the middle class economy with a much-needed boost.

Since 2003, 15 federal investigations have all found that billions of dollars in federal small business contracts have actually gone to hundreds of the largest corporations in the United States and Europe. In fact, some of the firms federal investigators identified as recipients of federal small business contracts were: Rolls-Royce, Lockheed Martin, Boeing, Raytheon, General Dynamics, Northrop Grumman, Xerox, Dell, John Deere, Microsoft, Titan Industries, British Aerospace Engineering (BAE) and Dutch conglomerate Buhrmann NV.

It is time for this problem to be solved and through the bailout bill a solution could be easily achieved. If government investigators are right, up to $100 billion a year is being pulled out of the middle class economy. It's time for Senator Barack Obama (D - IL), Senator John McCain (R - AZ) and members of Congress to give America's 27 million small businesses more than just lip service.

If Congress really wants to stabilize and bolster our nation's failing economy, let's put $100 billion a year in federal small business contracts back in the hands of the middle class firms where most American's work.


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Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn@asbl.com
(707) 789-9575

Lloyd Chapman: Bailout Bill Doesn't Need to Waive Federal Acquisition Law

Bailout Bill Could Create Billions in Abuses by Waving Federal Contracting Laws

Petaluma, Calif. - The following is a statement by American Small Business League President Lloyd Chapman:

In its present form, the bailout bill will give Bush Administration officials broad power to waive any provision of the Federal Acquisition Regulation (FAR) they choose for an indefinite period of time.

Section 107 of the bill could be a recipe for disaster at a time when the national economy has plummeted as the direct result of a blatant lack of proper government oversight. It would be foolhardy and irresponsible for Congress to grant the very individuals that are directly responsible for one of the worst economic disasters in United States history even more power to ignore federal procurement law for as long as they deem necessary.

The multitude of problems that could arise by allowing government officials to ignore even the most foundational principals of the FAR could be catastrophic. Staggering abuses in federal contracting are a common occurrence. Many of the nation's largest defense contractors are regularly found to be defrauding the federal government out of hundreds of millions and even billions in taxpayer dollars.

Waiving provisions of the FAR could result in billions of dollars in fraud and abuse at multiple levels of government. Government officials cannot be trusted with the power to waive any federal procurement law they deem unnecessary.

Treasury Secretary Henry Paulson was the Chairman and Chief Executive Officer of Goldman Sachs before he came to Washington and he will no doubt be back on Wall Street in an equally if not more powerful position in 90 days. Of all the Bush Administration officials that deserve their fair share of responsibility for our nation's financial disaster, Treasury Secretary Paulson's name should be close to the top of the list.

Treasury Secretary Paulson should not be trusted to waive provisions of the FAR, which could be beneficial to his past and future employers on Wall Street and detrimental to the primary goal of the bailout bill, which is to bolster the national economy. More fraud, abuse and loopholes for Wall Street and government officials will not make our nation's financial institutions more sound, create more jobs or help middle class Americans pay their bills.

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Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn@asbl.com
(707) 789-9575

Bailout Plan May Include Anti-Small Business Language

The following was release was distributed by the American Small Business League On October 1, 2008.

The Bush “bailout bill” includes some suspicious language that has small business advocates concerned. The Bush Administration has been persistent in its efforts to dismantle federal small business contracting programs and to divert those funds to big businesses. During his tenure, President Bush has cut the Small Business Administration’s (SBA) budget in half, and cut funding and oversight for every program assisting small businesses, including woman, minority and veteran-owned firms. (http://www.asbl.com/showmedia.php?id=1033)

The American Small Business League (ASBL) contends that language within the bailout bill seems out of place, extremely vague and overly broad. As a result, the legislation would give the Secretary of the Treasury a blank check to waive any section of the Federal Acquisition Regulations (FAR) he deems appropriate.

Section 107 of H.R. 3997, which addresses contracting procedures states, “For the purposes of this Act, the Secretary may waive specific provisions of the Federal Acquisition Regulation upon a determination that urgent and compelling circumstances make compliance with such provisions contrary to the public interest.” The House of Representatives defeated H.R. 3997 Monday with a 228-205 vote. However, the ASBL is concerned that as Congress moves to address the current financial crisis, a second incarnation of H.R. 3997 may be adopted with similar language.

During the last thirty days alone, Bush officials at the SBA have suspended taking applications for the Small Disadvantaged Business (SDB) contracting program, refused to release the government’s small business contracting statistics for fiscal year 2007, which ended a full year ago and appealed a Federal District Court ruling requiring them to release the names of firms that received federal small business contracts during FY 2005 and 2006. (http://www.asbl.com/documents/20080925courtordermod.pdf)

If the Bush bailout bill were to become law with the language of Section 107 in place, Bush officials would have the legal power to ignore the sections of the FAR that stipulate federal contracting opportunities for small businesses, woman-owned firms, minority-owned firms and veteran-owned firms. Federal agencies and prime contractors could be allowed to completely ignore the federal government’s small business contracting goals. Section 107 does not contain any stipulation on how long the “wavier of specific provisions” could last. The federal government’s ability to exclude small businesses could last years, and middle-class firms could continue to lose billions of dollars in government contracts and subcontracts.

The ASBL predicted the Bush Administration would try to intensify its efforts to dismantle and weaken federal small business contracting programs as the administration entered its final months. (http://www.asbl.com/showmedia.php?id=1068)

To date, 15 federal investigations have all found that during the Bush Administration, hundreds of billions of dollars in federal small business contracts have been diverted to some of the largest corporations in the World. (http://www.asbl.com/documentlibrary.html) In addition, CBS, ABC and CNN have all done investigative stories on the issue. (http://www.asbl.com/media2.php)

“Not only does this bill not contain any provisions that specifically help small business, it has provisions that could actually harm middle class firms. The language in Section 107 of the bill is totally inconsistent with the stated objectives of this legislation,” ASBL President Lloyd Chapman said. “It is clearly not necessary to suspend federal acquisition law to bail out Wall Street and the financial industry. I am very concerned the Bush Administration included that language to give them the authority to further dismantle federal programs designed to assist small businesses. We got into this situation because of a lack of proper regulation and now the same people that are responsible for these staggering economic problems want to be able to ignore any sections of federal contracting law they deem necessary. George Bush has proven time-after-time that he cannot be trusted especially when it comes to small business issues.”


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Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn@asbl.com
(707) 789-9575