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Thursday, March 5, 2009

Obama Administration Capitulates in Legal Battle with the American Small Business League

March 4, 2009

Petaluma, Calif. - The Obama Administration has capitulated in its appeal of a federal district court ruling in favor of the American Small Business League (ASBL). According to the court's briefing schedule, the Small Business Administration (SBA) was scheduled to deliver its appellate brief Wednesday. It failed to do so.

The ASBL filed suit against the SBA under the Freedom of Information Act (FOIA) after the agency refused to release the specific names of all firms that were coded by the federal government as small businesses for FY 2005 and FY 2006. During proceedings in United States District Court, Northern District of California, SBA attorneys attempted to convince United States District Judge Marilyn H. Patel that the agency did not possess any information on the actual recipients of federal small business contracts.

Patel rejected the SBA's excuse in her ruling in favor of the ASBL stating, "The court finds curious the SBA's argument that it does not 'control' the very information it needs to carry out its duties and functions."

Since 2003, more than a dozen federal investigations have uncovered the diversion of up to $100 billion a year in federal small business contracts to Fortune 500 corporations, their subsidiaries and other clearly large firms in the United States and even Europe.

Report 5-15, from the SBA Office of Inspector General 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." (

More than 500 stories in the main stream media, as well as investigative reports by ABC, CBS and CNN found the Bush Administration had diverted hundreds of billions of dollars in federal small business contracts to corporate giants such as: Lockheed Martin, Boeing, Rolls Royce, Microsoft, Wal-Mart, L-3 Communications, British Aerospace Engineering (BAE) and Buhrmann NV, a Dutch firm with 17,000 employees in 26 countries.

"It is time for President Obama to make good on his campaign promise to stop the diversion of federal small business contracts to corporate giants. The abuses in these economic stimulus programs for small businesses are at least a contributing factor to our country's current economic catastrophe. President Obama should move swiftly to immediately end these abuses," ASBL President Lloyd Chapman said.


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