Small Businesses Want President Obama to Answer One Question

FOR IMMEDIATE RELEASE
March 24, 2009

Petaluma, Calif. – As America slides deeper and deeper into recession, 27 million small business owners want President Barack Obama to answer one question at his press conference Tuesday.

Why are you allowing Fortune 500 firms to participate in government economic stimulus contracting programs designated for small businesses?

Since 2003, over a dozen federal investigations have been release, which found billions of dollars in federal small business contracts have been diverted to Fortune 500 firms and thousands of other large businesses around the world.

A recent investigative story by the Washington Post found up to 38.5 percent of all federal small business contracts were actually going to Fortune 500 firms alone.

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

The Small Business Administration (SBA) Office of Inspector General referred to the problem as, "One of the most important challenges facing the Small Business Administration (SBA) and the entire Federal Government today..." (http://www.sba.gov/IG/05-15.pdf)

In February of 2008, President Obama recognized the dramatic negative impact abuses in federal small business contracting programs were having on American small businesses when he released the statement, "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)

To date, President Obama has not followed through on his campaign promise to America’s small businesses by ending the diversion of federal small business contracts to corporate giants.

The American Small Business League (ASBL) estimates over $100 billion a year in economic stimulus contracts earmarked for small businesses are diverted to Fortune 500 firms and other large businesses.

"President Obama doesn't seem to understand that 98 percent of all U.S. firms have less than 100 employees and those firms are responsible for 97 percent of all new jobs in America," ASBL President Lloyd Chapman said. "If President Obama would make good on his campaign promise, and end the diversion of federal small business contracts to large businesses it would re-direct over $100 billion a year in existing federal infrastructure spending directly to small firms, create more jobs and stimulate the economy more than anything else he has proposed so far. Someone in the White House Press Corps needs to ask President Obama why he is allowing Fortune 500 firms to participate in federal economic stimulus programs for small businesses."

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