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Monday, April 6, 2009

New SBA Head Will Ignore Agency’s Biggest Problem

April 6, 2009

Petaluma, Calif. – Since 2003, over a dozen federal investigations have found billions of dollars in federal contracts earmarked for small businesses have been diverted to Fortune 500 corporations and some of the largest companies around the world.

In her confirmation hearing, Administrator of the U.S. Small Business Administration (SBA) Karen Gordon Mills sidestepped a question from Senator Jeanne Shaheen (D - NH) regarding her plan to address the diversion of federal small business contracts to Fortune 500 corporations and other clearly large firms.

The American Small Business League (ASBL) is predicting that new SBA Administrator Mills will completely ignore the issue. Additionally, the ASBL believes Mills will continue Bush Administration policies of covering up and withholding information that would prove the SBA has dramatically inflated the government's small business contracting statistics by including up to $100 billion a year in contracts to large businesses.

During the Bush Administration, the SBA lost a series of lawsuits against the ASBL. The lawsuits resulted in the release of thousands of pages of data proving that every year billions of dollars in government small business contracts have wound up in the hands of companies like: Lockheed Martin, Boeing, Rolls-Royce, Microsoft, Wall-Mart, L-3 Communications, British Aerospace Engineering (BAE), Home Depot, Xerox, Starwood Hotels, Dell and Buhrmann NV, a Dutch firm with 17,000 employees in 26 countries.

All of the SBA executives that were involved in the Bush Administration's policies to divert federal small business contracts to corporate giants and then cover-up any information that would prove it, remain active employees at the agency.

Report 5-15 from the SBA's own Office of Inspector General referred to the diversion of federal small business contracts to large corporations as, "One of the most important challenges facing the Small Business Administration and the entire Federal government today." Despite Report 5-15, and more than a dozen other federal investigations, SBA Press Office Director Mike Stamler continues to try to convince the media that these abuses in small business programs are a “myth.”

"I predict Mills is not going to do anything to stop the diversion of federal small business contracts to large businesses and in fact, you can bet that Mills is going to support policies to divert even more federal small business contracts to some of President Obama's wealthiest contributors in the venture capital industry," ASBL President Lloyd Chapman said.


1 comment:

Charles (Chaz) Broersma said...

This is unprecedented! How is it that as small businesses we have such a marked and sustained positive impact on the economy, as you’ve detailed in your excellent post. The monies that should be flowing to us in any number of ways, from the Federal Government, are being knowingly and intentionally diverted to Big Business?

It is unconscionable for me to think that we, the entrepreneurs, small business owners and operators are literally responsible for the recovery of this economy. Let’s face it Big Businesses don’t create new jobs, Small Businesses do.

We work with 100s of specialty small businesses from coast to coast and their issues are markedly the same: Generation of revenue, access to capital, quality employees, path to market… What they don’t need is more challenges, like being ripped off by the very government that should be protecting them!

Karen Mills has a long and storied history (20 years +) as a Venture Capitalist with a “flip & skip” mentality and she is steeped in Big Business traditions, all the way back to her roots.

What can we do to ensure that this issue finds its way to the center of her radar and that she actually pays attention to it?

This doesn't seem to be a political issue to me as both sides share equal blame...