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Tuesday, February 17, 2009

Stimulus Bill Spending Shuts Out Small Business

February 18, 2009

Petaluma, Calif. - President Barack Obama's stimulus bill offers $499 billion in new government spending. The bill contains no specific provisions to direct even one dollar of those funds to America's 26 million small businesses.

According to the most recent data from the U.S. Census Bureau, firms with less than 20 employees account for over 90 percent of all American businesses and are responsible for more than 97 percent of all new jobs. These small businesses also employ over 50 percent of all private sector workers. ( and released stories on the findings. (,

Since the purpose of the stimulus bill is job creation, small business owners and advocates are puzzled as to why the bill virtually ignores the very firms that create 97 percent of all new jobs.

In addition to being shut out of the new economic stimulus bill, federal investigations have uncovered that small businesses are not receiving the minimum 23 percent of federal contracts as required by existing federal law.

According to a series of more than 15 federal investigations that have been released over the last seven years, the vast majority of contracts the Small Business Administration (SBA) reported as going to small businesses actually went to Fortune 500 firms and hundreds of other clearly large businesses around the world. (

As much as $100 billion a year in federal small business contracts have been diverted by the SBA and federal contracting officials to firms such as Xerox, Wal-Mart, Microsoft, Home Depot, Halliburton, Raytheon and General Dynamics. Federal contracting officials have even diverted U.S. government small business contracts to some of Europe's largest corporate giants. Rolls-Royce and British Aerospace (BAE) have received hundreds of millions of dollars in government small business contracts along with French defense contractor Thales Communications and Dutch conglomerate Buhrmann NV, which is headquartered in Amsterdam with thousands of employees worldwide.

As early as February of 2008, President Obama recognized the damage diverting government small business contracts was having on the national economy when he released the statement, "It is time to end the diversion of federal small business contracts to corporate giants." (

Since making that statement almost a year ago, President Obama has not proposed any policies to make good on his campaign promise. Without legislation to stop it, the middle class economy will continue to suffer, as over $400 million a day in government small business contracts continue to be diverted from American small businesses.


Small Business Administration Moves Forward in Federal Lawsuit to Withhold Contracting Data

February 17, 2009

Petaluma, Calif. - Despite President Obama's promise of increased transparency in government, the Small Business Administration (SBA) is moving ahead with its appeal of a San Francisco District Court ruling directing it to release small business contracting data to the American Small Business League (ASBL). The 9th Circuit Court of Appeals will now hear the case. The SBA must file its appellate brief with the court by March 20.

Under the Freedom of Information Act (FOIA), the ASBL requested the names of all firms that had received federal small business contracts during fiscal years (FY) 2005 and 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."

The ASBL has won a series of FOIA cases against the SBA, NASA and the Pentagon, which have proven that the SBA dramatically inflated government small business contracting statistics. The information indicated that billions of dollars in contracts the SBA reported as going to small businesses had been diverted to Fortune 500 firms, their subsidiaries and thousands of other large businesses in United States and even Europe.

Since 2003, over a dozen federal investigations have found widespread fraud and abuse in virtually every small business program administered by the SBA. Several investigations found large businesses had received federal small business contracts fraudulently through "false certifications," "improper certifications" and "vendor deception."

In Report 5-14, the SBA's own Office of Inspector General found the SBA had reported contracts to several large businesses as small business awards, including Dutch conglomerate Buhrmann NV with more than 26,000 employees worldwide. (

SBA Press Office Director Mike Stamler has managed an extensive SBA media campaign to portray the billions of dollars in fraud and abuse in federal small business contracting programs as a "myth." ( With the help of several journalists, the ASBL has obtained evidence indicating Stamler has also made libelous and slanderous statements about the ASBL.

The ASBL is preparing to file another FOIA lawsuit against the SBA for refusing to comply with a FOIA request for e-mails Stamler sent members of the press in an attempt to slander ASBL President Lloyd Chapman.


Monday, February 16, 2009

Stimulus Bill Ignores Current Government Spending

February 16, 2009

Petaluma, Calif. - President Barack Obama hopes the stimulus bill will create jobs and stimulate America's faltering economy with approximately $550 billion in additional government spending over the next few years.

In addition to new spending, the stimulus bill should have included provisions to address over $600 billion a year the government currently spends in a manner that would have created even more jobs.

One of the most effective economic stimulus bills ever passed by Congress was the Small Business Act of 1953. Current federal law based on the Small Business Act, stipulates that a minimum of 23 percent of all federal contracts and sub-contracts be awarded to small businesses. Congress passed the Small Business Act based on the realization that most Americans are employed by small businesses. The same statistics hold true today.

The most recent U.S. Census Bureau data indicates that firms with less than 20 employees account for 90 percent of all U.S. firms and are responsible for more than 97 percent of all new jobs in America. These firms also employ approximately 50 percent of all private sector workers. Economic experts agree, directing federal infrastructure spending to small business is the most efficient way to create jobs and stimulate the economy. (

Since 2003, over a dozen federal investigations found fraud and dramatic abuses in virtually every federal small business contracting program. Several investigations found hundreds of billions of dollars in federal contracts earmarked for small businesses were diverted to Fortune 500 firms. ABC, CBS and CNN aired stories on the abuses. (ABC,; CBS,; CNN,

Based on all available data, it would appear that the simplest and most effective method of stimulating the national economy and creating jobs would be to stop the dramatic abuses in existing government economic stimulus programs.

President Obama recognized the magnitude of this problem as early as February of 2008 when he released the 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." (

The simplest way for President Obama to stimulate the economy is to make good on that campaign promise. He should bring an end to the fraud and abuses that have diverted hundreds of billions of dollars in federal small business contracts away from America's nearly 27 million hardworking small businesses, that create over 97 percent of all new jobs.

Millions of jobs could be created using existing federal programs at no additional cost to taxpayers.