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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.


Tuesday, March 3, 2009

Obama Policies to Allow Goliath to Slay David

President Barack Obama is expected to support legislation or policy that will allow wealthy venture capitalists to dominate federal programs designed to assist small businesses. If he is successful, it will force thousands of small businesses to close their doors and cost countless American jobs. (

The Small Business Act requires that a small business be “independently owned.” Firms that are owned and controlled by venture capitalists are not considered small businesses in federal small business contracting and grant programs.

The venture capital industry, led by the National Venture Capital Association (NVCA) has spent millions of dollars lobbying members of Congress to change the current definition of a small business to allow even billionaire venture capitalists to own a controlling interest in a small business and still qualify as participants in federal small business programs. Small business advocates are concerned that such a change would set a dangerous precedent for venture capital participation in all federal small business programs, and lead to the diversion of billions more in federal small business contracts to wealthy venture capitalists.

The American Small Business League (ASBL) is concerned that President Obama may attempt to sell federal small business programs to the venture capital industry by pushing Congress to add language to the omnibus spending bill, making changes to existing Small Business Administration policy or by issuing an executive order.

According to, the venture capital industry contributed more than $1.2 million to President Obama's campaign. Additionally, the venture capital lobby has focused its campaign to buy political influence on key democratic leaders like Speaker of the House Nancy Pelosi (D - CA) and Senator John Kerry (D - MA). (

Small business advocates point to the appointments of venture capitalist and Tootsie Roll heiress Karen Gordon Mills to run the Small Business Administration (SBA), and Julius Genachowski of Rock Creek Ventures to head the Federal Communications Commission (FCC), as further indications that President Obama may support the interests of the venture capital industry over small businesses.

“Small businesses are the engine that drives this nation’s economy in the car that takes American’s to work. That ‘car’ is responsible for nearly all-new jobs. President Obama needs to consider America’s 27 million small businesses before he facilitates the wholesale diversion of billions of dollars in small business grants and contracts to some of our nation’s wealthiest investors,” ASBL President Lloyd Chapman said. “Legislation or policy that will allow venture capitalist owned-firms to participate in small business programs would damage our nation’s small businesses, cost America’s middle class billions and push our country further towards a depression. It is just not reasonable.”