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Thursday, March 26, 2009

More Investigations Find Fraud in SBA Managed Programs

FOR IMMEDIATE RELEASE
March 26, 2009

Petaluma, Calif. – On Wednesday, the Government Accountability Office (GAO) released yet another investigation which found widespread fraud in the Small Business Administration's (SBA) HUBZone program. This most recent GAO investigation represents just the latest in a series of federal investigations over the last seven years which have found fraud, abuse, loopholes and a lack of oversight in SBA programs.

Since 2003, approximately 15 federal investigations have found widespread fraud and abuse in federal small business contracting programs administered by the SBA. Several investigations found outright fraud was responsible for large corporations receiving federal small business contracts.

Report 5-16 from the SBA Office of Inspector General (OIG) found that some large businesses had committed fraud to illegally receive federal small business contracts. (http://www.sba.gov/IG/05-16.pdf)

In 2002, the SBA Office of Advocacy released a report which found that "vendor deception" was responsible for large firms receiving small business contracts. (http://www.asbl.com/documents/eagkeeye_report%202002.pdf)

The American Small Business League (ASBL) estimates that the SBA, the Department of Defense and a number of other federal agencies are responsible for the diversion of over $100 billion a year in federal small business contracts to Fortune 500 firms and thousands of other large businesses.

Although the first investigation into small business contracting was the subject of a hearing by the House Committee on Small Businesses in 2003, neither the House, nor the Senate Committee on Small Business and Entrepreneurship have ever proposed legislation to stop large corporations from receiving federal small business contracts.

In Report 5-15, the SBA OIG 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." (http://www.sba.gov/IG/05-15.pdf)

President Obama recognized the magnitude of the problem during his campaign 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)

"It has been seven years since the first federal investigation into this issue, and yet the SBA still maintains that it is a myth. It is time for the FBI to investigate the SBA’s handling of these matters. As our country slides deeper, and deeper towards the worst economic disaster in its history, it is time for President Obama and Congress to act now, and enact legislation and policy to stop the diversion of government small business contracts to corporate giants," ASBL President Lloyd Chapman said. "It is time for President Obama to do what he said he would do during the campaign, and stop the diversion of federal small business contracts to corporate giants. If President Obama were to address this issue it would do more to create jobs and stimulate the economy than everything else he has done combined."

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Wednesday, March 25, 2009

Obama Giving Federal Small Business Money to Fortune 500 Firms

FOR IMMEDIATE RELEASE
March 25, 2009

Petaluma, Calif. – Since President Barack Obama took office in January, over $16 billion in federal small business contracts have been diverted to Fortune 500 firms. By the end of President Obama's first year in office, the American Small Business League (ASBL) estimates that number will top $100 billion.

Over a dozen federal investigations have found the Bush Administration allowed billions of dollars in federal small business contracts to be diverted to many of the largest firms in America. Several of the investigations concluded that outright fraud was one of the reasons large businesses were receiving federal small business contracts.

In March of 2005, the Small Business Administration (SBA) Office of Inspector General referred to the abuses as, "One of the most important challenges facing the Small Business Administration and the entire Federal government today…" (http://www.sba.gov/IG/05-15.pdf)

During his campaign, President Obama promised small business owners he would end the abuses if he were elected. In February of 2008, 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)

Small business owners around the country are understandably outraged that President Obama has gone back on his campaign promise and has consistently refused to support any legislation or policy to end the diversion of federal small business contracts to Fortune 500 firms and thousands of other large businesses.

U.S. Census data shows firms with 100 employees or less make up 98 percent of all American firms and are responsible for over 98 percent of all new jobs. These firms employ over 50 percent of all private sector workers.

Small business owners and advocates agree that bringing an end to the fraud and abuses that are pulling over $100 billion a year out of the middle class economy would create more jobs and stimulate the economy more than any of the policies President Obama has proposed so far.

The American Small Business League (ASBL) has won five federal lawsuits under the Freedom of Information Act (FOIA) against the Bush Administration to expose the abuses. The group plans to continue to file lawsuits against the Obama Administration until President Obama keeps his campaign promise to, "end the diversion of federal small business contracts to corporate giants."

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Tuesday, March 24, 2009

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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