Obama Drops Windfall Profits Tax for Oil and Gas Industry

Obama Backs Down from Promise to Institute Windfall Profits Tax

Petaluma, Calif. – President-elect Barack Obama has removed any reference of his promise to implement a windfall profits tax on the oil and gas industry from the Obama-Biden Transition Team website, www.change.gov.

During the course of the 2008 presidential election, the Obama campaign called for a windfall profits tax on the oil industry as a means of subsidizing a $1,000 "emergency" rebate for consumers struggling with surging gas prices. However www.change.gov, which houses the Obama-Biden transition agenda, was recently cleansed of any mention of such a tax.

The promise was displayed prominently at the top of the “economy” section of Obama’s campaign website. That same information was transferred to Obama’s transition website, www.change.gov, when it was launched on Thursday, November 6th. However, the language regarding the windfall profits tax was removed on Saturday, November 8th in an unceremonious and abrupt manner. (pre-change, http://www.asbl.com/documents/Economy_Change.pdf ; post-change, http://change.gov/agenda/economy_agenda/ )

While on the campaign trail, Obama made provocative statements regarding the cost of energy and its respective negative impact on American families. On May 6, 2008, Obama stated, “It isn't right that oil companies are making record profits at a time when ordinary Americans are going into debt trying to pay rising energy costs. That's why we'll put a windfall profits tax on oil companies and use it to help Indiana families pay their heating and cooling bills and reduce energy costs.” (http://www.guardian.co.uk/world/2008/apr/25/barackobama.uselections20081)

With the election behind him, President-elect Obama has failed to justify the removal of the windfall profits tax from his tax plan. The subtle and unexplained elimination of this issue from the Obama-Biden agenda should concern Americans from every background. The American Small Business League (ASBL) questions whether the sudden elimination of this issue is a further indication that large corporations are already demonstrating their ability to influence the Obama Administration. (www.asbl.com)

“This is not the only campaign promise the Obama-Biden Transition Team has removed from change.gov; I believe that President-elect Obama owes the American people an explanation as to why these campaign promises have been pulled from his agenda.” American Small Business League President Lloyd Chapman said. “With that in mind, someone from the mainstream media needs to ask President-elect Obama why these policies have been dropped.”

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Lloyd Chapman on CNN: The Diversion of Small Business Contracts to Large Corporations

The following clip ran recently ran on CNN regarding the presidential elections and the diversion of federal small business contracts to large corporations. American Small Business League President Lloyd Chapman is featured on the clip specifically discussing Barack Obama's refusal to acknowledge more than 15 federal investigations, which have found fraud, abuse, loopholes and a lack of oversight in federal small business contracting programs. All of which have led to the diversion of billions of dollars in federal small business contracting opportunities to Fortune 500 corporations, their subsidiaries and other clearly large firms in the United States and Europe.

Corporate Giants Force Obama to Drop Campaign Promises

Obama Drops Campaign Promises to Assist Middle Class

Petaluma, Calif. - During the 2008 presidential election cycle, President-elect Barack Obama made two key campaign promises which would have directed billions of dollars into the middle class economy. With the election behind him, it seems that President-elect Barack Obama has now broken his promise to enact a windfall profits tax on the oil and gas industry which would have provided a $1,000 emergency energy rebate to American families, as well as his promise to end the diversion of federal small business contracts to corporate giants.

Prior to his election, President-elect Obama made a promise to initiate a windfall profits tax on the oil and gas industry to fund a $1000 tax rebate for families. The promise was displayed prominently at the top of the economy section of Obama's campaign website. That same information was transferred to Obama's transition website, www.change.gov, but was recently removed in an unceremonious and abrupt manner. ( Pre-change, http://www.asbl.com/documents/Economy_Change.pdf ; Post-change, http://change.gov/agenda/economy_agenda/ )

In February, President-elect Obama said, "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." (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)

Since 2003, a series of more than a dozen federal investigations have found that every year billions of dollars in federal small business contracts are diverted to some of the largest corporations in the United States and Europe. Investigative stories by ABC, CBS, and CNN (http://www.asbl.com/media2.php) have all found that billions of dollars in government small business contracts actually went to firms such as Dell, Home Depot, John Deere, Xerox, Lockheed Martin, Boeing, GTSI, General Dynamics, L-3 Communications, Titan Industries, Northrop Grumman, Rolls-Royce and British Aerospace (BAE).

Obama's pledge to end the diversion of small business contracts to corporate giants has now been completely eliminated from the change.gov website.

The sudden elimination of these two issues from change.gov would seem to indicate that large corporations are already flexing their muscles with the Obama Administration and demonstrating their ability to control presidential policy over the will of the American people.

"He hasn't been inaugurated yet and we are already witnessing the elimination of policies that would have greatly benefited the middle class economy in the midst of one of the worst economic downturns in our lifetimes," President of the American Small Business League Lloyd Chapman said. "I endorsed him, I voted for him, and I supported him and now I feel betrayed. He is obviously already going back on campaign promises. I think all small business owners should be concerned. Based upon the extremely low priority that Obama has placed upon small business issues, it would not surprise me if he tried to completely close the Small Business Administration by combining it with the United States Department of Commerce."


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Obama's Change.gov Website Drops Small Business Promise

November 20, 2008

Petaluma, Calif. - President-elect Obama's pre-election promises to end dramatic and well-documented abuses in federal small business contracting programs are conspicuously absent from the "Agenda" on the new Obama-Biden Change.gov website. (www.change.gov)

In February Senator Obama released this statement, "It's time to end the diversion of federal small business contracts to corporate giants." The Obama statement was in response to a series of federal investigations and mainstream media stories that found the Bush Administration had diverted billions of dollars in federal small business contracts to Fortune 500 firms. (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)

Some of the federal investigations found "false certifications" and "vendor deception" were responsible for large businesses receiving government small business contracts. (http://www.sba.gov/ig/05-16.pdf)

The Department of Interior Office of Inspector General released a report on July 1st that found they had awarded millions of dollars in government small business contracts to Fortune 500 firms such as Dell Computer, John Deere, Home Depot and Sherwin Williams. (http://www.doioig.gov/upload/2008-G-0024.pdf)

A recent Washington Post investigative story discovered as much as 38.5% of $89 billion in federal small business prime contracts were actually awarded to Fortune 500 firms. (http://www.washingtonpost.com/wp-dyn/content/article/2008/10/21/AR2008102102989.html?hpid=topnews)

The Small Business Administration (SBA) Office of Inspector General released the results of an extensive investigation into the Bush Administration's diversion of government small business contracts to large businesses in 2005. It 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." (http://www.sba.gov/ig/05-15.pdf)

Based on the federal investigations and information obtained from a series of successful law suits against the Bush Administration, the American Small Business League (ASBL) projects as much as $100 billion a year in federal small business contracts are diverted from middle class firms to Fortune 500 companies and hundreds of other large businesses.

"We are very disappointed that President-elect Obama appears to have already gone back on his campaign pledge to millions of American small business owners. They supported him expecting the 'change' he promised. Considering the dire state of our nation's economy, I cannot imagine why President-elect Obama has not offered any specific plan to end the dramatic abuses in existing federal programs to assist small businesses and firms owned by women, minorities and veterans," stated ASBL President Lloyd Chapman.


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Washington Post Story Minimizes Government Contracting Scandal - McCain and Obama Ignore It

Petaluma, Calif. - The following is a statement by American Small Business League President, Lloyd Chapman

A recent Washington Post story about the diversion of billions in government small business contracts to Fortune 500 firms looks more like it was written by the White House press office than the newspaper that broke the story on Watergate. (http://www.asbl.com/showmedia.php?id=1179)

The story seems "un-Washington Post-like." Titled, "Agencies Counted Big Firms As Small," with a Bush Administration excuse for a subtitle - "SBA Says It Will Correct Data On Federal Contracts." The first sentence begins with "US government agencies make at least $5 billion in mistakes…"

Just $5 billion in mistakes; the SBA has it under control, no big deal.

Here's the truth. Federal investigators have released a series of investigations since 2003 that found the Bush Administration has diverted hundreds of billions of dollars in government small business contracts to Fortune 500 firms and thousands of other large businesses. (http://www.asbl.com/documentlibrary.html) Several investigations uncovered fraud. (http://www.sba.gov/IG/05-16.pdf) ABC, CBS, CNN (http://www.asbl.com/media2.php) and every major newspaper in the country have covered the issue. ( http://www.asbl.com/showmedia.php?id=1121)

The Washington Post sampled $13 billion of the $89 billion in prime contracts the Bush Administration reported as going to small businesses during 2007. They found at least $5 billion or 38.5% of the $13 billion sample went to Fortune 500 firms.

Using the Washington Post's sample, 38.5% of the $89 billion equals $34.2 billion in small business contracts diverted to Fortune 500 firms for 2007.

Now consider this, the 38.5% number is just for Fortune 500 firms. What about the thousands of other large business? How much did they get, 30%, 40%, 50%?

Lets be conservative and say 30%. If these contracting officials can't tell Fortune 500 firms like Xerox, Home Depot and Rolls Royce from a small business they are certainly going to have trouble differentiating the average large business from small businesses.

What about subcontracts? The Washington Post did not even look at that. The SBA Office of Advocacy says the Bush Administration reports $135 billion a year in prime contracts and subcontracts go to small businesses. That's another $46 billion in subcontracts.

Add the 38.5% for Fortune 500 firms to the 30% for all other large businesses. That is 68.5% of the $135 billion, or $92.4 billion a year.

$92.4 billion a year for the eight years of the Bush Administration, equals $739.2 billion in small business contracts diverted to many of the largest contributors to George W. Bush and Congress, by mistake of course, year after year.

Senators McCain and Obama have never mentioned this staggering problem and no journalist has ever asked them a single question on this issue.


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Why Do Republicans Hate Small Businesses?

Republican Anti-Small Business History Revealed

In 1953 Congress passed the Small Business Act out of the realization that most Americans worked for small businesses, and that these firms were the heart and soul of our great nation's economy.

During 1984 and 1985 President Ronald Reagan tried to close the Small Business Administration (SBA) and bring an end to all federal programs designed to assist small businesses, including small firms owned by woman, minorities, and veterans.

Senator Carl Levin (D - MI), and other Democratic members of Congress were all that stopped Ronald Regan from achieving his goal.

Again in 1996, Republican members of Congress proposed legislation to close the SBA and bring an end to the federal programs established by the Small Business Act to assist America's 27 million small businesses.

As soon as George W. Bush was elected, one of his first acts as President of the United States was to remove the Administrator of the SBA from the President's Cabinet. Additionally, he cut the SBA's budget more than any other federal agency. Today, the SBA's budget is less than half of what it was during the Reagan Administration.

Since 2003, more than a dozen federal investigations have found fraud, bad policies and a blatant lack of proper oversight in nearly every federal small business program. Several investigations found Bush officials had diverted billions of dollars in federal small business contracts to a "who's who" of corporate giants in the United States and Europe. Thousands of small businesses were forced to close their doors as they unknowingly tried to compete head-to-head with Fortune 1000 firms for even the smallest orders of goods and services.

Every major newspaper in the country has published stories on the Bush Administration's diversion of billions of dollars in federal small business contracts to large businesses. Major networks such as ABC, CBS and CNN have all aired investigative stories on the diversion of federal small business contracts to corporate giants.

In an attempt to stop further investigative stories on the issue, in 2006 Bush officials removed all data from the government's Central Contractor Registration (CCR) database that could be used by the media, the public and every federal agency to differentiate large businesses from small businesses.

Bush officials then established a policy, which made it easier for large firms to misrepresent themselves as small businesses by omitting the total number of employees and annual revenue fields from the CCR database.

In 2007, the Bush Administration adopted a policy that will allow Fortune 1000 firms to continue to receive government small business contracts until the year 2012.

In response to hundreds of stories in the media on the diversion of government small business contracts to large businesses, Bush officials launched a public relations campaign to convince the public that the diversion of federal small business contracts to corporate giants was simply a myth. (http://www.sba.gov/idc/groups/public/documents/sba_homepage/news_07-30.pdf)

President Bush has also refused to implement a federal law, which was passed over seven years ago, establishing a 5 percent set-aside goal for woman-owned firms.

Bush closed the SBA office that was established to assist veteran-owned firms and disabled veteran-owned firms. They even disbanded the Veteran's Advisory Committee.

Recently, the Bush Administration began to dismantle the federal program to help minority-owned firms by suspending applications for the government's Small Disadvantaged Business Contracting Program.

The American Small Business League (ASBL) has won a series of Freedom of Information Act (FOIA) lawsuits against the Bush Administration. Information received as a result of the legal victories has proven that hundreds of Fortune 1000 firms are the actual recipients of most federal small business contracts. The ASBL estimates that by the time President Bush leaves office, small businesses will have lost more than $800 billion in federal small business contracts to large businesses.

If Senator John McCain is elected President, he will continue the long Republican history of trying to close the SBA and bring an end to economic programs that were established by the Small Business Act to assist America's 27 million small businesses.

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ASBL Recommendations to End Fraud, Abuse, and Loopholes in Federal Small Business Contracting Programs Will Boost Middle Class Economy Immediately

FOR IMMEDIATE RELEASE
October 27, 2008

Petaluma, Calif. - Since 2003, over a dozen federal investigations have found billions of dollars in federal contracts earmarked for middle class firms have been diverted to Fortune 500 companies. A recent story in the Washington Post found over 40 percent of government small business contracts actually went to Fortune 500 firms. Even though the diversion of government small business contracts was first exposed in 2002, Congress has not passed a single piece of legislation to address the problem.

Now politicians in Washington are talking about creating new economic stimulus packages for the middle class. The American Small Business League (ASBL) believes that it does not make sense to create new programs to boost the middle class when the existing programs that were designed to direct federal contracts to middle class firms have been corrupted.

Congress needs to act now to pass legislation to end the diversion of small business contracts to Fortune 500 companies. The fastest and simplest way to stimulate the middle class economy is to enforce existing laws and end fraud and abuse in the existing federal programs to assist small businesses.

The ASBL makes the following recommendations to address existing problems in federal small business contracting programs, and to bolster the middle class economy:

1. Support the Small Business Fairness and Transparency in Contracting Act:
The ASBL has produced draft legislation with Senator Barbara Boxer (D - CA) that would preclude the federal government from counting publicly traded firms towards the congressionally mandated 23 percent small business procurement goal.

2. Abolish the comprehensive test program:
The comprehensive test program allows contractors to avoid penalties for non-compliance and avoid submitting reports that are used to track compliance with small business sub-contracting goals. As a result, the program allows prime contractors to circumvent small business programs designed to assist small businesses and firms owned by women, minority and veterans.

3. Enforce "Liquidated Damages":
FAR clause at 52.219-16, entitled "Liquidated Damages," created a penalty for prime contractor non-compliance with its small business sub-contracting plans. The law has never been enforced. As a result, most prime contractors never achieve the small business subcontracting goals stated in their government issued prime contracts.

4. Remove any restrictions from the $100,000 small business set-aside:
The FAR Council exempted any acquisition on the General Services Administration (GSA) schedule from the congressionally mandated $100,000 small business set-aside for small businesses. Removing this exemption would provide small businesses with more access to federal small business contracting opportunities.

5. Aggressively prosecute fraud and misrepresentation in federal small business programs:
Misrepresenting the size of a firm in order to illegally receive federal contracts and subcontracts is a felony with penalties of up to 10 years in prison, a fine up to $500,000, cancellation of all contracts and debarment from federal contracting programs. Policy should require the SBA to respond to any protest against any firm that misrepresents its size, regardless of whether or not the contract is a small business set-aside.

6. Require the SBA to publish the previous years contracting data within 90 days of the end of the fiscal year:
The SBA should be required to publish the previous years contracting data in a public forum within 90 days of the end of the fiscal year as a means of maintaining transparency and determining whether or not the federal government was compliant with the congressionally mandated small business procurement goal. The SBA regularly waits 10 months or longer to release the data despite the fact that the data exists in a real time database and could be released following the end of the government fiscal year.

7. Reporting the names of firms coded as small businesses:
As a means of increasing transparency in federal small business contracting programs and ensuring that the federal government is adhering to its congressionally mandated small business procurement goal, each year the Administrator of the SBA should be required to report the names of companies coded as receiving federal small business contracts. The reporting should be released to the public and placed in a prominent position on the SBA's web site. This year, the ASBL was forced to file suit against the SBA in United States Federal District Court as a means of obtaining the names of firms coded as small businesses for 2005 and 2006. Last month, the SBA appealed a federal district court decision in favor of the ASBL to the Ninth Circuit Court of Appeals.

8. Put the Central Contractor Registration (CCR) database back under the control of the SBA:
The SBA is charged with administering all federal programs designed to assist small businesses. We believe that the CCR should be removed from the jurisdiction of the Department of Defense (DoD) and placed back within the jurisdiction of the SBA allowing the agency to monitor compliance with CCR regulations more effectively.

9. Put a warning on CCR:
Currently many of the profiles for firms registered on the CCR are filled with unreliable and fraudulent data. As a result, large businesses are regularly coded as small businesses by contracting-officers government wide. Recently, federal investigations have found that firms intentionally put fraudulent information in the CCR database to illegally receive federal small business contracts. The warning should state clearly: Misrepresentation of a large firm as small for the purposes of obtaining federal small business contracts is punishable under section 16 (d) of the Small Business Act (15 USC §. 645(d)).

10. Restore the fields on the CCR:
As a means of maintaining transparency in federal contracting programs, fields which have been removed from the CCR or made optional such as: capability narrative, primary NAICS code, total number of employees and annual revenue; should be restored as required fields and made available to the public.

11. Require all government contractors claiming small business status to recertify annually:
Current federal policy requires all government vendors to update their information on CCR annually; therefore annual re-certification can be completed at that time simply by updating one box in the database. Annual re-certification will be a simple, easy, quick and efficient way to stop the flow of billions of dollars in federal small business contracts to Fortune 1000 firms and other large businesses. In the past, annual re-certification has already been endorsed by the SBA (prior to the arrival of Steven Preston), the SBA Office of Inspector General, the Office of Federal Procurement Policy, the Senate Small Business Committee and the Office of Management and Budget.

12. Abolish the Alaska Native Program or place the same $3 million contract cap that every other government program for minorities has:
The government is hitting its minority-owned small business procurement goal with no-bid, no ceiling Alaska Native Corporation (ANC) 8(a) contracts. The way to solve the problem is to level the playing field by imposing the same contract ceiling as all other federal programs for minorities on the ANC Program. This would provide small minority-owned businesses with more opportunity to compete for and obtain federal small business contracts.

13. Oppose H.R. 3567, H.R. 5819, S. 3362 and any other legislation that allows billionaire venture capitalists to participate in federal small business contracting programs:
The Small Business Act states that a small business must be "independently owned and operated." H.R. 3567 would allow firms that are controlled by some of the nation's wealthiest investors to be treated as small businesses. This would create a staggering loophole that would result in the diversion of billions of dollars in federal small business contracts away from the average American small business and into the hands of some of the nation's wealthiest investors. That said, the recent series of House and Senate bills designed to reauthorize the Small Business Innovation Research (SBIR) Program would allow firms that are owned and controlled by billionaire venture capitalists to participate in federal programs designed for small businesses. These bills fly in the face of the original intent of the SBIR program and create a dangerous precedent for venture capital participation in all government programs designed for small businesses. We believe this legislation could force thousands of businesses across the United States to close their doors and cause serious damage to an already floundering middle class economy.


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