New SBA Administrator Should Address Biggest Problem First

FOR IMMEDIATE RELEASE
April 1, 2009

Petaluma, Calif. – No problem facing the Small Business Administration has been the subject of more federal investigations and more media attention than the diversion of federal small business contracts to Fortune 500 firms. The American Small Business League (ASBL) has estimated that every year more than $100 billion in federal small business contracts are diverted from legitimate small businesses to some of the largest corporations in the United States and Europe.

Since U.S. Census Bureau statistics show that firms with less than 20 employees create more than 97 percent of all new jobs in America, bringing an end to the diversion of billions of dollars in federal small business contracts to "corporate giants" should be the first order of business for incoming SBA Administrator Karen Gordon Mills.

In March of 2005, the SBA Office of Inspector General (OIG) released Report 5-15 which 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)

Every major newspaper in the country has written about the diversion of hundreds of billions of dollars in federal small business contracts to Fortune 500 firms and thousands of other large businesses in the United States, and even Europe. (http://www.asbl.com/documentlibrary.html)

ABC, CBS and CNN have aired investigative stories, which found corporate giants such as Rolls Royce, Wal Mart, Microsoft, Xerox, Sherwin-Williams, John Deere, Raytheon, General Dynamics and British Aerospace (BAE) had been the actual recipients of federal small business contracts. (ABC, http://www.asbl.com/abc_evening_news.wmv; CBS, http://www.asbl.com/cbs.wmv; CNN, http://www.asbl.com/showmedia.php?id=1170)

In February of 2008, President Obama recognized the gravity of the issue 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)

As a first order of business at the SBA, Karen Mills should immediately remove all Fortune 500 firms, large businesses and their subsidiaries from any and all government databases of firms claiming status as small businesses. This would once and for all bring an end to the "miscoding" that has plagued the SBA for the last eight years.

Next, a warning should be placed on the government's Central Contractor Registration (CCR) Database warning all government suppliers that misrepresenting a firms status as a small business to illegally receive federal small business contracts is a felony under section 16(d) of the Small Business Act, which carries a penalty of up to 10 years in prison and a $500,000 fine per occurrence.

Finally, Administrator Mills should ask President Obama to issue an executive order immediately directing all federal agencies and all prime contractors to stop reporting awards to publicly traded firms as small business awards. The Small Business Act clearly defines a small business as "independently owned." Publicly traded firms are certainly not small businesses, and do not qualify as "independently owned."

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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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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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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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Small Business Administration Sued For Refusing to Release Executive's Phone Records

FOR IMMEDIATE RELEASE
March 12, 2009

Petaluma, Calif. – The Small Business Administration (SBA) is being sued by the American Small Business League (ASBL) in United States District Court, Northern District of California for refusing to release the telephone records of SBA Press Office Director Mike Stamler. The ASBL requested Mr. Stamler's phone records under the Freedom of Information Act (FOIA). The ASBL believes Mr. Stamler engaged in an aggressive campaign to mislead the media and damage the organization's reputation.

The ASBL has won a series of federal lawsuits against the SBA, which forced the disclosure of information showing that the SBA had fabricated federal small business contracting data and covered-up the diversion of hundreds of billions of dollars in federal small business contracts to Fortune 500 companies and other large businesses.

The ASBL expects to file an additional lawsuit against the SBA for refusing to release all of Mr. Stamler's emails for the years 2006 and 2007. The ASBL began requesting Mr. Stamler's communications after several journalists informed the organization that Mr. Stamler had libeled and slandered the ASBL and its President Lloyd Chapman, and embarked on an aggressive campaign to impugn the organization’s credibility with members of the media.

In one such example, after the Long Island Business News (LIBN) quoted ASBL President Lloyd Chapman in a story, the LIBN reporter received a profanity-riddled email from Mr. Stamler. In response, the LIBN reporter published a blog titled, "Expletives the SBA's Forte?" (http://libn.com/libizblog/2008/02/22/expletives-the-sbas-forte/)

The ASBL intends to continue gathering information on Mr. Stamler's campaign to libel and slander the organization and its President Lloyd Chapman in preparation for another lawsuit to be filed against the SBA for defamation of character.

The SBA's own Inspector General has released several investigations that found blatant fraud and abuses in SBA administered small business contracting programs. (http://www.sba.gov/IG/05-15.pdf)

In the past, the SBA responded to federal investigations and news stories, which found billions of dollars in small business contracts had gone to Fortune 500 corporations with a series of press releases claiming that the diversion of federal small business contracts to large corporations was a myth. (www.asbl.com/documents/sbamythvfact.pdf)

"There is no question that Mike Stamler and the SBA have tried to cover up the diversion of small business contracts to Fortune 500 corporations," ASBL President Lloyd Chapman said. "Based upon the information we have obtained so far, it's obvious that they have launched a massive campaign to attack our organization and impugn our credibility as we continue to expose the rampant fraud and abuse that has gone unchecked since 2002."

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Glen Beck: The Death of Small Business with Lloyd Chapman

Obama Economic Policy Falters Without Small Business Stimulus

FOR IMMEDIATE RELEASE

Petaluma, Calif. - Since President Barack Obama signed the stimulus bill, the Dow has dropped to a 12-year low and unemployment has jumped to a 25-year high. The most recent U.S. Census Bureau statistics could be the key to understanding why President Obama's economic stimulus bill hasn't worked so far and may never achieve its intended goal of creating millions of new jobs.

According to the most recent data, 98 percent of all U.S. firms have less than 100 employees. These firms are responsible for 98 percent of all new jobs in America and employ 50.2 percent of the private sector workforce. American small businesses are responsible for over 97 percent of all exported goods and generate the majority of innovations that come from the United States.

Not one dollar of the $2.3 trillion in economic stimulus funds will go to the 27 million small businesses where most Americans work. One hundred percent of the stimulus bill funds not destined for states, will go to the top 1 percent of U.S. firms. The firms in that top 1 percent have not created one net new job in America since 1977.

In addition to ignoring small businesses, which are the nation's top job creators in the stimulus bill, President Obama has refused to stop rampant fraud and abuse in existing federal economic stimulus programs for small businesses. During the Bush Administration, a series of over a dozen federal investigations found hundreds of billions of dollars in federal small business contracts were diverted to Fortune 500 firms. Millions of small businesses were adversely affected and thousands of hardworking small businesses were forced to close their doors as a result of the fraud and abuse. (http://www.asbl.com/documentlibrary.html)

President Obama acknowledged the magnitude of the problems in government small business programs in February of 2008 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 refused to make good on his campaign promise, by proposing policies to stop the fraud and abuse that have crippled federal economic stimulus programs for small businesses.

Things could get even worse for the economy and small business under the Obama Administration. President Obama has confirmed he will raise taxes on small business owners, and he is expected to support new loopholes in federal contracting law that will divert billions more in federal small business contracts away from the middle class and into the hands of wealthy venture capitalists that contributed heavily to his campaign.


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