Hypocrisy Runs Deep for Representative Velázquez

The nomination by President Bush last week of Steven Preston to take over as Secretary of Housing and Urban Development (HUD) sent chills through the small business community and has left many small business advocates outraged. One of those who appears to be outraged is Representative Nydia M. Velázquez (D - NY), Chair of the House Committee on Small Business and New York City's senior Member on the Subcommittee on Housing and Community Opportunity.

In a statement released last week, Rep. Velázquez stated, "…the fact remains the agency Mr. Preston has been responsible for leading [SBA] is still plagued by serious problems of its own. Large businesses continue getting small business contracts, SBA's Katrina disaster relief program is a failure, and morale of the agency's personnel is one of the lowest in the federal government." I would like to highlight the section of this quote where Rep. Velazquez clearly states that "Large businesses continue getting small business contracts."

It is interesting that Rep. Velázquez has been Chair of the House Committee on Small Business since January of 2007 and has yet to introduce a single piece of legislation that will end the diversion of billions of dollars in federal small business contracts to large and Fortune 1000 firms every year. In fact, she is responsible for pushing through (in less than a week) H.R. 5819, the SBIR/STTR Reauthorization Act, which will open up a gigantic loophole for venture capital participation in the SBIR program and set a dangerous precedent to allow billionaire venture capital firms access to billions of dollars in federal small business contracts. The Chair of the House Committee on Small Business likes to bluster about the importance of small businesses while at the same time giving away small business contracts and grants to billionaire venture capitalists.

I would like Rep. Velázquez to follow though on rhetoric. If she is really outraged at Preston's failure to stop the diversion of federal small business contracts to large firms, then she MUST draft legislation that will ensure small business contracts go to legitimate small businesses.

Bush Small Business Rhetoric a Stark Contrast to Administration Policies

Bush praises Small Businesses while moving to end all federal programs to assist small businesses.

Petaluma, Calif. - On Tuesday, President George W. Bush issued Proclamation 8241, which stated, "Small businesses are the backbone of the American economy, and my Administration is committed to fostering an environment in which the entrepreneurial spirit can thrive." However, an examination of the Bush Administration's policies from the last seven years reveals a patchwork of anti-small business policies that have been instituted to the detriment of small businesses across the nation.

To read more, please click here: http://www.asbl.com/showmedia.php?id=1033

Small Business Administration Stalls Release of PR Executives E-mails

SBA PR executive's e-mail shows evidence of an aggressive campaign to kill stories on contracting abuses.

Petaluma, Calif. - The Small Business Administration (SBA) is delaying the release of SBA Press Office Director, Mike Stamler's inbound and outbound e-mails from 2006 and 2007. The American Small Business League (ASBL) requested the information under the Freedom of Information Act (FOIA).

The ASBL requested Stamler's e-mails after it discovered that Stamler had sent a number of aggressive and threatening e-mails to journalists and publications which ran stories on ASBL's efforts. Specifically, the ASBL's effort to expose the diversion of federal small business contracts to Fortune 1000 firms. The ASBL has also received information from journalists that Stamler has made a number of libelous statements about the ASBL and its President, Lloyd Chapman.
The ASBL believes the SBA's decision to stall the release of Stamler's e-mails is an attempt to allow SBA attorneys more time to review Stamler's communications and scrub them of any damaging information. The ASBL believes that Stamler's emails will indicate that the SBA has made a significant effort to pressure journalists into dropping stories on the diversion of federal small business contracts to major corporations.

"Mike Stamler has been browbeating, threatening and bullying journalists to drop this story for years," President of the ASBL, Lloyd Chapman said. "Our goal is to simply uncover the facts and expose the SBA's campaign to discredit the ASBL and to mislead Congress, the public and the media on this issue. SBA Administrator Steven Preston is obviously stalling the release of Stamler's e-mails so they can remove all the damaging information."

"Mr. Stamler wants to impugn my credibility with the media, but he knows that I have won every federal lawsuit I have filed against the Department of Defense (DOD), NASA (http://www.asbl.com/showmedia.php?id=223) and the SBA. He also knows that information I provided prompted the first General Accounting Office (GAO) investigation (http://www.gao.gov/new.items/d03704t.pdf ) and the first Congressional hearing into the diversion of government small business contracts to Fortune 1000 firms. He knows I provided information to the SBA that resulted in the removal of 600 large businesses (http://www.washingtontechnology.com/print/17_22/20094-1.html) from the SBA's small business database. He also knows I worked with the SBA's Office of Inspector General and provided information that led to one firm being recommended for debarment and a second firm paying a $1 million fine for misrepresenting themselves as a small business," Chapman stated. (http://www.govexec.com/story_page.cfm?articleid=33735&ref=rellink)

In one example, Stamler sent an e-mail to the Long Island Business Journal that was so aggressive and profane that it prompted LIBJ Staff Writer, Ambrose Clancy to write a piece on the paper's blog entitled, "Expletives the SBA's forte?" (http://libizblog.wordpress.com/2008/02/22/expletives-the-sbas-forte/)

In other cases, Stamler has threatened to remove publications that ran stories on the SBA's role in the diversion of federal small business contracts to large businesses from the SBA's media list.
Stamler has reportedly made hostile and aggressive calls to journalists, editors and publishers that were preparing to publish stories on the issue and tried to bully or pressure them into dropping the stories.

The ASBL is preparing to file suit against the SBA in the event that all of Stamler's 2006 and 2007 e-mails are not released promptly.

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Additionally, today the ASBL released two press releases. Please click to the following title to view a copy of the release. "Anti-Small Business Bill Backed By Venture Capitalist Lobby Moves Through House In Record Time."

House Committee Sells Out Small Business for Big Bucks From Billionaire Venture Capitalists

Petaluma, Calif. - Members of the House Committee on Small Business are being accused of selling out America's 26 million small businesses in exchange for contributions from wealthy venture capitalists. During 2008, members of the House Committee on Small Business have been targeted with a slew of campaign contributions from the National Venture Capital Association (NVCA). According to Opensecrets.org, 13 members of the committee have received contributions from NVCA this year alone. Additionally, Rep. Velázquez has been the top committee recipient of funds from NVCA during 2008.

This is the second time in less than a year that a proposal has come out of the House Committee on Small Business that will divert billions of dollars in federal contracts earmarked for small business into the hands of the nation's wealthiest venture capitalists.

To read more, please click the following link: http://www.asbl.com/showmedia.php?id=1024

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Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn (at) asbl.com
(707) 789-9575

Democrats Push Bill That Would Hurt Small Businesses

This is a great post from Abby Prince at Smallbusinessnewz.com. Click Here to read more.

Just in Time for Small Business Week, Congresswoman Velazquez Hands Venture Capital Firms a Billion Dollar Gift

Yesterday, in yet another move in a long line of disappointments, Chair of the House Committee on Small Business, Representative Velazquez (D-NY) introduced a new bill, H.R. 5819, the “SBIR/STTR Reauthorization Act,” which will open up federal small business programs to allow venture capital firms access to billions of dollars in federal money that is meant for small businesses.

On the eve of Small Business Week, which is next week, Chairwoman Velazquez has successfully handed venture capital firms a gift that will amount to billions of dollars. Unfortunately, this gift will come at the cost of legitimate small businesses that will now have to compete against billionaires venture capital firms for valuable SBIR money.

Last year, Velazquez pushed through H.R. 3567, the “Small Business Investment Expansion Act,” which contained almost verbatim the same provision as Title II of H.R. 5819. The ASBL led the successful opposition to H.R. 3567 and was joined by the White House, the U.S. Chamber of Commerce, NFIB, and numerous other small business groups and was able to stop H.R. 3567 in the Senate.

This makes me wonder why the Chair of the House Committee on Small Business keeps introducing legislation that will effectively harm small businesses while allowing venture capital firms access to billions of dollars in federal small business money. For the second time in less than a year, Velazquez has stated publicly that the National Venture Capital Association, a group that has supported her by funding her re-election campaigns, supports both H.R. 5819 and H.R. 3567. Question answered.

Now to add insult to injury, it has just been announced that President Bush will appoint SBA Administrator, Steve Preston to head the Department of Housing and Urban Development (HUD). While HUD has been mired in scandals under former Secretary Jackson, Preston’s appointment seems to fall in line with previous appointments made by Bush, where the prime qualification seems to be loyalty over competence- does anyone remember “Brownie, you’re doin’ a heck of a job?”

Preston took over as Administrator of the SBA in 2006, and since then he has presided over a 100 billion dollar giveaway in small business contracts to some of the largest firms in the United States and Europe.

H.R. 5819, the “SBIR/STTR Reauthorization Act”

Today, H.R. 5819, the "SBIR/STTR Reauthorization Act," was marked-up in the House committee on Small Business. The Bill which was introduced by Congresswoman Nydia M. Velázquez (D - NY), contains a provision that changes the definition of a small business from the current definition of "independently owned" to include businesses owned up to 49.9 percent by a venture capital firm. Title II of the act amends Sec. 9 (e) of the Small Business Act, which is specific to the SBIR program. It is our understanding that the bill limits venture capital participation in a small business concern to the SBIR program. However, it appears that the change creates a dangerous precedent for venture capital participation in other small business programs. If the definition of a small business is amended to include SBIR participation, even for the purposes of SBIR, legislators are opening the door for venture capital participation in other small business programs.

Additionally, according to Genomeweb.com the bill would, "reauthorize the programs through 2010 and would give Congress time to examine how the programs are working. The bill also would increase funding levels, raising Phase I awards from $100,000 to $300,000 and Phase II awards from $750,000 to $2.2 million, to reflect the rising costs of high-tech research. The authorization also increases the SBIR program's flexibility by allowing cross-agency awards, letting applicants apply directly for Phase II funding, and loosening eligibility for awards to include small businesses that are backed by venture capital funding. The bill expands the requirements for databases of recipients and it requires interoperability and accessibility between databases in order to allow for better congressional oversight." (http://www.genomeweb.com/issues/news/146371-1.html)

Please visit the following link to watch a clip of the mark-up of H.R. 5819 in the House Committee on Small Business: http://youtube.com/watch?v=7lpXdgDcrL0

Please click here to view a copy of the bill: http://thomas.loc.gov/cgi-bin/query/F?c110:1:./temp/~c110muAyO8:e1172: