Bush Administration Continues to Claim Contracting Scandal Is a "Myth," According to the American Small Business League

PETALUMA, CA--(Marketwire - June 25, 2008) - The following is a statement by the American Small Business League:

On June 12th, the Small Business Administration (SBA) issued the latest release in a series of press releases entitled "Myth vs. Fact." (http://www.sba.gov/idc/groups/public/documents/sba_homepage/myth_fact.pdf) The latest "Myth vs. Fact" press release is in response to a New York Times article on a multitude of significant problems at the SBA that continue even after the departure of Administrator Steven Preston. In the release, Bush officials at the SBA once again claimed, "Large corporations are not receiving contracts meant for small businesses." (http://www.nytimes.com/2008/06/12/business/smallbusiness/12sba.html?ref=smallbusiness)

Despite a growing mountain of evidence, the Bush Administration is still refusing to admit they diverted billions of dollars in federal small business contracts to a long list of corporate giants. A series of federal investigations beginning in 2002 (http://www.asbl.com/documents/keystatements.html) all found the Bush Administration awarded billions of dollars in federal small business contracts to firms such as Lockheed Martin, Boeing, Raytheon, Halliburton, L-3 Communications, Battelle, Titan Industries and British Aerospace and Engineering (BAE).

In 2003, the General Accounting Office (GAO) completed the first investigation into the diversion of government small business contracts to large businesses and found that the Bush Administration awarded federal small business contracts to thousands of large businesses.

Since 2003, over 400 stories have run in newspapers, magazines and on-line regarding the diversion of federal small business contacts to Fortune 1000 firms. ABC, CBS and CNN have all run investigative stories on the issue.

Bush officials have persistently ignored the overwhelming preponderance of evidence and even claim it is a "myth" that large businesses are receiving federal small business contracts. (http://www.sba.gov/idc/groups/public/documents/sba_homepage/myth_fact.pdf) The SBA first claimed it was a "myth" that large businesses were receiving government small business contracts in a "Myth vs. Fact" press release on March 11, 2007. (http://www.sba.gov/idc/groups/public/documents/sba_homepage/news_07-30.pdf) The American Small Business League issued a press release refuting each of the SBA's statements. (http://www.asbl.com/showmedia.php?id=577)

Even federal offices headed by Bush appointees acknowledged that Fortune 1000 firms and other large businesses have been the actual recipients of billions of dollars in federal small business contracts.

In 2004, the SBA Office of Advocacy, headed by Bush appointee Thomas Sullivan, released an investigation on a sampling of government contracts that discovered firms such as Hewlett-Packard, Oracle, Raytheon, General Dynamics, Northrop Grumman, Booze Allen Hamilton and the Carlyle Group received billions of dollars in contracts the Bush Administration reported as going to small businesses. (http://www.asbl.com/asbl.resource/content/supdoc/SBAreport.pdf)

In statements to the Senate Committee on Small Business and Entrepreneurship in July of 2006, Bush appointee Eric Thornson, the SBA's own Inspector General, acknowledged large firms were being allowed to receive and perform government small business contracts. His recommendations to stop the flow of federal small business contracts to large firms were subsequently ignored by SBA Administrator Steven Preston. (http://www.sba.gov/ig/WrittenStatement-7-12-06SSBECHearingonGovernment.pdf)

The most damaging evidence against the SBA's latest "Myth vs. Fact" press release comes from the SBA's own Office of Inspector General.

In Report 5-15, the SBA Inspector General stated, "One of the most important challenges facing the Small Business Administration (SBA) 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)

Report 5-14, found the SBA itself inflated their small business contracting data by reporting millions of dollars in awards to large business as small business awards. In one example the SBA reported contracts to the Dutch giant Buhrmann NV as small business awards. (http://www.sba.gov/ig/05-14.pdf) Buhrmann is headquartered in Amsterdam and has thousands of employees in over 25 countries worldwide.

In June, the ASBL won its fourth federal lawsuit against the SBA under the Freedom of Information Act (FOIA). The SBA was forced to release over 10,000 pages of documents on the actual recipients of federal small business contracts for fiscal years 2005 and 2006. The data proved conclusively that the Bush Administration had in fact awarded billions of dollars in federal small business contracts to Fortune 1000 firms and hundreds of other large businesses. Third party analysis of the data found hundreds of individual Fortune 1000 firms had received as much as $900 million annually in federal small business contracts. The data is available on the ASBL website.

Contact Information: Contact: Christopher Gunn Communications Director American Small Business League (707) 789-9575