Contact Information: Contact: Christopher Gunn Communications Director American Small Business League (707) 789-9575
More Investigations Find Fraud in SBA Managed Programs, According to the American Small Business League
| Source: American Small Business League
PETALUMA, CA--(Marketwire - March 26, 2009) - The following is a statement by the American
Small Business League:
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."