By American Small Business League
March 22, 2012
The following is an open letter from American Small Business League President Lloyd Chapman to Mr. Robert Thomson, Editor-in-Chief, The Wall Street Journal:
“Should the Small Business Administration Be Abolished?”
I challenge the Wall Street Journal to report that its parent company News Corporation is part of a decade-long scandal that has cost U.S. small businesses hundreds of billions of dollars.
This week the WSJ published the article, “Should the Small Business Administration Be Abolished?”
The article’s headline reinforces what I have said for years: ‘consolidation’ and ‘closure’ of the SBA are synonymous terms. President Obama has never directly admitted that he plans to close the SBA but even the WSJ correctly associates Obama’s consolidation proposal with abolishment.
The WSJ article, however, completely ignored fraud, abuse and loopholes in federal small business contracting programs that allow large businesses to cheat the American middle class out of tens of billions of dollars every year.
The article also neglected the fact that closing the SBA will make it easier for large companies to hijack federal small business contracts.
If the WSJ were really interested in reporting about what’s important for small businesses, the newspaper would think about the actual consequences of the SBA’s closure:
The U.S. government is the world’s largest buyer of goods and services, spending over $500 billion annually, and by law must award at least 23 percent of that total to small businesses. Small businesses, according to the federal government, create 90 percent of net new jobs, employ half the private sector workforce and account for half of GDP.
Yet since 2003, a series of over a dozen federal investigations have discovered hundreds of billions of dollars worth of federal small business contracts that were diverted to some of the largest companies in the world.
Companies that received federal small business contracts in FY 2011 include: Apple, GE, Bank of America, General Dynamics, Wells-Fargo, Verizon, Comcast, Lockheed Martin, the New York Times Company and Chevron.
In January 2012, a News Corporation company also received federal contracts that were coded as going to “small business.”
So I lay this on your doorstep. Is the WSJ willing to investigate contracts News Corporation received from the government under the label “small business”?
President and founder, American Small Business League