A bigger Voice for Small Business

White House PR Firms Squash Stories On Small Business Contracting Scandal

by | Mar 19, 2007 | Press Releases

Press Release

White House PR Firms Squash Stories On Small Business Contracting Scandal

White House uses big PR firms to kill stories on small business

March 19, 2007

Petaluma, Calif.-- American Small Business League President Lloyd Chapman says he believes the Bush administration’s expenditure of over $50 million a month to some of the nation’s largest public relations firms is hampering his efforts to expose billions in fraud and abuse in federal small business contracting programs.
 
“White House PR firms have been working overtime to kill stories on Bush administration policies that have diverted over $300 billion in federal small business contracts to the top 2 percent of U.S. firms,” Chapman said.
 
A 2006 Office of Government Accountability report found the Bush administration had spent $1.6 billion over 30 months on public relations campaigns and advertising. In some cases, journalists like Armstrong Williams were paid as much as $240,000 to promote pro-Bush administration policy and pass it off as unbiased opinion.
 
Chapman points to a pattern over the last few years wherein newspapers, magazines and even some of the largest television networks drop his story once Bush administration officials were notified.
 
NBC spent a week in California filming a story on Chapman and his successful legal battle to stop the Bush administration from diverting billions in federal small business contracts to Fortune 500 firms, but the story never aired. CNN’s Lou Dobbs Tonight spent a month researching and filming a story on Chapman and his organization, but pulled the story just hours before it was supposed to air. When the story finally aired six months later, any mention of Chapman and the American Small Business League had been deleted. CBS spent weeks working with Chapman and his staff on what would have been CBS’s third installment in a series of investigative reports on the diversion of billions in federal small business contracts to firms like Rolls Royce, Wal-Mart, Boeing and Lockheed Martin. The story was suddenly halted after the SBA found out about the piece.
 
After spending months working with the New York Times on a story, any mention of Chapman and his group was removed from the story after it was written. 
 
“After the New York Times story, I was contacted by the Los Angeles Times. They wanted to do a story on my campaign to stop fraud and abuse in federal small business contracting,” Chapman said. “I told the reporter if she mentioned me in the story, my name would be removed before the story ran, but she laughed. She called me the day the story ran, very upset, and told me her editor removed all references to me in the story.”
 
Chapman says he believes other publications have suddenly dropped their stories on this issue after being pressured by White House public relations firms, including the Associated Press, USA Today, Wall Street Journal, Dallas Morning News, BusinessWeek, Inc Magazine, Entrepreneur, Fortune, Fortune Small Business and dozens of other smaller newspapers and magazines around the country.
 
“We intend to use the Freedom of Information Act to uncover more information on exactly how PR firms working for the Bush administration are able to exert so much pressure on the media,” Chapman said. “I would like to see Rep. Henry Waxman hold hearings into why the Bush administration needs to spend $50 million a month on PR firms and exactly what those firms are involved in.”

Democrats Ignore Small Business Contracting Scandal

by | Mar 13, 2007 | Press Releases

Press Release

Democrats Ignore Small Business Contracting Scandal

No Plans From New Congress to Stop Fraud and Abuse

March 13, 2007

Petaluma, Calif.- Since the Democrats took control of Congress in January, more than $10 billion in small business set-aside contracts have been diverted to some of the largest firms in the U.S. and not one piece of legislation has been passed to stop it.
 
There have been over 400 stories in the media and 14 federal investigations over the last four years on large businesses receiving small business procurement awards. The Small Business Administration Inspector General called this situation “one of the most important challenges facing the Small Business Administration and the entire Federal government today.”
 
Lloyd Chapman, president of the American Small Business League, said that although the Democrats pledged to clean up fraud, corruption and abuses in government while campaigning for Congress, they have given nothing but lip service to this issue.
 
“The Democrats have blamed the Republicans for years for the loopholes and abuse in federal small business contracting and yet, now that they are in power, have done nothing to change it,” Chapman said. “If you look at the House and Senate Small Business Committee Web sites, you will notice that any mention of small business contracting abuse is conspicuously absent.”
 
Sen. John Kerry, current head of the Senate Small Business and Entrepreneurship Committee, who has been a proclaimed advocate for small businesses for nearly two decades, has publicly stated that the current policies are inefficient.
 
“Politicians love to say they want to help small businesses,” Kerry said in the Marin Independent Journal. “But how can any politician make that claim with a straight face when contracts that should be going to these hard-working small businesses are being turned into giveaways to large multinational companies?"
 
Rep. Nydia Velasquez, the head of the House Small Business Committee, has also challenged current SBA policies in investigative reports on CBS, ABC, and CNN and in the New York Times.
 
“The fact that large businesses are being awarded with small-business contracts, and that there is no system in place with penalties or consequences for this, is extremely concerning,” Velázquez said in a New York Times article in December 2006.
Mediterranean
 
Chapman said that despite all the statements Velasquez and Kerry have given regarding the magnitude of this problem, they continue to be “all show and no go.”
 
“I hope we get more than just talk from the Democrats like we got from the Republicans,” Chapman said.
 
ASBL research concluded that approximately half of all funds reported as going to small businesses actually went to some of the largest firms in the U.S., totaling nearly $65 billion a year. Chapman said this problem could be easily resolved with passing an annual recertification policy, but instead, the SBA passed a five-year plan that will allow large businesses to continue collecting small business awards until 2012.
 
“Five-year recertification is just like repealing the Small Business Act for the next five years,” Chapman said. “I can’t believe we’re even talking about how many more years Fortune 1000 firms will get small business contracts.”  
 

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New SBA Administrator Receives Failing Marks From Small Business Group

by | Mar 8, 2007 | Press Releases

Press Release

New SBA Administrator Receives Failing Marks From Small Business Group

Steven Preston Accused of Covering Up Fraud

March 8, 2007

Petaluma, Calif.- The new Small Business Administration Head, Steven Preston, has now passed the sixth-month mark as chief of the Small Business Administration. Although organizations like the National Federation for Independent Business, the Small Business and Entrepreneurship Council and the US Chamber of Commerce applauded Preston’s credentials when he was first appointed, small-business advocacy groups are now deeply dissatisfied with his performance.
 
Preston outraged small business owners across the country when he allowed GTSI Corp, a major government IT contractor that the SBA Inspector General recommended for debarment for misrepresenting themselves as a small business, to continue to receive small business contracts without consequence. 
 
On Dec 12, 2006, while the American Small Business League was in the middle of research for a CBS investigative story on small business contracting fraud, Preston directed that all employee and revenue numbers that allow the public to determine the small business status of federal contractors be removed from the Central Contractor Registry data system. In November 2006, less than four months after his confirmation, Preston ignored the SBA Inspector General, the OMB, former head of the Administration for Federal Procurement Angela Styles, and a unanimous vote for annual recertification from the Senate Small Business Committee and put forth his own policy that will allow the government to report awards to Fortune 1000 firms as small business awards until the year 2012.
 
American Small Business League president Lloyd Chapman said that Preston’s actions are devastating for thousands of small businesses across the country.
 
“I told Forbes when Preston was nominated last year that he would likely foster policies that will act as barriers to small firms doing business with the federal government,” Chapman said. “He’s doing exactly what I said he would do by adopting policies that protect fraudulent companies and will divert even more from small businesses. He’s worse than I ever dreamed he would be.”
 
Chapman said that Preston promised to clean up the problems of federal contracting but has made them worse than even the former SBA Administrator, Hector Barreto.
 
“There’s a pattern here. Everything Preston has done makes it easier and easier for large business to misrepresent themselves,” Chapman said. “He’s let a company recommended for debarment go free. He’s proposed a policy that will cheat small businesses out of $300 billion in small business contracts over the last five years. And now he’s trying to cover up this fraud and abuse by removing information from a database that allows the public and the media to tell small businesses from large businesses.”
 
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Government chided for neglecting to meet mandatory small-business contracts

by | Mar 6, 2007 | ASBL News

News

Government chided for neglecting to meet mandatory small-business contracts

By Melissa Frederick
The Examiner
March 6, 2007

WASHINGTON - New statistics indicate the federal government is not meeting legal requirements to award 23 percent of federal contract work to small businesses.

 

Eagle Eye Inc., a Fairfax-based research firm that focuses on the federal government, compiled statistics this week showing the government has awarded only an average of 19 percent of its contracts to small firms.

“It generally confirms the general trend we’ve seen in the last several years, that it is just getting more and more difficult for small businesses to compete and for agencies to meet their ... overall goal,” Paul Murphy, president of Eagle Eye Inc., said Monday.

The figures were met with outrage by Lloyd Chapman, president of the American Small Business League advocacy group.

“There’s a culture in government that is, ‘How can we get around hiring small businesses?’” Chapman said Monday. “They’ll pass policies, legislation, anything they can, because small businesses have little or no clout with the government, and defense contractors have more than anybody in the world.”

Christine Mangi, press secretary of the U.S. Small Business Administration, the agency charged with promoting small businesses to the government, said Monday she could not respond to questions about the statistics by deadline.

Chapman said the numbers may be even lower than what Eagle Eye Inc. found.

His group has accused the SBA of not doing enough to make sure that companies registered as small businesses actually meet the criteria, a concern echoed by the inspector general governing the SBA.

Chapman is also concerned about the issue of federal contractors purchasing small businesses as soon as they receive a significant award, he said.

The SBA, though, is implementing a new rule that would require companies to recertify that they meet small-business criteria every five years, though the rule does not take effect until 2012.

The agency also is planning to review existing small-business contracting information and make it public, as well as implementing a small-business report card that scores federal agencies on their progress in meeting small business goals, SBA administrator Steven Preston said in a February speech at the National Press Club.

melissa.frederick@dcexaminer.com

© 2007 The Examiner All rights reserved.

Bush Administration Fails Small Businesses Once Again

by | Mar 5, 2007 | Press Releases

Press Release

Bush Administration Fails Small Businesses Once Again

Latest statistics show government fails to meet small business goals for seventh year

March 5, 2007

Petaluma, Calif.- According to a recent report by Eagle Eye Publishing, a commercial provider of federal procurement information, the federal government has failed to achieve the federally mandated 23 percent small business contracting goal for the seventh consecutive year. 
 
Eagle eye statistics found that the government reached a mere 19 percent once again in 2006. However, Lloyd Chapman, small business advocate and president of the American Small Business League, estimates that the actual number is significantly lower considering many of the top recipients were Fortune 1000 companies or subsidiaries. Last year’s statistics cited L-3 Communications as the top recipient in small business contracts totaling $650 million. 
 
“The numbers that Eagle Eye Publishers reported includes contracts awarded to major corporations like Boeing, Lockheed, Microsoft and Bechtel—some of the largest firms in the US and dozens in Europe,” Chapman said. “If you exclude the Fortune 1000 firms on the list, the government is probably only reaching 5 percent of small businesses.”
 
Since 2002, 14 federal investigations have found billions of dollars have been diverted from legitimate small businesses to Fortune 1000 companies and subsidiaries across the country. Even though this issue was first exposed in 2002, Congress has passed no legislation to stop it. In November 2006, Steven Preston, head of the Small Business Administration, proposed a policy that will actually allow the government to continue to count awards to large companies toward its small business goals until 2012.
 
On Dec. 16, 2006, the government abruptly pulled employee and revenue statistics off of the government’s Central Contracting Registry, information that allows the public to determine a company’s small business size status. Chapman says he believes this is another government attempt to keep Congress, the public, and the media from being able to prove that federal agencies have completely falsified their small business numbers for several years.