Petaluma, Calif. - As the leaders of our country's oldest, largest and most prestigious financial institutions plunged our economy into a near 1929 style depression; they paid themselves billions of dollars in bonuses. Now, they want middle-class America to step-in and rescue them with its hard earned tax dollars. Hard working Americans could be paying for this bailout of Wall St. billionaires for decades.

According to Jesse Fried, a nationally recognized expert on executive compensation, during the last two years, Wall Street financiers received over $60 billion in bonuses. Lehman Brothers alone paid out $6 billion in bonuses during 2007 before recently filing bankruptcy.

Now, as part of the Bush Administration's bailout bill, Section 107 will give current Treasury Secretary and former Goldman Sachs Chairman and CEO, Henry Paulson the power to waive any provisions of the Federal Acquisition Regulation (FAR) he chooses. In its current form, Treasury Secretary Paulson's power to waive provisions of the Federal Acquisitions Regulations has no time limit. The waivers could go on indefinitely and could conceivably apply to any and all areas of federal contracting.

Secretary Paulson will no doubt be leaving Washington and be back on Wall St. in a matter of months; therefore, giving him the broad power to waive provisions of the Federal Acquisition Regulation that might be unpopular with his friends and associates on Wall St. is very bad idea.

Every man, woman and child in America will suffer from this financial fiasco in one-way or another. This devastating financial crisis is the direct and undeniable result of a total lack of proper oversight by Bush Administration officials. If Congress is sincerely attempting to solve this problem, the last thing they should do is give Secretary Paulson the power to waive the very federal laws that were passed to keep federal officials in check.

During the Bush Administration, more than 15 federal investigations have uncovered hundreds of billions of dollars in abuses and outright fraud in federal contracting programs. (https://www.asbl.com/documentlibrary.html) In just one example, Bush officials claim to have lost $9 billion dollars in cash in Iraq.(http://edition.cnn.com/2005/WORLD/meast/01/30/iraq.audit/) Four separate federal investigations have been released during the last sixty days that found hundreds of millions of dollars in abuses to have taken place in federal small business contracting programs. (http://www.sba.gov/IG/05-15.pdf)

Bush Administration officials have clearly shown they do not need less regulation, quite to the contrary, they need more regulation and they should be required to strictly adhere to all existing federal acquisition laws.

If the bailout bill passes with Section 107 intact, it could prompt billions of dollars in abuses and even fraud in a variety of areas. Section 107 is more of the same lax oversight and failure to adhere to federal law that created this financial meltdown in the first place. Section 107 should be removed from the bailout bill immediately.

Petaluma, Calif. – Senator Barack Obama has voted for the latest Senate version of the Wall Street bailout bill despite language that could be used by Bush officials to limit contracting opportunities for minority and woman-owned businesses.

Section 107 of the bill will give Treasury Secretary Henry Paulson the power to waive any provisions of the Federal Acquisition Regulations (FAR) he chooses. Paragraph 9 (b) of the bill specifically mentions the waiver of “any provision of the Federal Acquisition Regulations pertaining to minority contracting” and wavier of provisions pertaining to “woman-owned businesses.”

In summary, the language states that Secretary Paulson may waive existing federal law and provisions of the Federal Acquisition Regulations, establishing specific numerical contracting goals for minority and woman-owned firms and replace it with a completely unenforceable statement of intent to use minority and woman-owned firms “to the maximum extent practicable.”

Critics of the bill question why it was necessary to include language in a bill, designed to rescue failing financial institutions, with language that could exclude minority and woman-owned firms from federal contracting opportunities. Section 107 does not have any time limits. It is possible the waivers could continue indefinitely.   

Replacing federal law establishing specific contracting goals for minority and women-owned firms with a Bush Administration pledge to use those firms “to the maximum extent practicable” has minority and women business owners concerned.

The Bush Administration opposition to federal programs to assist small businesses, minority and woman-owned firms is well documented. In addition to cutting the Small Business Administration’s (SBA) budget and staffing in half, President Bush has refused to implement a seven-year-old federal law establishing a 5 percent set-aside goal for woman-owned firms. (https://www.asbl.com/showmedia.php?id=642) A Bush Administration commission also issued a report that said the federal government should cut back contracting opportunities for minority-owned firms.

As recently as last week, the SBA suspended taking applications for the government's Small Disadvantaged Business contracting program. It was predicted that President Bush would try to dismantle federal programs to assist small business, minority-owned firms and woman-owned firms in the remaining months of his presidency. (https://www.asbl.com/showmedia.php?id=1068)

It is quite possible the unnecessary language in Section 107 was specifically inserted by the Bush Administration to dismantle contracting programs for small businesses, minority-owned and woman-owned firms. A bill that was supposed to bolster the national economy and create jobs may have the opposite effect on firms owned by women and minorities.

Small business advocates are extremely disappointed Senator Obama did not object to Section 107 of the bailout bill.  Considering the Bush Administration's well documented track record of opposing federal programs for women and minorities, it seems unwise to trust them with the power to waive the long standing federal law establishing specific contracting goals for women and minorities and replace it with a vague and unenforceable promise to use women and minority-owned firms “to the maximum extent practicable.”

Petaluma, Calif. - In March of 2005, the Small Business Administration (SBA) Office of Inspector General issued Report 5-15, which 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."

Since the purpose of the "bailout bill" is to bolster our nation's economy, wouldn't it make sense to include a simple and easy provision that would solve a major and longstanding problem within the federal contracting system and redirect up to $100 billion a year in federal small business contracts back into the hands of legitimate and hardworking middle class firms?

The Small Business Act defines a small business as a firm that is "independently owned." Legally, the term independently owned is defined as a firm that is not publicly owned or traded. The addition of a single sentence to the bailout bill could redirect billions of dollars in federal small business contracts back to the very middle class firms the bill is supposed to ultimately rescue. This single sentence would also finally bring an end to years of abuses in federal small business contracting programs.

The sentence should read, "As of January 1st, 2009, the federal government will no longer report awards to publicly traded firms as small business awards."

The addition of this sentence would be a simple and easy solution to the diversion of hundreds of billions of dollars in federal small business contracts to large corporations, and it would provide small businesses and the middle class economy with a much-needed boost.

Since 2003, 15 federal investigations have all found that billions of dollars in federal small business contracts have actually gone to hundreds of the largest corporations in the United States and Europe. In fact, some of the firms federal investigators identified as recipients of federal small business contracts were: Rolls-Royce, Lockheed Martin, Boeing, Raytheon, General Dynamics, Northrop Grumman, Xerox, Dell, John Deere, Microsoft, Titan Industries, British Aerospace Engineering (BAE) and Dutch conglomerate Buhrmann NV.

It is time for this problem to be solved and through the bailout bill a solution could be easily achieved. If government investigators are right, up to $100 billion a year is being pulled out of the middle class economy. It's time for Senator Barack Obama (D - IL), Senator John McCain (R - AZ) and members of Congress to give America's 27 million small businesses more than just lip service.

If Congress really wants to stabilize and bolster our nation's failing economy, let's put $100 billion a year in federal small business contracts back in the hands of the middle class firms where most American's work.

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