Petaluma, Calif. – President-elect Barack Obama has dropped a campaign promise to end Bush Administration policies that have allowed Fortune 500 firms to receive federal small business contracts.

In February, President-elect Obama released the following statement, “Over half of all Americans work for a small business. Small businesses are the backbone of our nation's economy and we must protect this great resource. 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)

Just two days after the election, the Obama-Biden Transition Team launched its transition website, Change.gov. Any mention of President-elect Obama's campaign promise to stop Fortune 500 firms from hijacking government small business contracts had vanished without explanation. (https://www.asbl.com/documents/Economy_Change.pdf)

Since 2003, more than a dozen federal investigations have found widespread fraud and abuse in virtually every federal small business contracting program under the Bush Administration. (https://www.asbl.com/documentlibrary.html) Several investigations found Fortune 500 firms and thousands of other large businesses had received billions of dollars in federal small business contracts. Two separate investigations found large businesses had received federal small business contracts illegally through "vendor deception" and "false certifications". (http://www.sba.gov/IG/05-16.pdf)

In July, the Department of the Interior Office of Inspector General found the agency had awarded millions of dollars in federal small business contracts to Fortune 500 firms such as Xerox, John Deere, Sherwin Williams, Dell, World Wide Technology, Home Depot, McGraw-Hill, Ricoh, Starwood Hotels and Weyerhaeuser. (http://www.doioig.gov/upload/2008-G-0024.pdf)

In October, the Washington Post released an independent study which found approximately 40 percent of all federal prime small business contracts had actually gone to Fortune 500 firms. Based on the sample used by the Washington Post, as much as 80 percent of government small business contracts could be going to Fortune 500 firms and thousands of other large businesses. (https://www.asbl.com/showmedia.php?id=1179)

The diversion of billions of dollars in government small business contracts to Fortune 500 firms has been reported by most of the nation’s largest newspapers, over two hundred radio stations and by ABC, CBS and CNN. (ABC, https://www.asbl.com/abc_evening_news.wmv; CBS, https://www.asbl.com/cbs.wmv; CNN, https://www.asbl.com/showmedia.php?id=1170)   

Considering the current state of the U.S. economy, Obama's decision to drop his campaign promise to rescue millions of middle class firms and end the diversion of federal small business contracts to "corporate giants" is seen by small business owners and advocates as a clear indication that the Obama Administration will not be pro-American small business.

The American Small Business League (ASBL) predicts that President-elect Obama will enact legislation and policies that will hurt American small businesses and even create more loopholes that will allow some of the nation’s wealthiest investors to take federal contracts earmarked for legitimate small businesses.

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Barack Obama may already be losing credibility over his explanation as to why he dropped the windfall profits tax on the oil and gas industry from his administration's agenda.  During his campaign, President-elect Obama promised to enact a windfall profits tax on the oil and gas industry, which would help finance a $1,000 emergency energy rebate for American families.

During the campaign, Obama repeated his commitment to enacting a windfall profits tax on the oil and gas industry hundreds of times. The Obama camp ran national television advertisements touting the windfall profits tax, and used the issue in campaign speeches right up to the election. (http://www.youtube.com/watch?v=QJPo5IGTd0A) 

Now, any mention of the windfall profits tax has been quietly removed from the Obama-Biden transition website, www.change.gov, and an anonymous "transition team aide" acknowledged that the windfall profits tax had been dropped.

The Obama camp's explanation as to why the windfall profits tax has been dropped is inconsistent with the facts and the actual series of events.

The main excuse the Obama camp offered was that the price of oil had dropped below $80 per barrel, and as a result there was no need for a windfall profits tax. (http://www.businessweek.com) There are several problems with their excuse.

According to OPEC, the price of oil dropped below $80 per barrel in early October, yet Obama continued to campaign on the promise of a windfall profits tax.

The windfall profits tax was the number one issue under "economy" on Obama's transition site, www.change.gov, when it was launched on November 6th and the price of oil was $54.89. It was removed without explanation on November 8th. The price of oil remained relatively stable during that three-day time frame and any miniscule change would not justify the sudden and unexplained elimination of one of Obama's cornerstone campaign promises.

The oil and gas industry has been making excessive profits for several years, even when the price of a barrel of oil was dramatically less than it is now. At the present moment gas prices have decreased, but with no windfall profits tax in place the oil companies are free to arbitrarily increase the price of gas at any point in time.

In 2003, when the average price of a barrel of oil was $30.06, big oil companies reaped record profits. (http://www.eia.doe.gov/emeu/international/crude2.html) According to an Associated Press (AP) article dated January 29, 2004, Exxon-Mobil earned $21.51 billion in profits during fiscal year (FY) 2003.  At the time, the mark nearly doubled the company's profit during FY 2002.  (http://www.washingtonpost.com/wp-dyn/articles/A60862-2004Jan29_2.html)

"It is difficult to believe President-elect Obama's explanation for dropping one of his most significant campaign promises when you look at the facts," American Small Business League President Lloyd Chapman said.