A bigger Voice for Small Business

Pelosi Backed Bills Let Billionaire Investors Hijack Small Business Contracts

by | Aug 14, 2008 | Press Release

Press Release

Pelosi Backed Bills Let Billionaire Investors Hijack Small Business Contracts

Pelosi Backed Bills Will Destroy Thousands of Small Businesses Nationwide

August 14, 2008

Petaluma, Calif. – After receiving significant campaign contributions from the National Venture Capital Association (NVCA), and special interests representing the biotechnology industry, Speaker of the House, Nancy Pelosi (D – CA) has ramrodded legislation through the House of Representatives that will allow billionaire venture capitalists to hijack federal small business contracting programs. Thousands of legitimate small businesses across America could be forced to close their doors if the legislation becomes law.
 
Both bills, H.R. 3567 and H.R. 5819 will require the average American small business to compete head-to-head with firms owned and controlled by the nation’s wealthiest investors for even the smallest federal small business contracts.
 
In its original form, H.R. 3567 would have allowed firms that are completely controlled by wealthy investors to be considered small businesses. Despite opposition from the nation’s largest small business organizations and the Small Business Administration (SBA), Speaker Pelosi exerted enough pressure on her colleagues to get the bill passed in record time. The bill was pushed through the House so quickly, that many members of the House complained that they did not have adequate time to even read the bill before they were strong-armed by Pelosi into voting for it.
 
In H.R. 5819, Pelosi went so far as to allow some of the nation’s largest and wealthiest venture capital firms to own up to 98 percent of a company and still be considered a small business. The full senate will be considering its version of the bill, S.3362, when they return from summer recess.
 
“I truly think that it is unfair for firms owned by venture capital companies to be considered small businesses. The inclusion of venture capital firms in government small business programs will leave legitimate small businesses out in the cold when it comes to getting federal work,” said ASBL member Daryl Corley, President and CEO of the Clinton, Maryland based MSDS Consultant Services.
 
In a January 5, 2007 press release, Speaker Pelosi stated, “Honest leadership is not just a partisan goal. It is the key to putting the interests of all Americans ahead of the special interests. It is what the American people sent us here to do, and House Democrats are proud to have taken serious and substantive steps to ensure Congress governs with the highest ethical steps.” Pelosi’s words are a stark contrast to her actions regarding H.R. 3567 and H.R. 5819, which support the interests of Biotechnology Industry Organization (BIO) and the NVCA, as opposed to the interests of America’s nearly 27 million legitimate small businesses.
 
Speaker Pelosi has received significant contributions from several groups, which stand to substantially benefit from venture capital participation in federal small business programs. According to MAPLight.org, from January 2005 to May 2008, Speaker Pelosi received a combined $108,400 from venture capital giant, Kleiner Perkins Caufield & Byers; pharmaceutical giant, Amgen Inc; and lobbyist, Akin Gump Strauss Hauer & Feld LLP.
 
According to Opensecrets.org, in addition to its contributions to House Speaker Pelosi, the NVCA made major contributions to 17 members of the House Committee on Small Business to ensure that its two bills passed that committee. The largest recipient of their generous contributions was Committee Chair, Nydia M. Velázquez.
 
“I think Speaker Pelosi has forgotten that America is a Democracy. You will not find anyone outside the National Venture Capital Association who thinks billionaires and venture capital firms should be allowed to participate in federal programs to assist small businesses,” ASBL President Lloyd Chapman said. “Our government is supposed to represent the will of all the people not just the wealthy people. Speaker Pelosi has clearly gone back on her campaign promises to end corruption in Washington. She is turning our government into a plutocracy and is selling legislation to wealthy investors that will cheat small business in the middle class economy out of hundreds of billions of dollars in federal contracts.”
 
Chapman added, “It is starting to look like small business in America might have been better off with a Republican controlled Congress.”
 
 
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Should VC-backed startups qualify for federal small business benefits?

by | Aug 14, 2008 | ASBL News

News

Should VC-backed startups qualify for federal small business benefits?

By Alain Sherter
theDeal.com
August 14, 2008

A small business advocacy group is calling out U.S. House of Representatives Speaker Nancy Pelosi, D.-Calif., for pushing through legislation that would help companies backed by venture capital to qualify for federal loan guarantees, fee waiver grants and other benefits available under the U.S. Small Business Administration's "innovation research," or SBIR, program. Among other effects, the bills modify the definition of a small enterprise under the Small Business Act, which extends only to companies that are independently owned. In effect, that would allow companies financed by well-heeled VCs to elbow aside genuinely needy small businesses for access to the federal program, the group says, accusing Pelosi of acting on behalf of the many venture investors that operate near her home district in San Francisco.

"After receiving significant campaign contributions from the National Venture Capital Association and special interests representing the biotechnology industry, [Pelosi] has ramrodded legislation through the House of Representatives that will allow billionaire venture capitalists to hijack federal small business contracting programs," says the American Small Business League in a statement today. "Thousands of legitimate small businesses across America could be forced to close their doors if the legislation becomes law."

Pelosi press secretary Drew Hamill characterizes the ASBL's contentions as a "non-story," noting that the two House bills that would amend the Small Business Act to the benefit of venture-funded companies--H.R. 3567 and H.R. 5819--passed the chamber with broad support. "Both these bills went through full committee process and had amendments on the floor, and they both passed the House with significant bipartisan support," he says by e-mail. "Under H.R. 5819, the SBIR program would be opened to venture-backed small businesses, but the grants are awarded competitively."

Indeed, the bills had broad support, passing by margins of 325-72 and 368-43, respectively, with 112 Republican House members voting for H.R. 3567 and 149 Republicans supporting H.R. 5819.

But the issue here is not ideology, but money, namely, the kind that ends up in lawmakers' pockets, says Chris Gunn, director of communications at the ASBL. The National Venture Capital Association, which supports expanding the definition of small businesses to include VC-supported companies, in the 2008 election cycle has made financial contributions to 13 of the members on the House Committee on Small Business, according to the Center for Responsive Politics. One of the largest recipients of the NVCA's largesse: Rep. Nydia Velázquez, D., N.Y., who chairs the panel and who is chief sponsor of H.R. 5819. The venture group also gives money to Rep. Jason Altmire, D.-Pa., who sponsored H.R. 3567 (co-sponsored by Velazquez), and to Sen. John Kerry, D.-Mass., chair of the U.S. Senate Committee on Small Business and Entrepreneurship, which last month passed S. 3362, the companion measure to H.R. 5819.

The American way? No doubt. Under our political system, groups such as the NVCA are perfectly entitled to grease whomever they please, just as our elected officials are entitled to sop up contributions. Technology startups also will argue that they are, in fact, small businesses, regardless of their financial backers. In other words, why should a solar power company with five employees be disqualified for federal contracts available to other small businesses just because it's partly owned by Kleiner Perkins Caufield & Byers?

Because, the ASBL argues, that disadvantages real "mom and pop" businesses that depend on federal support and that have no chance in hell of getting a sit-down with John Doerr. A related question is whether extending federal small business status to VC-backed companies effectively subsidizes venture firms by using government monies to support private R&D.

Of course, such issues appear moot so far as the legislation in question is concerned. The House is on board, and the Senate small business panel passed S. 3362 only one day after it was introduced. Expect the full Senate to approve the bill when lawmakers return from the summer recess. Time will tell if the result is that U.S. small business owners suffer in the name of championing innovation. --

See Aug. 14 press release from the  American Small Business League
See list of NVCA contributions to federal candidates from Opensecrets.org




Source: http://www.thedeal.com/techconfidential/vc-ratings/vc-ratings/a-california-advocacy-group-ca-1.php

McCain Small Business Plan Favors Fortune 500 Firms With Little or No Help for Small Businesses, According to ASBL President Lloyd Chapman

by | Aug 6, 2008 | Press Release

Press Release

McCain Small Business Plan Favors Fortune 500 Firms With Little or No Help for Small Businesses, According to ASBL President Lloyd Chapman

August 6, 2008

Petaluma, Calif. - On Monday, August 4th, the McCain campaign released "John McCain's Plan To Help Small Businesses." Senator McCain's plan is exceptional, that is, as long as your small business is a Fortune 500 corporation.

Senator McCain's small business plan uses a tried and true Bush Administration tactic of attempting to pass off the classic Republican political platform of "big benefits for big business" as a plan to help small business. Factually, the majority of Senator McCain's small business plan is comprised of tax cuts that Fortune 500 firms have been lobbying for, and changes in United States energy policy, for which oil companies have been lobbying. 

According to the U.S. Census Bureau, 98 percent of all firms in the United States have less than 100 employees. Senator McCain's plan contains nothing of substance for these firms. McCain's small business plan is nothing more than smoke and mirrors.

The proof of Senator McCain and President Bush's total lack of concern for America's nearly 27 million small businesses can be uncovered by paying attention to their actions, as opposed to listening to their tired and predictable recitation of empty republican catch phrases on the importance of American small business.

The truth is, while President Bush has been unwavering in his two-faced pandering to the small business community, he has cut the budget and staffing for every single federal program to assist legitimate small businesses, and Senator John McCain has never objected in any way.

Since 2001, the Bush Administration has done everything in its power to close the only federal agency to assist America's small businesses, the Small Business Administration (SBA). In fact, President Bush has virtually starved the SBA to death with the largest budget and staffing cuts of any federal agency. He has even refused to implement a seven-year-old federal law establishing a 5 percent set-aside goal for woman-owned firms and closed the SBA office to assist veteran-owned small businesses. Again McCain said and did nothing. 

Since 2002, more than a dozen federal investigations, including three during the last thirty days, have all found widespread fraud, abuse and manipulation of contracting numbers within federal small business contracting programs.  As recently as July 1, the Department of Interior Inspector General released a report, which found the DOI had intentionally included Fortune 500 corporations in its small business contracting statistics.  Evidence supports the conclusion that these abuses have been designed to divert federal small business contracts to Fortune 500 firms and give the impression that the Bush Administration is hitting its small business procurement goal.

In February of 2005, the 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."

Some of the firms that have received billions of dollars in federal small business contracts during the Bush Administration include: Lockheed Martin, Boeing, Northrop Grumman, Raytheon, Titan, Rolls Royce, John Deere, Xerox, British Aerospace and Engineering (BAE), Dell, GTSI and the multi-billion dollar Dutch conglomerate Buhrmann NV.

In June of 2007, Former SBA Administrator and Bush Administration fundraiser, Steven Preston implemented a federal policy that will allow Fortune 500 firms and hundreds of other large businesses around the world to continue to receive U.S. government small business contracts until the year 2012.

Despite hundreds of stories in mainstream media outlets across the country on the diversion of hundreds of billions of dollars in federal small business contracts to many of the largest companies in the world, Senator McCain has never uttered a single word on the subject.

If Senator McCain wants a real plan to help small businesses, he needs to address the specific challenges facing legitimate small businesses, as opposed to proposing a plan consisting of government giveaways to Fortune 500 firms and calling it a small business plan. 

If Senator McCain sincerely wants to help small businesses, he needs to release a plan that addresses helping the SBA. That agency needs to have its staffing and budget restored so it can fulfill its real mission of administering a wide variety of loan, grant and contracting programs for America's 27 million legitimate small businesses and the 160 million Americans that work in those firms.

Additionally, perhaps Senator McCain should consider a plan to stop the flow of more than $100 billion a year in federal small business contracts to some of the largest corporations in the United States and even Europe. It is my understanding that Senator Barbara Boxer (D - CA) has produced draft legislation, specifically designed to stop the diversion of federal small business contracts to large corporations.  The draft legislation has been tentatively titled, the Small Business Fairness and Transparency in Contracting Act.  I believe it would bring an immediate end to the diversion of federal small business contracts to large businesses. 

Since millions of American small businesses are owned by women, Senator McCain might want to give us his plan to implement the federal law passed more than seven years ago mandating the establishment of a 5 percent set-aside for woman-owned firms.

Minorities own millions of small businesses. Senator McCain may want to come up with a plan to insure minorities receive a fair share of government business.

As a concerned veteran, Senator McCain might want to see if he can't encourage the SBA to reopen, fully staff and fund the office to assist veteran-owned firms.

This year, House Speaker Nancy Pelosi (D - CA) pushed two pieces of legislation (H.R. 3567 and H.R. 5819) through the House of Representatives, which would allow billionaire venture capitalists to participate in federal small business contracting programs. If that legislation were to become law, thousands of legitimate small businesses could be forced to shut their doors. Maybe Senator McCain could come up with a plan to insure billionaire venture capitalists are not allowed within 1000 miles of a federal small business contracting program.
 
I do like Senator McCain's ideas on legislation to prevent speculation from driving up the cost of fuel. If he really wants to help small businesses with the escalating price of fuel, Senator McCain might want to consider supporting some sort of excessive profits legislation for the oil and gas industry. I am not an economist but I think there may be a connection between the highest gas prices in American history and record profits for the oil and gas industry.

Who knows, if Senator McCain can come up with a plan to stop the diversion of more than $100 billion per year in federal small business dollars to Fortune 500 firms, small business might be helped out a little. Maybe if the government would stop pulling $100 billion a year out of the middle class economy where most Americans work and where over 90 percent of all new jobs are created, more Americans might be able to afford decent health care and make their mortgage payments.

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