Mean Street: The Sham of a Mockery of an Obama Jobs Summit


Mean Street: The Sham of a Mockery of an Obama Jobs Summit

By Evan Newmark
Wall Street Journal
December 2, 2009

What is it about Thursday’s White House “jobs summit” that rubs me the wrong way?

All presidents engage in these sorts of elaborate PR stunts. Why not just dismiss it as another meaningless piece of Washington political theater?

I should. But I can’t. And that’s because this jobs summit seems an unusually pointless and cynical waste of time.

Obamanomics — the White House’s jumble of industrial policy, massive deficit spending and tax hikes — isn’t working.

There are now 15.7 million Americans without jobs. And a big White House conference on jobs is nothing more than a soft distraction from those hard facts.

Now, I’ve never been to a White House summit, so I can’t say exactly what will happen on Thursday. But as a past Davos World Economic Forum participant, I’m pretty familiar with these kinds of VIP schmooze and snoozefests.

And here’s how it will likely play out. A senior White House official — perhaps the president — will give a welcome pep talk to the 130 gathered “summiteers.” He’ll ply them with thanks and stirring patriotic words.

But then he’ll urge them to not waste the day in conference fuzzy talk. Instead, the summiteers should turn words into actions and actions into jobs. After all, it is a “jobs” summit.

And then the summiteers will shuffle off to one of six working groups — where of course they’ll end up wasting the day in conference fuzzy talk.

It’s inevitable. Prepared remarks, banal anecdotes and empty debates are the stuff of these mushy forums. I can count on one hand the number of memorable moments from the dozens of my Davos sessions on technology super-revolutions, entrepreneurial innovation and world peace.

That’s because the VIPs at these things aren’t there to say or do anything unexpected.

Do you think that FedEx CEO Fred Smith and United Steelworkers President Leo Girard will somehow reach agreement that the best way to create jobs is to kill the union-card check?

Do you think that Randi Weingarten, President of the American Federation of Teachers, will suddenly serve up innovative ideas for trade unions to assist small businesses?

It seems unlikely.

And so the jobs summit will fail for the same reason Obamanomics is failing: The White House mistakenly believes economic growth and new jobs are created by society’s stakeholders — business, labor and government — cooperatively working together.

But that’s not the way capitalism works. It doesn’t take a village to create a new job. It takes a businessman trying to make another buck.

Of course, you won’t hear too much of this “greed is good” uber-capitalism stuff at the jobs summit. Not too many of the summiteers would dare. Do you think Comcast CEO Brian Roberts, now in the middle of acquiring NBC Universal, will tell the gathering what he really thinks of government intervention in the economy?

But the White House knows this. And it knows that it really doesn’t matter. This jobs summit isn’t meant to be a “real” jobs summit.

A “real” jobs summit would focus on how American businesses can win globally. A “real” jobs summit would consider why Texas can compete for jobs and California can’t. A “real” jobs summit would look at permanent corporate and payroll tax cuts. And a “real” jobs summit would actually embrace debate, not stifle it.

But in Washington, it’s the form that counts more than the substance. And no doubt, this summit will have plenty of good form. Each of the summit working groups will work their whiteboards and somehow come up with a list of “deliverables” and “next steps.” There will be nice words drafted for White House press releases.

At the end of the day, the President will stand up, thank everyone and close the job summit by declaring it a “success”.

And then everyone will file out of the White House and go back to their regular jobs, having done little to nothing on December 3rd to create any new ones.


Fraud hits disabled veterans


Fraud hits disabled veterans

A government investigation found that fraud and abuse are diverting millions of dollars in contracts intended to go to businesses owned by service-disabled veterans.

By Jim Wyss
November 25, 2009

Millions of dollars worth of government contracts designated for service-disabled veterans are being siphoned off by fraud and abuse, according to a recent government report.

In a case-study of 10 firms, including one Florida company, the Government Accountability Office found ineligible companies had won about $100 million worth of contracts earmarked for service-disabled veteran-owned companies.

The ``program is vulnerable to fraud and abuse, which could result in legitimate service-disabled veterans losing contracts to ineligible firms,'' according to the report, which was presented to Congress last week.

Florida is home to 1,421 service-disabled veteran-owned businesses, according to the government's Central Contractor Registry. And while the government has a mandate to set aside 3 percent of all federal contracts for such firms, it often misses the mark.

During fiscal year 2008 -- the latest data available -- service-disabled small businesses won $3.3 billion worth of federal contracts, or about 1 percent. But the GAO study suggests that even those modest results are overstated.

In one case, the GAO found a full-time Department of Defense contractor, who was disabled and worked at MacDill Air Force Base in Tampa, was passing along a $900,000 contract to manufacture furniture to his wife's company. She, in turn, passed it along to another manufacturer that actually completed the work.

The investigation found that while officials at MacDill were aware of the illegal ``pass through,'' they approved the contract anyway.

In another case, a Las Vegas company won a $7.5 million contract to maintain trailers in the wake of Hurricane Katrina. Even after it was discovered the owners were not service disabled, they continued to receive service-disabled contracts, the investigation found.

``Although ineligible firms have been identified through bid protests, firms found ineligible do not face real consequences, can be allowed to complete the contracts received, and are not suspended or debarred,'' the report found.

Govanny Nancy Flores was in the U.S. Coast Guard for 21 years before retiring with a medical disability. Her Miami company, DD&F Industries, does light construction, security and IT work and has won contracts earmarked for veterans.

``When a project comes out and it is designated as service disabled I say `Thank you God,''' she said. ``But to think that someone is utilizing a title that is not theirs is offensive. That basically takes bread out of my mouth or someone else who is even more disabled than I am.''

Among the problems identified by the report: The government has no process to validate a firm's eligibility for the program. While the Veterans' administration is working on such a database, it is not used by other contracting agencies.

The federal government has a poor track record of controlling government spending. A Miami Herald study of federal small business contracts performed in the state in 2008 found that massive billion-dollar companies, including General Electric and Boeing, had soaked up at least $76 million that were reported as going to small firms.


More Fraud in SBA Managed Small Business Programs

Press Release

More Fraud in SBA Managed Small Business Programs

November 24, 2009

Petaluma, Calif. – In a recent U.S. Government Accountability Office (GAO) investigation into fraud in the Service Disabled Veteran Owned Small Business (SDVOSB) program, investigators stated, "By failing to hold firms accountable, SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud or abusing the intent of the veterans program."  

The report, which was presented to Congress on Thursday, November 19, is just the latest example of ongoing abuses in the government's small business contracting programs, finding at least $100 million in federal contracts fraudulently awarded to ineligible firms.

Since 2002, there have been more than 24 other federal investigations, which have found fraud, abuse, loopholes and a lack of oversight in small business contracting programs under various federal agencies.  

In 2005, Report 5-15 from the Small Business Administration Office of Inspector General (SBA OIG) stated, "One of the most important challenges facing the Small Business Administration 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 2006, The SBA OIG has classified this issue as the #1 management challenge facing the agency.,   

In 2008, the Department of Interior Office of Inspector General (DOI OIG) released a report titled, "Interior Misstated Achievement of Small Business Goals by Including Fortune 500 companies."  In its report, the DOI OIG found the agency awarded small business contracts to Fortune 500 firms like, Home Depot, John Deere, Dell, Sherwin Williams, Starwood Hotels and Waste Management.  

The American Small Business League (ASBL) has estimated that due to these abuses, every year more than $100 billion in federal small business contracts are diverted away from legitimate small businesses and into the hands of Fortune 500 corporations and other clearly large firms around the world. 

In February of 2008, President Obama promised to stop these abuses by stating, "It is time to end the diversion of federal small business contracts to corporate giants."  To date, the Obama Administration has not honored that promise.

"It is ludicrous to think President Obama is trying to help small businesses when he has given them a tenth of a percent of the stimulus funds, and his administration has continued to give billions of dollars a month in federal small business contracts to some of the biggest companies in the world," ASBL President Lloyd Chapman said.


Please click here to watch a short clip about the ASBL's concerns:  

Report: Fraud and abuse in SBA program for disabled vets


Report: Fraud and abuse in SBA program for disabled vets

By Staff
Central Valley Business Times
November 24, 2009

•  Taxpayers cheated of at least $100 Million

•  Few if any consequences

A program designed to help small businesses owned by military veterans where were injured when serving their country is riddled with fraud and abuse, says the Government Accounting Office.
Millions of dollars in federal contracts meant for the small businesses through the Service-Disabled Veteran-Owned Small Business Program have gone instead to foreign companies and other firms that should not have gotten the federal contracts, the GAO says in a new report.
(Download a copy of the report by clicking on the link below.)
In one case, the GAO investigators found $5 million in a contract for construction and janitorial services going to a firm that “utilizes employees from a large non-SDVOSB foreign-based corporation, which reported almost $12 billion in annual revenue in 2008, to perform contracts.”
Cheaters get away with it without fear of consequences, the report suggests.
“Although ineligible firms have been identified through bid protests, firms found ineligible do not face real consequences, can be allowed to complete the contracts received, and are not suspended or debarred,” the GAO report says.
It’s just another example of unchecked fraud, says a critic of the SBA, the American Small Business League of Petaluma.
“Since 2002, there have been more than 24 other federal investigations, which have found fraud, abuse, loopholes and a lack of oversight in small business contracting programs under various federal agencies,” the ASBL says.





American Small Business League: Obama 'short Change'


American Small Business League: Obama 'short Change'

By Resources for Entrepreneurs Staff
November 24, 2009

The American Small Business League has criticized President Obama for not fulfilling his promises to small businesses.

The American Small Business League sharply criticized President Obama for what it said were unfulfilled campaign promises to help small business owners get a fair share of the economic pie.

"A year after being elected, President Barack Obama's small business policies don't seem to match his campaign promises to America's 27 million small businesses," the group said.

The ASBL - founded in 2004 out of a group called the Microcomputer Industry Suppliers Association - lists four main grievances with the Obama administration over campaign pledges, including a promise to fully restore the Small Business Administration's (SBA) budget and staffing.

The group said Obama has not followed through with a pledge he made in February 2008 on the campaign trail to "end the diversion of federal small business contracts to corporate giants," which ASBL said includes billions of dollars in contracts going to Fortune 500 companies.

"American small businesses need more than speeches from President Obama," said ASBL President Lloyd Chapman, who also broke the bad news for small business owners in a recent appearance on CNN with host Lou Dobbs.

Obama has been focused in recent days on small business lending and healthcare reform, but financial experts fear banks are not lending due to federal requirements for government-backed loans.