Petaluma, Calif. – At a press conference Wednesday, Federal Reserve Chairman Ben Benanke raised concerns that the high unemployment rate will likely persist in the face of slow job growth. To date, the economic policies of the Federal Reserve, and the Obama Administration have largely ignored the fact that small businesses create over 90 percent of all net new jobs.

“At 8.8 percent, the current unemployment rate is elevated… and progress towards more normal levels of unemployment seems likely to be slow,” Chairman Bernanke said.  (http://www.guardian.co.uk/business/richard-adams-blog/2011/apr/27/ben-bernanke-press-conference-live) 

According to the latest figures from the U.S. Census Bureau, small businesses are responsible for over half of the private sector workforce, 50 percent of the gross domestic product (GDP), 90 percent of exports and innovations, and 90 percent of net new jobs.  Ninety-eight percent of all U.S. firms have less than 100 employees.

Over the past several years, small businesses have received less than 5 percent of all money spent through various federal programs intended to stimulate economic growth. (http://money.cnn.com/news/storysupplement/economy/bailouttracker/) The economic recovery policies issued by the Federal Reserve and the Obama Administration have ignored U.S. Census Bureau statistics, and remained tightly focused on assistance for large firms. Large businesses have not created one net new job since 1977.

Small business groups like the American Small Business League (ASBL) support ending fraud and abuse in federal small business contracting programs as a means of directing federal infrastructure spending into the hands of small businesses, and creating jobs. Last year, Senator Mary Landrieu (D-LA) estimated that increasing contracts to small business by 1 percent would create more than 100,000 new jobs. The ASBL has estimated that addressing the diversion of small business contracts to large companies would raise the percentage of federal contracts awarded to small businesses by a staggering 18 percent, creating approximately 1.8 million jobs.

(http://sbc.senate.gov/public/index.cfm?a=Files.Serve&File_id=bc065833-dafc-46c5-9e6f-21209a532de2)

Since 2003, a series of federal investigations have uncovered billions of dollars a year in federal small business contracts actually flowing into the hands of Fortune 500 corporations and other clearly large businesses. In Report 5-15, the SBA Office of Inspector General (SBA IG) referred to the issue as, “One of the most important challenges facing the Small Business Administration and the entire Federal government today.” (https://www.asbl.com/documents/05-15.pdf) President Obama recognized the importance of the situation when he stated, “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)  

“I think it’s shocking that Chairman Bernanke, President Obama, and Treasury Secretary Geithner have all missed the boat on focusing stimulus efforts on our nation’s chief job creators, its small businesses,” ASBL President Lloyd Chapman said.

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Petaluma, Calif. – On Wednesday, April 13, the American Small Business League (ASBL) filed suit against the U.S. Department of Housing and Urban Development (HUD) after the agency refused to release subcontracting reports on a contract awarded to Fortune 500 defense giant Lockheed Martin. The ASBL filed suit in United States District Court, Northern District of California. (https://www.asbl.com/documents/complaint_lockheedmartin_sub_report.pdf)   

The case was filed after HUD repeatedly refused to respond to a Freedom of Information Act (FOIA) request for documents related to Lockheed Martin’s compliance with small business subcontracting goals.

The ASBL believes the information contained in Lockheed’s subcontracting reports may show that the contractor is not complying with its small business goals.  Additionally, the ASBL is concerned the reports may indicate that Lockheed and HUD cooperated in an effort to circumvent federal law, which requires 23 percent of all federal contracts to be awarded to small businesses.

The ASBL’s most recent lawsuit against HUD is yet another legal action originating from ASBL efforts to gather information on the subcontracting practices of a series of major government prime contractors, which may lead to litigation filed under the False Claims Act, and Section 16(d) of the Small Business Act.  The ASBL’s suit against HUD is the 14th lawsuit filed by the ASBL against the Obama Administration in pursuit of publicly releasable documents regarding government contracting programs. In 1994, the 9th Circuit Court of Appeals ruled that subcontracting reports are releasable to the public, and do not contain trade secret or proprietary information.

Despite continually promising the most transparent administration in history, the Obama Administration has actually been amongst the least transparent. In early 2010, the Associated Press conducted a review of FOIA reports filed by 17 major agencies, and found across the board increases in the number of rejections. While the federal government as a whole received fewer FOIA requests during the first year of the Obama Administration, agencies increasingly said “no” to requesters looking for public documents. (http://www.breitbart.com/article.php?id=D9EFRPJG0)  

“I can’t blame them for trying to withhold this information because it shows that the Obama Administration is failing to address widespread abuse in small business contracting programs.  Every day corporate giants are circumventing their small business subcontracting goals, and every day more than $800 million in small business contracts are diverted to corporate giants,” ASBL President Lloyd Chapman said. “That is why we have to go to federal court for every piece of paper regarding small business contracting programs.  They are treating this stuff like it’s top secret.”

Petaluma, Calif. – Today President Barack Obama rolled out his blueprint for deficit reduction, during which he highlighted a plan to implement higher taxes on “the wealthy.”  The American Small Business League (ASBL) is concerned that President Obama’s reference to the wealthy, meaning wage earners over $250,000 a year, is actually a reference to a large percentage of America’s 27 million small businesses.

According to the U.S. Census Bureau, small businesses are responsible for over half of the private sector workforce, 50 percent the gross domestic product, 90 percent of exports and innovations, and 90 percent of net new jobs.  98 percent of all U.S. firms have less than 100 employees.  Small businesses drive America’s job creation, and growth.  Despite the clear negative implications of increasing taxes on the nation’s chief job creators, under President Obama’s new plan, small businesses will pay higher federal taxes.

“The Obama Administration gave less than three percent of stimulus funds to the small businesses that create over 90 percent of net new jobs, and now he is going to raise their taxes.  That does not sound like much of a recovery plan to me,” ASBL President Lloyd Chapman said.

In addition to the serious economic implications of increasing the tax burden of America’s chief job creators, President Obama’s plan also fails to address billions of dollars in fraud and abuse in federal small business contracting programs.

Since 2003, a series of federal investigations have found Fortune 500 firms and other corporate giants are the actual recipients of most federal small business contracts. In February of 2008, President Barack Obama promised to end the abuse. Despite, thousands of business closures and countless lost jobs, the Obama Administration has failed to honor its promise, and end the diversion of federal small business contracts to corporate giants. (https://www.asbl.com/documentlibrary.html, https://www.asbl.com/documents/20081007_Obama_Promise_Website.pdf)  

The most recent information released by the Obama Administration shows large recipients of small business contracts such as Boeing, Lockheed Martin, Northrop Grumman, Raytheon, Dell Computer, Xerox, SAIC, General Dynamics, Bechtel and John Deere.  Moreover, federal data indicates that corporate giants may be receiving as much as $200 billion a year in federal small business contracts. (www.asbl.com/documents/ASBL_2009_dataanalysis.pdf)

“It is infuriating to listen to President Obama talk about shared prosperity and responsibility when you realize that every business hour of his administration has meant the continued diversion of up to $100 million in small business contracts to corporate giants,” Chapman said. “Small businesses need to be this administration’s priority.”

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