PETALUMA, Calif., Feb. 12, 2015/PRNewswire-USNewswire/ -- The Small Business Administration (SBA) has finalized a new rule that Congress included in the 2013National Defense Authorization Act titled, "safe harbor from fraudpenalties."  The new rule will allow large businesses thatmisrepresent themselves as small businesses to illegallyreceive federal small business contracts to avoid all prosecution andpenalties by simply claiming they "acted in good faith."

Prior to the implementation of the "safe harbor from fraudpenalties" policy, large businesses that misrepresented their subsidiariesas small businesses to hijack federal small business contracts could facesevere penalties.

Under Section 16(d) of the Small Business Act, any firm thatmisrepresents itself as a small business to receive federal small businesscontracts could face up to 10 years in prison or fines of up to $500,000 per occurrence.

The new "safe harbor from fraud penalties" essentiallyrepeals any penalties for small business contracting fraud.

Every year since 2005, the SBA Office of inspector General hasreported the diversion of federal small business contracts to large businesses asthe number one problem at the SBA.

In 2005, the SBA Inspector General released Report5-15 that stated, "One of the most important challenges facing theSmall Business Administration (SBA) and the entire Federal Government today isthat large businesses are receiving small business procurement awards andagencies are receiving credit for these awards."

President Obama recognized the magnitude of the fraud in federal smallbusiness contracting programs during his first campaign for the White House. In2008, he released the statement, "It is time toend the diversion of federal small business contracts to corporate giants."

The American Small Business League (ASBL) has been the onlynational small business advocacy organization to publiclyoppose the diversion of federal small business contracts to large businessesand the "safe harbor from fraud penalties" policy.

The ASBL launched a national campaign to oppose the "safeharbor from fraud penalties" rule that included a barrage of blogs andpress releases. The ASBL also conducted a survey of 2000 Chambers of Commerceacross the country that found over 97 percent of the respondents opposed the policy.

Because of the overwhelming national opposition to the SBA's"safe harbor from fraud penalties" policy, the SBA's Final Rule haschanged the text from when it was first proposed in June of 2014 to now say "limitationsof liability from fraud penalties."

"The fact that Congress has refused to pass any legislationto stop the rampant fraud that has been uncovered in federal small businessprograms, but instead, adopt legislation to protect fraudulent companies is aprime example of everything that is foul and corrupt in the federalgovernment," stated Chapman.

ASBL Documentary Trailer

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PETALUMA, Calif., Feb. 11, 2015 /PRNewswire/-- President Obama's 2016 Budget Proposal includes the resurrection of a plan President Ronald Reagan attempted to use to permanently close the SmallBusiness Administration (SBA) and end all federal programs designed toassist middle class small businesses.

President Reagan made it clear he wanted to permanentlyclose the Small Business Administration and end all federal programs thathad been established by the Small Business Act to help small businesses. Hisplan to close the SBA was to combine it with the Department of Commerce.

In 2011, Fox News reported on a bill written by North Carolina Senator Richard Burr that would permanently close theSBA and bring and end to all federal programs to assist small businesses. Like Ronald Reagan, combining the SBA with theDepartment of Commerce was Senator Burr's plan to close the SBA.

President Obama's plan to close the SBA is identical to Reaganand Burr's proposal, which is to close the agency by combining it with the Department of Commerce.

Critics of the Obama plan to close the SBA point the fact theSBA is the only federal agency created to help middle class small businesses.SBA supporters point out U.S. Census Bureau data that indicate over 98% of all U.S.firms have less than 100 employees. That data also indicates small businessesare responsible for over 90% of the net new jobs in America, over 50% of theprivate sector work force, over 50% of the Gross Domestic Product and over 90%of all U.S. exporters.

American Small Business League (ASBL) President Lloyd Chapmanfirst predicted President Obama would try and close the SBA by combining itwith the Department of Commerce in November of2008. Since then, Chapman has done national televisionand radiointerviews predicting President Obama would try and close the SBA to cover-upfraud and abuse at the agency that allowed Fortune 500 firms to receivebillions of dollars in federal small business contracts.

ABC, CBS, NBC, CNN, Fox News, CNBC, MSNBC and RTTV haveall produced segments on fraud in federal small business programs.

"President Obama claims he wants to close the SBA tostreamline government. You can't streamline the federal government by closingthe smallest agency in Washington.How about the trillions that are unaccounted for at the Pentagon, maybe heshould start there. The real reason he wants to close the SBA is to obscure therampant fraud that federal investigators and investigative journalist haveuncovered in every SBA program during his administration," said Chapman.

The President's 2016 budget plan now goes to Congress.

The End ofan Era: Obama's plan to close the Small Business Administration VIDEO

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PETALUMA, Calif., Feb. 2, 2015(GLOBE NEWSWIRE) -- The Pentagonhas filedan appeal in a Freedom of Information Act (FOIA) casethey lost to the American Small Business League (ASBL).The 9th Circuit Court of Appeals will now hear the case.

On November23, Federal District Court Judge William Alsup ordered the Pentagon to release a report SikorskyAviation Corporation submitted to the Comprehensive Subcontracting Plan TestProgram to the ASBL by December 3.

"The purpose of the Freedomof Information Act is so the public can see how our government works. Congresspassed this law to make the small businesses have access to some of theseprojects, and here is the United States covering it up,"said Judge Alsup in the hearing.

The ASBL originally requested theSikorsky data to test the Pentagon's refusal to release any data on the CSPTP inover 25 years and prove the program had cheated small businesses out oftrillions of dollars in subcontracts.

The ASBL also hoped to use thedata to convince Congress not to include language inthe 2015 National Defense Authorization Act (NDAA) that would renew the CSPTPinto its twenty-eighth year of testing.

ASBL President and founder LloydChapman has been an outspokencritic of the CSPTP. No Washington based organization claimingto represent the interests of small businesses has ever publicly criticized theprogram since it began over 25 years ago.

"The ComprehensiveSubcontracting Plan Test Program has allowed the Pentagon to cheat Americansmall businesses out of trillions of dollars in subcontracts for over 25 years.The Pentagon knows the release of this data will prove that fact," statedChapman.

The Pentagon adopted the CSPTP in1990 under the pretense of "increasing subcontractingopportunities for small businesses." In reality the programeliminated all transparency on small business subcontracting programs by primecontractors and eliminated all non-compliance penalties such as"liquidated damages." 

In a Dec.30 article in the Washington Post, Pentagon spokeswoman MaureenSchumann confirmed Chapman's criticism that small businesses had been shortchangedby the CSPTP. She stated the program "has led to an erosion of [theagency's] small business industrial base," and while the Pentagon suggeststhat it has resulted in savings for the participating large contractors,"there is no evidence that the CSPTP has benefited small companies."

In September, Prof. CharlesTiefer issued a legal opinion on the CSPTP that confirmed Chapman'sconcerns that the program has harmed small businesses. Prof. Tiefer stated,"The program is a sham andits extension will be seriously harmful to vital opportunities for smallbusiness... There is no doubt in my mind the CSPTP has significantly reducedsubcontracting opportunities for small businesses… Let it expire."
 
Despite overwhelming evidence the CSPTP had significantly reducedsubcontracting opportunities for small businesses, President Obamasigned the 2015 NDAA and renewed the CSPTP into its twenty-eighth year oftesting, until 2017.

To view full press release, click here: http://globenewswire.com/news-release/2015/02/02/701990/10118072/en/Pentagon-Appeals-Sikorsky-Case-to-9th-Circuit-Court-of-Appeals.html