The American Small Business League (ASBL) has filed suit against the Pentagon after the agency repeatedly refused to release small business subcontracting reports on federal contracts with Hewlett Packard.

The Pentagon claims that the subcontracting report requested by the ASBL can be withheld from the public “because it applies to information on trade secrets and commercial and financial information.”

However, in 1994, the 9^th Circuit Court of Appeals ruled that subcontracting reports are releasable to the public and do not contain trade secrets or proprietary information.

In the ASBL’s complaint for injunctive relief, ASBL attorney Robert Belshaw states that, “ASBL has a right of access to the documents requested pursuant to 5 U.S.C. 552(a)(3), and there is no legal basis for DoD’s denial of such access. Accordingly, the ASBL seeks an order from this court compelling DoD to provide the requested information.”

Over the past decade, the ASBL has won more than 20 similar lawsuits against federal agencies. With each successful lawsuit, the ASBL has compelled the release of contracting and subcontracting reports to prove that prime contractors and federal contracting officials are falsifying federal small business contracting data.

During his 2008 campaign President Obama promised to have the most transparent administration in history; however, what we are seeing is just the opposite. In 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.

“This is just another attempt by the Obama administration to hide the fact that they are lying to the public and misleading Congress about the true percentage of federal contract dollars awarded to small businesses,” ASBL President and founder Lloyd Chapman said. “I am confident that the documents we requested will further prove that corporate giants are receiving billions a month in federal small business contracts— and the fact that we must take the Pentagon to court should be an indication of how damaging the information is.”

The U.S. Department of Labor reported Friday that unemployment jumped to 8.2 percent. Labor’s most inclusive unemployment figure, U-6 unemployment, remained staggeringly high at 14.8 percent, which does not include the 20 percent of the population that is self employed.

Despite the rise in unemployment, the Obama administration continues its policy of diverting federal contracts earmarked for small businesses to some of the largest corporations worldwide. The latest federal procurement datashows that the Obama administration has diverted billions in federal small business contracts to firms such as Lockheed Martin, Apple, Bank of America, Finmeccanica and many others.

According to the U.S. Census Bureau, small businesses are responsible for more than 90 percent of all net new jobs. A study by theKauffman Foundation found that small businesses have created virtually 100 percent of all net new jobs since 1980.

Federal law mandates that a minimum of 23 percent of all federal contract dollars be awarded to small businesses. But since 2003, aseries of federal investigations have found that most of that money is actually awarded to large businesses. In Report 5-15, the Small Business Administration 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.” The SBA IG has named the issue as the agency’s top management challenge for the last seven consecutive years.

In February 2008, President Obama promised to end the problem stating, “It is time to end the diversion of federal small business contracts to corporate giants.” The Obama administration has failed honor that promise, leaving small business advocates wondering what changed his mind.

“If President Obama was serious about cutting unemployment, he would stop giving small business contracts to Fortune 500 firms,” said American Small Business League (ASBL) President Lloyd Chapman. “He needs to back the Fairness and Transparency in Contracting Act, which would once and for all stop the diversion of federal small business contracts to corporate giants. That bill would inject billions into the middle class and create millions of jobs.”

Congresswoman Nydia Velazquez (D-NY) and Congressman Sam Graves (R-MO) have been named by the American Small Business League (ASBL) as the most anti-small business members of the U.S. House of Representatives.

The ASBL points to the fact that Rep. Velazquez and Rep. Graves have worked for years to dismantle federal small business programs and divert billions in federal contract dollars earmarked for small businesses to billionaire venture capitalists and their syndicates. Both representatives have also given tacit approval for the diversion of federal small business contracts to corporate giants by refusing to back legislation that would prevent Fortune 500 companies from hijacking federal small business contracts.

The ASBL estimates that every year tens of billions of dollars worth of federal small business contracts are diverted to firms such as Lockheed Martin, Boeing, BlackWater, Home Depot, John Deere, Apple Inc., Rolls-Royce and Italian defense firm Finmeccanica, which has 75,000 employees and over $30 billion annual revenue.

In 2005, report 5-15 from the Small Business Administration’s Office of Inspector General referred to the diversion of federal small business contracts as “one of the most important challenges facing the Small Business Administration and the entire Federal government today.”

For the last seven consecutive years the SBA Inspector General has named the diversion of federal small business contracts as the agency’s “top management challenge” yet both Rep. Graves and Rep. Velazquez have blocked legislation (H.R. 3184, “The Fairness and Transparency in Contracting Act”) that would prevent corporate giants from hijacking billions of dollars worth of federal contracts reserved for small businesses.

“Let’s look at the facts,” ASBL President Lloyd Chapman said. “America is in the middle of the worst economic downturn in 80 years; we know from the U.S. Census Bureau that small businesses create 90 percent of net new jobs; and that directing federal infrastructure dollars to America’s 28 million small businesses is one of the best ways to stimulate the economy and create jobs – but Reps. Graves and Velazquez are instead trying to dismantle all federal small business programs. These two representatives are prime examples of why Congress has such record low approval.”

On Tuesday Congressman Jason Altmire (D-PA-4), rated the most anti-small business member of Congress by the American Small Business League (ASBL), lost his bid for reelection. Congressman Altmire was defeated by follow Democratic Congressman Mark Critz (D-PA-12).

“I’m pleased to hear that Altmire is going to be out of Congress,” said ASBL President Lloyd Chapman. “We don’t need anti-small business people like him in Congress. I hope his departure serves as a warning to members of Congress who would attempt to pass anti-small business legislation.”

The ASBL began criticizing Congressman Altmire after he introduced a series of policies that would have forced legitimate small businesses to compete head-to-head against big businesses and venture capital syndicates for federal small business contracts, grants and loans.

Chapman blew the whistle on Altmire’s anti-small business policies as early as 2007 and in October 2010 appeared on Fox Business’ Varney & Company to bring national attention to the issue.

During his first year in office, Congressman Altmire introduced H.R. 3567, the Small Business Investment Expansion Act of 2007. H.R 3567 would have drastically changed the definition of a small business. Currently a small business is defined as a firm that is “independently owned.” Congressman Altmire’s bill would have allowed businesses majority owned and controlled by billionaire venture capitalists to be considered small businesses.

Former Ranking Member of the House Small Business Committee, Congressman Steve Chabot (Rep-OH-1), called the bill "eviscerating," and stated that the bill would "drastically change the long-held standard [under the Small Business Act] that a small business is one that is 'independently owned and operated,” according to AllBusiness.com.

During 2009, Congressman Altmire introduced H.R. 2965, the SBIR/STTR Reauthorization Act. This legislation was intended to reauthorize a vital small business program; instead Congressman Altmire inserted language into the bill that would have once again drastically changed the definition of a small business to include billionaire venture capitalists.

“Jason Altmire is the epitome of the type of person who should not be in Congress, said Chapman. “He is a coldblooded lobbyist who was willing to push legislation that would have shut down small businesses across the country.”

The following is an open letter from American Small Business League President Lloyd Chapman to Mr. Robert Thomson, Editor-in-Chief, The Wall Street Journal:

“Should the Small Business Administration Be Abolished?”

I challenge the Wall Street Journal to report that its parent company News Corporation is part of a decade-long scandal that has cost U.S. small businesses hundreds of billions of dollars.

This week the WSJ published the article, “Should the Small Business Administration Be Abolished?”

The article’s headline reinforces what I have said for years: ‘consolidation’ and ‘closure’ of the SBA are synonymous terms. President Obama has never directly admitted that he plans to close the SBA but even the WSJ correctly associates Obama’s consolidation proposal with abolishment.

The WSJ article, however, completely ignored fraud, abuse and loopholes in federal small business contracting programs that allow large businesses to cheat the American middle class out of tens of billions of dollars every year.

The article also neglected the fact that closing the SBA will make it easier for large companies to hijack federal small business contracts.

If the WSJ were really interested in reporting about what’s important for small businesses, the newspaper would think about the actual consequences of the SBA’s closure:

The U.S. government is the world’s largest buyer of goods and services, spending over $500 billion annually, and by law must award at least 23 percent of that total to small businesses. Small businesses, according to the federal government, create 90 percent of net new jobs, employ half the private sector workforce and account for half of GDP.

Yet since 2003, a series of over a dozen federal investigations have discovered hundreds of billions of dollars worth of federal small business contracts that were diverted to some of the largest companies in the world.

Companies that received federal small business contracts in FY 2011 include: Apple, GE, Bank of America, General Dynamics, Wells-Fargo, Verizon, Comcast, Lockheed Martin, the New York Times Company and Chevron.

In January 2012, a News Corporation company also received federal contracts that were coded as going to “small business.”

So I lay this on your doorstep. Is the WSJ willing to investigate contracts News Corporation received from the government under the label “small business”?

Sincerely,
Lloyd Chapman
President and founder, American Small Business League