SAN FRANCISCO, CA, April 19, 2006 /PRNewswire/ -- Lloyd Chapman, President of the American Small Business League has filed his third suit in Federal court today against the Small Business Administration (SBA). The suit was filed under the Freedom of Information Act after the SBA refused to release the name of a government contractor which the SBA's Inspector General had recommended be debarred for intentionally misrepresenting its size as a small business in order to illegally obtain Federal contracts set aside for small firms.

The recommendation was made to SBA Administrator Hector Barreto in June 2005 and was subsequently reported in the Inspector General's semiannual report to Congress. There have now been eleven Federal investigations that have uncovered fraud, abuse, loopholes, and a lack of oversight in small business contracting programs. Several of the investigations reported that billions of dollars in Federal small business contracts were actually awarded to Fortune 1000 firms and their subsidiaries.

Under section 16d of the Small Business Act, falsely claiming to be a small business in order to receive a Federal small business contract is a felony carrying a penalty of up to ten years in prison, a $500,000 fine, and permanent debarment from government contracting.

To date, Administrator Barreto has failed to take action to debar any firm for contracting fraud and only one firms has been fined.

"I am sick and tired of the Federal government turning a blind eye to blatant felony contracting fraud," said Lloyd Chapman, President of the American Small Business League. "The SBA Office of Inspector General would not have recommended that this firm be debarred unless they had conducted an exhaustive investigation and were absolutely sure the firm is guilty. I intend to take every legal option available to expose this firm and see that it is prosecuted to the fullest extent of Federal and civil law.

About the ASBL
The American Small Business League was formed to promote and advocate policies that provide the greatest opportunity for small businesses - the 98% of U.S. companies with less than 100 employees. The ASBL is founded on the principle that small businesses, the backbone of a vital American economy, should receive the fair treatment promised by the Small Business Act of 1953. Representing small businesses in all fields and industries throughout the United States, the ASBL monitors existing policies and proposed policy changes by the Small Business Administration and other federal agencies that affect its members.

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PETALUMA, Calif., April 19, 2006 /PRNewswire/ The comment period for the General Services Administration's recent notice of proposed rulemaking (ANPR) ended Monday,
April 17, 2006. According to a GSA spokesperson, 98% of the 736 comments submitted were from angry small business owners demanding that the GSA adopt policies to end the fraud, abuse, loopholes, and lack of oversight that have been uncovered in eleven Federal investigations. Small business owners were concerned that the GSA may be adopting policies that would allow billions of dollars in small business contracts to be diverted to Fortune 1000 firms. The vast majority of the comments came in from supporters of the American Small Business League.

The response that the GSA received has echoed reaction to other agencies' proposed policy changes in the last 24 months. In 2005, the Small Business Administration proposed changes that would have negatively impacted small businesses, and again, over 95% of comments were against any attempt by the SBA to adopt policies that would divert Federal funds away from small businesses.

Lloyd Chapman, President of the American Small Business League, stated today, "I hope that this will send a message that is loud enough and clear enough that the GSA can hear it. Small business owners are sick and tired of policies that allow prime contractors and Federal agencies to report contracts with large businesses as small business awards. American's small businesses are fed up with this and they are not going to take it any more."

About the ASBL
The American Small Business League was formed to promote and advocate policies that provide the greatest opportunity for small businesses - the 98% of U.S. companies with less than 100 employees. The ASBL is founded on the principle that small businesses, the backbone of a vital American economy, should receive the fair treatment promised by the Small Business Act of 1953. Representing small businesses in all fields and industries throughout the United States, the ASBL monitors existing policies and proposed policy changes by the Small Business Administration and other federal agencies that affect its members.

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PETALUMA, Calif., April 7, 2006 /PRNewswire/ Oklahoma Senator Tom Coburn was infuriated when a press release circulated by the American Small Business League announced that he had called a hearing to "abolish small business programs." The results of the hearing indicate that the ASBL may have been on the mark with their concerns as witnessed by the fact that after the ASBL statement was made public, two pro-small business advocates were added to the roster–Congresswoman Sue Kelly (R-NY) and David Bartram, Chairman of the National Association of Government Guaranteed Lenders–both espousing the benefits of SBA's small business programs.

Another signal that media attention changed the tone of the hearing was the complete absence of testimony from Veronique de Rugy, of the American Enterprise Institute, that Federal small business programs should be eliminated. Ms. de Rugy has been a vocal opponent of the SBA and has repeatedly called for the abolition of programs for small businesses, women, minorities, and disabled veteran-owned firms. Ms. de Rugy's testimony was uncharacteristically demure, almost certainly due to the concern expressed by small business advocates across the country.

While de Rugy tried to convince the Senate panel that less than 5% of American small businesses obtain SBA loans, expert witness David Bartram stated that of the small businesses that actually pursue loans, 40% of these receive loans from the SBA, which effectively refuted de Rugy's claim.

Senator Coburn stated that the purpose of the hearing was to discuss how to make the SBA run more effectively, but during the two hour and fifteen minute hearing, less than five minutes of testimony was directed toward solutions to fix the SBA. The majority of the testimony focused on problems within the agency. Professor Jonathan Bean of Southern Illinois University, stated that the SBA had "outlived its usefulness," and referred to it as a "bureaucratic mosquito."

Virtually none of the testimony addressed the seven Federal investigations that have found billions of dollars in small business contracts have been diverted to large companies. The SBA Office of Inspector General has characterized this as "one of the most important challenges facing the Small Business Administration and the entire Federal government today."

About the ASBL
The American Small Business League was formed to promote and advocate policies that provide the greatest opportunity for small businesses - the 98% of U.S. companies with less than 100 employees. The ASBL is founded on the principle that small businesses, the backbone of a vital American economy, should receive the fair treatment promised by the Small Business Act of 1953. Representing small businesses in all fields and industries throughout the United States, the ASBL monitors existing policies and proposed policy changes by the Small Business Administration and other federal agencies that affect its members.

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PETALUMA, Calif., March 28, 2006 /PRNewswire/ Oklahoma Senator Tom Coburn has called for a Congressional hearing to be held on April 6th to hear testimony from individuals that believe the Federal Government should eliminate programs that assist small businesses, woman-owned firms, minority-owned firms and firms owned by disabled veterans. Government officials have repeatedly denied any plan to close the Small Business Administration and end programs that have directed over $119 billion in Federal contracts and subcontracts to firms designated as small. The Senate hearing indicates that rumors about government plans to close the SBA may be accurate.

Veronique de Rugy, of the American Enterprise Institute, is one of the individuals who has been called to testify. In a recent editorial on Forbes.com, Ms. de Rugy reiterated her recommendation to "abolish the SBA and get rid of subsidies aimed at small business." She further states that the government should not be giving small firms any "special regulatory treatment or preferential access to government contracts." What she fails to acknowledge is that small businesses are where most Americans work and where most U.S. tax revenue is derived.

According to the Oklahoma Department of Commerce, more than 95 percent of all Oklahoma businesses have fewer than 50 employees and more than 45 percent of its workforce is employed by small businesses. Eagle Eye Publishers, a research company that tracks Federal contracting, reports that the top ten small business contractors alone in Oklahoma received more $375 million in awards during fiscal year 2004. If the SBA is closed, Oklahoma entrepreneurs will lose a major source of small business loans and hundreds of millions of dollars in Federal small business contracts and subcontracts.

"I think that small business owners in Oklahoma should be outraged that one of their senators is trying to bring an end to programs that are so vital to the state's economy," stated Lloyd Chapman, President of the American Small Business League. "If the government ends small business contracting programs, then $119 billion in awards currently set aside for small firms will go to large firms which make up only 2% of U.S. employers. Small business owners in Oklahoma need to get on the phone or on the Internet and let their Congressional delegates know that they don't want the government to eliminate Federal programs for small business. Once these programs are gone, we will never get them back."

About the ASBL
The American Small Business League was formed to promote and advocate policies that provide the greatest opportunity for small businesses - the 98% of U.S. companies with less than 100 employees. The ASBL is founded on the principle that small businesses, the backbone of a vital American economy, should receive the fair treatment promised by the Small Business Act of 1953. Representing small businesses in all fields and industries throughout the United States, the ASBL monitors existing policies and proposed policy changes by the Small Business Administration and other federal agencies that affect its members.

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WASHINGTON - The Ranking Democrat on the House Small Business Committee, Congresswoman Nydia M. Velázquez (D-N.Y.), today called for the immediate resignation of Hector Barreto, head of the Small Business Administration (SBA), amid scathing reports of the agency's failure to provide adequate assistance to Gulf Coast entrepreneurs recovering from the recent hurricanes. Three months after Hurricanes Katrina, Rita and Wilma, SBA declined 80 percent of all disaster loans, with a backlog of over 200,000 pending applications. This comes at a time when the agency is struggling under the weight of congressional inquiries, various GAO investigations, and even critical reports from its own Inspector General (IG) for its performance over the past year. Velázquez pointed out that this caps yet another year SBA has failed to deliver America's small business owners with the access to capital, contracting opportunities, and business development they need to be successful.

"For three months now, we have heard the harrowing tales from Gulf Coast business owners, with Mr. Barreto promising assistance in days, not months - but at this point, it is clear the agency has failed to deliver that promise," Congresswoman Velázquez said. "We continue to see low loan approval rates for SBA disaster loans, immense backlogs and high decline rates, coupled with massive business losses in the Gulf Coast region. Rather than take responsibility for these missteps, the administrator remains out of touch with reality claiming 'everything is fine.' Well, clearly, everything is not fine. We need new leadership at SBA with the vision to put this agency back on track and return to its mission of assisting entrepreneurs."

Nearly one month after Hurricane Katrina touched down, not even one loan had been approved for local homeowners and business owners. Now over three months later, out of the 312,000 applicants, only 5 percent have actually received any financial assistance - meaning that Gulf residents and business owners will continue to wait for any form of aid. When compared to the 2004 hurricane season, SBA was able to approve over twice as many loans with nearly a fourth of the staff they currently have. Much of the problem stems from the fact that despite criticism and concern, the agency poorly chose to implement a new loan processing system during the height of hurricane season, failing to give employees ample time to become fully trained and comfortable with the system.

Under intense pressure to speed up the loan approval process, SBA announced the Go Loan program on November 8 - over two months after the hurricanes hit - to allow private banks to underwrite small business loans. However, as of last week, only ten Go Loans had been approved. Instead of taking the steps necessary to fix the loan processing system meant to help businesses affected by disasters, the agency chose to introduce a loan program with high fees and soaring interest rates reaching 13.5 percent - which have deterred most business owners from even utilizing the program. The troubles with the disaster loan processing system, coupled with a misguided, inefficient alternative in the Go Loan program, are only inhibiting the recovery process for thousands of small businesses waiting for financial assistance.

The agency's recent mishandling of the hurricane disaster loans is just the latest in a series of blunders occurring under Hector Barreto's leadership, with the delayed response times only adding to its woes. SBA, an agency with a budget that has been shrinking each year, has been claiming to succeed at doing "more with less" despite the size of their budget. However, just last year, SBA's flagship 7(a) program - responsible for 30 percent of all long term lending - was temporarily shut down after the agency failed to notify Congress that the program needed additional funding to operate. On top of this, the Small Business Investment Companies (SBIC) Participating Securities program - SBA's only venture capital program - is no longer operating due to Mr. Barreto's ill-informed policy recommendations. The agency has been unable to provide any solutions for reopening the program.

SBA's failure to provide entrepreneurs with adequate access to federal procurement opportunities is further evidence of the agency's downfalls. Last year, SBA triumphantly announced the achievement of record small business contracting goals - only to admit three months later that the numbers were incorrect and had to be revised downward due to misrepresentation of contract awards. Inaccurate data is not the sole contracting issue plaguing SBA. For the entity charged as the primary watchdog to ensure small companies are treated fairly in the federal marketplace, the agency allowed other agencies to count contracts provided to large firms as part of their small business achievements for years now. Despite congressional oversight and numerous IG reports, Mr. Barreto has failed to correct these problems, costing small firms $1.4 billion in lost contracting opportunities in FY 2004 alone. On top of this, SBA's own IG issued numerous troubling reports stating the agency has failed to review bundled contracts, properly code contracts, and comply with the requirements outlined in the President's 2002 Small Business Agenda.

There has also been a significant lack of commitment to minority and women-owned firms, despite claims of support for this sector upon Mr. Barreto's takeover of the agency. SBA's 8(a) program, the key business development initiative designed to help minority business owners access the federal marketplace, has been on a downward spiral. In one year alone, 8(a) participants lost a record $2.4 billion in contracting opportunities in FY 2004. This is coupled with the fact that for the past five years, Hector Barreto has refused to implement the women's procurement program, signed into law in 2000 - inaction that has cost women entrepreneurs over $33 billion in contracting opportunities. This has led to the filing of an unprecedented lawsuit by women business owners against Hector Barreto to force him to implement the program.

This mismanagement and disregard for SBA's hardworking employees has resulted in an all-time low for agency satisfaction. In a 2005 ranking of employee morale at 30 federal agencies issued in mid-September by the non-profit Partnership for Public Service, SBA came in last - a drop of 17.4 percent, the largest decrease of any federal agency from the previous year. In a 2004 American Customer Satisfaction Index (ACSI) for the federal government conducted, by the University of Michigan, that took into account courtesy, professionalism, timeliness of service, accessibility, and confidence - SBA scored a mere 67 on a 100-point scale for consumer satisfaction.

Velázquez noted the preponderance of evidence that points to nothing less than an immediate need for new leadership at SBA. "For an agency tasked with the sole purpose of providing assistance to our nation's entrepreneurs, it is inconceivable to think that Mr. Barreto - a former small business owner himself - has simply run SBA straight into the ground," Congresswoman Velázquez said. "I truly fear for small business owners, whether it is those in the Gulf who are hanging on by a thread, or any of this nation's 23 million small firms that are being impacted on a daily basis by SBA's missteps. These inactions have resulted in little, if any assistance actually reaching our entrepreneurs. The bottom line here is that America's small businesses deserve better than the leadership Mr. Barreto has to offer this agency - not just in the Gulf Coast, but across the country."

Congresswoman Velázquez will discuss this issue tomorrow at the 11:30 press conference in the House Radio/TV Gallery for the release of the House Small Business Committee Democrats' End of Year report. Press credentials are required.