Federal Investigation Finds SBA Executives Violating "Laws and Regulations"

Press Release

Federal Investigation Finds SBA Executives Violating "Laws and Regulations"

ASBL Encourages Congress to Hold Hearing on SBA Executives

By Lloyd Chapman
American Small Business League
November 11, 2015

PETALUMA, Calif., Nov. 11, 2015/PRNewswire-USNewswire/ -- A damning investigationby the Government Accountability Office (GAO) has accused the Small BusinessAdministration (SBA) of violating federal law.

The GAO also found the SBA cannot demonstrate with certaintythat its workforce has the skills the agency requires.

The SBA has been widely criticized for years for their role indiverting billions of dollars in federal small business contracts to Fortune500 firms. ABC,CBS, NBC, CNN and RTTV haveall reported on the fraud in federal small business contracting programs.

As early as 2003 the GAO found the SBA had dramatically inflated the actual volume of federal contracts awarded tosmall businesses and falsified the government's compliance with the 23% smallbusiness contracting goal by includingcontracts to over 5,000 large businesses.

In 2005, the SBA Office of Inspector General released Report5-15 that described the diversion of federal small business contracts to largebusinesses as, "One of the most important challenges facing the SmallBusiness Administration (SBA) and the entire federal government today…"

Every SBA Inspector General since 2005 has reiterated thediversion of government small business contracts to corporate giants as thenumber one problem at the SBA in their annual report to Congress.

In 2009, the GAO essentially accused the SBA and federalagencies of encouraging fraud in Report 10-108 that stated, "By failing to hold firmsaccountable, SBA and contracting agencies have sent a message to thecontracting community that there is no punishment or consequences forcommitting fraud."

In 2014, the GAO issued yet another scathing reporton the SBA Office of Advocacy that found they often work with large corporateinterests to block regulations that they find inconvenient to their bottomline. The Center for Progressive Reform even analyzed the report and referredto the SBA Office of Advocacy as a "taxpayer-funded lobby shop" for large businesses.

In May, Public Citizen released an investigative report on theSBA and federal small business contracting programs title, "Slighted." That investigation found the SBA usingaccounting tricks to create the "false impression that small businessesare getting their share of federal procurement money."

The House Small Business Committee adopted an amendment calling for another GAO investigation of the SBA based on theresearch conducted by the American Small Business League (ASBL).

ASBL encourages Congress to hold a hearing on the SBA to findout which executives are responsible for the fraud that has been uncovered atthe agency.

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