Petaluma, Calif. – Members of the House Committee on Small Business are being accused of selling out America's 26 million small businesses in exchange for contributions from wealthy venture capitalists. During 2008, members of the House Committee on Small Business have been targeted with a slew of campaign contributions from the National Venture Capital Association (NVCA). According to Opensecrets.org, 13 members of the committee have received contributions from NVCA this year alone. Additionally, Rep. Velázquez has been the top committee recipient of funds from NVCA during 2008.

 

This is the second time in less than a year that a proposal has come out of the House Committee on Small Business that will divert billions of dollars in federal contracts earmarked for small business into the hands of the nation's wealthiest venture capitalists.

 

Last week, Nydia M. Velázquez (D - NY) the Chair of the House Committee on Small Business introduced H.R. 5819, the “SBIR/STTR Reauthorization Act.” If H.R 5819 is passed, the bill will create a loophole for venture capitalists, by amending the 55 year-old Small Business Act to eliminate the most basic safeguard in the law requiring that small businesses be "independently owned.” Under Velazquez's bill, a venture capital firm with billions of dollars in managed assets would be allowed to own up to 49.9 percent of a business and still qualify for government programs designed to assist small businesses. 

 

Opponents of the bill believe it would essentially repeal the Small Business Act and cost small businesses in every state billions of dollars in federal contracts.

 

During 2007, the House Committee on Small Business passed H.R. 3567, the "Small Business Investment Expansion Act of 2007." Title V of H.R. 3567 contains a nearly identical loophole to Title II of H.R. 5819. H.R. 3567 fizzled in the Senate after receiving opposition from the American Small Business League (ASBL), the Small Business Administration, the White House, the National Small Business Association and the U.S. Chamber of Commerce.

 

"The American people have had it with a government that is run by special interests that couldn't care less about the average working family. This is the worst example I have ever seen of members of Congress supporting legislation that is detrimental to their constituents in exchange for political contributions. Considering the pattern of the contributions by the National Venture Capital Association, this is clearly a prime example of special interests trying to buy legislation for financial gain," President of the ASBL, Lloyd Chapman said. 

 

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