Petaluma, Calif. - President Barack Obama issued a memorandum yesterday to address a variety of problems in federal contracting programs.  One element conspicuously absent from the Obama memorandum is a plan to stop widely reported fraud and abuse in federal small business programs that have resulted in the diversion of hundreds of billions of dollars in federal small business contracts to Fortune 500 corporations and other clearly large firms.

Since 2003, a series of more than 15 federal investigations have found that hundreds of billions of dollars in federal contracts earmarked for small businesses have been diverted to Fortune 500 corporations and other large businesses around the world.

As part of an economic stimulus plan passed by Congress in 1953, the Small Business Act directs that 23 percent of the total value of all prime and sub-contracts shall go to small businesses. In February of 2008, President Obama stated, "It is time to end the diversion of federal small business contracts to corporate giants." 

Since making that statement, President Obama has had six opportunities to address the issue, but in each case he has declined.  He refused to address the issue on his campaign website, in his Small Business Emergency Rescue Plan, on Change.gov, in the stimulus bill, in his fiscal year 2010 budget proposal and now he has refused to address it in his memorandum on government contracting.

The American Small Business League (ASBL) encouraged President Obama to put one sentence in the stimulus bill that would have stopped the problem, and redirected up to $100 billion a year back to the middle class. That one line was, "The federal government and prime contractors can no longer report awards to publicly traded firms as small business awards."

"I think President Obama's refusal to address this issue speaks volumes about his true character.  His refusal to address this issue should outrage every American.  People need to quit listening to President Obama's charismatic and compelling speeches, and start paying more attention to his actions," ASBL President Lloyd Chapman said. "Under President Obama, small businesses are not going to get a dime of the stimulus bill, fraud in existing government economic stimulus programs for small businesses is likely to continue, and now he is going to raise their taxes. It's starting to look like President Obama is anti-small business."

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