PETALUMA, Calif., March 2, 2006 /PRNewswire/ -- Hector Barreto, Administrator of the Small Business Administration, has been widely criticized over the past few months for his poor performance heading the agency. Dubbed "The Disappointment" by Inc. Magazine, complaints against him have ranged from his mishandling of the 9/11 and Gulf hurricane recovery loan programs to his complicity with the Bush Administration in cutting the SBA's staff and budget for six consecutive years. Perhaps most troubling is that in a recent interview with BusinessWeek Online, Barreto continues to deny the existence of fraud and abuse in small business contracting despite seven government investigations and two private studies that show otherwise.

In a recent interview with the Dallas Morning News, Hector Barreto stated, "There has been some criticism that large companies get contracts that were meant for small businesses, and we disagree with that." However, according to SBA's Inspector General last year, "One of the most important challenges facing the Small Business Administration and the entire Federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards." (Report 5-15)

Barreto has stated that large businesses obtain government contracts because they have grown to be large or because they purchased a smaller company. But the SBA's Inspector General stated, "The SBA awarded four of the six high dollar procurements, reported as small business procurements, to large companies at the time of the procurements." (Report 5-14)

Furthermore, an SBA Office of Advocacy report listed "vendor deception" as one of the reasons why small business awards are going to large businesses; while another Inspector General's report found false and improper self-certifications by large businesses to illegally obtain contracts.
(Report 5-16)

Barreto also claims that there would be "serious repercussions" for any large business guilty of misrepresenting its size. But in June 2005, the Inspector General recommended debarment of a major contractor for misrepresenting its size in order to obtain a small business award. To date, the SBA has done nothing to penalize this company. (Office of Inspector General Semiannual Report, September 2005)

"The abuse of government contracting awards demands action," stated Lloyd Chapman, President of the American Small Business League. "Hector Barreto's behavior clearly shows he is not being honest with Congress, the public, or the press. He should be working with government authorities to expose and correct the roots of the problems that allow fraud and abuse. Instead, his vigorous denials fuel the accusation that he is trying to cover it up. The evidence is irrefutable. It's time for the Justice Department to step in and review the SBA's handling of this matter."

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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