On Wednesday, October 21, President Barack Obama announced plans to convene a conference of "regulators, congressional leaders, lenders and small businesses to determine what additional steps we can take to get credit flowing to small businesses that want to expand and create more jobs."
Small business groups like the American Small Business League (ASBL) are concerned the real agenda of the upcoming Obama administration small business conference will be to adopt legislation and policy that will change the definition of a small business and divert federal small business contracts to wealthy venture capitalists.
The Small Business Act requires that a small business be "independently owned." Firms that are owned and controlled by venture capitalists are not considered small businesses in federal small business contracting and grant programs.
The venture capital industry, led by the National Venture Capital Association (NVCA) has spent millions of dollars lobbying members of Congress to change the current definition of a small business to allow even billionaire venture capitalists to participate in federal small business contracting programs.
During his 2003 race for a seat in the U.S. Senate, President Obama developed deep ties within the venture capital industry. Since then, President Obama has received http://maplight.org/map/us/interest/F2500">significant contributions from the NVCA and its members.
Both the House and Senate small business committees have attempted to pass legislation that could destroy millions of legitimate small businesses by diverting billions of dollars in federal small business contracts to wealthy venture capitalists that have contributed millions of dollars to key democratic leaders in Congress.
House Small Business Committee Chair Nydia M. Velázquez (D - NY) introduced H.R. 3567, Small Business Investment Expansion Act of 2007, which would have changed the definition of a small business for all federal programs to include firms owned and controlled by venture capitalists. In a story titled, "Velázquez Champions VC Firms at Small Business Expense," by Keith Girard, AllBusiness.com, Velázquez was accused of "quarterbacking the venture capital industry's efforts."
"I predict that President Obama will try to cheat legitimate small businesses by diverting billions of dollars in federal small business contracts to his wealthy venture capitalist contributors under the guise of 'increasing access to capital for small businesses,' " ASBL President Lloyd Chapman said.
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