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Obama May Support Venture Capitalists' Move to Dominate Government Small Business Programs

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The National Venture Capital Association (NVCA) has blanketed Congress with millions of dollars in campaign contributions, and venture capitalists have set their sights on taking over federal small business contracting programs.

According to MAPLight.org, the venture capital industry contributed more than $1.2 million to President Obama's campaign. The venture capital lobby has focused its campaign to buy political influence on key democratic leaders like Speaker of the House Nancy Pelosi (D - CA) and Senator John Kerry (D - MA).

For several years, the NVCA and its members have been aggressively lobbying Congress to change the longstanding federal definition of a small business as "independently owned" to include firms that are controlled by wealthy venture capitalists and even some of the largest venture capital firms in America. The change would allow well-heeled investors to hijack billions of dollars in federal contracts earmarked for legitimate small businesses.

Several members of the Senate Committee on Small Business and Entrepreneurship received campaign contributions from the NVCA, including Senator Kerry who has received more than $680,000 in contributions from the venture capital industry. Under Kerry's leadership the Senate Committee on Small Business and Entrepreneurship passed S. 3362, which would allow billionaire investors to participate in federal small business contracting programs.

The majority of the members of the House Small Business Committee, including Chairwoman Nydia Velazquez, received contributions from the NVCA and its members. According to Opensecrets.org, 17 members of the House Committee on Small Business received campaign contributions from the NVCA during the 2008 election cycle.

Speaker Pelosi aggressively pushed H.R. 3567 and H.R. 5819 though the House of Representatives. Both bills would divert billions of dollars in federal small business contracts to firms controlled by wealthy investors who were major contributors to her campaign and the Democratic Party.

At a time when American small businesses need the assistance of federal small business contracting programs more than ever, thousands of legitimate small businesses could be forced to close their doors and millions of middle class jobs could be lost if the NVCA is successful.

President Obama's appointment of multi-millionaire venture capitalist and heir to the multi-billion dollar Tootsie Roll fortune, Karen Mills to head the Small Business Administration (SBA), is seen as an indication he will support federal legislation and policies that could kill millions of middle class jobs by diverting billions of dollars in federal small business contracts to some of the nation's wealthiest venture capitalists.

The American Small Business League is concerned the Obama stimulus bill may ultimately include the loophole venture capitalists have been lobbying for.