iOS app Android app More

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors
Lloyd Chapman

GET UPDATES FROM Lloyd Chapman
 

Obama's Closing the Small Business Administration, Why Is the Media Helping?

Posted: 10/07/2013 9:00 am

Not one journalist has ever mentioned that President Obama's plan to combine the Small Business Administration (SBA) with the Department of Commerce was the exact plan that Ronald Reagan proposed to close it.

Here is the truth that you will never hear or see in any story in the mainstream media about why President Obama wants to close the SBA.

President Obama will close the SBA to cover up the rampant fraud that has been uncovered at the SBA during his administration. He will close the SBA because that is what the corporate giants that he and most of the other politicians in Washington work for want. Fortune 500 firms own our government, they are the major funders of all political campaigns for national office, they fund the army of lobbyists that infest our nation's capital and pervert our nation's laws and policies to increase their profits and lower their taxes.

Federal law mandates that a minimum of 23 percent of all federal contracts go to small businesses and that all government prime contractors must award 23 percent of their subcontracts to small businesses. A long series of federal investigations have found that, in reality, most federal small business contracts have been fraudulently awarded to corporate giants. Information obtained by the Freedom of Information Act that spans over a decade clearly indicates that the nation's largest prime contractors have fraudulently falsified compliance with their 23 percent small business contracting goals.

In the last few months, I have put out dozens of press releases and blogs sounding the alarm that President Obama was going to close the SBA by combining it with the Department of Commerce. I predicted he would do that in November of 2008. I reiterated that prediction in several national television appearances.

In January of 2012, he proved me right and announced his plan to do exactly that.

Not one journalist in America ever contacted me and asked me how I knew he would do that more than three years before he announced it.

When Ronald Reagan tried, very aggressively, to close the SBA and end all federal programs to help small businesses, his plan to close the SBA was to combine it with the Department of Commerce.

Data from the U.S. Census Bureau tells us that America's 28 million small businesses are responsible for over 90 percent of net new jobs in America, over 50 percent of the private sector work force, over 50 percent of the GDP and over 90 percent of all U.S. exporters. Small businesses are the undeniable, irrefutable engine of economic growth and job creation in America.

Now President Obama is proposing to close the one and only measly little federal agency in our whole government to help the American small businesses that create the overwhelming majority of all new jobs.

This fact has gone totally and completely unreported in the mainstream media. Why?

Let's look at the real reason President Obama wants to permanently close the SBA by combining it with the Department of Commerce or as he and the media prefer to call it, "streamlining government" or "combining agencies."

In case you don't know, the Department of Commerce is the complete opposite of the SBA. That agency represents the interests of the largest corporate giants in America. Combining the SBA and the Department of Commerce would be like combining the KKK and the NAACP.

Every SBA Inspector General for over NINE YEARS has named the diversion of federal small business contracts to corporate giants as the most rampant problem at the SBA. The SBA's own data shows last year 235 Fortune 500 firms received billions of dollars in federal small business contracts. The rampant fraud in federal small business contracting programs has been reported in dozens of major media investigations.

Even President Obama acknowledged the magnitude of the problem in February of 2008, when he released the statement, "It is time to end the diversion of federal small business contracts to corporate giants."

The corporate giants that are represented by the Department of Commerce are the very firms that have been lobbying to close the SBA since Reagan was President. Does anyone actually believe that a great solution to ending the diversion of federal small business contracts to Fortune 500 firms is to combine the SBA with the federal agency that represents the very corporate giants that 100 percent of the federal investigations have found have been hijacking federal small business contracts for a decade?

Under section 16 (d) of the Small Business Act, misrepresenting a firm's status as a small business is punishable by up to 10 years in prison, a $500,000 fine per occurrence or both. Federal law titled, "Liquidated Damages" requires that any prime contractor that fails to make a good faith effort to reach their small business goals shall pay a penalty in the amount of the deficiency.

It has been well documented that Fortune 500 firms have been the actual recipients of most federal small business contracts for over a decade and that most federal prime contractors have falsified their compliance with their congressionally-mandated small business contracting goals. Corrupt Pentagon created loopholes like the Comprehensive Subcontracting Test Program have allowed the nation's largest prime contractors to cheat small businesses out of hundreds of billions of dollars for over 20 years.

Now that all the rampant fraud in SBA-managed programs has been exposed, one of two things will happen. Either the rampant and well-documented fraud and abuse in federal small business contracting programs will need to be investigated and the guilty parties will be prosecuted and face prison terms and billions of dollars in penalties or the SBA can be permanently closed as Ronald Reagan proposed by combing it with the Department of Commerce. If that happens, all the problems for the corporate giants in the Defense and Aerospace Industry will disappear. No prison time and no billions in fines. President Obama has obviously chosen the latter and he will try and pass it off as "streamlining government" to minimize the violent public outcry if he told the truth that he is actually permanently CLOSING THE SBA.

These are the irrefutable facts about the real reason President Obama is closing the SBA. It is doubtful you will ever see or hear these truths from even a single member of the corporate-owned mainstream media.

You will also never hear these truths from any of the sham organizations that claim to represent the interests of American small businesses.

Luckily for American small businesses there is one honest organization they can count on for the truth about what is really happening in government, the American Small Business League.

 

Follow Lloyd Chapman on Twitter: www.twitter.com/LloydChapman

FOLLOW SMALL BUSINESS