THE BLOG
08/29/2013 03:19 pm ET Updated Oct 29, 2013

SBA Administrator Leaves Agency with Legacy of Fraud and No Successor

This Friday could be an interesting day at the Small Business Administration (SBA). I'll tell you why I say that. It will be SBA Administrator Karen Mills' last day on the job. She resigned over six months ago and President Obama has not named a successor. That sounds like trouble to me, if you're a small business owner.

I'm also concerned that one of the Pentagon's top public relations heavy hitters and experienced spin masters has quietly taken over the SBA press office. Retired Naval Commander Terrence Sutherland was the worldwide spokesman for the Pentagon. He very quietly took over the SBA press office in April with no official announcement, no press release, not even a blog. That seems strange. He has handled many of the most high profile and sensitive public relations problems at the Pentagon for over 10 years. What's a guy like that doing at the SBA?

The SBA has a documentable track record of releasing embarrassing or fabricated data or any information they want to try and keep out of the media on Friday afternoons. Friday afternoons, just before a holiday weekend, are reserved for the vilest, objectionable and corrupt information from the SBA. Any data the SBA releases on a Friday before a holiday weekend deserves a serious FBI investigation, a Congressional Hearing followed by a criminal trial. Labor Day weekend is coming up. I wonder if some major announcement regarding the future of the SBA will be released this Friday afternoon to try and keep it out of the press.

According to U.S. Census Bureau data, 98 percent of all U.S. firms have less than 100 employees and 89 percent have less than 20 employees. Those 28 million small businesses are responsible for over 90 percent of the 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 U.S. exporters.

It has been widely reported that during the Obama administration billions of dollars in federal small business contracts have been diverted to some of the largest corporate giants around the world. If fact, the SBA Office of Inspector General referred to the rampant fraud at the SBA as, "One of the most important challenges facing the SBA and the entire federal government today." In fact, SBA Inspector General Peg Gustafson, who was appointed by President Obama, has named the widespread fraud in federal small business contracting programs as the number one problem at the SBA.

President Obama even recognized what a significant problem fraud at the SBA was during his first presidential campaign when he released the statement, "It is time to end the diversion of federal small business contracts to corporate giants."

I predicted President Obama would try and close the SBA by combining it with the Department of Commerce in November of 2008. He proved me right in January of 2012 when he announced his plan to do exactly that.

Ronald Reagan tried to close the SBA by combining it with the Department of Commerce. An old trick in D.C. is to close an agency the public doesn't want closed by saying it's being combining with another agency.

What I found really astounding is the president claimed he wanted to close the SBA to save a measly $300 million a year. $300 million to the federal government is like dirty pennies we see lying in the street and don't even consider bending over to pick up. The SBA budget is roughly .001 percent of the Pentagon budget. Did I mention the SBA budget was larger when Ronald Reagan was President 30 years ago than it is today under Obama?

The most recent audit of Pentagon spending by the Government Accountability Office found up to 25 percent of all Pentagon spending couldn't even be accounted for. Former Defense Secretary Donald Rumsfeld discovered over $2.3 trillion in Pentagon spending could not be accounted for. If you were really trying to save money in government, the SBA would be the very last place to consider.

A recent poll found President Obama's approval rating for handling the economy has plummeted to just 35 percent. Another poll found the number one issue for voters is the economy and the number two issue is jobs. Since small businesses are responsible for over 90 percent of net new jobs and over 50 percent of the GDP, closing the only federal agency in government to assist the nation's 28 million small businesses would be economic and political suicide for Obama and the Democrats.

Since it makes no economic sense to close the SBA, if Obama tries to close it, it will be to cover up the fraud and abuse that has been uncovered at the SBA by several federal investigations as well as NBC, CBS, ABC, CNN and the Washington Post.

The Government Accountability Office investigated the SBA and released Report 10-108 that stated, "By failing to hold firms accountable the SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud." Ouch!!!

I hope I'm wrong about this Friday. I guess we'll just have to wait and see. If it turns
Out that I'm right, maybe I can get back on TV.

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