THE BLOG
09/25/2013 08:19 am ET Updated Nov 25, 2013

SBA Fraud and Potential Closure Reveal True Small Business Advocates

The Small Business Administration (SBA) is the only government agency to assist the nation's 28 million small businesses. President Obama is proposing to close it. Now, who is objecting to that plan?

Without question, the oldest, largest, most efficient and effective federal program to stimulate the middle class economy is the Small Business Act. The law mandates a minimum of 23 percent of all federal contracts and subcontracts be awarded to small businesses, including woman-owned firms, minority-owned firms and disabled veteran-owned firms.

According to U.S. Census Bureau data, 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 all U.S. exporters. There is no better way to reinvest existing federal infrastructure spending than to invest those funds back into the 28 million small businesses where most Americans work.

The vast majority of the funds allocated under TARP and the American Reinvestment and Recovery Act went to a fairly small number of financial institutions. Those funds were supposed to trickle down to the middle class and create jobs. The actual success of those two economic programs is debatable.

The Small Business Act directs over $100 billion a year in existing federal infrastructure spending directly into the middle class. Unfortunately, since 2002 a series of federal investigations and investigative reports by the mainstream media have found widespread fraud in federal programs designed to help small businesses.

In Report 5-15 from 2005, the SBA Inspector General described the diversion of federal small business contracts to corporate giants as, "One of the most important challenges facing the SBA and the entire federal government today."

In 2008, President Obama stated, "It is time to end the diversion of federal small business contracts to corporate giants."

The latest data from the Federal Procurement Data System shows President Obama has not kept that campaign promise and that in the past two years at least 235 Fortune 500 firms received federal small business contracts.

Every year of the Obama administration, the SBA Inspector General, Peg Gustafson, who was appointed by President Obama, has named the diversion of federal small business contracts to corporate giants as the number one challenge at the SBA.

Every SBA Inspector General for nine years has agreed this is the most rampant problem at the SBA.

How have the largest organizations in America, the ones that claim to represent the best interests of small businesses, responded to the verified fraud and abuse against American small businesses?

I challenge anyone in America to produce one TV appearance, one press release, one radio show, one magazine article or one anything from national organizations that claim to represent small businesses objecting to the diversion of federal small business contracts to corporate giants. You also won't find a word from groups like the National Federation of Independent Business (NFIB), the US Chamber of Commerce or the National Small Business Association objecting to plans to essentially close the SBA.

The SBA manages the two largest federal programs to help the 28 million small businesses where most Americans work. The SBA lending program was responsible for over $100 billion in loans. The SBA is also responsible for the federal program that mandates a minimum of 23 percent of all federal contracts be awarded to small businesses.

Only one national small business organization in the country has stepped up to challenge the rampant fraud and abuse against American small businesses, the exclusion of small businesses in economic stimulus programs, cuts in the SBA budget and now the possible closure of the SBA, the American Small Business League (ASBL).

The ASBL is the only national small business advocacy organization that has written legislation and had it introduced to Congress to end the fraud in federal small business contracting programs.

The ASBL has won over two dozen lawsuits against the federal government to expose fraud in federal small business programs. I have done over three dozen national television appearances and over 100 radio shows advocating for small businesses. The ASBL has released hundreds of press releases trying to bring media attention to the government policies that have hurt small businesses.

I say the ASBL has done more to end fraud and abuse in the largest federal programs to assist America's 28 million small businesses than all other supposed national small business advocacy organization combined.

In 2005, Entrepreneur magazine did a story on me that began with the sentence, "Depending on whom you talk to, Texas born small business advocate Lloyd Chapman is either a modern day Cesar Chavez or a conspiracy theorist with a grudge."

After dozens of federal investigations and investigative stories in the media that backup every word I have ever said about fraud in federal small business programs, I think the "conspiracy theorist with a grudge" has been put to rest.

Anyone that wants to prove me wrong simply needs to show me the national television appearances, the legal victories, the radio shows, the legislation, the press releases and the blogs on any other national organization objecting to rampant fraud in the largest federal programs to help small businesses and now the possible closure of the SBA.

It's put up or shut up time.

For the latest video from the ASBL, click here.

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