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SBA Struggles To Cover Up Rampant Fraud Against Mounting Evidence

3:56 pm in Uncategorized by Lloyd Chapman

The Small Business Administration (SBA) is starting to run out of believable excuses to explain why every year since 2000, billions of dollars in federal small business contracts have wound up in the hands of some of the largest corporate giants in the world.

The SBA has consistently claimed for over fifteen years that the diversion of billions of dollars in federal small business contracts to corporate giants is the result of random errors, computer glitches, miscoding, simple human error and anomalies.

What the SBA has never been able to explain is why all the alleged random mistakes do not have a random pattern of distribution, but in fact always divert federal small business contracts to large businesses and inflate the volume of federal contracts that are reported as going to legitimate small businesses.

On Thursday, September 10, new SBA Administrator Maria Contreras-Sweet struggled to explain why the SBA is still including billions of dollars in federal contracts to Fortune 500 firms in their small business contracting statistics.

New York Representative, and ranking member on the House Small Business Committee, Nydia Velasquez chastised Administrator Contreras-Sweet about firms like Raytheon, Northrop Grumman and Chevron receiving small business contracts. Representative Velasquez threatened Administrator Sweet with another GAO investigation of the agency. A 2003 GAO investigation of the SBA uncovered over 5000 large businesses were receiving federal small business contracts.

The latest data from the Federal Procurement Data System indicates of the top 100 companies receiving the highest dollar amount in federal small business contracts, 79 were actually large businesses.

The SBA Office of Inspector General has named the diversion of federal small business contracts to corporate giants as the number one problem at the SBA for a decade.

Fox News, CNBC, MSNBC, NBC, ABC, CBS and CNN have all covered the diversion of federal small business contracts to Fortune 500 firms and thousands of large businesses.

A recent legal opinion by Professor Charles Tiefer, one of the nation’s leading experts on federal contracting law, found no legal justification for the SBA’s inclusion of federal small business contracts to large businesses in their small business contracting data. He also found that the actual total federal acquisition budget is closer to $1.1 trillion versus the much smaller $355 billion used by the SBA.

As opposed to adopting any legislation or policies to halt the rampant fraud and abuse, the SBA has done just the opposite. On August 25, the SBA concluded taking public comment on a new policy that would likely encourage more federal contracting fraud and divert even more federal small business contracts to large businesses.

The SBA’s new “safe harbor from fraud penalties” policy received an overwhelming thumbs down from the public.

Under current federal law, a firm that misrepresents itself as a small business to illegally receive federal small business contracts can face up to ten years in prison, a fine of up to $500,000, or both.

Under the proposed SBA “safe harbor from fraud” policy, a large business that is caught committing felony federal contracting fraud can avoid any penalties by simply claiming they “acted in good faith.”

The fact that the SBA has proposed a new policy that could encourage fraud is startling, considering an investigation by the GAO essentially accused the SBA of encouraging fraud. GAO Report 10-108 stated, “By failing to hold firms accountable, SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud.”

A recent investigation of the SBA Office of Advocacy by the Government Accountability Office also found significant problems. The head of that office resigned shortly after the results of the GAO investigations were released.

The American Small Business League has launched a national campaign to encourage the GAO and the FBI to conduct an investigation of SBA executives to determine who is responsible for the continuing fraud in SBA managed programs.

One Call To SBA’s Terry Sutherland Could Lead To A Pulitzer Prize

3:09 pm in Uncategorized by Lloyd Chapman

Portrait of Terry Sutherland

Journalists: Call Terry Sutherland for a chance to win valuable prizes.

You think stories about the Small Business Administration (SBA) are beneath you and trivial. Would a story about over a trillion dollars in federal contracting fraud that involves every federal agency and the Pentagon’s largest prime contractors interest you? I suggest you take five minutes and make one phone call and see what happens.

Call Terry Sutherland at the Small Business Administration Press Office and ask him if the SBA is including any Fortune 500 firms or their subsidiaries in the SBA’s latest small business contracting statistics. See what happens.

See if you can just call Terry Sutherland up and get him to answer questions on why the SBA has included billions of dollars in federal contracts to Fortune 500 firms in their small business contracting data every year since 2000.

See if you can just give him a call and talk with him without having to make an appointment with him and several people all at once on a conference call. (They love those conference calls) Tell him you just want to talk to him one on one. See what happens.

If I’m just a conspiracy nut like the SBA has been telling journalist for over a decade there shouldn’t be any problem getting Terry Sutherland to answer extemporaneous questions on why Fortune 500 firms have been receiving billions of dollars in federal small business contracts for 15 years.

Listen to him tell you it’s the result of miscoding, anomalies, computer glitches and simple human error. Then ask him why these random errors always divert federal business contracts to Fortune 500 firms and other large businesses and never the other way around.

Random, unintentional errors would have a random pattern of distribution like flipping a coin. Heads or tails or in the case of federal contracting, big or small. Ask him to explain why for every billion dollars in federal contracts to a large business that was miscoded as a small business contract there isn’t a billion dollars in contracts to small businesses that have been miscoded as large business contracts.

Ask him why according to the latest data from the Federal Procurement Data System, 175 Fortune 500 firms received small businesses contracts in FY 2013.

When he tells you it’s the result of big companies purchasing small ones, remind him under federal law that as soon as a big business buys a small one that firms is legally no longer a small business.

Ask Terry Sutherland if he will release all his phone records and emails. See what happens. Ask Terry Sutherland why the SBA Office of Inspector General has named the diversion of federal small business contracts to large businesses as the number one problem at the SBA every year since 2005 and yet the SBA has never even proposed any policies to stop it.

Ask Terry Sutherland why the SBA is now taking public comment on a new SBA policy that will create a “safe harbor from fraud penalties” for large businesses that have misrepresented themselves as small businesses and illegally landed federal small business contracts.

When he gives you some baloney about protecting firms that have “acted in good faith” ask him if the SBA Office of Inspector General has ever issued a report that found too many firms that “acted in good faith” were being prosecuted for contracting fraud.

The SBA has vehemently denied there is any fraud in federal small business contracting since 2002. Ask Terry Sutherland why the SBA is taking public comment on a policy to create a “safe harbor” for fraud when they have consistently denied any evidence of fraud in federal small business contracting.

When you see the reaction to some of these questions you might begin to wonder what is really going on here. You might even ask yourself why one of the Pentagon’s most senior spokesmen suddenly showed up at the teeny tiny Small Business Administration. Ask him how he went from handling issues like the possibility of a nuclear missile strike on the U.S. by China to miscoding and anomalies at the SBA.

When Terry wants to talk to you off the record, say no. When he starts trash talking me tell him you are not interested in talking about Lloyd Chapman. Tell him you just want to stick to the facts and leave me out of it. Do me a favor, when he starts trash talking me, ask him how he feels as a veteran about the Government Accountability Office essentially accusing the SBA of encouraging fraud in the Service-Disabled Veteran-Owned Small Business program in GAO Reports 10-108 and DOD OIG Report DODIG-2012-059. Imagine the color draining from his face as he nervously begins looking at his watch.

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Terry Sutherland’s Appearance Explained with New SBA Fraud Protection Policy

3:19 pm in Uncategorized by Lloyd Chapman

I have been wondering why one of the most tenured and experience Pentagon spokesmen suddenly popped up at one of the smallest agencies in government, the Small Business Administration (SBA).

Portrait of Terry Sutherland

Sympathy for the devil.

It makes perfect sense. Terry Sutherland is there to help journalists understand why the SBA needs a policy to create a “safe harbor” from penalties for firms that are guilty of the fraud that is absolutely not happening at the SBA.

Terry Sutherland is there to help the public understand why the SBA needs a policy to essentially legalize the fraud that has not been uncovered in over a dozen federal investigations and countless reports in the mainstream media. They have not all found hundreds of billions of dollars in federal small business contracts that have actually wound up in the hands of some of the biggest corporations in the world.

Commander Cover-Up has taken over the SBA Press Office to help journalists understand they need a new “safe harbor “policy to protect fraudulent firms from penalties because Lloyd Chapman is a conspiracy nut.  CNN did not uncover wide spread fraud in a federal program designed to help small businesses.

Terry Sutherland is there to help the mainstream media understand there is no fraud in SBA managed programs. That’s why the Government Accountability Office released Report 10-108 that stated, “By failing to hold firms accountable, SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud.”

Terry Sutherland is just there to help the media clearly understand that even though the SBA Inspector General has named the diversion of federal small business contracts to big businesses as the number one problem in the SBA ever year for a decade, there is no fraud at the SBA. That’s why the SBA needs a new policy to protect fraudulent firms with a “safe harbor” from penalties.

I hope it’s clear to everyone the fact that one of the Pentagon’s top cover-up hit men went from the largest agency in government to a teeny tiny agency with a budget that is .001% of the Pentagon’s budget because there is no fraud at the SBA or the Pentagon.

And of course Lloyd Chapman is just a conspiracy nut with his 40 national television appearances, his endless press releases and blogs and his 30 legal victories over the federal government and his Bill in Congress, H.R. 1622.

Federal law mandates a penalty of not more than 10 years in prison, a $500,000 fine per occurrence, or both, for big businesses that misrepresent themselves as small businesses to hijack federal small business contracts.

Since there is clearly no fraud in SBA managed small business contracting programs, Terry Sutherland simply wants everyone in the media to understand that’s why the SBA has proposed a new “safe harbor” from penalties for firms that commit fraud.

Why Does The SBA Need Terry Sutherland If There Is No Fraud?

3:53 pm in Uncategorized by Lloyd Chapman

I think this in an excellent question. For years I have tried to expose the rampant fraud and abuse in federal small business contracting programs. Dozens of federal investigations have uncovered billions of dollars in federal small business contracts that have been diverted to some of the largest corporations in the world.

Terry Sutherland

Every year for the last nine years the Small Business Administration (SBA) Office of Inspector General has named the diversion of federal small business contracts to corporate giants as the number one problem at the SBA.

Numerous investigative reports in the media have found that dozens, if not hundreds, of Fortune 500 firms have received federal small business contracts.

The SBA and federal officials have responded to the well-documented fraud in several ways. First, they admitted it. In 2003 the Associated Press ran a story on the first federal investigation and congressional hearing regarding the diversion of federal small business contracts to Fortune 500 firms.  In that story David Drabkin, senior procurement officer for the General Services Administration, stated, “The numbers are inflated, we just don’t know the extent.”

In that same article Sue Hensley, a spokeswoman for the SBA, stated, “This transition has led to the apparent diversion of federal small business contract dollars intended for small businesses.”

In 2006 the SBA Press Office claimed it was a myth that large businesses were receiving federal small businesses contracts. They released the now infamous Myth vs. Fact press release.

What was so astonishing about the Myth vs. Fact press release was the fact that back in 2005 the SBA Office of Inspector General released Report 5-15 that described the diversion of federal small business contracts to Fortune 500 firms as, “One of the most important challenges facing the Small Business Administration (SBA) and the entire federal government today…”

Think of the gall of the SBA Press Office. First, a Government Accounting Office investigation finds over 5300 large businesses receiving federal small business contracts. Then the Associated Press writes a story about it and runs it in newspapers all across the country, with the SBA’s own Inspector General referring to it as, “One of the most important challenges facing the Small Business Administration (SBA) and the entire federal government today…” Then the very next year, the SBA Press Office issues a press release that claims it’s all just a myth. Astounding! A myth, like dragons and unicorns!

In 2009 the Government Accountability Office released Report 10-108 that essentially accused the SBA and other federal agencies of encouraging fraud and stated, “By failing to hold firms accountable, SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud.”

Investigative reports by CBSABCNBCCNN and RTTV have all uncovered rampant fraud and abuse in SBA managed programs.

The SBA Press Office’s standard response is that Fortune 500 firms have landed billions of dollars in federal contracts year after year, for over 11 years now as a result of miscoding, computer glitches, simple human error and anomalies.

So back to my original question. Why does the SBA need Terry Sutherland, or Commander Cover-Up as he is known around Washington, if there is no fraud? Look at Terry Sutherland’s background and see if he looks like a guy that shows up to deal with myths, miscoding and anomalies.

He was the guy the Defense Intelligence Agency counted on to smear the Able Danger 9/11 whistleblowers when it came out that they had uncovered three of the 9/11 hijackers a YEAR BEFORE 9/11.

Terry Sutherland’s sudden appearance at the SBA Press Office last April is proof we’re not talking about myths, miscoding and anomalies.

Terry Sutherland/Commander Cover-Up is there to cover up hundreds of billions of dollars in felony federal contracting fraud. Most of it at the Pentagon.

I’m flattered they had to call Commander Cover-Up to deal with me and try to shut down the media coverage on the rampant fraud at the Pentagon and the SBA. It’s the strongest indication I have ever seen from the federal government that I’m doing my job very, very well and they are scared. They should be.

They are so desperate they are trying to make it difficult for people to comment on all of my blogs. If you ever have any problems commenting on my blogs, please let me know (Lchapman@ASBL.com).

Pentagon PR Hit Man At The Small Business Administration?

1:39 pm in Uncategorized by Lloyd Chapman

Terry Sutherland

The Small Business Administration (SBA) Press Office Director, Terry Sutherland, is a very interesting guy. Take a look at his LinkedIn profile and at the website Terrysutherlandinfo.org.

Does his career path seem a little unusual to you? Commander United States Navy, Surface Weapons Officer 1987-1993, Public Affairs Officer 1993-2007, Chief External Communications, Defense Intelligence Agency 2004-2009, Director Corporate Communications, Pentagon Force Protection Agency, 2009-2013.

Then in April of 2013 Mr. Sutherland quietly appears as Director of the Press Office for the Small Business Administration?

Why did a man with top-secret security clearance and 20 years of experience as a Pentagon spokesman suddenly pop up at the smallest agency in Washington? To put this into perspective, the SBA’s budget is .001% of the Pentagon Budget.

Terry Sutherland handled some of the most controversial and sensitive public relations issues at the Pentagon. My favorite was the Able Danger controversy. During the 9/11 Commission investigation it came out that a top secret intelligence unit called Able Danger uncovered three of the 9/11 hijackers a year before the 9/11 attacks. The Defense Intelligence Agency launched a massive smear campaign against the leader of the Able Danger unit, Lieutenant Commander Tony Shaffer. Sutherland was the Chief of External Communications for the Defense Intelligence Agency that was going after Tony Shaffer. Tony Shaffer wrote a book about it and the Pentagon destroyed the first 10,000 copies.

Congressman Curt Weldon got up in front of Congress and blasted the Pentagon for trying to smear Lieutenant Commander Shaffer.

Now Terry Sutherland has popped up at the Small Business Administration. Why? What is happening at the SBA that would require one of the Pentagon’s top smear campaign, damage control and anti-whistle blower hot shots?

Oh, I know, maybe it’s the trillion dollars in contracting fraud that has been uncovered in federal small business contracting programs, particularly at the Pentagon. Every major television network has covered the story.

No, that couldn’t be it because the SBA has claimed for over a decade that Fortune 500 firms have landed billions of dollars in federal small business contracts because of simple miscoding, computer glitches and anomalies. Yeah that’s it, anomalies. It’s not felony federal contracting fraud, it’s just anomalies.

Now I’m confusing myself. If it’s just anomalies and not hundreds of billions of dollars in contracting fraud at the Pentagon, why would the SBA need a former Pentagon heavy hitter like Terry Sutherland?

Why would one of the smallest agencies in government, the SBA, need a guy that went after 9/11 whistleblowers?

Here is what I think. I think that Terry Sutherland leaving as Director of Corporate Communications at the Pentagon one day and then quietly showing up at the SBA the next day is irrefutable proof the Pentagon is trying to cover up hundreds of billions of dollars and possible even over a trillion dollars in federal contracting fraud. If that sounds hard to believe, take a look at a legal opinion from one of the nations leading experts on federal contracting law, Professor Charles Tiefer. He says it’s fraud and it’s up to a trillion dollars.

Let me close with my favorite quote from one of my favorite fellow conspiracy nuts, President Barack Obama, “It is time to end the diversion of federal small business contracts to corporate giants.”

(If you have any questions about why the Pentagon’s largest Fortune 500 contractors are getting billions of dollars in federal small business contracts, give Terry Sutherland a call. As the former Director of Corporate Communications at the Pentagon, I’m sure he will be more than happy to answer any of your questions. (202) 205-6919 | terrence.sutherland@sba.gov)