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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.

House Armed Services Committee Chairman Howard McKeon Loves Pentagon Anti-Small Business Program

8:52 am in Uncategorized by Lloyd Chapman

House Armed Services Committee Chairman, Howard P. McKeon likes the Pentagon’s 25 year old anti-small business, anti-transparency, anti-middle class test program so much he has voted to extend it into its 28th year of testing.

The 2015 National Defense Authorization Bill, H.R. 4435 includes an extension of the Comprehensive Subcontracting Plan Test Program (CSPTP) until 2017. The Pentagon adopted the CSPTP in 1990 under the guise of testing changes in federal contracting law to determine if those changes would increase subcontracting opportunities for small businesses.

The changes the Pentagon felt should help small businesses were the elimination of any subcontracting plans and reports that were available to the public and the elimination of “liquidated damages” for prime contractors that failed to achieve their small business subcontracting goals.

Anyone with the I.Q. north of a gerbil’s can see the CSPTP was not adopted to increase subcontracting opportunities for small business. It was adopted to help some of the Pentagon’s largest prime contractors violate federal contracting law, cheat small businesses out of billions of dollars and hide all the evidence of that fact.  

It is not surprising that during the 25 years the CSPTP has been tested, the Pentagon has consistently refused to release any data on the test program. Especially anything that showed that the elimination of transparency and any penalties for prime contractors actually increased subcontracting opportunities for small businesses.

Congressman McKeon’s own language in the Chairman’s Mark of the FY15 National Defense Authorization Bill acknowledges there has never been any evidence the test program has increased subcontracting opportunities for small businesses. Knowing that, Congressman McKeon in his infinite wisdom has voted to renew it into its 28th year of testing.

In the Chairman’s Mark, McKeon states,“ However, after nearly 24 years since the original authorization of the program, the test program has yet to provide evidence that it meets the original stated goal of the program…

A 2004 Government Accountability Office (GAO) investigation into the Comprehensive Subcontracting Plan Test Program also concluded there was no evidence the program had increased subcontracting opportunities for small businesses.

In 2010 several members of Congress requested another GAO investigation into the CSPTP but the GAO declined to launch the investigation.

Based on all of the information I have seen, I estimate small businesses have been defrauded out of well over one trillion dollars in subcontracts since the “Test Program” began 1990.

I have launched a legal challenge to the CSPTP. The American Small Business League (ASBL) is suing the Pentagon in Federal District Court in San Francisco after the Pentagon refused to release any subcontracting data from the CSPTP under the Freedom of Information Act.

The Comprehensive Subcontracting Plan Test Program is an obvious loophole in federal contracting law that allows the Pentagon and its largest prime contractors to cheat small businesses and the middle class out of billions of dollars. I’m sure Congressman McKeon’s belief that this anti-small business program needs to be renewed into its 28th year has nothing to do with the fact that according to OpenSecret.org, no member of the House Armed Services Committee has received more money from the defense industry than he has.

Congressman McKeon likes to be referred to as Buck. Considering the amount of money he has received from the defense industry I think we should all start calling him “Big Bucks McKeon”.

I continue to be astonished, amazed and disappointed by the fact that not one journalist from the mainstream media has ever reported on this blatant Pentagon scam in 25 years. Let me say that again, in a quarter of a century, no journalist from the mainstream media, not one, has ever reported on the 25 year old Comprehensive Subcontracting Plan Test Program.

Anti-Small Business Policies Prove Depth of Government Corruption

4:03 pm in Uncategorized by Lloyd Chapman

Over the last twenty-five years three U.S. Presidents and thousands of members of Congress have continually approved some of the most anti-small business, anti-middle class federal programs in history.

Microsoft sign in front of company research building

Just one of many small businesses awarded small business contracts by the US government.

U.S. Census Bureau data indicates small businesses are responsible for over 90% of net new jobs, over 50% of the private sector workforce, over 50% of the Gross Domestic Product and over 90% of all U.S. exports.

The single largest federal program in history to assist small businesses, stimulate the middle class economy and create jobs is the Small Business Act of 1953. Today federal law based on the original Small Business Act requires that a minimum of 23% of all federal contracts be awarded to small businesses.

For over 11 years a series of federal investigations and investigative reports in the media have found billions of dollars a year in federal small business contracts that have been knowingly diverted to Fortune 500 firms and corporate giants around the world. ABC, CBS, NBC and CNN have all covered the rampant fraud in federal small business contracting programs.

Some of the firms that have been uncovered as receiving federal small business contracts include IBM, Hewlett-Packard, Oracle, Microsoft, Dell, Lockheed Martin, Northrop Grumman, Raytheon, General Dynamics, Chevron, Apple, General Electric, AT&T, Verizon, Citigroup, Boeing, UPS, John Deere, Thales in France, Rosoboronexport in Russia, Ssangyong Co. in South Korea, Finmeccanica in Italy, Buhrmann N.V. in Holland and British Aerospace Engineering (BAE) and Rolls-Royce in England.

One of the ways that this fraud and abuse has been allowed to occur, even endorsed, is via the Comprehensive Subcontracting Plan Test Program.  The program began in 1990 and eliminated all transparency, along with any and all penalties for non-compliance with federal small business subcontracting goals for the Pentagon’s largest prime contractors.  The purpose of the “Test Program” was to determine if this would increase subcontracting opportunities for small businesses.

Let me emphasize this was a “Test Program.” Think of the insanity of a program that eliminates transparency and penalties for the Pentagon’s largest prime contractors and then tests it for 25 years to see if it helps small businesses. Even the language in the FY15 National Defense Authorization Bill that will renew the “Test Program” admits it has failed, yet Congress and President Obama intend to renew it for three more years through 2017.

Our government is going to renew this anti-small business, anti-middle class, anti-job creation scam into its 28th year and no one is objecting but me? Astounding!

If you are a Democrat, Progressive, Republican, Conservative, Libertarian or however you chose to describe your political views, realize this. Not one of the politicians you support has ever stood up to oppose any of the federal government’s anti-small business policies. NOT ONE!

Much like they say you can tell a lot about people by the way they treat animals, I think you can tell everything about politicians by how they treat small businesses. Remember, small businesses are where most Americans work and where most of the nation’s Gross Domestic Product is created, yet politicians continue to turn a blind eye towards anti-small businesses policies that affect the very people who got them elected.

The fact that Fortune 500 firms have been allowed to fraudulently and illegally hijack trillions of dollars in federal small business contracts for over 11 years with no repercussions proves how corrupt the government actually is.

The fact Congress and President Obama will renew the anti-small business, anti-transparency Comprehensive Subcontracting Plan Test Program into its 28th year of testing without objection from the American people must mean one of two things. Either the government thinks Americans are apathetic, uninformed, delusional fools who don’t care about small business, or they are confident that a lack of media coverage will allow them to slide in anti-small business policies right under all of our noses.

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Congress to Renew 25 Year Old Pentagon Test Program to “Help” Small Businesses by Eliminating Transparency

1:29 pm in Uncategorized by Lloyd Chapman

Government Accountability Office seal

The GAO calls it a bad idea … but who listens to those dirty hippies anyway?

Congress and President Obama are set to renew a 25 year old Pentagon test program. The Comprehensive Subcontracting Plan Test Program (CSPTP) was developed to determine if removing all transparency from federal small business contracting programs for the Pentagon’s largest prime contractors would increase subcontracting opportunities for small businesses. That makes sense right?

Then to really sweeten the deal for small businesses and increase subcontracting opportunities, the Comprehensive Subcontracting Plan Test Program totally eliminates all penalties such as “liquidated damages” for prime contractors that do not comply with their small business contracting goals. Genius!!!

This all sounds like a really amazing opportunity for small businesses. Current federal law, The Small Business Act of 1953, requires that a minimum of 23% of all federal contracts and subcontracts be awarded to small businesses. Obviously, eliminating all transparency and public access to the reports used to determine if prime contractors are complying with their small business goals will cause subcontracting opportunities for small businesses to skyrocket. The elimination of any penalties for non-compliance is a total bonus for small businesses. What took them so long to come up with this fantastic idea?

Oh wait, did I mention the part about testing it for the last 25 years? How about the part where the Pentagon has refused to release any data on the results of the “Test Program” for a quarter of a century? Clearly, they don’t want to jump to any conclusions. Anything worth doing is worth doing right, I say.

Those wacky conspiracy nuts over at the Government Accountability Office just don’t get what a sweet deal this is for small businesses. Ten years ago they issued the results of an investigation, GAO-04-381, that found no data showing that the Pentagon “Test Program” had ever helped small businesses in any way.

Those guys at the GAO are so suspicious. Don’t they know that all the men and women that work at the Pentagon and in the defense industry are American heroes? Have they not seen the Sunday TV news shows with those fantastic Lockheed Martin, Boeing and Northrop Grumman ads talking about how they are helping to protect this great nation of ours? You would have to be a paranoid conspiracy nut with a tin foil hat if you don’t realize that the men and women at the Pentagon only have the best interest of American small businesses at heart.

I think even Congress is getting a little paranoid. The language in the 2015 Defense Authorization Bill Section 811 says, “However, after nearly 24 years since the original authorization of the program, the test program has yet to provide evidence that it meets the original stated goal of the program…

DUH! In just 25 years how can you expect the Pentagon to adequately test if removing all transparency and eliminating all penalties for non-compliance with federal small business contracting goals would actually increase subcontracting opportunities for small businesses?

House Small Business Committee Chair Sam Graves is right: The Comprehensive Subcontracting Plan Test Program clearly needs to be renewed until 2017. That would give the Pentagon 28 years to see if the “Test Program” works.

I think the Pentagon is on to something. I’m thinking we could dramatically streamline government and get some really impressive results if we applied the same principal used in the Comprehensive Subcontracting Plan Test Program to other areas of government.

The IRS should immediately launch a 25 year test program to determine if eliminating tax returns and any penalties for not paying your income taxes increases tax revenue. Tax revenues should hit an all time high!

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Why Does Washington Hate Small Businesses?

1:54 pm in Uncategorized by Lloyd Chapman

When you look at the facts, the only possible conclusion you could come up with is that the federal government is so pro-big business that they have become anti-small business.

Seal of the Small Business Administration

The real job creators suffer after cuts to the Small Business Administration.

Back in 2009, after the Government Accountability Office (GAO) investigated the Small Business Administration (SBA) they released Report 10-108, “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.”

Is the GAO saying the SBA and other agencies are encouraging firms to commit felony federal contracting fraud to cheat legitimate small businesses out of billions of dollars in contracts? Sounds like it to me.

In February of 2008, President Obama made the statement, “It is time to end the diversion of federal small business contracts to corporate giants.” Since he has taken office, up to 235 Fortune 500 firms a year have received federal small business contracts.

In 2005, the SBA Office of Inspector General released Report 5-15 that stated, “One of the most important challenges facing the Small Business Administration and the entire federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards.”

The rampant fraud and abuse in federal small business contracting programs has been uncovered in dozens of federal investigations and investigative reports in the mainstream media.

Over the last 24 months, the SBA’s budget has been cut more than any other agency in government. While most agencies have seen their budgets increase by as much as 10% a year, the SBA’s budget has been slashed by over 25%. Why? I thought we were trying to create jobs here in America. The US Census Bureau data clearly indicates small businesses are responsible for over 90% of all net new jobs. Why haven’t the President and Congress doubled the SBA’s budget? The SBA is the only agency in government to help small businesses.

Additionally, the Small Business Act mandates that a minimum of 23% of all federal contracts be awarded to small businesses and is one of the most efficient and effective economic stimulus and job creation programs in government. Yet still, both Republicans and Democrats in Congress have agreed to gut the SBA budget. Why?

Last week, the House Small Business Committee voted unanimously to cut the SBA budget by an additional $50 million. Why?

J.D. Harrison of the Washington Post did a story last week about the House Small Business Committee proposing to cut the SBA budget even further because they were not doing enough to prevent fraud. Does that make sense?

Why aren’t they increasing the budget for the SBA Office of Inspector General so they can crack down on the widespread fraud that has been uncovered in federal small business programs for over a decade?

I have a bill in the House Small Business Committee, H.R. 1622, The Fairness and Transparency in Contracting Act that would completely halt the diversion of federal small business contracts to Fortune 500 firms and large businesses. The Committee has never voted it on. Why?

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Lloyd Chapman, American Small Business Advocate, Part 4

3:27 pm in Uncategorized by Lloyd Chapman

The Truth About Fraud in Federal Small Business Contracting was Published 10 Years Ago

I was just banging around on the Internet the other day and guess what I found? The first Associated Press story that ever ran nationally on the diversion of federal small business contracts to Fortune 500 firms. This was a rare find because in that first story, the Feds had not started to lie about it yet. They were actually telling the truth for the first and last time.

The story I stumbled onto was an Associate Press story written by Larry Margasak that ran in dozens of the largest newspaper in the country. The one I found was published on July 11, 2003, in the Honolulu Star Bulletin. It was titled, “Little Big Firms”. It reported how Fortune 500 firms like Verizon, AT&T, Barnes & Noble and the Dole Food Co. were receiving millions of dollars in federal small business contracts.

I found two quotes from federal officials in the story. The first was from David Drabkin, the senior procurement officer for the General Services Administration. He was referring to the fact that the actual percentage and dollar volume of federal contracts awarded to legitimate small businesses was not accurate. Since it was not accurate, the federal government had included billions of dollars in contracts to Fortune 500 firms and thousands of other big businesses in the federal government’s small business contracting data.

He stated, “The numbers are inflated, we just don’t know the extent.”

That was the first and last time any government official ever admitted the actual volume of contracts awarded to small businesses was “inflated” and the federal government had cheated American small businesses out of billions of dollars in contracts.

The story reported, “Once a company’s status in mischaracterized, it stays that way for the life of a contract—which can be 20 years. That means smaller firms the administration intended to help may be frozen out from fresh business by bigger companies with the incorrect designation.”

In referring to the fact that Fortune 500 firms have been classified as small businesses, David Drabkin stated, “not something we can clean up overnight”.

Overnight? Think about this, for over twelve years, dozens of federal investigations have found the government has been diverting hundreds of billions in federal small business contracts to many of the largest corporate giants in the world. Companies like Verizon, General Dynamics, Dell, British Aerospace and Engineering, Finmechannica in Italy, French defense giant Thales, San Jong in South Korea, Rosebornexports in Russian, Oracle, Microsoft, Home Depot, IBM, Chevron, General Electric, Hewlett-Packard, Citigroup, AT&T, Target and thousands more. For over twelve years the federal government has claimed this is the result of “miscoding, computer glitches, anomalies and simple human error.” The SBA has even tried to claim it was a “myth” that large corporations have received federal small business contracts.

I realize they may not have been able to fix the problem “overnight”, but twelve years, come on! In 2014, you have to understand that the diversion of hundreds of billions of dollars in federal small business contracts for over twelve years to Fortune 500 firms, and many of the largest corporations on earth, is clearly willful and intentional.

There is also another quote in the article that is another first and last time any federal official told the truth about why Fortune 500 firms have been allowed to hijack hundreds of billions of dollars in government small business contracts for over 12 years.

I’m talking about the Small Business Administration’s database of small businesses that just happened to include thousands of the largest companies in the world, U.S. Small Business Administration spokeswoman Sue Hensley stated,

 “This transition has led to the apparent diversion of contract dollars intended for small businesses.”

Again, the first and last time any government official admitted that federal small business contracts were being diverted to Fortune 500 firms and thousands of other large businesses.

The actual volume and percentage of federal contracts awarded to legitimate small businesses has obviously been “inflated” as Mr. Drabkin stated. It is also clear the federal government has willfully and intentionally diverted, “contract dollars intended for small businesses”, as SBA Spokeswoman, Sue Hensley, admitted in July of 2003.

In February of 2008, Presidential candidate Barrack Obama released the statement,

It is time to end the diversion of federal small business contracts to corporate giants.

Every year of the Obama Administration, the Inspector General for the Small Business Administration that was appointed by President Obama, Peg Gustafson, has named the diversion of federal small business contracts to large businesses as the number one problem at the SBA.

Dozens of congressional hearings, federal investigations and investigative reports in the media have confirmed the rampant fraud and abuse against small businesses.

In fiscal year 2012, over 235 Fortune 500 firms received federal small business contracts.

This fraud against American small businesses has gone on for over 12 years. The 28 million small businesses where most Americans work have been cheated out of well over a trillion dollars in federal contracts during the last decade. How much longer will the mainstream media, the President and Congress allow this fraud to continue?

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Lloyd Chapman, American Small Business Advocate, Part 3

3:57 pm in Uncategorized by Lloyd Chapman

The SBA Press Office, Washington’s Most Secretive Press Office

What are they trying to hide?

 

When you think about some of the most secure locations in government, what comes to mind? Fort Knox? The Pentagon? Maybe the White House?

Would you believe the Small Business Administration Press Office is one of them? You can go on a tour of the White House, but try and get a tour of the Small Business Administration Press Office.

I have lost count of how many legal battles I have won against the federal government over the last 25 years. I think it’s somewhere in the neighborhood of 30.

The only case I have ever lost was when the Supreme Court declined to review my Freedom of Information Act appeal for the phone records of the Small Business Administration’s Press Office Director, Mike Stamler. (press release)
SBA National Small Business Week @
After all these years of winning Freedom of Information Act cases against the government, I have learned you can tell how damaging the information you’re trying to obtain is based on how hard the government fights to prevent the disclosure of the data. (video)

In preparation for my case against the SBA, I submitted Freedom of Information Act requests for the Press Office Director’s phone records from several similar sized agencies. Every other agency simply emailed me the phone records with no drama and no objection. Not the SBA, they were willing to go to the Supreme Court to withhold Mike Stamler’s phone records. Why?

Before I tell you why I think the SBA was willing to fight to the death to withhold Stamler’s phone records let me tell you a little story. About five years ago I had an appointment to meet with the SBA Inspector General, Peg Gustafson and her staff.

I went through the usual airport style security in the SBA lobby and took the elevator to the executive offices of the fifth floor. When I got off the elevator, to the right was a large open door way. I walked through it to a large reception desk. To the right of the reception desk, I could have strolled right into SBA Administrator Karen Mills’ office. SBA Administrator Mills was a member of the President’s Cabinet and anyone of the fifth floor could have walked right into her office. To the left of the reception desk, were the offices of the SBA Inspector General and SBA’s Chief Counsel where I had my meetings.

The SBA Inspector General investigates felony federal contracting fraud where the guilty can be sent to prison, be permanently debarred from ever doing business with the federal government and pay hundreds of thousands of dollars in fines. Heavy stuff.

After my meeting with the Inspector General staff, I went back out the doorway and stepped into the elevator. As the doors were closing I looked up and saw a sign that said “Press Office”. I immediately stuck my hand out to stop the doors from closing and jumped out of the elevator. I was going to walk into the SBA Press Office and go say howdy to my archrival and nemesis, Mike Stamler. As I rounded the corner expecting to walk right into the SBA Press Office, I was shocked to see a door like I had never seen before. It looked like a door you would expect to see in the inner sanctum of the Pentagon. This door looked like the launch codes for nuclear missiles might be behind it. It was clear my surprise visit to Mike Stamler wasn’t going to happen. Stunned and disappointed, I got back into the elevator.

As the elevator descended I started to realize something was going on inside the SBA Press Office that they absolutely did not want the public to see. What in the world could it be?

After seeing the Stargate SG1 style door to the SBA Press Office and thinking about how amazing it was that I had to go to the Supreme Court to try and get Mike Stamler’s phone records, I had a startling realization:

The Pentagon actually runs the SBA.

Every policy the SBA has released for over 20 years relating to federal small business contracting has helped to divert hundreds of billions of dollars in federal small business contracts to many of the nation’s largest defense contractors and thousands of other large businesses around the world. (2004 CBS story)

Some of the recipients of federal small business contracts in recent years include large corporations like Rolls Royce, British Aerospace and Engineering, Thales in France, Finmanicaa in Italy, Rosebornexports in Russia and Sanjong Corporation in Korea. Every major newspaper and most of the major television networks have covered this rampant fraud and abuse in federal small business contracting. (abc news story)

I challenge anyone to show me a single policy from the SBA in the last 20 years that has actually assisted legitimate small businesses to obtain federal small business contracts. Every policy, without exception, has been carefully crafted to create loopholes that have allowed federal agencies and the government’s largest prime contractors to falsify and fabricate their compliance with the 23% federal small business contracting goal by including billions of dollars in contracts to many of the largest firms on the planet. (CBS Boston)

So the real reason the SBA was willing to go to the Supreme Court to withhold Mike Stamler’s phone records is that the phone records would prove that the Pentagon runs the SBA.

In closing, if you doubt my assertion that the SBA is actually run by the Pentagon, guess who is now the head of the SBA Press Office? Keep in mind, the SBA is one of the tiniest agencies in Washington with a budget that is .001% of the Pentagon’s budget.

The answer: Retired Naval Commander and former worldwide spokesman for the Pentagon, Terry Sutherland. In case you’re not familiar with career paths in Washington, you don’t go from being the worldwide spokesman for the largest agency in our entire government to being the head of the press office for one of the smallest agencies in Washington.

Sutherland’s very quiet appointment to head the SBA Press Office is irrefutable proof that the Pentagon runs the SBA. That’s why in 2012, 235 Fortune 500 firms received federal small business contracts.

That’s why, every year for the last nine years, 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 and absolutely nothing has been done to stop it. (2013 OIG Report)

Let me close with a quote from Report 10-108 by those “conspiracy nuts” like me over at the Government Accountability Office (GAO).

“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.” (GAO-10-108)

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Lloyd Chapman, American Small Business Advocate, Part 2

1:21 pm in Uncategorized by Lloyd Chapman

My astonishing call from a sobbing Pentagon Attorney 25 years ago.

In the late eighties, I won a landmark legal decision in the 9th Circuit Court of Appeals after initially losing at the district court level. I had sued the Pentagon under the Freedom of Information Act to force them to release the subcontracting reports on three of the nation’s largest defense contractors; Northrop, McDonnell Douglas and Loral. After receiving the documents, as I suspected, the actual subcontracting dollars awarded to small business by these Pentagon prime contractors was less than three percent,  nowhere near the twenty percent required by law at that time.
Pentagon
In the court’s ruling, they stated my lawsuit was “consistent with the Congressional intent of passing both the Freedom of Information Act and the Small Business Act and would in general encourage government contractors to set higher small and small disadvantaged business subcontracting goals.” I’m very proud that thousands of small businesses around the country benefited from that legal battle. My legal fees had been in the neighborhood of $150,000 over the three years it took to finally win the case.

When you win a Freedom of Information Act case against the federal government, they have to reimburse you for your legal fees. A few days after the 9th Circuit released their ruling in my favor, I received a call from a Pentagon attorney I had talked with earlier regarding my original Freedom of Information Act request. He sounded like he was probably in his mid-thirties, and based on his accent, he sounded like he was from somewhere in the south. I was surprised when he told me I should be “proud of myself” and that the success of the lawsuit would “help out a lot of people”. He said, “Lets get to work to get your legal fees back.” He explained how we needed to compile our legal bills and submit them to get our legal fees back. We had a very nice cordial conversation and I remember thinking, “Well that was easy.”

About three days later he called me back. I will remember that phone call until the day I die. He was crying uncontrollably and his voice was quivering so dramatically he could hardly talk. He was gasping for air like a child that was trying to talk as they cried. Every few words, he would make a kind of a gasping honking sound as he gasped for air. The picture I had in my mind was like a scene from a movie. I pictured him tied in a chair, his face bleeding and swollen with someone holding a gun to his head.

Based on the cadence of his voice he was clearly reading off of a statement someone was forcing him to read to me over the phone.  As opposed to his congratulatory, congenial style of our last conversation, he said, “If you think you’re going to get your money back, you’ve got another thing coming.”  As he read the prepared statement about every three or four words he was sobbing heavily and gasping for air. He continued, “You haven’t won anything. You’re going to have to go to court for every piece of paper you get from the Pentagon.” He hung up. I was shocked, stunned, confused and slightly traumatized myself.

What on earth had happened to this poor guy to prompt him to make such a bazaar phone call? This was an attorney for the Pentagon!

Luckily, I had a great relationship with both of my Senators here in California, Barbara Boxer and Diane Feinstein. They had a good relationship with Attorney General Janet Reno. With the help of Senators Boxer and Feinstein, the government eventually reimbursed me for the majority of my legal fees. Before we deposited the check I had it enlarged and framed. It’s still on the wall in the office to this day.

The Pentagon attorney was right about having to go to court to get any information from the Pentagon on federal small business contracting. I have lost count, but I’m guessing I have won around 30 legal battles with the Pentagon and other federal agencies, forcing the release of thousands of pages of documents. In every case the information I uncovered was more evidence that the federal government’s entire small business contracting program is smoke and mirrors. The truth is that most federal small business contracts are actually going to many of the largest corporate giants in the world. In 2012, 235 Fortune 500 firms received federal small business contracts. (link)

Luckily, I have been able to get over dozens of stories about this rampant fraud in federal small business contracting on national television, radio, virtually every major newspaper in the country and on hundreds of blogs and articles online. (video)

By the way that was not the only or last time I would see and hear government attorneys sobbing as they unsuccessfully struggled to cover up hundreds of billions of dollars in blatant fraud against American small businesses.

I have started working with a film crew on a short documentary. My goal is to find that poor fellow and get him on video explaining what in the hell happened to him that would explain that astonishing phone call 25 years ago.

Link to video
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Lloyd Chapman, American Small Business Advocate, Part 1

1:39 pm in Uncategorized by Lloyd Chapman

I have been winning federal lawsuits on behalf of American small businesses for about 25 yeas now. My campaign to stop the federal government from diverting small business contracts to Fortune 500 firms and corporate giants around the world has been covered on every major television network, one international network, virtually every major newspaper in the country, over 200 radio shows and countless stories and blogs on the internet.

I am constantly bothered by the feeling I have never seen a story that tells the whole truth about how the federal government actually cheats small businesses. I also don’t believe any story has painted an accurate picture of my efforts to stop rampant fraud and abuse in federal small business programs and address a wide variety of other issues that have negatively affected American small businesses.

I have come to the conclusion the only way to get the whole truth out there is to begin to write a series of stories on what has actually happened to myself. I also intend to begin a campaign of unabashed self-promotion for the simple reason I’m tired of the unrelenting campaign by the federal government to portray me as a conspiracy nut.

In 2005, Entrepreneur Magazine published a story about me that stated, “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.” It was a great story; I have a copy of it framed in my office. I was hoping someone would write a follow up story and clarify if I was a “modern day Cesar Chavez or a conspiracy theorist with a grudge.” Since no journalist has ever seen fit to answer that question, it looks like I’ll have to do it myself.

I like the quote from Yogi Berra that says, “It ain’t bragging if you can do it”. Well I can do it and I have done it and I intend to write about it in a series of blogs and stories that I will post in a variety of places on the internet to tell my story and tell the truth about the billions if not trillions of dollars in fraud and abuse against American small businesses and the individual people, politicians, bureaucrats and companies that have perpetrated these abuses against the middle class.

Some of the things I have experienced and done sound more like an episode from the X Files than anything you would expect to encounter simply trying to stop the federal government from cheating small businesses. Some people may find some of the things I have experience to be difficult to believe. Looking back on it now, I even find it hard to realize those things really happened. I will do my best to try and document everything I can with links to verifiable information.

I believe most people will find my exploits to be funny, sad, fascinating, shocking, infuriating, uplifting and inspirational. I will be writing about death threats, seeing government lawyers cry, government surveillance, duping politicians and federal agencies, landmark legal victories and the stunning level of corruption and fraud in the federal government at virtually every level.

My goal is to write something every week but I may write something monthly or even daily, I’m not sure. I might even try and put all my adventures as a small business advocate together and write a book.

I’m excited about this project because of the therapeutic affect it will have for me and I will get started immediately. Stay tuned.