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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.

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.

SBA Magic Trick Turns Thousands of Big Businesses into Small Ones

1:01 pm in Uncategorized by Lloyd Chapman

Seal of the Small Business Administration

Legalistic trickery threatens to turn fraudulent big corporations into legal businesses.

On Monday morning July 14, thousands of big businesses will instantly become small businesses again. The Small Business Administration (SBA) will perform this magical miracle with just two quiet policy changes.

Hounded for over a decade for diverting billions of dollars in federal small business contracts to big businesses, the SBA has finally come up with a very creative solution to their dilemma. Adopt phony baloney polices under the guise of “helping small businesses” that turn all the big businesses the SBA has been including in their small business contracting data for over a decade into small businesses.

Abracadabra! Thousands of small businesses suddenly appear. Shazam! Problem solved!

The SBA has displayed an astounding mystical magnitude of slight of hand and misdirection that would make David Copperfield proud.

Every year for a decade the SBA’s pesky Office of Inspector General has named the diversion of federal small business contracts to big businesses as the number one problem at the SBA. The SBA is sick and tired of investigative journalists at NBC, CBS, ABC and CNN making them look bad with their facts and accurate data.

The SBA won’t have to take that anymore. Their new smoke and mirrors policies will take thousands of firms that were guilty of felony federal contracting fraud last year and, presto chango, no more fraud. Siegfried and Roy never came up with a magic trick better than this one.

According to the latest data from the U. S. Census Bureau, 98% of all American firms have less than 100 employees and the average American firm has approximately 12 employees. SBA’s magical powers and policies have turned companies that are 100 times larger than the average American firm into small businesses. SBA mystical, magical policies have turned companies that are 15 times larger than 98% of all U.S. firms into small businesses.

Now the SBA is even adopting a new policy that legalizes fraud. They’re creating a “safe harbor” to protect large firms that have fraudulently misrepresented themselves as small businesses to hijack small business contracts.

If you would like to tell the SBA what you think about their new magical policies to turn big businesses back into small ones, you can send comments to here.