Federal Investigation Finds SBA Executives Violating "Laws and Regulations"

ASBL Encourages Congress to Hold Hearing on SBA Executives

Nov 11, 2015, 10:41 ET from American Small Business League

PETALUMA, Calif., Nov. 11, 2015 /PRNewswire-USNewswire/ -- A damning investigation by the Government Accountability Office (GAO) has accused the Small Business Administration (SBA) of violating federal law.

The GAO also found the SBA cannot demonstrate with certainty that its workforce has the skills the agency requires.

The SBA has been widely criticized for years for their role in diverting billions of dollars in federal small business contracts to Fortune 500 firms. ABC, CBS, NBC, CNN and RTTV have all reported on the fraud in federal small business contracting programs.

As early as 2003 the GAO found the SBA had dramatically inflated the actual volume of federal contracts awarded to small businesses and falsified the government's compliance with the 23% small business contracting goal by including contracts to over 5,000 large businesses.

In 2005, the SBA Office of Inspector General released Report 5-15 that described the diversion of federal small business contracts to large businesses as, "One of the most important challenges facing the Small Business Administration (SBA) and the entire federal government today…"

Every SBA Inspector General since 2005 has reiterated the diversion of government small business contracts to corporate giants as the number one problem at the SBA in their annual report to Congress.

In 2009, the GAO essentially accused the SBA and federal agencies of encouraging fraud in 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."

In 2014, the GAO issued yet another scathing report on the SBA Office of Advocacy that found they often work with large corporate interests to block regulations that they find inconvenient to their bottom line. The Center for Progressive Reform even analyzed the report and referred to the SBA Office of Advocacy as a "taxpayer-funded lobby shop" for large businesses.

In May, Public Citizen released an investigative report on the SBA and federal small business contracting programs title, "Slighted." That investigation found the SBA using accounting tricks to create the "false impression that small businesses are getting their share of federal procurement money."

The House Small Business Committee adopted an amendment calling for another GAO investigation of the SBA based on the research conducted by the American Small Business League (ASBL).

ASBL encourages Congress to hold a hearing on the SBA to find out which executives are responsible for the fraud that has been uncovered at the agency.

Contact:  Steve Godfrey

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SOURCE American Small Business League