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SBA's Cover-Up of Small Business Contract Abuses: A Decade of Corruption and Silence

Strategic Insights

— 2 min read

Despite irrefutable evidence of widespread abuse, the Small Business Administration's (SBA) Press Office Director, Mike Stamler, launched a campaign to cover up the scandal, intimidate journalists, and convince the public that the abuse was a "myth." This persistent effort to silence the truth has been ongoing since 2003, with the SBA allowing billions of dollars in federal small business contracts to be diverted to Fortune 500 firms.

Key Takeaways:

  • Since 2003, federal investigations have found the SBA to have allowed billions of dollars in federal small business contracts to be diverted to Fortune 500 firms.
  • Several investigations have revealed large businesses committing fraud through "vendor deception" and "false certifications" to illegally take billions of dollars in federal small business contracts.
  • Most major newspapers and television networks, including ABC, CBS, and CNN, have covered the story, highlighting the SBA's involvement in the widespread abuses.
  • SBA Press Office Director Mike Stamler has been aggressively campaigning to cover up the scandal, intimidating journalists, and convincing the public that the abuse was a "myth."
  • The SBA's own Office of Inspector General has released multiple scathing reports describing the rampant fraud and abuse as "one of the most important challenges facing the Small Business Administration and the entire Federal government today."
  • Lloyd Chapman, President of the American Small Business League, initiated the U.S. Government Accountability Office investigation into SBA contracting program abuses and has won several Freedom of Information Act lawsuits against the SBA.

Statistics:

  • Billions of dollars in federal small business contracts have been diverted to Fortune 500 firms since 2003.
  • Over 100 federal investigations have found evidence of widespread abuse and fraud in SBA contracting programs.
  • More than 90% of the federal small business contracts diverted to big businesses have been awarded in the absence of any marketplace competition.
  • For the past decade, the SBA has been accused of failing to prevent Fortune 500 firms from winning a significant portion of federal small business contracts.
  • Over 10,000 pages of documents obtained through Freedom of Information Act lawsuits have revealed Fortune 500 firms receiving billions of dollars in federal small business contracts.

Sources:

  • American Small Business League: http://www.asbl.com/documentlibrary.html
  • American Small Business League: http://www.asbl.com/documents/eagkeeye_report%202002.pdf
  • American Small Business League: http://www.asbl.com/documents/sbamythvfact.pdf
  • ABC: http://www.asbl.com/abc_evening_news.wmv
  • CBS: http://www.asbl.com/cbs.wmv
  • CNN: http://www.asbl.com/showmedia.php?id=1170
  • Long Island Business Journal: http://libizblog.wordpress.com/2008/02/22/expletives-the-sbas-forte/
  • SBA Office of Inspector General: http://www.sba.gov/IG/05-15.pdf
  • American Small Business League: http://www.asbl.com/documents/20090312complaint.pdf

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