/PRNewswire-USNewswire/ -- Since 2003, over a dozen federal investigations that have uncovered billions of dollars in federal contracts intended for small businesses actually wound up in the hands of Fortune 500 firms.
Any plans from President Barack Obama to adopt the recommendation of the Small Business Administration (SBA) Office of Inspector General to address the problem have been conspicuously absent from any of his stimulus plans or proposed policies.
President Obama has also ignored repeated pleas from small business groups around the country to adopt legislation and policies to stop Fortune 500 firms and thousands of other large businesses from commandeering up to $100 billion a year in federal small business contracts.
ABC, CBS and CNN have all released investigative stories on the issue, which found that firms such as Lockheed Martin, Wal-Mart, Microsoft, John Deere, Xerox, Dell Computer, Northrop Grumman and Home Depot all received millions of dollars in federal small business contracts.
Even some of the largest firms in Europe such as British Aerospace (BAE), Rolls-Royce and Dutch giant Buhrmann NV have received hundreds of millions a year in U.S. government contracts intended for small businesses.
Thousands of middle class firms have been forced to close their doors as they struggled in vain to compete with Fortune 500 firms for even the smallest government orders for goods and services specifically set aside for small businesses.
Small business advocates are concerned that President Obama will not only allow federal small business contracts to continue to be diverted to Fortune 500 firms, but that he will support a new federal policy that will create a new loophole in federal law allowing even more government small business contracts to be diverted to firms controlled by some of the nation's wealthiest investors.
The National Venture Capital Association (NVCA) has contributed millions of dollars to President Obama and key members of Congress, such as House Speaker Nancy Pelosi, to try and have federal law changed to allow some of the wealthiest investors in the country to masquerade as small businesses and take billions of dollars in federal contracts designated for legitimate small businesses.
President Obama's appointment of Karen Mills, a multi-millionaire venture capitalist, to the post of Administrator of the SBA is seen by small business groups as a confirmation that President Obama will attempt to create more loopholes in federal contracting law, which will divert more federal small business contracts away from middle class firms and into the hands of wealthy investors.
Showing posts with label loophole. Show all posts
Showing posts with label loophole. Show all posts
Thursday, January 22, 2009
Monday, January 12, 2009
Pelosi-Backed Loophole for Venture Capitalists Will Damage Middle Class Economy
/PRNewswire-USNewswire/ -- House Speaker Nancy Pelosi (D - CA) is leading congressional support for a new loophole in federal contracting law that will allow some of the wealthiest venture capitalists in America to receive federal contracts set-aside for small businesses.
The new loophole could divert billions of dollars in federal small business contracts away from middle class firms and into the hands of wealthy investors. If Congress does adopt legislation that allows venture capitalists to participate in federal small business contracting programs, thousands of middle class jobs could be lost as legitimate small businesses struggle to compete head-to-head with firms owned and controlled by billionaire investors.
In 2008, Speaker Pelosi backed H.R. 3567 and H.R. 5819, both of which would have allowed individual venture capitalists and even some of the nation's largest venture capital firms to take contracts meant for small businesses.
After leading the opposition against H.R. 3567, the American Small Business League (ASBL) was joined by the Small Business Administration (SBA), the U.S. Chamber of Commerce, the National Association of Government Contractors, the National Small Businesses Association, and the Bush White House.
The key element of the Pelosi-backed legislation is a change in the longstanding definition of a small business, which is defined in the Small Business Act as a firm that is "independently owned." Pelosi would like to see the definition changed to include firms that are not "independently owned" but actually owned and controlled by well-heeled venture capitalists.
Many of the top venture capital firms in America are located in or near Speaker Pelosi's 8th congressional district and according to MAPLight.org, from January 2005 to May 2008, Speaker Pelosi received a combined $108,400 from venture capital giant, Kleiner Perkins Caufield & Byers; pharmaceutical giant, Amgen Inc; and lobbyist, Akin Gump Strauss Hauer & Feld LLP.
The ASBL predicts that Speaker Pelosi may try to include a loophole for venture capitalists in any up-and-coming economic stimulus plan coming out of the House of Representatives, under the guise of "increasing access to capital" for small businesses.
In the past, the National Venture Capital Association (NVCA) has used the term "increasing access to capital" for small business to disguise legislation and policies designed to allow its members to take federal contracts earmarked for legitimate small businesses.
President-elect Barack Obama has also received significant contributions from the venture capital industry. His appointment of Karen Mills, a venture capitalist, as Administrator of the SBA is seen as a clear signal he will support legislation that will likely divert billions of dollars in federal infrastructure funds away from middle class firms, and into the hands of some of the nation's wealthiest investors.
The new loophole could divert billions of dollars in federal small business contracts away from middle class firms and into the hands of wealthy investors. If Congress does adopt legislation that allows venture capitalists to participate in federal small business contracting programs, thousands of middle class jobs could be lost as legitimate small businesses struggle to compete head-to-head with firms owned and controlled by billionaire investors.
In 2008, Speaker Pelosi backed H.R. 3567 and H.R. 5819, both of which would have allowed individual venture capitalists and even some of the nation's largest venture capital firms to take contracts meant for small businesses.
After leading the opposition against H.R. 3567, the American Small Business League (ASBL) was joined by the Small Business Administration (SBA), the U.S. Chamber of Commerce, the National Association of Government Contractors, the National Small Businesses Association, and the Bush White House.
The key element of the Pelosi-backed legislation is a change in the longstanding definition of a small business, which is defined in the Small Business Act as a firm that is "independently owned." Pelosi would like to see the definition changed to include firms that are not "independently owned" but actually owned and controlled by well-heeled venture capitalists.
Many of the top venture capital firms in America are located in or near Speaker Pelosi's 8th congressional district and according to MAPLight.org, from January 2005 to May 2008, Speaker Pelosi received a combined $108,400 from venture capital giant, Kleiner Perkins Caufield & Byers; pharmaceutical giant, Amgen Inc; and lobbyist, Akin Gump Strauss Hauer & Feld LLP.
The ASBL predicts that Speaker Pelosi may try to include a loophole for venture capitalists in any up-and-coming economic stimulus plan coming out of the House of Representatives, under the guise of "increasing access to capital" for small businesses.
In the past, the National Venture Capital Association (NVCA) has used the term "increasing access to capital" for small business to disguise legislation and policies designed to allow its members to take federal contracts earmarked for legitimate small businesses.
President-elect Barack Obama has also received significant contributions from the venture capital industry. His appointment of Karen Mills, a venture capitalist, as Administrator of the SBA is seen as a clear signal he will support legislation that will likely divert billions of dollars in federal infrastructure funds away from middle class firms, and into the hands of some of the nation's wealthiest investors.
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