Small Business Administration Administrator and Tootsie Roll heiress, Karen Mills announced her resignation from the SBA over six months ago. The Deputy Administrator for the SBA Marie Johns resigned in May.
Why hasn’t President Obama named a replacement for Mills and Johns?
How important is the Small Business Administration (SBA) and why should we care?
I’ll tell you.
America is struggling to recover from one of the worst economic downturns since the Great Depression. According to the Labor Department, U6 unemployment is still at 14 percent and that number does not even include the 20 percent of the workforce that is self-employed.
We need to create jobs in America and get people off unemployment and get them working and paying taxes. So what is the best way to do that? I know! Why don’t we quit giving federal small business contracts to Fortune 500 firms? I know that sounds like a crazy idea but I think it’s worth a try.
Let’s look at some of the facts. According to data from the US Census Bureau we know America’s 28 million small businesses are responsible for over 90 percent of net new jobs, over 50 percent of the private sector work force, over 50 percent of the GDP and over 90 percent of all U.S. exporters.
One of, if not the most, efficient and effective economic stimulus programs in our nation’s history is the Small Business Act that established the federal law that mandates that a minimum of 23 percent of all federal contracts be awarded to small businesses. That makes sense doesn’t it? What better way to invest existing federal infrastructure spending than to reinvest in the small businesses that create over 90 percent of the net new jobs in America.
Guess who is responsible for administering this incredibly efficient and effective economic stimulus program? That’s right, the SBA.
President Obama says he is trying to boost the economy and create jobs. Clearly the federal government’s 23 percent small business contracting goal and the host of other federal programs to help minority-owned firms, woman-owned firms and disadvantaged veteran-owned firms are crucial to the economy.
So why hasn’t President Obama named replacements for the Administrator and Deputy Administrator of the SBA?
Here is my theory. In November of 2008, I predicted President Obama would try and close the SBA by combining it with the Department of Commerce. In January 2012, he announced his plans to do just that. (For a conspiracy nut my predictions are pretty accurate, don’t you think?)
Considering the vital importance of the SBA and its programs to the small businesses that create over 90 percent of the net new jobs in America, why would President Obama want to close the agency?
Could it be to cover up the rampant fraud that has gone on at the SBA every day of the Obama administration? Every year that President Obama has been in office, Peg Gustafson, the SBA Inspector General that President Obama appointed, has named the diversion of federal small business contracts to corporate giants around the world as the number one challenge at the SBA.
ABC, NBC, CBS, CNN and dozens of newspapers like the Washington Post have covered the rampant fraud and abuse.
Dozens of federal investigations have found fraud at the SBA. In her spring, 2013 report to Congress, SBA Inspector General Peg Gustafson stated there was fraud in all SBA-managed programs.
After investigating the SBA, the Government Accountability Office (GAO) released report 10-108 that stated, “By failing to hold firms accountable the SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud.”
In English, that means the GAO is accusing the SBA of encouraging firms to commit felony federal contracting fraud. Sounds pretty serious to me. Under section 16(d) of the Small Business Act, misrepresenting yourself as a small business to illegally received federal small business contracts is punishable by up to 10 years in prison.
So I’m sticking to my original prediction from November of 2008. President Obama has not named a successor to SBA Administrator Karen Mills because he is going to try and close the SBA under the guise of combining it with the Department of Commerce.
Did I mention that Ronald Reagan tried to close the SBA twice? You want to guess how he was going to close it? If you guessed by combining it with the Department of Commerce you would be right.
President Obama’s motivation to close the SBA will be to cover up the hundreds of billions of dollars in rampant and blatant fraud that the GAO was referring to in Report 10-108. The SBA prefers to refer to blatant and documentable fraud as “mistakes and errors” but whatever you call it, since Obama has taken office, hundreds of billions of dollars in federal small business contracts have been diverted to Fortune 500 firms and many of the largest corporate giants around the world.
In February of 2008, presidential candidate Obama released the statement, “It is time to end the diversion of federal small business contracts to corporate giants.”
Now, as opposed to keeping his campaign promise to end fraud and abuse against American small businesses, he is going to try and kill the only federal agency in Washington to assist the 28 million small businesses that create over 90 percent of the net new jobs and employ over 50 percent of the private sector workforce.
I’m from Round Rock, Texas and back there we call that lying. What do they call that where you come from?