Kerry Demands Investigation into Fraud; Small Business Groups Cheer

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In letters to Small Business Administration Administrator Hector Barreto and SBA Inspector General Harold Damelin, Senator John Kerry has called for an audit and investigation into fraud, abuse, and inflated federal small business contracting statistics. On Janaury 24, Kerry also proposed legislation aimed at contract bundling and small business contracting fraud.

Kerry has accused the SBA of “fostering an atmosphere that encourages widespread fraud and abuse in small business contracting.”

Kerry’s demand for investigations at the SBA and new legislation to stem fraud in government small business contracting comes on the heels of a damaging report the SBA was forced to release last month. The SBA was forced to release portions of the report as a result of an ongoing lawsuit by the American Small Business League.

The SBA is refusing to release portions of the report that American Small Business League President Lloyd Chapman believes will show the SBA has been aware of blatant fraud in small business contracting for several years.

“Our investigations have found the SBA’s own Office of the Inspector General found widespread fraud in federal small business contracting programs as early as 1995,” said Chapman.

Some small business groups are blaming the lack of new legislation to address fraud and abuse in federal small business contracting programs on Representative Tom Davis, chairman of the powerful Government Reform Committee. Davis’s district in Virginia is home to many of the firm’s whose status as legitimate small businesses have been called into question by a series of government and independent investigations into fraud and abuse in federal small business contracting programs.

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For more information contact Lloyd Chapman, 707-789-9575

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