Justice Department Helps Cover up Fraud, Says American Small Business League

5 May 2006

In the last twenty- four months, the Justice Department has represented the Small Business Administration in their efforts to withhold information requested under the Freedom of Information Act that could be used to prove felony contracting fraud. The American Small Business League has been forced to sue the Federal government four times for data that, by law, must be available to the public.

Since 2003, there have been eleven Federal investigations that have uncovered a variety of fraudulent practices and other abuses in small business contracting. The investigations have also found that contracting officers within government agencies have participated in the process by coding large businesses as small in order to project the false impression that they have met their small business goals. Intentionally misrepresenting a firm's size status in order to receive small business contracts is a felony that carries a maximum sentence of ten years in prison, a $500,000 fine per occurrence, and permanent debarment from government contracting. To date, none of the firms that were cited in the investigations have been prosecuted.

Rather than taking appropriate action to put a stop to the illegal activity, the Justice Department assists agencies to withhold damaging information.

"I've won every lawsuit that I've filed so far, and in each case we've exposed more evidence of fraud and abuse. It doesn't seem right that the Justice Department is one of my biggest opponents," stated Lloyd Chapman, president of the American Small Business League. "I know the American people would much rather see Attorney General Alberto Gonzales do his job and go after the fraudulent companies than to help agencies to cover up abuse of the system."

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About the ASBL:

The American Small Business League was formed to promote and advocate policies that provide the greatest opportunity for small businesses -- the 98 percent of U.S. companies with less than 100 employees. The ASBL is founded on the principle that small businesses, the backbone of a vital American economy, should receive the fair treatment promised by the Small Business Act of 1953. Representing small businesses in all fields and industries throughout the United States, the ASBL monitors existing policies and proposed policy changes by the Small Business Administration and other federal agencies that affect its members.

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