Petaluma, Calif. - President Barack Obama has moved one step closer to adopting federal policies and legislation that will divert billions of dollars in federal small business contracts to some of the nation's wealthiest investors.
President Obama has appointed Winslow Sargeant, Ph.D., to become the Chief Counsel for the Office of Advocacy at the U.S. Small Business Administration (SBA). Sargeant is currently a managing director of the Wisconsin-based venture firm, Venture Investors LLC. He is a proponent of changes in federal policy that will allow venture capitalists to participate in federal small business contracting programs. (http://blogs.wsj.com/venturecapital/2009/05/22/obamas-sba-nomination-nods-in-favor-of-vc-industry/, http://wistechnology.com/articles/3310/)
President Obama had previously appointed Karen Gordon Mills, a wealthy New York venture capitalist and heiress to the Tootsie Roll Company, to be the head of the SBA.
Mills and Sargeant were both major contributors to Obama's campaign.
Small business advocates see Sargeant's appointment as the latest indication President Obama intends to adopt federal policies that will allow some of the nation's wealthiest venture capitalists to receive federal contracts intended for legitimate small businesses.
Since 2003, over a dozen federal investigations have found Fortune 500 firms were receiving billions of dollars a year in federal small business contracts. President Obama has refused to adopt any policies or legislation to halt the flow of federal small business contracts to corporate giants.
The American Small Business League (ASBL) is predicting President Obama will exacerbate the challenges small business are facing during the recession by adopting policies that will allow venture capitalists to receive small business contracts along with Fortune 500 firms.
Earlier this year, President Obama indicated he would exempt the sale of stock in small businesses from capital gains tax. The exemption from capital gains tax is one of the key political favors wealthy investors that backed President Obama's campaign were hoping to garner.
If President Obama is successful, some of the nation's wealthiest venture capitalists will be able to receive billions of dollars in government small business contracts and avoid paying taxes on the profits from those contracts.
"This is a prime example of why President Obama's economic policies are not working. In the middle of one of the worst economic disasters in history, he is going to allow Fortune 500 firms and multi-millionaire venture capitalists to hijack federal contracts meant for the legitimate small businesses that create 97 percent of all new jobs in America," ASBL President Lloyd Chapman said.