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Wealthy Venture Capitalists to Join Fortune 500 Firms in Obama Administration Small Business Programs

June 8, 2009

Petaluma, Calif. - The Obama Administration is moving closer to new legislation and policy that will allow many of President Barack Obama's wealthiest contributors in the venture capital industry to take federal contracts meant for small businesses.

President Obama has already appointed two of his chief campaign fundraisers from the venture capital industry to top positions at the Small Business Administration (SBA). New York venture capitalist, and heiress to the multi-billion dollar Tootsie Roll Company, Karen Gordon Mills was appointed to head the agency. During her confirmation hearing, Mills voiced her support for new federal policy that would divert billions of dollars in federal small business contracts to wealthy venture capitalists.

President Obama has now appointed another major campaign contributor from the venture capital industry to the other top spot at the SBA, the Chief Counsel for the SBA Office of Advocacy. Winslow Sargeant, Ph.D., will fill that position. Prior to his appointment, Sargeant was a managing director of the Wisconsin-based venture firm, Venture Investors LLC. He is a proponent of changes in federal policy that will divert federal small business contracts to well-heeled venture capitalists and even many of the nation's top venture capital firms.
(http://blogs.wsj.com/venturecapital/2009/05/22/obamas-sba-nomination-nods-in-favor-of-vcindustry/, http://wistechnology.com/articles/3310/)

The Obama Administration is currently allowing Fortune 500 firms and thousands of other clearly large businesses to take federal contracts earmarked for legitimate small businesses. Investigative stories by ABC, CBS and CNN have reported firms receiving federal small business contracts include: British Aerospace (BAE), Rolls-Royce, Xerox, John Deere, Wal-Mart, Home Depot, Sherwin-Williams, Dell Computer and Dutch giant Buhrmann NV. (ABC, http://www.asbl.com/abc_evening_news.wmv; CBS, http://www.asbl.com/cbs.wmv; CNN, http://www.asbl.com/showmedia.php?id=1170)

Congresswoman Nydia M. Velázquez (D - NY) is leading the Obama Administration's efforts in the House Committee on Small Business to pass legislation to divert federal small business contracts to some of the nation's most successful investors. Velázquez has already passed two bills through her committee, and is expected to pass a third in the near future that would divert billions of dollars a year in federal small business contracts to firms owned and controlled by venture capitalists.

Velázquez has been one of several key members of Congress who has received significant campaign contributions from the National Venture Capital Association (NVCA), its members and the venture capital industry as a whole. (http://www.allbusiness.com/company-activitiesmanagement/business-climate-conditions/9077284-1.html)

Velázquez has also been a vocal opponent to the new Fairness and Transparency in Contracting Act that was written to stop the diversion of federal small business contracts to Fortune 500 firms and other large businesses. (http://www.asbl.com/documents/hr2568.pdf)

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Reid Brownlie
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email to rbrownlie@asbl.com

 

 

     

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