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Obama Administration Diverts Small Business Funds to Italian Defense Giant

September 7, 2011

Petaluma, Calif. - The Obama Administration has diverted more than $190 million in U.S. federal small business contracts to Italian defense giant Finmeccanica SpA. Based in Rome, the defense conglomerate has more than 75,000 employees and $25 billion in annual revenue.

According to the U.S. Small Business Administration (SBA), a small business must be independently owned and operate primarily within the U.S. Moreover, to be considered a small business in any U.S. industry, a company cannot have more than 1,500 employees and more than $38 million in annual revenue.

Finmeccanica is just one of several multinational corporations to receive U.S. federal small business contracts from the Obama Administration. British Aerospace (BAE), Rolls-Royce and Thales Communications Inc. have all received federal small business contracts since President Obama took office. The American Small Business League (ASBL) estimates every year as much as $200 billion in small business contracts is diverted to some of the largest companies in the world.

The diversion of federal small business contracts to multinational corporations is part of a decade-long small business contracting scandal. The Small Business Act mandates that 23 percent of all federal contract dollars go to legitimate small businesses. Yet since 2003, a series of federal investigations have found that most of those dollars are diverted to some of the largest companies worldwide.

During his 2008 presidential campaign, Barack Obama stated, "It is time to end the diversion of federal small business contracts to corporate giants." Yet every day his administration diverts hundreds of millions of dollars in small business contracts to large corporations.

In Report 5-15, the SBA Office of Inspector General described the diversion of federal small business contracts to large businesses as, "One of the most important challenges facing the Small Business Administration and the entire federal government today."

According to the U.S. Census Bureau, America's 28 million small businesses create 90 percent of net new jobs. Small businesses are responsible for half of GDP, half the private sector workforce and 90 percent of all U.S. exports. Based on this data, the ASBL estimates that ending the diversion of federal small business contracts to large multinational corporations would create millions of jobs for Americans.

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Reid Brownlie
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3910 Cypress Dr., Suite B
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email to rbrownlie@asbl.com

 

 

     

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