Say Anything Blog

Government investigators were able to qualify for a federal program with access to billions of dollars of government contracts designed to give preference to firms that are headquartered in disadvantaged communities by setting up bogus firms with phony addresses.

The HUBZone program, under the direction of the Small Business Administration, doles out $8 billion dollars in government contracts a year and is incredibly easy to game, according to a new Government Accountability Office report.

“It’s absolutely shameful,” said House Committee on Small Business Chairwoman Nydia M. Velázquez (D-NY) who chaired a hearing on the issue yesterday.

“It’s tougher to get a library card than it is to get into the HUBZone program. All you need is a bit of White-out,” said Velazquez, referring to a quick change of address that would allow for a company based in a wealthy area to qualify for federal contracts meant for companies located in poorer communities.

GAO’s lead investigators told the Congressional panel they had found countless instances of abuse by non-qualifying firms. 

Investigators said they found the SBA is doing almost nothing to verify the information of applicants.  Investigators also said they had extensive evidence of individuals who misrepresent the locations of their companies, knowing the agency will not question them about their applications.

The GAO review delves into ten randomly-selected firms in the Washington DC metropolitan area.  Many of these companies had set up “virtual offices” or rented mailboxes in poor communities with the sole purpose of gaining a mailing address within HUBZone boundaries.  All ten failed GAO’s site inspections, and have been referred to the Inspector General for corrective action. 

Investigators also set up four bogus firms to test SBA’s application process.  One of the businesses was listed as occupying a local Starbucks; another a major sports arena.  One had only a P.O. Box address and one listed the address of a “virtual office”, which actually was a rented closet within the boundaries of the HUBZone. 

Each time, the applications were certified as HUBZone eligible by the SBAwith little or no questions asked.

Velazquez, who has been calling for HUBZone reform for two years without seeing any results, said the HUBZone fraud is likely taking place across the country and the problem must be fixed immediately.

Last year, the House passed legislation to require on-site visits and other means of confirming compliance with HUBZone guidelines, but the Senate has yet to act on the bill.

President Bush has opposed the bill aggressively. The White House Office of Management and Budget said in a statement last year that the bill’s elements would be “burdensome and undesirable.”

...For an insight as to why the GOP is down and out in Washington, take a look at Jefferson City. That’s where Sarah Steelman, the state treasurer, is running in an Aug. 5 primary for the Missouri governorship. And it’s where her reform campaign against earmarks and self-dealing is threatening the entrenched status quo, causing her own party to rise against her.

So bitter are House Minority Whip Roy Blunt and Sen. Kit Bond at Ms. Steelman’s attack on their cherished spending beliefs that last month they rallied the entire Missouri congressional delegation to put out a public statement openly criticizing her campaign against six-term U.S. Rep. Kenny Hulshof. Joining them in their support of Mr. Hulshof has been the vast majority of the state Republican machine. Ms. Steelman is clearly doing something right.

Her sin is in fact to belong to that new mold of Republican – Louisiana Gov. Bobby Jindal, Alaska Gov. Sarah Palin, Sens. Tom Coburn and Jim DeMint – who know it’s no longer enough to simply hawk lower taxes. In 10 years as a state legislator and treasurer, her target has been the slothful political favor factory that’s led Republicans away from small-government principles and outraged conservative voters.

...For Mr. Blunt, this is also just a wee bit personal. His son, Matt, is the outgoing governor, and has been on the receiving end of a few Treasurer Steelman blasts. Last year she stopped payment on a $70,000 secret check his administration cut to settle a sexual harassment suit against an official. Her demand for transparency blew the case into the open, infuriating GOP colleagues.

The Nevada Republican Party decided Thursday not to reconvene its scuttled state convention this month, claiming it couldn’t generate enough interest to reach a legal quorum to elect delegates to the national convention in St. Paul, Minn.

Instead, the party’s executive board, in a private conference call July 25, would decide who from Nevada will attend the Republican National Convention to formally nominate U.S. Sen. John McCain.

The state party abruptly ended its state convention in April to head off a delegation of Ron Paul supporters who had captured control of the proceedings and appeared on track to elect a majority slate to the Sept. 1-4 national convention.

Party officials planned to reconvene on July 26. But only about 300 delegates sent in RSVPs, well short of the 675 needed for a quorum.

...“I don’t ever remember such chaos in the party,” said Barbara Vucanovich, a former congresswoman who has been involved in party politics since the early 1950s. “Frankly, its an embarrassment for our state and also makes it difficult for John McCain. He needs all the electoral votes he can get.”

It turns out that presumptive Republican nominee Sen. John McCain, has attended even fewer Afghanistan-related Senate hearings over the past two years than Obama’s one. Which is a nice way of saying, McCain, R-Ariz., the top Republican on the Senate Armed Service Committee, has attended zero of his committee’s six hearings on Afghanistan over the last two years.

WASHINGTON—The second-in-command at the government’s top whistle-blower office has quit in a dispute with his boss, whom he accused of putting “political agendas and personal vendettas” ahead of the agency’s mission and independence.

James Byrne’s resignation as deputy to U.S. Special Counsel Scott Bloch is effective Saturday. Bloch is under federal investigation, accused of destroying evidence potentially showing he retaliated against his own staff.

Upon my departure, I am obligated to note that the mission, independence and very existence of the Office of Special Counsel are—and shall remain—at risk unless and until this agency is afforded a presidentially appointed, Senate-confirmed leader who is capable of putting OSC’s mission and OSC’s people ahead of political agendas and personal vendettas,” Byrne, the deputy special counsel, wrote in a July 10 letter to Bloch that was obtained by The Associated Press.

...A group of current and former agency workers filed a complaint against Bloch in 2005, accusing him of retaliating with intimidation and involuntary transfers of those who opposed his policies.

...FBI and White House Office of Personnel Management agents raided Bloch’s office and home in May as part of a criminal investigation into whether he obstructed justice and, potentially, lied to Congress about hiring an outside tech company to scrub his government laptop computer.

...Rep. Tom Davis, R-Va., has joined liberal-leaning watchdog groups in demanding that Bloch resign immediately.

Thank you Harry