Sen. Ernst urges 24 federal agencies to pause 8(a) program funding

EXCLUSIVE: Republican Sen. Joni Ernst of Iowa, chairman of the Senate Small Enterprise Committee, is urging 24 federal businesses to halt funding for a Biden-expanded program for “socially and economically deprived” entrepreneurs now below hearth for alleged fraud and corruption, Fox Information Digital has discovered.

‘Regardless of considerations concerning the 8(a) program, Joe Biden has opened the floodgates to fraud’ Ernst informed Fox Information Digital about this system. “I’ve discovered proof of alarming, doubtlessly fraudulent 8(a) awards granted by the federal government that should be investigated. This system should be halted at each company whereas a radical evaluation is carried out to make sure taxpayers usually are not being defrauded by scammers. Tax {dollars} designed to assist small companies ought to really profit all small companies.”

The federal authorities’s 8(a) program is an initiative of the Small Enterprise Administration (SBA) to assist “socially and economically deprived” small companies, based on the company’s web site, together with coaching and counseling, and unique entry to federal contracting alternatives.

Ernst despatched letters to the heads of 24 federal businesses which have created 8(a) applications — from Transportation Secretary Sean Duffy to Homeland Safety Secretary Kristi Noem — calling on them to halt funding over fraud considerations.

FEDERAL PROBE TARGETS ALLEGED MINNESOTA SOMALIA FRAUD ‘NETWORK’ AS COVID-AID CRIME REMAINS CONTINUING

Republican Sen. Joni Ernst of Iowa is looking on 24 federal businesses to cease funding the 8(a) program amid fraud considerations that emerged below the Biden administration. (Reuters)

See also  Netanyahu seeks pardon from Israeli president after Trump urges clemency

“The SBA’s 8(a) program is the company’s largest set-aside program, having generated greater than $40 billion in contracts in fiscal yr 2024 (FY 24) alone,” Ernst wrote within the letters. “But many years of investigations by the Authorities Accountability Workplace (GAO), the SBA’s Workplace of Inspector Common, and the DOJ reveal the identical mess. Sloppy oversight and weak enforcement measures permit 8(a) members to behave as pass-through entities, scooping up limitless ‘no-bid offers’ with little transparency. Each loophole erodes public belief and pits the system in opposition to sincere opponents.”

Ernst mentioned the Biden administration has tripled the initiative’s contract objectives, from an authentic objective of awarding 5% of federal contracts to eight(a) firms, to fifteen% throughout his time period. Ernst pointed to a current failure by the Justice Division in its push to chop off funding, in addition to a guerrilla-style interview in October carried out by James O’Keefe that reportedly uncovered an 8(a) agency that admitted to “violating federal legislation by utilizing minority standing as a entrance to acquire no-bid authorities contracts in extra of $100 million whereas outsourcing 80% of the work.”

The Justice Division arrested 4 individuals in Maryland and Florida in June for working an alleged decade-long bribery scheme involving a minimum of 14 8(a) contracts value greater than $550 million to U.S. taxpayers. In line with the Justice Division, one of many 4 males arrested was a authorities contractor for the U.S. Company for Worldwide Growth. The boys pleaded responsible within the scheme.

COMER INVESTIGATES WALZ IN NEW HOME INVESTIGATION, INVOLVING NEARLY $1 BILLION IN ALLEGED MINNESOTA FRAUD

The scheme concerned bribes akin to money, NBA tickets and a rustic membership wedding ceremony, Mike Emanuel, Fox Information’ chief Washington correspondent, reported in June.

SBA Chief Government Kelly Loeffler in June ordered a full audit of all authorities contracting officers who’ve exercised grant-making authority below the company’s enterprise improvement program over the previous 15 years. She mentioned the company’s audit would begin with costly and restricted aggressive contracts inside SBA’s 8(a) enterprise improvement program.

Following O’Keefe’s investigation, Loeffler opened an investigation into that contract, she reported on X in October.

“Regardless of considerations concerning the 8(a) program, Joe Biden has opened the floodgates for fraud,” Senator Joni Ernst informed Fox Information Digital about this system. (Al Drago/Bloomberg through Getty Photographs)

The 8(a) program is dealing with growing warmth after Treasury Secretary Scott Bessent in November introduced “a complete audit of all contracts and activity orders awarded below preference-based contracting, with a complete contract worth of roughly $9 billion throughout the Treasury Division and its businesses.”

The audit focuses on the “Small Enterprise Administration’s 8(a) Enterprise Growth Program and different initiatives that present federal contracting desire to sure eligible companies,” the division reported on the time.

That very same month, Ernst launched laws, “Cease 8(a) Contracting Fraud Act,” to halt funding of all new no-bid awards till a radical audit and report of this system is carried out.

Loeffler additionally despatched letters to all 4,300 8(a) contractors throughout the federal authorities, directing them to “submit monetary information as a part of a complete effort to root out fraud, waste and abuse,” she wrote on X on Friday.

“There may be proof that the 8(a) program, initially designed for ‘socially and economically deprived’ companies, has turn into a conduit for rampant abuse – particularly throughout the Biden administration, which aggressively prioritized DEI over benefit in federal contracts.” Loeffler added.

BLUE STATES DESTROYED FOR SPENDING MILLIONS IN SNAP CASH FOR FAST FOOD MEALS

“Whereas there isn’t any doubt that the Biden administration’s indifference to the integrity of the 8(a) program allowed scammers and fraudsters to deal with federal contract applications as private piggy banks, the shortcomings of the 8(a) program have raised alarm bells for many years,” Ernst continued in her letters.

Small enterprise administrator Kelly Loeffler moreover despatched letters to all 4,300 8(a) contractors throughout the federal authorities, “directing them to submit monetary information as a part of a complete effort to root out fraud, waste and abuse.” (Aaron Schwartz/CNP/Bloomberg through Getty Photographs)

CLICK HERE TO DOWNLOAD THE FOX NEWS APP

Ernst calls on the heads of the 24 businesses to pause procurement, audit present contracts, evaluation set-aside contracts awarded by the respective businesses because the 2020 funds yr and report any findings to the Senate Committee on Small Enterprise and Entrepreneurship by December 22.

Fox Information Digital reached out to Biden’s workplace about his administration’s growth of this system and up to date investigations into alleged fraud schemes, however didn’t instantly obtain a response.

Fox Information Digital’s Andrew Mark Miller and Peter Pinedo contributed to this report.