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In a decisive move to curb misuse of government contracts, Senator Joni Ernst of Iowa has put forth new legislation aimed at halting fraudulent activities within federal contracting. Her initiative comes in response to disturbing reports of a multi-million-dollar bribery scheme that exploited the Small Business Administration’s (SBA) 8(a) program over several decades.
Amidst allegations involving a staggering $100 million fraud, Senator Ernst, who chairs the Senate Small Business Committee, has introduced the Stop 8(a) Contracting Fraud Act. This proposed legislation seeks to suspend any new no-bid contract awards until a comprehensive audit of the program has been conducted. The goal is to ensure transparency and accountability, preventing further financial abuses.
Senator Ernst expressed her concerns in a statement to Breitbart News, emphasizing the urgent need for reform. “The 8(a) program is broken and needs to be completely reformed before another dollar goes out the door,” she stated. Ernst’s message underscores her commitment to safeguarding taxpayer money from fraudulent schemes.
“I will not allow taxpayers to be defrauded of hundreds of millions of dollars because the Biden administration invited con artists to have a free-for-all. It is common sense that SBA programs should help small businesses not serve as a personal piggy bank to criminals,” Ernst added, highlighting the broader implications of such misconduct on public trust and small businesses.
The issue gained further attention after O’Keefe Media Group released a video in October. The footage purportedly shows Anish Abraham, a senior director at ATI Government Solutions, admitting that his company acted as a “pass-through.” According to the allegations, ATI secured a $100 million contract, retained $65 million, and outsourced the remaining $45 million to another firm to fulfill the contract.
Melayne Cromwell, director of contracts at ATI, reportedly said the firm only does roughly 20 percent of the work.
“A lot of our subcontractors bid on contracts that were perfect in their industry, but because they weren’t Native American, they wouldn’t win it, so we bid on it for them, and they became our subcontractor,” Cromwell said in the video.
In June, the Department of Justice announced that a United States Agency for International Development (USAID) official and three corporate executives pleaded guilty to a decade-long bribery scheme involving over $550 million in contracts:
According to court documents, beginning in 2013, Watson, while a USAID contracting officer, agreed with Britt to receive bribes in exchange for using Watson’s influence to award contracts to Apprio. As a certified small business under the SBA 8(a) contracting program, which helps socially and economically disadvantaged businesses, Apprio could access lucrative federal contracting opportunities through set-asides and sole-source contracts exclusively available to eligible contractors without a competitive bid process.
Matthew R. Galeotti, head of the Justice Department’s Criminal Division, said in statement at the time:
The defendants sought to enrich themselves at the expense of American taxpayers through bribery and fraud. Their scheme violated the public trust by corrupting the federal government’s procurement process. Anybody who cares about good and effective government should be concerned about the waste, fraud, and abuse in government agencies, including USAID.
Galeotti added, “Those who engage in bribery schemes to exploit the U.S. Small Business Administration’s vital economic programs for small businesses — whether individuals or corporations acting through them — will be held to account.”
