After receiving significant campaign contributions from the National Venture Capital Association (NVCA) and special interests representing the biotechnology industry, Speaker of the House Nancy Pelosi (D-California) has ramrodded legislation through the House of Representatives that will let billionaire venture capitalists hijack federal small business contracting programs. Thousands of legitimate small businesses across America could be forced to close their doors if the legislation becomes law.
Both bills, HR 3567 and HR 5819, will require the average American small business to compete head-to-head with firms owned and controlled by the nation’s wealthiest investors for even the smallest federal small business contracts.
In its original form, HR 3567 would have allowed firms that are completely controlled by wealthy investors to be considered small businesses. Despite opposition from the nation’s largest small business organizations and the Small Business Administration (SBA), Pelosi exerted enough pressure on her colleagues to get the bill passed in record time. The bill was pushed through the House so quickly, many members complained they didn’t have adequate time to even read it before they were strong-armed by Pelosi into voting for it.
In HR 5819, Pelosi went so far as to allow some of the nation’s largest and wealthiest venture capital firms to own up to 98 percent of a company and still be considered a small business. The full senate will be considering its version of the bill, sb 3362, when it returns from summer recess.
“I truly think it’s unfair for firms owned by venture capital companies to be considered small businesses. The inclusion of venture capital firms in government small business programs will leave legitimate small businesses out in the cold when it comes to getting federal work,” said American Small Business League (ASBL) member Daryl Corley, president and CEO of the Clinton, Maryland-based MSDS Consultant Services.
In a January 2007 press release, Pelosi stated, “Honest leadership isn’t just a partisan goal. It’s the key to putting the interests of all Americans ahead of the special interests. It’s what the American people sent us here to do, and House Democrats are proud to have taken serious and substantive steps to ensure Congress governs with the highest ethical steps.” Pelosi’s words are a stark contrast to her actions regarding HR 3567 and HR 5819, which support the interests of Biotechnology Industry Organization (BIO) and the NVCA, as opposed to the interests of America’s nearly 27 million legitimate small businesses.
Pelosi has received significant contributions from several groups that stand to benefit substantially from venture capital participation in federal small business programs. According to MAPLight.org, between January 2005 and May 2008, Pelosi received a combined $108,400 from venture capital giant Kleiner Perkins Caufield & Byers, pharmaceutical giant Amgen Inc. and lobbyist Akin Gump Strauss Hauer & Feld LLP.
According to Opensecrets.org, in addition to its contributions to Pelosi, the NVCA made major contributions to 17 members of the House Committee on Small Business to ensure its two bills passed. The largest recipient of its generous contributions was Committee Chair Nydia M. Velázquez.
I think Speaker Pelosi has forgotten that America is a democracy. You won’t find anyone outside the National Venture Capital Association who thinks billionaires and venture capital firms should be allowed to participate in federal programs to assist small businesses. Our government is supposed to represent the will of all the people—not just the wealthy people. Pelosi has clearly gone back on her campaign promises to end corruption in Washington. She’s turning our government into a plutocracy and is selling legislation to wealthy investors that will cheat small business in the middle class economy out of hundreds of billions of dollars in federal contracts.
It’s starting to look like small business in America might have been better off with a Republican-controlled Congress.
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