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

Exclusive: Iowa Republican Senator Joni Ernst, who chairs Senate The Small Business Committee is urging 24 federal agencies to stop funding Biden’s expanded program for “socially and economically disadvantaged” business owners who are now under fire for alleged fraud and corruption, Fox News Digital has learned.

“Despite concerns about the 8(a) program, Joe Biden “They opened the doors to fraud.” Ernst told Fox News Digital about the show. “I have found troubling, and potentially fraudulent, evidence of 8(a) awards made across the government that needs to be investigated. The program should be halted at each agency while a comprehensive review is conducted to ensure taxpayers are not defrauded by fraudsters. Tax dollars designed to help small businesses should actually benefit all small businesses.”

The federal government’s 8(a) program is an initiative under the Small Business Administration (SBA) to assist small businesses that are “socially and economically disadvantaged,” according to the agency’s website, including training, counseling, and exclusive access to federal contracting opportunities.

Ernst sent letters to the heads of 24 federal agencies that established the 8(a) programs – extending from Secretary of Transportation Sean Duffy to Secretary of Homeland Security Kristi Noem – Calls on them to stop funding amid fears of fraud.

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Iowa Republican Sen. Joni Ernst called on 24 federal agencies to stop funding the 8(a) program amid fraud concerns that have emerged under the Biden administration. (Reuters)

“The SBA 8(a) program is the agency’s largest earmarked program, having allocated more than $40 billion in contract awards during fiscal year 2024 (FY24) alone,” Ernst wrote in the letters. “Yet, decades of investigations by the Government Accountability Office (GAO), the Small Business Administration (SBA) Office of Inspector General, and the Department of Justice reveal the same corruption. Sloppy oversight and weak enforcement measures allow 8(a) participants to operate as pass-through entities, causing unlimited no-bid deals to fall through with little transparency.4 Each loophole destroys public trust and rigs the system against honest competitors.”

The Biden administration has tripled the initiative’s contracting goals from the original goal of awarding 5% of federal contracts to eight companies, up to 15% during his term, Ernst said. Ernst pointed to the Justice Department’s recent failure in its push to halt funding, as well as a scathing guerrilla-style interview in October by Amnesty International. James O’Keefe Which allegedly revealed the 8(a) company admitted to “violating federal law, and using minority-owned status as a front to obtain $100 million+ in no-bid government contracts while outsourcing 80% of the work.”

the Ministry of Justice In June, four individuals were arrested in Maryland and Florida on charges of running an alleged decade-long bribery scheme involving at least 14 contracts worth more than $550 million in U.S. taxpayer dollars. One of the four men arrested was a government contractor with the U.S. Agency for International Development, according to the Justice Department. The men pleaded guilty to the scheme.

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Mike Emanuel, a Fox News correspondent in Washington, said in June that the scheme included bribes such as cash, NBA tickets and a wedding at a country club.

SBA Chairman Kelly Loeffler ordered a full audit of all government contracting officials who exercised grant-awarding authority under the agency’s business development program over the past 15 years in June. The agency’s audit will begin with competitive, high-cost, limited contracts under the SBA’s 8(a) Business Development Program, she said.

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

Then-President Joe Biden speaks at the National Museum of African American History and Culture in Washington, D.C., United States on Friday, May 17, 2024. (Al Drago/Bloomberg via Getty Images)

The 8(a) program is facing intense heat after Treasury Secretary Scott Besent announced a “comprehensive review of all contracts and task orders awarded under preference-based contracting, totaling approximately $9 billion in contract value across the Treasury Department and its offices” in November.

The audit focused on the Small Business Administration’s 8(a) Business Development Program and other initiatives that provide federal contracting preferences to certain eligible businesses, the department said at the time.

That same month, Ernst introduced legislation, the “Stop 8(a) Contract Fraud Act,” to stop funding all new no-bid awards until a comprehensive audit and report on the program is conducted.

Additionally, Loeffler sent letters to all 4,300 8(a) contractors across the federal government, ordering them to “produce financial records as part of a comprehensive effort to eliminate fraud, waste, and abuse,” she posted on X Friday.

“Evidence suggests that the 8(a) program, initially designed for ‘socially and economically disadvantaged’ businesses, has become a transit vehicle for rampant abuses — particularly during the Biden administration, which has aggressively prioritized DEI over merit in federal contracting.” Loeffler added.

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“While there is no doubt that the Biden administration’s indifference to the integrity of the 8(a) program has enabled scammers and fraudsters to treat federal contracting programs like piggy banks, the flaws of the 8(a) program have raised alarm bells for decades,” Ernst continued in her letters.

Furloughed employees at the Small Business Administration sent automated out-of-office emails criticizing Democrats over the shutdown. (Aaron Schwartz/CNP/Bloomberg via Getty Images)

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Ernst calls on the heads of the 24 agencies to temporarily halt contracts, Current audit contracts, reviewing set aside contracts awarded by relevant agencies since fiscal year 2020 and reporting any findings to the Senate Committee on Small Business and Entrepreneurship by December 22.

Fox News Digital reached out to Biden’s office regarding his administration’s expansion of the program and recent investigations into alleged fraud schemes, but did not immediately receive a response.

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