"Don't blame me if I say I hope that Donald J. Trump will win," says Dutch ethno-nationalist leader Geert Wilders.
Josh HarkinsonAug. 25, 2016 1:40 PM
Former UK Independence Party Leader Nigel Farage compared Trump's campaign to the vote for Brexit.
Last night, Donald Trump took his "America First" message global. Appearing at a rally in Mississippi alongside British Member of European Parliament Nigel Farage, the architect of the United Kingdom's exit from the European Union, the GOP nominee sought to re-energize his struggling campaign by hitching his star to Europe's resurgent right-wing populism. "On June 23, the people of Britain voted to declare their independence," Trump said, "which is what we are going to do also, folks."
"If I was an American citizen," Brexit architect Nigel Farage told Trump fans, "I wouldn't vote for Hillary Clinton if you paid me."
On a conservative Mississippi talk radio show earlier in the day, Farage compared himself to Trump, touting how he had won the Brexit vote against all predictions by the political establishment—despite being accused of xenophobia and "neo-nazism…There are huge similarities between what made Brexit happen and what can help Trump to win," said Farage, the former leader of the anti-immigration UK Independence Party. "The same thing can happen here." At the evening rally, Farage added, "If I was an American citizen, I wouldn't vote for Hillary Clinton if you paid me."
Trump's appearance alongside Farage is the latest example of his campaign making common cause with ethno-nationalist political parties across the Atlantic. In June, Trump, while in Scotland to promote his golf resort there, proclaimed Brexit "a great thing," and his affinity with Europe's far-right runs deeper than their mutual dislike of the European Union. Farage shares Trump's penchant for racially charged rhetoric, such as when he told an interviewer he would feel "concerned" if a group of Romanian men moved next door but suggested that he would have no problem if they were Germans. Trump has received glowing endorsements from many of continental Europe's most controversial nativists and xenophobes—politicians championed by some of Trump's most prominent supporters.
Trump has at times rubbed shoulders with some of his controversial European supporters. In April, leading Italian right-wing politician Matteo Salvini, who has praised the "good work" of fascist Italian dictator Benito Mussolini, tweeted a photo of himself posing with the candidate at a Trump campaign rally. Farage and Wilders, the Dutch nationalist, traveled to Cleveland in July to attend the Republican National Convention's Trumpalooza.
"We shall win, we must win, and we will win this war," said Trump booster and Dutch nationalist leader Geert Wilders.
Wilders, who has called for outlawing the Koran and taxing Hijab-wearing Muslims, was called "a friend to freedom" by Breitbart News editor and self-described "Trump surrogate" Milo Yiannopoulos at a party he hosted during the RNC. "He is the hope for Western civilization."
"I'm not American, but don't blame me if I say I hope that Donald J. Trump will win the election in November!" Wilders responded. He went on to decry the influence of Islam in the Western world, before concluding, "for everyone that might have some doubts, we shall win, we must win, and we will win this war."
Stephen Bannon, Trump's new campaign director, has been a champion of European ethno-nationalists. In 2014, Bannon, then the publisher of Breitbart News, announced the launch of Breitbart London, a vertical dedicated to supporting a European version of the tea party. It quickly emerged as one of the most vocal champions of Brexit; Farage has written dozens of op-eds for the site. Last month, after Farage resigned as the leader of the UK Independence Party, Breitbart London editor-in-chief Raheem Kassam (and Farage's former chief of staff) told the BBC he was considering a bid for the party's leadership.
Under Bannon's direction, Breitbart News has written hundreds of fawning stories about ethno-nationalist leaders. "I have a political crush, but one I couldn't vote for today, because she ran for office in France," Trump surrogate Sarah Palin wrote on Breitbart News in December. "Marion Marechal-Le Pen is the new deserved 'It Girl' of French politics." Marechal-Le Pen is the granddaughter of Jean-Marie Le Pen and a member of his right-wing National Front. Since early last year, Breitbart News has published 75 stories about the Le Pens.
On a Mississippi radio show, Farage spoke of his shock at riding trains where none of the passengers spoke English.
The flirtation with European ethno-nationalists by Trump and his preferred media outlet may help to legitimize their nationalism in the eyes of voters by casting it as part of a global revolt against elites. And by reinforcing the similarities between his campaign and Brexit, Trump gives his supporters hope that, as Brexit proponents did in the United Kingdom, he can overcome a seemingly insurmountable disadvantage in the polls.
Farage drove home that very point during his morning radio interview on SuperTalk Mississippi, contending that voters in the United Kingdom are secretly appalled at how their country has been overrun with foreigners. He spoke of his own shock at riding trains where none of the passengers spoke English. "There was an unease about this that had been building up," he told host JT Williamson. "For years, people said to me, 'Nigel, I listened to what you've got to say. I think you're right, but I dare not tell anybody because they might think I am some awful, dreadful person.' And what the Brexit vote did was give people an opportunity to express that."
Williamson shot back appreciatively: "The similarities between that and Donald Trump are just amazing."
This article was reported in partnership with The Investigative Fund at the Nation Institute. Additional reporting was done by Sarah Posner, Kalen Goodluck, and Jaime Longoria.
"When I am teaching, there is no doubt in my mind that I am a worker."
Josh HarkinsonAug. 23, 2016 4:17 PM
Reversing a landmark ruling from the George W. Bush era, the National Labor Relations Board ruled today that graduate students who work as teaching and research assistants at private universities have the right to form labor unions.
"This is a historic moment," said Julie Kushner, director of the northeast chapter of the United Auto Workers, which challenged the Bush-era NLRB ruling on behalf of graduate-student workers at Columbia University. "There are tens of thousands of workers at private universities across the United States that will reap the benefits of unionization."
In 2004, the NLRB barred grad students at Brown University from engaging collective bargaining, contending that their status as students constrained their right to unionize. Yet in a 3-1 vote along partisan lines today, the Democratic-controlled NLRB reversed the prior board's decision, arguing that graduate workers can be both students and workers at the same time. The students' right to organize "is not foreclosed by the existence of some other, additional relationship," the decision says.
Columbia grad students cheered the decision. "When I am working on my own research I clearly am a student," said Paul Katz, a fourth-year PhD. student in Latin American history, "but when I am at the front of the room teaching 15 students about, say, the history of ancient Greece, there is no doubt in my mind that I am a worker, doing work that makes Columbia University great."
Columbia University released a statement objecting with the ruling. "Columbia—along with many of our peer institutions—disagrees with this outcome because we believe the academic relationship students have with faculty members and departments as part of their studies is not the same as between employer and employee," the statement said. "First and foremost, students serving as research or teaching assistants come to Columbia to gain knowledge and expertise, and we believe there are legitimate concerns about the impact of involving a non-academic third-party in this scholarly training."
"When it comes to stipends or healthcare or housing, it is clear that those are labor issues."
Columbia and other Ivy League universities have long argued that granting collective bargaining rights to graduate students could impinge on academic freedom by, for example, allowing unions to negotiate over whether tests should consist of multiple choice questions or essays. But the American Association of University Professors disagreed, telling the NLRB that giving unionization rights to grad workers would actually improve academic freedom by making it legally protected in labor contracts.
Today's decision applies only to private universities. Grad students at public universities are already considered employees by many states. The United Auto Workers, for example, represents student workers at the University of Massachusetts, the University of Washington, the University of California, and California State University. It also represents grad workers New York University, which is private, but in 2002 voluntarily recognized a UAW union.
Columbia graduate students point to NYU as evidence that collective bargaining makes a difference. The NYU contract eliminated healthcare premiums and increased graduate student stipends from $12,500 to $22,000 a year—still a pittance, given the cost of living in New York and the amount of time many grad students spend teaching classes and grading papers.
The Columbia students also aim to push for a grievance procedure for sexual harassment and more certainty about pay and benefits. Similar unionization efforts are underway at Harvard and New York's New School.
"I don't think anybody expects unions to figure out what grade a student gets in a class," says Eric Foner, a Columbia history professor who supports the union efforts, "but when it comes to stipends or healthcare or housing, it is clear that those are labor issues."
Anti-TPP signs were fixtures at July's Democratic National Convention.
Until very recently, grousing about the pitfalls of global trade was seen as akin to complaining about the weather. One could no more stop China from dumping cheap imports than outlaw El Niño. And besides, the deluge of foreign goods would in the long run lift all boats. Or so we were told—before Bernie Sanders and Donald Trump begged to differ.
In a year of seething resentment toward the political establishment, support for "free trade" is no longer a given within either party. Even Hillary Clinton, whose husband famously signed NAFTA into law, has come out against the Trans-Pacific Partnership—a sweeping trade deal she helped set up as secretary of state.
Larry Cohen has a pretty good idea why that happened. As the president of the Communications Workers of America, and more recently a senior adviser to Bernie Sanders, he has probably done more than anyone to elevate the issue. I reached out to Cohen to ask how he managed to make trade a big deal again.
Mother Jones: How has global trade affected your union members?
Larry Cohen: Call center jobs are tradable—more tradable than the production of steel or auto parts. Tens of thousands of CWA jobs are now in South Asia with English speakers. But that's not all. The United States is the biggest consumer of telecom products in the world and almost none of them are made here. Other countries that don't have this kind of trade regime have held onto those jobs. So Germany with Siemens and France with Alcatel—the French government puts huge penalties on shutdowns. We don't put any.
MJ: The Democratic Party has been divided on trade since the 1990s, when Bill Clinton pushed through NAFTA with Republican support. President Obama's Trans-Pacific Partnership agreement with 12 Pacific Rim countries was supposed to win over the liberal wing of the Democratic Party by better protecting workers and the environment. What happened?
Obama said to me, "Larry, you must admit, the language is a lot better in here." I said, "Yeah…but the problem is with enforcement."
LC: A year ago, President Obama said to me, "Larry, you must admit, the language is a lot better in here." And I said, "Yeah, the language is a lot better, but the problem is with enforcement."
MJ: Give me an example.
LC: I worked on a case in Honduras involving the murder of labor organizers and the collapse of bargaining rights. When there's complaints, the International Labor Affairs Bureau does an investigation. It takes them at least two years. Then you get a report eventually, and then it goes to the US Trade Representative. This is the guy who is gung ho for all these deals in the first place. When he gets to it, he meets with his foreign counterpart. They had one meeting on Honduras. It can move, after years and years, to a loss of some trade preferences. TPP enumerates that a little bit more clearly. But that's years and years, and by that point, you know?
MJ: The jobs are long gone?
LC: It's not just the jobs. It was people being butchered! The bottom line is: Multinational corporations get reparations. We get reports.
MJ: In other words, companies get to sue to protect their interests but workers and environmental groups do not?
LC: Right. Companies get to sue under what's known as "investor state dispute settlement." TransUnion is suing the US over Keystone: $15 billion. Vattenfall, which is a Swedish energy company, is suing Germany for $5 billion euros because [German Chancellor Angela] Merkel, a conservative, said we're going to shut down nuclear after Fukushima. These are examples. That has been the history of 25 years of so-called improvements in side agreements in trade.
"Chapter after chapter [of the TPP] was written by corporate lobbyists. Nothing was written by people like me."
MJ: And you don't think TPP fixes those problems?
LC: Chapter after chapter was written by corporate lobbyists. Nothing was written by people like me. There was a little side panel on labor and the environment and they didn't do a single thing we wanted.
MJ: Obama has framed the TPP as part of his "pivot to Asia," arguing basically that this is really a diplomatic mission aimed at counteracting the influence of China.
LC: That's what they wrap this in. But what it really is about is all the multinational corporations that are cheering this deal because they will reign supreme in all 12 countries. That is the core of our foreign policy. Just look at our embassies around the word. In Honduras they throw in one person on human rights. This person says, "I am totally overwhelmed. People are killed here, killed there—it's a police state." And then the Commerce Department has 15, 20 people in Honduras promoting US multinationals there, from Fruit of the Loom to you name it. It's way off.
MJ: How did your meeting with Obama come about?
LC: It was May of 2015. I'd been criticizing TPP at the time and they said, "He'd like to talk to you." What he told me was: "I am too far down the road to change." He repeated it over and over.
MJ: So you got a sense that he kind of agreed with you?
LC: No, he never agreed with me. His point of view was that this was significantly better than any other trade agreement on the things that I cared about. He did most of the talking. The joke I made at the end was: I grew up as the only kid. There were five adults in my great grandmother's rural house in North Philadelphia. These were big talkers. Once in a while, I got to talk, and they never listened to a thing I said. And I told the president, "I love you very much anyway."
MJ: What did he say?
LC: He laughed. They all laughed.
MJ: So after that meeting you kept fighting against TPP—and you almost derailed it.
LC: Right, June 27. They needed 60 votes to pass fast-track authority for the deal. We lost in the Senate by one vote.
MJ: And that's when you decided to do something different.
LC: In September I said, "I am not going to run again [for CWA president]. I feel like we are in a box. I want to go back to movement building."
MJ: So you joined the Sanders campaign as a senior advisor.
LC: Yeah, I worked full time, unpaid.
"We call it trade, but it really isn't trade. It's how we rig it."
MJ: On the trade issue?
LC: Yeah, that was my job.
MJ: What did you do, specifically?
LC: In Lansing, Michigan, we set up a trade forum with Bernie and the media and brought in a whole bunch of people who gave firsthand reports about what they had experienced.
We did a nonpartisan march through Indianapolis. Carrier, which is owned by United Technologies, announced a shutdown of their heating and furnaces plant—1,900 jobs moving to Monterrey, Mexico, at $3 an hour. Bernie spoke at the march and it was 100 percent about trade.
On the South Side of Chicago, we did a big event in front of the Nabisco plant in the middle of winter with the workers there, mostly black. They had announced they are moving the Oreo cookie line, over 1,000 jobs out of that plant, to Mexico.
Bernie wrote op-eds on trade. He did a thing in Pittsburgh, We had a thing called "Labor for Bernie" that I helped organize, bringing in tens of thousands of active union members.
MJ: Can you point to any particular moment in the campaign when it became clear that the trade issue was really resonating with voters?
LC: Definitely Michigan.
MJ: Sanders' primary victory there was a big upset.
LC: There were dramatic results there from what we believed was, in part, that work. I would give the credit to Bernie. He really thinks that the way the global economy is working is at the center of what's wrong. We call it trade, but it really isn't trade. It's how we rig it.
MJ: As secretary of state, Hillary Clinton helped set up the negotiations for TPP, so it was surprising when she came out against it in October. Did you see that coming?
"I think Hillary made a very careful calculation: If she had not come out against TPP, she would have lost to Bernie Sanders."
LC: Gradually. The pressure was enormous. I think she made a very careful calculation: If she had not come out against TPP, she would have lost to Bernie Sanders. She never could have provided enough cover to the national labor unions that endorsed her campaign without that flip.
MJ: Did you then start to see other prominent Democrats follow her lead?
LC: No. Tim Kaine would be the next prominent Democrat, and that was only when it was announced that he would be vice president.
MJ: Interesting. So what were you doing heading into the Democratic convention?
LC: Bernie put trade right at the top of his list. We had five people on the platform drafting committee out of 16. There was a meeting in St. Louis where the draft got finalized. The language had said that Democrats are "divided" on the TPP. The platform committee itself had I think 188 people, of which we had 72. They realized they had a problem. They took out "Democrats are divided" and instead they listed a bunch of standards that are actually pretty decent. The document concludes by saying, "Trade deals must meet this standard." We had an amendment that said, "Therefore, we oppose the TPP." It lost 106 to 74. So we got 2 votes from the Clinton appointees and our 72.
MJ: If Clinton really opposes the TPP, why would most of her platform committee reps oppose that language?
LC: The reason is, I think, that the White House said, "This is a total embarrassment to us. You are our secretary of state. We are not going to put up with that. We don't want any opposition to the TPP in the platform."
MJ: Why didn't you take it to a floor vote?
LC: We could have, because you only need 25 percent of the platform committee to go to the floor, but Bernie's view was that we would get the same thing. We would lose, and then it would look like the Democratic Party doesn't oppose the TPP.
"On Monday night [at the DNC] we had the giant TPP forum with 800 delegates. We actually practiced the chants of 'No TPP!'"
MJ: So you orchestrated a protest instead. People who watched the convention on TV may still remember all the anti-TPP signs. How did that come about?
LC: On Monday night we had the giant TPP forum with 800 delegates. That's where we sort of revved up the signs and the stickers and the chants of "No TPP!" We actually practiced that in the room.
MJ: Whose idea was it to do that?
LC: Me and others who organized the forum. We knew we had to use it as a springboard. That is what a political convention is supposed to be. It's not just about falling in line. In my opinion, Hillary Clinton is opposed to TPP, so we should be saying it publicly so we don't give ground to Trump.
MJ: What is your take on how the trade backlash happened within the GOP?
LC: It's voters. Hillary Clinton would say the same thing. "I listened to voters." People get it. They look at the numbers about jobs or incomes or the trade deficit, and they see the results.
MJ: Trade might be the only thing Trump and Sanders agree on.
LC: At an ideological level, we don't have the same views of fair trade at all. Our view would be that workers rights and the environment need to count as much as corporate profits, and Trump's view would be just that it's "a bad deal."
MJ: Do you think you can build an effective bipartisan coalition on trade?
LC: With regular people we can do that. But it's not like our part of the movement can unite with whatever that part is in the Republican Party. There's some acknowledgement of each other. That's about it. I just got off a call earlier making a plan for the next few months. We don't have any of them to make a plan with.
MJ: Do you think TPP will be addressed in the lame duck session?
LC: Only once can TPP be sent to Congress by any president. If it is sent before the election, it's really gonna get attacked. Anyone who is in a vulnerable district, that issue is gonna go way to the top. The White House could send it after the election but they are not even guaranteed the vote. So they are caught here. They can't send it unless they think they have the best chance they possibly have to pass it. That's why you have [House Speaker Paul] Ryan doubting it for lame duck.
MJ: So they might just wait until the next administration?
LC: Yeah, but we're not going to give on that. We are going to mobilize constantly on it.
MJ: And beyond the TPP?
LC: The only thing that the president really controls is trade policy. Congress reacts, the president acts. I do think there is a ground swell for not bringing Wall Street people into the US Trade Representative's office and taking it over. That has been going on either directly or indirectly for decades.
MJ: What should the overarching principles be?
"We need to have plain, simple language where we count just as much as the richest corporations."
LC: Balanced trade should be a major factor: The net effect on jobs. Consequences about manufacturing. What happens to different employment sectors in our country. But also, ending the investor state dispute settlement. There should be issues about the environment or workers rights or human rights that can trump national courts in the same way that investment rights do now.
MJ: This stuff is obviously important, yet when politicians talk about it, people's eyes often glaze over. How do you keep voters engaged?
LC: Only by saying to people quite bluntly, "This is not about trade, it is fundamentally about the way in which large foreign corporations rig the global economy." We need to have plain, simple language that regulates the global economy where we count just as much as the richest corporations in the world. That's what people react to.
The government recommends everyone drink three cups of milk a day—but a new study suggests African Americans might not need any.
Josh HarkinsonAug. 3, 2016 6:00 AM
The federal government's dietary guidelines urge adults to consume at least three cups of milk a day to guard against osteoporosis, a disease in which bones become brittle and weak. People who are lactose intolerant—a group that includes 75 percent of African Americans—"can choose low-lactose and lactose-free dairy products," the guidelines say. But a new study has called into question this one-size-fits-all approach. It suggests that most African American adults might not need milk at all.
Scientists have known for some time that people who live in Africa have some of the world's lowest rates of osteoporosis. Researchers long assumed that the difference was due to Africans' lower life expectancy (since the condition usually shows up later in life), more active lifestyles, and a lack of doctors to diagnose and treat the condition. Yet a study published in June in BoneKEy, an offshoot of the journal Nature, offers a compelling alternative explanation: Many Africans are genetically adapted to low-calcium diets.
Study author Constance Hilliard, an evolutionary historian at the University of North Texas, examined osteoporosis rates in Nigeria and Cameroon, two African countries that fall within an area known as the tsetse belt. Dairy farming is impossible in this equatorial region because of the presence of the tsetse fly, a tropical pest that transmits parasites that kill cattle. Despite a nearly complete lack of dairy consumption in the two countries, their osteoporosis rates are among the lowest in the world—just two to three cases out of every 100,000 people.
In an effort to figure out why, Hilliard looked at Kenya, a country outside the tsetse belt where milk consumption is common yet life expectancies and socioeconomic conditions remain essentially the same. Kenya's rate of osteoporosis is dramatically higher—245 cases out of 100,000 people. That's also much closer to levels in the United States, where the rate is 595 per 100,000 people.
So what's going on here? One possibility is that milk consumption actually increases the risk for osteoporosis. As I mentioned in a magazine piece last year, a 2014 Swedish study found women who drank more than two and a half glasses of milk a day had a higher fracture risk than their counterparts who drank less than one glass a day. Though other studies have come to the opposite conclusion, researchers have found, on balance, that calcium intake does not significantly reduce the risk of hip fracture in women or men.
"The medical community has yet to frame its questions in ways that investigate whether foods that have been culturally labeled as 'good for you' have deleterious consequences for minorities."
Hilliard finds a more compelling explanation in genetics. The tsetse belt is largely inhabited by the Niger-Kordofanian ethnicity (also the predominant ethnicity among African Americans), which is known to be lactose intolerant. Niger-Kordofanians make up for the lack of milk in their diets by better absorbing calcium. In the United States, studies have shown that black children and adults excrete less calcium than whites on essentially the same diets, thereby retaining more calcium in their bones. "This is why certain populations can maintain strong bones and are at low risk of osteoporosis even though they consume 200 mg of calcium day"—a fifth of what the federal government recommends, Hilliard says. It could also be why the rate of osteoporosis and related fractures in African American women is half that of Caucasian women.
"This is a very interesting paper," says Connie Weaver, the director of the Women's Global Health Institute at Purdue University and an expert on osteoporosis. "We know that genetics determine 60 to 80 percent of bone mass and lifestyle choices the rest. This paper offers one genetic difference that is likely more controlling of bone mass than diet or other lifestyle choices."
Still, Weaver doesn't think African Americans should consume less dairy. Though they may have less of a genetic disposition for osteoporosis, she argues that "there still would be a range of risk within that genotype that would be improved by adequate dairy or the nutrients provided by dairy."
Hilliard makes no dietary recommendations—after all, she is a historian, not a nutritionist. Still, she points out that African Americans may be uniquely susceptible to some of milk's side effects. Multiple studies have correlated high levels of dairy consumption to prostate cancer; African Americans are 2.4 times as likely to die from the disease as the population at large. Though other genetic and socioeconomic factors may explain their higher risk, some studies have pointed to dairy. The California Collaborative Prostate Cancer Study, published in 2012, found that calcium consumption was closely related to an increased risk of prostate cancer, particularly in black men who carry a genotype common in populations of African origin.
Yet the federal government's dietary recommendations don't account for such distinctions. And that omission, she says, amounts to something like discrimination. "What has happened is the medical community has universalized the particular biology of [Caucasians]," Hilliard says. "And the medical community has yet to frame its questions in ways that investigate whether foods that have been culturally labeled as 'good for you' have deleterious consequences for minorities."
So says this advocacy group for actual small businesses.
Josh HarkinsonJul. 25, 2016 6:00 AM
Verizon Communications is the largest wireless provider in the United States, with 178,000 employees and $91.7 billion in sales last year, and yet it somehow managed to wrangle more than $107 million in federal "small-business contracts" last year through the US Small Business Administration.
Verizon isn't the only gargantuan company the SBA deems eligible for assistance. In 2015, according to a recent lawsuit by an advocacy group for actual small businesses, the SBA counted contracts with 150 other Fortune 500 companies in its fulfillment of the federal government's small-business contracting obligations.
"The Small Business Administration has become perverted. At some point their mission changed to helping government and contractors circumvent" the law.
"The Small Business Administration has become perverted," says Lloyd Chapman, founder of the American Small Business League, which filed the suit in May. "At some point their mission changed to helping the government and contractors circumvent the Small Business Act."
Congress created the SBA in 1953 with its passage of the Small Business Act, legislation designed to "maintain and strengthen the overall economy" by giving the small fry of the business world a leg up. The definition of "small" varies by industry, from a maximum of 100 to 1,500 employees and revenues of $750,000 to $38.5 million. (Chapman, noting that the average American business has just 17 employees, says these caps are too high.) In any case, federal research shows that such businesses are key to supporting the middle class: Although they employ less than half of all private sector workers, they create 64 percent of net new jobs. They also tend to buck the offshoring trend and are seen as a counterbalance to income inequality because they spread wealth around to millions of entrepreneurs. "The Small Business Act is the largest economic stimulus program for the middle class in US history," Chapman proclaims. "And we are its protectors."
Indeed, his and other watchdog groups have repeatedly accused the SBA of failing to fulfill its original mission. Under the law, the agency is required to ensure that at least 23 percent of federal contract money goes to small businesses. The actual figure, Chapman calculates, is about 4 percent, a difference of hundreds of billions of dollars each year.
"The United States government is anti-small-business," says Chapman, whose scrappy three-person outfit in Petaluma, California, has filed dozens of lawsuits against the SBA and other federal agencies over the past quarter-century, often compelling the agency to reveal more information about how it handles contracts. The latest suit seeks an injunction that would require the SBA to stop allegedly cooking its books when it reports on federal contracting.
SBA spokeswoman Tiffani Clements would not comment directly on the lawsuit, but argued in an email that actual misreporting of small-business contracts is rare, and not the fault of SBA employees. Corporate behemoths that acquire smaller firms may simply ignore a requirement to recertify the size of the firms they acquire (the Verizon contracts were awarded to a subsidiary, Terremark Federal Group, that Verizon purchased in 2011). Additionally, Clements said, "There is always the possibility of human error" when the government's contracting officers record a company’s data. (Chapman counters that if human errors were to blame, then the small firms would get misclassified as large ones, too—and nobody in his group has ever seen that happen.)
"The Small Business Act is the largest economic stimulus program for the middle class in US history...And we are its protectors."
Chapman is hardly alone in his criticisms. Every year since 2005, the SBA's Office of the Inspector General has ranked "small business contracting" as the agency's most serious management challenge. "As an advocate for small business, SBA should strive to ensure that only eligible small firms obtain and perform small business awards," the OIG wrote in an October report citing "widespread misreporting…since many contract awards that were reported as having gone to small firms have actually been substantially performed by larger companies." The report blamed reporting errors mainly on contracting officers and poor oversight of how companies calculate their size.
Perhaps the most significant way the SBA fudges the small-business contracting numbers is as follows: In arriving at its 23 percent figure, the agency does not include any contracts for work performed outside the United States or in service of dozens of different federal agencies, including the Postal Service, the federal courts, the National Security Agency, and the CIA. It also excludes a large amount of contract spending related to Medicare, Medicaid, and veterans' health. Finally, it doesn't count contracts commissioned by state and local agencies using federal grant money.
The SBA argues that these exclusions are legal because the small business requirements apply only to "contracts" (not grants) at "federal agencies"—which the SBA defines as excluding "non-executive branch federal government entities" such as the court system. It also excludes contracts that don't appear in the Federal Procurement Data System and those that may be deemed sensitive for "national security reasons."
In fact, the SBA's exclusions cover the majority of federal discretionary spending, according to an analysis by law professor Charles Tiefer, an expert on government contracts at the University of Baltimore. Tiefer calculates that, in 2011, the SBA excluded $677 billion worth of federal grants and contracts from $1.1 trillion in overall spending, which allowed the agency to claim that 22 percent of the contracting dollars went to small businesses that year.
Small businesses "are the backbone of our economy and the cornerstones of our nation's promise." —Barack Obama
"The SBA has a lot of trouble getting agencies like the Department of Defense to give awards to small businesses instead of the Lockheeds and the Halliburtons," Tiefer explains, "so it wants formulas that establish the lowest possible total to lighten up its work for how much small-business contracting it has to round up."
Although genuflecting to the shrine of small business has become standard practice for politicians—President Barack Obama said in 2012 that small businesses "are the backbone of our economy and the cornerstones of our nation's promise"—the SBA's flaws are largely ignored by the leaders of both parties. The watchdog group Public Citizen, which examined the issue last year, blames the inaction on the revolving door between government and major contractors, and on prodigious lobbying and political donations from Fortune 500 companies.
More surprisingly, the issue has received scant attention from the nation's best-known "small business" groups. The National Federation of Independent Business, which claims 325,000 members and chapters in 50 states, hasn't touched it. Chapman believes the NFIB is actually a shill operation for large corporations. In 2011, it received a $3.7 million donation from Karl Rove's Crossroads GPS, the dark-money arm of his conservative political fundraising juggernaut.
In Tiefer's view, the outrage of Chapman’s group is spot on. Redirecting hundreds of billions of dollars to small businesses each year would do a lot to address income inequality, he told me: "The difference is much smaller between the salaries of the people at the top of a small business and the worker bees…By and large, the people at the top of the big contractors like Lockheed are in the 1 percent, whereas the people in the top of small businesses are not."
Correction: An earlier version of this story incorrectly described an SBA rule relating to small business acquisition