Following the revelation of a significant bribery scandal at USAID, the Small Business Administration (SBA) is initiating a comprehensive audit of every government contracting officer who has granted awards under its business development program over the past 15 years.
In a letter acquired by Fox News Digital, SBA Administrator Kelly Loeffler described the fraud as a “damning reflection of systemic failures in oversight and accountability,” asserting that it “was not an isolated incident.”
Loeffler instructed Associate Administrator Tre Pennie, who is responsible for SBA contracting, to “act decisively” and commence a thorough audit of all awarding officers dating back to 2010, as reported by Fox News.
“The role of federal government contracting officers is not ceremonial or self-serving; it is a position of significant authority and fiduciary responsibility,” Loeffler stated. “The contracting process must be transparent and based on merit, rather than personal gain.”
This action follows the dismantling of USAID, the foreign aid agency, due to budget cuts identified by Elon Musk and President Donald Trump, which aimed to eliminate waste, fraud, and abuse. Democrats have voiced their opposition, arguing that these cuts would adversely affect impoverished communities abroad.
However, those same programs have now been linked to years of fraudulent activities. Roderick Watson, a veteran USAID contracting officer, recently admitted guilt to charges of “bribery of a public official” in connection with a large-scale kickback scheme that operated from 2013 to 2020.
The Department of Justice (DOJ) reported that Watson accepted bribes from Walter Barnes, the owner of Vistant, and Darryl Britt, the owner of Apprio, with assistance from subcontractor Paul Young.
According to the DOJ, “Britt and Barnes routinely funneled bribes to Watson, which included cash, laptops, thousands of dollars in tickets to a suite at an NBA game, a country club wedding, down payments on two residential mortgages, cellular phones, and employment for relatives. The bribes were frequently disguised through electronic bank transfers that falsely listed Watson on payroll, incorporated shell companies, and fraudulent invoices.”
The total value of the bribes was estimated…
In November 2023, Vistant—through a collaborative venture—secured a contract valued at up to $800 million. One of the objectives of this contract was to tackle “a range of issues influencing the fundamental causes of irregular migration from Central America to the United States,” a matter that had been entrusted to Kamala Harris during her tenure as vice president.
Shortly after the contract was awarded, USAID annulled the agreement and disqualified Vistant, citing “evidence of conduct indicating a lack of business honesty or integrity.”
However, the situation did not conclude there. The joint venture initiated legal action, prevailed in court, and not only had the contract reinstated but also received a $10,000 compensation from the government in August 2024.
In her correspondence, Loeffler remarked that the USAID incident “illustrates a failure in the very safeguards intended to protect American taxpayer funds and guarantee fair access for legitimate small enterprises.”
She criticized the Biden administration for granting the $800 million contract to a firm that had previously been flagged for dishonesty.
“The reality that a federal official could serve as the linchpin of a sustained, large-scale fraudulent operation highlights a deficiency in internal controls and a collapse in the contracting environment that necessitates immediate rectification,” Loeffler stated.
She further emphasized that the SBA plays a “vital role” in the contracting process and “will no longer remain passive while abuses are committed at the expense of taxpayers and deserving small businesses.”
The agency’s audit will commence with high-value and limited competition contracts within the SBA’s 8(a) program. Findings will be forwarded to the Office of Inspector General and the Department of Justice.
Officials or businesses that are discovered to have breached ethical standards or engaged in criminal activities will be reported to the appropriate authorities, and the SBA will aid in the recovery of taxpayer funds.
“We will not permit public trust to be subtly undermined by covert agreements and unregulated discretion,” Loeffler stated.
“We have a responsibility to America’s small businesses to ensure this is handled correctly,” she continued. “Your office possesses the authority, and now the obligation, to take decisive action.”
