SBA office worked to block federal regulations on businesses

Report co-author Sidney Shapiro said SBA's Office of Advocacy has been "Acting as a federal outpost for big business and its anti-regulatory agenda.” Report co-author Sidney Shapiro said SBA's Office of Advocacy has been "Acting as a federal outpost for big business and its anti-regulatory agenda.” bogdanhoda/

An independent office within the Small Business Administration has worked to block health, safety and environmental regulations on behalf of small and large businesses without appropriate technical expertise, two new studies have charged.

Scholars at the nonprofit Center for Progressive Reform in a report released Tuesday argued that the SBA unit set up in 1976 to go to bat for small business owners was a “small and largely unaccountable office” that quietly became “a highly influential player in the federal regulatory system, combatting protections developed by other federal agencies.”

The SBA's Office of Advocacy “has lost its way," said report co-author Sidney Shapiro, University Distinguished Chair in Law at Wake Forest University School of Law. "Instead of focusing like a laser on advancing the unique interests of small business, it's spending too much of its time, and too many taxpayer dollars, acting as a federal outpost for big business and its anti-regulatory agenda.”

One example is the office reportedly pressuring the Environmental Protection Agency “to water down key pending standards that limit the toxic pollutants coal power plants can release. The office’s comments did not press for special exemptions for smaller power plants,” the report said, “they simply called for the EPA not to put any limits at all on most of the hazardous pollutants the rule would limit (such as arsenic, fine particle pollution, and lead).” The final regulation is protected to prevent 4,200-11,000 premature deaths each year, the center reported. The study argued that regulations such as those setting air pollution standards actually help small businesses by bolstering the market for pollution control equipment.

Also released on Tuesday, a study by the Center for Effective Government (formerly OMB Watch) charged that the Office of Advocacy over the years has “decided to comment on technical, scientific assessments of the cancer risks of formaldehyde, styrene, and chromium. By its own admission, Advocacy lacks the scientific expertise to evaluate the merits of such assessments,” the study said.

Analysts found that the office’s comments raised no issues of specific concern to small business and relied almost exclusively on talking points provided by trade associations dominated by big chemical companies. From 2005 to 2012, the center found, the American Chemistry Council and members spent more than $333 million “lobbying Congress and federal agencies on, among other things, a protracted campaign to prevent government agencies from designating formaldehyde, styrene, and chromium as carcinogens. The Formaldehyde Council, Styrene Industry Research Council, and Chrome Coalition spent millions more. These groups asked the Office of Advocacy for assistance, and the office became their willing partner.”

The Center for Progressive Reform said the record “demonstrates how the Office of Advocacy has taken advantage of the overly broad standards developed by the SBA to define what counts as a small business…. In dozens of industries, SBA considers companies with up to 500 employees to be small businesses; in a few areas, firms with up to 1,500 workers are deemed "small."

Its report recommends that Congress amend the office’s authorizing statutes to “focus on promoting small business `competitiveness’ instead of on reducing regulatory impacts or burdens,” and to bolster congressional oversight.

The Center for Effective Government study challenged the Office of Advocacy’s practice of hosting regular environmental roundtables attended by trade association representatives and lobbyists. “The discussions and minutes are kept secret, although the consensus positions that emerge appear to inform the Office of Advocacy’s policy positions.” Saying such practices violate “the spirit, and perhaps the letter, of the Federal Advisory Committee Act,” the center called for the Government Accountability Office to investigate.

The Advocacy Office said through a spokesman that it would have no comment, having not read the embargoed reports.

An SBA press release last February said the office had saved small businesses $11.7 billion in first-year regulatory costs and $10.7 billion in annually recurring costs by helping federal agencies comply with the Regulatory Flexibility Act. “As a former entrepreneur, I can attest that small firms are in a better position to grow, innovate, and create jobs when regulations are less burdensome,” said Chief Counsel for Advocacy Winslow Sargeant. “Federal agencies that work with Advocacy to use the RFA effectively write rules that are better for small entities and the economy while still meeting the statutory goals the regulations were designed to carry out.”

(Image via bogdanhoda/

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Federal IT Applications: Assessing Government's Core Drivers

    In order to better understand the current state of external and internal-facing agency workplace applications, Government Business Council (GBC) and Riverbed undertook an in-depth research study of federal employees. Overall, survey findings indicate that federal IT applications still face a gamut of challenges with regard to quality, reliability, and performance management.

  • PIV- I And Multifactor Authentication: The Best Defense for Federal Government Contractors

    This white paper explores NIST SP 800-171 and why compliance is critical to federal government contractors, especially those that work with the Department of Defense, as well as how leveraging PIV-I credentialing with multifactor authentication can be used as a defense against cyberattacks

  • Toward A More Innovative Government

    This research study aims to understand how state and local leaders regard their agency’s innovation efforts and what they are doing to overcome the challenges they face in successfully implementing these efforts.

  • From Volume to Value: UK’s NHS Digital Provides U.S. Healthcare Agencies A Roadmap For Value-Based Payment Models

    The U.S. healthcare industry is rapidly moving away from traditional fee-for-service models and towards value-based purchasing that reimburses physicians for quality of care in place of frequency of care.

  • GBC Flash Poll: Is Your Agency Safe?

    Federal leaders weigh in on the state of information security


When you download a report, your information may be shared with the underwriters of that document.