Reports: Big business using obscure office to kill federal regulations

A little known office within the Small Business Administration (SBA) is working at the behest of industry to block new federal rules and should be reined in, a pair of pro-regulation groups charged Tuesday.

The Center for Effective Government and the Center for Progressive Reform (CPR) issued separate, scathing reports detailing activity in the SBA’s Office of Advocacy.

The office, created in 1976, is charged with making sure federal agencies take small business into consideration when adopting new rules. But the groups say it has since morphed into a saboteur of federal regulations.

“The SBA's Office of Advocacy has lost its way," said Sidney Shapiro, of Wake Forest University School of Law and a co-author of the CPR report. "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.”

Office of Advocacy spokesman Patrick Morris said officials had not been able to read the report and had no immediate comment on the criticism.

The report issued by CPR, a left-leaning nonprofit, contends that the Office has come to use overly broad standards to define what counts as a small business, often considering companies with as many as 500 employees in that category.

As an example of the office’s advocacy for big business, the CPR report cites one case in which officials there submitted comments to the Environmental Protection Agency (EPA) seeking to “water down” standards limiting the pollution emissions from coal power plants. The group notes that the office did not seek special exemptions for small companies, but the industry as a whole.

The Center for Effective Government’s report focuses on a series of comments the office made on scientific assessments of whether certain chemicals — formaldehyde, styrene and chromium — present risks of cancer. Through the Freedom of Information Act, the watchdog group formerly known as OMB Watch sought documents detailing the process that led to the comments.

The group determined that the Office of Advocacy hosted regular roundtable meetings in a number of policy areas, attended by representatives of trade groups and lobbyists, who represent the interests of big and small businesses alike, according to the report. 

In one email obtained by the group, a staff member at the Office of Advocacy told a lobbyist for General Electric that he was invited to attend a meeting on labor safety, as long as he “maintain(ed) a small business perspective.”

Ultimately, the group concluded that the Office of Advocacy “relied almost exclusively on talking points provided by trade associations dominated by big chemical companies” when it commented on the cancer risks of the three chemicals, according to the report.

The Center for Effective Government urged the Government Accountability Office to investigate the office.

Additionally, both groups laid out a set of recommendations that would limit the scope of office’s work and increase oversight.