American Small Business League Prevails in Pentagon Freedom of Information Case

SAN FRANCISCO–(BUSINESS WIRE)–U.S. District Judge William Alsup Friday handed another victory to a small business advocacy group, the American Small Business League (“ASBL”), holding that the Department of Defense and the Department of Justice didn’t comply with his previous orders requiring them to disclose their ratings of major defense contractors and the Justice Department’s communications with defense contractors’ lawyers.

Judge Alsup’s ruling is the latest in a long-running, David-versus-Goliath struggle between ASBL and the two federal agencies. The government has already had to pay ASBL $500,000 in attorney’s fees in the Freedom of Information Act (“FOIA”) case.

The latest, June 5 ruling held that even after an earlier ruling last November, the government was withholding too much information from its “compliance reviews” of defense contractors Lockheed Martin and Sikorsky. The Pentagon is required to monitor defense contractors’ compliance with subcontracting goals as part of a mandated government-wide effort to provide at least 23 percent of the total value of all prime contracts to small and minority-owned businesses. In the past, the government has disclosed to the public positive reviews of the defense contractors but tried to hide negative reviews, claiming they are confidential.

Lloyd Chapman, ASBL’s president, hailed the latest ruling, saying, “Small businesses, especially women- and minority-owned small businesses, are being shortchanged out of billions of dollars a year. It’s important to shine a light on whether small businesses are getting a fair share of the defense budget, and this ruling will help us do that.”

Karl Olson, ASBL’s lawyer, noted that the latest ruling also ordered the Justice Department to disclose its communications with lawyers for Sikorsky in a prior case, and that Judge Alsup had warned the government that it’s not a wholly-owned subsidiary of the defense contractors, but rather “a wholly-owned subsidiary of the American people.” Olson said the documents Alsup ordered released “will likely show a too-cozy relationship between Justice Department lawyers and the major defense contractors they are supposed to regulate.”

The government has already had to pay a combined $975,000 to ASBL in the latest case and a prior one, and ASBL is going to seek fees after the latest ruling, likely bringing the tab for the government’s unsuccessful attempts to withhold documents to over $1 million.

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