A multi-billion dollar defense contractor that gets federal work without competition because of the hardships of life as an &#8220;Alaskan native&#8221; doesn&#8217;t just have an apparently Eskimo-free executive suite — it passes through millions to the non-native companies of the CEO&#8217;s husband, which don&#8217;t even pretend to be indigenous.
ASRC Federal&#8217;s business model relies on racial preference laws that allow no-bid contracts for firms owned by minorities, with even larger contracts available to those owned by indigenous people. It is named after, and is owned by, the Arctic Slope Regional Corporation, a for-profit company whose shares are held by 14,000 Inupiaq natives in a remote region of Alaska.
There is little indication that the government&#8217;s so-called 8(a) program is training disadvantaged indigenous people to do high-skilled work. The company declined to say how many Alaska natives work there. Its CEO is Jennifer Felix, a white woman who lives in a $4.3 million home in Loudoun County, Virginia, as The Daily Wire reported last month.
Much of the money awarded to &#8220;Alaskan&#8221;-owned firms isn&#8217;t done by those firms at all. ASRC has subcontracted $3.5 million to the companies of Jennifer Felix&#8217;s white husband. Even without her salary from ASRC — which it declined to disclose — that&#8217;s nearly enough to pay for their 14,000-square foot home with a guest house and private movie theater. Meanwhile, the largest village in the Inupiaq area has only one rusted-out, <a href="https://www.documentcloud.org/documents/27876493-cl-2023-16612comp/" target="_blank" rel="noopener">closed-down</a> theater.
&#8220;The 8(a) program wasn’t designed to bankroll Beltway power-couples,” said Tom Jones, president of the American Accountability Foundation, whose researchers tipped The Daily Wire off to the subcontracts. &#8220;This is a corrupt grift and Americans are paying for it.&#8221;
In 2022, the Department of Homeland Security gave ASRC Federal Data Network Technologies LLC a $16.7 million contract for &#8220;networking maintenance and engineering services.&#8221; Nearly a fifth of the work — <a href="https://www.usaspending.gov/award/CONT_AWD_70T03022F7672N001_7013_HHSN316201200127W_7529" target="_blank" rel="noopener">$3 million</a> — was subcontracted out to companies associated with Jennifer Felix&#8217;s husband.
This was not an 8(a) contract, but it was still enabled by ASRC’s minority status. The $16.7 million award came through a <a href="https://www.usaspending.gov/award/CONT_IDV_HHSN316201200127W_7529" target="_blank" rel="noopener">contract</a> limited to small businesses — the Alaska native program <a href="https://www.ecfr.gov/current/title-13/chapter-I/part-121#se13.1.121_1201" target="_blank" rel="noopener">allows</a> native tribes to create an unlimited number of subsidiaries and have them count as a &#8220;small&#8221; business for purposes of contracting, even though they are owned by a multi-billion dollar one. If the company was a subsidiary of a white-owned business, it would not be eligible for small business contracts because its size would be based on the parent company.
Ironically, the contract was to help the &#8220;acquisition program management office,&#8221; which deals with contracting policy — even as the contract is itself a case study in how the intent of the DEI program is blatantly being undermined.
Ken Felix was vice president at B&amp;B Consulting Enterprises, a software firm. The company received more than <a href="https://www.highergov.com/awardee/b-b-consulting-enterprises-inc-10011973/" target="_blank" rel="noopener">$1.7 million</a> in subcontracts on the ASRC job. According to a lawsuit filed by B&amp;B, the company terminated Ken from his $230,000-a-year job in September 2022.
He and another employee created Daurem LLC as a competing company, despite provisions in their contracts, and ASRC then moved the subcontract to Daurem, specifically naming Ken Felix as Program Manager, the suit said. Daurem LLC has received more than $1.2 million on that job.
Money subcontracted to the CEO’s husband&#8217;s firm means less profit for indigenous shareholders. Yet moves that undermine the goals of the 8(a) program are so common, and have historically faced so little scrutiny, that they aren&#8217;t even hidden: ASRC, Daurem LLC, and the TSA won an award for their &#8220;partnership.&#8221; The American Council for Technology and Industry Advisory Council lauded them for working together to develop &#8220;biometric identity verification technology, currently deployed at 10 high-volume international airports.&#8221;
Agile Decision Sciences has disclosed 103 <a href="https://www.highergov.com/awardee/agile-decision-sciences-llc-10005368/" target="_blank" rel="noopener">&#8220;teaming partners,&#8221;</a> a euphemism used in the 8(a) world that amounts to work being subcontracted out to non-disadvantaged firms, while being open about it with the government because the qualifications of the non-disadvantaged partner help convince the government to give the contract.
Even as the Alaska native contracting program was justified by the poverty and low-tech lifestyles of the indigenous people, its proposition rests on the idea that they are now developing America’s most high-tech defense systems. In reality, the work is more often done by highly-paid white people in Virginia, the most common state where &#8220;Alaskan&#8221; firms operate.
Jennifer Felix has showered liberal politicians with tens of thousands of dollars in donations to groups like &#8220;Pro-Choice Majority 2024,&#8221; &#8220;Elect Dems Now,&#8221; and the campaigns of Democrat Virginia senators Tim Kaine and Mark Warner.
According to data from <a href="https://www.highergov.com/awardee/daurem-llc-541097139/" target="_blank" rel="noopener">HigherGov.com</a>, the vast majority of the husband&#8217;s company&#8217;s government revenue has come from ASRC subcontracts. Another ASRC subsidiary gave Daurem LLC a $480,000 subcontract on a TSA contract that it got without competition — an eighth of the money paid out on the overall contract. The <a href="https://www.usaspending.gov/award/CONT_AWD_70T04023C7573N002_7013_-NONE-_-NONE-" target="_blank" rel="noopener">contract description</a> reads, &#8220;This is an 8(a) award to Agile Decision Sciences, LLC for a mobile phone app to do identity verification activities for transportation security officers.&#8221;
ASRC said in a statement that “Any characterization or suggestion that ASRC Federal has improperly steered contracts to its leadership’s family members is materially false … Leaders including our CEO adhere to a strict corporate code of conduct and a conflict-of-interest policy to ensure proper protocols are followed.”
B&amp;B&#8217;s <a href="https://www.documentcloud.org/documents/27876493-cl-2023-16612comp/" target="_blank" rel="noopener">lawsuit</a> said that Ken Felix arranged for other employees to leave the company to work directly at ASRC, and also teamed up with a different woman-owned business called Intellect Solutions LLC to bid on work that was, thanks to 8(a), earmarked exclusively for woman-owned contractors.
Daurem&#8217;s lawyers replied that &#8220;employees do not owe fiduciary duties of loyalty post-employment and are therefore free to compete against a former employer.&#8221; A judge rejected many of its arguments, and the lawsuit was settled soon after.
Secretary of War Pete Hegseth has <a href="https://www.dailywire.com/news/why-pete-hegseth-is-right-to-take-a-sledgehammer-to-the-8a-scam" target="_blank" rel="noopener">said</a> his department is cracking down on the 8(a) program.
“In the Pentagon, $100 million sole-source contracts go out the door to these 8(a) firms almost <a href="https://www.dailywire.com/news/why-pete-hegseth-is-right-to-take-a-sledgehammer-to-the-8a-scam" target="_blank" rel="noopener">every day</a> without any competition or opportunity for anyone else to bid,” he said. “In many, many instances, these socially disadvantaged businesses don’t even do work. They take a 10%, 20%, sometimes 50% fee off the top, then pass the contract off to a giant consulting firm.&#8221;
The Small Business Administration, which doles out the 8(a) designation to companies, last week said it has moved to ban 624 firms because &#8220;amid the Biden-era DEI agenda, the 8(a) federal contracting program became rife with so-called ‘socially and economically disadvantaged’ firms who abused sole-source and set-aside contracts to enrich themselves with pass-through schemes.&#8221;
Editor&#8217;s note: This piece was updated with additional details about the contracts awarded to ASRC.
Related: <a href="https://www.dailywire.com/news/how-a-top-pentagon-contractor-enriches-dc-insiders-using-a-law-intended-to-help-eskimos" target="_blank" rel="noopener">How A Top Pentagon Contractor Enriches DC Insiders Using Law Intended To Help Eskimos</a>

Jennifer Felix, CEO of ASRC Federal

Defense Contractor Used Minority Status To Win Contracts, Subcontracted To CEO’s White Husband

Department of Defense

Investigation

Minority Contracting

The Department of War has awarded $45 billion in contracts to &#8220;Alaskan Native&#8221; companies in the last half-decade, fueled by minority-contracting laws. But Alaska Natives are hard to come by at the companies. Instead, the work most commonly happened in Virginia, with racial preference laws putting white, Democrat Beltway insiders in multi-million-dollar homes, while natives live in poverty.
No &#8220;Alaskan native&#8221; company got more contracts than ASRC Federal, which lists zero native executives. The company is named after, and is owned by, the Arctic Slope Regional Corporation, a for-profit umbrella company representing 14,000 Inupiaq natives in a remote region of Alaska known as the North Slope. The company is <a href="https://www.forbes.com/lists/top-private-companies/" target="_blank" rel="noopener">ranked</a> the 111th-largest private company in America, with $5.7 billion in revenue. It owns five million acres of land, including oil reserves whose sale leads to dividend payments to the natives.
Yet the most valuable resource might come from Washington, which in 1971 passed a law saying companies can get contracts without having to go through the competitive bidding process if they are at least 51% owned by Alaskan Natives. Other minorities can get no-bid contracts for nine years while they own a small business, but Alaskan firms retain the disadvantaged status even when they have billions of dollars in revenue.
That has led to business executives donning the skins of native people to get high-tech contracts, under the curious pretext that the natives dwelling in huts are learning to do advanced engineering. The scale of the riches that unleashes is mind-boggling.
<div class="image"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-1045703" src="https://dw-wp-production.imgix.net/2026/02/asrc-leadership.jpg" alt="" width="1854" height="1698" srcset="https://dw-wp-production.imgix.net/2026/02/asrc-leadership.jpg 1854w, https://dw-wp-production.imgix.net/2026/02/asrc-leadership-300x275.jpg 300w, https://dw-wp-production.imgix.net/2026/02/asrc-leadership-629x576.jpg 629w, https://dw-wp-production.imgix.net/2026/02/asrc-leadership-768x703.jpg 768w, https://dw-wp-production.imgix.net/2026/02/asrc-leadership-1536x1407.jpg 1536w" sizes=" (max-width: 1854px) 100vw, 1854px" /></div>
Last month alone, ASRC Federal announced that it was awarded a Defense Logistics Agency contract worth up to <a href="https://www.asrcfederal.com/defense-logistics-agency-awards-asrc-federal-up-to-2-3-billion-to-manage-chemical-and-oil-supply-chain/" target="_blank" rel="noopener">$2.3 billion</a>, as well as a &#8220;Missile Defense Agency Scalable Homeland Innovative Enterprise Layered Defense (SHIELD) indefinite-delivery/indefinite-quantity (IDIQ) contract with a ceiling of <a href="https://www.asrcfederal.com/asrc-federal-secures-position-on-missile-defense-agency-shield-contract-vehicle/" target="_blank" rel="noopener">$151</a> [billion].&#8221;
The Department of War has awarded nearly one million separate contracts, totaling $45 billion, to &#8220;Alaskan Native&#8221; companies since fiscal year 2021, according to <a href="https://www.usaspending.gov/search?hash=c138c3b3102e4ead5777696955f0e871" target="_blank" rel="noopener">USASpending.gov</a>. The most common &#8220;place of performance,&#8221; however, was Virginia. Less than 12% was spent in Alaska.
No company brought in more than ASRC Federal, which is made up of numerous subsidiary companies that exist to get federal contracts. ASRC Federal Facilities Logistics LLC billed taxpayers $2 billion, ASRC Communications Ltd. charged half a billion, ASRC Federal Field Services LLC earned $390 million, and ASRC Federal System Solutions LLC took $319 million.
ASRC Federal&#8217;s CEO is <a href="https://www.asrcfederal.com/about-us/#leadership" target="_blank" rel="noopener">Jennifer Felix</a>, who lives in a $4.3 million, 14,000-square-foot home in Loudoun County, Virginia. The mansion sits on four acres and includes a guest home and private movie theater. Felix has showered liberal politicians with tens of thousands of dollars in donations since 2022, donating to groups like &#8220;Pro-Choice Majority 2024,&#8221; &#8220;Elect Dems Now,&#8221; and the campaigns of Virginia senators Tim Kaine and Mark Warner.
Meanwhile, there is no sign that residents of the North Slope even have a public movie theater. The only theater in town is a now-closed, rusted hut, research from the American Accountability Foundation, a government watchdog group, found.
<div id="attachment_1045705" style="width: 1842px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-1045705" class="size-full wp-image-1045705" src="https://dw-wp-production.imgix.net/2026/02/felix-house.jpg" alt="" width="1832" height="1044" srcset="https://dw-wp-production.imgix.net/2026/02/felix-house.jpg 1832w, https://dw-wp-production.imgix.net/2026/02/felix-house-300x171.jpg 300w, https://dw-wp-production.imgix.net/2026/02/felix-house-1011x576.jpg 1011w, https://dw-wp-production.imgix.net/2026/02/felix-house-768x438.jpg 768w, https://dw-wp-production.imgix.net/2026/02/felix-house-1536x875.jpg 1536w" sizes=" (max-width: 1832px) 100vw, 1832px" />Home of white &#8220;Alaskan Native&#8221; contractor CEO, replete with private movie theater</div>
<div id="attachment_1045707" style="width: 1918px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-1045707" class="size-full wp-image-1045707" src="https://dw-wp-production.imgix.net/2026/02/alaskan-theater.jpg" alt="" width="1908" height="1050" srcset="https://dw-wp-production.imgix.net/2026/02/alaskan-theater.jpg 1908w, https://dw-wp-production.imgix.net/2026/02/alaskan-theater-300x165.jpg 300w, https://dw-wp-production.imgix.net/2026/02/alaskan-theater-1024x564.jpg 1024w, https://dw-wp-production.imgix.net/2026/02/alaskan-theater-768x423.jpg 768w, https://dw-wp-production.imgix.net/2026/02/alaskan-theater-1536x845.jpg 1536w" sizes=" (max-width: 1908px) 100vw, 1908px" />Shuttered theater used by actual Alaskan Natives</div>
&#8220;Felix has a long history of working with government contractors, previously being employed with companies like General Dynamics, Sotera Defense Solutions, and Deloitte. She is, put simply, a typical Beltway bandit defense contractor,&#8221; the American Accountability Foundation wrote in a report provided to The Daily Wire.
Conservatives say no-bid minority contracting laws, known as 8(a), are wasteful and unfair. But the absence of actual Alaskan Natives at companies bearing their names raises questions about whether the program has even succeeded in its liberal-minded goal of lifting minorities out of poverty by training them in business.
Secretary of War Pete Hegseth raised a similar question last month when he said that other minority-owned firms often subcontract the work to white-owned firms, while keeping a large cut for playing middleman. “In the Pentagon, $100 million sole-source contracts go out the door to these 8(a) firms almost <a href="https://www.dailywire.com/news/why-pete-hegseth-is-right-to-take-a-sledgehammer-to-the-8a-scam" target="_blank" rel="noopener">every day</a> without any competition or opportunity for anyone else to bid,” he said.
Joseph Winthrop, ASRC Federal&#8217;s chief financial officer, lives in a $2 million Loudoun County home replete with a wine cellar. Executive Scott Altman lives in a Georgetown townhouse and is paid $1.1 million a year, according to a recent contract disclosure.
Clifford Greenblatt lives in Chevy Chase, Maryland, the historic domain of the Beltway elite, in a <a href="https://censusreporter.org/profiles/15000US240317054002-bg-2-tract-7054-montgomery-md/" target="_blank" rel="noopener">neighborhood</a> that is 0% black or native and has a $200,000 median per capita income. Chief Strategy Officer Ann Stevens lives on the banks of the Potomac River in Great Falls, Virginia.
It&#8217;s a vastly different life than the company&#8217;s Inupiat shareholders. &#8220;The supposed beneficiaries of the corporation – the Inupiat – live in conditions that would make most Americans cringe,&#8221; the American Accountability Foundation wrote. Alaskan Natives make up nearly all the people on welfare in the North Slope, with more than 17% collecting food stamps.
A spokeswoman for ASRC Federal, Aubrel Mellos, did not respond to questions including how many of the company&#8217;s employees are Alaskan Native, or what dividends from federal contract dollars have been paid out to native people. But she wrote in an email:
&#8220;Every ASRC subsidiary operates at the direction of ASRC&#8217;s 100% Iñupiaq Board of Directors for the benefit of its 14,000+ Iñupiaq shareholders. ASRC&#8217;s Board Members are directly selected by its Indigenous shareholders through annual elections. ASRC Federal&#8217;s operations, business priorities, and hiring are done to the benefit of ASRC&#8217;s Iñupiaq shareholders, who receive dividends based on the success of the corporation – as was the will of Congress and the federal government when the Alaska Native Claims Settlement Act of 1971 (ANCSA) established ASRC and the 11 other regional Alaska Native corporations.&#8221;
&#8220;ASRC Federal directly contributes to the self-determination of the North Slope Iñupiat through dividend payments and economic opportunity, contributing to a <a href="https://globalhealth.washington.edu/news/2017/05/09/alaska-dispatch-news-alaska-sees-most-dramatic-increases-life-expectancy-nation-new" target="_blank" rel="noopener">remarkable increase</a> in lifespan on Alaska&#8217;s North Slope,” she continued.
<div id="attachment_1045709" style="width: 1778px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-1045709" class="size-full wp-image-1045709" src="https://dw-wp-production.imgix.net/2026/02/winthrop-wine-cellar.jpg" alt="" width="1768" height="1258" srcset="https://dw-wp-production.imgix.net/2026/02/winthrop-wine-cellar.jpg 1768w, https://dw-wp-production.imgix.net/2026/02/winthrop-wine-cellar-300x213.jpg 300w, https://dw-wp-production.imgix.net/2026/02/winthrop-wine-cellar-810x576.jpg 810w, https://dw-wp-production.imgix.net/2026/02/winthrop-wine-cellar-768x546.jpg 768w, https://dw-wp-production.imgix.net/2026/02/winthrop-wine-cellar-1536x1093.jpg 1536w" sizes=" (max-width: 1768px) 100vw, 1768px" />Joseph Winthrop&#8217;s wine cellar</div>
<div id="attachment_1045713" style="width: 1492px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-1045713" class="size-full wp-image-1045713" src="https://dw-wp-production.imgix.net/2026/02/alaskan-village.jpg" alt="" width="1482" height="1094" srcset="https://dw-wp-production.imgix.net/2026/02/alaskan-village.jpg 1482w, https://dw-wp-production.imgix.net/2026/02/alaskan-village-300x221.jpg 300w, https://dw-wp-production.imgix.net/2026/02/alaskan-village-780x576.jpg 780w, https://dw-wp-production.imgix.net/2026/02/alaskan-village-768x567.jpg 768w" sizes=" (max-width: 1482px) 100vw, 1482px" />The largest Inupiat city</div>
For decades, politicians in both parties have said that Alaskan contracting was not advancing the goals that justified the program. That&#8217;s what then-Sen. Claire McCaskill (D-MO) said in 2010. In <a href="https://www.washingtonpost.com/archive/national/2010/09/30/bethesda-consultant-made-millions-with-alaska-firm/e9187e20-cc34-11df-8eee-2e1a26a3708e/" target="_blank" rel="noopener">one case</a> from that time period, a Bethesda, Maryland, man was paid $15 million to run an Alaskan government contractor for three years, while its Alaskan Native owners received a total of $682,000 in dividends in 2009, or $305 each. The company won a contract to make military uniforms, which it manufactured in Puerto Rico instead of Alaska.
But efforts at reform have been blocked by Alaska Republican senators such as the now-deceased Ted Stevens, who for years chaired the powerful Appropriations Committee. Lisa Murkowski (R-Alaska) is a <a href="https://punchbowl.news/article/defense/murkowski-gavel/" target="_blank" rel="noopener">contender to chair</a> either the Senate Appropriations Committee or its defense subcommittee next Congress.
Now, if the Alaskan program meets its end, it&#8217;s likely to be through the abolition of the broader minority-contracting program. The Trump administration has made moves to rein in the DEI scheme after a black man, Walter Barnes, pleaded guilty to getting $500 million in USAID contracts by paying a USAID official <a href="https://www.dailywire.com/news/usaid-official-three-contractors-plead-guilty-to-half-billion-dollar-bribery-scheme" target="_blank" rel="noopener">$1 million in bribes</a>. The scheme worked because 8(a) empowers a government official to steer contracts to specific companies.
The increased scrutiny has placed Alaska&#8217;s senators, both Republicans, in the curious position of defending the DEI program as a whole.
Sen. Joni Ernst, chair of the Small Business Committee, which oversees the 8(a) program, asked agencies to pause sole-source contracts in order to get a handle on fraud. But Murkowski and Dan Sullivan (R-Alaska) <a href="https://www.dailywire.com/news/alaska-republicans-secretly-working-to-protect-fraud-plagued-dei-program" target="_blank" rel="noopener">secretly urged</a> the agencies to ignore that request, according to a letter previously obtained by The Daily Wire.
The letter highlighted that Pentagon officials enjoy taking advantage of the Alaskan law because although the competitive bidding process is designed to get the most qualified company and the best price, it is also a bureaucratic slog.
&#8220;We consistently hear from top Pentagon officials that the 8(a) Program provides flexibility and timeliness in procuring weapons systems that strengthen our country,&#8221; they wrote. &#8220;The program reduces administrative burden, shortens acquisition timelines, and avoids the delays and litigation risks that often accompany large-scale procurements.&#8221;
Murkowski and Sullivan did not respond when The Daily Wire asked for statistics about how many Alaskan Natives actually work at firms like Bowhead, another multibillion dollar defense contractor whose leadership consists virtually entirely of white males.
<div class="image"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-1026861" src="https://dw-wp-production.imgix.net/2026/01/bowhead-scaled.jpg" alt="" width="2560" height="1535" srcset="https://dw-wp-production.imgix.net/2026/01/bowhead-scaled.jpg 2560w, https://dw-wp-production.imgix.net/2026/01/bowhead-300x180.jpg 300w, https://dw-wp-production.imgix.net/2026/01/bowhead-961x576.jpg 961w, https://dw-wp-production.imgix.net/2026/01/bowhead-768x460.jpg 768w, https://dw-wp-production.imgix.net/2026/01/bowhead-1536x921.jpg 1536w, https://dw-wp-production.imgix.net/2026/01/bowhead-2048x1228.jpg 2048w" sizes=" (max-width: 2560px) 100vw, 2560px" /></div>
In the 1980s, Congress passed laws allowing Native Americans to join Alaskan Natives as so-called &#8220;super 8(a)&#8217;s,&#8221; exempt from having to show that they are actually small, disadvantaged companies. Undercover journalist James O&#8217;Keefe caught an executive from one such firm, ATI Government Solutions, boasting that it received a $100 million contract and kept two-thirds while paying a big company, like Accenture, to do the actual work.
None of ATI&#8217;s executives was native, either. Members of the Susanville Indian Rancheria tribe, which owns part of ATI Government Solutions, were interviewed by O&#8217;Keefe&#8217;s outlet. &#8220;Here you have this millionaire making money off of us, and we&#8217;re here begging for help. All of the things that were created for us, we <a href="https://x.com/JamesOKeefeIII/status/1988770902243176767" target="_blank" rel="noopener">don&#8217;t benefit</a> from,&#8221; one tribe member said.
The American Accountability Foundation called for ending the 8(a) program, saying &#8220;it is currently not benefiting minority populations and is enriching D.C. elites.&#8221;

ASRC

How A Top Pentagon Contractor Enriches DC Insiders Using Law Intended To Help Eskimos

Alaska

Few organizations know more about leadership than the United States Army. Yet for years, the Army paid an outside consultant for instruction on the topic: A fly-by-night company co-founded by a Pakistani who sits on the board of an organization once linked to the Muslim Brotherhood.
Between 2021 and 2025, the Army Corps of Engineers shelled out $1.7 million across eight contracts to the vaguely named Nonprofit Empowerment Group. The group is actually a for-profit, bare-bones operation configured to scoop up federal contracts using woman-owned &#8220;set-asides.&#8221;
The company’s only listed employee is a former bank teller who hardly seemed to meet the government’s call for an academic institution to provide &#8220;<a href="https://sam.gov/workspace/contract/opp/0161b3be328843d2abe84bbf29e1a446/view" target="_blank" rel="noopener">graduate level</a> instruction&#8221; on “leadership development skills.” Yet the so-called &#8220;Nonprofit Empowerment Group&#8221; <a href="https://negwebsitegov.com/" target="_blank" rel="noopener">advertised</a> a qualification that helped it gain access to the military: Its status as a &#8220;Disadvantaged Women Small Owned Business&#8221; [sic].
The saga raises questions about whether the government&#8217;s affirmative action contracting law, known as 8(a), not only wastes money by padding the wallets of middlemen, but could potentially undermine readiness and even risk foreign influence. The Trump administration canceled the Nonprofit Endowment Group&#8217;s contracts this week, the Daily Wire can exclusively report. A Pentagon official told The Daily Wire that the &#8220;absurd&#8221; and &#8220;sketchy&#8221; contracts were cancelled because they &#8220;don’t serve the national interest.&#8221;
The Nonprofit Empowerment Group&#8217;s only known employee, Angela Massey, declined to discuss the company’s work with The Daily Wire. According to Illinois corporation filings, Massey is the company&#8217;s president, while its secretary is Tariq H. Cheema.
At the same address in Lombard, Illinois, the pair once operated a nonprofit called the World Congress of Muslim Philanthropists. It was a reverse configuration — with Massey as secretary and Cheema as president, according to <a href="https://projects.propublica.org/nonprofits/display_990/800253036/2010_12_EO%2F80-0253036_990EZ_200912" target="_blank" rel="noopener">tax-exempt filings</a>.
The Nonprofit Empowerment Group cites seven clients on its <a href="http://negwebsitegov.com" target="_blank" rel="noopener">website</a>, many of which appear to move money from Islamic nonprofits with ties to Cheema to the for-profit he co-founded.
That includes The Global Donors Forum, another group founded by Cheema; The American Refugee Committee, for which Cheema <a href="https://www.tariqcheema.us/" target="_blank" rel="noopener">serves</a> as executive director; The Association of Pakistani Physicians of North America, where Cheema also held the position of executive director; Roshni Homes, where Cheema served as an <a href="https://www.globalgiving.org/pfil/51653/projdoc.pdf" target="_blank" rel="noopener">advisor</a>; and The Islamic Medical Association of North America (IMANA), on whose board <a href="https://imana.org/our-board/" target="_blank" rel="noopener">Cheema sits</a>.
The Muslim Brotherhood, a <a href="https://home.treasury.gov/news/press-releases/sb0357">designated terror organization</a>, in 1991 included the Islamic Medical Association on &#8220;a <a href="https://www.investigativeproject.org/documents/20/an-explanatory-memorandum-on-the-general.pdf" target="_blank" rel="noopener">list</a> of our organizations and the organizations of our friends.&#8221; That document, laying out a plan for the radical Muslim group to take over North America, described how to bring about a &#8220;grand Jihad in eliminating and destroying the Western civilization from within.&#8221;
The Islamic Medical Association was established as a <a href="https://www.researchgate.net/publication/390944347_ENCYCLOPEDIA_ENTRY_Islamic_Society_of_North_America_ISNA" target="_blank" rel="noopener">&#8220;constituent organization&#8221;</a> of the Islamic Society of North America (ISNA), which originated out of Illinois. The United States named ISNA an <a href="https://www.politico.com/blogs/under-the-radar/2010/11/judges-ruling-on-islamic-groups-as-unindicted-co-conspirators-made-public-030922" target="_blank" rel="noopener">unindicted co-conspirator</a> in the 2007 Holy Land Foundation trial centered on Hamas fundraising.
<div class="image"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-1044009" src="https://dw-wp-production.imgix.net/2026/02/muslim-brotherhood.jpg" alt="" width="990" height="312" srcset="https://dw-wp-production.imgix.net/2026/02/muslim-brotherhood.jpg 990w, https://dw-wp-production.imgix.net/2026/02/muslim-brotherhood-300x95.jpg 300w, https://dw-wp-production.imgix.net/2026/02/muslim-brotherhood-768x242.jpg 768w" sizes=" (max-width: 990px) 100vw, 990px" /></div>
The World Congress of Muslim Philanthropists was <a href="https://projects.propublica.org/nonprofits/organizations/800253036" target="_blank" rel="noopener">established in 2009</a> to “build a culture of enduring engagement where Muslim donors collaborate with each other.&#8221; But it almost immediately went hundreds of thousands of dollars into debt, according to a nonprofit tax filing signed by Massey, who has not been listed on the forms in recent years.
Those filings said it hadn&#8217;t taken foreign donations, but Cheema, who declined to answer The Daily Wire’s questions, has said the group was operating abroad. In 2013, he <a href="https://berkleycenter.georgetown.edu/interviews/a-discussion-with-tariq-cheema-world-congress-of-muslim-philanthropists" target="_blank" rel="noopener">said,</a> &#8220;Our headquarters are in Chicago but we are just establishing a second headquarters in Doha, so much more of our work will in the future be handled from Qatar. I split my time between the two, and also my home country, Pakistan.&#8221;
&#8220;I went to medical school and led an essentially normal life until September 11, 2001. That was a wake up call for everybody. I was moved by the events and the reactions to them, but especially by a growing awareness that Muslim charities were being shut down more on the basis of suspicion than evidence of wrongdoing,&#8221; he said. &#8220;We also were aware of the enforcement of new regulations that were making giving more difficult.&#8221;
While Cheema <a href="https://www.tariqcheema.us" target="_blank" rel="noopener">describes</a> himself as &#8220;among the top 500 most influential Muslims shaping our world today,&#8221; the finances that the World Congress of Muslim Philanthropists reported to the United States government were in disarray. By 2016, the last year it filed a nonprofit disclosure, it had income of only $6,955 and $392,809 in debt.
But Cheema and Massey still had the Nonprofit Empowerment Group, which seemed to have been operating as a for-profit slush fund focused on Islamic issues and foreign affairs. The company&#8217;s website depicts it dealing with leaders from countries with mixed relationships with the United States, including Pakistan, China, Russia, Sudan, Saudi Arabia, and Qatar.
One photo shows Turkey&#8217;s president, Recep Erdoğan, speaking in front of a banner that includes both the World Congress of Muslim Philanthropists and the Nonprofit Empowerment Group&#8217;s names. The website said Massey is also involved with the United Nations.
Soon after the World Congress of Muslim Philanthropists submitted its last tax filing, the for-profit company found a new source of revenue: repurposing their company to get government contracts for — well, anything.
<div class="image"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-1044011" src="https://dw-wp-production.imgix.net/2026/02/nonprofit-empowerment-group.jpg" alt="" width="1896" height="1192" srcset="https://dw-wp-production.imgix.net/2026/02/nonprofit-empowerment-group.jpg 1896w, https://dw-wp-production.imgix.net/2026/02/nonprofit-empowerment-group-300x189.jpg 300w, https://dw-wp-production.imgix.net/2026/02/nonprofit-empowerment-group-916x576.jpg 916w, https://dw-wp-production.imgix.net/2026/02/nonprofit-empowerment-group-768x483.jpg 768w, https://dw-wp-production.imgix.net/2026/02/nonprofit-empowerment-group-1536x966.jpg 1536w" sizes=" (max-width: 1896px) 100vw, 1896px" /></div>
According to its website<a href="https://archive.is/wip/TeVYN" target="_blank" rel="noopener"> NEGwebsitegov.com</a>, &#8220;Nonprofit Empowerment Group Inc specializes in providing administrative management and general management consulting services.&#8221;
In 2019, the company received a $10,000 contract for <a href="https://www.usaspending.gov/award/CONT_AWD_N4523A18P1387_9700_-NONE-_-NONE-" target="_blank" rel="noopener">“writing courses”</a> from the Navy, due to the Navy setting aside the job for a “woman-owned business.” In 2022, it received its first contract for “leadership development program services” from the Army, also reserved for a woman-owned business.
As recently as June 2025 — this time without reserving the work for a minority — the Army gave the Nonprofit Empowerment Group its latest <a href="https://www.usaspending.gov/award/CONT_AWD_W9127N25CA038_9700_-NONE-_-NONE-" target="_blank" rel="noopener">contract</a> for the &#8220;professional services of an academic institution regionally accredited by an agency recognized by the U.S. Department of Education and the Council for Higher Education Accreditation.&#8221;
&#8220;The Contractor will be responsible for providing graduate level instruction&#8221; on &#8220;leadership development skills,&#8221; a <a href="https://sam.gov/workspace/contract/opp/0161b3be328843d2abe84bbf29e1a446/view" target="_blank" rel="noopener">contracting document</a> said.
The Nonprofit Empowerment Group is not an academic institution: a more detailed version of the contracting requirements contains a loophole that also permits “an entity that has access to an accredited academic institution.” According to Massey’s LinkedIn <a href="https://www.linkedin.com/in/angela-massey-9971072a/">profile</a>, she worked as a bank teller, then founded the company while simultaneously working as a &#8220;middle market&#8221; banker. The profile describes her as &#8220;a staunch supporter of economic and social justice.&#8221;
The government subsidized that group through its contract for a leadership development course, paying it for activities the Army likely could have better organized itself — including introducing Army Corps of Engineers staff to members of Congress and other officials.
Assistant Secretary of the Army Adam Telle told The Daily Wire that the Trump administration has empowered the Pentagon to &#8220;cut ties&#8221; with groups like the Nonprofit Empowerment Group.
“There is no good reason that one part of the federal government should use taxpayer dollars to pay a third party in order to talk to another part of the federal government,&#8221; Assistant Secretary of the Army Adam Telle told The Daily Wire.
&#8220;We terminated these contracts because they are not only unnecessary, they also don’t serve the national interest, and they undermine the cohesion of the Army Civil Works mission. President Trump has empowered us to cut ties with organizations that aren’t aligned with our priorities, and that’s exactly what we’re doing,” he said.
The move comes as Secretary of War Pete Hegseth is <a href="https://www.dailywire.com/news/why-pete-hegseth-is-right-to-take-a-sledgehammer-to-the-8a-scam" target="_blank" rel="noopener">cracking down</a> on minority contracting, saying, “In many, many instances, these socially disadvantaged businesses don’t even do work. They take a 10%, 20%, sometimes 50% fee off the top, then pass the contract off to a giant consulting firm &#8230; For decades, this program, 8(a), has been a breeding ground for fraud.”
A <a href="https://www.dailywire.com/news/a-quarter-of-minority-contracting-firms-banned-after-refusing-anti-fraud-check" target="_blank" rel="noopener">quarter</a> of all minority contracting firms lost their certifications last month after failing to turn over records that would show whether they actually did the work, or simply subcontracted it to third parties.
Related: <a href="https://www.dailywire.com/news/how-the-military-gave-a-homeless-lesbians-minority-contracting-firm-19-million" target="_blank" rel="noopener">How The Military Gave A Homeless Lesbian’s ‘Minority Contracting’ Firm $19 Million</a>

Joe Biden’s Secretary of Defense Lloyd Austin

U.S. Army Paid Company Founded By Director Of Muslim Brotherhood-Linked Group For ‘Leadership’ Training

Last month, Secretary of War Pete Hegseth made a seismic <a href="https://x.com/SecWar/status/2012302240594170106" target="_blank" rel="noopener">announcement</a>: &#8220;We&#8217;re taking a sledgehammer to the oldest DEI program in the federal government. A program few people outside of Washington have ever heard of. That I haven&#8217;t heard of. It&#8217;s called the 8(a) program.&#8221;
We&#8217;re confident that Daily Wire readers knew about the program: Our own investigative reporter Luke Rosiak <a href="https://www.sbc.senate.gov/public/_cache/files/6/e/6e1b9b58-ff59-48e1-ba7a-3baf8c80fdd3/0A2A02F0F82887A517B8056DA86CE02F8EB6D4405302E38F039CACF58B354005.rosiak-testimony.pdf" target="_blank" rel="noopener">testified</a> to the Senate about the fraud-ridden, multi-billion dollar minority contracting scheme just a month earlier. He&#8217;s written about it <a href="https://www.dailywire.com/news/a-quarter-of-minority-contracting-firms-banned-after-refusing-anti-fraud-check" target="_blank" rel="noopener">extensively</a> for years. Under the decades-old 8(a) program, 5% of all federal contracts are &#8220;set aside&#8221; for minority- and women-owned businesses. That&#8217;s right — instead of a competitive process that identifies the best company with the best value, government officials direct contracts to specific companies, with no bidding at all, based on minority status.
As Rosiak told the Senate, it opens the door to sordid corruption. When black businessman Walter Barnes got <a href="https://www.dailywire.com/news/usaid-official-three-contractors-plead-guilty-to-half-billion-dollar-bribery-scheme" target="_blank" rel="noopener">half a billion dollars</a> in USAID contracts by bribing a government procurement official with $1 million, the contracting officer was able to guarantee he could make good on the bribe only because the 8(a) program gave him that discretion.
We don&#8217;t know if Hegseth was tuned in for Rosiak&#8217;s testimony, but Hegseth laid out the issue as clearly as anyone.
&#8220;In the Pentagon, $100 million sole-source contracts go out the door to these 8(a) firms almost every day,&#8221; Hegseth explained, &#8220;without any competition or opportunity for anyone else to bid.&#8221;
Hegseth continued: &#8220;In many, many instances, these socially disadvantaged businesses don&#8217;t even do work. They take a 10%, 20%, sometimes 50% fee off the top, then pass the contract off to a giant consulting firm, commonly known as Beltway Bandits. For decades, this program, 8(a), has been a breeding ground for fraud.&#8221;
He&#8217;s talking about the Capital Beltway that surrounds Washington, D.C., where the biggest players in the government contracting business have learned to make hay out of 8(a). You see, rather than fighting only for direct contracts, the contractors based in D.C.&#8217;s suburbs have learned that they can also seek the business of the minority middlemen.
This process is flagrant. In Dulles Airport&#8217;s Terminal C, there&#8217;s a giant advertisement from an 8(a) firm, seeking companies to &#8220;partner&#8221; with. What it&#8217;s saying is that if a company like Deloitte wants to get a giant contract, it should cut the 8(a) in on the deal. The minority firm will submit a &#8220;joint venture&#8221; or &#8220;mentor-protege&#8221; application, letting government officials know with a wink and a nod that it will be Deloitte doing the work.
<blockquote class="twitter-tweet" data-media-max-width="560">
We are taking a sledgehammer to the oldest DEI program in the federal government—the 8(a) program. <a href="https://t.co/c9iH8gcqG7" target="_blank" rel="noopener">pic.twitter.com/c9iH8gcqG7</a>
— Secretary of War Pete Hegseth (@SecWar) <a href="https://twitter.com/SecWar/status/2012302240594170106?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">January 16, 2026</a></blockquote>
<script async="" charset="utf-8" src="https://platform.twitter.com/widgets.js"></script>
It works for everyone but taxpayers. The Beltway Bandit gets the contract without having to beat its rivals on price. A random minority gets a massive payday for brokering it. And the bureaucrats don&#8217;t have to go through the hassle of a competitive bidding process — they can just send the money immediately out the door.
Perhaps some government employees are overpaid, but contractors are milking the taxpayers for orders of magnitude more.
As Rosiak told the Senate, a man named Atul Kathuria bought one of the most expensive homes in the D.C. region after getting $43 million in no-bid contracts because he is&#8230; wait for it&#8230; a person from the country of India working in IT. He is no &#8220;slumdog millionaire&#8221; — he went to Georgetown University and worked at massive consultancy Booz Allen Hamilton before shattering the glass ceiling to become the first Indian IT guy.
The Small Business Administration is in charge of determining who gets the sought-after &#8220;socially disadvantaged&#8221; superpowers, and its leader Kelly Loeffler has made serious strides at attacking the fraud. She required 8(a)s to turn over an unprecedented amount of information, down to <a href="https://www.dailywire.com/news/trump-just-ordered-beneficiaries-of-the-largest-dei-program-to-turn-over-all-financial-records?author=Luke+Rosiak&amp;category=News&amp;elementPosition=undefined&amp;row=0&amp;rowType=Vertical+List&amp;title=Trump+Orders+All+Beneficiaries+Of+The+Largest+DEI+Program+To+Turn+Over+Internal+Financial+Records" target="_blank" rel="noopener">bank account statements</a> and payroll records. The payroll records alone will be enough to prove that many of these companies are merely shells.
<a href="https://www.dailywire.com/news/feds-crack-down-on-minority-contracting-schemes-d-c-s-worst-kept-secret" target="_blank" rel="noopener">READ MORE:</a> <a href="https://www.dailywire.com/news/feds-crack-down-on-minority-contracting-schemes-d-c-s-worst-kept-secret" target="_blank" rel="noopener">Feds Crack Down On Minority Contracting Schemes, D.C.’s Worst-Kept Secret</a>
But the Department of War getting in on 8(a) reform is where the real money is. As Hegseth said, the Pentagon gives out 10 times as many 8(a) contracts as the next-largest agency. That&#8217;s because the Pentagon can give out up to $100 million contracts without competitive bidding if the business is &#8220;disadvantaged,&#8221; while at other agencies the limit is $4.5 million or $7 million.
A constellation of fly-by-night brokerage firms has sprung up to cash in on this — one or two black men, or even white women, who get contracts and &#8220;partner&#8221; with other companies to do the work. But the most notorious offenders are so-called &#8220;Super 8(a)s,&#8221; which can engage in even more seedy business dealings because, in the government&#8217;s eye, their owners have been even more oppressed: Those owned by Native American firms or Alaskan native tribes.
Here, again, we see how 8(a) is the Swamp that Donald Trump warned about. Alaska&#8217;s senators, both Republicans, are <a href="https://www.dailywire.com/news/alaska-republicans-secretly-working-to-protect-fraud-plagued-dei-program" target="_blank" rel="noopener">secretly lobbying</a> to preserve the DEI program–calling it, perversely, &#8220;conservative&#8221; and &#8220;market-based.&#8221;
We asked Senators Lisa Murkowski and Dan Sullivan how many people who worked at so-called &#8220;Alaskan&#8221; companies were actually Alaskan, and they wouldn&#8217;t say. These are firms like Bowhead, a multi-billion-dollar conglomerate whose <a href="https://www.bowhead.com/executive-team/" target="_blank" rel="noopener">leadership</a> is about as indigenous as Elizabeth Warren.
<div class="image"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-1026861" src="https://dw-wp-production.imgix.net/2026/01/bowhead-scaled.jpg" alt="" width="2560" height="1535" srcset="https://dw-wp-production.imgix.net/2026/01/bowhead-scaled.jpg 2560w, https://dw-wp-production.imgix.net/2026/01/bowhead-300x180.jpg 300w, https://dw-wp-production.imgix.net/2026/01/bowhead-961x576.jpg 961w, https://dw-wp-production.imgix.net/2026/01/bowhead-768x460.jpg 768w, https://dw-wp-production.imgix.net/2026/01/bowhead-1536x921.jpg 1536w, https://dw-wp-production.imgix.net/2026/01/bowhead-2048x1228.jpg 2048w" sizes=" (max-width: 2560px) 100vw, 2560px" /></div>
&#8220;There are skyscrapers down the street in Tysons Corner, defense contractors working on advanced weapons, that don&#8217;t have to bid competitively for contracts because we say they&#8217;re Alaskan Native Corporations,&#8221; Rosiak testified to the Senate. &#8220;But every one of us here knows there aren’t native Alaskans in those buildings.&#8221;
The Alaskan senators gave away the game when they defended the program by praising the &#8220;flexibility&#8221; the 8(a) program offers.
&#8220;We consistently hear from top Pentagon officials that the 8(a) Program provides flexibility and timeliness in procuring weapons systems that strengthen our country,&#8221; they said.
At least they&#8217;re being honest. The purpose of 8(a) isn&#8217;t to help minorities, it&#8217;s to help lazy bureaucrats steer millions to big companies without having to fill out the paperwork.
If doing government procurement the right way takes too long, then fix that. But the 8(a) program must be abolished by Congress. Trying to stop the fraud is a fool&#8217;s errand; fraudsters will simply find more clever ways to hide the fact that they&#8217;re simply subcontracting out most of the work.
The courts have recently <a href="https://www.dailywire.com/news/new-lawsuit-could-topple-the-heart-of-race-based-federal-programs?author=Luke+Rosiak&amp;category=News&amp;elementPosition=undefined&amp;row=0&amp;rowType=Vertical+List&amp;title=New+Lawsuit+Could+Topple+The+Heart+Of+Race-Based+Federal+Programs" target="_blank" rel="noopener">made clear</a> that automatic racial preferences in contracting are illegal, a development celebrated by conservative lawyers. But if you ask us, it only makes the problem worse: The set-asides for &#8220;disadvantaged&#8221; companies are still enshrined in law, so now they&#8217;re awarded based on an even more vague and arbitrary system. We kid you not, companies can get no-bid contracts if they write an essay describing how they have been victims.
It&#8217;s time for Congress to scrap the antiquated, failed 8(a) laws. It has gone on for long enough, and thanks to Hegseth and reporters exposing the waste, America is onto the scam.

Defense Sec. Pete Hegseth Holds Pentagon Press Conference On Iran Strikes

Why Pete Hegseth Is Right To Take A ‘Sledgehammer’ To The 8(a) Scam

Pete Hegseth's 'Sledgehammer' To 

Lisa Murkowski

Pete Hegseth

Rhonda Valles is an aspiring California musician who, in between writing and performing songs, formed a company that purported to make clothes.
The company never produced a stitch. The federal government paid it $19 million.
The spectacle demonstrates the absurdity of 8(a) contracting law, which requires that that 5% of all federal government contracts be &#8220;set aside&#8221; for minority-, women-owned, and other &#8220;disadvantaged&#8221; businesses. The program — which Secretary of War Pete Hegseth said this month has resulted in $100 million contracts going out the door without competitive bidding <a href="https://x.com/SecWar/status/2012302240594170106">nearly every day</a> — has led to paydays for flagrant middlemen who use their disadvantaged status to win government contracts, only to subcontract the work to larger firms.
Valles registered a company called <a href="https://www.usaspending.gov/search?hash=c5ea925ba77a354730a50d20bd0a7731">Romo Productions</a> with the Small Business Administration as a Self-Certified Small <a href="https://www.usaspending.gov/award/CONT_IDV_FA700014D0004_9700">Disadvantaged Business</a>, a Woman Owned Business, and a Hispanic American Owned Business. According to her <a href="https://guitarrhonda.com/about-me">music biography</a>, Valles&#8217;s father is &#8220;German/Irish/Spanish.&#8221;
That certification, which gave it a fast-track to government contracts, was the business: its <a href="https://www.romoproductions.com/home.html">website</a> dedicated more space to the Small Business Administration&#8217;s 8(a) logos than to its own name.
&#8220;ROMO Productions offers two advantages; quality, scaled production and woman owned small business. This means Government buyers can meet their small business set aside needs and receive well built products that are delivered on schedule,&#8221; a <a href="https://archive.is/wip/bSzJS">profile</a> said.
<blockquote>
<h1 class="md-end-block md-p">&#8216;I got this government contract, do you know anyone with a factory who can help me perform it?&#8217;</h1>
</blockquote>
Between 2009 and 2017, multiple military branches agreed to pay up to $72 million to the firm, ultimately shelling out just under $19 million to produce physical training outfits, federal spending records show. Some were awarded without competition as an &#8220;8(a) sole source,&#8221; while others were set aside for &#8220;small businesses.&#8221;
But Romo Productions never had the infrastructure to produce clothes. Brad Thompson, a white male to whom Valles subcontracted the work, recalls how she first approached him.
&#8220;She said &#8216;I got this government contract, do you know anyone with a factory who can help me perform it?&#8217; She was literally living in her car,&#8221; he told The Daily Wire. &#8220;I said &#8216;I can help you.'&#8221;
Thompson&#8217;s company, BT Apparel, was one of three factories that produced clothing for Romo Productions. Thompson sent the clothing to a space where Valles&#8217; band practiced, and she forwarded the packages on to the military, he said.
&#8220;She never owned a machine &#8230; I had 100 employees,&#8221; he said. &#8220;The whole 8(a) thing is a farce.&#8221;
During that time, Valles performed a song, &#8220;Token,&#8221; which includes the lyric &#8220;I need a token. Shut up boy, won&#8217;t you be my token&#8221;:​
<div class="md-htmlblock md-rawblock md-end-block" spellcheck="false">
​Government inspectors visited Thompson&#8217;s factory to ensure compliance with rules such as the Berry Amendment, which requires military products to be made in the United States. Thompson says he heard Valles giving the impression that she owned it. &#8220;I started to think there was something fraudulent going on,&#8221; he said.
He hired a lawyer to obtain a copy of the government contract using public records laws, and found that Valles was obligated to own the facilities that were performing the work, he said. The military had apparently never verified that she did.
Once Valles realized that Thompson was onto the scheme — a common occurrence in minority contracting, called a &#8220;pass-through&#8221; — she demanded he give her ownership of his business, which would make her more than a middle-woman: &#8220;Sell me 10% of your business for $1 and I&#8217;ll keep giving you work,&#8221; he recalled her saying.
The owners of the other two factories also began to suspect that Valles was simply siphoning government dollars as a middle-woman. Valles used legal threats and the prospect of withholding work to keep them as indentured servants.
She drafted a letter, intended for signature by Thompson, that said &#8220;I, Brad Thompson, have no further interest in obtaining pricing information from the USMC with respect to the above stated contract.&#8221;
Another document reviewed by The Daily Wire, with blank signature lines for the owners of the three factories, read: &#8220;We believe that what is best for Romo, is best for us. We do not now or ever want to make you think that we would try to take anything away from you.&#8221;
Thompson likened the move to extortion, and said when he refused to sign over ownership of his business, Valles abruptly pulled the work from his factory and even cast a curse on him. &#8220;Within three weeks it was all gone because I wouldn&#8217;t play ball,&#8221; he said.
Valles sued the second factory, Paradise Sewing, asking that it &#8220;be permanently restrained and enjoined from using misappropriated confidential information.&#8221; To support her case, she filed a contract that seemed to lay out her intent to commit a set-aside contracting pass-through scheme:
<blockquote>ROMO desires to retain sewing services of Paradise&#8230; to US Gov military apparel, from this day forward but has the following expectations:</blockquote>
Valles later filed a statement to the judge complaining about her own lawyer, because he &#8220;told me I was not going to win&#8221; and &#8220;that I &#8216;was behaving like a 3yr old.'&#8221; In 2018, a California appeals court <a href="https://www.casemine.com/judgement/us/5b0b8dc6ce869d79ee0c9c4c">ordered</a> her to pay Paradise&#8217;s attorneys fees, and Romo Productions collapsed.
But it&#8217;s unclear that the federal government ever sanctioned it. Romo&#8217;s website says it has an &#8220;<a href="https://www.romoproductions.com/history.html">A+</a> Contract Past Performance Rating&#8221; and <a href="h%20A+%20Contract%20Past%20Performance%20Rating">received</a> a &#8220;certificate of appreciation&#8221; from the Marine Corps.
Valles told The Daily Wire via email that she is &#8220;more interested in the health of the planet, feminine energy (yin) and cooperative kindness rather than male dominated competitive evil war profiteers.&#8221;
&#8220;In a stupid male dominated world especially this world being a woman alone is a disadvantage,&#8221; she added, railing against &#8220;evil feudal lords evil Jews slavery is still here.&#8221;
She said she is &#8220;starting a coalition for women to run the planet. Peace and Light and Love-like the Orca Whales. Raise the frequency of the planet. Male energy is heavy and war like and long overdue for a reduction.&#8221;
A Department of War spokesman declined to discuss Romo Productions. But speaking on 8(a) contracts earlier this month, Hegseth noted that &#8220;In many, many instances, these socially disadvantaged businesses don&#8217;t even do work. They take a 10%, 20%, sometimes 50% fee off the top, then pass the contract off to a giant consulting firm.&#8221;
&#8220;We&#8217;re doing away with these pass-through schemes,&#8221; Hegseth said, vowing that contracts not benefiting &#8220;lethality&#8221; would simply be ended.
After the fallout, Thompson&#8217;s company looked into getting government contracts itself, but he found that bureaucrats seemed to knowingly write contracts that necessitated middlemen in order to meet their &#8220;small&#8221; and &#8220;disadvantaged&#8221; business quotas.
&#8220;It&#8217;s like &#8216;procure apparel with an Under Armour logo.&#8217; Obviously they should just get them from Under Armour,&#8221; he said.
The Romo Productions contract was for the procurement of New Balance clothes — something only New Balance, which is not a small business, had the license to produce. To convince New Balance to allow other factories to produce clothes with its logo, the company had to be paid a licensing fee that gave it the same profit as if the contract had gone directly to it, he said.
With Romo Productions gone, Valles now <a href="https://rhondav.com/bio">markets</a> herself as the &#8220;&#8216;Oz behind the curtain&#8217; of many of the industry’s top Made in USA/Berry Compliant tactical apparel brands from 2008-present.&#8221; She says she consults with other companies that want to do business with the military to help them with <a href="https://rhondav.com/services">&#8220;sourcing/compliance.&#8221;</a>
Related: <a href="https://www.dailywire.com/news/trump-just-ordered-beneficiaries-of-the-largest-dei-program-to-turn-over-all-financial-records">Trump Orders All Beneficiaries Of The Largest DEI Program To Turn Over Internal Financial Records</a>
Related: <a href="https://www.dailywire.com/news/usaid-official-three-contractors-plead-guilty-to-half-billion-dollar-bribery-scheme">USAID Official, Three Contractors Plead Guilty To Half-Billion Dollar Bribery Scheme</a>
Editor&#8217;s Note: the views stated in this article are the author’s opinion. After publication, Ms. Valles contacted The Daily Wire to state that she disputes the accuracy of the article regarding her business operations, contracting history, and personal background, including any statement or implication that she was homeless or living in her car.”
</div>

Rhonda Valles

How The Military Gave A Homeless Lesbian’s ‘Minority Contracting’ Firm $19 Million

More than 1,000 firms that could get no-bid contracts from the federal government because they are owned by purportedly “disadvantaged” minorities have been banned from the program after they missed a deadline to turn over anti-fraud documents.
The documents were requested by the Small Business Administration because of the frequency of “pass-through” scams where minority &#8220;fronts&#8221; get contracts, then have large or white-owned businesses do the work while keeping a cut.
The now-suspended firms received more than $5 billion in federal money in the last four years, SBA said, and make up a quarter of all contractors getting preference under the so-called “8(a)” law.
“The Trump administration has acted from Day One to dismantle the discriminatory agenda that put white small business owners at a disadvantage, and to crack down on the fraud and corruption that proliferates within DEI programs,&#8221; SBA Administrator Kelly Loeffler said in a statement. &#8220;Today, we are suspending over 1,000 8(a) firms who have refused to provide basic documents that every legitimate business should have on-hand.&#8221;
The Senate Committee on Small Business held a <a href="https://www.dailywire.com/episode/luke-rosiak-testifies-at-us-senate-hearing">hearing on waste, fraud, and abuse</a> tied to the 8(a) program, during which <a href="https://www.sbc.senate.gov/public/_cache/files/6/e/6e1b9b58-ff59-48e1-ba7a-3baf8c80fdd3/0A2A02F0F82887A517B8056DA86CE02F8EB6D4405302E38F039CACF58B354005.rosiak-testimony.pdf">this reporter testified</a> on the widespread fraud that exists around it.
Under the law, 5% of contracts must be reserved for “disadvantaged” businesses, which President Joe Biden increased to 15%. Minorities with less than millions of dollars were automatically considered disadvantaged, as were all women.
Scrutiny of the long-running 8(a) program picked up in earnest after a black businessman pleaded guilty to obtaining $500 million in contracts from USAID by <a href="https://www.dailywire.com/news/usaid-official-three-contractors-plead-guilty-to-half-billion-dollar-bribery-scheme">bribing an official</a> $1 million. The official had the discretion to steer the contracts directly to Walter Barnes’ firm, Vistant, because of 8(a).
Journalist James O’Keefe also caught an official with a purported Native American firm on camera bragging about how they got $100 million and simply paid a large company $35 million to do the actual work.
On December 5, Loeffler ordered all 8(a) firms to turn over <a href="https://www.dailywire.com/news/trump-just-ordered-beneficiaries-of-the-largest-dei-program-to-turn-over-all-financial-records?author=Luke+Rosiak&amp;category=News&amp;elementPosition=11&amp;row=0&amp;rowType=Vertical+List&amp;title=Trump+Orders+All+Beneficiaries+Of+The+Largest+DEI+Program+To+Turn+Over+Internal+Financial+Records">detailed records</a> including payroll and bank statements. It has been an open secret in D.C. for decades that minority contractors get millions of dollars while having only one, two, or three people on staff–with the real work done by large, white-owned companies that are euphemistically referred to as &#8220;partners&#8221; or &#8220;mentors.&#8221; That means simply checking that firms actually had employees would have been enough to expose many for exploiting the system.
Going through all those records would be a Herculean task, one seemingly possible only through artificial intelligence. But it turned out that SBA didn&#8217;t even need to: Many fraudsters appeared to self-identify by simply refusing to cooperate.
Endemic fraud meant that the program was not even meaningfully meeting the goals liberals hoped for. The practice of no-bid contracting also drives up costs and lowers quality. But conservatives also opposed it on ideological grounds–with the <a href="https://www.dailywire.com/news/new-lawsuit-could-topple-the-heart-of-race-based-federal-programs?author=Luke+Rosiak&amp;category=News&amp;elementPosition=10&amp;row=0&amp;rowType=Vertical+List&amp;title=New+Lawsuit+Could+Topple+The+Heart+Of+Race-Based+Federal+Programs">courts making clear</a> that the decades-old program has to change or end.
After a court said the practice of assuming all minorities are disadvantaged was unconstitutional, the Biden administration began awarding the status based on essays in which people were asked to list instances of discrimination they have faced. SBA declined to provide The Daily Wire with the essays, citing privacy, indicating there was no attempt to verify whether the claims in the essays were true.
The SBA said that veterans, who also get contracting preference, were waiting for approval because the Biden administration diverted resources to approving minority firms.
Alaska&#8217;s Republican senators <a href="https://www.dailywire.com/news/alaska-republicans-secretly-working-to-protect-fraud-plagued-dei-program?author=Luke+Rosiak&amp;category=News&amp;elementPosition=3&amp;row=0&amp;rowType=Vertical+List&amp;title=Alaska+Republicans+Secretly+Working+To+Protect+Fraud-Plagued+DEI+Program">secretly went to bat</a> for the DEI program because big military contracts go to firms that call themselves Alaskan Native firms.

Darryl Britt (left) and Walter Barnes III

A Quarter Of ‘Minority Contracting’ Firms Banned After Refusing Anti-Fraud Check

Two Senate Republicans are standing in the way of efforts to eliminate a major DEI program that gives no-bid federal contracts to &#8220;socially disadvantaged&#8221; groups, a letter obtained by The Daily Wire shows.
Alaska Sens. Lisa Murkowski and Dan Sullivan wrote to agencies saying that a race-based program that removes competition for federal contracts for racial minorities &#8220;has reflected conservative, market-based principles by empowering small businesses to compete, grow, and succeed.&#8221; They said a Republican request that agencies review past contracts for &#8220;potential fraud&#8221; was &#8220;premature&#8221; and &#8220;unsupported by established facts.&#8221;
The Trump administration&#8217;s Small Business Administration moved to <a href="https://www.dailywire.com/news/feds-crack-down-on-minority-contracting-schemes-d-c-s-worst-kept-secret" target="_blank" rel="noopener">rein in</a> the federal minority contracting program, known as 8(a), after a <a href="https://www.dailywire.com/news/usaid-official-three-contractors-plead-guilty-to-half-billion-dollar-bribery-scheme" target="_blank" rel="noopener">black businessman bribed</a> a USAID official for half a billion dollars in contracts — a bribe the official could make good on only because contracts to minorities can be handed out at will instead of based on a showing of best value.
In October, James O&#8217;Keefe&#8217;s <a href="https://x.com/JamesOKeefeIII/status/1981042870460252398" target="_blank" rel="noopener">Citizen Journalism Foundation</a> captured officials from a white-led, but ostensibly Native American contractor, bragging about how they got a $100 million contract using minority preference and simply found someone else to do the actual work for a small portion of that. Follow-up reporting featured members of the Native American tribe bemoaning that outsiders were abusing the tribe&#8217;s name to <a href="https://x.com/jamesokeefeiii/status/1988770902243176767?s=42" target="_blank" rel="noopener">enrich</a> themselves, while tribe members lived in poverty.
Alaska Natives get even more preferential treatment than black, Hispanic, and Asian Americans, allowing them to run multibillion-dollar defense contractor companies while getting benefits initially designed for small, disadvantaged firms.
In December, Sen. Joni Ernst (R-IA), chair of the Senate Small Business Committee, which has jurisdiction over the program, wrote to agencies <a href="https://www.ernst.senate.gov/imo/media/doc/12082025sba8aprogramfinalletters.pdf" target="_blank" rel="noopener">asking them</a> to &#8220;immediately pause all 8(a) sole-source contracting&#8221; and &#8220;examine all 8(a) set-aside contracts awarded by your agency since FY 20 for any violation of laws and regulations,&#8221; noting that the Biden administration raised the goal for minority contracts to 15%.
For years, inquiries have flagged fraud and abuse in such arrangements, but Alaska Republicans have used their disproportionate power in the Senate to make the topic off-limits. The now-deceased Ted Stevens was an Alaska Republican who chaired the Senate&#8217;s Appropriations Committee for years, and Murkowski now sits on the committee.
Before the DEI craze captured Democrats, it wasn&#8217;t partisan to point out waste and abuse. In 2010, Sen. Claire McCaskill (D-MO) found abuse similar to what was highlighted by O&#8217;Keefe. But Murkowski &#8220;immediately sprung into action, lodging objections&#8221; to McCaskill&#8217;s effort to reform the program. McCaskill <a href="https://www.murkowski.senate.gov/press/article/mccaskill-retreats-attack-on-tribal-contracting" target="_blank" rel="noopener">folded</a>, but said, “Reform in this area is going to happen. It’s not a matter of if, but a matter of when.&#8221;
In the time since, little has changed. In 2011, The Washington Post reported that a D.C. lawyer named Paralee White had used the Alaska program to land more than <a href="https://www.washingtonpost.com/investigations/dc-insiders-can-reap-fortunes-from-federal-programs-for-small-businesses/2011/02/09/AB1NRJS_story.html" target="_blank" rel="noopener">$500 million</a> in military contracts and pay her family members lavish salaries. The Post noted, &#8220;Significantly for White, the subsidiaries set up by the corporations to receive contracts did not have to operate in Alaska or even be run by natives. They just had to be 51 percent owned by Alaska Natives, and they could hire nonnative subcontractors to do much of the work.&#8221;
In <a href="https://www.washingtonpost.com/archive/national/2010/09/30/bethesda-consultant-made-millions-with-alaska-firm/e9187e20-cc34-11df-8eee-2e1a26a3708e/" target="_blank" rel="noopener">another case</a>, a Bethesda, Maryland, man was paid $15 million to run an Alaskan government contractor for three years, while Alaska Natives received a total of $682,000 in dividends in 2009, or $305 each. The company won a contract to make military uniforms, which it manufactured in Puerto Rico instead of Alaska.
Sullivan and Murkowski did not publicize their letters to federal agencies, which goes against Republican orthodoxy when it comes to DEI and fraud and waste. A spokesman for Murkowski, Joseph Plesha, did not respond when The Daily Wire asked about the letter.
The inquiry asked: &#8220;Do you think the SBA and agencies have done a sufficient job rooting out abuse? If not, what are some examples that you&#8217;ve uncovered through your oversight? Do you support 8(a) for all minorities or only Alaskan natives?&#8221;
It also asked whether the type of Alaska Native Corporation that Murkowski holds up as a success includes Bowhead, virtually all of whose <a href="https://www.bowhead.com/executive-team/" target="_blank" rel="noopener">executives are white men</a>. Bowhead is technically an arm of an Alaskan tribe, but it is headquartered in the D.C. suburbs, and its family of high-tech defense contractors looks and operates like Northrop Grumman or Lockheed Martin — but without having to compete with them on price.
<div class="image"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-1026861" src="https://dw-wp-production.imgix.net/2026/01/bowhead-scaled.jpg" alt="" width="2560" height="1535" srcset="https://dw-wp-production.imgix.net/2026/01/bowhead-scaled.jpg 2560w, https://dw-wp-production.imgix.net/2026/01/bowhead-300x180.jpg 300w, https://dw-wp-production.imgix.net/2026/01/bowhead-961x576.jpg 961w, https://dw-wp-production.imgix.net/2026/01/bowhead-768x460.jpg 768w, https://dw-wp-production.imgix.net/2026/01/bowhead-1536x921.jpg 1536w, https://dw-wp-production.imgix.net/2026/01/bowhead-2048x1228.jpg 2048w" sizes=" (max-width: 2560px) 100vw, 2560px" /></div>
A spokeswoman for Sen. Sullivan, Amanda Coyne, also did not respond to a Daily Wire inquiry requesting data showing that such firms were actually staffed by Alaska Natives.
The letter said the 8(a) program &#8220;reduces administrative burden, shortens acquisition timelines, and avoids the delays and litigation risks that often accompany large-scale procurements. Further, as two Senators who care about the readiness of our military, we consistently hear from top Pentagon officials that the 8(a) Program provides flexibility and timeliness in procuring weapons systems that strengthen our country.&#8221;
The reason that some government officials like using 8(a) contracting is that they do not have to bother with competing for the work, a process designed to get the highest quality and lowest cost. Instead, they can simply choose who they want to give it to. At times, that includes the implicit understanding that the supposedly disadvantaged firm will subcontract much of the work to a traditional firm.
The 8(a) program is also facing court challenges, particularly after recent Supreme Court decisions made it likely that elements of it are unconstitutional. Multiple injunctions have been put in place by judges, and a lawsuit by lawyers from the Center for Individual Rights and the Wisconsin Institute for Law and Liberty has recently been filed on behalf of white people who were left out in the cold.
Dan Lennington, the director of the Wisconsin group&#8217;s Equality Under the Law Project, told The Daily Wire, &#8220;There is simply no question that the 8(a) program has been the source of significant waste, fraud, and abuse. The program was designed for &#8216;economically disadvantaged&#8217; small business owners, yet our clients have reported that these limits are not enforced and easily evaded, meaning that high net-worth individuals often scoop up preferences and sole-source contracts.&#8221;
&#8220;Moreover, the Section 8(a) program has been tainted with unconstitutional racial preferences, including racial preferences for &#8216;Alaska Natives,&#8217; which Senators Murkowski and Sullivan undoubtedly support. Federal law defines this category based on &#8216;blood,&#8217; &#8216;bloodlines,&#8217; and &#8216;minimum blood quantum,&#8217; all of which constitute unconstitutional racial categorizations. SBA should vigorously enforce the President&#8217;s Executive Orders, which require all agencies to eliminate racial preferences, including those remaining in Section 8(a),&#8221; he continued.
Murkowski and Sullivan&#8217;s letter read:
<blockquote>Fraud, waste, and abuse have no place in federal programs, and any participant who violates the law should be held fully accountable. However, we write to express serious concern with recent, unsubstantiated attacks on the Small Business Administration&#8217;s (SBA) 8(a) Business Development Program and the request that federal agencies halt all 8(a) sole-source awards absent verified findings of wrongdoing.
On December 8, 2025, the Chair of the Senate Committee on Small Business and Entrepreneurship sent letters to 22 federal agencies urging a pause on future 8(a) sole-source awards and a review of prior awards based on allegations of &#8220;potential fraud.&#8221; These requests are premature, unsupported by established facts, and risk significant harm to federal missions and thousands of compliant small businesses that lawfully participate in this program. Broad, sensationalized allegations leveled before the completion of any investigation amount to a presumption of guilt and undermine fundamental principles of due process.
For more than 40 years, the 8(a) Program, authorized under Section 8(a) of the Small Business Act, has been one of the federal government&#8217;s most effective tools for promoting entrepreneurship and economic mobility for disadvantaged communities. Participating firms routinely deliver high-quality, specialized services, achieve strong Contractor Performance Assessment Reporting System (CPARS) performance ratings, and provide agencies with cost-effective, timely procurement options. The program reduces administrative burden, shortens acquisition timelines, and avoids the delays and litigation risks that often accompany large-scale procurements. Further, as two Senators who care about the readiness of our military, we consistently hear from top Pentagon officials that the 8(a) Program provides flexibility and timeliness in procuring weapons systems that strengthen our country.
We fully support targeted, evidence-based oversight that identifies and removes bad actors. We cannot support sweeping actions that jeopardize thousands of legitimate businesses, many of which perform mission-critical work for your agency and others across the federal government.
Accordingly, we urge you to continue utilizing the 8(a) Program consistent with existing law and regulation, while allowing any appropriate reviews to proceed in an orderly and fact-driven manner. For decades, this program has reflected conservative, market-based principles by empowering small businesses to compete, grow, and succeed, rather than expanding government dependence on bureaucracy.</blockquote>
Editor&#8217;s note: Luke Rosiak <a href="https://www.dailywire.com/episode/luke-rosiak-testifies-at-us-senate-hearing" target="_blank" rel="noopener">testified</a> to the Senate Committee on Small Business about 8(a) contract abuse.

Sens. Dan Sullivan, R-Alaska, and Lisa Murkowski, R-Alaska.

Alaska Republicans Secretly Working To Protect Fraud-Plagued DEI Program

General

U.S.

U.S. Senate

A new lawsuit aims to end the government&#8217;s practice of assuming that people of certain races are &#8220;socially disadvantaged&#8221; and entitled to special benefits.
The case was brought on behalf of Revier Technologies, an artificial intelligence company that was denied a &#8220;Small Business Credit Initiative&#8221; subsidy because its owner, Matthew Schultheis, is white, and Young America&#8217;s Foundation, a conservative group that said the interns in its college program were barred from a Department of Homeland Security fellowship that relied on SBA&#8217;s &#8220;disadvantaged&#8221; classification.
Agencies across the federal government rely on a decades-old Small Business Administration designation that, according to federal regulation, automatically applies to anyone of certain races.
&#8220;The federal government’s pervasive use of race as a proxy for determining who is &#8216;socially disadvantaged&#8217; — and therefore who receives contracts, grants, loans, investment capital, opportunities, and other benefits — is unconstitutional, and it must be stopped,&#8221; the suit says.
The move comes as decades-old affirmative action programs are being ruled unconstitutional one by one. Center for Individual Rights attorney Mike Petrino told The Daily Wire that his suit targets a central regulation that is relied on by at least 20 different government programs. That is the SBA&#8217;s 8(a) designation, which takes its name from a 1953 law and is fleshed out in regulations, with no significant updates since 1998.
The longstanding government rule won&#8217;t pass constitutional muster under recent jurisprudence, including a landmark Supreme Court case on affirmative action at Harvard, the lawsuit argues.
Precedent requires that racial reparations be &#8220;narrowly tailored,&#8221; but the list of races given preference under SBA regulations is not based on any data about specific groups facing discrimination in specific industries, the suit said.
&#8220;As just some examples, Uyghur heritage from Kyrgyzstan is not presumed &#8216;socially disadvantaged,&#8217; but Han Chinese heritage is. Pakistanis are in; Afghans are out. And because &#8216;Hispanic American&#8217; includes anyone of Spanish origin, the lineal descendants of the conquistadors are presumed socially disadvantaged.&#8221;
Courts have held that race-based programs must also have a “logical end point.” SBA has never removed a minority group from its list and &#8220;does not have criteria to evaluate whether a group should be removed from this list because it is no longer suffering the present effects of past discrimination,&#8221; the suit said.
The November 17 <a href="https://cir-usa.org/cases/ending-race-based-discrimination-across-federal-benefits-programs/" target="_blank" rel="noopener">lawsuit</a>, filed in federal court in Louisiana, names as defendants SBA Administrator Kelly Loeffler and Attorney General Pam Bondi. It could lead to a court ruling that would end racial giveaways in government — perhaps with a third-party group intervening to defend the practice–or to the Trump administration settling the lawsuit by changing federal rules. SBA spokeswoman Caitlin O&#8217;Dea did not return a request for comment.
The 8(a) language was written to implement a government-wide &#8220;minority contracting&#8221; program that &#8220;set aside&#8221; a percentage of all federal contracts, totaling tens of billions of dollars, for disadvantaged businesses. In 2020, Center for Individual Rights lawyers sued on behalf of a white-owned company that lost out on government contracts during the first Trump administration, alleging that the government&#8217;s tying race to &#8220;disadvantaged&#8221; status was illegal.
For decades, courts had made clear that directly race-based government programs were constitutional, and SBA claimed it skirted that issue by affording minorities only a &#8220;rebuttable presumption&#8221; that they were disadvantaged. In other words, minorities would have less paperwork to complete, but a process was still in place to ensure that, for example, the child of a Chinese billionaire wouldn&#8217;t be considered to have suffered discrimination in America.
The 2018 case exposed that <a href="https://www.dailywire.com/news/core-part-of-minority-contracting-program-is-illegal-judge-said" target="_blank" rel="noopener">this was false</a>: A process to rebut the disadvantaged status didn&#8217;t even exist.
In July 2023, a judge issued a preliminary injunction forcing the SBA to change the way it chose which companies were &#8220;disadvantaged&#8221; for purposes of awarding government contracts. But the actual regulation was never changed, and other programs that piggybacked on it are still using it.
The Biden administration complied with the injunction by requiring potential 8(a) contractors to <a href="https://web.archive.org/web/20250208164952/https://sbaone.atlassian.net/wiki/spaces/CKB/pages/2768076819/Guide+for+Writing+a+Social+Disadvantage+Narrative" target="_blank" rel="noopener">write victimhood essays</a> describing how they had personally experienced discrimination in any aspect of life because of &#8220;racial, ethnic, or cultural bias within American society.&#8221;
The Department of Transportation also runs its own minority contracting program. The SBA and Transportation programs together likely make up the most lucrative race-based government programs in history. In 2021, 10% of all surface transportation money, more than $37 billion, was earmarked for &#8220;disadvantaged&#8221; companies.
But in September 2024, that program was also hit with a preliminary injunction amid claims that the program violates the Constitution&#8217;s equal protection clause, though it applied only to the companies that were parties in the case.
In May 2025, the Trump administration told a Kentucky judge it agreed that “the DBE program&#8217;s use of race- and sex-based presumptions of social and economic disadvantage &#8230; violates the equal protection component of the Due Process Clause.&#8221; Solicitor General D. John Sauer, who argues for the federal government before the Supreme Court, said he determined that his department would not defend the law.
In October 2025, the Trump administration&#8217;s transportation department enacted an interim final <a href="https://www.federalregister.gov/documents/2025/10/03/2025-19460/disadvantaged-business-enterprise-program-and-disadvantaged-business-enterprise-in-airport" target="_blank" rel="noopener">rule</a> that &#8220;eliminates presumptive eligibility based on race or sex and requires applicants to submit individualized evidence of social disadvantage.&#8221;
Petrino, the lawyer suing SBA, said the young, white business owner he represents could be considered under such a process without having his race held against him. &#8220;Our client from Louisiana is from a humble background, he&#8217;s faced struggles in life, he&#8217;s socially disadvantaged.&#8221;
It is unclear how the government could objectively verify, rank, and evaluate such claims, and whether the essays will merely be a pretext that results in essentially the same outcome: Preference given to minorities who write that they are disadvantaged because of their race. SBA has not responded to questions about the essays.
The set-aside contracting scheme has led to corruption as those who secure an inside track to government contracts often morph into influence-peddlers who rent out that access to &#8220;partners&#8221; or subcontractors–non-disadvantaged firms who do much of the actual work. The ability of government officers to steer funds directly to specific companies, without competitive bidding, has also facilitated <a href="https://www.dailywire.com/news/usaid-800m-migration-feds-bribes">bribery</a>.
Eliminating the existence of the set-aside programs, instead of just how they use race, would require an act of Congress, Petrino said. In the meantime, billions of dollars in government business are likely to be awarded based on essays written by business owners about their plight. The government already has a separate program reserving contracts for small businesses, the easiest and most objective way to ensure that someone is not privileged.
Last month, Loeffler, the SBA head, <a href="https://x.com/SBA_Kelly/status/1989805215919554580">said</a> a full review of the 8(a) program was underway, with an eye towards eliminating fraud. &#8220;For years, bureaucrats have turned a blind eye to rampant abuse within the contracting program for &#8216;socially and economically disadvantaged&#8217; small businesses,&#8221; she wrote, referencing a Daily Wire story. &#8220;That ends now – as SBA works to complete its full-scale audit of the 8(a) Program.&#8221;

Kelly Loeffler Appears For Nomination Hearing To Be Next SBA Administrator

New Lawsuit Could Topple The Heart Of Race-Based Federal Programs

Kelly Loeffler

Small Business Administration

The Small Business Administration on Friday ordered all companies that get preference for government contracts due to their status as &#8220;socially disadvantaged&#8221; minorities to provide detailed financial information to show they are not defrauding the program, The Daily Wire has learned.
The change represents a move to reevaluate a decades-old program that Washington insiders have long recognized as openly corrupt. The 8(a) program is one of the largest and oldest DEI initiatives in the country, affecting contracts at almost all federal agencies.
SBA administrator Kelly Loeffler said there is mounting evidence that minority contracts had become &#8220;a pass-through vehicle for rampant abuse and fraud,&#8221; especially after the Biden administration raised the target for contracts that are &#8220;set aside&#8221; for minorities from 5% to 15% of all contracting dollars.
&#8220;We&#8217;re committed to thoroughly reviewing every federal contract, contracting officer, and contractor — while working alongside federal law enforcement,&#8221; she said.
The records will shed light on the extent to which companies are subcontracting out the work to non-&#8220;disadvantaged&#8221; firms, while keeping a cut for serving as a middleman or &#8220;front&#8221; company. That would defeat the purpose of the program and result in higher prices for government services across the board.
Undercover journalist James O&#8217;Keefe caught employees from one such firm boasting that they did exactly that. <a href="https://x.com/JamesOKeefeIII/status/1981042870460252398" target="_blank" rel="noopener">O’Keefe Media Group</a> published a video exposing ATI Government Solutions, an 8(a) firm based on Native American ownership that is run by whites. Anish Abraham, senior director at ATI Government Solutions, acknowledged that his company was a “pass-through” that got a $100 million contract, kept $65 million, and paid another firm $35 million to do the work.
Such reports &#8220;have raised questions about widespread misconduct within the 8(a) Business Development Program, adding to years of credible concerns that the program designed to serve &#8216;socially and economically disadvantaged&#8217; businesses has become a vehicle for institutionalized abuse at taxpayer expense,&#8221; the SBA wrote to each of the 4,300 &#8220;disadvantaged&#8221; contractors.
The letter, exclusively obtained by The Daily Wire, requires that the companies upload their general ledger, bank statements, payroll register, subcontracting agreements, and other detailed internal information to the agency. Those who do not comply by January 5 risk losing their eligibility for contracts.
Most of the records are requested in the computer-friendly CSV format, which may suggest a plan to use artificial intelligence to help find &#8220;pass-through&#8221; abuse.
Loeffler said SBA&#8217;s top-to-bottom review of the so-called 8(a) minority contracting program, which has been in place since 1978, began in June after a criminal case revealed that one such firm had received more than <a href="https://www.dailywire.com/news/usaid-official-three-contractors-plead-guilty-to-half-billion-dollar-bribery-scheme" target="_blank" rel="noopener">half a billion dollars in USAID contracts</a> after bribing a government official with $1 million.
The 8(a) program is also called &#8220;set-aside&#8221; contracting because contracts are set aside from open competition and can be &#8220;sole-sourced&#8221; to a specific company, without needing to show that it&#8217;s the best qualified or provides the best value.
Without the 8(a) program, the contracting officer would have had difficulty following through on the bribe because he would be tasked with running a competition and awarding the work to the firm that was objectively best.
Pleading guilty were USAID official Roderick Watson; Walter Barnes, founder of Vistant, a company whose business model was getting contracts based on &#8220;disadvantaged&#8221; status and pairing with other companies who did the work; and Darryl Britt, founder of 8(a) form Apprio Inc. Britt was, at the time of his guilty plea, a member of Carnegie Mellon University&#8217;s Business Board of Advisers.
A mark of how minority set-aside contractors routinely game the system is how small companies receive contracts for widely divergent fields of work — a sign that they are simply having others do it or hiring staff afterwards with little knowledge of the subject area. Apprio’s contracts with government agencies range from developing websites to medical care to human resources to “ebola efforts.”
Other USAID contracts to Vistant include a $15 million contract “to help protect cyberspace and communications network domains to block the spread of insecure information.” A $28 million USAID contract was for “lab institutional contractor – mega bridge contract,” and a $40 million contract was for “creation of the PDEX award.” A $204,000 contract was for a “senior advisor to the Belarus country director.”
Even after Barnes&#8217;s misconduct had been detected, a joint venture between Vistant and a &#8220;small business&#8221; operating out of a home, called CollaborateUp, was awarded potential work up to <a href="https://www.dailywire.com/news/usaid-800m-migration-feds-bribes" target="_blank" rel="noopener">$800 million</a> to solve &#8220;the root causes of irregular migration from Central America to the United States.&#8221;
Since the O&#8217;Keefe exposé of ATI Government Solutions, whose <a href="https://atisolutions.us/" target="_blank" rel="noopener">website</a> openly advertised its main selling point as its ability to easily win government contracts through its affiliation with a Native American tribe, the SBA suspended the firm and a slew of others tied to its chief executive, Firmadge Crutchfield, who is white.
Tribe members <a href="https://x.com/jamesokeefeiii/status/1988770902243176767?s=42" target="_blank" rel="noopener">emotionally said</a> they were victims of the pass-through scheme, and that if a contracting program intended to steer work to Native Americans, that work should actually be done by Native Americans.
The minority set-aside program will need to be re-evaluated anyway because of recent <a href="https://www.dailywire.com/news/core-part-of-minority-contracting-program-is-illegal-judge-said" target="_blank" rel="noopener">court rulings</a> blocking the government from doling out benefits based on race.

Kelly Loeffler, U.S. President Donald Trump’s Administrator of the Small Business Administration. (Photo by Kevin Dietsch/Getty Images)

Trump Orders All Beneficiaries Of The Largest DEI Program To Turn Over Internal Financial Records

A judge in 2021 ruled that a key part of the government&#8217;s multibillion-dollar minority contracting program was illegal, potentially giving the Trump administration inroads to kill the fraud-ridden program.
In 1953, Congress instructed the Small Business Administration to reserve some federal contracts for &#8220;disadvantaged&#8221; businesses. Beginning in 1986, SBA counted businesses owned by racial minorities as &#8220;presumptively&#8221; disadvantaged. That meant instead of an applicant having to show that he had actually faced discrimination, he simply needed to show his race. The result was the <a href="https://www.dailywire.com/news/feds-crack-down-on-minority-contracting-schemes-d-c-s-worst-kept-secret?author=Luke+Rosiak&amp;category=News&amp;elementPosition=2&amp;row=0&amp;rowType=Vertical+List&amp;title=Feds+Crack+Down+On+Minority+Contracting+Schemes%2C+D.C.%E2%80%99s+Worst-Kept+Secret">8(a) program</a>, a sprawling DEI enterprise that has impacted every aspect of government.
That continued even during the first Trump administration. In one case in 2018, the Department of Agriculture reserved work on a particular project for &#8220;disadvantaged&#8221; businesses, even though it internally acknowledged that doing so would cause an &#8220;adverse impact&#8221; on Ultima Services Corp, which had been doing similar work for the agency for years.
Ultima <a href="https://storage.courtlistener.com/recap/gov.uscourts.tned.93612/gov.uscourts.tned.93612.1.0_1.pdf" target="_blank" rel="noopener">sued</a> in March 2020, alleging anti-white discrimination, but the Trump administration fought it, filing a motion to <a href="https://storage.courtlistener.com/recap/gov.uscourts.tned.93612/gov.uscourts.tned.93612.20.0.pdf" target="_blank" rel="noopener">dismiss</a> in July 2020.
Documents unearthed through that lawsuit revealed that even though the government claimed being a racial minority merely provided a &#8220;rebuttable presumption&#8221; that someone had experienced discrimination that &#8220;could be overcome with credible evidence to the contrary,&#8221; it had no mechanism for someone to actually rebut it. That means even &#8220;nepo babies&#8221; and people who worked in industries where their race never experienced discrimination were put on the fast track to government contracts.
A &#8220;socially and economically disadvantaged small business&#8221; is one that is at least 51% owned by a disadvantaged person. So, soon people began forming 51-49 partnerships where one person&#8217;s role was essentially to be a racial minority so contracts could be awarded to the company with no competition, while the other provided the actual expertise and work.
That leads to increased prices, because the firms essentially have to pay a middleman&#8217;s fee. It also generates a worse work product, since the government isn&#8217;t seeking multiple bids and choosing the best.
James O&#8217;Keefe recently captured an executive from one such business admitting to <a href="https://x.com/JamesOKeefeIII/status/1981042870460252398" target="_blank" rel="noopener">being a &#8220;pass-through&#8221;</a> that collected tens of millions of dollars by being a Native American-owned company that got government contracts and subcontracted the work to others, and SBA Administrator Kelly Loeffler said a <a href="https://www.dailywire.com/news/feds-crack-down-on-minority-contracting-schemes-d-c-s-worst-kept-secret">full review</a> of the 8(a) contracting program is underway.
Discovery in the Ultima lawsuit showed that SBA has never removed a group from &#8220;disadvantaged&#8221; status, making it a permanent reparations program instead of one that worked to offset past discrimination for a specific period of time.
It also revealed that SBA made no effort to determine whether specific minority groups had faced discrimination in specific industries. It simply assumed that all minority groups were disadvantaged in all fields — even giving Indians a leg up in computer science, a field in which they have been dramatically overrepresented for its entire history.
During the course of the lawsuit, SBA implemented a rule that said people would no longer be considered disadvantaged “if their net worth exceeds $850,000, their adjusted gross income exceeds $400,000, or their total assets exceed $6.5 million.” Ultima said those thresholds &#8220;only disqualify the richest individuals.&#8221;
The Biden administration continued fighting the lawsuit, while President Joe Biden increased the goal for minority &#8220;set-asides&#8221; from 5% of all federal contracts to 15%.
But in July 2023, Judge Clifton Corker, a Trump appointee in the Eastern District of Tennessee, <a href="https://storage.courtlistener.com/recap/gov.uscourts.tned.93612/gov.uscourts.tned.93612.86.0_1.pdf" target="_blank" rel="noopener">ruled</a> that assuming every minority was disadvantaged in every field was illegal, especially after Supreme Court precedent such as the 2023 Students for Fair Admissions case that ruled that affirmative action was illegal in colleges.
Biden&#8217;s excesses in flagrant racial favoritism led to court rulings that didn&#8217;t exist years prior, and included ruling against a program — also administered by the SBA — that prioritized minorities for coronavirus aid.
Corker wrote that &#8220;The Supreme Court has held that the government has a compelling interest in &#8216;remediating specific, identified instances of past discrimination that violated the Constitution or a statute.&#8217;” SBA never identified specific instances of racism that it was addressing, but merely provided nationwide statistics that showed minorities earning less money generally.
Ultima said the list of minorities given preference is essentially random, including Indian Americans, who out-earn whites, while excluding Arab Americans. Corker said SBA also &#8220;does not consider other groups, such as Hasidic Jews who have faced similarly appalling discrimination, eligible for the rebuttable presumption of social disadvantage.&#8221;
The government must identify “prior discrimination by the governmental unit involved” or “passive participation in a system of racial exclusion” before it “embark[ed] on an affirmative-action program,” Corker said, citing precedent.
SBA argued that &#8220;the presumption is flexible because it may be overcome with evidence that an individual is not socially disadvantaged,&#8221; but the judge said he &#8220;struggles to see how that process would work in practice,&#8221; with an SBA employee admitting &#8220;[t]here’s no process for a third party to question someone’s social disadvantage.&#8221;
Judge Corker said precedent requires that a race-conscious program &#8220;must be appropriately limited such that it will not last longer than the discriminatory effects it is designed to eliminate,&#8221; and have a &#8220;logical end point.&#8221; Seventy years after its advent, SBA conceded that &#8220;the 8(a) program has no termination date.&#8221;
&#8220;Defendants have failed to show that the use of the rebuttable presumption in the 8(a) program is narrowly tailored,&#8221; Judge Corker ruled. &#8220;Use of the rebuttable presumption violates Ultima’s Fifth Amendment right to equal protection of the law,&#8221; he said, enjoining the federal government from assuming that minorities are all disadvantaged.
That dealt a massive blow to the government&#8217;s multibillion-dollar DEI contracting regime.
In July 2024, the Biden SBA issued an <a href="https://www.sba.gov/federal-contracting/contracting-assistance-programs/8a-business-development-program/updates-8a-business-development-program" target="_blank" rel="noopener">advisory</a> acknowledging that most 8(a) contracts had been awarded based on the applicant&#8217;s race, with no showing of actual discrimination. It said to receive new contracts under &#8220;disadvantaged&#8221; set-asides, firms would need to &#8220;submit a social disadvantage narrative,&#8221; meaning an essay demonstrating that they are a victim.
It said, &#8220;the examples you include in your social disadvantage narrative can be related to any time in your life but must include detail of how the incident impacted your entry or advancement in the business world.&#8221; Those whose essays pass muster &#8220;will receive a Social Disadvantage Qualification letter.&#8221;
But the Biden administration may have simply sidestepped the injunction, and it is not clear how things have changed in the second Trump administration.
In July 2025, The Daily Wire submitted a Freedom of Information Act request for statistics on whether any minorities were rejected based on their essays, as opposed to disregarding the judge&#8217;s ruling by rubber-stamping them. The Daily Wire also requested copies of the victimhood essays.
Despite legal requirements, the Trump administration has not even acknowledged the FOIA request four months later. It has not responded to numerous follow-up inquiries about how it is dealing with the 8(a) program in light of the Ultima ruling, and spokeswoman Caitlin O&#8217;Dea did not return multiple phone calls.
Related: <a href="https://www.dailywire.com/news/usaid-official-three-contractors-plead-guilty-to-half-billion-dollar-bribery-scheme">USAID Official, Three Contractors Plead Guilty To Half-Billion Dollar Minority Contracting Scheme</a>

Menu