The Daily Wire has learned that the Small Business Administration has ordered all 4,300 firms in its 8(a) "socially disadvantaged" program, which receive no-bid federal contracts, to turn over their financial records, including general ledgers, bank statements, payroll files, subcontracting agreements, and other internal documents, by January 5 or face removal from the program.

SBA's crackdown on one of Washington's oldest DEI initiatives follows mounting evidence that some 8(a) firms have become a major pipeline for fraud, pass-through schemes, and artificially inflated contract costs.

Late last month, Peter Schweizer, president of the Government Accountability Institute and the investigative journalist who broke the Clinton Cash corruption story, published a report exposing the cronyism and corruption inside the 8(a) program, where pass-through firms handed bidless contracts on silver platters while quietly outsourcing the real work to major consulting companies.

"For years, DC insiders have exploited a federal DEI contracting program that provides windfalls to Beltway elites. This open secret isn't about helping the downtrodden; it's about bagging no-bid paydays. The SBA's 8(a) program is long overdue for reform," Schweizer wrote on X.

There was also a recent U.S. Treasury Department investigation into $9 billion in small-business contracting, amid alarming concerns from Treasury Secretary Scott Bessent and others about rampant fraud and abuse in preference-based programs. In other words, meritocracy will return under the Trump administration.

Everyone in the DC consulting world understands how the game works: set up a compliant 8(a) "small business," win the no-bid award, and let the big consulting firms do all the work.

8(a) was DC's best-kept secret - until journalist James O'Keefe blew the lid off the DEI program. O'Keefe went undercover and captured video of an individual linked to ATI Government Solutions bragging about keeping $65 million of a $100 million contract while subcontracting out the work.

Several firms, including ATI, have since been suspended. Native American tribes whose names were used in pass-through schemes are also under increasing scrutiny.

SBA Administrator Kelly Loeffler said there is mounting evidence that minority contracts had become "a pass-through vehicle for rampant abuse and fraud," especially after the Biden administration raised the target for contracts "set aside" for minorities from 5% to 15% of all contracting dollars.

"We're committed to thoroughly reviewing every federal contract, contracting officer, and contractor — while working alongside federal law enforcement," Loeffler said.

Such reports "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 'socially and economically disadvantaged' businesses has become a vehicle for institutionalized abuse at taxpayer expense," the SBA wrote in its letter to the 4,300 "disadvantaged" firms.

Schweizer hinted at the 8(a) reforms needed:

Last week... 

DEI mandates have proven to make the government more dysfunctional and more costly. It's time to end the madness and "Make Meritocracy Great Again."