Alaska Firms Suspended Over Improper Payments SBA has suspended two Alaska Native companies from the 8(a) program after the agency’s inspector general found that the companies paid millions of dollars to non-native managers in violation of program rules. APM LLC, majority-owned by Cape Fox Corp., and Goldbelt Raven LLC, majority-owned by Goldbelt Inc., “repeatedly violated” 8(a) rules, the IG found. The companies were awarded 8(a) contracts totaling up to $833 million from 2003 to 2006. Auditors said the two managers, identified only as “Mr. A.” and “Mr. B,” were part owners of the Alaska firms, but the firms did not disclose that relationship to SBA. The report said APM agreed to pay companies owned by “Mr. A.” $23 million over three years, plus a share of future 8(a) revenues. “Mr. A.” was entitled to up to 45% of APM’s revenues on some 8(a) contracts. Goldbelt paid “Mr. B’s” companies $16.1 million over the same period, and owed him a portion of future revenues, according to the audit. The Frederick, Maryland, News-Post identified “Mr. B” as Goldbelt’s former president, Suresh Doki. The IG said the payments violated 8(a) rules because the agreements were not submitted to SBA for approval. By concealing their relationships with the two managers, the companies “prevent[ed] the Agency from determining whether there were affiliation issues that would jeopardize their program eligibility,” the report said. Goldbelt’s new president, Tony Lieto, who was appointed after the IG report, told the Frederick newspaper that the company used employees from one of Doki’s firms when it won a support contract at Fort Detrick, Maryland. “You have to understand that Goldbelt Raven was a small company, strapped for cash,” he said. “What they tried to do was cut corners ... they did that to survive.” Goldbelt is one of several bidders on the follow-on to the $93 million Fort Detrick contract. The company said it is trying to get the suspension reversed. The IG recommended that SBA review other 8(a) companies owned by the parent Alaska Native corporations, Goldbelt Inc. and Cape Fox, “for compliance and affiliation issues.” SBA said it has suspended APM and Goldbelt Raven and initiated proceedings to terminate their participation in the 8(a) program. While they are suspended, they can continue to work on existing contracts but are not eligible for new ones. The agency said it will examine financial records of other 8(a) firms owned by Goldbelt and Cape Fox. The IG report is available at www.sba.gov/ig/8-14.pdf.