New State Department Reg Destroying Businesses

On July 15 the State Department instituted a new regulation that with one stroke of the pen put thousands of small business owners and their employees out of business.  This new regulation requires that anyone bringing students and other young people from Europe to fill short term jobs at places like ski resorts and Disney World are now required to put $1,000 per student in escrow and not touch it for two years. 

Hundreds of small business owners have worked in this HR industry space for decades.  My friend, Kerry Carr, has been doing this for 20 years as a solo entrepreneur with some part-time employees.  One of her main clients was Universal Studios.  On average she brought in 500 students and other short-term employees from Europe each year.  The new regulation would have required that she find $500,000 ($1,000 per student x 500 students), put it in escrow, and not touch it for two years.  Other very small businesses who bring in 1,000 are now required to post over a million dollars and simply leave it in the bank.

Every one of these small businesses was suddenly put out of business on July 15.  Meanwhile, the large corporations in this space simply posted the "bond", swooped in and took all the customers of these formerly very productive small companies.  If the decision was reversed today, there would be no market for them to return to.  The State Department has effectively ensured that no new small business owner will ever function in this space. 

We learned of this issue on July 11 and conatacted John Hart in the SBA Office of Advocacy.  24 days after attempting to get a response from him numerous times, he sent us an email saying he was offended that we had pursued him so aggressively.  That was tthe sum total of the help we got from this "advocate".

Major Clark, his boss in Washington, took over the issue.  It is now nearly 60 days since we first contacted the SBA Office of Advocacy, and on day 37 we got one terse, seven word email from Major Clark, in direct response to a blog post that has been getting high traffic.  His response: "Department of state is reviewing our concern."  The State Dept. has never contacted a single affected business owner, nor has the Office of Advocacy.

I have been emailing the following seven people approximately once a week for 60 days now.  Yesterday these emails were blocked and I received a "failed permanently" message attempting to email all seven of them, as well as the generic email box at Office of Advocacy.  Rather than deal with the issue, the Office of Advocacy is now blocking a citizen from emailing public servants.  I'm not sure that's legal.  I suppose I should request that the Office of Advocacy look into it, but something tells me that might be a conflict of interest.

The State Dept. put hundreds of small businesses with thousands of employees out of business in one day, while making it easier for large businesses to take over the entire market.  If there was ever an issue that the Office of Advcacy should have jumped on and ridden to a heroic conclusion for small business, this is it.  Instead we have been stonewalled from the begining and now it's looking more like a cover up than a resolution.  Word among the affected small business owners is that the new regulation came directly form Hillary Clinton who does not want to address it.  The complete lack of responsiveness from SBA Advocacy only lneds credence to that claim.

Please join me in pressuring SBA and their Office of Advocacy to address this issue immediately, expose who did this, and bring reparations to the affected small business owners and their employees.

This kind of arrogant neglect of the people is what makes government look like the enemy of small business, not the Advocate the SBA claims to be.

These small business owners look forward to your support.  Please email Dr. Winslow Sargeant as well as the other seven, and demand that they begin to be transparent on this issue and begin to respond to their constituency immediately.

We look forward to exposing who is behind this destruction of so many small businesses and getting this resolved.

See more on this issue.

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