Trump's war on government waste and DEI hit a brick wall nobody saw coming.
Two Senate Republicans are standing up for fraud and corruption.
And Alaska RINOs Lisa Murkowski and Dan Sullivan just stabbed Trump in the back with this secret letter defending the very DEI programs he promised to eliminate.
The Small Business Administration runs a $40 billion fraud scheme
The 8(a) Business Development Program is a Small Business Administration initiative that's supposed to help "socially disadvantaged" small businesses compete for federal contracts.
In reality, it's become one of the biggest scams in Washington.
The program hands out over $40 billion annually in no-bid contracts based on race.
Government officials don't have to bid out the work or find the best value for taxpayers.
They just hand contracts to whoever they want as long as the company claims minority ownership.
Undercover journalist James O'Keefe caught officials from ATI Government Solutions on video in October bragging about their scheme.
The company claimed Native American ownership to win over $100 million in contracts.
They admitted doing only 20% of the work themselves while passing the rest to subcontractors who would never qualify.
A black businessman bribed a USAID official for half a billion dollars in contracts.
The Small Business Administration's own Inspector General found that 20 of 25 firms reviewed should have been kicked out of the program.
Those 20 ineligible firms collected $127 million in just one year.
One Bethesda lawyer named Paralee White used Alaska Native corporations to land over $500 million in military contracts.
She paid her family lavish salaries while actual Alaska Natives received $305 each in dividends.
The corporations don't even need to operate in Alaska or employ Alaska Natives.
They just need to be 51% owned by Alaska Natives on paper while outsiders run everything and collect the real money.
Trump and Joni Ernst are trying to shut down 8(a) but Alaska Republicans are blocking them
Kelly Loeffler at the Small Business Administration launched a comprehensive investigation into the program for "institutionalized abuse" and "rampant fraud."
She ordered all 4,300 8(a) contractors to produce financial records by January 5.
Senator Joni Ernst sent letters in December demanding agencies "immediately pause all 8(a) sole-source contracting" and investigate contracts for fraud.
Ernst documented how the Biden administration tripled contracting goals to 15% while fraud exploded.
Trump signed executive orders on day one terminating diversity preferences in federal contracting.
That's when Murkowski and Sullivan stepped in to sabotage them.
The Alaska senators wrote secret letters to federal agencies defending the 8(a) program as "conservative, market-based principles."
They didn't publicize their letters while the rest of Senate Republicans demanded Trump eliminate racial preferences.
Murkowski and Sullivan called Ernst's investigation "premature" and "unsupported by established facts."
Dan Sullivan's conservative record just got exposed as a fraud
Everyone knows Murkowski is a RINO who votes with Democrats when it counts.
She opposed Brett Kavanaugh's Supreme Court confirmation and tried to block Trump's agenda for years.
But Sullivan campaigns as a rock-ribbed conservative who supports Trump's America First policies.
Now Sullivan's getting exposed for what he really is — another Alaska politician protecting his state's gravy train over the conservative movement.
Alaska Native corporation contracts are the biggest federal fraud scheme
Alaska Native corporations operate without the size limits other 8(a) firms face.
Most minority contractors can get sole-source contracts up to $5.5 million maximum.
Alaska Native corporations secured contracts worth hundreds of millions with zero competition.
The late Senator Ted Stevens created this gravy train in the 1980s when he chaired the Appropriations Committee.
Murkowski now sits on that same committee and Sullivan does her dirty work.
Take Bowhead Manufacturing, which Murkowski holds up as a success story.
Virtually all of Bowhead's executives are white men.
It's technically owned by an Alaska tribe but headquartered in the D.C. suburbs.
The company runs like any other massive defense contractor but gets to skip the bidding process entirely.
Sullivan and Murkowski wrote that the program "reduces administrative burden" and "avoids the delays and litigation risks that often accompany large-scale procurements."
Translation: government officials love skipping the competitive bidding designed to get taxpayers the best deal.
They just hand contracts to whoever they want and Alaska gets paid.
Sullivan calls that "conservative, market-based principles."
Real conservatives call it corruption.
The Supreme Court already ruled this unconstitutional but Alaska Republicans don't care
The Supreme Court's recent decisions made it crystal clear that race-based contracting violates equal protection.
Federal law defines Alaska Native status based on "blood," "bloodlines," and "minimum blood quantum."
Those are exactly the kind of racial categorizations the Supreme Court said are unconstitutional.
Dan Lennington from the Wisconsin Institute for Law and Liberty told the Daily Wire there's "simply no question" the 8(a) program has been "the source of significant waste, fraud, and abuse."
Sullivan and Murkowski wrote that fraud allegations are "sensationalized" and "amount to a presumption of guilt."
Trump's own administration is moving to shut this down and Sullivan is actively sabotaging them.
Sullivan's 2026 reelection hinges on betraying Trump over Alaska pork
Sullivan gave away his real motivation when he loosened restrictions on Alaska Native contracting in 2019.
That year he co-sponsored a provision raising the no-bid contract threshold to $100 million.
Previously contracts over $22 million needed approval from the secretaries of the Army, Navy and Air Force.
Sullivan's change let contracting officers approve these massive no-bid deals themselves.
He cares more about funneling defense dollars to Alaska than standing with Trump.
Sullivan stood by and watched Trump sign executive orders terminating diversity preferences on day one.
Then he turned around and wrote secret letters protecting billions in racial preferences.
He's betting Alaska voters care more about the money than conservative principles.
Sullivan talks like a Trump conservative but votes like a McCain Republican when Alaska's federal cash flow is on the line.
That's not fiscal conservatism — that's selling out the movement for home state pork.
Murkowski's betrayal was expected because she's been a RINO for years.
Sullivan's betrayal stings because conservatives actually trusted him.
Sources:
- Luke Rosiak, "Alaska Republicans Secretly Working To Protect Fraud-Plagued DEI Program," Daily Wire, January 12, 2026.
- Joni Ernst, "Ernst Calls for Complete Halt and Full Audit of Fraud-Filled Contracting Program," U.S. Senate Press Release, December 8, 2025.
- "Trump Admin Launches Probe Into Firms Allegedly Using 'Minority' Front To Win Multi-Million No-Bid Contracts," Daily Caller, October 21, 2025.
- Joe Lonsdale, "The Scandal of Minority Contracting," April 23, 2025.
- "Treasury Orders Department-Wide Investigation into Potential Fraud Across Contracting Programs," U.S. Department of the Treasury, November 6, 2025.
- "Defense spending bill headed for Trump's signature contains a lucrative win for Alaska Native corporations," Anchorage Daily News, December 27, 2019.
