Christopher Rufo Exposes $26 Billion SBA Slush Fund

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Aired on January 22, 2026. Transcript begins below and may contain minor errors.

DEI Exclusion Fraud Power Inside the SBA

STEVE BANNON (HOST): Chris Rufo, the great Chris Rufo, is joining us. And Chris, look, naturally I would want you on here in Davos, because Larry Fink, you’ve so broken Fink on DEI. Larry Fink, who was kind of the financial guy of enforcing all the companies to do it because of his immense power on Wall Street.

And he’s over at Davos kind of denying, you know, no ESG, no DEI. We don’t need to do that. We don’t need a Green New Deal because intermittent power won’t work for the data centers, AI. He’s throwing over all of his beliefs.

And you were the leader in the effort to break the DEI, but you came up with something, I think, two days ago that I think may be the biggest story in the country and people need to focus on it.

It was this, is it 26, we talk about Somalis in Minneapolis and the ripoff of the learning centers and all this is getting deeper and everybody’s telling me this. But you’re identifying, in the Trump administration, there’s still Congress approving, I guess there’s $26 billion being spent on this type of scams by the Small Business Administration.

And we kind of know it’s out there, but we’re not stopping it or not putting our hands on it. Can you walk people through this quite frankly blockbuster story?

CHRIS RUFO (GUEST): Yeah. So this is at the Small Business Administration. It’s a $26 billion slush fund that is dedicated to providing government contracts, including many no-bid government contracts, exclusively to firms that are owned by racial minorities and women.

In many cases, these are shell companies where they have a token minority and then a private firm behind them. But in all cases, for this entire $26 billion slush fund, there’s only one identity group that is prohibited from accessing these funds or bidding for these contracts, white men.

And so this is like the epitome of DEI. It’s billions of dollars. There’s all sorts of fraud and corruption. In the program’s 45-year history, there’s never been a single audit done.

And the question is simply this. It’s now one year into the Trump administration. The president came out strong on day one, said no more DEI. Why are we still administering billions of dollars for every group except for one? It seems totally unfair, totally unconstitutional. And yet it’s still something that, until now, has been surviving in the Trump administration.

STEVE BANNON (HOST): So, Chris, help me out there, because the president came out. He’s pretty upfront. You know, in the days of thunder, you know, flood the zone. Every day we’re coming out with ten executive orders.

President Trump said, hey, we’re not doing this anymore. I don’t want any more DEI. I don’t want it in the corporations. And particularly, it’s not simply not going to be in the government. It’s not going to be in my administration. I’m taking charge of this.

So how are we now, one year into it, and President Trump’s got a hundred things going on? He’s bringing world peace. They’ve got the world peace board tomorrow. They’re going to settle the Gaza thing once and for all.

You’ve got Greenland. You’ve got what he’s doing with the Chinese Communist Party, Japan, Venezuela, South America, hemispheric defense, the mass deportations. He’s got everything going on. Bobby Kennedy stuff.

How is this not the focus of Russ Vought over at our good buddy Russ Vought at OMB, and particularly Kelly Loeffler? She’s got a great team over there. Why are they just not taking guidance from the president and let’s just get rid of it?

CHRIS RUFO (GUEST): Well, so it boils down to a legal question. So there is a statute in place that says there is racial contracting. It’s called the Section 8(a) program that is supposed to be for disadvantaged groups.

And, you know, to be fair, Kelly Loeffler, who’s the administrator at the SBA, has done some great work in the first year. She’s mandated the first ever audit. She’s reduced the percentage of race-based contracting from 15% to 5%.

But I think what’s happened is that she feels hemmed in by legal considerations. It may not be technically a DEI program. It’s more like an affirmative action contracting program. The native tribes have sovereignty issues that make them somewhat of an exception to race-based rules.

But the bottom line is that it hasn’t gotten done. It needs to get done.

And I was fielding calls yesterday from the White House after this story came out. And look, the White House assures me we’re working on it. It’s been stalled. We’re trying to get it done. We think there’s going to be imminent action.

But what I think needs to happen, and what could happen, is simply to say this program is unconstitutional. We’re going to refuse to administer it. We’ll fight it in the courts where we think we have a pretty good shot.

Because look, the courts have been pretty clear about this stuff. Race-based contracting, especially a race-based contracting that says any group in the country can apply except for one, white men, is totally unfair. It’s totally illegal. It’s totally unconstitutional.

So I’d like to see the administration use the nuclear option here and just say we’re blowing up this program. We’re going to give contracts to the best firms. It doesn’t matter what the skin color is. It doesn’t matter where they’re from.

And look, the other thing that is kind of crazy, we look through a lot of these contracts. These are supposed to be for socially disadvantaged or oppressed people.

But you have a firm, for example, that’s run almost exclusively by Indian Americans with PhDs that have millions of dollars in assets, to give you one small example.

And you say, wait a minute. This is a group that has the highest education level, the highest income level, run by people who, by any measure, are part of the American elite now. Why are we giving them a contract advantage over other groups? It’s indefensible.

And I hope that we see action, maybe not today or tomorrow, but I hope we see something by next week at the latest.

STEVE BANNON (HOST): Chris, the other bomb here, I don’t want to bury the lead. You said, hey, because it’s $26 billion a year, but this thing’s been going on for 40 years.

And it’s not that, hey, maybe you do have some set aside for minorities, like I said, oppressed minorities, not Indian guys with PhDs that are building tech companies, whatever.

But you said there hasn’t been an audit. What I’ve always heard about this program is that it’s actually a company, but they put a woman or they put a minority on top of it and they get the contracts, but it’s a complete scam.

That it’s really not a minority company. They’re just doing that so they qualify for the contract itself.

Is it true that it hasn’t been audited to that depth to see if there’s been criminal activity or fraud in 40 years?

CHRIS RUFO (GUEST): Yeah. There have been cases. Certainly there are cases of fraud, cases that have been prosecuted, but there’s been no comprehensive audit of all of these approved minority contracting firms ever.

And we know it’s rife with fraud. We know this is part of it.

The other dirty detail or wrinkle that I heard from administration officials and others with inside knowledge of the program is that a lot of this money goes to Alaska, the state of Alaska, where there are native Alaskan tribes.

And there are these shell companies where private companies run by people from all different backgrounds use kind of token Alaska native firms to keep this flow of billions of dollars over time, tens of billions of dollars going.

And there are senators in Alaska who are very intent on keeping this spigot open. There’s at least one Republican senator in Alaska.

And so everyone is in on this scam. I think everyone knows that it’s a dirty business. It’s totally corrupt, totally unjust.

But I think it needed the attention because what’s really happened is that it fell under people’s radar. It’s not a headline story for many people. There’s a lot of exciting things happening in the news.

But the reason I wanted to draw attention to it is because this should be an easy layup for the administration.

We don’t do DEI. We don’t do race-based decision-making. It’s gone. That’s what I’d like to see, and I’m optimistic that we’ll get there.

STEVE BANNON (HOST): You talk about the Senate, the House appropriations. We see them in the middle of the night. In fact, we covered it here. We stream it. We get big audiences. You see these debates and the moderates always kind of win.

How did this, for 40 years, how was this going on when every guy running for Congress, every man and woman, I’m going to cut it, nothing’s going to get through. I’m against DEI. I’m against waste, fraud, and abuse. This hits every touchpoint.

How did Congress and the appropriations guys, the appropriators, keep doing this without getting outed?

CHRIS RUFO (GUEST): I mean, part of it is just it’s an automatic, renewable expense. It takes a lot of political capital to say we’re going to take this existing program that is benefiting Native Americans and the children of sharecroppers and all of this mythology around it.

They don’t want to be the big, bad Republican who’s cutting minority contracts.

But I think the deeper reason is psychological, and the psychological reason is this.

A lot of these guys, Republican congressmen, Republican senators, for many years were deathly afraid of being called racist, of being called bigoted, of being called cruel, of facing the scrutiny of the national news media.

And at the end of the day, it really took a figure like President Trump to come in there and say, hey, wait a minute, I don’t care what you call me. I’ve been through the media ringer. I’m willing to take the heat. We’re not going to do this. Get rid of it.

And that’s the kind of decisive action that was required.

And my suspicion is that the president, if this were put on his desk, he would be shocked and he would ask his people, why haven’t we gotten rid of this already?

And look, I think it is totally defensible legally, totally defensible politically, and most important, totally defensible morally.

We can either have a colorblind country where everyone is treated equally or we can have a racial hierarchy where people are treated unequally according to their race. I’m not about that. I think we have to stop.

STEVE BANNON (HOST): Yeah. No, your recommendation to the president, just let’s do a nuclear option here. And, hey, face them in court because they’re going to sue you anyway if you even try to touch it around the margins.

Let’s go for the whole thing, zero it out and say, come and get it.

Last thing. You were the leader in the DEI, getting rid of DEI, both in corporate America and the government. Larry Fink, the new mayor of Davos, is speaking a very different tune, at least publicly. Behind the scenes, maybe not.

Talk to me about Larry Fink. Now he’s taking over Davos. He’s in. He’s the mayor of the globalist village, and he’s not touting DEI like he used to, sir.

CHRIS RUFO (GUEST): That’s exactly right. It’s been an about face from Larry Fink.

So look, after 2020, Larry Fink, he was wealthy, but he wanted to become famous. He wanted to be beloved in international circles, business circles, philanthropic circles. And so he became really the poster boy of DEI and ESG.

But, you know, he took a beating for these once the kind of woke hysteria started to subside, once it was really demonstrated that these are forms of corruption and discrimination.

And, you know, from some sources that are even within my network in corporate America, what happened is that when Larry Fink started to realize that this was making him unpopular, he instructed people within the firm to quietly wind down some of these ESG programs and to rehabilitate his image.

And so he has reemerged after ten years of woke as a kind of neutral, corporate, you know, non-ideological figure.

I think it was phony then. I think it’s phony now. Guys like Larry Fink will do whatever is popular, whatever is expedient in the moment.

And so the big lesson here for conservatives is don’t necessarily worry about people’s convictions, because those are malleable. Worry about who sets the status incentives.

And so if DEI is perceived as high status, corporate executives will adopt DEI. If DEI is perceived as low status, corporate executives will abandon DEI. That’s the best way to have an influence. That’s the best way to change perception.

And Larry Fink’s kind of new face, new mask, is a sign that conservatives have won on ESG and won on DEI.

STEVE BANNON (HOST): Rufo, you’re the best. How do people follow you? How do they get to your site? How do they get to your books and how do they get to your social media?

CHRIS RUFO (GUEST): It’s easy. @ChristopherRRufo on Twitter, ChristopherRufo.com on the web. And you can buy my book, America’s Cultural Revolution, anywhere books are sold.

STEVE BANNON (HOST): Chris Rufo, great job. Keep at it, sir. Fantastic. Thank you. Appreciate you.

Chris Rufo. Lord have mercy. Trump will take the nuclear option. You put it from me. He’s going to say, what are we doing here? Zero this thing out. They’re going to take us to court anyway. Trump’s won, what, 22 or 24 times?