Diluting Black Business


We have these programs from the blood, sweat and tears of Dr. Martin Luther King, Jr. and the other giants of the Civil Rights Movement.

They saw the vision of having a new and improved civil rights act.  They envisioned one that would be more comprehensive than the Civil Rights Act of 1866 and 1957.  They demanded and bargained until President Lyndon Baines Johnson capitulated.  President Johnson had to convince many Democratic senators to go along with this.  He would refer to it as “The Nigger Bill” when encouraging the southern Democrats.  Thus, was the birth of the Civil Rights Act of 1964.  Finally, Blacks (on paper) became full-fledged American citizens.

There was even a business component to it. Title VI of this act says that the federal government and anyone receiving federal funding or benefitting from the federal government or being regulated by the federal government must not discriminate in their business practices. By the late 1970s, the implementation of this law began.  All levels of government (federal, state, county and local) had to show formal programs in their procurement activity.  Most major corporations do some kind of business with the federal government and they, too, must comply.  This gave birth to the Minority Supplier Development Council, which shows the federal government that its members have a program.  It also gave birth to the Minority Business Development Agency.  Nonprofits benefit from the IRS code and have to have a program if they have a procurement program.

By the mid-1980s, every state, large city, all agencies of the federal government and most major corporations had a formal program.  At first, these programs would count the amount of business they were doing with Blacks, Hispanics, Asians and Native Americans.  These groups received the collective name of “Minorities.”  The early years would show the federal government doing about 4 percent with Black business and less with each of the other groups.  Resistance from White business groups started to emerge. The adversaries came up with a strategy:  Put as many groups into these programs to dilute the potential for Black-owned firms.  By 1987, White women-owned businesses entered into the federal programs.  Then came veterans, disabled veterans, people with disabilities and Alaska Native Corporations.  Of late, HUB Zone firms (based in historically under -utilized businesses).  This had a very harmful effect on the development of Black business.  Today, Blacks do no more than 1.5 percent with the federal government and 2 percent with major corporations.  Some cities do less than that with a rare exception such as Atlanta, Houston and a few others.

Even though our numbers were low, White business representatives started suing cities and state for “reverse discrimination.”  Finally, the US Supreme Court stepped in via the Croson decision which applied to municipalities and the Adarand decision which covered states.  Many thought this would be the end of development programs.  Quite the contrary, these decisions explained how to do the programs properly.

Per the Supreme Court, it must be shown the level of discrimination for each group. These disparity studies tract the disparate impact, if any, for each group. Based on the study, goals are established for the discriminated group.  Often these studies will show no disparity with women, Native Americans and sometimes with Hispanics and Asians.  I have yet to find a bona-fide disparity study that shows no discrimination for Blacks. These studies are to be updated every five years.  Disparity studies are good things and court proof.  If your city, county, state has no study done, they are not in compliance with the law – Title VI of the Civil Rights Act of 1964.  Don’t tolerate this!

Many state-run universities think they are exempt from this.  They are nonprofit and under the supervision of the applicable state government.  They must comply and either do their own disparity study or follow the state’s study.  They should be challenged.

San Diego did a solid study but were still sued by the Associated General Contractors of California.  The suit had no standing as San Diego’s process was correct and White contractors could prove no real damage.  There are numerous lawsuits from time to time but if the entity has its program justified by a disparity study it will win – every time.

The problem we have is that there is no real enforcement of Title VI.  Many will put the program in place but will not aggressively end the discrimination.  Elected officials won’t hold the procurement offices accountable.  They must hold their feet to the fire.  Finally, the only way these programs are going to work is if we, the people, get involved.  Stop settling on mediocrity and end any proven discrimination.  The person responsible for Title VI enforcement is the U.S. Attorney General.  Don’t hold your breath, get involved!  Dr. King did not die for us to ignore this opportunity.

Harry C. Alford is the President/CEO of the National Black Chamber of Commerce.  Website: www.nationalbcc.org.  Email: halford@nationalbcc.org.

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