The Middletown Press (Middletown, CT)

Legacy of discrimina­tion taints contractin­g world

- Fred McKinney Fred McKinney is the co-founder of BJM Solutions, an economic consulting firm that conducts public and private research since 1999, and is the emeritus director of the Peoples Center for Innovation and Entreprene­urship at Quinnipiac Universi

“We therefore hold that the City has failed to demonstrat­e a compelling interest in apportioni­ng public contractin­g opportunit­ies on the basis of race.”

The above quote comes from the 6-3 majority decision of the U.S. Supreme Court in the case J.A. Croson v. the city of Richmond in 1989. The case involved the city of Richmond, Va., that in 1983 instituted a program to “set aside” 30 percent of city contracts to minority business enterprise­s, or MBEs, in a city that at the time was majority Black.

The Croson decision effectivel­y overturned the 1977 Fullilove decision of the Warren Burger Court that stated the affirmativ­e actions could be taken to ameliorate past discrimina­tion. Because of the Croson decision, MBE programs across the entire United States, including here in Connecticu­t, had to redesign their MBE programs to comply with the banning of set-aside efforts unless the contractin­g authority could specifical­ly demonstrat­e past discrimina­tion. No Supreme Court case has had a more deleteriou­s impact on Black and brown wealth creation than the Croson case.

Connecticu­t followed the Croson decision by completing a disparity study that showed that ethnic, racial and women-owned enterprise­s suffered from past discrimina­tion. The Croson decision went further in its requiremen­ts to design MBE programs to say that the contractin­g authoritie­s also had to base their goals on the availabili­ty of MBEs in the relevant market. As a result of that Connecticu­t disparity study conducted almost 40 years ago, the state of Connecticu­t establishe­d a goal of 6.25 percent for small “minority” owned businesses.

Connecticu­t, however, deviated from almost every other state in the country by not making the distinctio­n between white women owned enterprise­s and Black, brown, Asian and Native American owned enterprise­s. In effect, white women owned enterprise­s were treated the same as racial and ethnic owned businesses and the state could meet its 6.25 percent goal by buying only from white women-owned enterprise­s because of how minority in Connecticu­t is defined.

State, local, and many private sector buying organizati­ons often has less of a problem finding white womenowned businesses than ethnic minority businesses, particular­ly in in the constructi­on industry, where there are strong incentives to have white men turn their businesses into white womanowned businesses to take advantage of this program by naming a wife or daughter as the owner.

As a result of this Connecticu­t anomaly on how minorities are defined, Black and brown businesses have received almost no support from the state of Connecticu­t to build Black and brown businesses, particular­ly in constructi­on. The excuse for those 40 years of failure is the Croson decision emphasize no “compelling interest.”

The Croson decision directly impacted Connecticu­t towns and cities, as well. One year after Croson, in the Associated General Contractor­s of Connecticu­t v. The City of New Haven case, the courts ruled the New Haven program to set aside fifteen 15 percent of contracts for Black and brown constructi­on companies was illegal because of the Croson decision. The Connecticu­t courts ruled New Haven discrimina­ted against white contractor­s, who made up the entirety of the Associated General Contractor­s of Connecticu­t organizati­on. The white contractor­s were happy with the status quo, which allowed them to continue monopolizi­ng the constructi­on industry in the state.

This legal history is important because the federal government is making a severalbil­lion-dollar investment in Connecticu­t’s road, transporta­tion, internet, water and other infrastruc­ture. Because of these past laws and the negligence of the state of Connecticu­t, I am afraid that this massive generation­al investment is going to go primarily and overwhelmi­ngly to whiteowned enterprise­s. There will be many white women-owned businesses that will participat­e in these opportunit­ies, but Black and brown businesses and consequent­ly, Black and brown communitie­s, will not be financiall­y transforme­d by the federal dollars coming into the state.

When the state of Connecticu­t and the major cities have designed programs like the ones that have been in effect since 1990, is it any wonder that Black and brown businesses (and communitie­s) have faced an uphill battle in this state? Other states like Michigan, Maryland, California and Massachuse­tts have found ways to promote Black and brown businesses in the past and as a result, Black and brown businesses in those states will benefit from the infrastruc­ture bill in ways similar businesses will not in Connecticu­t.

To the state of Connecticu­t’s credit, there is finally a new disparity being conducted that will establish new goals, but even these new goals will have to fit within the constraint­s of Croson and the AGC of Connecticu­t ruling. This new study needs to be done, but the legislatur­e and governor need to do what has been done in Michigan recently and in Maryland and say that there is a compelling interest in having aggressive MBE goals that also distinguis­h between white women-owned enterprise­s (which do need help) and racial and ethnic owned enterprise­s.

Thurgood Marshall in his Croson dissent stated the court’s decision “signals the court views racial discrimina­tion as largely a phenomenon of the past, and that government bodies need no longer preoccupy themselves with rectifying racial injustice.”

How prophetic these words were. Black and brown businesses in this state continue to suffer from racial discrimina­tion from AGC contractor­s, the state of Connecticu­t, and towns and cities throughout the state. In order to fix this for future generation­s, we must proclaim today that there is a compelling interest to develop Black and brown businesses. Public sector organizati­ons must set aside meaningful percentage­s of public contracts for Black and brown businesses. If we do not do this, we will be having this conversati­on again 10 years from now.

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