The Quotas That Won't Die

...He explains that there was “massive resistance across the board” to implementing the Court’s edicts...

...The original intent of the DBE programs was to spread work around to a variety of struggling minority business owners, lifting them from poverty to the ranks of the successful...

...And then, like I said, we had made, you know, a really concerted effort to not just do great work, but establish the client relationships with WSDOT and with our other clients...

...North Star was a DBE from 1984 to 2000 when it “graduated” from the program...

...In the two years after racial preferences were eliminated the state saved an estimated $64 million...

...They remain beholden to the primes...

...PARTICIPANT I: And all the ones that have graduated don’t need a job...

...Spokane County in Washington State is a good example of the legal chicanery that ensued...

...Ward Connerly, a longtime opponent of preferences and the driving force behind the overturning of affi rmative action in California in 1996, points out that the DBEs’ original goal of creating self-suffi cient “minority entrepreneurs” has never been met...

...PARTICIPANT F: But if you say, okay, here is an engineering fi rm that’s doing work for, you know, all these tribes and entities and they do fantastic, but not one piece of work from WSDOT, how do you want to take that...

...North Star has once again “graduated” from the program, but a fi rm run by the owner’s husband—using the same equipment, same fax number, and same personnel as North Star—has qualifi ed for DBE status thanks to the ethnic minority rules...

...But inconveniently for the supporters of the DBE program, a number of attendees complained that the DBE program itself was “discriminatory” and that “it benefi ts a select few...

...You said that the work dropped off [after the Western States Paving ruling...

...In September 2005 the U.S...

...HOLT: You would think, but well, yeah, I mean, you would think...

...In addition, contractors are already used to all types of government regulations and codes and tend to view affi rmative action as just another of the many obstacles in doing business with the government...

...It does not identify prime contractors that discriminate in the selection of subcontractors and sanction them...

...nevertheless, because of their race or gender they will be presumed by the DBE program to be “socially disadvantaged” as long as they live...

...The fi ndings are, LaNoue notes, simply a “measure of ideology and opinion...

...The Croson and Adarand decisions did not actually abolish race-based contracting...

...Several factors account for the tenacity of preferentialcontracting programs despite two Supreme Court rulings against them...

...The Quotas That Won’t Die Neither party has the nerve to take on the scandal of preferential set-asides in government contracts...

...and then the next year they’re back in the program because their sales fell by 75 percent so they get to get back in...

...There are two ways—or two things that we commonly hear, one is as part of being a small business and the other has to do with the—with the discrimination...

...Circuit Court of Appeals found the administration of a DBE program failed the strict scrutiny test...

...These DBE businesses who are supposedly being helped, Connerly says, “don’t graduate from preferences...

...He has documented the shenanigans that characterize race-conscious contracting in a 300-page report...

...These lists,” Gaziano says, “show just how political the determinations are rather than having anything to do with current or even recent discrimination...

...HOLT: Well, it depends...

...Unless the public loudly demands a colorblind government, we will continue with the one we have—one which uses spurious studies to justify entrenched programs benefi ting a select few and which capitulates to the notion that the government is entitled, indeed obligated, to discriminate among its citizens...

...I don’t know...

...LaNoue concluded: “Under the USDOT regulations, recipients of federal transportation funds are to set goals to create ‘the level of DBE participation that would be expected absent discrimination.’ . . . As this article shows, the FAA DBE goals process, instead, creates preferences for DBEs and massive overutilization of them as subcontractors...

...Try as they might, the questioners had trouble getting what they were looking for: MR...

...In 2001, the GAO reported to Congress that not only could none of these questions be answered, but that the 14 disparity studies which it examined were all analytically fl awed...

...And in Eastern Washington, at least, we are back to denying highway work to smaller, struggling non-DBE fi rms, particularly subcontractors, while providing protection from competition to multimillionaires who are certifi ed DBEs—socially and economically disadvantaged...

...Confi rming the arbitrary nature of these preferences, Justice Sandra Day O’Connor wrote in the Supreme Court’s 1989 decision in City of Richmond v. J.A...

...HOLT: Uh-huh...

...The Court insisted that race-neutral alternatives be considered...

...Civil Rights Commission published a study concluding “Ten years after the Adarand decision, the Commission has found that federal agencies still largely fail to consider race-neutral alternatives as the Constitution requires”: In 1995, Adarand’s strict scrutiny requirements compelled agencies to narrowly tailor reliance on race-conscious programs and to seriously consider race-neutral alternatives that would effectively redress discrimination...

...Although questionnaires are sent out and focus groups convened in an attempt to extract evidence, respondents tend to provide generic opinions on societal discrimination...

...It was able to recertify in 2003, and, according to Repp, North Star held “a virtual monopoly for the provision of traffi c control services in Spokane County and much of Eastern Washington...

...BY JENNIFER RUBIN Forty years ago, the Nixon administration (building on the Johnson administration’s attempt to transform the Small Business Administration into a weapon in the War on Poverty) undertook efforts to enhance “black capitalism,” using Section 8a of the Small Business Act to provide preferences, assistance, and loans based on the race of government contractors...

...Repp concludes that “With about a two to three year hiatus after Western States Paving, the DBE Program is being reinstituted in Washington state...

...PARTICIPANT F: Well, actually, strangely enough, we were afraid that the work was going to drop off, obviously, but actually, it turned out to be one of our biggest growth years...

...And if that weren’t the case, then you’d see a lot more women and minorities in positions of power and infl uence, and you don’t...

...By the end of 2005, LaNoue found there were almost 200 such disparity studies, which had cost taxpayers an estimated $75 million...

...Repp noted: The utilization study creates an aura of scientifi c-methodology to rationalize the DBE Program...

...Under this defi nition 95 percent of Americans might be “disadvantaged” if they started a construction business...

...In 1989, the U.S...

...The study offers statistical evidence of disparity but no evidence of discrimination...

...If no such discrimination is present in Washington, then the State’s DBE program does not serve a remedial purpose...

...it instead provides an unconstitutional windfall to minority contractors solely on the basis of their race or sex...

...v. Washington State Department of Transportation, the Ninth U.S...

...Jennifer Rubin is a writer in Virginia...

...And it is safer not to rock the boat...

...These studies, moreover, never provide evidence of discrimination...

...And between 1983 and 1999, all Department of Transportation contracts required 10 percent “goals”—their term of art for set-asides—for minorityand women-owned fi rms...

...Thus was born race- and gender-conscious contracting which would become endemic...

...Are you experiencing examples of discrimination...

...And for Colette’s report it’s—in terms of answering the questions that the court really wanted to fi nd, we want to focus in the beginning with issues related to discrimination...

...If they really want to be in the business, this would all be part of it...

...Too many Republicans think it’s just messy,” says Todd Gaziano of the U.S...

...The proponents of affi rmative action have played rope-a-dope for decades...

...Sometimes it’s pretty blatant, like if people spray paint across a truck “No Spics...

...George LaNoue, professor of political and public policy at the University of Maryland, Baltimore County, explained in a recent study of minority set-asides that a typical DBE program doesn’t concern itself with actual victims of discrimination: It does not identify contracts where discrimination occurred...

...Ed Repp recently retired as the equal employment offi cer for Spokane County’s Public Works Department, which oversees local government contracting...

...Some groups are on the list (e.g., Pakistanis) and some not (e.g., Afghans...

...It appears to entail “omitted-variable bias” (OVB), in that it omits the independent variable(s) that could explain the disparities...

...HOLT: A lot of places I hear that the minute the fi rms graduate, nobody will use them anymore...

...The Court left the door open,” notes Roger Clegg, the president and general counsel of the Center for Equal Opportunity, “and the government proceeded to drive a truck through it...

...It does not identify fi rms subjected to discrimination and provide remedies to them...

...With regard to the FAA airport contracts, LaNoue’s study determined that the programs creating preferences for DBEs did not accurately measure the relative numbers of ready, willing, and able DBE and non-DBE subcontracting...

...But study after study has shown that a small number of fi rms, a monopoly of just one or two in some jurisdictions, gets the overwhelming share of the contract awards...

...And again: MS...

...He observes ruefully that we have created a system where “Mexican Americans are given preference over people of Chinese descent on the rationale that 100 years ago white people enslaved black people...

...Washington also held eight meetings around the state to try to discern discrimination and satisfy the strict scrutiny standard...

...If they really want to be in their business, they would probably make it without the DBE certifi cation...

...Examining airport contracting, LaNoue found that women, not minorities, were the prime benefi ciaries of DBE programs, noting: A person may have gone to elite schools, have had very prestigious employment, be selected to prominent positions, and be a member of the best clubs...

...The Court in Richmond v. Croson held that to use preferences state and local governments must pass a “strict scrutiny” test demonstrating a “compelling state interest” in remedying discrimination and must narrowly tailor their programs to reach that goal...

...You have cover that you are ‘doing the Lord’s work.’ ” Nearly all elected Republicans and Republican candidates for governor and senator opposed the Michigan Civil Rights Initiative in 2006, which easily passed and banned preferences in hiring, contracting, and school admissions in the state...

...The results are often comical...

...Just as they did after Croson, the preference professionals revved up the production of disparity studies...

...A general contractor when asked to confi rm that DBE goals are too low gave the questioner an unexpected (if logical) response: We bend over backwards to help [the DBEs] stay in business...

...It would be understandable, if perhaps na?ve, to assume that after Croson and Adarand government entities abolished preference programs that did not meet the strict scrutiny test...

...North Star Enterprises is a paving fi rm owned by the daughter (who is white) of the former owner of the largest paving contractor in eastern Washington...

...We’ll get back to some of the small business issues, but we really want to focus in on what has been your experience...

...Repp noted, too, that “The salient fi nding from these empirical data is that for the twelve months after Western States Paving, one fi rm, North Star Enterprises, received 100 percent of the $463,043.23 awarded to DBE contractors in Spokane County, under seven separate contracts...

...Then in Adarand Constructors, Inc...

...From the U.S...

...But you just have to look around to fi gure out that we live in a society full of discrimination...

...According to a study by Justin Marion of the University of California at Santa Cruz, government contracting is estimated at almost 10 percent of gross domestic product and the practice of giving preferential treatment to disadvantaged business enterprise (DBE) contractors and subcontractors is widespread...

...An entire industry of consultants sprang up to provide studies of racial disparity to justify preferential contracting programs...

...In Western States Paving, Inc...

...The WSDOT conducted six focus groups where a consultant tried to extract fi rsthand evidence of discrimination from groups of contractors and subcontractors who participated in the DBE program...

...HOLT: And then what was your experience...

...One consultant was quite candid about the goal: “As soon as we get these focus groups done and the write-up, we’ll have a new package, send that off to the Federal Highway Administration, and hopefully WSDOT will start setting new goals in the contracts...

...Croson Co.:“There is absolutely no evidence of past discrimination against Spanish-speaking, Oriental, Indian, Eskimo, or Aleut persons in any aspect of the Richmond construction industry...

...When KPMG Peat Marwick conducted a disparity study for the city of Miami and proudly announced that there was no evidence of discrimination against blacks or Hispanics, the city commissioners demanded a new study that provided the desired results...

...Marion found that road construction projects in California cost 6 percent less after the overturning of affi rmative action by Proposition 209 in 1996...

...Rather than fi nding factual evidence of discrimination against DBEs, Repp found that the “six Focus Group Sessions unintentionally include copious evidence of discrimination against non-DBE fi rms, or conversely—evidence of preferences for women or minorities, in both construction and design contracting, perpetrated under the DBE Program...

...At least in theory, the decision required that if preferential contracting was to continue within the Ninth Circuit— Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington—localities needed evidence of actual discrimination...

...In many of these cases, the politically connected Eskimos displaced other minority fi rms whose bids were far more competitive...

...As a result of Western States Paving, Washington State’s DBE program was invalidated in 2005...

...They also fear offending well-organized civil rights activists who have the potential to organize pickets, demonstrations, and sophisticated public relations campaigns against a fi rm...

...He stands ready to inherit the monopoly on DBE contracts in eastern Washington...

...PARTICIPANT F: How do you defi ne that...

...Preferential contracting is a multibillion dollar business...

...He also found that DBE programs cause more discrimination than they remedy...

...They make it without it...

...In the focus groups, generic expressions of societal discrimination were common: PARTICIPANT A: Personally, you know, I don’t think I’ve ever been discriminated against...

...The participants were sometimes even unwilling to concede that life without preferences was an ordeal: MS...

...Its inferences of discrimination based on race and sex were then used as the justifi cation for WSDOT’s adopted 18.77 percent DBE Goal...

...Todd Gaziano, a U.S...

...On the political front, neither party takes seriously the concept of colorblind government...

...Civil Rights Commission...

...Race-conscious contracting practices are an enormous burden on taxpayers...

...LaNoue found African-American businesses (the originally intended benefi ciaries of DBE programs) received 23.5 percent of the airport contracts (31 percent of the dollars) awarded to DBEs while white women received 48.3 percent (36.5 percent of the dollars...

...First, aggrieved non-DBE-eligible companies are loath to sue the government and offend a hand that might feed them...

...The list of the presumed minorities recognized by the Small Business Administration (upon which many government agencies rely) is a monument to racial pieties...

...The circuit court explained: Whether Washington’s DBE program is narrowly tailored to further Congress’s remedial objective depends upon the presence or absence of discrimination in the State’s transportation contracting industry...

...Ten years later, the agencies in this study have still largely failed to satisfy this requirement...

...In 2002, 6.75 percent of federal procurement dollars, for example, were awarded through the Small Business Administration to DBEs...

...The premise of the Washington State Department of Transportation’s (WSDOT) statistical studies was that any disparities in earnings between various groups proved discrimination...

...MILLER: Let’s put it out there beforehand...

...If the person in a group “presumed to be disadvantaged” has a net worth of less than $750,000 (excluding the value of the person’s principal residence and the business) and a construction business with revenues below a set threshold (in the case of the Department of Transportation, $20.41 million in 2007), he or she can gain certifi cation as a DBE...

...PARTICIPANT A: Like, it’s a no-brainer...

...Programs designed in the 1960s to lift African Americans out of poverty have instead made a white woman in Washington very wealthy...

...DBE contracting programs can either meet their goals through direct bids from prime contracts, or, more frequently, indirectly from prime non-DBE contractors which subcontract out the work to DBEs...

...Indeed, no agency reviewed in this report engages in serious consideration of race-neutral alternatives...

...We went from 55 to about 70 that year...

...But sometimes we have to convince judges of things that we thought that everybody already knew, which is why we go through this exercise...

...Adarand seemed a dead letter...

...In 2007 Salon detailed the “often-secretive world of federal contracting, an area of government rife with abuse and poor oversight,” and told the sordid tale of an Alaska Eskimo fi rm receiving a no-bid State Department contract for assistance on Bolivian coca eradication...

...Civil Rights commissioner, told me, “When you use race as a proxy for disadvantaged [status], the subset that will take advantage are the most educated and the most affl uent...

...And despite the best efforts of government auditors, no one really knows if these programs work: how much they cost, how successful they are in assisting owners to operate without preferences, or any other meaningful indication of success...

...Because this decision was limited to the Ninth Circuit, the Justice Department has not enforced the ruling in other states...

...Every DBE must be certifi ed by a government agency and must provide considerable data to get certifi ed, but that data do not deal in any detail with whether the owners or the business have ever suffered discrimination...

...When, for example, a contracting association sued the city of Chicago over race-conscious contracting, a number of contractors withdrew from the association out of just such a concern...

...PARTICIPANT D: I actually can’t think of an example of a company locally that would meet that story...

...What it does do is redistribute subcontracting dollars to fi rms owned at least 51 percent by women or minorities...

...Jonathan Bean, a professor of history at Southern Illinois University, has studied the effects of affi rmative action programs...

...If statistics identifi ed a difference in annual wages between a given group and white men, it was only attributable to “discrimination...

...It may well be that Richmond has never had an Aleut or Eskimo citizen...

...But we had—I guess, I would say—that we had, really strategically fi gured out how we were going to handle it...

...But that same year a major stumbling block was thrown in the way of preferential contracting...

...Thanks to Senator Ted Stevens’s infl uence, federal no-bid contracts to Eskimo tribes under preferential contracting provisions grew from $180 million in 2000 to $876 million in 2004...

...Supreme Court intervened to put limits on race-based contracting...

...State Department to city garbage collection, contracts at all levels of government employ race and gender preferences...

...Most of the people that are really successful in the construction industry don’t rely on the DBE certifi cate to make a living...

...v. Pe?a in 1995, the Court held that all racial classifi cations used by the federal government must also be subject to “strict scrutiny,” with the burden of proof on the government to demonstrate that the classifi cation is the least restrictive way of serving a “compelling governmental interest...

...The evidence that individuals from Japan, Korea, Burma, Vietnam, Laos, Cambodia, Thailand, Malaysia, Indonesia, and the Philippines are suffering from discrimination in the United States is virtually nonexistent...

...But soon new studies were underway, aiming to prove discrimination...

...Conservatives may hold Democrats responsible for these programs, but Republicans have acceded to them for decades in what Connerly claims is their belief that “If you support preference you can hide behind the fi g leaf that you are doing the morally right thing...