Race Bias #20 - "Contract Set-Asides"

Reprinted below are excerpts from four articles describing the extent of race preferences in governmental contracting, known as "set-asides."

Many European-Americans are aware of the racial preferences in college admissions and in employment that disadvantage them.

However, few European-Americans are aware of the extent and scope of the governmental preferences extended to minority owned private business. It is a massive effort to direct the tax dollar toward creating a prosperous minority elite.

You see, most people with jobs (even very high paying jobs in the "information elite") are really wage slaves. They have no time for political organizing and no real independence.

To really participate in the political process and to shape public opinion, one must have economic assets and liesure time.

And that is the real purpose of governmental contract set- asides, - to create a prosperous minority class with the liesure and resources to support the integrationist politicians at your expense.

Political programs are established with political ends in mind, and not for abstract reasons like "racial equity".

That is why if you follow the money flows, you will arrive at the truth, and as the following exerpts show, there is a great deal of money flowing through the various governmental agencies, all of which now have preferences for minority recipients.



Feb. 1, 1978 Wall Street Journal P5 C2

Broadcasting Equity For Minority Groups Is Sought by Carter

Steps to Alter Policy of SBA, FCC Aren't Anticipated To Have Startling Results

By a WALL STREET JOURNAL staff Reporter

WASHINGTON--The Carter administration announced new steps aimed at encouraging minority ownership of radio and television stations and cable-TV systems. * * * So the White House announced revisions in Small Business Administration loan policies to provide up to $350,000 in direct loans or $500,000 in federally backed loans for broadcast uses per applicant. * * *

As profitable broadcast properties usually carry multimillion- dollar price tags, any minority purchases probably will be limited to less profitable radio stations in the South and Southwest, where minority audiences are larger, said Henry Geller, a Commerce Department communications consultant. at a press briefing here. The stations Mr. Geller has in mind sell for $350,000.

The White House, through its Office of Telecommunications Policy, also gave its backing to proposals pending before the Federal Communications Commission that would encourage minority ownership of broadcast properties.

One proposal would let the FCC use its power to defer certain federal taxes in situations where owners sell broadcast properties to minority-controlled buyers.

A second proposal would permit a broadcaster threatened with loss of his license-- usually as the result of an FCC rule infraction-to sell to a minority buyer and thus avoid having to defend himself in FCC license-renewal proceedings. If owners were anxious to avoid FCC hearings their asking prices could be significantly below the going market rates, supporters of this proposal contend. * * *


1978 (Undated) Wall Street Journal

Helping Hand

Minority-Group Firms Get More Subcontracts Under Federal Projects

Agencies Set Flexible Goals For Giving U.S. Orders; Some Concerns Are Saved

But One 'Nightmare' Is Cited By DAVID GUMPERT


* * *

Mr. Rodriguez's break stemmed from an unlikely source--his Cuban ancestry. The Department of Transportation, in dispensing $1.75 billion of rail-revitalization funds, has set a goal that 15% or more of the money be directed to companies owned by blacks, Hispanics and other racial minorities. Thus the Rodriguez subcontract was awarded by a contractor-a joint venture between San-Vel Soncrete Corp., Littleton, Mass., and a division of Santa Fe International Corp., Orange, Calif.-that had pledged to find minority subcontractors as a condition of its own contract.

Significant Upturn

Such goals and pledges are fast increasing the federal money going to minority businesses. Although the idea of expanding minority jobs and strengthening minority communities has been around since the late 1960s, only in the past couple of years have significant federal orders been awarded.

As a result, "market opportunities for minority firms have increased,'' says John Gloster, president of Opportunity Funding Corp., a Washington, D.C., venture-capital firm that aids minority businesses. In a few cases he adds, the money has poured in so rapidiy that minority firms have run into difficulties from expanding too fast.

The exact amount of federal money involved isn't known, but it appears to be well over $1 billion a year and growing fast. In the fiscal year ended last Sept. 30, about $1.2 billion of a total of approximately $75 billion of federal procurements went to minority businesses. That share is up from $807 million two years earlier, according to the Office of Minority Business Enterprise, a Commerce Department agency that encourages increased spending with minority businesses. (The proportion of additional billions of dollars of federal grants, public-works projects and other federal spending going to minority businesses isn't known, although an official of the Office of Minority Business Enterprise terms the amount "very small." )

Bakke Case Discounted

Moreover, government officials and representatives of minority business groups don't expect the Supreme Court's recent Bakke decision to change the trend. In the Bakke case, the high court expressed disapproval of arbitrary quotas favoring minorities but backed affirmative-action programs in general in ruling that a white applicant to the University of California Medical School at Davis was unjustly denied admission because of a minority- recruitment program. Government and minority-group representatives contend that the federal spending programs aiding minority businesses aren't arbitrary because the programs are based on provable past discrimination. They also argue that the programs aren't rigid but rather allow flexibility based on the availability of minority companies in different geographical areas and among different industries.

Government spending with minority firms has been increased in several ways. A Commerce Department public-works program that dispensed $4 billion this fiscal year included a requirement that at least 10%, or $400 million, of contracts go to minority firms. Apparently the minority share actually was closer to $600 million, according to a Commerce Department official. At least one heavy-spending federal agency, the Department of Transportation, has attempted on its own to increase spending with minority businesses. It adopted the 15% minority-spending goal for the recently started Northeast corridor project. In addition, since last year the agency's Urban Mass Transportation Administration has been requiring municipalities to offer evidence that federal mass-transit grants will partly benefit minority firms. And an order issued last March by Transportation Secretary Brock Adams requires the department's other agencies to set up minority spending programs even if "this may result in some increased cost."

More Efforts Slated

Such efforts are due to proliferate. President Carter has called for a tripling by the end of fiscal 1979 of the $1.2 billion of federal procurements from minority firms last year. Consequently, several agencies are said to be reexamining their procurement practices. The Department of the Interior, for instance, is contemplating a goal that 20% of its spending be with minority firms.

In addition, a proposal currently before Congress would strengthen the government's ability to encourage minority- business subcontracting by requiring winners of contracts exceeding $1 million for construction and $500,000 for other purposes to work out a plan for such subcontracts before the contracts are awarded. Under current law, federal contractors must simply show, after contracts are completed, that the contractors did their best to find minority subcontractors.

* * *


Enterprise: Lawmakers Seek More RTC Business for Minorities


Strict Provision on Distribution of Contracts Is Inserted in House Funding Bill


By Albert R. Karr

Staff Reporter of The Wall Street Journal



* * *

Pressured by the Clinton administration, the RTC has recently become more vigorous about extending contracts to minority and women-owned companies. But critics in Congress contend that companies owned by white women receive an inordinate share of the agency's contracts aimed at minorities and women.

Companies owned by white women received 27% of the RTC's contracts during the first five months of 1993, even though only slightly more companies owned by white women than minority concerns have registered as potential contract seekers. Minority-owned companies got 13% of those contracts. Black and Hispanic-owned businesses did garner a slightly higher proportion of the fees, however. The contracts primarily cover financial and asset analysis and management of failed thrifts.

Black and Hispanic House members have successfully pushed for additional language in the RTC funding bill that would require women and minority contracts to be spread more evenly between those groups. "The RTC has proven itself unable to keep up with what they tell Congress they will do" about giving contracts to minority-owned businesses, says Rep. Maxine Waters, a black Democratic lawmaker from California. "It has been very tough to rely on them simply to do the right thing," she adds.

The House measure would force the RTC to write guidelines for achieving "reasonably even distribution of contracts" between various subgroups, such as women, blacks and Hispanics. A roughly equal allotment of contracts would have to be made to any subgroup that accounts for at least 5% of all companies registered with the agency. The bill also would impose sanctions on prime contractors that violate joint-venture and subcontracting requirements involving the use of minority companies. The Senate version of the RTC funding bill doesn't carry such language.

* * *

Some RTC officials also appear to favor giving more contracts to minority-owned businesses. Last year, the agency set a goal of awarding 30% of its contracts to businesses owned by women or minorities. The RTC reports that goal has been exceeded lately. But Johnnie Booker, a black woman recently promoted to RTC vice president for minority women's programs, has said that she may recommend a goal of 20% for minorities alone.

The Clinton administration and the Democratic House leadership need black and Hispanic votes to pass the RTC measure. They worry that the minority-contracting provisions could help to defeat the legislation on the House floor, however.

Opponents argue that this approach would snarl the RTC in de facto "quotas within quotas." Rep. Stephen Neal (D., N.C.), chairman of the House Banking Committee's financial institutions subcommittee, recently said he favored the goals of the provisions, but didn't want to "inspire opposition from a number of people who would be automatically opposed to anything that had quotas."

Overall, the RTC is giving a rising share of contracts to minority and womenowned companies. In the first five months of this year, 41% of its awards and 36% of its fees went to such companies, up from 34% and 29%, respectively, in all of 1992. A recent report from the congressional General Accounting Office noted "significant" gains in RTC efforts to award contracts to companies owned by minorities and women. The report praised the agency for creating a specific office to push this program and for setting specific goals.

But "key areas still need improvement," the GAO said.

Separately, minorities and women-owned underwriters have collected $13 million in fees since the RTC's mortgage-loan securitization program began two years ago. That represents 5% of the amounts paid to large, non-minority companies, the agency says.

* * *


Politics & Policy: Supreme Court's Study of Affirmative Action Turns to Federal Plans Aiding Minority Firms


By Stephen Wermiel and Mary Lu Carnevale Staff Reporters of The Wall Street Journal


WASHINGTON -- The Supreme Court, which last year forced state and local governments to scrap or revamp hundreds of affirmative-action plans, is zeroing in on federal programs to aid minority businesses.

In arguments this week, the high court will examine the constitutionality of Federal Communications Commission policies that encourage minorities and women to own radio and television stations.

But the two cases -- the biggest civil-rights cases of the court term -- could have effects far beyond the broadcasting industry, calling into question a range of other federal affirmative-action programs that give businesses owned by minorities or women an advantage in competing for government contracts.

"Potentially, the stakes could be that the court will set forth legal standards that apply to all federal programs," says John Payton, a Washington lawyer who filed a brief in the court for the Lawyers' Committee for Civil Rights Under Law.

* * *

The Justice Department says the Constitution allows Congress to adopt programs that give preference to minorities and women. In several federal courts the department is defending a public-works program passed by Congress for the Transportation Department. That program requires contractors for highway and airport construction to give businesses run by minorities, women and other "disadvantaged" groups at least 10% of their subcontracts.

* * *

Legally, the Supreme Court must reconcile two previous decisions. In 1980, the justices upheld a public-works program passed by Congress requiring that 10% of construction contracts go to minority businesses. But last year, in a case involving Richmond, Va.'s, effort to channel contracts to minorities, the court said state and local governments have very limited authority to institute such minority-preference programs. The two cases deeply divided the court, producing a total of 11 separate opinions. * * *

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