Government induced dishonesty

This wasn't supposed to happen here

[Reprinted from Issues & Views June 28, 2004]

From the beginning, there were those who predicted that such preferential policies would invite fraud and dishonesty. Inevitably, they claimed, there would be the black, or other preferred colored, who lacked the necessary business expertise and background to qualify for "minority" contracts worth millions of dollars. And just as inevitably, there would be the crafty white possessed of savvy, expertise and past experience, who would eagerly act as front man. Such cheats would find one another, it was argued. And, sure enough, over the years, there have been exposés about companies whose colored recipients of business contracts were "owners" in name only of the companies awarded said contracts.

A couple of recent cases are typical of how the scheme works. In Tim Novak's report, "Whites cashing in on minority contracts," in the Chicago Sun-Times (6/20/04), he describes the workings of the Benchmark Construction Company, supposedly owned and run by Michael Smith, a black man. Chicago, like just about every other municipality in the country, has an affirmative action program that awards some of its contracts on the basis of race and gender. Although the city has certain rules designed to "prevent the infiltration of front firms," these rules can be circumvented.

Such rules specifically prohibit white men from having "primary responsibility" for the day-to-day operation of a company that is registered in the name of a woman or "minority." The Benchmark company appears to have ties to an older established business that was created years before Michael Smith came on the scene. This company, Vondra, is described by reporter Novak as owned by "a multimillionaire construction czar."

In the case of Benchmark/Vondra, there are so many interwoven threads between people and companies and city contracts and contributions to politicians and outright bribes, that the trail is hard to follow. Is or is not Benchmark an integral part of Vondra? Did some cunning businessmen seize the opportunity to cash in on affirmative action programs, which prevented them, as white men, from bidding on contracts under their own companies' names?

In a similar case, the Sun-Times tells of an unnamed black window installer whom prosecutors claim was "duped" by white businessman Joseph Doyle. Doyle is said to have set up the window installer, one of his employees, as a front, in order to acquire a $6 million contract to replace windows in the city's public schools. The naïve installer, made head of a "company" named Quality Window Installation, finally figured out what Doyle was really up to, got himself a lawyer, and then blew the whistle. Claiming that Doyle broke no law, his attorney asks (surely in feigned innocence), "You try to help an African-American guy out, you help set him up a business, you give him the contracts -- where’s the scam?"

During this year, Chicago has stripped three companies of their special minority or female status over questions of who owned what. In 2000, officials stripped Windy City Maintenance of its female-run status for similar reasons, after the company won $100 million in city contracts.

In this game of affirmative action, it is easy to understand the temptation to screw the system on the part of both lawbreakers -- the "minority" who, by virtue of an accident of birth, qualifies for special treatment, and the experienced business person who resents being shut out of contract bids, also due to an accident of birth. Corruption and swindle are built into what are essentially unconstitutional, biased government policies.

[In "John Goode's Troubles," see what happens to a black man who refuses to play the affirmative action game.]

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