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Chicago Inspector General Calls Minority Business Program "Dysfunctional"

Business

First Posted: 06/10/11 02:29 PM ET Updated: 08/10/11 06:12 AM ET

Chicago Inspector General Joe Ferguson sounded the alarm Thursday in a new report detailing "widespread fraud, abuse and mismanagement" in the city minority business program due to an alleged lack of commitment to reform by former Mayor Richard M. Daley.

The 22-page report serves as a follow-up to the Inspector General office's May 2010 review which drew similar conclusions about the city's Minority & Women Owned Business Enterprise (MWBE) program. Though that review outlined several recommendations to improve the program, Ferguson points out that his office has since launched some 16 investigations into questionable activities within the program, indicating "little positive change" in either the program's administration or performance has occurred in that time.

"Though it was forged from the community's noblest ideals, poor leadership has grounded the program in its more cynical proclivities," Ferguson said in a press release touting the new report.

"That said, the current dilapidated state of the program provides the City with a clean slate and opportunity to rebuild the program from the ground up," he continued. "Doing so is the best way to ensure the MWBE program accomplishes its important mission of providing economic opportunity to historically disadvantaged communities."

In order to address the problems continuing to render the program "dysfunctional," as Ferguson described it, he called for a number of actions including shifting the city's focus away from certifying new businesses into ensuring compliance of existing participants, more accurately tracking and reporting the payments issued to participants and increasing staffing within the program. He also wants participation figures to be based on actual paid city contracts, rather than reporting the projection numbers, which the Daley administration made a habit of doing.

According to the Chicago Sun-Times, Mayor Rahm Emanuel refused to comment on the new report and indicated that he has not yet had the time to review it in detail.

The minority contracting program was consistently controversial for Daley, most pointedly in 2005 when James Duff pleaded guilty to scheming the city out of contracts worth $100 million that had been targeted toward minorities and women. The issue became one of many thorn in the backs for one candidate -- Rev. James Meeks -- in this year's mayoral campaign. In a radio interview in February, Meeks said he believed that only African Americans should be eligible for city contract minority set-asides.

"I think that the word 'minority,' from our standpoint, should mean African-American," Meeks told WVON radio. "I don't think women, Asians and Hispanics should be able to use that title. That's why our numbers cannot improve, because we use women, Asians and Hispanics, who are not people of color, who are not people who have been discriminated against."

The question of expanding the definition of who qualifies as a minority for the program to gay business-owners has also been on the table, and was supported at one point by former Mayor Daley. In July 2009, 44th Ward Alderman Tom Tunney, then the only openly gay City Council member, raised the issue to Corporation Counsel Mara Georges. Daley described the inclusion of LGBT businesses under the program to the Chicago Tribune as "help[ing] small businesses. It helps businesses grow in the city, and that’s what you want.”

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Filed by Joseph Erbentraut  |