A long-awaited study released earlier this month declared that African Americans were being shut out of Oakland city contracts. Black political and business leaders said the study finally proved what they had been alleging for several years. "It's no surprise," pronounced City Councilwoman Desley Brooks, who is black, during a public hearing last week on the study's results. But a closer analysis of the study reveals that it not only fails to prove discrimination, it also contains several dubious assertions.
First, some background. The city council commissioned the disparity study in March 2005 after black business leaders complained that they had been stiff-armed by the Jerry Brown administration. The council hired influential black businesswoman Eleanor Mason Ramsey and her firm, Mason Tillman Associates, and paid her $550,000 to conduct the study.
As reported previously in this column ("Not So Pressing After All," 3/28), Ramsey's firm promptly blew several deadlines. Under her contract, she was supposed to finish by February 2006. She didn't complete the study, however, until May 18 of this year fifteen months late. Deborah Lusk-Barnes, who works for City Administrator Deborah Edgerly and oversaw Mason Tillman's performance under the contract, said it was delayed because Ramsey's team had "done an extraordinary amount of outreach" to make sure no local minority businesses were overlooked. But this "outreach" commendable as it might be in other circumstances calls the study's results into question.
One of Mason Tillman's most eye-popping claims, for example, was the supposedly huge disparity in city construction contracts of less than $500,000. The study stated that from July 2002 through June 2005, black-owned firms received just 7.9 percent of these contracts, even though they made up 20.6 percent of the construction businesses "willing and able" to do the work. Disparities such as these, Ramsey said at the hearing, were so glaring that they could not have been accidental. She stopped short of saying it, but the implication was clear: Black-owned construction firms were victims of discrimination by the city.
But were they really? During the hearing, and in the major findings section of her report, Ramsey failed to address two key questions: how she and her team arrived at the 20.6 percent figure, and how they defined "willing and able." The answers, it turns out, are buried deep in the lengthy report.
The 20.6 percent figure is dubious at best. Why? Because, according to the report, 28.6 percent of the minority- and women-owned construction businesses included in the study were located through Mason Tillman's "outreach" process because they didn't exist on any list of public contractors. That means the City of Oakland, the County of Alameda, the East Bay Municipal Utility District, the Port of Oakland, AC Transit none of these public agencies knew that the businesses in question had an interest in their contracts, either because the business owners had never bid on one, or because they had never bothered to register themselves with the agencies, declaring, in effect, "We exist."
And how did Ramsey's team conclude that these elusive businesses were "willing and able"? In an interview after the hearing last week, Ramsey admitted that one of her criteria for "willing" was that the businesses came to one of her meetings after she'd found them and invited them. In other words, they had shown their willingness after the fact.
How can city officials be accused of shutting out businesses they never knew existed? And how could any business claim discrimination when it never tried to bid on a contract, or even register as a potential contractor? Ramsey gave two answers.
First, she said that the city's paperwork was unreliable, and that it's possible some of these firms had bid on contracts before and thus should have been on the list. But she acknowledged there was no way to tell whether, and how often, this may have occurred. Moreover, her own results undercut this theory.
Consider the city's architecture and engineering contracts. According to Ramsey's study, nearly all of the businesses in this category were publicly identifiable less than 2 percent of the minority- and women-owned businesses were located during outreach. Lo and behold, her study found no racial disparities in this category, which suggests that the city awarded contracts equitably at least in terms of race when it was aware of all the businesses.
Secondly, Ramsey maintained that Oakland's "good ol' boys" culture convinced many minority-owned businesses that bidding on contracts or registering with the city was a waste of time. As proof, she noted that of the $244 million in contracts paid by the city from 2002 to 2005, just twelve companies got 25 percent of the total. "What does that say to a person who is preparing a bid?" she asked. "Do not apply."
This second point has some merit: Oakland, as detailed repeatedly in these pages, operated under a pay-to-play system during the Brown years, in which certain well-connected contractors got more than their fair share. But that's hardly proof of racial discrimination. Rather, it's evidence of cronyism.
Dellums' Chamber Ties
Oakland Mayor Ron Dellums is coming under fire these days for his growing connections to East Bay corporate interests and the Oakland Metropolitan Chamber of Commerce. The latest flap involves his chief of staff Dan Boggan Jr. , who is also a member of the board of directors of Clorox, an Oakland-based company and a major mover and shaker in the chamber.
According to the company's filings with the Securities and Exchange Commission, Clorox paid Boggan nearly $200,000 last year, including future stock options, for his work. He has been a boardmember for more than sixteen years and, as such, has a clear fiduciary responsibility to the huge company best known for its household bleach.
But Boggan's Clorox salary, first noted publicly by community group Oakland Residents for Peaceful Neighborhoods on its Web site (ORPN.org), raises questions of potential conflicts of interest. As Dellums' right-hand man, for example, Boggan is a key player in establishing the mayor's economic agenda, but his company's interests may sometimes clash with those of the city.
For example, ORPN member Charlie Pine noted that Dellums plans to push for an increase in the city's landscape and lighting property assessment tax, rather than, say, levying a business tax on large corporations. "Clorox has an interest imposing a regressive property tax rather than ... a levy based on business revenues," Pine said.
Boggan, a former Cal vice chancellor whose salary from the city is $97,000, sees no potential problem with his dual role. "It hasn't been a conflict at the University of California at Berkeley, and it hasn't been a conflict here," he said. He also maintained that he merely advises Dellums and is not a decisionmaker.
Yet some of Dellums' recent decisions, and his lack of a clear economic vision, have rankled some progressives and raised questions about Boggan's allegiances. In early May, for instance, the mayor held a $75-a-head economic summit luncheon with the Chamber of Commerce at the Marriott Convention Center. The cost dissuaded some from attending, and those who did saw the chamber present its economic plans for Oakland, which left some people wondering what role Boggan played in orchestrating the event. "Dellums and his administration have not clearly laid out an economic agenda for the city," said former Councilman Wilson Riles Jr., "and that leaves open the question of what side Dan Boggan is on."
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