Chicago Initiative Nears a Conclusion Chicago Initiative Nears a Conclusion
Contract program is ruled illegal
The Boston Globe
http://www.boston.com/news/nation/articles/2004/01/04/chicago_initiative_nears_a_conclusion/
By Eric Ferkenhoff, Globe Correspondent
January 4, 2004
CHICAGO -- Almost 20 years ago, Harold Washington, Chicago's first black mayor, decreed that a share of all city contracts be set aside for minorities and women. It was an early experiment with affirmative action, and it was seen as a major step toward ensuring equality in a city known for doling out lucrative contracts to cronies -- typically rich white men.
But Chicago's set-aside program, as it is known, has been called into question after a federal judge ruled last week that the program is illegal because, among other things, it amounts to a quota system.
The judge, James B. Moran, stayed his order for six months, meaning that the program can remain in effect until early summer while city officials work on amending it. The ruling marks another blow to government set-aside programs designed to aid minority- and women-owned firms that have suffered numerous setbacks as courts question the programs' constitutionality.
"The judge ruled the city program cannot stand," said Tim Conway, a lawyer who represented the Builders Association of Greater Chicago, which brought the suit against the city in 1996. "Formulistic percentages cannot survive strict scrutiny."
Under Chicago's program, 25 percent of city contracts are allotted to minority-owned firms; 5 percent go to women-owned companies. The suit focused on contracts for the construction industry -- which, the judge agreed, is dominated by white men -- but the ordinance covers all city contracts, from food vending to ambulance services.
In his decision, Moran cited several flaws in the city's program.
He said the city was too generous in setting a ceiling on revenues for qualified companies. The ceiling, $27.5 million, meant that too many rich and established companies would qualify, he said.
Also, Moran said the city had set quotas, not goals; had erred in making the program permanent; had not been flexible in granting waivers when a qualified minority- or women-owned firm could not be found; and had not evaluated the wealth of company owners to make sure the program helped the disadvantaged.
Conway said he had read Moran's ruling as a death knell for the city's set-aside program.
"I don't know what the city is going to do, and I don't know what the city could possibly do," to make the program constitutionally sound.
But city officials noted that Moran stopped short of striking down the law, instead giving the city six months to rewrite its ordinance. They seized on that fact to declare his ruling a success.
"If you look at what could have happened, following a national trend, he could have said this program was unconstitutional and struck down the entire program," said the city's chief lawyer, Mara Georges.
A number of programs across the country -- in Richmond, Atlanta, Philadelphia, Michigan, Tampa, and Hillsborough County, Fla., -- have been struck down by the courts. And in California, voters endorsed a measure that reduced the level of set-asides, halving the goal of 20 percent to 10 percent for minority contractors.
In 2000, the program for Cook County (which includes Chicago but is a separate entity) was ruled unconstitutional because it did not gather the necessary evidence to show that discrimination existed and that the program was needed. That suit also was brought by the Builders Association of Greater Chicago. Still, Moran said he thought the city had to do something to ensure participation among minority- and women-owned businesses. "The city has a compelling interest in not having its construction projects slip back to near-monopoly domination by white male firms," he wrote.
At trial, the city presented witnesses who cited numerous examples indicating that the level of minority- or women-owned participation in construction projects dropped off sharply once a set-aside program was eliminated, said Jennifer Hoyle, spokeswoman for the city's Law Department.
When Atlanta's program was invalidated in 1989, minority participation dropped from 35 percent to 14 percent. In Philadelphia, which lost its program the following year, minority participation on projects dropped off by 97 percent in the first month, Hoyle said, citing the testimony.
Similar drops were seen in Hillsborough County, Fla., and in Tampa, while in Michigan, minorities were virtually shut out of highway projects within six months of the courts striking down a set-aside program.
The Rainbow/PUSH Coalition, founded by the Rev. Jesse Jackson, said it is pleased the judge did not strike down the entire law.
"So often, these qualified individuals are not even invited to the table to prove they are capable because historically, they have been systematically excluded from the process," said a spokeswoman for the group, Keiana Peyton-Barrett. She added that the group is not an advocate for quotas but thinks some sort of set-aside program is needed to even the playing field for minorities and women.
Copyright © 2004 Globe Newspaper Company.
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