Advocates struggle to measure stimulus relief for minority businesses

By Krissah Thompson
Washington Post Staff Writer
Monday, January 18, 2010

As Congress looks to pass a second stimulus, groups that represent small, minority and women-owned businesses are eager to assess how much their companies have benefited from the $787 billion infusion of cash pushed through by the Obama administration 11 months ago.

A report by the Kirwan Institute, which studies race and ethnicity at Ohio State University, has been tracking the dollars and found that 34 percent of the $39 billion direct federal contracts awarded last year went to small businesses -- 7.6 percent of those are owned by women, 3.5 percent by Hispanics and 2.5 percent by African Americans.

The picture is hazy because nearly 80 percent of stimulus funds have flowed through state and local governments, making them harder to track than direct federal spending. State and local laws saying how much government spending must be set aside for minority-owned businesses vary widely.

John Powell, executive director of the institute, which has researched the location of schools, health care and transportation in relation to populations from various demographic groups, said the amount of direct federal spending was low. He said the government should be using the recession and accompanied increases in spending to fix longstanding disparities that existed before the downturn.

"Crises present an opportunity, and in large part this opportunity has been wasted," Powell said. "We are stimulating the status quo. If we were far behind before, we are going to be even further behind."

The Rev. Jesse Jackson, who has been concerned about the disproportionate effect the economic slump has had on minority communities, agreed. "We thought once it [the stimulus] left Washington and went to the states it would be fairly distributed with the civil rights laws enforced and equal employment opportunity contract compliance, but that did not happen," he said.

David Hinson, director of the Minority Business Development Agency, said the Obama administration worked hard last year to make sure minority businesses were treated fairly. His agency spent $1 million and held more than 100 events across the country to help minority firms access information about stimulus contracts.

"The president has indicated on numerous occasions that the desire has been for minority firms to get their fair and equitable share, and that's something that we're continuing to work for," Hinson said.

Minority-business contracting has long been a contentious issue, and some minority business advocates said expectations for contracting opportunities grew when Obama took office. However, no specific minority business contracting goals, or set-asides, were created for doling out stimulus dollars, which were pushed out the door quickly to try to stabilize the economy.

In addition to looking at minority contracting rates for direct federal stimulus spending, the Kirwan Institute, along with the Miami Workers Center, has been tracking stimulus dollars in Florida and using the state as a case study. A report due out later this month will seek to measure the number of jobs created and contracts awarded to small and minority-owned businesses in the state.

Members of the African American Chamber of Commerce of Central Florida were excited about getting a shot at stimulus dollars, but they have found it difficult, said Robert M. Spooney, the group's president. Only one member -- an information technology firm working on education software -- has received a stimulus-related contract. The owners had previously worked with the state department of education, which positioned them for the work, Spooney said.

Emilio Monte, who owns a payroll services and benefits company in Miami, said he is measuring the impact of the stimulus by the availability of credit and the overall business environment.

"When it comes to the money filtering down, we really haven't seen it," he said. "There hasn't been any expansion of job programs that we've seen. There's been a lot of rhetoric, but we just haven't seen it."

Hinson said that his agency could "certainly do better" but that the bulk of stimulus money went to "tax credits and to state government, which have had a trickle-down impact that may not be captured in the number of contracts that people have."

Staff writer Perry Bacon Jr. contributed to this report.

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