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On Affirmative Action, New Perspectives Strain Old Alliances

By John F. Harris and Kevin Merida
Washington Post Staff Writers
Wednesday, April 5, 1995; Page A01

There was a time when the friends of affirmative action were powerful Republicans as well as powerful Democrats. And during the Nixon administration, people who thought the federal government should redress the unfair treatment of minorities and women in the workplace had few better friends than two Republicans at the U.S. Labor Department: Secretary George P. Shultz and a top deputy, Arthur A. Fletcher.

Beginning in 1969, Shultz and Fletcher were architects of some of the very federal hiring and contracting regulations that are now being reviewed by President Clinton and assaulted by congressional Republicans. But a quarter-century after their collaboration under President Richard M. Nixon – years during which the concept of affirmative action has been woven into far corners of the U.S. government and economy – the two men find that affirmative action no longer holds them together.

"It's certainly outlived its usefulness," said Shultz, now at the Hoover Institution at Stanford University. "At the time we needed a 2 by 4 {to end discrimination} but the time for the 2 by 4 is gone."

Fletcher, by contrast, complains "that my party is making me sick" with its attacks on affirmative action. Fletcher, a member of the U.S. Commission on Civil Rights, says affirmative action is "about ensuring that evils are not committed in the future, not paying for past sins."

These opposing views reflect how the broad support that once watered the growth of affirmative action has evaporated. In its place has risen a vast political dust cloud, one that often has obscured the details of government programs designed to improve the social and economic position of women and minorities.

What would actually change if, as some Republicans advocate, the federal government were simply to abandon affirmative action?

The answer is a lot, at least by numerical measure. According to the Congressional Research Service, about 160 federal programs, statutes, regulations and executive orders grant some measure of "preference" to women or minorities in the areas of hiring, federal contracts, educational opportunities and grants.

But the list can be deceiving. Some of what goes by the name affirmative action is little more than boosterism; some is vaguely admonitory. The Agriculture Department, to cite one of dozens of similar examples, requires that winners of rural housing grants be "encouraged to use minority banks."

Other policies are bluntly prescriptive: "not less than 10 percent" of the $151 billion approved for spending over a period of years in a 1991 transportation act is to be spent on small firms owned by women and minorities.

Senate Majority Leader Robert J. Dole (R-Kan.), whose criticisms first stoked the debate in Washington nearly two months ago, said he is for affirmative action if it means "remedying proven past discrimination against individuals" and recruiting "qualified minorities and women to give them an opportunity to compete without guaranteeing the results of the competition."

But he added: "If affirmative action means quotas, set-asides and other preferences that favor individuals simply because they happen to belong to certain groups, then that's where I draw the line."

But drawing the line will be difficult. The Congressional Research Service report that Dole ordered lists no more than 25 programs or rules -- about 15 percent – that contain specific numerical requirements based on race, ethnicity or gender. And even some of these programs were carefully built with linguistic escape hatches, such as "to the maximum extent practicable" and "absent a waiver" by the Cabinet secretary.

Engine Propelling the Program

Behind its blandly bureaucratic name, the Office of Federal Contract Compliance Programs (OFCCP) is one of the government's most important engines of affirmative action.

It enforces Executive Order 11246, signed by President Lyndon B. Johnson and vastly expanded under Nixon, requiring every company with 50 employees and doing more than $50,000 in business directly with the federal government or as a subcontractor to prepare "goals and timetables" for a more diverse work force. Its ultimate weapon is to disqualify companies from doing work for the federal government, although that penalty usually is implemented in only a handful of cases each year.

Some 90,000 or so firms fall under the Labor Department agency's domain, accounting for an estimated 25 million U.S. workers.

One is Aaron Woodson, an African American. Woodson never complained about discrimination after he applied for but did not get a job at Solectron Corp., a Silicon Valley computer chip manufacturer. Instead, his case was found two years later with the help of a computer.

It typifies how the OFCCP works. Using reports that Solectron filed with the Equal Employment Opportunity Commission, a computer analysis showed that Solectron had a low percentage of minority workers compared with similar firms in that geographic area. The OFCCP's regional office in San Francisco began an audit, one of about 4,100 done annually on firms that do business with the federal government.

After reviewing Solectron's records, the auditors found nine qualified minority applicants – five Hispanics and four African Americans – who had been rejected for jobs. The firm reached a settlement with the contract compliance agency that included up to $237,000 in payments, job offers to the nine employees, and an agreement to refine its affirmative action goals. A Solectron official said the OFCCP audit actually helped the firm improve its hiring procedures for minorities and others.

"We think that this audit did us a large service," said Jeffrey F. Cox, a Solectron spokesman, "because it pointed out a hole in our procedures that if not filled would have put us at a great disadvantage competitively."

"I think it would be a major setback in this country if we didn't have affirmative action," said Woodson, who turned down Solectron's later job offer but received a check for $10,500. "Lots of places, minorities wouldn't get in the door."

Affirmative action proponents say there is a tendency among white managers to simply hire people who are like them; the motivation may not be prejudice so much as habit. Goals and timetables force companies like Solectron to "cast a wider net," said Shirley J. Wilcher, the OFCCP's director in Washington, but they do not amount to quotas.

"A quota is a rigid and inflexible target," Wilcher said. "What we require are benchmarks . . . and good-faith effort."

Policies Are 'Good Business'

Yet, inevitably, the definition of a quota remains firmly in the eye of the beholder. Among U.S. businesses, there is nothing remotely like consensus on what the federal government's affirmative action policies should be. Typically, the largest firms have been supportive of a government role, saying it simply complements efforts they were making on their own.

"We would have these policies because they're good business," said Laurie Broedling, vice president for human resources at McDonnell Douglas, a large federal defense contractor.

Because the firm's customers are diverse, Broedling said, McDonnell Douglas wants to make sure its workers are too, even if that requires extra effort. "There are great talent pools in our country that have not been tapped," she said. "We want the best talent, and talent grows everywhere."

Fred Alvarez, a former Labor Department official now practicing law in San Francisco, said big firms realize that "a company with an effective affirmative action plan is much less likely to be a target" of discrimination complaints and lawsuits.

Yet these same policies often look quite different from the vantage point of a smaller firm. Bob Lindberg, president of Young Co. in Seattle, thought his small metal firm had a decent diversity record -- with a work force that included about 35 percent women and minorities -- until the OFCCP came knocking in 1993. He said the agency accused the firm, which is a subcontractor for a company that supplies anchors to the Navy, of a number of charges, including failing to hire qualified Asian applicants.

Young opened its books to the auditors, spent thousands of dollars on a consultant, and finally settled in part by paying $47,500 in back wages to some minority workers.

"They were looking for blood and weren't going to be happy until they found some," Lindberg said.

His son, Mark Lindberg, a Young vice president, said the company now has an extensive affirmative action plan that it is following in anticipation of another audit. "They like to call them goals, not quotas," he said. "For us, there's no difference."

Some Minority Firms Rejected

After enforcing hiring goals, probably the most important element of the government's affirmative action policies is helping companies owned by minorities and women gain a larger share of federal largess. The government's main tool for this is the "set-aside," reserving a portion of federal contracts solely for bids by these businesses.

Programs with this aim are scattered across the government, but the model for most are the set-aside programs run by the Small Business Administration. Among the most important of them is the so-called 8(a) program, named after the section of the Small Business Act that created it.

Firms that are granted 8(a) status are able to win contracts from agencies across the federal government without competitive bidding if the contracts are less than $5 million for manufacturing and $3 million for other services.

Participating companies must be 51 percent owned, controlled and operated by individuals who are "socially and economically disadvantaged." Social disadvantage applies automatically to most racial and ethnic minorities, but can extend to white men and women if they demonstrate they have suffered because of some prejudice or cultural bias. To establish economic disadvantage individuals must show their net worth does not exceed $250,000, exclusive of home equity or business investment.

The dual criteria mean that some minorities get rejected, such as Rep. Eva Clayton (D-N.C.) when she sought to win federal contracts for her fledgling consulting business in the early 1980s. She was turned down, she said, because her husband made too much money. "Of course I disagreed with that," Clayton said. "It was me that was applying, not my husband."

Still, 46 percent of the program's 5,330 participants are black like Clayton, 23 percent are Spanish-speaking and 21 percent are Asian. Only seven firms headed by white women have qualified, which has led to criticism of the criteria.

Rep. Jan Meyers (R-Kan.), chairman of the House Small Business Committee, says that a black Harvard graduate with a net worth of a quarter of a million dollars stands a better chance of getting into the program than a poor white woman from Appalachia. "There is something wrong with that," she said.

In addition, Meyers adds, program rules allow a participant to remain eligible while his net worth steadily climbs during his nine-year tenure in 8(a). "If a person has $750,000 in assets, plus a house, plus a business," she said, "then government shouldn't be involved."

Before the 8(a) program awarded its first contract in 1969, minority companies did $11 million in business with the federal government. Since then, the program alone has been responsible for $48 billion in contracts to minority-owned companies and others who qualify. And 8(a) now accounts for about half of the contract dollars that minority businesses get from the federal government.

"The 8(a) program has been absolutely critical to our success in penetrating the railroad construction industry," said Melvin E. Clark Jr., president of an area construction firm, in recent testimony on Capitol Hill. "We started as an inexperienced, undercapitalized company with great ambitions. We needed help."

The program, Clark said, provided him with technical and management assistance, made banks and bond companies more receptive and opened access to the federal marketplace "that we never would have had." A measure of the program's success is that current or former participants include 32 of the top 100 African American-owned businesses and 17 of the top 100 Hispanic-owned companies.

Over the years, however, reports by the General Accounting Office, the SBA's inspector general and other parties have highlighted continuing problems with 8(a). One common criticism is that a few firms are getting a disproportionately large share of the contracts and getting rich while claiming a disadvantage.

In fiscal 1994, for example, 50 firms – or about 1 percent of the participants – received a quarter of the $4.4 billion in contract dollars awarded. Furthermore, 56 percent of the enrolled firms did not receive any contracts during the last fiscal year.

SBA officials said those statistics reflect, in part, how aggressively some firms market themselves compared with others and the tendency of many federal agencies to deal with companies they know. Though there are still some problems to work out, SBA officials said, overall the program is working.

"Given the opportunity," said Herbert L. Mitchell, who supervises the program, "minority firms perform."

Discrimination or Development?

Are set-asides a mild way of evening out the natural advantages established firms have against new and minority firms? Or an intrusive form of favoritism that amount to de facto quotas? The Defense Department's program for aiding disadvantaged businesses shows that the question can be difficult to answer. With a contracting budget that totaled $112 billion last year, the Pentagon's decision to set aside 5 percent of that for firms owned by women and minorities would seem to leave plenty of business to go around. Moreover, the goal is not a mandate: though the current contracting program was established in 1987, the Defense Department met the 5 percent goal for the first time in 1993.

The Pentagon attains the goal in part by setting aside contracts whenever it has a reasonable expectation that two or more small, disadvantaged businesses will compete for them. Also, in certain instances, disadvantaged businesses can bid high by as much as 10 percent and still win a contract.

Daniel R. Gill, the Pentagon official in charge of aiding disadvantaged businesses, does not consider it affirmative action. "In my judgment it's an economic development program," Gill said.

But Bryan McGinnis, who helps runs a small, white-owned construction company in Texas, considers the same program a blatant exercise in reverse discrimination. In some recent years, he said, all the contracts his firm is qualified to compete for in the San Antonio area – not merely 5 percent – have been set aside for disadvantaged firms.

The reason is that many defense dollars go for big-ticket items such as bombers and tanks that are not likely to ever go to disadvantaged firms. In order to meet its departmentwide goal, therefore, the military services must compensate by awarding more than 5 percent of other types of business to disadvantaged firms.

"I never discriminated against any of those people in the past," McGinnis said. "If you had oppression of one group and you're opposed to that, why would you turn around and oppress another group? Minority firms should have to compete for business just like any other firm."

The Politics of Anxiety

Why is the consensus that sustained affirmative action suddenly so imperiled?

Adherents believe it is due more to a general free-floating frustration adrift in the modern economy than it is to specific grievances against individual programs.

Polling seems to have only muddled the picture. When Americans are asked whether they favor granting "preferences" to minorities or women -- such as making a certain number of educational scholarships available only for them – respondents generally oppose such measures. But when asked, for instance, if they favor companies making "special efforts" to attract "qualified" minorities and women to those companies, Americans generally are supportive.

For all the rhetoric about "reverse discrimination," there is little hard data to suggest bias against white males is widespread. Of the 91,183 discrimination complaints filed with the Equal Employment Opportunity Commission in fiscal 1994, only 1.5 percent alleged that white men had been discriminated against because of their race. Over the past eight years, the percentage of such complaints has been fairly constant.

Further, a draft study of discrimination cases handled by U.S. district and appellate courts conducted for the Labor Department indicates that a "high proportion" of reverse discrimination claims are "without merit."

"You can't make the case that this {backlash} is quotas," said California Assembly Speaker Willie Brown (D). "The explanation for why people view it that way is the scapegoat phenomenon."

Others, such as conservative activist Clint Bolick, believe the breakdown has occurred because some of the key affirmative action measures were implemented by executive orders, not legislative action, and thus never had strong roots in the political culture.

Today's debate is caught up in the politics of anxiety, fueled by emotional arguments about merit versus preference, opportunity versus discrimination. In this arena, anecdotes seem to carry the day.

"I'm a white male," said Bob McCallie, whose Nebraska firm sells computer services to the government. "I don't feel that I have been given anything, cut a break, because I'm a white male. I don't know why a female or a minority wouldn't have had the same opportunity to enter the system that I had." Yet despite McCallie's perceptions, something is clearly barring women and minorities from reaching the highest levels of achievement in the workplace, regardless of qualifications. The Glass Ceiling Commission report released last month found that 97 percent of senior managers in Fortune 1,000 industrial and Fortune 500 companies are white; 95 to 97 percent are male.

Fletcher Mulls 1996 Campaign

By the time the dust clears, the old bulls who were on the frontlines of affirmative action may become more involved in the fight than they would have imagined 25 years ago.

Shultz expects to support California's proposed referendum that would ban most affirmative action policies at the state level. "The problem is," Shultz said, "that affirmative action that you genuinely want to see . . . turns very easily into a quota."

Arthur Fletcher, meanwhile, is so upset with his fellow Republicans that he is planning to announce today a presidential exploratory effort to determine if he should enter the 1996 GOP race as "the affirmative action constituency's candidate."

"They're getting ready to divide this country," said Fletcher, "so we can't solve the race problem for the next 100 years."

Around the Government

From a listing of more than 160 programs affecting every major area of the government, but varying from those that simply encourage extra effort to those that set explicit numerical guidelines. Among the programs:

DEFENSE

  • The Pentagon has a goal that 5 percent of all its procurement budget ($112 billion last year) be awarded to firms owned by "socially and economically disadvantaged individuals," meaning women and minorities, as well as historically black colleges and universities.

  • As the Navy cleans up environmental damage at its facility on Kahoolawe, part of the Hawaiian island chain, it is to give "especial preferences to businesses owned by Native Hawaiians."

    ENVIRONMENTAL PROTECTION AGENCY

    State and local governments that win EPA grants "shall make positive efforts to use small businesses and minority-owned business sources of supplies and services."

    EDUCATION

    In awarding grants for teacher training, the Education Department is to give "special consideration" to "historically black colleges and universities," and to schools with at least 50 percent minorities.

    HEALTH AND HUMAN SERVICES

    The minority medical biomedical research support program, run by the National Institute of General Medical Sciences, gives grants to educational institutions with a "significant proportion" of minority students. Grants are awarded to faculty members, regardless or race, and include money to support research assistants at schools ranging from predominantly black Morehouse School of Medicine in Atlanta to California State University in Los Angeles, which has a large Hispanic population. Last year the institute devoted $34.8 million, about 4 percent of its budget, to the program.

    STATE

    "Not less than 10 percent" of money appropriated for diplomatic construction shall be allocated "to the extent practicable" to minority contractors.

    TRANSPORTATION

    "Except to the extent that secretary determines otherwise, not less than 10 percent" of the money authorized in the $151 billion transportation act passed in 1991 will be spent on "small business concerns owned and controlled by socially and economically disadvantaged individuals."

    © Copyright 1995 The Washington Post Company

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