Should the federal government bankroll a membership drive for the District's Chamber of Commerce?
Should taxpayers help finance trade associations for black insurance agents or shoe store owners?
Should the government subsidize conventions for minority businessmen?
These are some of the questions raised by efforts to reorganize the Commerce Department's Office of Minority Business Enterprise (OMBE).
The OMBE reorganization has important implications for capital commerce because both what is right and what is wrong with OMBE can be seen in Washington's minority business community. Unfortunately, telling right from wrong, at least as far as OMBE is concerned, depends on who you listen to.
here's no disagreement however on the need for encouraging minority entrepreneurs. Every month suburban Washington retail sales figures climb impressively. Every month city sales figures lag behind - telling evidence that Washington's hundreds of black businesses need help.
Against the Depression-era landscape of the 14th Street corridor, OMBE is a puny effort. The whole agency has only a $50 million budget and a staff of 200.
The agency allocates only $5 million in aid - mostly management and technical assistance - to minority businesses in a region that includes not only Washington, Maryland and Virginia, but also West Virginia, Delaware and Pennsylvania.
To maximize that money, the local region began consolidating three years ago. Six rival business development groups were replaced by the Greater Washington Business Center, the prototype for the "one stop center" that is a key element in OMBEs reorganization plan.
Lou Encinas, who heads the regional office, said the creation of the umbrella agency has permitted greater economies, more professional technical assistance, and more sophisticated counselling for local businessmen.
A study by the Rockville Consulting Group - a local minority enterprise - provided more telling arguments. Compared to cities where OMBE efforts have not where OMBE efforts have not been consolidated, the minority businesses served by GWBC "tend to increase their gross receipts more" and to survive in business longer.
Encinas says the reorganization works, in part, because Washington has a relatively homogeneius minority community. In cities where black-Spanish rivalries are greater, he cautioned, things might be different.
The demand for separate black and Hispanic agences in some communities is one argument against the OMBE streamlining. Another is the contention that consolidating 204 business development centers to 56 will leave three-quarters of these minority business consultants is an implicit goals of the OMBE reorganization.
A half dozen minority trade associations - all of them located here - are on the hit list. They get nearly $1.5 million a year in federal aid to represent minority banks, savings and loan associations, lawyers, accountants, real estate agents and shoe store owners.
Members' dues, not taxpayers' money, ought to finance these organizations, one side argues. Struggling minority businessmen need the professional and technical assistance of trade associations, but can't afford to finance them, says the other; without subsidies, many of these groups might not survive.
There's also the question of subsidies for groups like the D.C. Chamber of Commerce. Until the funds ran out in July, the chamber had been a regular recipient of OMBE funds. Another application for an OMBE contract is in the works.
Unlike the minority trade associations which get flat OMBE grants, the D.C. chamber gets a contract for specific purposes - to be "an information and resource center" for the district's small businesses.
Part of that involves outreach into the minority business community, including, in the upcoming proposal, a membership drive.
Expanding the membership is what it will take to make the D.C. chamber self-sufficient, says executive secretary James L. Denson. The chamber was here long before OMBE was and is not dependent on federal funds, he said, but the $100,000 a year in federal conracts has had "a substantial impact" on its ability to serve small businessmen.
OMBE also picks up most of the cost of running 22 state OMBE units, including $146,000 in Maryland and $153,000 in Virginia. (Officially costs are shared on a 75-25 per cent basis, but OMBE puts up the cash and the states match it with desks, office space and other non-cash contributions.)
The main accomplishment of the state agencies has been to increase state purchases from minority firms, an OMBE study says, and that the states should be doing that without federal money.
Inside OMBE there are political appointees and professional administrators on both sides of virtually every question involved in sharping up the agency.
It is now up to Undersecretary of Commerce Sidney Harmon, who has a reputation as an innovative businessman, to reconcile the conflicting interests of rival groups with the undeniable need to bolster minority capitalism.