Defining minorities can be odd business Baltimore agency yses twisted logic in city's enterprise program


Recently, Baltimore's Board of Estimates expelled Rod Shakiba from the city's Minority Business Enterprise (MBE) program after eight years' membership.

This program, begun in 1977, provides preferences in competition for city contracts to firms owned by women and members of designated minority groups. Shakiba had just gone into debt to buy a concrete manufacturing company, in part no doubt to take advantage of his MBE status. After an anonymous phone tip from a competitor, the board decided that Shakiba, an Iranian-American, did not fit the program category Asian American.

Iran, as any atlas clearly shows, is in Asia, the largest of the world's continents, spanning the Bosporus to the Sea of Japan. But Baltimore's MBE program requires that Asians be from one of the "original peoples of the Far East, Southeast Asia, the Indian subcontinent or the Pacific Islands." This definition implies that the city has evidence showing some Asian subgroups are more likely to be victims of discrimination than others. Such evidence, however, does not exist.

Also, according to the city's definition, the business owner must be a descendant of one of the "original peoples." An interesting concept that, and presumably one on which the Board of Estimates possesses great anthropological expertise.

Plausibly, the "original people" concept emerged in 1993, when a Sudanese-American, Emil Abdelsayed, applied to the Baltimore MBE program. Although he was born in the Sudan and was certified by Maryland as an MBE owner, the board found that because he did not come from a group having origins in the "black African or Nilotic peoples" of southern Sudan, he did not qualify as an African-American.

The "original people" concept as applied to Shakiba is a bit ironic. Iranians, in their former incarnation as Persians, have been an Asian civilization since about 6000 B.C. Many people from India or Pakistan, whose citizens are clearly considered Asian Americans by the MBE program, are descendants of Shakiba's Mughal ancestors who swept into the Indian subcontinent around the 12th century A.D. The ebb and flow of Asian peoples and who were the "original" Asians would appear not to have much relevance to the competition for Baltimore concrete contracts.

Mayor Kurt L. Schmoke, who has a fine legal education, expressed discomfort about the actions taken against Shakiba and Abdelsayed. The mayor's scruples, if not his vote, were exactly right. Across the country, courts are striking down MBE programs and jurisdictions are redesigning those that remain.

MBE programs operate on the principle of presumptive eligibility. For firm owners to receive a public contracting preference, they must belong to a group that is presumptively "socially disadvantaged." They do not have to prove or even claim that their businesses ever actually suffered from discrimination. In fact, using conventional measures of education, income, club memberships or residence, the owners need not actually be socially disadvantaged. All that is necessary to receive preferences is identification with a designated group.

MBE programs began in the 1960s as an attempt to help African-Americans overcome discrimination and form businesses. Championed by then-Rep. Parren J. Mitchell of Baltimore, MBE programs expanded in the federal government and throughout the nation. Gradually, the list of presumptively eligible groups expanded as well, to include persons from such unusual places as:

Republic of Palau, Republic of the Marshall Islands, Federated States of Micronesia, the Commonwealth of the Northern Mariana Islands, Guam, Samoa, Macao, Hong Kong, Fiji, Tonga, Kiribati, Tuvalu, Nauru, Sri Lanka, Bhutan, the Maldives Islands and Nepal.

Over time, African-Americans have become a minority of the MBE beneficiaries, as immigration has expanded the number of Asian American and Hispanic participants. In most programs, white women also receive preferences.

Defending the particular groups entitled to receive preferences is the great vulnerability of MBE programs. In 1989, the U.S. Supreme Court in City of Richmond vs. Crosan, found that city's MBE program unconstitutional in part because it included groups where there was no evidence of past discrimination. Consequently, in some cities, for reasons of law or politics, the preference programs have been pared down by eliminating particular groups. The Richmond MBE program now includes only African-Americans. In other cities (Philadelphia, Columbus, Ohio, and Atlanta), the groups eligible for contracting preferences have been decided through litigation.

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