EthnicMajority

There are always a few bad apples in any organization or program, and minority business programs are no exception. Take for example Wallace Construction in Rhode Island.

According to a story in the Providence Journal, Wallace was certified as a minority owned business and eligible to participate in federally-funded transportation projects that targeted contracting/subcontracting a portion of the business with minority owned businesses. Christina Rosciti, the daughter of a principal in a much larger construction firm, purchased a 49% interest in Wallace apparently for the sole purpose of using it as a front to keep more of the business in the family.

All was going swimmingly until the founder Wallace (an African American male) died, and the authorities began to question the firm’s minority status. In order to qualify for the federal minority owned business program (and most state and local programs), firms must be majority owned AND controlled by minorities. After the founder’s widow assumed the title of President, the firm had its minority status reinstated.

The reinstatement occurred in spite of several disturbing facts. Neither the founder’s widow nor Rosciti had any previous executive management experience. Rosciti had not paid taxes in years and clearly lacked the financial resources to buy her equity stake in Wallace, which was not a successful business until becoming the beneficiary of millions of dollars of business from Rosciti’s family businesses. There was also evidence that 15 employees were employed by both Wallace and Rosciti’s companies.

Minority business programs are intended to give legitimate companies opportunities to compete and grow. If a majority company acquires a significant interest in a minority owned company, brings in its own people, and funnels business to it, the minority owner becomes nothing more than a front for the majority owners. These fronts give both the program and the legitimate minority owned companies a bad name, and should be aggressively investigated and banned from the program.

Ethnicmajority Business page.

Small Business Administration (SBA) loans should be easier to get (theoretically) in the future. According to the Associated Press, the SBA has eliminated fees for its 7a and 504 small business loans. In addition, $15 billion in TARP money will be used to buy current SBA loans from the banks, thereby freeing up capital that can be used for new SBA loans.

The TARP program, which stands for Troubled Asset Relief Program, has gotten a nasty reputation as a bank bailout program funded by the taxpayers. Although there was the expectation that TARP funds would be used to loosen credit to make new loans, the reality is that most recipients have used the funding to shore up liquidity and protect against loan losses.

Perhaps new program changes increasing the amount of each loan the government will guarantee from 75-80% to 90% will help. If the lenders have less risk, they should be willing to make more loans.

For more details, see the Congressional Research Report.

Ethnicmajority Business page.

OAK BROOK, IL: McDonald’s increased communications efforts for its second year of helping Hispanic high school students prepare for college. It is promoting its “Steps for Success College Workshops” and the company’s scholarship program, funded by Ronald McDonald House Charities (RMHC).

McDonald’s partnered with Hispanic American Commitment to Education Resources (part of RMHC) and the Hispanic Scholarship Fund for the effort. Valencia Pérez & Echeveste, which handles Hispanic consumer marketing for McDonald’s, is providing PR support.

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Nearly a decade after the Agriculture Department agreed to settle a discrimination suit brought by black farmers, one of the largest payouts in U.S. history at almost $1 billion so far, the department has yet to develop a system to adequately address hundreds of other bias complaints from farmers and its own employees, the Government Accountability Office said this week.

In blunt testimony before a House subcommittee this week, Lisa Shames, director of natural resources and environment for the GAO, said the department cannot prove that it has reduced its mountainous backlog of discrimination complaints and that its claims to the contrary cannot be trusted.

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The U.S. mutual fund industry is doing little to increase diversity and hire more minority workers, a senior executive at boutique investment firm Ariel Investments said this week.“The fund industry has to make a real commitment, not lip service, to diversity. And really go out of our way to find people of color to work in our organizations,” Ariel president Mellody Hobson told Reuters in an interview on Thursday.

Ariel has long championed the cause of spreading financial literacy in the African-American community. Founder John Rogers is helping raise support and funds for Barack Obama.

“Name any well-known black portfolio manager besides John Rogers,” Hobson said on the sidelines of the annual Investment Company Institute (ICI) conference. “And, to our knowledge, I am the only black woman chair of a mutual fund board. That’s not progress,” she said. Hobson chairs the board of trustees of Ariel’s mutual funds.

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NEW YORK (AdAge.com) — The good news for many of the agencies that came under the gaze of the New York City Commission on Human Rights is that they met their goals for minority hiring in 2007. The bad news is critics are likely to be unimpressed.

For one, the goals were set by the agencies themselves. Second, some of them — most notably a handful of Omnicom shops — failed to meet even those goals. But perhaps more important, a closer look at the numbers shows African-Americans and Hispanics lag behind Asian-Americans and that agencies seem to lose minority hires as fast as they hire them. Following a two-year investigation by the CCHR, 15 advertising agencies in 2007 pledged to meet goals for minority hiring, presented as a percentage of total hires for the year. The goals will be monitored for three years, and agencies that don’t meet them will be subject to penalties.

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The appearance of Chinese actors and filmmakers in Hollywood film and television has been problematic since the first films appeared in the early 1900s. Arthur Dong’s “Hollywood Chinese” documentary, screening as part of the 11th annual Hawaii International Film Festival Spring Showcase, retraces the struggle that has gone on for 100 years, with no sign of abating anytime soon.

For those new to the controversies, Dong’s work neatly captures the “progress” of Asian-Americans on screen through the decades, depicting the ways that each baby step forward is often accompanied by a leap backward.

The dilemma of the Chinese in film closely mirrors that of the Chinese-American and Asian-American experience in daily life as a minority presence, marked by one stereotype after another.

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NEW YORK (AP) — It’s getting lonelier at the top for black CEOs.

Only four blacks will be left running Fortune 500 companies after Stan O’Neal’s abrupt retirement from the top spot at Merrill Lynch & Co. last week and Time Warner Inc. Dick Parsons’ announcement Monday that he will retire at the end of the year.

That leaves Aylwin Lewis at Sears Holding Corp., Kenneth Chenault at American Express Co., Ronald Williams at Aetna Inc. and Clarence Otis at Darden Restaurants Inc. as the only black chief executives among this list of the nation’s largest companies.

To some, the departures of O’Neal and Parsons underscore that all CEOs, whatever their race, have a short shelf life.

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Whichever way you say it, “big” or “grande,” Hispanic users online represent a target marketers want to reach.

eMarketer estimates that there are 18.8 million Hispanic American Internet users in 2007. That number will grow to nearly 25 million in 2011.

Language is a key issue for marketers targeting them—but it is not the only issue.

“As important as it is, the choice between communicating in Spanish or English is just one piece of the puzzle,” says Debra Aho Williamson, eMarketer Senior Analyst and author of the new report Hispanic Americans Online: A Fragmented Population.

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NEWARK — New Jersey’s minority small-business owners have reached a new
milestone.

For the first time, minority-owned business received the majority of the loans approved in New Jersey by the U.S. Small Business Administration, during the agency’s fiscal year 2007, the period of Oct. 1, 2006 through Sept. 30, 2007.

According to SBA New Jersey District Director James A. Kocsi, minority small-business owners accounted for 52 percent of all loans approved by SBA’s New Jersey District Office in fiscal year 2007 and received 1,856 loans for $254 million.

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