Even though Illinois didn't rank as a leader in a listing of states, Cook County did come in fourth in a tally of the number of minority business owners in U.S. counties. A little more than 30 percent, or 154,811, of the firms in Cook County are minority-owned, according to new numbers by the Census Bureau's Survey of Minority Business Owners.
While it is encouraging to see that Illinois is a leader in minority business ownership, a new report by the city of Chicago's inspector general stating that the municipality's Minority & Women Owned Business Enterprise program (MWBE) is "beset by fraud and abuse" is quite disheartening. What does that mean for the thousands of women and minority business owners in Cook County that bid on proposals meant to ensure that city contracts are doled out fairly to all qualified parties?
It apparently means a lack of access to a massive amount of potential earned income. According to a report last year by City Inspector Joe Ferguson, minority and women-owned businesses lost out on $19 million in construction project contracts in 2008 alone due to systematic fraud and mismanagement of the MWBE program. The scathing report released by Ferguson late last week blasted the Daley administration for its poor management of the program, saying not much has changed over the last year. "The lack of an overall commitment to confronting the program’s deficiencies has left it beset by fraud and abuse and unable to achieve its objectives,” he wrote.
In the 22-page report, Ferguson suggested that Mayor Rahm Emanuel put a temporary stop on the program until potential legal issues surrounding constitutionality are ironed out due to the lack of proper tracking and reporting done over the last several years. He also suggested that Emanuel prioritize how MWBE applications are processed, only allow certifications to go to businesses that are located in areas where the city contracts, and move the certification process for minority businesses to the Department of Procurement Services from its current place at the Office of Compliance. Emanuel has yet to comment on the report, saying last Thursday that he needed time to go over the document first.
He shouldn't wait too long to move on that report because the longer the MWBE program is allowed to float around aimlessly in the wind, the longer we all lose out in the long run. In hard times, entrepreneurship tends to skyrocket, so it's pretty safe to say that many small businesses will attempt to launch during the current economic downturn. And it appears that minority-owned businesses will be no exception to that rule, especially considering the strong growth they have seen over recent years. Nationwide, minority business ownership grew more than double the rate of all other U.S. businesses between the years of 2002 and 2007. With Cook County as a leader in minority business ownership and the potential for additional growth, it is imperative that Emanuel take action to steer the city's "dysfunctional" and scandal-ridden minority business program in the right direction in order to truly achieve his stated goal of promoting more business opportunities for Chicagoans and boosting the potential for economic growth for all of the area's business owners.