Beyond the Rhetoric
How big contractors corrupt construction bids
There is much corruption when it comes to procurement. Probably, the industry with the most corruption is construction. Keep in mind that corruption is the first cousin of discrimination, which is why the establishment cringes at the thought of Black strangers coming into their territory. They want to keep the graft private.
I learned much about this corruption when I was in Indianapolis. One day one of my members invited me to attend “Bid Night.” Bid Night would occur two to three times a year. It was sponsored by the Indiana Department of Transportation (INDOT) and held at a downtown hotel in Indianapolis. Every major highway contractor would attend. Basically, it was a party held on the eve of bid openings. My friend was a known contractor and always attended. I went undercover, as I would have never been formally invited to this good-ol’-boy event. He would introduce me as his new vice president.
After about two hours most of the contractors were starting to get drunk. The member and I were two of the three Blacks in the whole place. It was very, very uncomfortable—rednecks getting drunk. Some would be referred to as a “bitches.” It was explained to me that such a moniker described a front of a women-owned business. Such White males actually owned fictitious women-owned businesses in order to get in the Disadvantaged Business Enterprise program, and would subcontract some of their work to themselves. This would give them credit towards the DBE program at the expense of Black, Hispanic and real women-owned firms.
I left the affair early. It went on until about 2 a.m. Starting at 8 the next morning the bids would be awarded. This was virtually a criminal activity. Each bid would have five or six companies “competing” for the lowest bid. There would be one logical bid and the others wouldn’t even be in the ballpark. The bid room would fill with laughter as this went on for hours. It was obvious that these construction companies got together and decided who would win what. In the end, everyone had their share of contracts. It was bid-rigging, pure and simple, and it was sanctioned by the state of Indiana. I was appalled. The member laughed at me and said, “That’s how it’s done!”
A few days later, he invited me to see how “fronting” occurs. One form of fronting is to rent your company’s name to contracting activity. A White firm will actually do the work and get the money, but the minority business report would falsely state that it was a Black firm. The member had a trucking company. The Indianapolis Airport Authority had his firm listed for dirt removal on a big project. He took me to the work site. There we saw three different White-owned trucking companies doing the work. He informed me, “Harry, you are seeing a truck come out every 20 seconds. Each truck means a $3 fee for me. That’s $9 per minute; $540 per hour and $5,400 per day. Just for the use of my name! That’s why I front.”
Those three trucking companies simply padded their fee by $3 per haul to cover the fronting fee.
That was taxpayer money! The member had no shame about this. We were at a reception to honor the mayor of Indianapolis. The mayor came up to the member and asked him, “What are you doing at the airport?” He retorted, “I am fronting.” The mayor didn’t understand the answer.
I just shook my head.
Then there was the case of “Dead Man Contracting.” On a downtown project I noticed a particular firm listed as doing a sizable contract. I once knew the owner. He had died a year earlier—the business closed. I found a contact number and called it. It was the widow’s home phone and I asked her if she had taken over the business. She explained to me, “No, I just fill out invoices per their instructions and they give me 2 percent of the invoice cost. I feel ashamed misrepresenting my husband’s memory, but the money is easy and I can use it.” She promised to cease this illegal activity, and I assured her that she wouldn’t be reported as long as she stopped immediately.
It got so bad that I soon started to periodically write “Fudge Reports.” I would call out a fronting activity—names of the fronts and the projects included. The reports would be widely distributed.
In them, I explained how a real deal would have amounted in so many actual dollars being made. I would show how many jobs in the Black community would be created and how many families would have enjoyed the income. The fronting began to slow down.
Harry Alford is co-founder, president/CEO of the National Black Chamber of Commerce®. Website: www.nationalbcc.org. Email: firstname.lastname@example.org.
DISCLAIMER: The beliefs and viewpoints expressed in opinion pieces, letters to the editor, by columnists and/or contributing writers are not necessarily those of OurWeekly.
Feeling and looking good has become one of the fitness focal points of the modern era. As a result, billions of dollars are poured into chic megagyms that offer everything from yoga classes to freshly squeezed juice after a workout.
The number of American “patriot” extremist groups has reached a record level, according to a new study, and experts are warning of a wave of anti-government violence.
A report released Tuesday by the Southern Poverty Law Center counted 1,360 “patriot” extremist groups in 2012—up by 7% from 2011. The study defines patriot groups as anti-government militias driven by their fear that authorities will strip them of their guns and liberties.
With all this talk about slavery and “Django: Unchained” we bring into focus writer Alex Haley, the man who dared to write a groundbreaking novel about his ancestors entitled “Roots.”
“Roots,” which originally aired in 1977 on the ABC Network, literally captured the heart and imagination of America and the world. Never before had anything focusing on the subject of slavery ever graced the airwaves with such power and authority as this mini-series.
I was among the 33.5 million people who sat riveted to their televisions, parsing every second of the State of the Union address. I was stunned to learn, through a Washington Post article by Lisa De Moraes, that viewership was less substantial for this address than last year’s 38 million, and even lower than the 48 million that watched in 2010. Are people less interested in what our president has to say? Or is there something else going on?
In any case, from my perspective this was an important and significant State of the Union address.
According to a new report by the Federal Deposit Insurance Corp. (FDIC), in 2011 more than 37 million American households were either unbanked or under-banked. African American households represent 34 percent of all under-banked consumers, the highest percentage among demographics surveyed. When under-banked African American and Latino households are combined, these two communities of color comprise more than 60 percent of the nation’s under-banked households.