00001
    1                  CITY OF CHICAGO
    2              COMMITTEE ON THE BUDGET
    3             AND GOVERNMENT OPERATIONS
    4  
    5  
    6  
    7       RE:  MAYORAL TASK FORCE, MINORITY BUSINESS
    8            ENTERPRISE/WOMEN BUSINESS ENTERPRISE
    9            PROGRAM
   10  
   11  
   12  
   13            REPORT OF PROCEEDINGS of the hearing
   14  of the City of Chicago, Committee on the Budget
   15  and Government Operations, taken on March 24,
   16  2004 at 10:00 a.m. in the City Council
   17  Chambers, Illinois, and presided over by
   18  MR. WILLIAM M. BEAVERS, Chairman.
   19  
   20  
   21         REPORTED BY:  Berna Davis, C.S.R.
   22  
   23  
   24  
00002
    1            CHAIRMAN BEAVERS:  Ladies and
    2  Gentlemen, the Recessed Committee on the
    3  Mayor's Task Force is now back in session.  We
    4  have --
    5                 I'm going to give you the names
    6  of the members of the committee.
    7                 We attorney Earl Neal from the
    8  Civic Committee; Gloria Castillo from Chicago
    9  United; Hedy Ratner from Women's Business
   10  Development Center; John DiCiurcio from Turner
   11  Construction; William Shook from Clark
   12  Construction; Pam McDonough from the Federation
   13  of Women's Contractors; Edward McKinnie, Black
   14  Contractors United; Perry Nakachi, Association
   15  of Asian Contractors Enterprise; Ralph Moore,
   16  Ralph Moore and Associates; Ralph Hernandez,
   17  Hispanic American Construction Association;
   18  Alderman William Beavers, Alderman Freddrenna
   19  Lyle, Alderman George Cardenas, Alderman
   20  Ricardo Munoz, Alderman Isaac Carothers, and
   21  Alderman Ray Suarez.
   22                 We have here sitting at the
   23  podium, I'm Alderman William Beavers, Chairman
   24  of the Mayor's Task Force.  We have the Chief
00003
    1  of Procurement, Eddie Griggs, and we have
    2  Colette Holt, who is a specialist in
    3  affirmative action.
    4            MS. HOLT:  Good morning, Mr. Chairman
    5  and members of the Task Force and interested
    6  members of the public.
    7                 The Chair had asked me to
    8  comment very briefly on the legal standards
    9  that are involved in Judge Moran's ruling, as
   10  well as give you a quick overview of the
   11  decision so that everyone's comments this
   12  morning can be more informed by the
   13  requirements of the Court and the
   14  constitutional constraints under which we
   15  labor.
   16                 As some of you probably know,
   17  the Federal courts apply what's called strict
   18  constitutional scrutiny to race-based
   19  government decision making.  That includes
   20  affirmative action programs and higher
   21  education such as you saw last year with the
   22  University of Michigan cases, as well as
   23  minority business programs and other types of
   24  government programs.
00004
    1                 Strict scrutiny has two
    2  elements.  The first is that the government
    3  must have a compelling interest in remedying
    4  discrimination, and it has to prove that
    5  compelling interest by a strong basis and
    6  evidence.  This is a very high evidentiary
    7  task.
    8                 The second component of strict
    9  scrutiny is that the program that the
   10  government adopts must be narrowly tailored to
   11  the evidence it presented.
   12                 Both of those elements have to
   13  be met.  It's not sufficient to prove that
   14  there is general society discrimination.  You
   15  must be able to prove that there is
   16  discrimination against minorities and women in
   17  the contracting marketplace in which the
   18  government operates.
   19                 General population is also not
   20  what the Courts look to.  The fact that
   21  approximately 50 percent of the citizens will
   22  be female, does not permit you to set a 50
   23  percent women business enterprise goal.
   24                 When you come to narrow
00005
    1  tailoring, the Courts look at several factors.
    2  The first is whether or not race-neutral
    3  methods are as effective; whether or not there
    4  are impermissible burdens on third parties.
    5  There must be proportionality between the goals
    6  that you set and the evidences that you have.
    7  The program has to be flexible.  It has to be
    8  the ability to seek waivers.  You cannot use
    9  formulistic points, and quotas are not
   10  permitted.
   11                 That said, I think it is
   12  important to recognize that for about ten
   13  years, between approximately 1992 and 2003, not
   14  a single local government minority business
   15  program has withstood a legal challenge.  Not
   16  one.  The Courts are extremely hostile to these
   17  programs, and everybody who actually went to
   18  trial lost.  Some jurisdictions, when they got
   19  sued, just gave up immediately and dropped
   20  their programs.  The result has been a very
   21  difficult burden for us to meet, but we also
   22  have learned that when there are no programs
   23  the participation by minorities and women will
   24  virtually disappear overnight.
00006
    1                 So the Courts are now much more
    2  interested, I think, in the actual results of
    3  affirmative action.  We have had some
    4  significant wins recently.  Last year the City
    5  and County of Denver's program was upheld, and
    6  the Federal Disadvantaged Business Enterprise
    7  programs have so far withstood judicial
    8  scrutiny.
    9                 That brings me to Judge Moran's
   10  opinion which he issued last December 29th.  We
   11  had an approximate six-week trial last May and
   12  June.  I was one of the experts for them.  And
   13  as Mr. Beavers said, I do specialize in
   14  designing and defending these programs.
   15                 Judge Moran found, first of all,
   16  that the City did prove discrimination.  He
   17  notes that Chicago is a union town and has had
   18  a long history of discrimination in the
   19  construction industry, particularly against
   20  Blacks.
   21                 He also found that the City has
   22  an interest in not having contracting return to
   23  mere monopoly power by White male-owned firms.
   24  However, the Judge did find that the program as
00007
    1  it's presently designed is not narrowly
    2  tailored.  And he points to various things that
    3  we need to take a look at.  For example, he
    4  says that the program is too broad, it's too
    5  rigid; that waivers were not available; that we
    6  used, as he put it, formulistic percentages and
    7  points.  He notes that the City did not have a
    8  personal net worth threshold for individual
    9  owners; that the graduation level was very
   10  high, certainly much higher than in the
   11  Department of Transportation's program; and
   12  that we do not have any sunset or termination
   13  date.
   14                 He also suggested that the City
   15  needs to focus more on the race-neutral
   16  measures such as Link Deposits, Quick Pay,
   17  Restrictive Sales, performance by primes,
   18  bonding remedies, direct pay to subcontractors,
   19  outreach, technical assistance, and last but
   20  certainly not least, better data collection so
   21  that we will know much more about who's out
   22  there in the marketplace and the behavior of
   23  prime contractors in their private sector
   24  projects.
00008
    1                 The Judge did something that had
    2  never happened before in an affirmative action
    3  case.  He gave the City of Chicago six months
    4  to revise the program.  No other Court has ever
    5  given a Municipal Government this type of
    6  opportunity to, as they say, amend not end its
    7  programs.  That's led to the creation of this
    8  Task Force, these hearings, and the process
    9  whereby the City will go about revising the
   10  program to meet the Judge's requirements.
   11            CHAIRMAN BEAVERS:  We also have the
   12  Chief of Procurement Officer, Eric Griggs.
   13            MR. GRIGGS:  Good morning, everyone.
   14  I'd like to thank everyone for coming out, and
   15  those of you that are testifying and those of
   16  you that have just come to support the program.
   17                 And as Collet said, this program
   18  that we have to modify is the construction
   19  program for the corporate fund dollars that are
   20  spent in hard construction, and we're not
   21  talking about anything as it relates to
   22  commodities or professional services.  So it's
   23  just hard construction dollars that are the
   24  City of Chicago taxpayer's money.
00009
    1                 So with that in mind, I just
    2  wanted to turn it back over to the Chairman so
    3  that we can get started with testimony.
    4            CHAIRMAN BEAVERS:  Thank you.  And
    5  first, Alderman Munoz.
    6            ALDERMAN MUNOZ:  Thank you,
    7  Mr. Chairman.  Just one point of clarification
    8  from Ms. Holt.  You just mentioned that the
    9  Judge found discrimination in the construction
   10  industry particularly in the Black Community.
   11  But he also made mention of Latino and
   12  women-owned businesses in his ruling; correct?
   13            MS. HOLT:  That's certainly correct,
   14  yes.
   15                 Well, he certainly put on a case
   16  that tended to prove discrimination against all
   17  of the included minority groups.  And in this
   18  very lengthy opinion, he does discuss the
   19  evidence that was presented for each group, and
   20  different types of evidence; statistical
   21  evidence, anecdotal evidence, expert reports,
   22  that type of thing.
   23            ALDERMAN MUNOZ:  Okay.  Thank you
   24  very much.
00010
    1            CHAIRMAN BEAVERS:  Our first witness
    2  is going to be Judith A. Roussel, District
    3  Director of SBA.
    4                 Did I pronounce your name right?
    5            MS. ROUSSEL:  Roussel, yes.
    6            CHAIRMAN BEAVERS:  Will you state
    7  your name and title for the record, please, and
    8  for the court reporter?
    9            MS. ROUSSEL:  Good morning.  I'm
   10  Judith Roussel, and I'm the District Director
   11  for the U.S. Small Business Administration for
   12  the Illinois District.  Prior to assuming that
   13  position in 1999, I did service SBA's associate
   14  administrator for about nine years, both for
   15  minority small business and for government
   16  contracting.
   17                 So I want to thank the Chairman
   18  and the Task Force for allowing me this morning
   19  to make some comments related to several
   20  aspects of the Federal government's Small
   21  Disadvantaged Business Procurement and Business
   22  Development programs.
   23                 The Small Disadvantaged
   24  Business, or SDB Program, was enacted through
00011
    1  public law 95-507 back in 1978.  And under that
    2  program, procurement preferences at that time,
    3  including set-asides, were given to small
    4  businesses that were at least 51 percent owned
    5  by socially and economically disadvantaged
    6  persons.  Also, evaluation preferences and cash
    7  incentives were offered to large prime bidders
    8  for exceeding SDB subcontracting goals.
    9                 As you are all well aware, the
   10  Department of Transportation's DBE program was
   11  challenged in 1989 by Adarand Constructors, and
   12  ultimately, as a result, the U.S. Supreme Court
   13  held that Federal programs benefiting
   14  minority businesses must also pass the strict
   15  scrutiny test that State and local government
   16  programs must adhere too.
   17                 And first, of course, it's two
   18  pronged.  There must be in existence compelling
   19  governmental interest justifying with
   20  specificity that particular finding of past or
   21  present discrimination existed in the
   22  marketplace.  And then, of course, the second
   23  part of that test is whether the program, to
   24  address this discrimination, is sufficiently
00012
    1  narrowly tailored.  So that is that the
    2  government must demonstrate that the program is
    3  reasonably designed to benefit only the victims
    4  of such discrimination.
    5                 Before and since the ruling,
    6  principal owners of SDBs have been required to
    7  be socially and economically disadvantaged.
    8  Members of certain minority groups were and
    9  remain presumed socially disadvantaged; others
   10  have to make a specific case of their own
   11  social disadvantage; and all have to be able to
   12  specifically prove economic disadvantage.
   13                 One of the major qualifying
   14  factors for that is that the qualifying owners
   15  can have a personal net worth of no more than
   16  $750,000 during the duration of their
   17  participation in the program.  Prior to
   18  Adarand, SDB's self-certified their status when
   19  bidding on prime and subcontracts.  Subsequent
   20  to Adarand, SDBs must be certified by SBA and
   21  must be listed in a national public database.
   22                 To meet the second part of the
   23  test, the Federal government established
   24  benchmarks to determine in which industry
00013
    1  categories SDBs had been under-represented in
    2  the Federal acquisition marketplace.  The
    3  benchmarks help to set target participation
    4  levels which, when reached, would trigger a
    5  suspension of preferences in that particular
    6  industry category.
    7                 So long as an SDB remains owned
    8  by socially and economically disadvantaged
    9  individuals and remains small by SBA's size
   10  standards, participation can continue.
   11                 The second program, the 8(a)
   12  Program, which is administered by the SBA,
   13  provides business development assistance which
   14  includes contracting preferences to SDBs that
   15  are specifically certified by SBA for this
   16  program.  They must meet the socially
   17  disadvantaged requirements, but the owners
   18  under the economic disadvantage status for this
   19  program, owners cannot have a personal net
   20  worth that exceeds $250,000 at the time they
   21  enter the program, and cannot exceed 750,000
   22  during -- any time during their participation.
   23                 The personal net worth limit is
   24  exclusive of a participant's primary residence,
00014
    1  and it also excludes their net worth in the
    2  subject or the certified business.
    3                 These companies must also, in
    4  the 8(a) Program, demonstrate what we consider
    5  potential for success.  They must submit
    6  financial statements to SBA annually, and they
    7  must be reviewed for continued eligibility and
    8  participation.
    9                 Because 8(a) companies, unlike
   10  other SDBs, may receive individual contracts of
   11  up to $3 million for service contracts and up
   12  to 5 million for manufacturing on a sole source
   13  basis, or they may participate in competitive
   14  set-aside contract awards, program
   15  participation is, therefore, statutorily
   16  limited to nine years for any company and for
   17  any individual who uses their disadvantaged
   18  status as an owner of an 8(a) company.
   19                 Participant's must submit a
   20  business plan upon certification, and they will
   21  be graduated from the program if they meet the
   22  objectives of that plan before the nine years.
   23                 Companies may also be terminated
   24  from the program for any number of causes.
00015
    1  It's long been a concern that companies enter
    2  the 8(a) Program and many acquire sole source
    3  unlimited competition contracts totaling tens
    4  of millions, in a few cases maybe hundreds of
    5  millions, of dollars; but when they complete
    6  their terms, suddenly they may no longer
    7  compete for the very contracts that helped them
    8  to grow and develop.
    9                 So several years ago SBA
   10  developed a Mentor/Protege Program that allows
   11  a graduated firm to mentor a current firm in
   12  its developmental stage, and to assist with
   13  management guidance, bonding, financing, vital
   14  aspects such as those, while allowing the
   15  mentor to participate in joint ventures with
   16  the protege on 8(a) contracts without
   17  jeopardizing the entities small or
   18  disadvantaged business status.
   19                 Lastly, as a business
   20  development program 8(a) requires a participant
   21  company to obtain a mix of business from
   22  private sector or Non- 8(a) government --
   23  Federal sources along with its 8(a) contracts
   24  in a ratio that is progressively toward non-
00016
    1  8(a) as their participation in the program
    2  continues.  And this is for the last five years
    3  on a transitional phase of participation.
    4                 There are also various
    5  incentives for large prime contractors to
    6  utilize SDB companies as team members,
    7  subcontractors, and suppliers.  The Small
    8  Business Act requires that large contractors
    9  submit and have approved a subcontracting plan
   10  when they are the successful bidder on a
   11  service or manufacturing contract of at least
   12  $500,000 and a construction contract of at
   13  least a million.  And that plan must set forth
   14  proposed utilization of small, small
   15  disadvantaged, women-owned, and veteran-owned
   16  subcontractors.
   17                 Agencies also often set
   18  mandatory subcontracting percentages.  They
   19  award evaluation credit for the highest
   20  percentage of proposed utilization, or they
   21  even offer cash incentive awards for exceeding
   22  the required participation percentages.
   23                 The subcontracting plan becomes
   24  a material part of the contract, and a prime
00017
    1  contractor can be held in default for failure
    2  to make a good faith effort to achieve the
    3  goals, and can be assessed liquidated damages,
    4  at least theoretically.  We don't know a lot of
    5  cases where that's actually happened.
    6                 But in its subcontracting
    7  program, SBA formally reviews the
    8  subcontracting programs of the large Federal
    9  contractors, and we give them a rating.  This
   10  forms the basis, amongst other things, for an
   11  outstanding rating, which leads to an award of
   12  excellence and -- if that rating is achieved.
   13                 And annually, SBA awards
   14  something called the Eisenhower Award in four
   15  industry categories to large primes nominated
   16  by government agencies, evaluated, ranked and
   17  selected based on many factors that demonstrate
   18  their outstanding performance in the
   19  utilization of small, small disadvantaged, and
   20  women-owned businesses.
   21                 And I can tell you that it may
   22  seem frivolous, but every person and every
   23  entity covets recognition.  The Eisenhower
   24  Award is competed for very very aggressively
00018
    1  and vigorously by the largest contractors to
    2  the United States Government.
    3                 On a final note, I would like to
    4  mention that SBA recently adjusted its
    5  revenue-based size standards for inflation, and
    6  published a proposed rule to increase the size
    7  standard for Facility Support Services and Base
    8  Maintenance up to $30 million from the previous
    9  6 million and 23 million level.  Currently the
   10  standard for general construction is 28 and a
   11  half million, and 12 million for the specialty
   12  construction trades.
   13                 Also, SBA just published a
   14  proposed rule to change or to convert all of
   15  our size standards -- some of which are now
   16  based on revenues and others on numbers of
   17  employees -- to convert all of them to ten
   18  bands of employee-based standards.  In some
   19  industries, including construction, that would
   20  still be a ceiling for revenues, but it's
   21  expected it would be considerably higher than
   22  the current 28 and a half million level.  That
   23  is currently open for public comment, I think,
   24  through sometime in May.
00019
    1                 With that, I'll conclude my
    2  remarks.  Thank you for the opportunity, and we
    3  will be happy if you had any questions that
    4  you'd like to ask.
    5            CHAIRMAN BEAVERS:  Alderman Cardenas,
    6  then Alderman Ed Smith, then Mr. Nakachi, and
    7  Attorney Earl Neal.
    8                 All right.  Alderman Cardenas.
    9            ALDERMAN CARDENAS:  Thank you.  I'll
   10  be brief.  I'll be brief in my questions.  I
   11  just have a couple of ones.
   12                 I would like to get your
   13  sense -- I want to know your profile on -- of a
   14  company that has a net worth of no more than
   15  $750,000 --
   16                 The purpose of what we're trying
   17  to do, we're going to get a good -- at least in
   18  my part -- want to get a good idea of what the
   19  company looks like so we make the right
   20  decision.  So if you could answer that for me.
   21                 And second, you talked about
   22  that the SBA uses good faith efforts.  I'd like
   23  to know how many companies have been terminated
   24  based on that assumption.  And that would be
00020
    1  good for now.
    2            MS. ROUSSEL:  Okay.  First, on the
    3  $750,000 net worth, this is the personal net
    4  worth of any individual owner who uses their
    5  disadvantaged status as a part of the company.
    6  So it's not the company per se, but it's the
    7  individual owners.
    8                 And, you know, it's been a very
    9  controversial aspect of the SDB and the 8(a)
   10  Program for many many many years.  For the 8(a)
   11  Program it's actually in statute.  And, you
   12  know, a lot of people feel like it's too low a
   13  standard for today.  The whole structure of the
   14  minority business community has changed
   15  drastically since the inception of the 8(a)
   16  Program almost forty years ago; yet, the
   17  personal net worth standard hasn't changed.
   18                 And the $750,000 standard we
   19  have looked at, and there's been a lot of
   20  discussion about whether that needed to be
   21  raised, but --
   22            ALDERMAN CARDENAS:  What is your
   23  professional opinion?
   24            MS. ROUSSEL:  I'm sorry?
00021
    1            ALDERMAN CARDENAS:  What is your
    2  professional opinion in regards to the amount,
    3  if there is an amount?
    4            MS. ROUSSEL:  You know, in the --
    5                 Actually, the SBA administers
    6  the programs.  And we don't make those rules,
    7  they're statutory or regulatory.  And, you
    8  know, I certainly don't want to sit here and
    9  say I don't have a personal opinion; but, you
   10  know, the government's decision as of now has
   11  been to keep it up to 750,000.
   12            ALDERMAN CARDENAS:  But in your
   13  opinion, professional opinion that is, based on
   14  your being accessible to the SBA program, what
   15  that number should look like based on your
   16  experiences running the program?
   17            MS. ROUSSEL:  Well, I would think it
   18  varies, you know.  It depends on the thought
   19  processes that certain industries require a
   20  smaller capitalization for start-ups.  And then
   21  there are industries in which, you know, if you
   22  are an individual with a $250,000 or less
   23  personal net worth, you probably don't have the
   24  wherewithal to capitalize business in certain
00022
    1  industries.
    2                 So, you know, again, if I had a
    3  professional opinion, it would be that perhaps
    4  there should be a look at the industry
    5  structure, what it requires to capitalize the
    6  business in a certain industry, and that
    7  perhaps the personal net worth should somehow
    8  be relevant to that.
    9            ALDERMAN CARDENAS:  And on good faith
   10  effort, how many really have been terminated?
   11  I mean, does that work?
   12            MS. ROUSSEL:  I will tell you that
   13  it's been very, practically speaking, it's been
   14  very difficult for the government to --
   15            ALDERMAN CARDENAS:  Ascertain if it's
   16  good faith?
   17            MS. ROUSSEL:  -- to prove that there
   18  was not a good faith effort.  And, as I
   19  mentioned, while liquidated damages could
   20  actually be assessed, I don't personally know
   21  of any cases where that has happened from the
   22  SBA standpoint because it's really the
   23  contracting agency's responsibility to assure
   24  that subcontracting plans are being adhered to.
00023
    1  And the SBA has a responsibility to assure that
    2  a prime has a very good or an acceptable -- at
    3  least an acceptable small business program.  So
    4  we don't have the wherewithal to monitor every
    5  individual in contract.
    6            ALDERMAN CARDENAS:  And for the
    7  purposes of, obviously, this hearing and this
    8  program, that's just my concern, that we base
    9  it just on good faith.  I just don't know how
   10  we enforce that and how we come to measure that
   11  and what it's going to be.
   12            MS. ROUSSEL:  One of the ways the
   13  government sought to remedy this in recent
   14  times is by making an assurance to the
   15  subcontracting plan a part of the past
   16  performance record of the prime.  And past
   17  performance has been increasingly used as an
   18  evaluation criteria when awarding contracts in
   19  the future.  So if you have not met your
   20  subcontracting goals in the past, it could
   21  seriously jeopardize your chances in a real
   22  fierce competition in the future.  So that is
   23  one area where there has been some impact.
   24                 And there are also some
00024
    1  occasions where agencies have utilized the
    2  cash, you know, incentive awards for exceeding
    3  the proposed utilization in the subcontracting
    4  plans.
    5            ALDERMAN CARDENAS:  Thank you.
    6            MS. ROUSSEL:  Sort of a carrot rather
    7  than a stick.
    8            ALDERMAN CARDENAS:  Thank you,
    9  Mr. Chairman.
   10            CHAIRMAN BEAVERS:  Alderman Ed Smith,
   11  will you hold on a minute and let Alderman
   12  Stone speak?
   13                 Alderman Stone.
   14            ALDERMAN STONE:  Are you going to
   15  allow me to testify?
   16            CHAIRMAN BEAVERS:  Yeah, right there.
   17  Right there.
   18            ALDERMAN STONE:  I didn't want to
   19  interrupt your testimony.  I do want to testify
   20  before the Task Force, however.  I'm not asking
   21  a question, I want to testify.
   22            CHAIRMAN BEAVERS:  I understand, but
   23  do you have time?  You want to testify now?
   24            ALDERMAN STONE:  Yes.  Thank you.
00025
    1            CHAIRMAN BEAVERS:  I'm giving you
    2  time now.
    3            ALDERMAN STONE:  First of all, I want
    4  to apologize to the Task Force.  As many of you
    5  know -- several of my colleagues know I have
    6  been, for the last month and a half, I have
    7  been in major surgery, and I'm still
    8  recovering.  And in the last two weeks I've had
    9  another illness which has made it almost
   10  impossible for me to even read, so I didn't
   11  even know until this morning what was happening
   12  here today, even though I've received many
   13  letters from the Asian community.
   14                 Let me also say to you, of every
   15  four neigh -- four of my neighbors, one is
   16  Asian.  These letters are communications from
   17  the Asian community.
   18                 I'm absolutely insulted by a
   19  communication which I now know exists from
   20  Judge Moran.  Why am I insulted, a decision
   21  which suggests that the Asian community should
   22  be omitted in the minority status which it
   23  presently has.
   24                 When we sit in this room as a
00026
    1  body, all -- a majority of that body is
    2  African-American; almost half of the majority
    3  is Hispanic-American.  Yet, not one single
    4  Asian-American sits in the spot, and the
    5  closest thing to an Asian-American is me.  So
    6  it is obvious that an Asian-American is the
    7  smallest minority of all the minorities.
    8                 The Judge, in his ruling,
    9  indicated that they are -- because I haven't
   10  read the ruling because I couldn't read.
   11  That's the reason I'm wearing these glasses.
   12                 He indicated that because of
   13  their education and their attempt to move
   14  ahead, that the Asian-American community is not
   15  discriminated against and, therefore, should
   16  not be given minority status.  That is the most
   17  ridiculous statement I have ever heard in my
   18  life.  And I want those of you in the other
   19  minority statuses to think of how you would
   20  feel if any Judge said that about you in your
   21  minority status, if you attempt to move ahead
   22  you should be excluded.  That's ridiculous.
   23  That is one of the most ridiculous statements
   24  I've ever heard, anybody who attempts to move
00027
    1  ahead should be excluded.
    2                 He also indicated -- I guess
    3  that must be by reference -- that we can lump
    4  all peoples together; that, apparently, if some
    5  Asians are successful all Asians are
    6  successful.  I was always taught that one
    7  should not characterize and generalize against
    8  any group.  And that is -- no Judge sitting in
    9  any court should ever make a statement of that
   10  nature.  To assume that every Asian is
   11  extremely successful is ridiculous, and it's
   12  very -- by its very statement.
   13                 I understand also the Judge says
   14  there are insufficient evidences of any
   15  prejudices or other manners in which Asians are
   16  discriminated against.
   17                 I now come here and tell you
   18  that in one respect I must plead guilty.  A
   19  number of years ago -- and this is not going to
   20  make the City of Chicago look good -- a number
   21  of years ago when the City went to privatize
   22  and they chose to privatize certain groups of
   23  people, the first group they privatized were
   24  the engineers.  And who made up that group of
00028
    1  engineers, Asian-Americans and Russian Jews.
    2  And I sat silent.  And I shouldn't have sat
    3  silent because most of them lived in my ward.
    4  What did I do, I tried to find other placement
    5  for them.
    6                 You want examples of
    7  discrimination?  You want examples?  There is
    8  an example, Mr. Judge Moran, of where the City
    9  acted against Asians.  Ask the Asians who lost
   10  their jobs with the City of Chicago because who
   11  made up the engineer class of the City of
   12  Chicago, Asians.  And they were fired by the
   13  City of Chicago.  Sure, the City tried to find
   14  other employment for them, and, yes, I was able
   15  to help some of them find other employment, but
   16  they lost their jobs because they were
   17  discriminated against.
   18                 And don't tell me it just so
   19  happened that all those engineers happened to
   20  be Asians.  And I'm at fault because I didn't
   21  stand up at that time and say something.
   22                 So, Mr. Judge Moran, I tell you
   23  there are discriminations.  And if you live
   24  with Asians, you'll find little discriminations
00029
    1  every day on the street.  And those of you who
    2  are Hispanic and those of you who are
    3  African-American know what I'm talking about.
    4                 Discrimination isn't -- doesn't
    5  come up and slap you in the face every day,
    6  it's done in subtle ways.  It's done subtly.
    7  Tell Judge Moran about the subtleties of
    8  discrimination.  Tell these Asians in the
    9  audience about discrimination, they'll tell you
   10  what discrimination is.
   11                 I couldn't believe what I read
   12  in the newspaper this morning.  And believe me,
   13  it's hard for me to read.  I had Shingles of
   14  the eye -- of the left eye, and it's very
   15  difficult for me to read.  That's why I'm
   16  wearing these dark glasses.  But I couldn't
   17  stand to know that these hearings were going on
   18  and I couldn't -- and I had to testify.
   19                 There is discrimination.  You
   20  must find that there is discrimination against
   21  Asians, and you must report this back.  And any
   22  system that will take the smallest community
   23  that is being discriminated against and say,
   24  well, they're doing pretty good; yes, they are.
00030
    1  Some of them are doing very good, and God bless
    2  them because they believe in education, and God
    3  bless them.  I wish everybody would work as
    4  hard to move ahead in society as the Asian
    5  community does.
    6                 God bless everybody who moves
    7  ahead and fights discrimination, as all of you
    8  should.  Everybody should fight discrimination.
    9                 And that's really all I have to
   10  say.
   11            CHAIRMAN BEAVERS:  Alderman Ed Smith.
   12                 I think he had some questions
   13  for you.
   14            ALDERMAN SMITH:  Thank you very much,
   15  Mr. Chairman.  I've got a couple of questions.
   16                 First of all I want to thank you
   17  for coming down.  The 8(a) Program, as bad as
   18  it might seem in the initial stages, it did
   19  create some opportunities for the Blacks,
   20  minorities, to get some opportunities,
   21  especially through financial institutions and
   22  set-asides.
   23                 And since the 8(a) Program has
   24  been sort of like the grandparent of all of
00031
    1  this, do you feel that a program can be
    2  generated that could allow minorities to
    3  participate in these programs with a greater
    4  degree of presence and still live within the
    5  guidelines that has been set aside by Moran?
    6            MS. ROUSSEL:  Well, I think the 8(a)
    7  program is a good example of a program that has
    8  stood the test of time.  And I think one of the
    9  strongest points -- and everybody would agree
   10  with you that, you know, the program is not
   11  perfect.  One of the big issues, I think, is
   12  that when the program was established almost
   13  forty years ago, the structure of the minority
   14  business community was totally different than
   15  it is today, yet we're operating under the same
   16  statutory requirements.
   17                 But having said that, the
   18  strength of the program, I think, lies in the
   19  fact that there are very stringent requirements
   20  for certification, for showing not only social
   21  and economic disadvantage, but at the same time
   22  showing that you do have the potential to
   23  succeed with this kind of assistance.
   24                 So I think my answer would be, I
00032
    1  think a program could be structured that meets
    2  the, you know, the mandates laid out for the
    3  City, and that could be a successful program.
    4            ALDERMAN SMITH:  I guess our concern
    5  is that minority business is disappearing or
    6  having all kinds of problems trying to survive.
    7  And with the economy being what it is now, we
    8  have been put into these constraints, then it's
    9  going to hurt them even more.  And I want to
   10  talk to anyone who can help me come up with
   11  some ideas that will allow us to get in a
   12  position where these businesses can survive.
   13  Because definitely, this is a disadvantage.
   14                 The way this program -- the way
   15  the directives have been written by the Order,
   16  it is an adversity to the minority community
   17  who's in business.  And I'd like to talk to
   18  anyone who can give me some ideas on how we can
   19  come up with a program that can make this thing
   20  work and still live within the guidelines that
   21  have been set aside.
   22            MS. ROUSSEL:  I think by getting with
   23  the, not only the 8(a) Program but the Federal
   24  SDB Program, the fact that there is some limit
00033
    1  on personal net worth and the economic
    2  viability, I guess, of the company.  And it
    3  just happens in Federal programs to be set at a
    4  certain level, 750,000; but, you know,
    5  certainly that is something that could be set
    6  at a, I believe, at a different level.
    7                 To have a graduation I think is
    8  also workable.  Ours is done based on
    9  maintaining that economic disadvantage and
   10  staying within the size standards.  So I think
   11  within those confines you can meet those
   12  requirements by having a certain duration,
   13  having a graduation or a limited participation
   14  based on whatever factors you deem to be the
   15  appropriate ones.
   16            ALDERMAN SMITH:  Well, the last point
   17  is, you've talked about mentoring in your
   18  article -- in your presentation.  And I would
   19  like to sit and talk with you about that
   20  because I think that is one of the ways we can
   21  come up with some help, if we can get it into
   22  the program and make it acceptable to the
   23  Judge's Order.  So I'd like to talk to you
   24  along those lines.
00034
    1            MS. ROUSSEL:  Certainly.  Personally
    2  I think it's one of the best aspects of our
    3  program.
    4            ALDERMAN SMITH:  Thank you,
    5  Mr. Chairman.
    6            CHAIRMAN BEAVERS:  Mr. Nakachi.
    7            MR. NAKACHI:  Thank you,
    8  Mr. Chairman.
    9                 Are Asians included in the
   10  minority group that is presumed socially
   11  disadvantaged --
   12            MS. ROUSSEL:  Yes.
   13            MR. NAKACHI:  -- and if they are, on
   14  what basis are they included?
   15            MS. ROUSSEL:  Asians are amongst the
   16  original groups that were statutorily included
   17  in the 8(a) Program.  Other groups can petition
   18  the agency for participation, but Asians are
   19  amongst the original groups.
   20  African-Americans, Hispanics, Asians and Native
   21  Americans were all included in our programs
   22  from the inception.
   23            MR. NAKACHI:  Do you know what it
   24  took to include those groups in that
00035
    1  original -- including Asians in that original
    2  group?
    3            MS. ROUSSEL:  I can't tell you that
    4  I'm personally aware of it, you know.  It's
    5  been quite some time since that happened.  I
    6  know subsequently, over the years since I've
    7  been with the SBA there have been other ethnic
    8  groups that have petitioned the agency but did
    9  not by the agency's decision making compelling
   10  enough case I would say of broad discrimination
   11  over a long period of time.  It has to be
   12  long-term, chronic disadvantage based on
   13  discrimination, bias, et cetera.
   14            MR. NAKACHI:  Do you know if Asians
   15  are excluded from any other type of programs
   16  like this?
   17            MS. ROUSSEL:  Not to my knowledge at
   18  the Federal level.  It's a group that's
   19  included as a socially disadvantaged group in
   20  Federal contracting companies.
   21            MR. NAKACHI:  Thank you very much.
   22                 Thank you very much,
   23  Mr. Chairman.
   24            CHAIRMAN BEAVERS:  Okay.  Attorney
00036
    1  Earl Neal.
    2            MR. NEAL:  My question was just asked
    3  and answered.  Thank you.
    4            CHAIRMAN BEAVERS:  Okay.  Mr. Ed
    5  McKinnie.
    6            MR. McKINNIE:  Thank you,
    7  Mr. Chairman.
    8                 In reference to the annual
    9  Eisenhower Award, do we have any local
   10  contractors who have been either nominated or
   11  given the award?
   12            MS. ROUSSEL:  Just off the top I
   13  would say I know Boeing has received the award.
   14  It's for the large prime contractors.  It's not
   15  the small businesses.  Following -- Motorola,
   16  over the years just, you off the top of my
   17  head.
   18            MR. McKINNIE:  But no construction
   19  contractors?
   20            MS. ROUSSEL:  You know, I don't want
   21  to say that with absolute certainty.  I can
   22  certainly look into it for you, but I can't
   23  think of any just off the top.
   24            MR. McKINNIE:  And based on the
00037
    1  incentive that the contractors are given --
    2                 Well, what is the incentive
    3  based on?  Is it an incentive for contractors
    4  exceeding minority participation?
    5            MS. ROUSSEL:  If in certain types of
    6  contracts, if in the solicitation it is stated
    7  that the agency is looking for a certain target
    8  level of participation, they can actually offer
    9  specific amounts, sort of a bonus, a cash
   10  incentive, at the conclusion of the contract if
   11  those percentages have been exceeded.  So it
   12  varies.  It's not often used, but it is
   13  sometimes used in contracting.
   14            MR. McKINNIE:  But is that determined
   15  prior to the contract being bid?
   16            MS. ROUSSEL:  Yes.  Yes.  Any such
   17  incentive must be stated in the solicitation
   18  when it goes out.
   19            ALDERMAN BALCER:  Thank you.
   20            CHAIRMAN BEAVERS:  Ms. Hedy Ratner.
   21            MS. RATNER:  Thank you, Mr. Chairman.
   22  Thank you, Director Roussel.  Your information
   23  has been enormously valuable to us.
   24                 My question is on the revenue
00038
    1  cap.  I think that discussion on the personal
    2  net worth has been addressed.  But on the
    3  revenue cap, the SBA has increased the revenue
    4  cap just recently for graduation from the
    5  program.  It is now, you said, 28 million; is
    6  that correct?
    7            MS. ROUSSEL:  For construction, 28
    8  and a half million.
    9            MS. RATNER:  And that's been recently
   10  increased based on changes in the economy,
   11  changes in the nature of the industry.
   12            MS. ROUSSEL:  Exactly.  That was a
   13  part of the adjustment made in all of our size
   14  standards, revenue-based size standards
   15  adjusted for inflation.  And I want to just
   16  mention that that's not because a company is
   17  considered no longer disadvantaged, that's
   18  because they're no longer small, and both
   19  criteria must be met.
   20                 So the size standard control the
   21  small business aspect of it.
   22            MS. RATNER:  Is there any wiggle-room
   23  on the specialty construction trades?  Right
   24  now you have it set all at 12 million.  Is it
00039
    1  possible that within various trades that that
    2  is looked upon with some flexibility?
    3            MS. ROUSSEL:  Well, there is a
    4  process, and that is a possibility.  But it is
    5  a process.  The reasons high standards have
    6  been adjusted in certain industries, as I
    7  mentioned, separate from the inflation
    8  adjustment the Base Maintenance and that area
    9  has been proposed to be raised because we've
   10  been petitioned by the industry and they've
   11  made a case.  And our economists and
   12  statisticians have analyzed that industry.
   13                 So the answer is, it's a
   14  possibility but it has not been done in this
   15  last adjustment.  It was just an
   16  across-the-board adjustment.  And all the
   17  specialty construction trades are set at that
   18  same level.
   19            MS. RATNER:  12 million still.
   20            MS. ROUSSEL:  But there is a
   21  possibility to petition the SBA and to make a
   22  case, and we have in the past made specific
   23  adjustments when it was deemed warranted.
   24            MS. RATNER:  The Task Force is
00040
    1  looking to the SBA standards for setting some
    2  of our standards as well.  But you mentioned
    3  something else that was very interesting.  The
    4  proposed rule to convert all size standards to,
    5  you said, ten bands of employee-based --
    6            MS. ROUSSEL:  Right.
    7            MS. RATNER:  -- Standards.  What does
    8  that mean and how could that -- how different
    9  is that from the revenue cap you have now and
   10  what affect will it have?
   11            MS. ROUSSEL:  Well, at present the
   12  manufacturing industries, wholesalers,
   13  researching and development, certain areas are
   14  based on an employee size standard, so the
   15  revenues really, you know, are almost
   16  limitless.  And the proposal to convert, we
   17  have a broad array of size standards.  And I
   18  think about thirty-seven of them are in the
   19  revenue standards.  And the proposal is to
   20  convert all to an employees' base.
   21            MS. RATNER:  Including the
   22  construction industry?
   23            MS. ROUSSEL:  Including construction;
   24  however, for construction and some other
00041
    1  industries -- and I do have the proposal here.
    2  I could tell you exactly which ones if you were
    3  interested -- the proposal is to convert to an
    4  employee base size standard but to cap the
    5  revenues as well.
    6                 And I, as a matter of fact,
    7  yesterday had some discussion with our -- the
    8  headquarters as to exactly what that meant
    9  because it would appear on the surface you're
   10  now going to have two standards to meet instead
   11  of one.  And I was assured that that is factual
   12  except that it's anticipated this cap would be
   13  far greater than the 28 and a half million
   14  existing now for construction.  So it would
   15  truly allow considerable growth for companies
   16  in that industry.
   17            MS. RATNER:  Thank you.
   18            CHAIRMAN BEAVERS:  Chief Procurement
   19  Officer, Eric Griggs, you have a question?
   20            MR. GRIGGS:  But you still have
   21  $750,000 net worth, not being able to exceed
   22  that even under this new proposed rule.
   23            MS. ROUSSEL:  That is true.  But I
   24  would again remind you that is per individual
00042
    1  owner.  I think if you're 20 percent or more
    2  owner of the business and you claim a
    3  disadvantaged status, you, and all principals,
    4  may not.  It just has to be 50 -- I mean 51
    5  percent of the ownership has to be by
    6  disadvantaged persons.
    7            CHAIRMAN BEAVERS:  Ms. Ratner, are
    8  you through?
    9            MS. RATNER:  Yes.  Thank you very
   10  much.
   11                 Thank you, Mr. Chairman.
   12            CHAIRMAN BEAVERS:  Gloria Castillo.
   13            MS. CASTILLO:  Thank you,
   14  Mr. Chairman.
   15                 Good morning, Director.
   16                 I have a question about the
   17  status as it relates to race-neutral status.
   18  If you have a group -- you have several groups
   19  that are presumed to be disadvantaged, but
   20  other individuals may petition to be part of
   21  the 8(a) Program; therefore, is the program
   22  explicitly race-neutral because others can
   23  enter the program other than ethnic minorities?
   24            MS. ROUSSEL:  It has been deemed to
00043
    1  be race-neutral in that there was always the
    2  potential for nondesignated group members to
    3  make a case for their own individual social
    4  disadvantage.  They, prior to the decision
    5  after Adarand, they had to make this case to a
    6  clear and convincing standard.  And as a
    7  consequence, at the time that I ran the 8(a)
    8  Program I don't think we had had, you know, in
    9  the total history a dozen non-minority group
   10  persons to participate.
   11                 That standard was reduced to a
   12  preponderance of the evidence.  And since that
   13  time, there are a considerably larger number of
   14  nondesignated group members who participate in
   15  the program.  So it is -- it has met the test
   16  of being a race-neutral.
   17            CHAIRMAN BEAVERS:  Are you through?
   18            MS. CASTILLO:  Yes.  Thank you.
   19            CHAIRMAN BEAVERS:  Pam McDonough.
   20  Then --
   21                 Alderman Lyle, you have some
   22  questions?
   23            MS. McDonough:  Good morning,
   24  Director.
00044
    1                 In terms of setting these
    2  graduation levels, there is, just for our
    3  purposes, I think, us tying things to data
    4  that's related to a process or some statistical
    5  connection.  I think maybe it would be useful
    6  for you to explain to the group how that's
    7  done.  I believe there is some connection with
    8  the Department of Commerce, there's a committee
    9  that looks at different variables.  I think
   10  that would be helpful for us to hear.
   11            MS. ROUSSEL:  Is that for the
   12  benchmarking aspects for the SDB?
   13            MS. McDONOUGH:  For your 28.5 and
   14  your 12.  I mean, you said that goes through a
   15  process.  So it was my understanding that it
   16  had some connection also to other government
   17  bodies such as the Department of Commerce.  Is
   18  that correct?
   19            MS. ROUSSEL:  Well, actually, in
   20  setting the standards, that comes under SBA's
   21  purview.  And there is an analysis that's done
   22  on the structure of the given industry.  The
   23  standards are set based on the NAICS Codes,
   24  which used to be the CIC (phonetic) Codes.  So
00045
    1  to that extent, there is the involvement of the
    2  Department of Commerce.
    3                 But SBA does set the standards
    4  and SBA analyzes the structure of the industry.
    5  And then they do -- and I'm not a statistician
    6  or an economist, but they tried to explain it
    7  to me.  And to the extent I can stay awake,
    8  I'll explain it to you.
    9                 But there is an analysis done of
   10  the structure of the industry, and they look at
   11  the percentages of companies in the industry
   12  and where their revenues are.  And they compare
   13  it to a comparison group of other similarly
   14  structured industries, et cetera.  It's a
   15  process.  And I couldn't adequately describe it
   16  to you.
   17                 But back in 1953 at the agency's
   18  inception, there were what was called the two
   19  acre size standards that were set.  And that
   20  was $1 million for the retail and services, and
   21  50, I think, was the employee size standard.
   22  And through these analyses of different
   23  industries over the years, that's what -- how
   24  the levels have changed.  So now that 1 million
00046
    1  standard, for instance, the anchor, is now 6
    2  million for revenue-based standards and 500 is
    3  the anchor for the employee base.
    4                 But there is definitely a
    5  process.  I actually -- it's explained in the
    6  Federal Register Notice in great detail.  In
    7  fact, I can give you a copy.
    8            MS. McDONOUGH:  I think that would be
    9  useful if you'd share that with the Committee.
   10            MS. ROUSSEL:  I will.  But it's quite
   11  a process.  I don't, you know, totally
   12  understand though.
   13            MS. McDONOUGH:  When they were
   14  explaining this process to you on how they come
   15  up with these numbers, were they looking at
   16  what the annual revenues or gross receipts for
   17  large construction companies and then --
   18                 I mean, what did they do, assign
   19  a formula to what percentage of that makes it
   20  small?
   21            MS. ROUSSEL:  Yeah.  In fact, they
   22  stratified the industry by --
   23            MS. McDONOUGH:  -- The NAICS Codes.
   24            MS. ROUSSEL:  Exactly.  And they look
00047
    1  at, you know, revenue.  What percentage of the
    2  companies are at 100 million and over, and
    3  whatever percentage -- or at the lower revenue
    4  and --
    5                 So all of this is taken into
    6  account.  And, for instance, if 40, let's
    7  say -- I think the standard is 40 percent.  If
    8  40 percent or more of an industry is -- has
    9  annual -- average annual revenues not more
   10  than, you know, $5 million, then that's a
   11  significant portion.  And that sort of thing is
   12  taken into consideration, that may be that
   13  standard needs to be lowered.  But if a much
   14  larger percentage of the industry has a higher
   15  revenue base, then that helps to make the case
   16  for raising it.
   17            MS. McDONOUGH:  Sort of run a
   18  statistical formula against the numbers and
   19  that's how we get to the 28.5 --
   20            MS. ROUSSEL:  Absolutely.
   21            MS. McDONOUGH:  -- and the 12.
   22            MS. ROUSSEL:  In fact, I have a whole
   23  outbreak presentation on that I will be happy
   24  to make available to the Task Force.
00048
    1            MS. McDONOUGH:  One other question.
    2  You said the 750,000 net asset -- asset
    3  limitation is in the Federal statute.  Would
    4  you think that that might also be something
    5  that would better get reviewed in the context
    6  that you do set these numbers for size of
    7  company?  I mean, maybe using some kind of
    8  metric analysis in that same grouping might
    9  give us a better number compared to what I
   10  presume was a number plugged in the statute and
   11  not connected to any statistical analysis.
   12            MS. ROUSSEL:  I can't say that there
   13  wasn't some analysis at the time, but it's been
   14  so long ago that it's no longer relevant
   15  probably.  But I can tell you from my own
   16  personal experience it would seem that the
   17  simple thing to do is just change the statute.
   18                 However, we have learned from
   19  vast experience that often times one of the
   20  reasons, to be perfectly honest, I think there
   21  haven't been statutory changes to the 8(a)
   22  Program in, you know, almost four decades, and
   23  it's because once you open it up it's fair game
   24  to all sides of the issue.
00049
    1            MS. McDONOUGH:  Thank you.
    2            CHAIRMAN BEAVERS:  Alderman Lyle then
    3  Alderman Carothers.
    4            ALDERMAN LYLE:  Some of the questions
    5  I was going to ask, and I was particularly
    6  interested in the process, and so we really
    7  would be interested in you getting that to the
    8  Chair and he can give copies to us.
    9                 The statistics that they used in
   10  formulating their decision on nationwide
   11  statistics in terms of what contractors over
   12  the country would earn --
   13            MS. ROUSSEL:  Yes.  Sure --
   14            ALDERMAN LYLE:  -- and that would
   15  include, like, the Halliburtons (phonetic) and
   16  those kind of people.
   17            MS. ROUSSEL:  Sure.  Sure.  They look
   18  at the structure of the industry, whether, you
   19  know, that's who dominates an industry or, you
   20  know, our small business dominated industries
   21  as well.
   22            ALDERMAN LYLE:  And so technically
   23  the regions, since the SBA covers the total
   24  United States, they would be doing a regional
00050
    1  analysis of what the contractors make and
    2  taking that to another level.  And, regionally,
    3  we may have different standards here in the
    4  City of Chicago because we have a different
    5  economic playing field than Paducah, Kentucky.
    6            MS. ROUSSEL:  You're absolutely
    7  right.  Since our standards have to cover the
    8  landscape nationwide, it's the economic census
    9  data that's used.  And it is conceivable that a
   10  given region might deem in its own regional or
   11  local program that a different standard is
   12  necessary.
   13            ALDERMAN LYLE:  And -- I'm sorry.  I
   14  didn't mean to interrupt you.
   15                 The areas that have been
   16  recently amended you said were facilities
   17  management and base --
   18            MS. ROUSSEL:  Yes.  Base -- Facility
   19  Support Services and Base Maintenance.
   20                 Base Maintenance is a
   21  subcategory of Facility Support Services.  And
   22  those were two that are proposed to change
   23  because of some specifics in the structure of
   24  that industry, or what is typically -- you're
00051
    1  generally talking about, you know, federal
    2  government procurement, in that area.  And a
    3  lot of, I think, what may drive the need for
    4  the larger standards is that, you know,
    5  contract bundling.  I hate to use this dreaded
    6  term.  But in a way that has changed the
    7  structure of what Base Facility Support
    8  Services means, and I think that's why that was
    9  revisited.
   10            ALDERMAN LYLE:  Base meaning on bases
   11  or buildings, or Army Bases and those type of
   12  things?
   13            MS. ROUSSEL:  Exactly.  Exactly.
   14            ALDERMAN LYLE:  And I just want a
   15  clarification.  You said that people in the
   16  industry petitioned the SBA to make these
   17  changes, and then they submitted their
   18  documentation?
   19            MS. ROUSSEL:  That is correct.  And I
   20  think there is not a real -- in other words,
   21  there is not a petition process whereby you
   22  have to -- we have to react or we have to make
   23  a change, but information industries often will
   24  come and present statistical documentation or
00052
    1  other relevant information that shows our
    2  standards are now obsolete.  And if they make a
    3  sufficient case along with the research that
    4  our own size standards office does, then a
    5  decision can and occasionally is made to
    6  revisit a particular standard that might need
    7  to be raised.
    8            ALDERMAN LYLE:  And can SBA do that
    9  in itself, they don't have to go back to
   10  Congress to get --
   11            MS. ROUSSEL:  No.  It's a regulatory
   12  process so it's published and we get comments,
   13  and it goes through that process.  And
   14  periodically, we will make across-the-board
   15  adjustments for inflation.
   16            ALDERMAN LYLE:  Thank you.
   17            CHAIRMAN BEAVERS:  Alderman
   18  Carothers.
   19            ALDERMAN CAROTHERS:  Thank you,
   20  Mr. Chairman.
   21                 Good morning, Director.
   22            MS. ROUSSEL:  Good morning.
   23            ALDERMAN CAROTHERS:  I just have a
   24  couple of questions, and I think your testimony
00053
    1  certainly has been thought-provoking for many
    2  of us, as you're receiving a lot of questions.
    3                 What's kind of interesting is
    4  your testimony regarding the Mentor/Protege
    5  Program.  And it's interesting on one front
    6  because certainly it would allow for companies
    7  to still be involved in the process and at the
    8  same time helping to build other companies.
    9  But I guess what really makes it useful is if
   10  you have a large number of people graduating
   11  from the program to begin with.  If you don't
   12  have a large number of people who graduate from
   13  the program, then you really don't have the
   14  opportunity for them to mentor to allow them to
   15  stay in the program.  So what is the graduation
   16  rate from the program that you have?
   17            MS. ROUSSEL:  Well, there's --
   18  everybody has a nine-year term.  We use the
   19  term "graduation" fairly loosely because when
   20  you complete your nine year term, you know, we
   21  say you graduated; but technically, graduation
   22  means that you have met the objectives of your
   23  business plan, or for some reason you're going
   24  to leave the program before the nine-year
00054
    1  expiration.
    2                 But, you know, at the end of the
    3  nine-year term you can also serve as a mentor.
    4  Actually, non- 8(a) graduates can participate
    5  conceivably as mentors also, but it's to mentor
    6  existing 8(a) companies.
    7                 So everybody graduates or
    8  everybody completes participation at some
    9  point.  It's not the norm that a company is
   10  graduated early; but, for instance, if their
   11  size standard -- if they get larger than the
   12  size standard for their primary NAICS Code,
   13  then there is a process by which they are
   14  graduated.  If a company has become -- is
   15  deemed to have become successful and met the
   16  needs that they sought by participating -- this
   17  is fairly rarely but -- that this happens, that
   18  we graduate them for that purpose.
   19            ALDERMAN CAROTHERS:  And the second
   20  part of the question would be, then, when they
   21  are allowed to a Mentor/Protege Program, and it
   22  indicates in your written comments, it says,
   23  providing vital management guidance, bonding
   24  and financing.
00055
    1            MS. ROUSSEL:  As examples, yes.
    2            ALDERMAN CAROTHERS:  -- but it also
    3  includes self-performing work.  Are they also
    4  allowed to do that with the contract?
    5            MS. ROUSSEL:  It means that by having
    6  a mentor-protege relationship, the mentoring
    7  company is able to help with developmental
    8  assistance to the protege company, and that
    9  might be by helping, if they joint venture --
   10  they're allowed to joint venture and
   11  participate in 8(a) contracts, for example,
   12  without jeopardizing the size standard or any
   13  of those requirements.  And what the mentor can
   14  bring to that joint venture perhaps is bonding
   15  capability that the protege company doesn't
   16  have, or provide financing for the contractor
   17  or some management structure.
   18                 So the protege company is
   19  receiving some benefit from it.  And also in
   20  the agreement, in a joint venture agreement, we
   21  have to assure that the protege company is
   22  receiving the bulk of the benefits from this.
   23            ALDERMAN CAROTHERS:  And that would
   24  be my next question.  What is the participation
00056
    1  level?  Is there a set level of participation?
    2  Is it, like, 50/50 or is it 70/30?  What is the
    3  participation level for the mentor versus the
    4  protege?
    5            MS. ROUSSEL:  I was getting ready to
    6  tell you my expert on the detail of that is
    7  sitting here, and we could ask him.  This is
    8  Robert Connor, and he is the head of 8(a)
    9  Program locally and he knows what goes into
   10  these agreements.  If you don't mind, I would
   11  ask him to comment on the specifics.
   12            ALDERMAN CAROTHERS:  Mr. Chairman --
   13            CHAIRMAN BEAVERS:  He's coming down.
   14                 Will you state your name and
   15  title for the record, please?
   16            MR. CONNOR:  Robert Connor, Assistant
   17  District Director, U.S. Small Business
   18  Administrator.
   19            CHAIRMAN BEAVERS:  All right.  Did
   20  you hear the question?
   21            MR. CONNOR:  Yes.  Under the
   22  Mentor/Protege Program, as a joint venture
   23  partner the profits -- props profits have to be
   24  51 percent for the 8(a) firm and 49 percent is
00057
    1  the max that a mentor can receive on a
    2  contract.
    3                 As far as the performance, there
    4  is performance requirements on all Federal
    5  contracts.  The general construction normally
    6  is 15 percent, the 8(a) requirements is a
    7  significant portion of that 15 percent.
    8            ALDERMAN CAROTHERS:  Thank you,
    9  Mr. Chairman.  He answered my question.
   10            CHAIRMAN BEAVERS:  Hedy Ratner.
   11            MS. RATNER:  Thank you.
   12                 Two questions.  One is, I was
   13  most interested in the race gender neutral
   14  program about including past performance for
   15  prime contractors in terms of awarding a
   16  contract for the future as a way of including
   17  minority women-owned business on private sector
   18  work, not just Federal work; is that correct?
   19            MS. ROUSSEL:  Well, it's actually
   20  often times used in a solicitation for our
   21  Federal contract because there is a past
   22  performance record generally based on Federal
   23  contracts because that's easier for the
   24  government to --
00058
    1            MS. RATNER:  Could it also be applied
    2  to private sector where it would be a way for
    3  us to have an incentive for prime contractors
    4  to participate in minority and women-owned
    5  business programs on private sector work in
    6  order to have additional incentives for them to
    7  be awarded a government contract?
    8            MS. ROUSSEL:  Absolutely.  If there
    9  is an appropriate mechanism in place to collect
   10  the data, to keep a rating on performance, then
   11  it certainly could be incorporated.
   12            MS. RATNER:  Great.  And the second
   13  question is the dreaded contract bundling
   14  question.
   15                 We did have someone testifying
   16  yesterday on contract bundling, but it didn't
   17  address the issue from our perspective, which
   18  is contract bundling and the adverse effect of
   19  contract bundling and strategic sourcing harm
   20  mino -- small minority and women-owned
   21  businesses.  I understand that there are new
   22  Federal regulations to limit contract bundling
   23  just on that rationale alone; is that correct?
   24            MS. ROUSSEL:  Well, anecdotally, we
00059
    1  all know that contract bundling is detrimental
    2  to small business.  What has happened, SBA has
    3  long had very broad authorities to challenge
    4  any procurement strategy that we thought was
    5  going to diminish the potential for small and
    6  disadvantaged and women-owned businesses to
    7  participate.  However, there was a change in
    8  the statute in 1997, I think it was, that, in
    9  effect, gave agencies a lot more flexibility to
   10  do contract bundling.  And it was not -- a
   11  challenge could not be triggered just by the
   12  detriment to small business.  It was based on
   13  agencies were allowed to bundle if they were
   14  going to save money for the government, et
   15  cetera, et cetera.  They worked a lot of ways
   16  in which that could be done.
   17                 Since then there's been a
   18  regulatory change that requires agencies to
   19  justify contract bundling, and it also gives
   20  more authority to the offices of Small
   21  Disadvantaged Business utilization.  It
   22  requires them, actually, to review any proposed
   23  bundled contract by their agency.  It requires
   24  the head of that agency to report to the
00060
    1  Congress annually or periodically on the
    2  contracts that they bundle.  So it's supposed
    3  to help deter unnecessary bundling, but there
    4  is still a concept of necessary and justified
    5  bundling.
    6            MS. RATNER:  Could we get a copy of
    7  the regulations on that issue?
    8            MS. ROUSSEL:  Yes, I will get that to
    9  you.
   10            MR. RATNER:  And then, when there is
   11  contract bundling is there a requirement that
   12  there be second-tier subcontracting goals for
   13  smaller minority and women-owned businesses?
   14            MS. ROUSSEL:  Well, there is a
   15  requirement that if they are going to bundle,
   16  if they show that it's justified, they have to
   17  take steps to mitigate the detriment to small
   18  business.  One of the things that SBA has
   19  always done is to work on alternative
   20  acquisition strategies that include small
   21  business.  And if it can't be at the prime
   22  level through multiple awards, et cetera, our
   23  setting aside a part of it, then we ask that
   24  there be very strong subcontracting
00061
    1  requirements, either -- a government agency can
    2  dictate a minimum subcontracting requirement
    3  for a small disadvantaged or women-owned
    4  businesses.  And that becomes a part of the --
    5  a material part of the contract.
    6            MS. RATNER:  Thank you, Director
    7  Roussel.  You've finally given us the answer we
    8  wanted.
    9            CHAIRMAN BEAVERS:  All right.  We're
   10  going to try to move on.  We've held her long
   11  enough.
   12                 And Eric Griggs has one question
   13  for you.
   14            MR. GRIGGS:  I just have one question
   15  in terms of proposed rule making.  I know -- is
   16  it a fixed period of time or can this go on for
   17  years?
   18            MS. ROUSSEL:  It shouldn't, no.  We
   19  generally -- for instance, it's 60 days.  We
   20  propose the rule as a 60-day comment period.
   21  We do have to review and give ample
   22  consideration to all comments and then make a
   23  decision.  Sometimes we can do what's called an
   24  interim final rule where you start to implement
00062
    1  something but it's not final yet.  It could
    2  change.
    3                 If I had to give you -- you
    4  know, if it's a really hot issue, we usually
    5  try to move real fast, but six months is not
    6  unheard of.  I suspect that for something like
    7  this it's going to be a lot less, but that
    8  might be a normal time.
    9            CHAIRMAN BEAVERS:  Okay.  We want to
   10  thank you and we want to move on.  And we're
   11  going to take the first witness.  Each witness
   12  gets five minutes.  When this bell rings over
   13  here, your time is up.
   14                 The first witness is Jabril
   15  Muhammad.  Is that correct?
   16            MR. MUHAMMAD:  Yes, sir.
   17            CHAIRMAN BEAVERS:  All right.  Step
   18  down.  Ramesh Nair, is he here?
   19                 Have a seat, sir, and state your
   20  name and who you represent for the record,
   21  please.
   22            MR. MUHAMMAD:  Good morning,
   23  Mr. Chairman.  My name is Jabril Muhammad.  I'm
   24  the President and owner of M3 Products, a
00063
    1  specialty chemical manufacturing company
    2  located in South Holland, Illinois.
    3                 Before I begin, I want to thank
    4  the Chairman, the Task Force, the Aldermen, and
    5  all those individuals that's responsible for
    6  this particular hearing.
    7                 Currently, just prior to 9-11,
    8  we did some research in the market and we
    9  discovered that there was a viable program out
   10  here for a company and a technology like ours.
   11  We have 25 years of research and development
   12  experience in a personal care market, as well
   13  as 25 years of research and development with
   14  specialty chemicals, meaning that we possess
   15  that technology to manufacture carpet cleaners,
   16  all purpose cleaners, disinfectants, just about
   17  everything along that commodity class.
   18                 We were called out to O'Hare
   19  just prior to 9-11, and we developed some
   20  exciting technology for the end-users out there
   21  at the airport.  The whole staff actually
   22  approved our products, and they saw that our
   23  products had those cleaning efficacies that far
   24  surpassed some of the current market --
00064
    1  products that are on the market today.  And we
    2  thought that we had a very good product to use
    3  out there at the airport.
    4            CHAIRMAN BEAVERS:   Yeah, but what's
    5  your question?
    6            MR. MUHAMMAD:  My question is this:
    7  I favor this particular program because we're
    8  on a City-wide janitorial contracts right now,
    9  and we've been on these contracts since last
   10  year that was approved by the Mayor.  But we
   11  haven't received any type of business or
   12  purchase orders from the City of Chicago.  And
   13  we would still like to see this program move
   14  forward.  And if there needs to be some
   15  modification in that program, we certainly
   16  support that.  Because without that, I think
   17  that a lot of MBE companies would really have a
   18  wide gap in trying to procure any opportunities
   19  on the state, the local or federal contracting
   20  opportunities.  So we do favor that.  And I
   21  just wanted to come out and make that
   22  statement, and just to say that we still would
   23  like to have that opportunity to have a
   24  business relationship with the City and the
00065
    1  Federal government.
    2                 Thank you, sir.
    3            CHAIRMAN BEAVERS:  Thank you.
    4  Mr. Nair, is he here?
    5                 William Nino, Sharon Topel.
    6            MR. NINO:  Good morning,
    7  Mr. Chairman.  My name is William Nino,
    8  N-i-n-o.  I'm Vice President of --
    9            CHAIRMAN BEAVERS:  Nino.  Is that how
   10  you pronounce it?
   11            MR. NINO:  N-i-n-o, sir.
   12            CHAIRMAN BEAVERS:  Okay.  Thank you.
   13            MR. NINO:  I'm Vice President and
   14  head of operations for ABCO Environmental.
   15  It's a four-trade MBE contractor for the City
   16  of Chicago, certified in 1998 through 2008.
   17                 Since I've sat in the forum out
   18  here, what I've heard is a lot of SBA and 8(a).
   19  This is not what this is about -- or DBE.  This
   20  is about MBE.
   21                 And my MBE statement -- and I
   22  carry a letter bearing your signature and we're
   23  proud of it.  My problem is not using the
   24  letter for general contractors who are quote,
00066
    1  unquote, predominantly non-minority.  And
    2  sometimes they'll take too lightly to using
    3  that letter because they're forced into doing
    4  it, such as the CHA contract where you got to
    5  be 40 percent minority.
    6                 What's happened with these
    7  letters is -- and our qualification is it's
    8  being abused, not used.  They have to use it in
    9  sections of Walsh Construction, which we did
   10  $6 million worth of work.  Well, we wanted 3
   11  million and was told, you do 6 million or
   12  you'll take nothing.  So we did the $6 million
   13  in work.  Now, you don't have to be Albert
   14  Einstein to figure out you're going to have a
   15  financial cash flow problem if you're a 2
   16  million dollar a year company and all of a
   17  sudden you do $6 million worth of work; don't
   18  worry, we'll take care of you.  Sure they will.
   19  The other 40 percent, they don't care.  That's
   20  goes to the next contractor.  That's the way
   21  this goes.  So you're being used and you're
   22  being taken care of to a point.
   23                 Now, what happens when you have
   24  this cash flow problem?  What are you told?
00067
    1  We'll take over your company.  You'll take over
    2  my what; you'll take over my company.  We'll
    3  assume you're employees.  Well, that's not what
    4  you said then.
    5                 The Chicago Housing Authority
    6  right now is in possession of this potential
    7  Change Order for me and my father-in-law,
    8  Mr. Vasquez (phonetic) for $2.6. million.  We
    9  are closing our business Monday and moving.  We
   10  are out of business.  We have to rescind our
   11  Illinois Department of Public Health licenses
   12  for asbestos and lead to the City -- back to
   13  the State of Illinois because our insurance is
   14  invalid for comp and general liability, which
   15  we have no funds to possibly get because they
   16  are holding $2.6 million.
   17                 The loss report --
   18                 Because we did this job all
   19  alone.  We did ten high-rises for them; four
   20  trades and three buildings trades and six
   21  painting, environmental contract and
   22  demolition.  We finished those jobs, and those
   23  jobs went on for some eight months.  They told
   24  us to produce a loss report because they didn't
00068
    1  have -- what I have to say is going to be more
    2  than five minutes so I'll try to make it as
    3  short as possible.
    4            CHAIRMAN BEAVERS:  No.  What you have
    5  to say is you were abused.  They gave --
    6            MR. NINO:  Absolutely.
    7            CHAIRMAN BEAVERS:  -- they put you
    8  out of business and then they didn't pay you.
    9  Walsh does that to everybody; okay.  Listen,
   10  they do that to everybody.  And it's about time
   11  that you all, as contractors, get together and
   12  stop it.
   13                 You could only do three build --
   14  you put you out of business.  You should have
   15  saw it coming.  You can't meet the payroll.
   16  You understand?
   17            MR. NINO:  This is what was said to
   18  me, sir, and I quote from the Walsh Project
   19  Manager:  You will get your Change Order.
   20            CHAIRMAN BEAVERS:  That's what they
   21  tell everybody.  But if it ain't in writing,
   22  you ain't got nothing coming.
   23            MR. NINO:  Yes, sir.
   24                 So they know they got you.  And
00069
    1  they know they can use you, and they know they
    2  can abuse you.
    3                 Now, this is set up so when they
    4  bid, they ask for the minority letter.  I give
    5  the minority letter; now they want to schedule
    6  a GC one-on-one, it's a general contractor
    7  one-on-one form.  I give it to them.  I say,
    8  okay, I'll do a million in carpentry, a million
    9  in painting, a million in demo.  I don't want
   10  to, but I got to say it.  So you have $3
   11  million.  Now what happens?
   12                 See, the reason I've been in
   13  this program on the website in the parameters
   14  of this, yes, we want to make them use that
   15  letter; yes, they have to give them a GC
   16  one-on-one; yes, they have to prove they're
   17  using 3 million in MBE.  That's where it stops.
   18                 Now, who's policing it after
   19  that?  What happened to the MBE, did he
   20  successfully complete the job or was he, you
   21  know, didn't do the job?  Okay, he successfully
   22  completed the job; he did a great job; ten
   23  high-rises and we haven't been back for a
   24  touch-up in four trades.  That's 1700
00070
    1  apartments plus all the hallways, common areas,
    2  vestibules throughout, inside, outside,
    3  basement, the penthouse; not been back for a
    4  touch up yet, but we're out $2.6 million.
    5                 My children and his
    6  grandchildren of Puerto Rican descent are
    7  getting chucked out of high school.  And you
    8  know what Walsh tells me, don't take it
    9  personal.  My trucks are getting repossessed;
   10  my car is gone, his car is gone, and I'm not
   11  supposed to take it personal.  Well, if that's
   12  not personal, what is?
   13            CHAIRMAN BEAVERS:  How much does he
   14  owe you?
   15            MR. NINO:  CHA, 2.6 million.
   16            CHAIRMAN BEAVERS:  No, how much does
   17  Walsh owe you?
   18            MR. NINO:  Walsh -- and I didn't want
   19  to interrupt you while you were speaking,
   20  Mr. Chairman -- walsh did help me.  They tried
   21  to help me.  Of course, I had to finish the
   22  work.  Who else were they going to get?
   23  Because if I was off the job, they lose the 40
   24  percent and they would never finish that
00071
    1  project.
    2                 CHA owes Walsh who owes me.
    3            CHAIRMAN BEAVERS:  Who is your
    4  contract with?
    5            MR. NINO:  Walsh Construction
    6  Company.  And they tell me --
    7            CHAIRMAN BEAVERS:   Wait a minute.
    8  Who pays you when the job is complete?
    9            MR. NINO:  Walsh Construction
   10  Company.
   11            CHAIRMAN BEAVERS:  Okay.  Then Walsh
   12  owes you.  CHA don't owe you a dime.
   13            MR. NINO:  Yes, sir.
   14            ALDERMAN MUNOZ:  Any questions?
   15  Alderman Lyle.
   16            ALDERMAN LYLE:  I just had a comment
   17  to Mr. Nino.
   18                 One of the things that we were
   19  looking at when we were meeting, and some of
   20  our discussions, of course, were some of the
   21  problems that you talked about.  It's not
   22  unusual, it's very very unfortunate.
   23                 Sometimes you can contact CHA
   24  and they will help to resolve some of these
00072
    1  issues.  I don't know if you've done that or
    2  not --
    3            MR. NINO:  Oh, yes.
    4            ALDERMAN LYLE:  -- I'm just saying in
    5  a generic kind of sense --
    6            MR. NINO:  Elston every day.
    7            ALDERMAN LYLE:  But we are looking at
    8  monitoring -- better monitoring of these
    9  contracts; we are looking at revising Schedule
   10  C; we are looking at monitoring performance a
   11  little better than we've done because we are
   12  trying to prevent -- we're trying to grow
   13  businesses and empower businesses, not see them
   14  put out of business.  That's not what we're
   15  here for.
   16                 So it's unfortunate that we may
   17  not have had these things in play last year,
   18  but we are certainly working to make sure that
   19  five years from now or two years from now we're
   20  not sitting in another hearing like this and
   21  hearing the same kind of story.
   22            MR. NINO:  Well, is there anybody in
   23  this room that wants to help me save my
   24  business?  I'm asked by Walsh to call over to
00073
    1  CHA, if I got any clout.
    2            ALDERMAN LYLE:  Where do you live?
    3            MR. NINO:   Where do I live, my home?
    4            ALDERMAN LYLE:  Do you live in the
    5  Chicago area?
    6            MR. NINO:  Yes, (indecipherable) and
    7  Kostner.
    8            ALDERMAN LYLE:  And you know who your
    9  Alderman is?
   10            MR. NINO:  Yes.
   11            ALDERMAN LYLE:  Wait on the side when
   12  you get finished testifying.
   13            MR. NINO:  One thing about contacting
   14  CHA, I contacted Mr. Peterson and Mr. August
   15  Kitakino (phonetic) on a daily basis.  And, you
   16  know, if they called -- wrote back and told me
   17  to drop dead I'd feel okay, but they didn't
   18  even reply.  Nothing.
   19                 Now I understand that Mr. Kohler
   20  from Walsh Construction, the Vice President,
   21  who knows all about this, had contacted my
   22  lawyers, Jonathan and Templer (phonetic), and
   23  said the collateral damage from being on this,
   24  we have been out of operations.  We gave a
00074
    1  million dollars in contracts away because we
    2  couldn't do them, so there's a million on 2.6
    3  million.  We've got a legal bill of $78,000.
    4  Collateral damage again, with no income and
    5  nothing coming in, including an attorney bill.
    6                 Why do I have an attorney bill?
    7  I didn't do nothing wrong?  All I did was
    8  finish the jobs.  But now I have attorneys
    9  trying to get my money because at least they'll
   10  talk to the attorneys because they'll get
   11  forceful, unlike me, who, I can, and I get
   12  called hot head and this that and the other
   13  thing because they tell me don't take it
   14  personal.  When you're losing your --
   15                 My father-in-law's house is up
   16  on this in 90 days, his home that he bought in
   17  1945 -- I mean 1965.  His home is up and could
   18  be going to the bank, but I'm not supposed to
   19  take that personal.
   20                 So I don't know who governs
   21  this, but nobody is policing what happens to
   22  the MBE after the fact that a contract is
   23  given, issued, and they did their curing.
   24                 What about the direct payments
00075
    1  to subcontractors?  See, if they don't have my
    2  money, I don't got any funds.
    3            ALDERMAN LYLE:  We're working on it.
    4            MR. NINO:  I know you are.  And I
    5  want to --
    6                 See, one of the parameters --
    7  and I was like, yeah.  Yeah, well, this is one
    8  of the things:  You're a minority -- we're a
    9  minority contractor, whatever contractor,
   10  they're all owned by non-minorities, let's face
   11  it, 90 percent of them; okay.  So without using
   12  race, creed, or color, they know they're bigger
   13  than you.  And it comes down to dollars, not
   14  race.  They got you.
   15                 And when they can abuse this
   16  letter that they really don't like to use, that
   17  they have to use.  You're forcing them to do
   18  it, and they have a problem with that.  They
   19  can't do nothing about it because the majority
   20  rules and the letter stands.  And without your
   21  letter and the use of my letter, and his name
   22  on it and with your signature on it, you don't
   23  carry a bond.  So they have to use it although
   24  they don't want to use it, so they get you back
00076
    1  in other ways.
    2                 And you know what, and
    3  Mr. Peterson, head CEO of CHA, I sent him
    4  cordial letters, I've sent him -- there are --
    5                 That loss report of 2.7 (sic)
    6  million dollars, there's a ton of them in this
    7  building starting on the fifth floor.  They
    8  were hand-delivered there five times; no
    9  response.  No response from the Mayor or an
   10  aide, no response on the voicemail, no response
   11  on the e-mail --
   12            ALDERMAN MUNOZ:  Mr. Nino --
   13            THE WITNESS:  -- nothing.
   14            ALDERMAN MUNOZ:  -- we were trying to
   15  get you to respond to her question, and you've
   16  responded.  Thank you very much.
   17                 Is there another question,
   18  Aldermen?  Alderman Cardenas.
   19            ALDERMAN CARDENAS:  I think the Chair
   20  is correct.  I think all the problems you're
   21  having is that you're dealing with someone
   22  dealing in contract work.  The CHA does not
   23  give you a contract.  The contract was with
   24  Walsh, and Walsh should be responsible for
00077
    1  paying you.  And Walsh should be fining CHA if
    2  it didn't -- for whatever happened in that
    3  contract; if it didn't get done on time or it
    4  didn't get done right or maybe he
    5  underestimated the project, you know.  It was a
    6  cost overrun.  And that's something that's got
    7  to do with CHA.
    8                 The problem you're having is
    9  that they're not going to answer to you.  You
   10  know why, because you didn't contract with CHA;
   11  you did not.  So it's Walsh and you.  And, if
   12  anything, if you want help, then we need to get
   13  you the right help, but it's got to be through
   14  Walsh and whatever means that the City has, you
   15  know, if they do.
   16                 I don't think that the City
   17  deals with Walsh, but if there's a way to help
   18  you then that's the right way.  CHA, that's
   19  not --
   20            MR. NINO:  Well, my loss report is
   21  directed to CHA and that's what I was told to
   22  do by CHA, not Walsh, sir.
   23            ALDERMAN CARDENAS:  So you contracted
   24  with --
00078
    1            MR. NINO:  My contract is I'm a
    2  subcontractor, which you already know.  What
    3  happened is, CHA --
    4                 Just give me one second.
    5                 -- they did a high-rise.  You
    6  clear off the first floor, you move them
    7  around, you go 19, 18, 17, 16, 15, 14, so when
    8  you build the new building you go one to the
    9  top.  You knock that down.  You got down this
   10  group of ten buildings all over the place.  All
   11  over the place.  All throughout the day.  I
   12  couldn't spray paint because the floors were
   13  never cleared.  There's old people on it.
   14  That's a $500,000 difference spraying
   15  application and manual cut and roll.
   16                 No skip elevators.  Ten guys
   17  waiting for an elevator in one building, three
   18  hours a day each, 6, $7000 a day loss.  So it's
   19  a loss report which I was told to address to
   20  CHA, not Walsh.
   21                 As a matter of fact, Walsh is
   22  owed 8 million by CHA and a potential Change
   23  Order, so I hear.  That's not my business, but
   24  that's what I heard.
00079
    1                 Now, there's Jay Carpentry
    2  behind me, who's out of a couple of hundred
    3  thousand dollars; Thomas Mechanicals, Black
    4  owned, is out of a couple of hundred thousand
    5  dollars.  This goes on and on and on and on.
    6  Sure, okay.  It's Walsh, Walsh, Walsh, Walsh
    7  Walsh.  What's Walsh going to give me if CHA
    8  doesn't approve the potential Change Order.
    9            ALDERMAN MUNOZ:  Alderman, do you
   10  have a specific question?
   11            ALDERMAN CARDENAS:  That was it.  It
   12  was just a commentary.
   13                 Chief Procurement Officer, how
   14  do we get into --
   15            MR. GRIGGS:  Let me, without getting
   16  too bureaucratic here.
   17            ALDERMAN MUNOZ:  And short, please.
   18            MR. GRIGGS:  Well, I'll make it
   19  short.
   20                 I represent the City of Chicago
   21  in the 44 City departments, the larger
   22  departments being Aviation, Police, Fire.
   23  Those agencies, like CHA, they're sister
   24  agencies.  They have their separate procurement
00080
    1  officers, they have all of their separate
    2  financing and funding sources.  And the ways
    3  they raise money to function are done totally
    4  independent of my office, but I don't really
    5  get involved in sister agencies sort of
    6  squabbles because they have individuals to
    7  perform those functions.
    8                 CPS, Public Schools, the Housing
    9  Authority we mentioned, Park District, CTA,
   10  McPier, all of those are sister agencies that
   11  have a separate funding and there are separate
   12  individuals in place to deal with his issues.
   13  But they use the certification letter that
   14  comes from my office in order to make sure that
   15  the companies that are going to be utilized on
   16  these contracts have minority and women
   17  participation.  So that is the only involvement
   18  that we really have on a legal standpoint.
   19                 But for -- I don't like hearing
   20  things of this nature, and I don't know what
   21  all of the ramifications are.  It sounds like
   22  this has been a long and drawn out process.
   23                 But I'm willing to, you know,
   24  make a telephone call to see what we can do to
00081
    1  sort of help you with our problem --
    2            MR. NINO:  Thank you.  I can get the
    3  loss report to your office today.
    4            MR. GRIGGS:  All right.
    5            ALDERMAN MUNOZ:  All right.  Thank
    6  you.
    7            MR. NINO:  Thank you very much,
    8  Ladies and Gentlemen.
    9            ALDERMAN MUNOZ:  Sharon Topel from
   10  the Association of Subcontractors and
   11  Affiliates.  And after her will be Ronald
   12  Parker.
   13                 If you can come up, please,
   14  Ronald Parker.
   15                 Would you please identify
   16  yourself for the record?
   17            MS. TOPEL:  Good morning, Alderman.
   18  As you said, my name is Sharon Topel, and I am
   19  the Executive Director of the Association of
   20  Subcontractors and Affiliates, a local
   21  association of over 425 members.  I'm here to
   22  talk about helping our small subcontractor
   23  members who work with the City of Chicago.
   24                 And one of the ways that has
00082
    1  been proven successful in other areas is by
    2  instituting the direct payment method for
    3  subcontractors.  I would like to give you a
    4  little background about direct pay.  Direct pay
    5  is a method by which owners make payments
    6  directly to their contractors, subcontractors,
    7  and suppliers.  Parties associated with a
    8  particular contract provide banking information
    9  to the owners, and funds can be transferred via
   10  electronic deposit.
   11                 Private owners, as well as
   12  government agencies, can use this method of
   13  payment.  One of the most notable examples of
   14  direct pay among government agencies can be
   15  found in the Montgomery County, Maryland,
   16  Public Schools.  This school system is among
   17  the 20 largest school systems in the country in
   18  terms of enrollment.  In the mid '90's it
   19  embarked on a 500 million dollar building
   20  construction and renovation program.  With
   21  direct pay, the school district is spending 20
   22  percent less than the State average for its
   23  construction costs.
   24                 In Chicago, examples of direct
00083
    1  pay are numerous in the private sector
    2  projects.  The most significant private project
    3  that implemented direct pay was the
    4  Northwestern Memorial Hospital project.  This
    5  600 million dollar project was delivered on
    6  time and under budget thanks in large part to
    7  an aggressive direct pay program that afforded
    8  subcontractors timely payment via electronic
    9  deposit.  Direct pay was a key factor in
   10  bringing together a diverse group of
   11  subcontractors to work on the project.
   12                 Adopting the direct pay practice
   13  benefits all parties involved.  By using a
   14  third party to issue these payments, the City
   15  can continue to maintain its arm's-length
   16  distance from subcontractors, and at the same
   17  time substantially reduce its administrative
   18  costs.
   19                 The costs associated with
   20  retaining a third party can range between a
   21  half percent and one percent of the project's
   22  cost.  However, the City will realize
   23  substantial cost savings from increased
   24  competition and more competitive pricing.
00084
    1                 Many of our members,
    2  subcontractors, avoid bidding City work due to
    3  the serious payment delays.  If the City paid
    4  its general contractors and subcontractors
    5  directly, more companies would pursue these
    6  opportunities, which would bring more
    7  competitive pricing.
    8                 As I mentioned before, in
    9  Montgomery County, Maryland, the public school
   10  system saved more than 20 percent on its
   11  capital program by issuing direct pay directly
   12  to its contractors and subcontractors.  Prime
   13  contractors will realize the dramatic reduction
   14  in the costs associated with processing
   15  subcontractor payments.  These savings will
   16  likely be passed on to the City as pricing from
   17  prime contractors becomes more competitive.
   18                 The subcontractor doing business
   19  with the City will benefit from a more
   20  consistent payment system.  This consistency
   21  will bring many subcontractors back to Chicago,
   22  and the increased competition will lower the
   23  City's prices even further.  It will also
   24  provide greater access to capital for
00085
    1  subcontractors, particularly small
    2  subcontractors, due to their increased
    3  reliability of payments from the City and
    4  improved cash flow for their business.
    5                 Some will argue that paying
    6  subcontractors direct compromises a prime
    7  contractor's ability to insure quality control
    8  on a project.  However, a direct payment system
    9  would still require the prime contractor to
   10  approve the work of a subcontractor before
   11  approving any payments.
   12                 In 1999 Mayor Daley sponsored on
   13  Ordinance allowing the City to pay
   14  subcontractors direct, but it is yet to be
   15  fully implemented.  The City's system allows
   16  for processing of payments to subcontractors.
   17                 By implementing the direct
   18  payment system, which is one of the
   19  race-neutral measures mentioned here, Chicago
   20  would be helping the small subcontractors stay
   21  in business.
   22                 Thank you for the opportunity to
   23  speak here today.
   24            ALDERMAN MUNOZ:  Thank you.  We have
00086
    1  a few questions.
    2                 Alderman Carothers.
    3            ALDERMAN CAROTHERS:  Thank you,
    4  Mr. Chairman.
    5                 I have one question regarding
    6  that.  Even with the direct pay method, which I
    7  think is something that is important and I
    8  think that's one of the biggest impediments
    9  affecting subs today, if they need approval
   10  from the prime in order to actually issue that
   11  direct payment, what is it to keep the prime,
   12  for whatever reason, from actually issuing that
   13  approval?  I mean, it appears to me that the
   14  prime would always be able to, for some reason,
   15  say, do not pay at this time, for whatever
   16  reason.  It seems they still would have -- they
   17  would be the controller in terms of payment.
   18                 And not only that, one of the
   19  issues also may be the prime often time will
   20  say, well, I haven't been paid.  And I think
   21  that's another problem that we have is that,
   22  the slow payment even to the prime.  So in this
   23  program you're suggesting -- are you suggesting
   24  that the sub be paid only when the prime is
00087
    1  paid?
    2                 I think, secondarily, the prime
    3  would still have control, to me, if they would
    4  say, do not issue payment because I need a
    5  check -- because I need a check back, and that
    6  could still carry out one month at a time,
    7  another month at a time, and maybe six months
    8  down the road.
    9            MS. TOPEL:  Well, the two areas that
   10  I mentioned, the Montgomery County, Maryland,
   11  and at Northwestern Hospital, the owners, those
   12  owners paid the subcontractors direct after
   13  approval from the general contract --
   14            ALDERMAN CAROTHERS:  They needed
   15  approval from the general to issue payment.
   16            MS. TOPEL:  Right.  Now, Montgomery
   17  County, Maryland, I do know had a system in
   18  place where the general contractor, once they
   19  got paid from Montgomery County, had to approve
   20  the subcontractor's payment within 15 days or
   21  they, the subcontractor, could go back to the
   22  Montgomery County School System and demand to
   23  know why.
   24                 I'm not sure.  I don't know the
00088
    1  answer to Northwestern Hospital, how they did
    2  it.  All I know is that the members of my
    3  association that worked on the Northwestern
    4  project had no problems with Power
    5  Construction, who was the general contractor on
    6  that project, approving their payments in a
    7  timely manner so that they were able to get
    8  their payment.  And because they were able to
    9  do that, on their bidding they didn't have to
   10  put in time for payment, and so that's how the
   11  costs were under budget.
   12            ALDERMAN CAROTHERS:  But under both
   13  instances, the prime had to be paid first.
   14            MS. TOPEL:  The prime should be paid
   15  first.  But in the contracts it could state
   16  that once the prime is paid, they have a
   17  certain amount of time in which the pay the
   18  sub -- in which the subcontractor gets paid.
   19            ALDERMAN CAROTHERS:  Thank you.
   20                 Thank you, Mr. Chairman.
   21            ALDERMAN MUNOZ:  Thank you very much.
   22                 Next to testify is Ronald Parker
   23  from V.O.I.C.E.  Is he in the room?
   24                 David Namkung from Shah
00089
    1  Engineering, please come up.  And after
    2  Mr. Namkung will be Wayne Taubkon from Carnow
    3  Conibear.
    4                 Is Ronald Parker in the room?
    5            MR. NAMKUNG:  My name is David
    6  Namkung, and I'm a Vice President at Shah
    7  Engineering, Inc..
    8                 The reason I'm here today is to
    9  support the inclusion of all minorities, as
   10  well as women, African-Americans,
   11  Asian-Americans, Hispanics, Latino-Americans,
   12  and the WBE in the new City's Ordinance which
   13  comes to you on June 29th.
   14                 However, the focus of my
   15  testimony today will be on the potential
   16  exclusion of Asian-Americans from the new City
   17  Ordinance.  The reasons for this are as
   18  follows:  I represent an Asian-American firm; I
   19  am an Asian-American, Korean by birth;
   20  naturalized American citizen.  I'm also married
   21  to an Asian-Indian American.  And at the same
   22  time, it appears that, based on Judge Moran's
   23  ruling, that the group that is of greatest risk
   24  is the Asian-American group.
00090
    1                 After listening to yesterday's
    2  testimonials and the Q and A session, there
    3  seems to be a central theme that in order for
    4  this Task Force to basically include
    5  Asian-Americans, they are in the unenviable
    6  position of having to prove with hard
    7  statistical data or conclusive empirical
    8  evidence that Asian-Americans should be
    9  included.
   10                 Based on the evidence that Judge
   11  Moran apparently looked at, the support for
   12  Asian-Americans was quote-unquote, thin.  And,
   13  unfortunately, we have not seen the evidence.
   14  I would love to have that evidence made
   15  available to myself as well as some of the
   16  other Asian-American groups.
   17                 As many of you may know,
   18  statistics can be very misleading.  Data
   19  collection, data analysis, the variance, they
   20  build in margins of error for exactly this
   21  reason.  For example, let me give some examples
   22  to this Task Force of how statistics can be
   23  misleading, and also introduce some supporting
   24  statistics that I believe will help the Task
00091
    1  Force conclude that Asian-Americans are
    2  definitely discriminated against.
    3                 For example, if I were to take a
    4  coin -- I think everyone knows that if you take
    5  a coin and you flip it once, it will either
    6  land heads or tails.  But I think we all know
    7  that the probability of a head or a tail is
    8  50/50.  Well, how do you resolve that issue?
    9  How do you resolve that?  On one single trial
   10  you will be off by 50 percent on your result;
   11  okay.
   12                 If I flip it five times, the
   13  best I can do is 60/40, 40/60.  I will still be
   14  10 percent off on my result.  So how do you
   15  resolve that issue?  Any odd number of flips of
   16  that coin will not yield a 50/50 result.
   17  Statistics can be very misleading if they are
   18  not interpreted correctly.
   19                 Let me give you some other
   20  examples.  For example, Judge Moran may be
   21  looking at thin evidence to support Asian's
   22  inclusion, saying that Asians economically have
   23  achieved a level of success.  Well, if you
   24  don't overlay that with the amount of effort,
00092
    1  the amount of education, the amount of
    2  investment and time to reach that level of
    3  success, discrimination could be in the mix
    4  without representing itself in the actual end
    5  results.
    6                 For example, if an
    7  Asian-American is 25 percent more successful
    8  than another minority group, yet they worked 50
    9  percent harder to reach 25 percent additional
   10  success, where does the extra 25 percent go?
   11  Was it because of discrimination?  Does an
   12  Asian-American need to have a Master's Degree
   13  to achieve the same level of success that a
   14  White may with a high school diploma in this
   15  industry?  Those questions have to be answered
   16  in order for us to conclude whether there is or
   17  is not discrimination on this basis.
   18                 Third, the lack of hard
   19  statistical evidence to support the inclusion
   20  of Asians is very difficult in many cases
   21  because of sample size issues because of a lack
   22  of an organization that's gathering this
   23  information.  Well, if hard statistical
   24  evidence was a prerequisite to every decision
00093
    1  we have ever made as a society in life, where
    2  would we ever be?  Christopher Columbus would
    3  never have sailed to America knowing that
    4  there's no hard statistical evidence to support
    5  his coming here.  We would have never sent
    6  anybody to the moon knowing there's no hard
    7  statistical evidence to support that.
    8                 Now, understanding that we have
    9  some guidelines set aside by the Supreme Court
   10  that mandate us to find hard statistical
   11  evidence to support us, I know that we will
   12  have to endeavor to help this Task Force with
   13  that mission.
   14                 So on that vein, I'd like to
   15  speak about a couple of other items.
   16                 In this society of 2004
   17  discrimination is not very overt.  We do not
   18  see signs that say, Blacks to the back of the
   19  bus; we do not see, Colored water drinking
   20  fountains, and, White drinking fountains.
   21  Discrimination it not very overt.
   22                 My company, Shah Engineering,
   23  "Shah" is spelled S-h-a-h.  How many times have
   24  I seen it spelled "S-h-a-w"?  Well, quite
00094
    1  honestly, when you flip through the phone book
    2  or you look through the internet and there are
    3  two Shah's Engineering, one with a W and one
    4  with an H, you may think, let me call the one
    5  with the W because you know that the one with
    6  that H may be minority.
    7                 How do you quantify that?  Where
    8  is the data that suggests that?  Where is the
    9  data that says, if I call a company and leave a
   10  message with an Asian accent that phone call
   11  may be returned 50 percent of the time; if I
   12  call without an accent, that may be returned 80
   13  percent of the time.  How do you quantify that?
   14  Yet, that is discrimination.  It is very very
   15  covert discrimination.
   16            ALDERMAN MUNOZ:  Mr. Namkung, can you
   17  wrap it up, please?
   18            MR. NAMKUNG:  Yeah.  Sure.
   19                 In concluding, I also want to
   20  support Alderman Stone's view that the Asians
   21  as a group are not -- are quite diverse.  Let
   22  me throw out a couple of numbers supporting
   23  that diversity.  Proficiency in English, Asians
   24  speak quite a few different languages.
00095
    1  Hispanics, for the most part, speak Spanish;
    2  African-Americans, for the most part, have
    3  adopted English as their language.
    4                 44 percent of Cambodians and
    5  Laotians don't speak English proficiently;
    6  Vietnamese, 40 percent; Koreans, 33 percent.
    7  The top four are Asian-American groups that
    8  don't speak English.  The top three in the lack
    9  of high school diplomas are Asian-American
   10  groups.  In lowest median income, three of the
   11  top five are lowest in median personal income.
   12                 These things speak to the
   13  potential for discrimination when we go to bid
   14  for construction contracts and try to obtain
   15  construction contracts.
   16                 So in conclusion, I would just
   17  like to say thank you very much for your time,
   18  and that the Asian community would like to
   19  support the Task Force in their conclusion that
   20  Asians should be included in the City's
   21  Ordinance.
   22            ALDERMAN MUNOZ:  Thank you.
   23                 If you could please also provide
   24  us with copies of the documentation you had,
00096
    1  the statistics?
    2            MR. NAMKUNG:  They are not compiled
    3  in a professional manner.  I'd love to.  I'll
    4  compile and I'll  --
    5            ALDERMAN MUNOZ:  From your notes just
    6  type it up and send it to the Task Force.
    7                 And we had some questions?  One
    8  question, Alderman Lyle.
    9            ALDERMAN LYLE:  One of the things I
   10  just wanted to mention in your testimony is the
   11  fact that we really -- I don't think he said
   12  that he had to have hard statistical analysis
   13  and that that's the only thing we can consider.
   14  We can consider anecdotal.  And I think that's
   15  what we anticipated the people would come in
   16  with, an anecdotal kind of evidence for us.
   17  Because both of those have been acknowledged
   18  and approved by the Courts, and so that's what
   19  we were looking for.
   20            MR. NAMKUNG:  Yes.  I was fearful
   21  that Judge Moran's ruling and heard -- I guess
   22  the message behind the ruling seemed to
   23  emphasize that hard statistical evidence was
   24  necessary and, thus, that was my conclusion.
00097
    1            ALDERMAN LYLE:  Thank you.
    2            ALDERMAN MUNOZ:  Alderman Cardenas.
    3            ALDERMAN CARDENAS:  Yes, thank you.
    4  Just one quick question on statistics.
    5                 What do you estimate, and you
    6  probably know the answer, the census,
    7  Asian-Americans in Illinois or Chicago?  What
    8  is the census?  Just give me the number.
    9            MR. NAMKUNG:  It ranges just because
   10  unlike some other groups, if you're half Asian
   11  and half not, it's somewhere between six and
   12  seven percent.
   13            ALDERMAN CARDENAS:  What is it?
   14            MR. NAMKUNG:  Six and seven percent.
   15            ALDERMAN CARDENAS:  What was the
   16  number, just an actual number?  Is it a million
   17  or is it 200,000?
   18            MR. NAMKUNG:  I have a copy of that
   19  2000 census right here if you'll allow me a
   20  moment.
   21                 I believe Asians, inclusive of
   22  Pacific Islanders, is somewhere around 700,000.
   23            ALDERMAN CARDENAS:  What is the per
   24  capita income of that group?
00098
    1            MR. NAMKUNG:  I don't think I have a
    2  summary of that readily available, but I can
    3  get that fairly quickly.  The per capita median
    4  income, as an individual of that group,
    5  according to the Asian Nation Website is
    6  20,2000, which is 3,420 less than the average
    7  for an equivalent White group.
    8            ALDERMAN CARDENAS:  So you're in the
    9  high bracket.
   10                 In terms of businesses, what is
   11  the number of businesses, Asian businesses, in
   12  Chicago or Illinois?
   13            MR. NAMKUNG:  I'm sorry.  I don't
   14  have that statistic readily available.
   15            ALDERMAN CARDENAS:  Okay.
   16            MR. NAMKUNG:  But I can note all of
   17  these questions and --
   18            ALDERMAN CARDENAS:  Yes, I would like
   19  to know for the purposes of our --
   20                 And also we need to know the end
   21  revenues of those businesses that you have also
   22  throughout, including engineering firms,
   23  whatever happens to be an Asian business,
   24  minority business.
00099
    1            MR. NAMKUNG:  Sure.  I can not
    2  guarantee that that statistic would be
    3  available to me, but if it is available to me
    4  then I'll --
    5            ALDERMAN CARDENAS:  The Chambers of
    6  Commerce have their members and have a way of
    7  collecting that data.  And that will help us
    8  understand and look at the numbers so that we
    9  can respond to Judge Moran, you know, his
   10  opinion.
   11            MR. NAMKUNG:  Well, it was my hope to
   12  have those numbers readily available today, but
   13  unfortunately my involvement in this process
   14  has been somewhat delayed by a couple of
   15  different factors.
   16            ALDERMAN CARDENAS:  We need the data
   17  so that we can get this thing done and do it
   18  fairly.
   19            MR. NAMKUNG:  Absolutely.
   20            ALDERMAN MUNOZ:  Next we have Wayne
   21  Taubkon from Carnow Conibear.  And then after
   22  that Michael Gonzalez, if you can come down and
   23  be the next person ready to testify.
   24                 Alderman.
00100
    1            ALDERMAN TROUTMAN:  Thank you.
    2  Mr. Chairman.
    3                 I just wanted to make a
    4  statement because I read the paper this morning
    5  and from what I got from Judge Moran's opinion,
    6  on page three he talked about the exclusion of
    7  African-Americans from the construction
    8  industry was telling the history, it was
    9  primarily racial exclusion.  And then on page
   10  20 it talked about the statistical evidence of
   11  disparities respecting Asians that could
   12  support an inference of discrimination as thin.
   13                 However, on page 25 he said, a
   14  strong basis is an evidence emerged that
   15  African-American construction firms in the
   16  Chicago area are victims of discrimination and
   17  the credit market; Asian and Hispanic firms
   18  probably encounter some discrimination in that
   19  market, and women may possibly encounter some
   20  discrimination there too.
   21                 Now, given these distortions and
   22  variance, I believe it is here that the program
   23  fails.  And that's paraphrased, but that's what
   24  Judge Moran says.  I read that he's talking
00101
    1  about all minorities are suffering with
    2  discrimination, so I don't think that he
    3  excludes Asians.
    4            ALDERMAN MUNOZ:  Thank you.
    5                 Mr. Taubkon.
    6            MR. TAUBKON:  I'm Wayne Taubkon,
    7  Executive Vice President of Carnow Conibear and
    8  Associates.  We are a WBE firm based here in
    9  Chicago, and have been in business in Chicago
   10  for about 29 years.  I want to refine the
   11  comments down to just the three areas under
   12  Judge Moran's ruling; one, the net worth
   13  threshold, graduation level, and termination
   14  clause, if I could.
   15                 The net worth thresholds that
   16  we're talking about and 8(a) Program,
   17  everything, and $750,000 that we talked about
   18  this morning, in our opinion, is willfully too
   19  low, especially for the construction industry.
   20                 A $750,000 net worth of a
   21  contractor, a general contractor especially,
   22  describes somebody that has less than four
   23  employees, a couple of trucks, computers,
   24  whatnot.  It's a very small number.
00102
    1                 When you go to the bank or you
    2  go to the brokers with a net worth of $750,000,
    3  you will have a great deal of difficulty
    4  getting bonded for any kind of job because the
    5  net worth of your organization is way too
    6  small.
    7                 Consequently, to throw a company
    8  out of the program that's finally gotten to the
    9  750,000 threshold is very unfair to the
   10  organizations that are involved, because they
   11  have not been given the time to expand and grow
   12  to they're a bona fide stand-alone business
   13  that can compete in the marketplace.  So the
   14  750 is a number that is way too low.
   15            ALDERMAN CAROTHERS:  Mr. Chairman,
   16  point of clarification?
   17            ALDERMAN MUNOZ:  Yes.  Alderman
   18  Carothers.
   19            ALDERMAN CAROTHERS:  I think that
   20  when you're talking about net worth we're not
   21  talking about the net worth of the company,
   22  this is only personal.
   23            MR. TAUBKON:  Both.  We talked about
   24  both the net worth of the owner and/or the net
00103
    1  worth of the business.  And either way you take
    2  it, the 750 number is way too low because you
    3  would not be able to get the financing,
    4  insurance, all the things you're going to need
    5  to be able to compete in the open marketplace.
    6  That's the first thing.
    7                 We participate in this program
    8  both as a WBE company and at times as a prime
    9  contractor.  And as a prime contractor, you're
   10  saddled with the financial and risk
   11  responsibilities of -- and we're in the
   12  environmental consulting area.  So those risk
   13  issues are horrendously large, that could put
   14  you out of business with one mistake.
   15                 Consequently, when you look at
   16  companies to include in your bid or in your
   17  projects, one of the things you look at is the
   18  financial stability, bonding capabilities,
   19  length of time in business, insurance, all
   20  these criteria.  And the 750 number is going to
   21  take way too many companies out of the mix.
   22                 Now, when you talk about the
   23  companies and that kind of thing, and taking
   24  them out of the program, I think we've missed
00104
    1  the point that these are people.  And to bring
    2  companies up starting as new organizations,
    3  build up your $750,000 net worth as an owner
    4  who -- or as a company or whatever only to have
    5  the rug pulled out before they are able to
    6  stand alone, to be thrown out of the program
    7  really creates chaos, and it's very unfair to
    8  the individuals.  On the net worth threshold, I
    9  think that really needs to be addressed.
   10                 We participate on both sides of
   11  the equation.  I've been authorized by our
   12  employees -- there are 72 of us that are based
   13  here in Chicago -- we are absolutely, totally
   14  ethically, morally, economically in support of
   15  the affirmative actions program; why, because
   16  it's the right thing to do.  We face
   17  discrimination routinely as a WBE.  And I think
   18  it's been well-established by all the other
   19  people that have come out.  Unfortunately, it's
   20  there and it has to be dealt with and taken
   21  care of.
   22                 The graduation level, you take a
   23  general contractor that has one project that's
   24  a $25 million project, he's on the verge of
00105
    1  being pulled out of the program.  But you look
    2  at what happens in that $25 million project.
    3  He has to sub out.  If it's a general
    4  contractor he subs out the electrical, he subs
    5  out the concrete, he subs out the masonry, he
    6  subs out a lot of work.
    7                 And our industry, environmental
    8  consultant, out of the hundred percent of the
    9  funds that are given to us to complete a
   10  project, only 5 to 7 percent only stay within
   11  our company, which pays for the time and
   12  expertise that we have in our area.  The rest
   13  of it goes to the landfills, to the haulers, to
   14  the excavators, to the contractor digging out
   15  underground storage tanks, whatever it is.
   16                 So when you use the criteria
   17  even on the revenue side, the numbers are way
   18  too short because we are trying to take a --
   19  one concept, and take a round ball and stuff it
   20  in a whole bunch of square holes.  For a
   21  general contractor, $27 million is way too
   22  small; for an electrical contractor, concrete,
   23  it's way too small.
   24                 Eddie Forte is here this morning
00106
    1  with his Ready-Mix business, a multimillion
    2  dollar investment in that physical facility.
    3  So he can be taken out with just one project.
    4                 So if we can, I would like to
    5  encourage the whole organization to look at
    6  this and come up with multi-levels based on the
    7  type of businesses that are in there and what
    8  we need to make the playing field level.
    9  That's all anybody is really asking for.
   10                 And if we are going to build
   11  jobs and employment in the City of Chicago, we
   12  need to be able to build businesses in the City
   13  of Chicago who will in turn hire our residents.
   14  Right now that's not happening.  There is --
   15                 So the competition is so
   16  incredibly strong right now, down economy, that
   17  we are over capacity in every area.
   18                 We had a meeting at Chicago --
   19  or at CPS yesterday for -- owners'
   20  representative meeting.  123 different
   21  companies were represented to chase two
   22  positions that's going to be in that area.
   23  That just gives you a feel for how competitive
   24  the market is right now.
00107
    1                 I would like to make a
    2  recommendation to the City as well.  We have a
    3  huge task to save the affirmative action
    4  program.  It's going to be very difficult to
    5  write this up and do it.  But the City could
    6  help by hiring Chicago-based companies and
    7  Chicago residents to do the work.  There's not
    8  enough work there for everybody now.  And when
    9  we bring in out-of-state companies and
   10  everything to compete and they put up barriers
   11  for us to even be able to get into line to work
   12  with them, it makes the problem even worse.
   13                 And as far as the termination of
   14  the whole program goes --
   15            ALDERMAN MUNOZ:  Mr. Taubkon, could
   16  you wrap it up, please?
   17            MR. TAUBKON:  Yeah.
   18                 Judge Moran needs to come out in
   19  the real world and see what it's like.  The day
   20  discrimination stops, if he can demonstrate or
   21  the government or any system can demonstrate
   22  that it's stopped, then you terminate the
   23  program.  Until then, we keep it going because
   24  peoples' lives and livelihoods depend on this,
00108
    1  and it's the only way you can get up and get
    2  started as minority businesses or small
    3  business.  Thank you.
    4            ALDERMAN MUNOZ:  Thank you.
    5                 Alderman Cardenas.
    6            ALDERMAN CARDENAS:  Yes,
    7  Mr. Chairman.  Thank you.
    8                 You know, a point of
    9  clarification.  Obviously, I mean, you have
   10  said a lot and your comments are well taken.
   11  But I think we have to dissect everything that
   12  you say because, you know, graduation -- I
   13  think we need to help minority business, but we
   14  also need to push them further along so they
   15  can go on and become bigger and better things,
   16  not keep them in the program where it's going
   17  to be limited, as mentioned, a limited
   18  opportunity for a few.
   19                 And I think we want to help.  We
   20  want firms to graduate because -- not because
   21  of what the Judge said, but because we want
   22  competition.  And we want other businesses to
   23  come up the ladder, help them out, and then
   24  graduate.  That's the reason we want to do
00109
    1  this, not because there's a hidden agenda on
    2  that.
    3            MR. TAUBKON:  May I make a comment to
    4  that, please?  And your point is well-taken.
    5                 In the real word, this is what's
    6  happening.  You have companies that start,
    7  develop, grow, and get to a point where they're
    8  taken out of the program.  And guess what, then
    9  they go back out and the same discriminatory
   10  activity starts again.  What we've done is take
   11  one business and build it up, and it gets to
   12  the level of success.  Then the thank you you
   13  get is you put them out of the program and then
   14  the spiral starts again.  You bring another
   15  company in and it starts to grow and it fills
   16  the void that's left there.  And at the end of
   17  the session what have we gained; nothing.
   18            ALDERMAN CARDENAS:  What do we do,
   19  just keep three of them in the program?  Is
   20  that what --
   21            MR. TAUBKON:  I would highly
   22  recommend that as we get the successes, we put
   23  them on the shelf and continue their
   24  participation.  And then we start developing
00110
    1  another company to come in right behind them,
    2  in the same industries; if it's general
    3  contracting, if electrical, if it's whatever
    4  the component is.  If it's environmental
    5  consulting, we start another one and build them
    6  up; they get to a certain level up there, you
    7  stay in the program here, now let's go to the
    8  third, the fourth, the fifth.  It will be done
    9  one company at a time.  One company will be
   10  successful, hire local residents.
   11            ALDERMAN CARDENAS:  The nature of
   12  business, sir, is that -- which is competition,
   13  which is, you know, the strongest survive.  And
   14  sometimes it's very tough to regulate that.
   15  You're in a business-competitive environment,
   16  so you must adapt and you must survive.  So we
   17  also have to consider that.
   18                 We want to help the businesses,
   19  the minority businesses.  We want to help them
   20  so they can grow.  So that's the idea.
   21                 As far as their own management
   22  skills, they have to also come into play.
   23  Mentoring program will help; firms like
   24  yourself to come in and help a firm and then
00111
    1  once they graduate, not to fall.  Because it is
    2  to our advantage, as you say, to hire within
    3  our community, to keep them in the City, to
    4  keep the employment going because it benefits
    5  us all.
    6                 But, you know, there's a
    7  simplistic approach to it.  You say that, you
    8  know, we're going to keep everybody in the
    9  program, well, there isn't enough, and there's
   10  not enough for everybody.  You know, you want
   11  to have 20, 30, 40 firms, so what are you going
   12  to do?  And what about the ones that want to
   13  come up to the programs?  And there's no room
   14  for that.
   15            MR. TAUBKON:  This relates right back
   16  to our point that there is infinitely too many
   17  companies chasing too few projects.  There are
   18  too many people needing and looking for jobs
   19  that just aren't available.  So we have that
   20  working against us in the marketplace.  And
   21  when you take your successful companies and
   22  pull the rug out and make them unsuccessful,
   23  what do we gain?
   24            ALDERMAN CARDENAS:  I take your
00112
    1  comment that we need to look at local, you
    2  know.  And I'm a localist.  As I keep saying,
    3  I'm a localist, I'm not a globalist.  I'm a
    4  localist because I believe that we ought to do
    5  for our community first, so that I take your
    6  point.
    7                 And again, for what we're trying
    8  to do here today and set this program in the
    9  right way and on the right track will take that
   10  consideration, which is that maybe perhaps we
   11  ought to formulate something that speaks to the
   12  companies that are providing the jobs here
   13  locally for our residents in our community.
   14  That's a point well-taken.
   15                 I'm not so sure about the aspect
   16  of not having anybody graduate, because then --
   17  imagine if we just kept all the students and
   18  just don't graduate.  I know it's not, you
   19  know, it's not an example, but think about
   20  those in those terms.  We need to push you
   21  along, they need to grow, they need to be out
   22  on their own.
   23            MR. TAUBKON:  You need to take the
   24  companies that are general contractors, those
00113
    1  kinds of things, that get to be at a level, you
    2  know, naturally will go out of the program.
    3                 For smaller companies, a
    4  threshold of 10, $12 million is plenty to get
    5  them up to be a bona fide stand-alone business.
    6  And there is that point you will get, but the
    7  second you start to pull them out before we
    8  stop the discrimination --
    9            ALDERMAN CARDENAS:  I understand.  We
   10  need to do a better job of monitoring this.  We
   11  need to do a better job of enforcement.  We
   12  have to do that, I understand.  And in terms of
   13  the net worth, we'll look at, you know, and I
   14  suggest and your point suggests maybe do a
   15  graduation of, you know, of amounts.
   16            MR. TAUBKON:  Take them on.  Thank
   17  you.
   18            CHAIRMAN BEAVERS:  Thank you,
   19  Mr. Taubkon.
   20                 Mike Gonzalez, from the Hispanic
   21  American Construction Industry Association.
   22  And after him, we have Georgia Clayton, Unified
   23  Westside Black Contractors.
   24                 Are you still in the room,
00114
    1  Georgia Clayton?  If you can come up and you're
    2  ready to testify after Mr. Gonzalez.
    3            MR. GONZALEZ:  Good morning,
    4  Mr. Chairman, Alderman Lyle, Troutman and
    5  Carothers, Cardenas.  My name is Michael
    6  Gonzalez.  I am a licensed professional
    7  engineer in the State of Illinois, co-founder
    8  and Executive Vice President of Premier
    9  Engineers, which is a Chicago area leader in
   10  design and engineer.
   11                 I am also the current Board
   12  President of the Hispanic American Construction
   13  Industry Association, also known as HACIA.  We
   14  are a 225-member association of general
   15  contractors, trade contractors such as HVAC,
   16  electrical, carpentry, et cetera.  We have
   17  suppliers, construction managers, architects
   18  and engineers.
   19                 And Mr. Chairman and many in the
   20  room know that we recently had a 25 year
   21  celebration of advocacy in facilitating
   22  opportunities for our members.  We had some 15
   23  to 20 percent African-American, Asian, and
   24  women-owned businesses within our ranks,
00115
    1  although we are a predominantly Hispanic group.
    2                 Over the past five years, five
    3  to seven years at least, HACIA has been unique
    4  in our efforts to reach out to other minority
    5  constituencies because we felt that it made
    6  sense to collaborate up front on public
    7  opportunities.  Many of our members have
    8  promoted team arrangements we were in a
    9  position to do.  That included African-American
   10  and Asian teaming partners.
   11                 This is definitely true on some
   12  of the mega-projects such as the O'Hare
   13  Modernization Program and McCormick Place
   14  expansion.  And it is also true for many
   15  projects for the public schools, public
   16  building commission, Chicago Transit Authority,
   17  and many others.
   18                 HACIA's position is supportive
   19  of the following issues, some of which have
   20  been stated by others providing testimony thus
   21  far.  Among these are keeping the Task Force
   22  intact upon enactment of the new Ordinance,
   23  maintaining accessibility of data that you will
   24  be collecting on the success, and failure of
00116
    1  participants; self-performance work by
    2  contractors and subcontractors, providing for
    3  mentoring of MBEs and WBEs, transition after
    4  graduation, and perhaps most importantly a
    5  strong monitoring component with penalties for
    6  noncompliance.
    7                 I urge City Council members and
    8  other Task Force participants to consider the
    9  number of suggestions that you have already
   10  heard in testimony yesterday and today in the
   11  context that will maintain relationships that
   12  have been fostered among Hispanics,
   13  African-Americans, Asian, and women-owned
   14  businesses.
   15                 The projects that we have
   16  collaborated on during the relatively short
   17  tenure of the minority and women business
   18  program have put us in a position to be
   19  competitive on small and medium size projects,
   20  and capable of participating in a meaningful
   21  and strategic way on larger projects.
   22                 In closing, as you consider the
   23  refinements to the program, please do not allow
   24  the momentum built by forward thinking
00117
    1  businesses of every minority constituency --
    2  and this has been the most effective over the
    3  last few years -- don't let that be lost.
    4                 If you believe as I do, that the
    5  City of Chicago is a better place to live and
    6  to work because of its diverse and vibrant
    7  communities, resist the internal and external
    8  pressures that would allow us -- that would
    9  allow any of us to be dubbed out on an ethic
   10  basis.  We are all needed to make this program
   11  work.
   12                 Thank you.
   13            ALDERMAN MUNOZ:  Any questions?
   14                      (No audible response.)
   15                 Mr. Gonzalez, thank you very
   16  much.  If you can provide us with a copy of
   17  your testimony for the record, please, when you
   18  get a chance.
   19                 Ms. Georgia Clayton from United
   20  Westside Black Contractors.  And the Task Force
   21  will be taking a recess at 12:30.
   22                 So, Ms. Clayton, can you come up
   23  and testify, please?
   24            MS. CLAYTON:  Good afternoon, Ladies
00118
    1  and Gentlemen.  As you know, my name is Georgia
    2  Clayton, and I am the CEO of the Unified
    3  Westside Black Contractors.
    4                 Westside Black Contractors were
    5  organized in 1998 with the insistence of
    6  Alderman Carothers.  At the time of our
    7  inception we hosted 63 Westside contractors.
    8  Today, there are 11 left.  Discrimination,
    9  blatant.  They don't try to hide it anymore.
   10                 We have to prove first of all
   11  that we're Black to work in our communities;
   12  '98 percent African-American community, 5
   13  percent of the job's requirement so says the
   14  Chicago Building Commission.
   15                 We were doing very well, thanks
   16  to Alderman Carothers.  We started out, our
   17  first project was an $18 million project.  But
   18  unfortunately, the majority of the schools now
   19  are being shifted over to the PBC.  Their
   20  requirement is 5 percent community involvement.
   21  Do they hire us, no; do our contractors get
   22  contracts, those that do don't get paid,
   23  they're forced out of business.  The mentorship
   24  program does not exist to us.
00119
    1                 I have the 15th District Police
    2  Station.  There was an agreement on the roofing
    3  that there would be a mentorship with one of my
    4  roofers.  It did not happen.  We had an
    5  agreement to hire from the community.  A
    6  contractor came in with 17 brick masons from
    7  DuPage County.  Are we discriminated against;
    8  yes, we are.
    9                 Hiring, I take my people to the
   10  jobsite to get a job, they need a union.  You
   11  go to join the union, you need a job.  Who is
   12  kidding who?
   13                 I send my young men and women
   14  through the apprenticeship program.  We get
   15  them to Carole Stream.  We get them to DuPage
   16  County because we know that's what the
   17  requirements are and also know it provides a
   18  future for them wherever they go.  When they
   19  get out of there, we have been chosen through
   20  the Empowerment Zone and the City of Chicago to
   21  do the placement for these young people that
   22  everyone else is training.  Where do I send
   23  them?  There are no jobs.  None.
   24                 When I walk on a jobsite and I
00120
    1  see 95 percent of the individuals working on
    2  that jobsite that are not of the community or
    3  they do not look like me, we're discriminated
    4  against.
    5                 Cook County, we're discriminated
    6  against.  Last year, less than 5 percent.  The
    7  City of Chicago, we're discriminated against.
    8  They have favorites.  They will choose four or
    9  five Black contractors, and you can follow
   10  their trail to each and every project.  They
   11  will take on one as a joint venture; they are
   12  not allowed to hire anyone else.
   13                 I was a consultant for the
   14  Washington Mall, a $35 million project.  They
   15  did not hire one African-American.  Even the
   16  unions complained to me because they brought
   17  out people to be hired and apprentices, they
   18  did not hire one.
   19                 I have one of those contractors
   20  working now on the Wellness Center who is
   21  fighting me day and night to hire one
   22  apprentice that's been to school.
   23                 So I do realize that there is a
   24  lot of disparity here.  Allow me to say this:
00121
    1  The Blue Line, I cheered the jobs and Training
    2  Committee for the Blue Line.  Every one knows
    3  the percentages of African-Americans in that
    4  particular community.  I want to say, Hacier
    5  (phonetic) had the contract.  When we started
    6  out it was 11 percent African-Americans, 33
    7  percent Hispanic, 51 -- 50.1 percent White
    8  males.  Three years later the percentage was
    9  the same; 11 percent African-American.  There
   10  is something wrong with this picture.
   11                 We do know that there was not
   12  one African-American contractor on that
   13  project.  Kiwi Delgado (phonetic) simply
   14  refused to consider any.
   15                 Our school projects are the
   16  same.  We're sitting here fighting for 25 and
   17  5, and I'm all for it.  I'm all for it.  But
   18  when the projects get transferred over to the
   19  Public Building Commission, that 25, 5 now
   20  drops down to 5 percent while we watch people
   21  from Indiana, Wisconsin, all of these people --
   22  95 percent can come into Chicago and take our
   23  tax dollars back and pay for their homes while
   24  we lose ours; educate their children while ours
00122
    1  go to the street corner and holler rocks and
    2  blows to buy pampers.  There's something wrong
    3  with this system.
    4                 I can tell you how to get them
    5  paid.  You don't have to be a mathematician.
    6  The City of Chicago does it every day with
    7  nonprofit organizations.  They have a voucher
    8  system.  They are on-line.
    9            ALDERMAN MUNOZ:  Ms. Clayton.
   10            MS. CLAYTON:  Yes.
   11            ALDERMAN MUNOZ:  If you can wrap it
   12  up, please.
   13            MS. CLAYTON:  Yes.
   14                 There's a voucher system.  The
   15  money goes in the bank, there's an agreement
   16  with the owner of the project and the bank that
   17  the sub will be able to draw on his project on
   18  percentages of finishing.  Very simple.  We're
   19  doing it at the U of I, and it works very very
   20  well.
   21                 Now with that I'm going to leave
   22  you guys to wonder who's being discriminated
   23  against.  And what are the percentages?  I
   24  would like to see them.
00123
    1                 Thank you.
    2            ALDERMAN MUNOZ:  Thank you very much.
    3                 Alderman Carothers.
    4            ALDERMAN CAROTHERS:  Thank you,
    5  Mr. Chairman.  I just want to thank Georgia
    6  Clayton for coming down.  I'll tell you I
    7  remember when we had meetings some time ago
    8  when there was no group at all on the westside
    9  or anything in the construction industry that
   10  was organized.  And Georgia did step forward
   11  and organized the group.
   12                 But I would have to agree with
   13  you that it is disconcerting when you go to
   14  these jobsites -- and I said it yesterday and
   15  I'll say it again today, it makes no
   16  difference -- from my experience I can tell you
   17  whether the prime is African-American, whether
   18  the prime is White, or whatever color the prime
   19  is, I have found difficulty in dealing with
   20  most primes in doing any kind of work.  And I
   21  certainly think the westside has been
   22  challenging in that area.
   23                 So I urge you to keep on the
   24  fight, because one of the issues certainly is
00124
    1  the slow payment that you've talked about.
    2  Trying to get people paid, that's manifested
    3  itself throughout these hearings on more than
    4  one occasion.  And it certainly appears that
    5  when we talk about the race-neutral issues,
    6  that's one that I'm sure that we're going to be
    7  very concerned about and talking with
    8  Mr. Griggs, because payment is essential for
    9  them to exist.
   10                 But there is a persistent fight
   11  about who's in the union, who's not in the
   12  union, and you can't get in the union.  And I
   13  constantly say that.  So I agree with you and
   14  commend you for coming down because the fight
   15  is still continuing, so we must still be
   16  vigilant and continue with the struggle.  Thank
   17  you.
   18                 Thank you, Mr. Chairman.
   19            ALDERMAN MUNOZ:  We have one more
   20  question.
   21                 Alderman Troutman.
   22            ALDERMAN TROUTMAN:  Thank you,
   23  Mr. Chairman.
   24                 It appears that it's an industry
00125
    1  standard to discriminate against anyone who is
    2  non-White.  That seems to be the standard.
    3                 Affirmative action was created
    4  to include minorities, not exclude.  And we,
    5  the City of Chicago, we do have -- we've got to
    6  set the standard for inclusion, including our
    7  residents to participate in more jobs.  And if
    8  we don't set that standard here today with
    9  this, then we are shucking our responsibility
   10  to the residents and the people of the City of
   11  Chicago.
   12                 I got a call on yesterday from a
   13  minority -- African-American firm, trucking
   14  firm, that there was an award for
   15  6.6,907,000 -- you can just round it off to $7
   16  million awarded to a Joel Kennedy (phonetic)
   17  Construction Company.  IDOT awarded that to
   18  him.
   19                 And he was told by IDOT people
   20  to get that 20 percent, that he should call a
   21  list of African-American contractors.  He did
   22  not do that, and he told them that he could not
   23  find any of them.  And one of the construction
   24  firms, it was a trucking industry, B.E.G., Inc,
00126
    1  he said that their phones were disconnected,
    2  which was not true.
    3                 And so, you know, it's -- 20
    4  percent of 7 million is not that much, and
    5  that's all he had to give to African-Americans.
    6  The project is going from 31st street to 71st
    7  street that he was awarded.  That is a
    8  predominantly African-American area.  So I
    9  understand what you're saying.
   10                 It still puzzles me that this
   11  IDOT project that's going to a predominantly
   12  African-American area, 98 million has been
   13  awarded right now.  98 million has already been
   14  let.  And out of that 98 million only 192,000
   15  has been given to Blacks, and that was one
   16  Black electrical company.
   17                 So I hear you.  And it's
   18  something that we can't tolerate and we
   19  shouldn't tolerate.  And we need to get
   20  together, you know.  All people who want to see
   21  justice in our communities, we have got to get
   22  together and do better by this.
   23            MS. CLAYTON:  You're absolutely
   24  right, Alderman.  And just allow me to say that
00127
    1  on that particular trucking contract one of my
    2  truckers made a bid on that.  We traveled down
    3  there to the bid opening.  When they saw who we
    4  were, they told us that bid would not be open
    5  that day; however, we left and came back 20
    6  minutes later and they were opening the bids.
    7                 So you guys, you here, this is
    8  your baby.  Only you can do this.  We need a
    9  referendum not just for African-Americans, not
   10  just for Hispanics or Orientals, we need a
   11  referendum through here for Chicago first.  We
   12  do not need to be losing our homes when we're
   13  paying for homes in Indiana.  This must stop.
   14                 Now, allow me to say this to
   15  you.
   16            ALDERMAN MUNOZ:  Can you wrap it up,
   17  please?
   18            MS. CLAYTON:  I have a standing army
   19  of 1,500 right now that's unemployed on the
   20  westside of Chicago between 18 and 35 years
   21  old.  If things don't change, it's going to be
   22  a very long, hot, bloody summer.  Because if we
   23  can't eat and work, nobody is going to come
   24  into out community and do so.
00128
    1            ALDERMAN TROUTMAN:  Mr. Chairman, I
    2  just want to say to Ms. Clayton, I want to
    3  commend my colleague, Alderman Carothers, for
    4  putting together a resourceful group such as
    5  the one that you're heading, Ms. Clayton.
    6            MS. CLAYTON:  And we're very thankful
    7  for the support.
    8            ALDERMAN TROUTMAN:  We're doing the
    9  same thing on the southside.  And it must be
   10  done.  I mean, it's just unconscionable that
   11  our people aren't being hired in our community.
   12  Economic development starts from within.  If
   13  our communities can't build our economic base,
   14  then, you know, no one should be building them.
   15  We must be included.  Thank you.
   16            ALDERMAN MUNOZ:  Thank you.
   17                 The Task Force will stand at
   18  ease until 1:30.  The Task Force will be
   19  meeting upstairs in our regular conference room
   20  on the fourth floor.  If we head upstairs right
   21  away, and then we will reconvene at 1:30 to
   22  hear more testimony from the individuals who
   23  have already signed up or anybody else that
   24  shows up.
00129
    1                 Thank you very much.
    2                      (WHEREUPON, a lunch break
    3                      was taken.)
    4            CHAIRMAN BEAVERS:  Good afternoon.
    5  The Recess Committee on the Mayoral Task Force
    6  on MBE/WBE is now back in session.
    7                 The next witness is Eddie Forte.
    8  Is he here?  Okay.
    9                 Hosea Curtis, Daniel McDuffie.
   10            Would you have a seat and state your
   11  name and who you represent?
   12            MR. McDUFFIE:  My name is Daniel
   13  McDuffie.  I'm the President of Destiny
   14  Decorators.
   15            CHAIRMAN BEAVERS:  You have a
   16  statement you'd like to read?
   17            MR. McDuffie:  Yes.  My issue that I
   18  have, and the reason I'm here, a few questions
   19  in reference to minority contracts that I've
   20  pursued.  I have been a -- just to give you a
   21  little history -- I've been a painter for 15
   22  years in this trade.  I have been in business
   23  as a contractor for four years.  And within the
   24  four years I've been a contractor, I became
00130
    1  certified as an MBE with the City of Chicago.
    2  I also became certified as an MBE with Cook
    3  County, CTA, Metra, Park District, Water,
    4  Reclamation Plant, and a few others.
    5                 The situation I have as a
    6  contractor is one instan --  a few incidents
    7  with what's going on as a Black contractor is
    8  in the private sector.  I've turned down jobs,
    9  and I'll give you an example.
   10                 I was -- a job was put to me
   11  with a company called Tiffany Decorators, a
   12  $548,000 job, non-minority contractor.  They
   13  needed a subcontractor, a minority, to do a
   14  percentage of 19.6 percent in the private
   15  sector.  Well, 19.6 percent of that would have
   16  been $120,000.  Well, he wanted to negotiate
   17  and pay me $7,000 and use my name, which is
   18  going on today.
   19            CHAIRMAN BEAVERS:  Two percent is?
   20            MR. McDuffie:  And, you know, I've
   21  been in this trade, as I said, 15 years.  And
   22  it's bad enough as a Black journeyman-painter
   23  when you have to go out and you work in this
   24  trade, and it's bad enough to even get a job
00131
    1  and be out there working and have to be twice
    2  as better to even compete with the competors
    3  that are out here.  And then to become a
    4  contractor you have to sell your name, which a
    5  lot of contractors are doing, which I think is
    6  ashame.
    7                 It's bad enough that we're here
    8  fighting for affirmative action so we can get
    9  our equal rights and opportunity where we can
   10  pursue and get the same opportunity of work in
   11  the work force, and then the jobs is being
   12  awarded and bidded out, then for us to sell
   13  out.
   14                 Second of all, jobs have been
   15  awarded to non-minorities.  Even that, jobs
   16  have been awarded to non-minorities and the
   17  names are being used.  What is being done about
   18  the private sector?  Well, in the, you know,
   19  dealing with CHA projects, you know, it's so
   20  much, you know, involvement with the City where
   21  anybody who as 25.5 percent or whatever,
   22  minority participation.  But in the private
   23  sector, they don't have to do that.  They use
   24  your name, but still they can get away with it,
00132
    1  which is happening.
    2                 And, you know, I'm here today to
    3  express my views and express my, you know,
    4  concerns about what's going on, even as a
    5  contractor, you know.  Why can't we get the
    6  equal opportunity?  And why we have to go
    7  through so much, you know, this, racism, bias,
    8  and even with our own, you know?  The system
    9  shouldn't have to be this way.  So that's my
   10  point.
   11            CHAIRMAN BEAVERS:  Okay.  Did you
   12  take the two percent?
   13            MR. McDUFFIE:  I definitely didn't.
   14  I turned it down.  I'm not here to sell out.
   15  I'm going to take a stand.  Guys need to work.
   16  And that's the point.
   17                 It's too many minority paint
   18  contractors out there, according to the
   19  statistics, even with the Work Builders'
   20  Project that goes on once a year.  The
   21  statistics show one thing on paper, but
   22  actually the workers on the job is not there,
   23  as far as the Black minority workers.  And we,
   24  as Black contractors, need to stop selling our
00133
    1  names and selling out.  And even in our own
    2  neighborhoods, we want to fight for affirmative
    3  action but, yet our own brothers are not
    4  working and sisters are not working in the
    5  neighborhoods with the jobs.  And that's
    6  ashame.
    7            CHAIRMAN BEAVERS:  I understand very
    8  well.
    9                 Mr. Eddie Forte.
   10            MR. FORTE:  Alderman, first of all I
   11  understand you called my name.  I'm sorry for
   12  being late.
   13            CHAIRMAN BEAVERS:  Okay.  Will you
   14  state your name and title for the record,
   15  please?
   16            MR. FORTE:  My name is Edward Forte.
   17  I'm the Chairman of the Board of Black
   18  Contractors United as well as the Chairman of
   19  Speedy-Ready-Mix.
   20                 First of all, I wanted to come
   21  and testify before this panel, distinguished I
   22  might add, and give you the benefit of what I
   23  have encountered in the construction industry
   24  for approximately 27 years of my life.
00134
    1                 I am a second generation
    2  contractor.  Our mother started us in 1977, to
    3  be specific.  And over the 27 years I've seen
    4  it all.  I mean, there's probably nothing in
    5  the construction-related industry that at one
    6  point I have not seen.  It's the same players,
    7  it's the same thing, it's just a different
    8  date.
    9                 The programs we have with the
   10  City of Chicago are affirmative action
   11  programs.  This program was brought about to
   12  bring indigenous people, or give them
   13  opportunity and accessibility for jobs,
   14  businesses, because that's where businesses,
   15  subcontractors come from, the actual jobs that
   16  people doing it on the sites.  This program
   17  supposed to be brought about to give them an
   18  opportunity.  And I have heard several things
   19  here today that really doesn't make a whole lot
   20  of sense when it comes to these programs, but
   21  that's what these programs have gravitated to,
   22  the politics of them.  And that's what I want
   23  to talk about.
   24                 Number one, the $750,000 cap, we
00135
    1  want to start right there.  For those that
    2  don't understand what the $750,000 cap means,
    3  it puts a limitation on the growth of any small
    4  business, be it African-American, be it Asian,
    5  be it Hispanic.  $750,000 net worth cap puts
    6  and stops the growth of a business.  This is
    7  why:  In order to do business, you must be able
    8  to bond.  With a $750,000 cap on an individual,
    9  that's your total net worth, your total bonding
   10  ability becomes maybe a million dollars,
   11  because bonding companies exclude your primary
   12  residence usually.  It's only your equity
   13  position.  And they use a 10:1 ratio just like
   14  the banks for the lines of credit on your
   15  bonds.
   16                 Since 9-11 the bonding companies
   17  have tightened up tremendously.  They lost a
   18  lot of money on -- the insurance companies lost
   19  a lot of money on 9-11, compound the issue with
   20  the Ennron incident, because there were bonds
   21  on those gas pipelines, the bonding industry
   22  has become notorious.  They're worse than the
   23  banks.
   24                 So, therefore, the $750,000 cap
00136
    1  makes no sense.  You are regulating the entire
    2  subcontracting community if they have to be --
    3  post a bond, because it is my understanding
    4  that all jobs over $75,000 public sector has to
    5  be bonded.  That's the rule that's imposed upon
    6  the City.  You have to have a bond.
    7                 Well, if you're individuals
    8  partaking in it can only get maybe a total of a
    9  million dollars in bonding, and that's if
   10  they're reaching the cap, that's regulating the
   11  growth of a small business.  The SBA has a 27
   12  or $28.5. million allowance for small business.
   13  That's what they designate as small business.
   14  But if you can't bond 28 and a half million
   15  dollars -- that's called the aggregate end of
   16  the bond line.  It works by per job with an
   17  aggregate at the end.
   18                 Well, if your total bonding
   19  capabilities is a million dollars, you're never
   20  going to get to the 8(a) program or to that
   21  limit.  You're never going to graduate without
   22  a mentor, without a mentor posting the bonds,
   23  of which at that point in time now you just
   24  gave control of the job, whether it be on paper
00137
    1  or not, that job is now controlled by the
    2  mentor, not the protege, because the protege
    3  has to do what the bonding and the financial
    4  institutions tell them.
    5                 So therefore, that's not going
    6  to work without the proper monitoring by a
    7  body.  That was the first issue.
    8                 The second issue I heard today
    9  and I want to speak about was Judge Moran's
   10  decision towards Asians.  Now, I read the
   11  33-page decision.  I haven't found yet where
   12  the Judge asked that Asians be stripped from
   13  the program.  What I did read was that there
   14  was no anecdotal evidence to say that the
   15  Asians were still being as deprived as other
   16  ethnicities.  So I want to erase that from the
   17  myth.
   18                 There was nothing in that
   19  33-page document that asked that Asians be
   20  stripped from the program.  There was -- but
   21  there was stated that there was not anecdotal
   22  or historical data to support, okay, the Asians
   23  on the same parallels as the Hispanics and/or
   24  Blacks, because they looking at a strictly --
00138
    1            CHAIRMAN BEAVERS:  And women.
    2            MR. FORTE:  And women.  So I want to
    3  erase that myth.  That was not there, unless
    4  somebody can show it to me.  It wasn't there
    5  when I read it.
    6                 The other thing I wanted to talk
    7  about is the continuation of the systemic
    8  discrimination towards people my color.  And
    9  this is fact.
   10                 We are the last on the totem
   11  pole when it comes to economic involvement in
   12  the construction industry.  It has nothing to
   13  do with abilities, it has nothing to do with
   14  availability, ability, capacity, as the
   15  terms -- the buzz word that's been thrown
   16  around.  What it has to do with is simply a
   17  system that has perpetuated the growth of
   18  White-male businesses since its conception in
   19  building in this country.
   20                 In the 1800's, the Chinese, the
   21  Blacks, others, built the country.  All of a
   22  sudden the jobs and opportunities gravitated
   23  towards construction and building in this
   24  country.  And the same people that were doing
00139
    1  it, when home on the range was over, all of a
    2  sudden they couldn't do it because it was jobs
    3  and opportunities.
    4                 Then you get the union
    5  involvement.  Everybody is looking out for
    6  their own kind in these construction projects,
    7  period.  And we just happen to have, as Black
    8  people, we don't have anybody on certain levels
    9  to look out for us; therefore, we need
   10  programs.
   11                 It's been demonstrated that in
   12  the absence of these programs Black involvement
   13  basically goes to nothing, period.  Other
   14  minority groups can survive.  And they are cut
   15  in half; two-thirds of it is gone, but our
   16  people go to nothing.  And in the private
   17  sector, we don't exist period.
   18            CHAIRMAN BEAVERS:  All right.  I'm
   19  going to have to cut you off now.  Bring it to
   20  a close.
   21            MR. FORTE:  And I'll accept that from
   22  you.
   23            CHAIRMAN BEAVERS:  I want to ask you
   24  one question, then.  If you had a credit line
00140
    1  where you could go to the bank and get all the
    2  money you possibly need to meet your payroll
    3  and everything, could you grow?
    4            MR. FORTE:  Could I what, now?
    5            CHAIRMAN BEAVERS:  Could you grow.
    6            MR. FORTE:  Most definitely.  Most
    7  definitely.
    8            CHAIRMAN BEAVERS:  All right, thanks.
    9            MR. FORTE:  Well, can I add this?
   10            CHAIRMAN BEAVERS:  Yes.
   11            MR. FORTE:  The only bank in the City
   12  limits of Chicago -- because most of the
   13  financial institutions are getting away from
   14  construction and construction-related contracts
   15  because it's a risk factor -- the only bank
   16  doing construction loans right now is LaSalle
   17  Bank that I know of.  The rest of the banks are
   18  putting contractors out of the bank.  They are
   19  saying that they are changing their lending to
   20  get away from asset based lending.  So again,
   21  it cripples the smaller contractors that don't
   22  have predetermined lines of credit already.
   23  And you couple that with slow pay from these
   24  contractors that are seeking these contracts,
00141
    1  and we'll pay you when we get paid, the
    2  majority of the community is barely surviving.
    3            CHAIRMAN BEAVERS:  All right.  Thank
    4  you.
    5                 Alderman Carothers.
    6            ALDERMAN CAROTHERS:  Thank you,
    7  Mr. Chairman.
    8                 Thank you Mr. Forte for coming
    9  down.  I have one question.  You made  a
   10  comment about a threshold of the net worth.
   11  Where do you think that threshold should be?
   12            MR. FORTE:  The threshold should
   13  be -- are we talking about the threshold or the
   14  graduation?
   15            ALDERMAN CAROTHERS:  The first one,
   16  net worth threshold that you referenced.
   17            MR. FORTE:  Well, see, the personal
   18  net worth, in my opinion, shouldn't even be in
   19  there for the simple fact of this:  Personal --
   20  why is it that minority community, to partake
   21  in the industry --
   22                 If you look at Cranes every year
   23  they publish a list of the most -- just the 25
   24  top majority contractors.  The smallest
00142
    1  contractor that makes it in there may do a
    2  hundred million dollars a year.  And then you
    3  have some that partake and do a lot of business
    4  in this City to $2 billion.  But we have a
    5  threshold to get rid of minority contractors if
    6  they graduate from the program at $28 million.
    7                 I think that the threshold
    8  should be parallel to the existing industry of
    9  what that subcontractor, if it's a
   10  subcontractor, it should be the median of what
   11  he's doing both public and private sector in
   12  the industry.  You take a median of what the
   13  contractors in that sector are doing and you
   14  grade him based on that.
   15                 But I caution you with this:
   16  Usually when a subcontractor, and I won't call
   17  the individuals' names, when they get dropped
   18  from these programs, the 8(a) Program and
   19  whatever, they reach the size, most of them go
   20  right back to being very small subcontractors
   21  and almost out of business without the
   22  assistance of these programs.
   23            ALDERMAN CAROTHERS:  Thank you.
   24                 Thank you, Mr. Chairman.
00143
    1            CHAIRMAN BEAVERS:  Mr. Hosea Curtis,
    2  Reverend Tolbert.
    3                 Please state your name and title
    4  for the record, please.
    5            REVEREND TOLBERT:  Reverend R. Andrew
    6  Tolbert, Assistant Pastor, Human Heart
    7  Missionary Baptist Church, 207 West 113th
    8  Street.  I'm also the President of the
    9  African-American Truckers' Coalition, and I'm a
   10  board member of the African-American Ministers
   11  and Contractors Alliance.
   12                 I'm here today very kind of
   13  disturbed about what's been going on in the
   14  industry, but I applaud this decision because,
   15  number one, it didn't throw out the program;
   16  but, number two, it has forced the City to fix
   17  a broken program.
   18                 Currently today the problem with
   19  our -- one of the problems with our program is
   20  that there's too much abuse in the system.  It
   21  allows for contractors, and I'll speak
   22  primarily about Black contractors because
   23  that's who generally I deal with, but I have to
   24  agree with Senator Jones in the article where
00144
    1  he said too many of our contractors are getting
    2  contracts, the politicians are helping them to
    3  get contracts.  They get on these contracts and
    4  then they turn around and they give the work to
    5  the White majority companies.
    6                 So in essence, what they are
    7  doing is fronting their pass-throughs on these
    8  projects, and it is killing our community.  It
    9  is cutting off opportunities for our children,
   10  for our young folks to even imagine a future
   11  that includes them.  And that's why they are
   12  turning to guns, gangs, and drugs, because they
   13  don't see a future.  They don't see a job on
   14  the horizon.
   15                 I suggest a couple of things.
   16  Number one, the City's new program should have
   17  some provisions in it to address fronting
   18  whereas the general contractors and the joint
   19  venture partnerships will not be given credit
   20  for minority participation unless the minority
   21  company actually performs work, and for that
   22  work only.
   23                 Number two, they should have
   24  trade breakouts in this new program.  The
00145
    1  Illinois Capital Development Board, when they
    2  let big contracts like Chicago State, they take
    3  specific trades and they pull them out of a
    4  contract and they bid them separately.  And
    5  they do that, it allows smaller and minority
    6  contractors to get a contract directly with the
    7  owner.
    8                 Number three, they should
    9  require in this program some specifics about
   10  local participation.  A lot of legal issues
   11  come up with the minority situation and
   12  different designations.  But if we emphasize
   13  local participation, it would give everyone a
   14  fair share in their own community, and that
   15  would open up a lot of doors.  In our
   16  community, we don't have hardly anybody our
   17  color working in our own community.
   18                 Number three, the City has to
   19  get involved in policing the program.  It is a
   20  slap in the face that the only time somebody
   21  goes to jail or gets prosecuted for abusing or
   22  committing fraud on these programs is when the
   23  U.S. Attorney gets involved.  We need the City
   24  to bring some kind of enforcement arm so that
00146
    1  the abuses that is going on now will not
    2  continue to go on.
    3            CHAIRMAN BEAVERS:  Thank you,
    4  Reverend.  And you made some good statements.
    5  Everything you said is true; okay.
    6                 Omar Shareef, Sanjeev Bandi.  Is
    7  this Theresa Jamison?  Barbara Manning, will
    8  you come down and have a seat if you're here?
    9                 Good afternoon, sir.  Will you
   10  state your name -- how do you pronounce your
   11  name?
   12            MR. BANDI:  Sanjeev Bandi.
   13            CHAIRMAN BEAVERS:  Okay.  I did a
   14  pretty good job.
   15            MR. BANDI:  I'm founder, principal,
   16  and Vice President of Great Lakes Soil and
   17  Environmental Consultants.
   18            CHAIRMAN BEAVERS:  You have a
   19  statement you would like to read?
   20            MR. BANDI:  Yes.
   21            CHAIRMAN BEAVERS:  Okay.  Go ahead.
   22            MR. BANDI:  Chicago, thank you for
   23  this opportunity.  It is a bit embarrassing to
   24  be in front of you to ask for your help,
00147
    1  because I'm an independent man.  What is not
    2  embarrassing is to tell you that I got my first
    3  paid off shoes when I went to your school that
    4  is hundred miles away in my 8th grade.  This
    5  school is one of the three in the state that
    6  sowed 15 million population of children of
    7  foreign or rural (indecipherable). I went to
    8  earn my Bachelor's and Master's degrees in
    9  India, all on scholarships.
   10                 I came to the U.S. in 1987; to
   11  Illinois Institute of Technology on a teaching
   12  assistant trip to earn my PhD in Civil
   13  Engineering.  After earning my PhD, I went on
   14  to work for a reputed firm in the Midwest.
   15  Soon it became apparent to me that it is a
   16  glass ceiling, and there is only crawling
   17  space.
   18                 I started a business in 1996
   19  with a friend of mine, who is in the audience
   20  today, with 1,000 investment.  In the first
   21  year we were able to earn a $1,000 salary.
   22  That's for the whole year, because we had to
   23  plow everything back into the business because
   24  we could not get any loans or credit lines, but
00148
    1  only could see through the keyholes of
    2  financial doors.
    3                 Most businesses we wanted to
    4  promote our qualifications wanted to know if we
    5  are an MBE even before we had a chance to sit
    6  down.  The work was hard to come by, and Great
    7  Lakes went through the process to get certified
    8  as an MBE/DBE with the City and State agencies.
    9  Our revenues increased significantly.  So did
   10  the number of employees.  Today we have thirty
   11  people, and over 70 percent of them are
   12  minorities.
   13                 My testimony contains instances
   14  where we were denied loans and credit lines.
   15  One example of a project we would not have
   16  gotten but for the MBE Program is the Terminal
   17  Six Project at O'Hare.  We provided
   18  environmental services and worked under
   19  extremely tight time constraints on old
   20  (indecipherable) Lawrence and appreciation from
   21  our client, T-Six Partners.  My written
   22  testimony contains an appreciation letter from
   23  the client.
   24                 Excluding Asians from the MBE
00149
    1  Program would significantly impact our revenues
    2  and our employees.
    3                 Chicago is a city that works,
    4  and I like it because I'm the same way.  I am
    5  proud of what you did for me Chicago, and I
    6  hope you are proud of me too because I'm part
    7  of your product.  I can count on your support
    8  for some time because I have miles to travel,
    9  mountains to climb, peaks to reach, and dreams
   10  to realize.  With my hands in yours, I can
   11  propel myself forward.  With your hand-holds
   12  and footholds, I can climb the steepest
   13  mountains.  Count me as your asset, not a
   14  liability to Chicago.
   15                 Thank you.
   16            CHAIRMAN BEAVERS:  I don't think this
   17  Ordinance affects you because you're in the
   18  engineering business.  This is construction.
   19            MR. BANDI:  We serve the construction
   20  industry.
   21            CHAIRMAN BEAVERS:  You serve the
   22  construction industry.  All right.  Good
   23  enough.
   24            MR. BANNDI:  Thank you.
00150
    1            CHAIRMAN BEAVERS:  Theresa Jamison.
    2            MS. JAMISON:  Good afternoon.  My
    3  name is Theresa Jamison, and I am Corporate
    4  Vice President of Smart Technology Services and
    5  Vice President of the Greater Illinois 8(a)
    6  Procurement Association, better known as GIPA.
    7                 We have about 150 8(a) firms in
    8  our database today.  I would like to say thank
    9  you to the City for hosting such a meeting.  It
   10  has long been needed.  GIPA's position has been
   11  on the Federal side.  Contract bundling and
   12  local buys, all of which have been noted in the
   13  morning session.
   14                 GIPA knows that for small
   15  businesses this has been a major concern.  So
   16  much so that we spoke before the Congressional
   17  House Small Business Committee on the concern
   18  of contract bundling and local buys.  GIPA
   19  ultimately has a one on -- we ultimately had a
   20  one-on-one meeting with the Chairman of the
   21  Federal Small Business Committee, Don Manzulo
   22  (phonetic), privately to continue to address
   23  the concerns that were continuing to plague the
   24  small business community here in the City of
00151
    1  Chicago as well as the State of Illinois.
    2                 What we are really asking, and
    3  again, this is on the Federal side, that on the
    4  contract bundling -- as well as with the State
    5  of Illinois -- that that be diminished; that it
    6  goes away.  Because we have viable small
    7  businesses here for local purchases for
    8  services and products to provide the
    9  governmental agencies and entities here, again,
   10  in the State of Illinois and the City of
   11  Chicago.
   12                 Regarding contract bundling, we
   13  are asking that with that demise comes at least
   14  an accountability to the prime contractor, the
   15  majority firm, that is to be monitored for, you
   16  know, the small business.  So that, again, what
   17  we've been hearing here this morning, that the
   18  small businesses will not be going out of
   19  business for no pay.
   20                 And so to speak to that I would
   21  like to talk about the key issues here this
   22  afternoon that really fall into play with
   23  contract bundling and local buys, and that is,
   24  number one, personal net wealth, or net worth I
00152
    1  should say.  I am in consensus with Eddie Forte
    2  and all of those that spoke this morning that,
    3  again, the $750,000 personal net worth needs to
    4  disappear.  It needs to go away as well.  It
    5  has no reason to be anywhere accounted for when
    6  we are doing, you know, majority work, or I
    7  should say contracting work with a majority
    8  firm here, you know, again, in the State as
    9  well as in the City of Chicago.
   10                 Regarding the graduation pays,
   11  we're talking about the 28.5 million and the 12
   12  million for specialty contractors.  Again,
   13  that's on the net worth and not what is really
   14  the bottom line of how our businesses, you
   15  know, perform; what we call retained earning.
   16  And that is where we need to be looking at.
   17                 With graduation from the City
   18  program when we have worked for the last 15
   19  years as companies to build ourselves and our
   20  presence here, and have done a darn good job
   21  doing so, to have to graduate out of that
   22  because, you know, we've gone over the, you
   23  know, the 12 million mark, what do we do, start
   24  a new business with that, or, you know, go out
00153
    1  of business because of it?  So that too needs
    2  to be looked at.  I mean, that cap either
    3  should be increased or it should not be there
    4  as well.
    5                 The Transitory Program, all for
    6  the Mentor/Protege.  Just because we are not a
    7  small business, or even in speaking on behalf
    8  of GIPA, the overall 8(a) participants on the
    9  Federal side have literally graduated out of
   10  the program without ever having one major
   11  project on their plate.
   12                 So I say that the prime
   13  contractors that are embellishing all of these
   14  opportunities here, again, in the City of
   15  Chicago and the State of Illinois, and the
   16  nation itself, should be held accountable to do
   17  a Mentor/Protege program that would continue to
   18  feed the presence of small businesses here in
   19  the City of Chicago.
   20                 End of my report.
   21            CHAIRMAN BEAVERS:  Thank you.  Did
   22  you read -- look at the Judge's decision?  Have
   23  you read it?
   24            MS. JAMISON:  Partially.
00154
    1            CHAIRMAN BEAVERS:  I think you need
    2  to read it.  Some of the things that you talked
    3  about, these are in his rulings that we have to
    4  abide by.
    5            MS. JAMISON:  Yes.
    6            CHAIRMAN BEAVERS:  I understand;
    7  okay.  Thank you.
    8            MS. MANNING:  Hi.  Good afternoon.
    9  My name is Barbara Manning.  My company is
   10  Genora Trucking.  I'm a small, very small
   11  trucking business here.  I come here today to
   12  speak in terms of trucking interests that my --
   13            CHAIRMAN BEAVERS:  The trucking
   14  industry is not affected by this.
   15            MS. MANNING:  Well, on the issue of
   16  the set-asides for WBEs and also having a
   17  broader number of WBEs that can be utilized on
   18  these jobs versus one or two WBEs being used on
   19  the same jobs over and over again without
   20  adequate amounts of equipment.
   21                 In trucking, it's my view that
   22  if you're going to go out there and bid on a
   23  job with the State or City with any type of
   24  Federal or Public funds, you should have a
00155
    1  stable business, you should have been in
    2  business for some years, and be able to show
    3  that you have the capability of providing the
    4  amount of trucks that are needed for that job,
    5  whether if you are leasing trucks or whatever.
    6                 However, I have spoken for the
    7  last year among my colleagues that you should
    8  at least have 50 percent of that equipment is
    9  owned by your company in order to get out there
   10  and participate on the job versus brokering and
   11  not allowing the owner/operator or the person
   12  that actually owns their equipment to compete
   13  on the jobs.
   14                 The union has been one of the
   15  major factors.  My business is almost out of
   16  business.  I have closed down one company and
   17  my other company is about to be closed down
   18  because of the issues of the union working,
   19  basically, in a position that is adversarial to
   20  a small company.  I do believe in unions.  I do
   21  believe in paying the right rate if you're
   22  getting the right rate on these jobs.  However,
   23  if you are not getting those and the union will
   24  not accept your employees into the union, I do
00156
    1  not feel that you should be paying fringe
    2  benefits for those employees.  That's something
    3  yet I'm still addressing for four months
    4  without any income into my company because of
    5  the union effects of it.
    6                 However, I strongly believe in
    7  fairness and equality, and that the set-aside
    8  programs are very important because if not, you
    9  would not be able to compete at all.
   10                 Thank you.
   11            CHAIRMAN BEAVERS:  Let me ask you a
   12  question.  You only pay union wage rates when
   13  you on a union job; is that correct?
   14            MS. MANNING:  What I do is I pay --
   15                 I have been working in the hired
   16  truck program.  And --
   17            CHAIRMAN BEAVERS:  All right.  Well,
   18  they don't pay union wages in the hired truck
   19  program.
   20            MS. MANNING:  Right.  But, however,
   21  what's happened to me, I have been paying about
   22  40 percent for my drivers for the last eight
   23  years; however, at this point, with paying on
   24  the construction contract, the fringe benefits
00157
    1  is $7.40 an hour, I'm now 50 something dollars
    2  as an hour whereas my monies are being held for
    3  four weeks.  And going through Federal Courts
    4  and bankruptcy and trying to handle everything
    5  to pay my employees, I'm at the state where I'm
    6  just holding my hands up trying to figure out
    7  what I'm going to do next.
    8            CHAIRMAN BEAVERS:  I understand.  But
    9  when you are working for the City on the hired
   10  truck program, you don't pay union wages; is
   11  that right?
   12            MS. MANNING:  Well, I do not pay
   13  union wages, but I pay a living wage based on
   14  the percentage.  I'm into 40 percent on --
   15            CHAIRMAN BEAVERS:  Do you pay the
   16  same thing that other truckers pay?
   17            MS. MANNING:  No, we all pay
   18  something different.  I've always paid higher
   19  than some other trucking firms.
   20            CHAIRMAN BEAVERS:  All right.  Thank
   21  you.
   22                 Robert J. McGee, Junior.  Is
   23  this, Sahar Mawlawi?  William J. Haddad.
   24            MR. McGEE:  Thank you, Alderman
00158
    1  Beavers, and the members of your committee.
    2                 My name is Robert J. McGee, Jr.
    3  I'm a Vice President of the II in One
    4  Contractors, and my firm has had the
    5  opportunity to grow significantly as a result
    6  of the City of Chicago's MBE program.
    7                 Many years ago I had the
    8  opportunity to participate in the hearing at
    9  the Metropolitan Water Reclamation District,
   10  and my firm was one of the firms that, when the
   11  Metropolitan Water Reclamation District Program
   12  went away, my business dropped off to virtually
   13  nothing.  And certainly the same thing, I
   14  think, will occur in the City.
   15                 A lot of people have spoken
   16  about many of the issues.  I would really like
   17  to focus in on the impact beyond the public
   18  sector work.  I just currently have been
   19  given -- recently given a contract to do the
   20  masonry on a bank in Warrenville for LaSalle
   21  Bank.  And that project is a direct result of
   22  the leadership of the City of Chicago, and
   23  because many of the responsible corporate --
   24  large corporations in this City see the 25 and
00159
    1  5 as valuable program and they extend it far
    2  beyond just the City.  Because of the City's
    3  leadership, the program extends far beyond just
    4  the public sector work.
    5                 And so I just want you, the
    6  members of your committee, to know that, far
    7  beyond even just the direct dollars that the
    8  City spends, the leadership in having a program
    9  to say to the corporate community this is
   10  what -- this is what this City needs has a very
   11  profound impact.
   12                 And while I'm not in a position
   13  to quantify it in the exact dollar terms, the
   14  dollars associated with construction spending
   15  beyond what the City spends directly is
   16  significant.  And I would like to just say that
   17  the program is very very important; very
   18  important on that level as well.
   19                 And then another issue is the
   20  cap, which I'm aware of exists for a lot of
   21  requirement reasons; but the reality of it is,
   22  as you try to move into the general contractor
   23  arena, particularly if you have been a
   24  subcontractor theretofore, it requires that you
00160
    1  change your entire business model, and it
    2  requires a substantial amount of money,
    3  personal net worth.
    4                 There is a very direct
    5  correlation between bonding and net worth.  And
    6  the multiple of ten times your net worth, as
    7  just a rule of thumb, that the bonding
    8  companies are prepared to bond, an individual
    9  with a $750,000 net worth could roundly assume
   10  7 and a half million dollar bonding capacity.
   11                 And so there is a real
   12  disconnect between that and even the 27 or 28
   13  million.  I mean, if you're at the point where
   14  you can bond 28 million, you would need a net
   15  worth in the multimillion dollar range on the
   16  low side, and that's assuming that they looked
   17  at all of your numbers in the most favorable of
   18  light.  And so there is a real disconnect
   19  between assuming that you can bond a $28 viable
   20  business, or 27 and a half million dollar
   21  viable on a net worth of less than $750,000.
   22                 And I just want to just say
   23  thank you.  I've been able to grow my firm, as
   24  I said, as a result of programs that the City
00161
    1  has taken the leadership, and I am very
    2  thankful to all of you.
    3            CHAIRMAN BEAVERS:  I want to ask you
    4  a couple of questions.  I really want to know
    5  why you don't want to grow more than you have
    6  grown, you know.
    7                 I have been pushing and pushing
    8  and pushing trying to make you grow, you know.
    9  I want you to grow.  But what is the reason?
   10  Why is it that you don't seem to want to get
   11  away from Walsh and McHugh and all the rest of
   12  them and be II In One?  That's what I would
   13  like to see.
   14            MR. McGEE:  Thank you, Alderman
   15  Beavers.  You are a very gracious man.  You
   16  have been very helpful to II In One
   17  Contractors.
   18                 And to put it as candidly and as
   19  bluntly and as honestly as you have asked me,
   20  the second highest failure rate among
   21  businesses in this industry is in the
   22  construction industry.  And it was only two
   23  years ago, I think, that I personally met you
   24  for the first time.
00162
    1            CHAIRMAN BEAVERS:  That's correct.
    2            MR. McGEE:  And it wasn't that I
    3  reached out to you, you reached out to me.
    4                 And quite candidly, in my -- I
    5  have a very strong construction background, but
    6  my understanding and association with being an
    7  active or activist kind of person and very
    8  connected to really what's going on, candidly,
    9  is a very new phenomenon for me personally.
   10  And the sense of support that I have seen that
   11  is available to me as a contractor is a new
   12  awakening.
   13                 And if you're doing business,
   14  and these are the only people that you see to
   15  do business with and they set all of the rules,
   16  you kind of think that that's how you have to
   17  do it.  And quite candidly, it's been a new
   18  awakening that is very recent for me personally
   19  to understand how important a single minority
   20  firm is in the overall scheme of things of this
   21  City and for our people.
   22                 I have struggled to do business
   23  within a framework of Christian integrity, and
   24  I've been able to do that, but I have not been
00163
    1  the most out front person by any stretch.  I
    2  have not.  But when a door is closed and
    3  without truly understanding the impact that
    4  people like yourself have, not too many, and
    5  including myself, have been very willing to
    6  just try to be out there all by yourself
    7  because it's a very lonely place to be.  And
    8  like I said, only recently have I gotten any
    9  real sense that there is truly, truly support
   10  for you in the construction area.  It is --
   11                 I don't know if that's clear
   12  or --
   13            CHAIRMAN BEAVERS:  It's clear, but,
   14  you know.
   15            MR. McGEE:  But I do have -- I have a
   16  vision for it.  I just recently got a project
   17  in Joliet as the GC for a church group that's
   18  not a minority group at all.  I just finished
   19  completing the concrete on a 28-story building
   20  at 200 West Grand.  And Walsh, or none of the
   21  other firms that you mentioned, were involved
   22  in that project.  And surprisingly enough, a
   23  substantial por -- we just -- the newspapers
   24  reflect today the opening of Harold Washington,
00164
    1  that we were the general contractors by
    2  ourselves.  We didn't have a White, or even
    3  another Black partner, on that project.  It was
    4  a long time in coming.  It's something that I
    5  and Alderman Tillman and our whole community
    6  will be very proud of and will serve us well
    7  for a long time.
    8                 So it's taken me some time.
    9  It's taken me personally a long time.  I still
   10  have some challenges and I still need your
   11  support way more than you can imagine going
   12  forward.
   13            CHAIRMAN BEAVERS:  I want you to
   14  grow.  Listen, I want you to grow.  I'm not
   15  going to be here forever, you know.  And I'm
   16  doing all I can now not only to make you grow,
   17  there's some others.  But, you know, at times
   18  you have to branch out.  And I understand, you
   19  know.
   20                 If my information is right,
   21  you're going to get screwed again, you know.
   22  And how long -- how often do you have to be
   23  screwed before it hurts?
   24            MR. McGEE:  It's hurting already,
00165
    1  Alderman.  It's really hurting.  But, you know,
    2  I think that if you're referring to what I
    3  think you're referring to, I can tell you I am
    4  continuing to work very diligently behind the
    5  scenes, and I pray that the outcome of our
    6  current situation is going to be better than --
    7            CHAIRMAN BEAVERS:  Well, I hope so.
    8  Because I want to see you here, you know.  And
    9  these handshake deals are no good.  We've been
   10  talking about them all morning.
   11                 We had a guy here this morning
   12  crying about he hadn't got paid on one of them
   13  handshake deals.  Listen, put it on paper; all
   14  right.  We talked about Change Orders
   15  yesterday.  People talking about Change Orders.
   16                 Listen, if you're contracted to
   17  do this, do that.  If they want you to do
   18  something over here, give me another contract.
   19  I'm telling you for your own good.  You don't
   20  have to kiss nobody's behind; you understand?
   21  You've got me.  I carry a big stick.  And not
   22  only me, you got little old Lyle over here.
   23  Okay.  All right.  We can keep you from eating
   24  crumbs.
00166
    1                 You understand what I'm talking
    2  about?
    3            MR. McGEE:  Yes, sir.  And I
    4  certainly appreciate that, and I appreciate the
    5  opportunity to come before you.  God bless you.
    6            CHAIRMAN BEAVERS:  Alderman
    7  Carothers.
    8            ALDERMAN CAROTHERS:  Thank you,
    9  Mr. Chairman.
   10                 Thank you for coming, Mr. McGee.
   11  Let me ask you a question.  Because you
   12  indicated that your company has done well as a
   13  participant of the program, and I'm assuming
   14  that probably 99 percent of the time you have
   15  been a subcontractor and you've done well.
   16                 But is it not true the fact of
   17  the matter is, I know that you do rebar and
   18  things like that for a lot of different primes,
   19  but once you become that general and now you're
   20  competing for the same business that these
   21  primes are competing for, and you know at the
   22  end of the day the reason why you're successful
   23  now is because you have actually been the sub
   24  for many of these same primes that you now are
00167
    1  competing against.  And is it not true -- or do
    2  you think that you will continue to be the
    3  prime sub for these same guys who now you're
    4  competing against on a general level?
    5            MR. McGEE:  That kind of goes back to
    6  the why I haven't made the hyperleap as quickly
    7  as it seems like I should have.  The reality of
    8  it is, people don't do business with people
    9  that compete against them; however, the
   10  exception to that is that as the community,
   11  with you all's leadership exerts itself, that
   12  can be overcome.  But that's the only way that
   13  that can be overcome.
   14                 But you're correct in your
   15  assessment that if we -- the specific example
   16  I'm aware of is that Brandenburg, many years
   17  ago decided they were going to become a bridge
   18  contractor.  Theretofore, they dominated the
   19  demolition for all of the contractors in the
   20  City doing work with the City on bridge
   21  demolition.  As soon as they bid the first time
   22  as a GC, every GC went out and start buying its
   23  own equipment to do bridge demolition.
   24                 Granted for, you know,
00168
    1  Brandenburg had an advantage for a while, well,
    2  eventually Brandenburg closed up their general
    3  contracting business because it hurt their
    4  overall demolition business so much.  And so
    5  that is a real challenge.
    6                 And so the transition of going
    7  to GC --
    8                 Although I need to be clear.  I
    9  am committed to taking on more projects as a
   10  general contractor.  There is a greater
   11  opportunity to -- well, there is the
   12  opportunity period to influence not just the
   13  work that you do yourself, but also the work of
   14  the other contractors involved with that
   15  project.  But obviously there are markets where
   16  there is an opportunity for me to participate
   17  as a general contractor, and then markets where
   18  that opportunity is much less limited.
   19                 And so I am making that
   20  transition, and I'm excited about it; and, yes.
   21  But your comment and what you brought out is
   22  very critical.
   23            ALDERMAN CAROTHERS:  Thank you,
   24  Mr. Chairman.
00169
    1            CHAIRMAN BEAVERS:  Mr. McKinnie.
    2            MR. McKINNIE:  Thank you,
    3  Mr. Chairman.
    4                 Mr. McGee, I'm glad to see you
    5  here today.  I would just like to make a
    6  comment.
    7                 You now have a strong commitment
    8  from Alderman Beavers.
    9            CHAIRMAN BEAVERS:  He had a strong
   10  commitment today.  Did you hear what he said?
   11  I reach out and got him, he didn't come and see
   12  me.
   13            MR. McKINNIE:  I understand that.
   14            CHAIRMAN BEAVERS:  I went and got
   15  him, he didn't come and see me.  He didn't even
   16  know me.
   17            MR. McKINNIE:  But what I would like
   18  to have pointed out is that, now that you have
   19  all this strong support are you going to also
   20  reach back and get the community contractors?
   21            MR. McGEE:  Absolutely.  And one of
   22  the areas that, I along with a number of other
   23  have been roundly criticized for is the absence
   24  of doing that.  And in projects where I am the
00170
    1  general contractor as II In One only, I have,
    2  at the end of the day, all of the authority to
    3  do that.  And my personal experience with you
    4  prove that.
    5                 Even in building the banquet
    6  hall, which, you know, when we reached out to
    7  you we made it work.  And when we had problems
    8  I did what I needed to do to make sure that it
    9  worked for you.  And I'm committed to that at a
   10  higher level than I have ever been.  And I
   11  expect to be held accountable.
   12            MR. McKINNIE:  We appreciate that.
   13            CHAIRMAN BEAVERS:  Alderman Lyle,
   14  then Alderman Cardenas.
   15            ALDERMAN LYLE:  Mr. McGee, I think
   16  that one of the underlying reasons for the
   17  interest that the African-American Aldermen
   18  have had in the MBE/WBE set-aside program over
   19  the years has been the fact that we understand
   20  that in order to have a strong community you
   21  have to have a strong business community, and
   22  construction is a part of our business
   23  community.
   24                 We understand historically that
00171
    1  we were with iron rights and the mill rights
    2  and the cabinetmakers and everything else in
    3  the south, and something happened to change
    4  that.  And then we had problems with unions.
    5                 But we have, on a daily basis in
    6  here when we are doing projects and looking at
    7  projects, we are constantly looking at
    8  opportunities to support business people from
    9  the community, because it's our theory they
   10  will support people from the community.  And
   11  then by supporting people from the community,
   12  those people will support other businesses in
   13  the community and we have healthy tax bases
   14  with which we can develop communities that are
   15  holistic and healthy and raise healthy
   16  children.
   17                 So I say to you that we -- many
   18  people don't reach out for help, but there has
   19  been help in this room for some time, but they
   20  never looked at us.  They looked at us as some
   21  sort of other kind of group.  But all of the
   22  Aldermen in the room are interested in making
   23  sure that the businesses that do -- that work
   24  in their community -- or trying to get more
00172
    1  businesses to work in their community are
    2  viable and strong; and try to the best of our
    3  limited ability to see that they don't get hurt
    4  because we want you to continue doing business.
    5                 I'm not going to use your word.
    6                 And I think that, you know -- I
    7  should have had all the friends that I know
    8  that are lawyers put their cards out in the
    9  hallway today, you know, to help some of these
   10  guys keep from getting into these problems.
   11                 But we're trying to put some
   12  stuff in the new Ordinance that will eliminate
   13  some of the problems that many people are --
   14  were having, but we still have to work within
   15  the parameters of Judge Moran's Order.
   16            MR. McGEE:  Mr. Chairman, can I say
   17  one more thing?
   18            CHAIRMAN BEAVERS:  Yes.
   19            MR. McGEE:  One area that I really
   20  think -- well, it's two areas that I think that
   21  will lead to the most significant long-term
   22  change, and that is very strong incentive
   23  programs changes to encourage contractors to
   24  have minorities, African-Americans, Hispanics,
00173
    1  women, experience working at the managerial
    2  levels in their organizations.  There's all
    3  kinds of programs for trade training and
    4  numbers and quotes and requirements of that
    5  nature.
    6                 But the area that will
    7  ultimately change if enough minorities and
    8  women get exposed to this business at the
    9  managerial levels, the long-term impact of that
   10  will be a percentage of them will start their
   11  own businesses and they will be competent.  And
   12  the booster or the jump start piece that really
   13  needs to be done or created that you possibly
   14  could influence is a very strong incentive of
   15  some sort to train minorities at the managerial
   16  levels.
   17                 Obviously it's not something
   18  that you can do for three or four years, but
   19  over a 10 or 12 or 15 year period it will flood
   20  the market with another level of competent
   21  people to start their manage firms.
   22                 And then my second point was --
   23            CHAIRMAN BEAVERS:  I'm going to have
   24  to cut you off after Alderman Cardenas.
00174
    1            ALDERMAN CARDENAS:  Just quickly, I
    2  want to commend you on, and I was very moved
    3  by, your testimony and your travails in this
    4  industry.
    5                 And by the way, Mr. Chair, I
    6  just want to say that the scope of what we're
    7  trying to do here today, it pertains to
    8  construction.  I know we have had a lot of
    9  testimony that seems to be surrounding the area
   10  of construction, but not really construction.
   11  And I just want to remind, you know, the panel
   12  that's coming forward and the people also
   13  behind us that that's what we're trying to do.
   14                 There's a scope that Judge Moran
   15  gave us, and that's what we're trying to do.
   16                 But I do commend you for your
   17  statement.  And, you know, it seems like you
   18  have a really good heart and I wish you well.
   19  And I think that there's a lot of good advice
   20  here, good help.  And Alderman Beavers reached
   21  out to you, and that's great; but you seem to
   22  have in you to help others in your community.
   23  So thank you.
   24            CHAIRMAN BEAVERS:  Pam McDonough.
00175
    1            MS. McDONOUGH:  Hi, Mr. McGee.  How
    2  are you?
    3            MR. McGEE:  How are you
    4  Ms. McDonough.
    5            MS. McDONOUGH:  I think it would be
    6  useful for the panel to hear what your
    7  impression of joint ventures -- what has that
    8  done for you and your company when you were
    9  able to team up with somebody?  Is it in this
   10  context of, you know, getting to the next level
   11  of managerial experience?
   12            MR. McGEE:  I think my personal
   13  experience with joint ventures is rather
   14  unique, and my underlying reason for joint
   15  venturing is that we had been able to identify
   16  the firms who are predominantly successful.
   17  But if you are not, as a minority, a part of
   18  the deal going in, you are not going to be a
   19  part of the deal period.  And so, if you say --
   20  so you really need to kind of say who you think
   21  is going to win before the bid, and then you
   22  try to make the best deal you can with them.
   23                 The reason why joint ventures
   24  have been popular -- and this may be in
00176
    1  transition as I'm speaking -- the reason why
    2  joint ventures have been popular, at the end of
    3  the day the joint venture reduces the minority
    4  participation by 50 percent.  Did you all get
    5  that?
    6            MS. McDONOUGH:  Yeah.  So it's been
    7  your experience in a joint venture arrangement
    8  that they then don't also apply subcontracting
    9  goals for minorities and females?
   10            MR. McGee:  I'm sorry.  I didn't hear
   11  your comment.
   12            MS. McDONOUGH:  Your point was, if
   13  you're a 50 percent joint venture partner, then
   14  somehow the requirement to apply -- to bring
   15  other minorities or females into it doesn't
   16  really happen as often?
   17            MR. McGEE:  You're only required to
   18  manage the work, not actually do the work,
   19  whereas in a straight subcontract relationship
   20  a subcontractor can't hire someone else to do
   21  his work; whereas, is if you are the general
   22  contractor you can subcontract 50 percent of
   23  that work to be done by other people.  Well,
   24  the other people are not limited to just
00177
    1  minorities that you can subcontract it to; but
    2  in the most recent contracts that I have seen
    3  that provision was --
    4            MS. McDONOUGH:  So in terms of --
    5            CHAIRMAN BEAVERS:  That provision has
    6  been taken out.
    7            MS. McDONOUGH:  So the way the City
    8  currently is handling this requires some level
    9  of self-performance?
   10            MR. McGEE:  No.  No.  No.  It's
   11  always required a level of self-performance;
   12  but, like, if you were a 25 percent joint
   13  venture partner, you would have to self-perform
   14  12 and a half percent; whereas if they achieve
   15  the same 25 percent participation all through
   16  subcontracting, they would have to identify a
   17  whole 25 percent.
   18            MS. McDONOUGH:  Actually, on one that
   19  I'm working on it's both, we have to do the
   20  performance for the percentage of what we're
   21  on, but then they also were trying to get the
   22  goals on the rest of the, you know, for the
   23  rest of the different categories.  So I think
   24  that's probably the way it should go.
00178
    1            CHAIRMAN BEAVERS:  All right.  Thank
    2  you, Mr. McGee.  We have to keep moving along
    3  here.
    4                 Sahar Mawlawi.
    5            MS. MAWLAWI:  Good afternoon,
    6  Mr. Chairman, Members of the Task Force.  I'd
    7  like to thank you, first, for giving me the
    8  opportunity to speak with you today.
    9                 My name is Sahar Mawlawi, and
   10  I'm the Director of the Chicago Commission on
   11  Human Relations and Advisory Council on Arab
   12  Affairs.  I have been in this position for the
   13  last four years.
   14                 The Advisory Council on Arab
   15  Affairs is mandated by City Ordinance to, among
   16  other things, act as a liaison between the City
   17  government and the Arab-American community, and
   18  to assist the Commission on Human Relations in
   19  the City of Chicago as a whole by reviewing
   20  existing programs and recommending new policies
   21  and programs in order to enhance its service
   22  delivery to the Arab-American community.
   23                 In keeping with its mandate, and
   24  prompted by the post September 11th climate,
00179
    1  which has had an adverse effect on the
    2  Arab-American community, the Advisory Council
    3  on Arab Affairs convened a Task Force last year
    4  on issues of concern to the Arab Americans in
    5  Chicago in order to formulate a set of policy
    6  recommendations that would enable the City to
    7  enhance its service delivery to Arab Americans.
    8                 The task force is composed of
    9  key leaders, activists, professionals, policy
   10  advocates, and experts in this field.  And it
   11  has served as a vehicle for securing
   12  consultative process and thoughtful
   13  deliberation.
   14                 The Advisory Council on Arab
   15  Affairs, along with the Task Force, issued a
   16  report identifying seven issues of concern and
   17  importance to the Arab-American community in
   18  Chicago.  The most pressing issue and concern
   19  for Arab Americans in Chicago is to be
   20  qualified as a minority for inclusion with
   21  Hispanics, Women, Asian, and African-American
   22  in the M/WBE.
   23                 The M/WBE was initiated in the
   24  late 1980's through a City Council resolution
00180
    1  that followed an empirical study sponsored by
    2  the City of Chicago on behalf of Hispanics,
    3  Asians, Women, and African-Americans.  However,
    4  Arab Americans were not included in that study
    5  and, therefore, were not qualified under the
    6  Ordinance to partake in the program, which
    7  requires that a prescribed percentage of City
    8  contracts be awarded to those qualified
    9  minorities.
   10                 Since the original Ordinance
   11  became law, the plight of Arab Americans in
   12  Chicago and throughout the United States has
   13  dramatically changed for the worse.  There are
   14  several studies -- there's studies by the Arab
   15  American Bar Association, Human Rights Watch,
   16  Council on American and Islamic Relation, the
   17  American Arab Antidiscrimination Committee.
   18  These are just examples that include empirical
   19  anecdotal study data supporting the conclusion
   20  that the Arab Americans are among the most
   21  discriminated minorities in the United States.
   22                 In October 1998 the San
   23  Francisco Board of Supervisors passed a new
   24  Minority, Women, and Local Business Ordinance
00181
    1  which recognized the Arab-American community as
    2  a legal minority class and afforded all the
    3  rights and benefits available to other
    4  traditional minorities under the City's
    5  contracting Ordinance.
    6                 Professionals from the
    7  Arab-American community who will do the bulk of
    8  testimony is Joint Advisory Council on Arab
    9  Affairs today, and you'll hear from them after
   10  me.  The Advisory Council on Arab Affairs
   11  advises its Task Force and the City of Chicago
   12  to support an empirical study as was done for
   13  the other minorities in the late 1980's to
   14  determine whether or not Arab Americans qualify
   15  as a minority for inclusion with Hispanics,
   16  Women, African-Americans, and Asians.
   17                 Thank you.
   18            ALDERMAN CAROTHERS:  Alderman Lyle.
   19            ALDERMAN LYLE:  Do you know what the
   20  population of your community was in the '80's
   21  when this study was commissioned?
   22            MR. MAWLAWI:  I don't know in the
   23  '80's, I know in the '90 --
   24                 What I know -- were told, they
00182
    1  basically did not think about the Americans.
    2            ALDERMAN LYLE:  I mean, you don't
    3  have any ideas as to what -- was it one
    4  percent?  Was it 20 percent?  Was it less than
    5  1 percent?
    6            MS. MAWLAWI:  Actually, I don't know,
    7  but the person who will be able to answer you
    8  this is in this room and she will be able to
    9  answer that.
   10            ALDERMAN LYLE:  And you indicated
   11  that you have studies that show that the Arab
   12  Americans were the most discriminated?
   13            MS. MAWLAWI:  By the empirical data,
   14  anecdotal data, and some statistics.
   15            ALDERMAN LYLE:  And give me an
   16  example of what we're talking about in terms of
   17  discrimination.
   18            MS. MAWLAWI:  There's discrimination
   19  in employment and the workplace.  There is
   20  discrimination --
   21            ALDERMAN LYLE:  I'm trying to write
   22  it down.  Slow down.  Employment and the
   23  workplace.  Go on.
   24            MS. MAWLAWI:  Well, there is social
00183
    1  discrimination.  There is a lot of hate crimes,
    2  actually.  Our numbers were lost for the
    3  longest time because we did not have a category
    4  that says "Arabs."  We were either classified
    5  as White or Pacific Islander.  And it was just
    6  recently, after the Advisory Council actually
    7  worked on it for three years, that the police
    8  department, for example, just issued a box that
    9  says "Arab" to be able to count the number of
   10  hate crimes that Arabs were victim of.
   11            ALDERMAN LYLE:  And do you have any
   12  information about, for instance, in economic
   13  banking, housing, those kind of things?
   14            MS. MAWLAWI:  I personally don't have
   15  it.
   16            ALDERMAN LYLE:  But there might be
   17  some?
   18            MS. MAWLAWI:  Yes.
   19            ALDERMAN CAROTHERS:  Ms. McDonough.
   20            MS. McDONOUGH:  Do you know if any
   21  Arab American firms have tried to apply for
   22  certification through the individual
   23  certification?
   24            MS. MAWLAWI:  Actually, these people
00184
    1  are here.  I think they will be the people who
    2  will be able to tell you --
    3            MS. McDONOUGH:  Because they could
    4  get in as a disadvantaged business if they, you
    5  know, present their discrimination.
    6            MS. MAWLAWI:  Well, we have,
    7  actually, the President and Board -- Chairman
    8  of the Board of Trustees of the Arab American
    9  Engineer and Architect Association is here with
   10  us.  We have some representative from the Arab
   11  American Bar Association, Arab American
   12  Professional and Business Association here, and
   13  I think they will be able to -- they're more
   14  expert in this than I am.
   15            MS. McDONOUGH:  One other question.
   16  Do you know -- you just mentioned that Arabs
   17  were treated as White or Pacific Islander.  Do
   18  you know how they were treated in the 2000
   19  census?  Is there a separate category for that
   20  particular ethnic group?
   21            MS. MAWLAWI:  From what I know -- and
   22  this person is also here and will be able to
   23  answer this.
   24                 From what I know, it depended on
00185
    1  which form you received.  If you received a
    2  long form you were able to actually put what
    3  answer to a nationality you were.
    4            MS. McDONOUGH:  Because I know
    5  earlier they spread out different Hispanics,
    6  and they captured a lot more ethnicity in each
    7  subsequent census.  So I just was wondering if
    8  that's captured in that.  Thank you.
    9            MS. MAWLAWI:  You're welcomed.
   10            ALDERMAN CAROTHERS:  Any other
   11  questions from the panel?
   12                      (No audible response.)
   13                 Thank you for coming.
   14            MS. MAWLAWI:  Thank you.
   15            ALDERMAN CAROTHERS:  Mr. Haddad, you
   16  can have a seat.
   17            MR. HADDAD:  Mr. Chairman, I have
   18  some items to attach to the record today --
   19            ALDERMAN CAROTHERS:  We'll give them
   20  to the staff.
   21            MR. HADDAD:  -- to the members.  I'd
   22  ask that it be made part of the record.
   23            ALDERMAN CAROTHERS:  Thank you.
   24                 Will you introduce yourself and
00186
    1  who you're representing for the record.
    2            MR. HADDAD:  My name is William
    3  Haddad.  Although I'm a Judge of the Circuit
    4  Court of Cook County, I'm here personally, and
    5  only in my personal capacity as a leader in the
    6  Arab-American community.  And I thank you for
    7  the opportunity to speak today.
    8                 I am, in the past, the founding
    9  President of the Arab American Bar Association,
   10  its Executive Director for ten years, and Vice
   11  President of the Arab Business and Professional
   12  Association of Illinois in the past.  I was one
   13  of the original members of the Advisory Council
   14  on Arab American Affairs here with the Mayor,
   15  and I was on the Governor's transition team on
   16  homeland security and anti-terrorism.  And I
   17  have written several articles that have been
   18  published throughout the United States and here
   19  in Illinois that I am sharing with you right
   20  now as part of the record that I asked to be
   21  appended and incorporated herewith, along with
   22  my curriculum vitae.  These articles go back to
   23  1992.
   24                 And I am here to answer some of
00187
    1  the questions that were very politely put to
    2  the predecessor speaker with regard to the
    3  condition of our people, because it needs to be
    4  said for this record and for Judge Moran.
    5                 Christians, Muslims, and Arab
    6  Americans from the Middle East are well defined
    7  minorities here in Chicago.  Before 9-11, they
    8  were targets of bigotry.  And I bring this
    9  message to you that after 9-11, the impact of
   10  hate, violence, and bigotry was so profound as
   11  to do permanent and dangerous harm for the
   12  foreseeable future of this community.
   13                 Today we are going to present
   14  evidence and research presented on behalf of
   15  our community that I believe might well be the
   16  kind of evidence that would qualify our people
   17  for at least consideration in the study for
   18  minority status under this law, which I go on
   19  record today on behalf of my community as
   20  saying it is a good law, it was a well
   21  thought-out law with good legitimate purpose,
   22  and I don't think it was ever meant to exclude
   23  anybody.  I think it was made for the time, and
   24  now the time is different.
00188
    1                 So my community believes that
    2  the City of Chicago funded the study and
    3  authorized the determination of whether or not
    4  Christians, Muslims and Arab Americans from the
    5  Middle East qualify as the fifth minority, if I
    6  can use that term, under the Minority Business
    7  Enterprise Act.
    8                 A little background, because you
    9  asked some questions earlier.  The first
   10  arrivals in the United States into Chicago from
   11  the Middle East came in the late 19th Century.
   12  They were Lebanon Christians like myself, and
   13  Cerion people who came from parts of the Middle
   14  East, but they were small in number.
   15                 After the 1967 episode or event
   16  in the Middle East, tens of thousands came to
   17  Chicago.  Christians and Muslims from the
   18  Middle East, from the Palestinian community,
   19  from Jordan, from Iraq, from many countries.
   20                 Today I can tell you, and I can
   21  tell you that for the last three months with
   22  certainty, that we have at least 150,000 in
   23  this area; as much as a quarter of a million
   24  Arab Americans, or what I would call
00189
    1  Christians, Muslims, and Arab Americans from
    2  the Middle East.  Of that I have no doubt.
    3                 If you add the issue of Muslims
    4  who might be looked at separately, there could
    5  be 400,000 here.  There are twenty mosques that
    6  are predominantly Arab American, 15 churches,
    7  25 to 30 social clubs and organizations; 50
    8  percent of them are Christian.
    9                 Today we have the President of
   10  the Arab Business and Professional Association,
   11  Mr. Talat Othman.  We have the President of
   12  their Engineers Association, Dr. Soliman
   13  Khudeira.  We have several others who are here
   14  to give you some anecdotal stories.  I'm just
   15  going to give you a little foundation for what
   16  they're going to say so that they are going to
   17  be two or three minutes, we hope.
   18                 All of us were affected by 9-11.
   19  All of us felt very badly about what happened.
   20  Our community was horrified by what occurred,
   21  but we reviewed it a different way.  We were
   22  not only sorry about our fellow citizens and
   23  many Muslims and Christians who were killed,
   24  and Arab Americans who were killed in the World
00190
    1  Trade Center, but we were also victimized by
    2  hate violence as never seen before.
    3                 Now, in 1992 there was somewhat
    4  of a riot after the Bull's basketball victory.
    5  Many will remember some of the stores were hit,
    6  our businesses were hit.  There was a study
    7  done; there was $14 million in damage found to
    8  exist, and the City put together a high
    9  violence protection plan that was in place with
   10  the Chicago Police Department and this Mayor
   11  and protected our community when 9-11 hit.  And
   12  we are grateful for that.  We're grateful for
   13  this City Council for having sponsored that.
   14                 This backlash, however, took
   15  place throughout the nation and in Chicago.  It
   16  came at us in three different ways:  Simple
   17  street crimes, business and workplace
   18  discrimination, and governmental actions that
   19  were seen by this community to be special
   20  legislation.
   21                 As to the backlash in the
   22  streets, we saw murders, armed robberies,
   23  assaults and batteries; batteries with guns,
   24  knives, pepper spray, cars, trucks, rifles,
00191
    1  arsons, fire bombings, vehicular driving into
    2  schools, mosques, and churches.  Sixteen
    3  murders throughout the country from California
    4  to Florida.
    5                 Many people that were killed
    6  were not even Arabs.  They were people that
    7  looked like us.  Many people thrown off
    8  airplanes were not Arabs, they looked like us.
    9  Some were Jews who were speaking Hebrew.  Many
   10  people were profiled at that time.
   11                 Mosques in Denton, Texas,
   12  Middleburry, Ohio, Evansville, Indiana,
   13  throughout the country, were fire bombed, were
   14  shot at, pig blood disseminated -- or desecrate
   15  with hatred.  The one in Bridgeview, Illinois,
   16  out here, which is one of the major mosque in
   17  the country --
   18            ALDERMAN CAROTHERS:  We're going to
   19  have to ask you to kind of wrap it up a little
   20  bit.
   21            MR. HADDAD:  Mr. Alderman, I wanted
   22  to kind of lay a foundation for the other
   23  speakers.  And following someone who was just
   24  up for half an hour, I thought I'd have an
00192
    1  opportunity to speak.
    2            ALDERMAN CAROTHERS:  Well, that's
    3  because they had questions.  And you may well
    4  have questions as well.  But basically we're
    5  giving everyone five minutes to make their
    6  presentation, and then the questions will allow
    7  them to go on a lot longer.  And you may have
    8  questions as well that may allow you to be for
    9  an hour.
   10                 So in keeping what we've been
   11  doing, we're going to ask you to kind of wrap.
   12  If you have written comments, you can certainly
   13  present them to the Chair.
   14            MR. HADDAD:  The violence on the
   15  campuses was also epidemic.  We saw businesses
   16  hit in Chicago.  Corrections officer on a
   17  motorcycle cycle had chased down a cab driver
   18  and took him down; called him a mass murderer.
   19  Chicago police reported 13 hate crimes in the
   20  early time of this episode.  The North Side
   21  Ascerian (phonetic) Catholic Church was set a
   22  fire.  A community center on the south side and
   23  was set a fire, and a pipe bottom was recovered
   24  on the near north side that was destined for
00193
    1  one of our professional organizations.
    2                 The backlash on the air by
    3  people like Anne Kolter, Senator Chambliss,
    4  Franklin Graham, Billy Graham's son, and even
    5  Ashcroft were very insulting to our people.  My
    6  Muslim brothers and sisters who are here today.
    7                 We were profiled, and the
    8  statistics show over 2,000 reports of
    9  discrimination in the first few months.  And
   10  I'm not going to get into the Patriot Act
   11  because this City Council already acted to
   12  condemn it, or the anti-terrorism laws that
   13  allow secret evidence that Bush said he'd get
   14  rid of and didn't do.  I'll just talk about
   15  some of these profiling directives for just a
   16  minute.
   17            ALDERMAN CAROTHERS:  We'd like to
   18  move to questions, Mr. Haddad.  I'm sorry.  I'd
   19  like to move along with you, but if we are
   20  going to have any time for questions then we'll
   21  have to start taking questions and not just,
   22  you know -- your presentation is much longer
   23  than what we've been allowing.
   24                 Alderman Ed Smith.
00194
    1            ALDERMAN SMITH  Thank you,
    2  Mr. Chairman.
    3                 Mr. Haddad, I want to make sure
    4  I understand.  I heard you mention all of the
    5  concerns that you have about the Middle East.
    6  And I heard today several people from the Far
    7  East who've come who've indicated that they are
    8  concerned about what might happen in this final
    9  analysis of the legislation.
   10                 Are you saying that the problems
   11  that exist, as far as you're concerned, and
   12  this is people in the Middle East, is more
   13  acute than the problems that might exist with
   14  those people in the Far East?
   15            MR. HADDAD:  I would never speak to
   16  the exclusion if anyone is legitimately covered
   17  under this Ordinance; but our exclusion, I
   18  feel, is improper.  And here we are, people who
   19  are from Asia but not Asian-Americans under the
   20  Ordinance; here we are, people from Northern
   21  Africa, but we're not African-American's under
   22  the Ordinance.  And we are people that have
   23  suffered tremendous amounts of bigotry.
   24                 We see from the Heldrick
00195
    1  (phonetic) Center, Mr. Alderman, that 20
    2  percent of the people say Arab Americans are
    3  employees more likely to be treated unfairly in
    4  the workplace.  That surpasses, according to
    5  the Heldrick Center, Women and Hispanics.
    6            ALDERMAN SMITH:  So you do support
    7  the inclusions of --
    8            MR. HADDAD:  I certainly do and we
    9  all do.  Our Asian brothers and Korean brothers
   10  deserve, I think, ample consideration if the
   11  law permits that.  We would want no one
   12  excluded who is part of this.  We're not here
   13  for the exclusion anyway.
   14            ALDERMAN SMITH:  Thank you very much.
   15                 Thank you, Mr. Chairman.
   16            ALDERMAN CAROTHERS:  Alderman
   17  Cardenas.
   18            ALDERMAN CARDENAS:  Well,
   19  Mr. Chairman, I just want to follow up with
   20  what my colleague was stating.  We want the
   21  data, we want the information so that we can do
   22  our work.  And the scope of this is to
   23  understand and draft an Ordinance that is fair
   24  to all the minorities in the City of Chicago;
00196
    1  Hispanics, Blacks, Women, Asians, and so forth.
    2                 We have a task to do, and that's
    3  why you were cut short.  But what do you
    4  provide in terms of discrimination from an
    5  economic standpoint, from companies that have
    6  done work in the construction industry, not
    7  anything else because that's what we're looking
    8  at today, construction-related businesses that
    9  have been discriminated, because that's what we
   10  need to base our decisions on?
   11            MR. HADDAD:  Well, I would ask how
   12  many people are here from the construction
   13  industry that are among the 25 I brought; I'd
   14  say about half of them.  And how many of you
   15  are born over seas or first generation
   16  Americans; about the same number or more.
   17  Okay.
   18                 And you also have the President
   19  of the Engineers and Architects Association
   20  here who will tell you of their 500 members and
   21  50 firms, they are ready willing and able to do
   22  work for the City of Chicago, and earn that
   23  work.  And they are certainly people that have
   24  to suffer the economic deprivation of 9-11.
00197
    1            ALDERMAN CARDENAS:  If you could
    2  provide the Chair with their information on the
    3  companies and the firms and the employees, and
    4  also any statistics you may have that would be,
    5  you know, helpful in getting to our decision,
    6  as we will.
    7                 Thank you, Mr. Chairman.
    8            MR. HADDAD:  Some of them will
    9  testify.  And also, we are working with the
   10  Legal Department for the City of Chicago with
   11  regard to that as well.  We have their
   12  cooperation.
   13            ALDERMAN CAROTHERS:  Mr. Hernandez.
   14            MR. HERNANDEZ:  I'm looking for a
   15  little clarification as to the focus for this
   16  Ordinance as the definition of construction
   17  businesses from maybe from Colette or someone
   18  out there; Mr. Griggs.  This Ordinance is
   19  affecting who?
   20            MR. GRIGGS:  This Ordinance is
   21  affecting the minorities and women business
   22  enterprises that are currently in the program,
   23  certified construction companies that are in
   24  the program.
00198
    1            MR. HERNANDEZ:  Does it affect
    2  architecture and engineering firms also?
    3            MR. GRIGGS:  No, it does not.
    4            MR. HERNANDEZ:  That's what I wanted
    5  to know.
    6            ALDERMAN CAROTHERS:  Any other
    7  questions?
    8            MR. HADDAD:  The architects and
    9  engineers are dealing with construction.
   10            ALDERMAN CAROTHERS:  Alderman Lyle.
   11            ALDERMAN LYLE:  Judge, you got some
   12  contractors that are going to give us some
   13  information, and at some point, I don't know if
   14  they have it already prepared, but we would
   15  need to get, if they have it, some information
   16  about the economic issues.  Because when these
   17  MBE programs are drafted, as you probably know
   18  better than I, it was to address the economic
   19  deprivations and disparities among the groups,
   20  as much as the social indignities.  But you
   21  can't really compensate for social indignities,
   22  but you can do something to address the
   23  financial problems that you have as a result of
   24  being classified by race.  And I think that
00199
    1  it's fair to say that that should go back
    2  beyond 9-11 also.
    3                 And so if you have anything like
    4  that, please submit it to the Chair and he'll
    5  make copies and get it to us.
    6            MR. HADDAD:  What we're asking is
    7  even more simple than that.  We're asking that
    8  the City authorize the study that needs to be
    9  done in order to do this.  And we are providing
   10  information today; but as we all know, when
   11  minorities are hit with hate crimes, the
   12  economic deprivations are there.  One is an
   13  insidious parallel to the other.
   14                 So we think a study would be the
   15  way to begin on this.  But -- well, that's
   16  right.
   17            ALDERMAN LYLE:  And clearly we --
   18  everyone understands that there is no physical
   19  possibility that a study can be conducted
   20  before the date we have to get back to Judge
   21  Moran.  Everybody understands that framework, I
   22  hope.  You've been very clear with the members
   23  of your community.  It would in fact be a
   24  beginning for a process that would continue and
00200
    1  would not end in June when we go before Judge
    2  Moran.
    3            MR. HADDAD:  And I would think that
    4  Judge Moran, like any good-thinking individual,
    5  would certainly be looking to the City of
    6  Chicago to provide at least evidence that that
    7  will take place.  So I certainly hope that this
    8  is where we're going on this.
    9            ALDERMAN LYLE:  And that's why we
   10  have people like you coming here, to give us
   11  something so that we can provide the evidence.
   12            MR. HADDAD:  Thank you very much.
   13            ALDERMAN CAROTHERS:  Thank you,
   14  Mr. Haddad, for coming.
   15                 Talat Othman.  Then we have
   16  Reverend Dr. Donald Wagner, followed by
   17  Dr. Ahmad Hammed, and in that order.
   18                 Mr. Othman, can you take a seat
   19  up here.  Give us your name and who you
   20  represent.
   21            MR. OTHMAN:  My name is Talat Othman.
   22  I represent the Urban American Business and
   23  Professional Association.  I have been
   24  President of the Association for 13 years,
00201
    1  since its forming.  It's a volunteer
    2  organization, and the objective is to promote
    3  networking among the members.  And we also
    4  promote trade between the Middle Eastern
    5  countries and Illinois.
    6                 We have conducted trade
    7  missions, and we also have brought in some
    8  investment funds into the business communities
    9  here in Chicago, have created some jobs, have
   10  saved some jobs.  And we also bring together
   11  members to do business among themselves, among
   12  each other.  And through that, some joint
   13  ventures have been formed and business was
   14  conducted between the members.
   15                 A bank was opened on the south
   16  side of Chicago by members cooperating with
   17  each other for that purpose.  And the community
   18  has, basically, benefited through the
   19  organization and the network and opportunities
   20  that are presented not only to work with each
   21  other, but also to work with the local business
   22  and professional community.
   23                 The organization has contributed
   24  to the economy activity in the City and -- by
00202
    1  promoting entrepreneurs who basically prove job
    2  opportunities are a vehicle for economic
    3  viability.  The organization has presented
    4  those situations to our members and to the
    5  outside larger community.
    6                 The first brother who spoke, he
    7  said that equal and fair opportunity was all
    8  that he's looking for.  And I guess that's all
    9  that we're talking about also, is a fair and
   10  equal opportunity to share and contribute to
   11  that duty in the City.
   12                 And the second brother said that
   13  his community is on the bottom of the totem
   14  pole.  And our communities is not even close to
   15  the totem pole, and we were told that we would
   16  get closer through this process, and a review
   17  of that has taken place today.
   18                 And I thank you very much for
   19  the opportunity, Mr. Chairman.
   20            ALDERMAN CAROTHERS:  Questions?
   21                      (No audible response.)
   22                 Thank you for coming.
   23                 Dr. Wagner.
   24            DR. WAGNER:  Thank you for having us
00203
    1  today.
    2                 My name is Donald Wagner.  I'm a
    3  professor of religion at North Park University
    4  and an Ordained Presbyterian Minister.  I've
    5  been working in and with the Arab community for
    6  27 years in Chicago in various capacities.
    7  I'll just address very briefly moral and
    8  personal issues involved in this.
    9                 Having been involved in the
   10  community for such a long time, I've seen it
   11  grow.  I can testify to its commitment to
   12  Chicago.  We have a strong sense of family
   13  structure in this community.  I think the sense
   14  of lawlessness is very low, and the commitment
   15  to high ethics and high standards of work are
   16  very high.
   17                 Studies were done by UNESTO
   18  (phonetic) in the late '80's that noted that
   19  the Palestinian community in Palestine had the
   20  highest education rate in all of the Middle
   21  East, and even a higher PhD rate per capita
   22  than the Israelis had.  Because of the success
   23  and wars in the Middle East, people have come
   24  here.  The Lebanese, the Jordanians, the
00204
    1  Egyptians are right behind them, very high
    2  commitment, industrious people committed to
    3  work, yet, discriminated against.  Flying below
    4  the radar, below the totem pole, as has been
    5  said.  Virtually invisible.  Also, the hate
    6  crimes and the sense of victimization is very
    7  low and hardly recognized in this community.
    8                 I was watching Channel 5 last
    9  night and noted that many synagogues are
   10  stepping up their surveillance and their
   11  security as a result of events in the Middle
   12  East.  That's despicable.  I got into this work
   13  because of the fight for the anti-Semitism, and
   14  I'm committed to that, to stand with my Jewish
   15  sisters and brothers.
   16                 But also, the Arab-American
   17  community really isn't even recognized.  Since
   18  September 11th, every mosque has had to have
   19  police protection.  Churches have had the same
   20  protection.  Many of us who are here have been
   21  on the southside with the Arab Community Center
   22  after it was fire bombed to help them put the
   23  pieces together.  We've stood is line at the
   24  vigils at the mosque so that they can be
00205
    1  protected around the clock after 9-11.
    2                 So I commend to you to recognize
    3  this community as a minority to give it the
    4  protection that it's due.
    5                 Just one or two personal
    6  examples.  One of my students, who happens to
    7  be a Palestinian Christian, after 9-11, his
    8  father had a small messenger service, was
    9  delivering a package in the loop.  And as he
   10  walked in and delivered it, he had something
   11  that identified him as an Arab, perhaps a
   12  (indecipherable).  The person stopped him at
   13  the building in the loop here, and would not
   14  even let him deliver the package.  He said, no
   15  more will you be allowed to enter here; we do
   16  not want your services anymore, go back to your
   17  own country, you terrorist.
   18                 One of my young students who
   19  happens to be American converted to Islam began
   20  to wear the Kajar (phonetic), literally two
   21  months ago, was run off the road because he had
   22  his Kajar on; was told to go back to Mecca, we
   23  don't need you people here, you terrorist.
   24                 Our students, our businesses,
00206
    1  our people suffer this way.  We need your help.
    2  We need you to recognize this community.
    3                 Five years ago I had Dr. Arund
    4  Ghandi speak at North Park University, grandson
    5  of Mahad Ghandi.  I'll never forget one thing
    6  he said, he said, you know, tolerance is not
    7  enough.  I always had the goal of tolerance.
    8  He said, tolerance means you're just simply
    9  putting up with people; beneath the surface
   10  still there are acts for discrimination, hatred
   11  and bigotry can last.  Until we reach the level
   12  of honoring the dignity of the others and
   13  treating them as our equal, we are not getting
   14  anywhere.
   15                 So I urge you, recognize the
   16  Arab community as a minority.  Commission this
   17  study so that we can not only take our place,
   18  but improve Chicago.
   19                 Thank you.
   20            ALDERMAN CAROTHERS:  Thank you.
   21  Questions?
   22                      (No audible response.)
   23            Dr. Hammed.
   24            DR. HAMMED:  Good afternoon.  My name
00207
    1  is Ahmad Hammed.  I'm representing the Arab
    2  American Engineers and Architects.  I am the
    3  Chairman of the Board of Trustees.
    4                 I am an American who immigrated
    5  from Jordan in 1981.  I have a wife and four
    6  children.  Currently I am a supervising
    7  structural engineer at a private consulting
    8  firm in downtown Chicago.  I am also a visiting
    9  lecturer at the University of Illinois at
   10  Chicago.  And I ask that my CV be appended to
   11  the testimony.
   12                 As I mentioned, I am currently
   13  the Chairman of the Board of Trustees of the
   14  Arab American Association of Engineers and
   15  Architects, tripple AEA.  Tripple AEA was
   16  formed in 1996 to serve the interest of the
   17  Arab American engineers and architects, and
   18  when I say engineers and architects I mean
   19  contractors are included there because these
   20  terms are engineering.
   21                 In 1997 we started operations
   22  with more than 50 engineers and architects.  We
   23  are nonprofit, nonpolitical, nonreligious,
   24  professional organization here in Chicago,
00208
    1  Illinois.  Today the organization has over 500
    2  members and 15 member firms.  Among the numbers
    3  are educators, practicing engineers,
    4  architects, computer scientists, engineering
    5  company owners, contractors, partners, and
    6  students.  Our members are American citizens,
    7  Muslims and Christians from every Middle
    8  Eastern nation.  And approximately 10 percent
    9  of our members are women, which is twice as big
   10  as other professional engineering associations
   11  in Chicago or in this country.
   12                 You will hear testimony today
   13  from a few of our members who will speak for
   14  all.  Each of us can witness discrimination
   15  against ourselves or someone we know due to our
   16  national ancestry.  We have been denied jobs.
   17  We have been terminated.  We have lost
   18  contracts or opportunities to bid on contracts.
   19  This has caused severe disadvantages.
   20                 Owners of professional firms
   21  went into the private sector looking for the
   22  American dream of owning their own business to
   23  realize later that their business did not grow.
   24  Many applied for City contracts, but did not
00209
    1  win jobs because they could not compete with
    2  the big firms.  Many others did not try going
    3  after City contracts because they knew the
    4  outcome.  Others had been contacted by prime
    5  consultants to team up with assuming Arab
    6  minorities and find out later that Arabs do not
    7  qualify as minorities, and thus, will not team
    8  up with these firms.
    9                 Here's a few examples of what I
   10  mean by wrongful termination and jobs denied.
   11  Salam Milasfir (phonetic) was wrongfully
   12  terminated two months ago.  He has a Master's
   13  Degree in civil engineering from the University
   14  of Illinois at Chicago.  This man is married
   15  with five children.  He is an American citizen
   16  who loves his country.
   17                 Another example is Mohammad
   18  (indecipherable), who has a Bachelor's Degree
   19  from the University of Illinois, UIC, in
   20  structural engineering.  He applied for several
   21  jobs and never received a call for an
   22  interview.  Mohammad changed his name later to
   23  John; John sent in his resume and John received
   24  12 phone calls for an interview.  John is an
00210
    1  American citizen.
    2                 Another example is the person,
    3  his name is Osamma Williams (phonetic).  He's a
    4  civil engineer who was denied an interview
    5  because of his name.  And what I was told by
    6  the person reviewing the resumes, how can I
    7  work with this person who has this name?
    8                 I could continue for many
    9  examples relating to this issue; however, I
   10  will give the opportunity for some of these
   11  firms that are in attendance to provide their
   12  own testimony.
   13                 Finally, the American
   14  Association of Engineers and Architects is
   15  ready to assist, as the Alderman requested, in
   16  contacting these firms and assisting in any
   17  research that the Task Force may want to carry
   18  out.
   19                 On behalf of AAEA, I am
   20  respectfully requesting the Task Force
   21  recommend that the Arab Americans be included
   22  under the DBE and MBE Ordinance.
   23                 Thank you for listening.
   24            ALDERMAN CAROTHERS.  Thank you.
00211
    1                 Soliman Khudeira, followed by
    2  Eyad Elqaq, who will be followed by Moussa
    3  Issa.
    4                 Please have a seat and give me
    5  your name and who you're representing.
    6            MR. KHUDEIRA:  Mr. Chairman, my name
    7  is Soliman Khudeira.  I am the current
    8  President of the Arab American Association of
    9  Engineers and Architects, and I am testifying
   10  here today in support of amending the WBE/MBE
   11  program.  I believe in the motto that I have
   12  read somewhere that we need to amend it -- we
   13  need to amend it but we need not to end it.
   14  This is a great program.
   15                 In my line of work, I am an
   16  engineer by profession.  I deal with
   17  engineering industries and the construction
   18  industries both.  In my life of profession, I
   19  see almost on a daily basis that there is a
   20  need to keep this program in place.  I have
   21  seen companies, Asians, Hispanic,
   22  African-American, women, if they do not have
   23  this status, indeed they will not be given this
   24  chance.
00212
    1                 I am here today to say again
    2  that we need the program to remain, but we need
    3  to amend it.  One of those amendments -- I'm
    4  sure you will have a lot of amendments, you
    5  have been listening to testimony for the past
    6  two days -- but one of those amendments, on a
    7  selfish basis, that we really need to be
    8  included as part of this program.  And to
    9  better elicit my point, let me give a personal
   10  story.
   11                 In 1991 I used to have a
   12  company.  It was engineering construction
   13  management, and we were going to venture into
   14  the construction industry.  I had a partner who
   15  was Asian.  That was in 1991.  The company was
   16  in the infancy stages, but the plan was big.
   17  We did not do much work.
   18                 Unfortunately, my partner died
   19  in 1992.  Naturally, the company lost its MBE
   20  status.  I approached the City to see do I
   21  qualify as a minority.  Being from the Middle
   22  East, being from Arab descent, I thought maybe
   23  I do.  So I approached them, and they told me,
   24  you do not.  And I told them, do I qualify as
00213
    1  being an Asian?  They mentioned that Asian
    2  means Far East, it does not mean Middle East.
    3  In essence, I was not qualified.
    4                 I told the person at that time
    5  who was interviewing me that what are my
    6  chances.  And I remember, quoting it, I told
    7  her that if I lose -- if this company loses the
    8  minority status, I have no other choice but to
    9  close the company.  The lady was very
   10  sympathetic.  She gave me an avenue that she
   11  told me maybe you could go through that avenue,
   12  and she said that first you have to provide
   13  statistics, census data.  You then have to --
   14  then after you have those data you have to
   15  present it to a Board.  I don't remember the
   16  name of the board; you have to present it to a
   17  Board, make a case to them that you, if you
   18  don't have this status, you will not be able to
   19  stay in business.
   20                 Well, at that time it was really
   21  very difficult.  There were no internet.  The
   22  fax, I remember it was a thermal paper fax.  I
   23  did start the process, but it was extremely
   24  difficult.  The chances of success was very
00214
    1  little.  And being an engineer, we look at
    2  numbers.  I did not pursue it.
    3                 There are people who are coming
    4  after me to testify and they will tell you
    5  similar stories.
    6                 Right now I work with the City,
    7  but I assure you, I am qualified.  And allow me
    8  just to say very little about myself.  I am a
    9  licensed professional engineer in Illinois.  I
   10  have a PhD in engineering from IIT, and I have
   11  18, 19 years of experience in the engineering
   12  and construction industry.  But why am I not
   13  opening a company, this is the reason.
   14                 I know the industry very well.
   15  It is extremely difficult to have someone only
   16  qualified without having the tool, which is
   17  MBE/WBE, or whatever it is.  So I urge you to
   18  keep the program, but I strongly urge you to
   19  try to look into including the Arab community
   20  as a minority.
   21                 Some of the questions that came
   22  today that this is related to only to
   23  construction is not engineering, and I believe
   24  the reason because Judge Moran specifically
00215
    1  mentioned construction.  But they are really --
    2  they are inseparable in the field.  The field
    3  of engineering also leads to the field of
    4  construction.
    5                 We, in our community, you will
    6  not find a lot of contractors.  You will not
    7  find a lot of construction companies.  And the
    8  reason is this, because they know that if they
    9  open a company it's going to be a small
   10  company.  There are some contractors here
   11  today, but they are small contractors.  They
   12  will not grow.  And if he doesn't grow, then
   13  our community doesn't grow.
   14                 So again, I urge you to
   15  consider.  I don't know what happened, why we
   16  were not considered in the 1990's.  I think
   17  something went wrong and this is our chance to
   18  be included.  This is probably our last chance,
   19  and I really -- it's a great opportunity and
   20  it's a responsibility on the Committee, the
   21  Aldermen, and all the 16 members to please
   22  recommend us after you have the evidence.  We
   23  are not asking -- we will present the evidence
   24  you need.
00216
    1                 As you know, economic
    2  opportunities is very difficult to come when
    3  someone doesn't look like -- he's a minority by
    4  appearance like myself.  If you look at me you
    5  know I'm a minority, but I do not have the
    6  minority status.  And giving us the minority
    7  status will give us an additional tool that we
    8  could utilize in addition to our qualification.
    9  Qualification is very important, but we really
   10  need this tool so we could contribute to the
   11  society that we live in and to our community,
   12  our communities (indecipherable).
   13                 And finally I have to say on
   14  behalf of the Arab community, again I have to
   15  emphasize, that we ask you respectfully to look
   16  at the inclusion of our community, the Arab
   17  community, as part of the MBE/WBE process.
   18                 Thank you very much.
   19            ALDERMAN CAROTHERS:  Thank you.
   20            MR. KHUDEIRA:  Mr. Chairman, this is
   21  for the record.
   22            ALDERMAN CAROTHERS:  Mr. Elqaq.
   23            MR. ELQAQ:  Good afternoon.  My name
   24  is Eyad Elqaq.  I'm an electrical engineer with
00217
    1  a Master's Degree from the University of
    2  Illinois at Chicago.  I'm also a PhD candidate
    3  at the same school.
    4                 I'm a licensed professional
    5  engineer in the State of Illinois, in addition
    6  to five more states.  I started with my
    7  brother, who is also an electrical engineer,
    8  our own engineering design firm, Advance
    9  Consulting Rue International, back in 1997.
   10  At that time our goal was to use our
   11  professional expertise to serve our community
   12  and the City of Chicago.
   13                 We are well-qualified to do our
   14  work, and we both get our experience working on
   15  commercial, residential, industrial, and
   16  institutional projects for big design firms
   17  such as Skidmoore, Owens and Merrill
   18  (phonetic), and A.H. Tyme and Sons (phonetic).
   19  However, we are facing several obstacles
   20  limiting our growth as a company.  And I,
   21  again, will just go over some of the examples
   22  to highlight it.
   23                 For example, like Chicago Public
   24  School projects.  Usually when there is a
00218
    1  project involving a new construction or a
    2  building addition, the architect of record
    3  always hires a minority firm to provide the
    4  engineering design services to satisfy the
    5  required set aside 25 percent quota.  And
    6  usually noting that the mechanical and
    7  electrical engineering design budget is usually
    8  25 to 30 percent, that's why it usually goes to
    9  a minority firm.
   10                 Therefore, we, as a company,
   11  when we go and approach companies to do the
   12  work, we get turned down because they need a
   13  minority firm, although I know we are qualified
   14  and our design fee is really competitive.  We
   15  always beat the others.  But because of that, a
   16  percentage of us don't get the job.
   17                 We always get -- if we get CPS
   18  project, Chicago School projects, we usually
   19  get it through minority official firms who meet
   20  the requirements of the, you know, minority
   21  firms, and they hire us as consulting design
   22  engineers to do the work.  But the problem,
   23  there are only a few number of official firms
   24  that qualify for minorities.  So our
00219
    1  opportunities are always limited in that field,
    2  working for CPS.
    3                 Another example is Chicago
    4  Housing Authority, CHA.  We were selected to be
    5  part of the housing Montgomery Watson
    6  Architectural and Engineering design team to do
    7  some CHA projects.  Our task was to provide
    8  engineering design services on an assignment
    9  basis.  But the problem, we never received a
   10  request to perform any assignment because every
   11  time they went to a minority firm design team
   12  to satisfy the quota.  I know we are qualified
   13  to do the job, but we cannot get the
   14  opportunity to do so.  So this is some of the
   15  problems we have.
   16                 We are also prequalified with
   17  the CTA; however, we didn't get any projects
   18  yet.  We approached one time -- we approached
   19  the official firm that works on a project with
   20  CTA and we approached to provide them with our
   21  services.  They declined and went
   22  (indecipherable).
   23                 We want to get that chance.  We
   24  want to be able to bid on the projects and
00220
    1  compete.  We are facing the same situation with
    2  State agencies such as IDOT and
    3  (indecipherable).
    4                 In the last seven years we grew
    5  from two employees to only five employees.
    6  This is well below our expectations to grow up
    7  to 20 employs in seven years.  A friend of mine
    8  who owns a minority firm, he started the year
    9  before me.  His firm grew to 20 employees now.
   10                 Our group has been diminished
   11  because we cannot compete.  On the basis of
   12  experience and capability, we know we have the
   13  capability but we need to get the opportunity.
   14  Our goals 6 or 7 years ago are still far from
   15  being achieved.  We're working hard, but we
   16  have special requests to include the
   17  Arab-American community in the set-aside
   18  program so we can help in the growth of our
   19  firms.
   20                 Thank you.
   21            ALDERMAN CAROTHERS:  Thank you.
   22                 Alderman Lyle.
   23            ALDERMAN LYLE:  Do you have a
   24  pamphlet that you can leave?
00221
    1            MR. ELQAQ:  Yes.
    2            ALDERMAN CAROTHERS:  Thank you.
    3                 Moussa Issa, who will be
    4  followed by Adam Moghamis, followed by Rafiq
    5  Kiswani, and then Rob Mourad.
    6                 Alderman Cardenas.
    7            ALDERMAN CARDENAS:  Mr. Chairman,
    8  could we --  I don't know, this sounds out of
    9  order, but could we bundle some of these
   10  statements?  I think we're getting -- I think a
   11  lot of the testimony we're receiving today, it
   12  relates to pretty much the same, which is the
   13  architects, the design engineering firms that
   14  are represented by this class.  And if that's
   15  the case, if they could all speak to the same
   16  issue, engineering issue, we could probably get
   17  further along on the testimony.
   18            ALDERMAN CAROTHERS:  Well, I think
   19  that if that's what they decide to do, it would
   20  be certainly fine to share; but certainly if
   21  people come down and desire to testify we
   22  certainly hear them individually.  But if there
   23  is a desire amongst the group who appear to be
   24  speaking pretty much on the same issue from the
00222
    1  same group, actually, that will be something
    2  that they can decide amongst themselves as we
    3  move forward.
    4            ALDERMAN CARDENAS:  Okay.  My
    5  question is, is it the same pretty much
    6  testimony from everybody, or is it just a
    7  different --
    8            MR. ISSA:  All are going to be on the
    9  engineering firm, because the firm, they are
   10  being denied WBE or DBE as well, which is my
   11  sister here as well too.  She's the president
   12  of the (indecipherable).
   13            ALDERMAN CAROTHERS:  Go ahead.
   14            MR. ISSA:  And good afternoon.  My
   15  name is Moussa Issa.  I am construction
   16  engineer with HBM Engineering Group.  We do
   17  here in the City of Chicago, Chicagoland, joint
   18  projects for design construction services.
   19                 And we started the firm -- the
   20  firm start like in late 2001 by my sister, a
   21  professional engineer as well.  She's an
   22  electrical engineer, and I joined her after
   23  awhile.
   24                 Giving a little bit about the
00223
    1  background about myself, I am an Arab American.
    2  I immigrated from Lebanon in 1979 due to the
    3  Civil War and to continue my education in the
    4  states.  And I came to Texas, I finished my
    5  B.S., M.S., and (indecipherable).  Since then
    6  I've been working as a professional engineer in
    7  Texas and Florida for 11 years.
    8  It was 11 years in Texas, as I said, when I get
    9  my education.  Then I moved to Florida, and
   10  this is my first year (indecipherable) in the
   11  Chicagoland, State of Illinois.
   12                 I've been here about three
   13  years.  I started with Hyatt about a year ago,
   14  with the firm.  My experience, my education, is
   15  on first on engineering and then on instruction
   16  and construction.  I'm a professor as well for
   17  the State University, as adjunctive professor
   18  in structural engineering.  I'm married with
   19  three kids.  I came myself from a farming
   20  family, to give you a little bit about the
   21  background and why we are here.
   22                 I came from a farming family.
   23  And my father and mom (indecipherable).  I have
   24  eight brothers -- nine boys and one girl.  All
00224
    1  of us, my father want to make sure all of us go
    2  to school and get education.  And we have the
    3  opportunities to come over here.  And three of
    4  us -- seven of us are engineers and three of us
    5  are doctors, actually.  And my sister, she had
    6  the opportunity as well.  She's an engineer as
    7  well.
    8                 So, you know, these are some of
    9  the things that we had and some of the
   10  extremes.  At the same time, when the firm
   11  started, which it started in June -- it,
   12  started the firm.  And from December 2001, I
   13  joined with the company in 2003 as a partner
   14  along with a friend of us, of Hayat and myself,
   15  when we were in Florida.  Her name is
   16  (indecipherable), who's an African-American as
   17  well.  And she came and joined us about a year
   18  ago.
   19                 And since then we have been
   20  trying to apply to get our WBE status or DBE
   21  status, and we have not got it yet.  We have
   22  been denied several times based on things that
   23  I'll be mentioning here.  But since then we
   24  have, like, an office equipped ready to go with
00225
    1  the three of us.  We've been paying rent since
    2  April.  We've been trying to apply for jobs for
    3  contracts.  We have not get it.  Individuals
    4  tell us, as soon as you get your DBE or WBE
    5  status give us a call and we will help you.
    6                 And what I want to say here is
    7  that, we are prequalified with the State, with
    8  the City of Chicago to do lots of business
    9  contracting, design, construction, inspection,
   10  and still the City denies our DBE application.
   11  And one of the reasons is -- I want to say the
   12  main reason for denial was that I am the male
   13  structural engineer in the company.  I believe
   14  the denial was based on part on a forced belief
   15  that my sister, a female Arab, is subservient
   16  to me as a male Arab (indecipherable).  And
   17  this is not true.  This is what we were told --
   18  or this is what she was told; that, you know,
   19  males are dominant in your country, so your
   20  brother -- you're -- the sister is an engineer,
   21  so then you are the one under control.  But
   22  this is false information.
   23                 But based upon this false belief
   24  our firm was denied WBE and DBE certification.
00226
    1  This has been really hurt our firm.  HBM, which
    2  is our firm, has been applying for jobs and
    3  competing with the big engineers like little
    4  fish in the sea, I want to say.  When HBM calls
    5  the other leading firms to team up with, their
    6  comment is, call us when you have your WBE or
    7  MBE or DBE certification.  (Indceipherable) to
    8  get MBE.
    9                 And the other thing we're told
   10  by some agencies, that -- actually we came from
   11  Lebanon (indecipherable).  Lebanon is an oil
   12  country, and you're not qualified to be an MBE.
   13  Lebanon is (indecipherable) country, you know.
   14  They don't even have oil.
   15                 The only firm that HBM was able
   16  to team up with were the minority groups, the
   17  MBE and WBE firms, without any results up to
   18  this point.  Due to the competition of the big
   19  boys, HBM has lost so many bids on contracts or
   20  a percentage to bid on contracts due to the
   21  status of the Arab Americans, females or males.
   22  Like, in our company is really female dominant
   23  five percent, which is by African-American and
   24  my sister, and still were denied that.
00227
    1                 This is just one example of the
    2  (indecipherable) that we have here; that we are
    3  trying to survive and accomplish the American
    4  dream.
    5                 I am really respectfully
    6  requesting the Task Force to recommend the Arab
    7  Americans to be included under the DBE or MBE
    8  Ordinance.
    9                 Thank you very much for your
   10  time and listening to us.
   11            ALDERMAN CAROTHERS:  Alderman
   12  Cardenas.
   13            ALDERMAN CARDENAS:  Question.  Where
   14  do you reside at?
   15            MR. ISSA:  Hillside, Illinois.
   16            ALDERMAN CARDENAS:  I'm sorry?
   17            MR. ISSA:  Hillside.  4415 West
   18  Harrison.
   19            ALDERMAN CAROTHERS:  Thank you for
   20  coming.  Thank you very much.
   21                 Adam Moghamis.
   22            MR. MOGHAMIS:  Good afternoon.  My
   23  name is Adam Moghamis, and I am principal
   24  engineer and (indecipherable) of a private
00228
    1  environmental, geotechnical and materials
    2  engineer from the West Loop area of Chicago.
    3                 Our firm has routinely been
    4  excluded from opportunities to participate in
    5  the City contract due to the lack of minority
    6  status.  We spent time and money on marketing,
    7  attending frequent meetings, and preparing
    8  proposal presentation to honor with the prime
    9  consultant, only to be rejected ultimately; not
   10  to our qualification, but our non-minority
   11  status.
   12                 In fact, many of our clients are
   13  frustrated by this as well due to the fact that
   14  they value our expertise, yet cannot include us
   15  in the major project.
   16                 As a small business, this
   17  investment of time and resources as just to the
   18  portions make an affect on us.  As a business
   19  based in Chicago, we are frustrated by our
   20  inability to participate to the contracts in
   21  our own City.  And I respectfully request the
   22  Task Force to recommend that an Arab American
   23  to be included under the MBE and WBE Ordinance.
   24                 Thanks.
00229
    1            ALDERMAN CAROTHERS:  Any questions
    2  from the panel?
    3                      (No audible response.)
    4                 Thank you for coming.
    5                 Mr. Kiswani.  Rafiq.  What is
    6  your last name?
    7            MR. KISWANI:  Kiswani.
    8            ALDERMAN CAROTHERS:  Proceed, sir.
    9            MR. KISWANI:  I have some copies I
   10  would like to hand out for you if I could.
   11                 My name is Rafiq Kiswani.  I
   12  represent Lucidline, a data continuity
   13  business.  Aside from construction and
   14  contractors, and I would like to raise the flag
   15  why other disciplines and other verticals are
   16  not included within the program to provide
   17  opportunities for other verticals.
   18                 In essence, we overlap.
   19  Engineering and technology and construction,
   20  construction engineers, sometimes the
   21  performance of any project requires various
   22  disciplines in order to achieve the results.
   23                 I'd like to start from the lost
   24  opportunity; in the fourth quarter of 2003 the
00230
    1  loss in opportunity for wireless access for
    2  both O'Hare Airport and Midway Airport.  Their
    3  request for proposal required service to be
    4  furnished so the travelers at both airports can
    5  access the internet from their laptops,
    6  depending if they have the wireless cards with
    7  them.  That would require that one is building
    8  some antennas and some bridges, and some
    9  infrastructure has to be provision.
   10                 Nevertheless, this project by
   11  itself was set-aside.  And we were denied the
   12  opportunity to participate in it for, in
   13  essence, we were not a minority or woman-owned
   14  business.
   15                 Lucidline was -- I founded
   16  Lucidline in May 2001, and prior to that I
   17  founded another company which we sold in 1999
   18  for a publically-traded firm.  The core
   19  competencies we carry is very high.  I sat in
   20  2001 in the Intel Corporation Advisory Council
   21  Board for high-speeds.  I did some publications
   22  for Net Worth Economist Data (indecipherable)
   23  access.  My partner, (indecipherable), he could
   24  not be here today.  He was Acting Vice
00231
    1  President for Telnex (phonetic) providing local
    2  customer support for 14 years, and he
    3  volunteered and developed curriculum for the
    4  minority business plan -- businessmen in
    5  minorities to gain status through similar to
    6  the program training to work at central offices
    7  for the same communication companies who are
    8  carriers, such as AT&T, Sprint, and AT&T, to
    9  fill the gap and fulfill the qualified
   10  installers needed to happen.
   11                 Unfortunately, with our
   12  contributions to the cause and to the merit of
   13  the program, we are denying the opportunity of
   14  the program. I believe we have to award the
   15  over-achievers by a fair opportunity and a fair
   16  landscape.  And if we fail to do that, I don't
   17  think that would be fair exchange for the
   18  economic standing of the City of Chicago and
   19  the State of Illinois.
   20                 I thank you very much.
   21            ALDERMAN CAROTHERS:  Any questions?
   22                      (No audible response.)
   23                 Thank you very much for coming.
   24                 Rob Mourad.
00232
    1            MR. MOURAD:  Good afternoon.  Thank
    2  you for the chance to speak.
    3            ALDERMAN CAROTHERS:  Before you go,
    4  we have Joan -- let me just get the lineup --
    5  Joan Archie, Lauren Sugerman, Roy Shalabi will
    6  be next.  So we've got the line up.
    7                 Continue.
    8            MR. MOURAD:  And I'll keep this
    9  brief.  I'm with the Arab American Bar
   10  Association.  I'm an attorney here in Chicago.
   11  I was born in Beirut, Lebanon, and immigrated
   12  to the United States at the age of five and
   13  grew up mostly in the Midwest, in the Chicago
   14  area, Ohio, and then moved back to Chicago
   15  about four years ago.
   16                 And I'll keep it to the point.
   17  The issue here is the struggle for identity
   18  that our community has and the struggle to
   19  erase this cloak of invisibility that has kind
   20  of overshadowed us.  We go along living our
   21  daily lives, and we are facing tremendous
   22  discrimination.  This is not just after
   23  September 11th, this was pre September 11th.
   24  As a five year old kid in the school in Nevil,
00233
    1  Indiana, people didn't know what to make of me.
    2  And most of the time the discrimination I got
    3  was they thought I was Hispanic.  And people
    4  would come up to me and makeup derogatory
    5  comments; well, (indecipherable) how you doing.
    6                 But now it's intensifying after
    7  September 11th.  Now it's intensifying, the
    8  hatred towards Arabs, the racial slurs, the
    9  words that are being used.  We're taking on a
   10  lot of racism, yet there's nothing going on to
   11  help us people out, help our communities out.
   12  We're a hardworking community, very diverse.
   13  We come of many religions, and we're good
   14  law-abiding citizens for the most part.  Like
   15  every community, there's good and there's bad.
   16                 But we no longer want to be
   17  invisible, and this is a first step.  We are
   18  taking steps this year.  This year we went out
   19  and we voted.  This year we pushed for certain
   20  candidates in this area locally and nationally.
   21  We are starting to stand up.  We have been
   22  crawling, and now we are leaning up and we're
   23  going to start walking, we're going to start
   24  running.  We're no longer going to be
00234
    1  invisible.
    2                 We ask you to help us with this
    3  step by supporting us and seeing us as a
    4  minority under the Ordinance, because this is
    5  one small step.  And we're going to take this
    6  and we're going to run with it and continue
    7  with it.
    8                 And I thank you for your time
    9  and courtesy.
   10            ALDERMAN CAROTHERS:  Alderman Lyle.
   11            ALDERMAN LYLE:  Can I start by
   12  getting your name?  I missed that in the
   13  beginning.
   14            MR. MOURAD:  Yes.  Rob.  The last
   15  name is Mourad, M-o-u-r-a-d.
   16            ALDERMAN LYLE:  We have -- I don't
   17  know if you've been here all afternoon, but
   18  we've had speakers who talked to us today, and
   19  clearly this afternoon, and they used words
   20  such as "over-achieving."  One of the speakers
   21  earlier said something about people who achieve
   22  50 percent more or something like that, and the
   23  last speaker just mentioned over-achieving.
   24                 And I think that people need to
00235
    1  be very careful about the words that they use
    2  when they talk about race in any category, but
    3  particularly in this area because this is a
    4  program designed to help those people who have,
    5  because of circumstances beyond their control
    6  could not achieve.  This is a program to help
    7  people that because of circumstances such as
    8  race, such as ethnic origin, have been kept
    9  below the achievement level of the national
   10  players.  And because of that, the government
   11  was empowered to go in and give them an extra
   12  hand to help them come on an equal level with
   13  everyone else.
   14                 And so when someone comes up and
   15  says, you know, the "over-achiever," they're
   16  automatically removing themselves from the
   17  category of people that we are designed to
   18  help.  So that's something you might want to
   19  talk to people about.  Plus it's offensive to
   20  some folks out here who are in that category
   21  who are like, well, what does that mean that
   22  we've been doing for 400 years?
   23            MR. MOURAD:  Right.  And then, no,
   24  that's not -- I hope you didn't take it that
00236
    1  way.
    2            ALDERMAN LYLE:  I didn't.  You know,
    3  that's what I'm saying.  We have to be real
    4  careful about the semantics that are being used
    5  in these discussions.
    6            MR. MOURAD:  Sure.  And you know
    7  what, I think sometimes, especially, you know,
    8  from our community, we've been painted very
    9  badly over the last few years.  And a lot of
   10  times we like to come out and show that, you
   11  know what, we're just as good as everybody
   12  else; not better, not worse, just as good.  We
   13  get portrayed very badly, so, you know, that's
   14  where my comments were coming from.  So I don't
   15  want you to take it --
   16            ALDERMAN LYLE:  But in terms of, you
   17  know, you know the Boxeran (phonetic) because
   18  you've read the case.  And in terms of what we
   19  have to do, we have to be able to substantiate
   20  that whoever we put in this group is a member
   21  of a disadvantaged -- member of a class that is
   22  being penalized by something that they
   23  cannot -- something that they had no -- nothing
   24  to do with.  And so that's why it's even more
00237
    1  important that when people sit up here they
    2  don't tell us about how they are not in the
    3  class, and then ask us to put them in the
    4  class.
    5                 So that's something we need to
    6  look at.
    7            MR. MOURAD:  And again, I believe
    8  that when you look at it and look at the
    9  testimony, you'll see that we do fall in the
   10  class and we are being penalized for a lot of
   11  things.  Nobody here in this community had
   12  anything to do with September 11th, but thanks
   13  to Ashcroft and the Bush administration, we've
   14  been penalized for that severely.
   15                 Thank you for your time.
   16            ALDERMAN CAROTHERS:  Thank you for
   17  coming.
   18                 Ms. Archie.
   19            MS. ARCHIE:  My name is Joan Archie,
   20  and I am the Director of the Employment,
   21  Counseling and Training Department of the
   22  Chicago Urban League.  On behalf of the Chicago
   23  Urban League and its President-CEO, James W.
   24  Compton, I want to thank you all for the
00238
    1  opportunity to give our input into the City's
    2  effort to revise its minority and women's
    3  business enterprise program.
    4                 Established in 1916, the mission
    5  of the Chicago Urban League is to eliminate
    6  racial discrimination and segregation, and work
    7  for achievement of equal opportunity and parity
    8  for African-Americans, other minorities, and
    9  the poor in every phase of American life.
   10                 Consistent with that charge, the
   11  League has long supported the local, state, and
   12  federal government efforts to help minorities
   13  and female-owned companies get a fair share of
   14  construction contracts.  We are proud to have
   15  been a founding participant in the formation of
   16  Black Contractors United, an organization that
   17  has paved the way for unprecedented
   18  African-American participation in numerous
   19  construction projects.  We are proud to have
   20  helped the City establish City-wide procurement
   21  goals of 25 percent for minorities and 5
   22  percent for women.
   23                 While progress has been made
   24  since the inception of the City's program, we
00239
    1  are concerned that much of this progress still
    2  appears to depend crucially on the explicit
    3  government affirmative action.  Minority
    4  business firms have not generally reached the
    5  point of maturity and acceptance where they can
    6  expect to survive without government
    7  protection.
    8                 We are disappointed that The
    9  Builders Association of Greater Chicago felt
   10  compelled to challenge the constitutionality of
   11  the City's M/WBE Program when White-owned
   12  construction firms continue to hold a near
   13  monopoly on private sector contracts and
   14  receive the lion's share of the public sector
   15  business.  It's hard to fathom how the Builders
   16  Association came to the conclusion that a City
   17  that is less than one-third White should not
   18  administer a program that assures that 25
   19  percent and 5 percent of publically funded
   20  projects go, respectively, to minorities and
   21  women.
   22                 We are bothered by the
   23  suggestion that a definite termination date be
   24  set on the City's M/WBE Program.  We cannot
00240
    1  identify a date when the impact of racial
    2  discrimination will be eliminated, and
    3  minority-owned firms will no longer require
    4  corrective and compensatory government
    5  protection to compete on a level playing field.
    6                 It is clear that the City's top
    7  construction firms are multi-general companies,
    8  products of a historical environment that
    9  included a culture and tradition of racial
   10  exclusion.  It is also clear that we cannot
   11  make up for hundreds of years of discrimination
   12  in two or three decades.
   13                 We do not agree with the
   14  suggestion that M/WBE firms graduate from the
   15  program when their average sales over a
   16  three-year period reach 17.5 million.  This is
   17  unrealistic given that average revenue for the
   18  top ten Chicago area contractors is around 86
   19  million per year, more than three times it's
   20  suggested graduation rate.  To put these
   21  numbers in perspective, experienced builders
   22  note that the 27.5 million graduation figure
   23  currently used is just enough to cover the
   24  maintenance needs of a firm hoping to bid on a
00241
    1  City building project.
    2                 As Paul King, the head of UBM,
    3  recently noted in N'Dgo Magazine, the sales
    4  volume of Chicago's top White firms is four
    5  times the annual volume of all Black
    6  contractors in the country.  These majority
    7  firms, King notes, have banking relationships
    8  with preferred rates that have been in place
    9  for two or three generations.
   10                 M/WBE enterprises graduating
   11  into the daunting construction free-market at 5
   12  million simply cannot hope to seriously compete
   13  with established White firms that have long
   14  capitalized their businesses in the billion
   15  range.  If anything, the size of graduating
   16  minority firms should be raised, not lowered.
   17                 We are also concerned with the
   18  suggestion that the City move towards the
   19  replacement of set-asides with voluntary
   20  programs within the construction industry.  The
   21  last time voluntary programs were practiced in
   22  Chicago during the 1970's, they failed by even
   23  the most generous evaluation.  Barely one-half
   24  of one percent of construction work went to
00242
    1  African-American firms over a two-year period.
    2                 To get a sense of what happens
    3  when affirmative action is liquidated, we only
    4  need to look in our own backyard to see that
    5  minority contracting fell by 50 percent after a
    6  Federal District Judge liquidated minority
    7  set-asides at Cook County and at the
    8  Metropolitan Water Reclamation District.
    9                 We are concerned with the
   10  $750,000 personal net worth cap.  If there must
   11  be a cap, we feel that 750,000 is low.  The
   12  start-up costs of a new construction firm often
   13  requires the entrepreneur to dip into his own
   14  pockets in order to meet the day-to-day needs
   15  of payroll, back-office, and other costs.  The
   16  M/WBE firm requires more money out of their own
   17  net personal worth in order to initially
   18  maintain their business.
   19                 We recommend that the personal
   20  net cap worth be raised minimally to 1.5
   21  million.  Increasing the cap will also broaden
   22  the base of eligible businesses for the
   23  program.
   24                 We support the idea of a
00243
    1  transitory program for recently graduated M/WBE
    2  firms.  The purpose of the transitory program
    3  should be on building stable minority business
    4  that can compete in private markets as well as
    5  public.  This offers the best long-term hope
    6  for affirmative action in the construction
    7  industry.  The program should combine
    8  education, nuts and bolts guidance on
    9  individual projects, and contracts with
   10  majority businesses that have available
   11  subcontracting work.
   12                 Thank you for this opportunity
   13  to share our reflections on revising the City's
   14  M/WBE construction contracting program.  The
   15  Chicago Urban League looks forward to helping
   16  the City address Judge Moran's concerns, and
   17  we're here to ensure that all Chicagoans
   18  receive equal opportunity to participate in the
   19  economic life of our great City.
   20            ALDERMAN CAROTHERS:  Thank you,
   21  Ms. Archie.  Questions?
   22                      (No audible response.)
   23                 You have a witness statement, I
   24  want you to leave it up here. I'll take it for
00244
    1  the other members, and thank you for coming.
    2                 Ms. Sugerman, Lauren Sugerman.
    3            MS. SUGERMAN:  Good afternoon and
    4  thank you very much.  My name is Lauren
    5  Sugerman, and I'm the President of Chicago
    6  Women in Trades.  Many people have talked about
    7  their CVs, and I just want to add that mine
    8  begins with a stent as an elevator constructor
    9  in Local Two of the International Union of
   10  Elevator Constructors here in Chicago.  And I
   11  was one of 15 women in a local union of about
   12  1,500 primarily White men.  That was part of
   13  what led me to become one of the founders of
   14  Chicago Women in Trades.
   15                 Chicago Women in Trades is a 23
   16  year old community-based, membership-based
   17  organization of women like myself who work in
   18  the trades.  And we now offer program and
   19  policy at a local and national level to ensure
   20  women access to careers in traditionally
   21  male-dominated industries, significantly those
   22  in the highly segregated field of construction.
   23                 Our goal is to increase women's
   24  economic equity through the elimination of
00245
    1  occupational segregation.  We work to eliminate
    2  the barriers that impede women's access and
    3  retention in the skill trades through direct
    4  service programs for women and girls, technical
    5  assistance to industry partners, and policy
    6  recommendations for public institutions.
    7                 We strongly support preserving
    8  and modifying the City of Chicago set-aside
    9  program.  This is an issue that is important to
   10  Chicago Women in Trades, known as CWIT, for
   11  several reasons.  The essential tenet of the
   12  program, affirmative action, is equal and vital
   13  to expanding opportunities for women to work in
   14  this field of trades as it is to creating
   15  markets for minority and female business.
   16                 Evidence continues to
   17  demonstrate that without targeted programs and
   18  goals to support participation, women and
   19  minorities have little access to either the
   20  jobs or the contracts in the industry.  Similar
   21  to studies that show few minority and female
   22  subcontractors are being utilized on private
   23  jobs, women and minority skilled trades workers
   24  find it difficult to attain and maintain work
00246
    1  outside of publically funded projects.
    2                 Although Judge Moran's decision
    3  affirms the continuing pattern of employment of
    4  discrimination, quite at the heart of this
    5  whole issue, I think, the decision proposes
    6  that legal remedies can address this.  Well,
    7  there are Federal and State laws that band
    8  discrimination in employment.  Utilization of
    9  the legal process is often undertaken at great
   10  risks to individual complainants.  Resolution,
   11  if favorable, often only affects limited
   12  numbers of individuals, and usually only one
   13  employer or union is affected and changed.  And
   14  it's very slow moving at best.
   15                 This also reflects a passive
   16  approach that mitigates the benefits of a
   17  proactive strategy to address issues that
   18  affect groups based on gender and race, and not
   19  only selected individuals who are brave enough
   20  to come forward.
   21                 Secondly, this issue is
   22  important to us because many of our members,
   23  like many of our peers in the construction
   24  industry, seek advancement in the industry that
00247
    1  leads to business ownership.  This is a natural
    2  path that we see many White male construction
    3  industry owners follow upon completing skill
    4  trade apprenticeships, and for junior skills in
    5  the industry.  But it is a path that for women
    6  and minorities -- that women and minorities
    7  still find prohibitive.  A range of obstacles
    8  still limit what's the natural progression of
    9  your White males.  The set-aside program is a
   10  vital program to helping overcome and remove
   11  those obstacles.
   12                 Finally, contrary to the opinion
   13  of the Court, a strong base of female and
   14  minority construction workers is critical to
   15  building the pipeline and base for future
   16  minority and female businesses.  I really want
   17  to emphasize this because I think Judge Moran
   18  got it wrong in the decision, and it's real
   19  important that you get it right as you re-craft
   20  the Ordinance.
   21                 In fact, really, the businesses
   22  that are grown out of the expertise and
   23  experience in the field have greater potential
   24  for success and for ensuring employment
00248
    1  opportunities for fellow minority and female
    2  workers.  And I want to underscore this:  There
    3  is room for a small number of business
    4  opportunities in this City, but there is
    5  greater room for hundreds of job opportunities
    6  and that's really where we see the extension of
    7  economic opportunity and benefit in the greater
    8  community, and especially in the low-income
    9  community.  So I think that should not be
   10  discounted as you look into how to modify the
   11  Ordinance at this point.
   12                 Judge Moran has directed the
   13  City of Chicago to create remedies to
   14  discrimination that continue to pervade the
   15  industry.  His direction is to make the
   16  remedies laser-like in their approach so as not
   17  to let the City skip back into near monopoly
   18  domination by White firms.
   19                 He asserts that a government has
   20  a compelling interest in eradicating
   21  discrimination.  And the City, in defending the
   22  program, asserted unwillingness to be a
   23  passive participant in discrimination.  This is
   24  ultimately what affirmative action was designed
00249
    1  to do, to make us proactive leaders in
    2  challenging and transforming the legacy of
    3  discrimination.
    4                 We urge that these same
    5  principals must apply to ensuring opportunity
    6  and non-discrmination for minority and female
    7  trades workers.  Do not take a passive approach
    8  to this issue.
    9                 We urge the City of Chicago to
   10  take this opportunity to focus a laser beam on
   11  the persistent discrimination against women and
   12  minority workers in the industry.  To ignore
   13  this aspect of the issue while specifically
   14  fine-tuning the program to support the growth
   15  of business for minorities and females would be
   16  remiss.
   17                 Reports on hiring achievements
   18  on major City projects continue to show dismal,
   19  dismal numbers for women's participation
   20  particularly.  Due to the ineffectiveness of
   21  the current City residency hiring Ordinance in
   22  holding contractors accountable for
   23  establishing  goals or adhering to goals for
   24  female hiring, women's work hours on
00250
    1  City-funded projects range from 0 -- and that's
    2  the majority of the projects -- 0 percent
    3  participation to a high of perhaps 3 percent.
    4            ALDERMAN CAROTHERS:  Could you wrap
    5  it up, Ms. Sugerman.
    6            MS. SUGERMAN:  Yes, I am.
    7                 This is in contrast to projects
    8  in Chicago and elsewhere with strong and high
    9  goals for female participation.  Research that
   10  I introduced as part of my testimony conducted
   11  by Chicago Women In Trades on six projects
   12  demonstrated that the higher the goals, the
   13  higher the participation rates for female
   14  workers.  And on several projects that we've
   15  documented, women's participation and work
   16  hours reached 11 percent, compared to the
   17  City's 0 percent.
   18                 Access to these jobs is
   19  critically important to women.  The result of
   20  occupational segregation is that the majority
   21  of women don't work in jobs where they can
   22  achieve economic self-sufficiency.
   23            ALDERMAN CAROTHERS:  Ms. Sugerman,
   24  you're going to have to wrap it up.  We have to
00251
    1  move along.
    2            MS. SUGERMAN:  Okay.  I'm want to
    3  urge you to adopt several recommendations:
    4  Established goals for trades, women's hours on
    5  City-funded projects, provide training and
    6  technical assistance for contractors on hiring
    7  and retaining female workers, promote job
    8  opportunities to female residents, fund
    9  programs that provide preparatory skill
   10  training and support for women seeking to enter
   11  construction careers, require contractors to
   12  adopt policies and conduct training on sexual
   13  harassment prevention, provide support training
   14  and mentoring linkages to help minority and
   15  female trades workers pursue business
   16  development opportunities, and report annually
   17  on the progress of women in the trades and on
   18  City-funded projects.  I think this kind of
   19  annual report would serve the entire industry
   20  as well.
   21                 So without intentional
   22  direction --
   23            ALDERMAN CAROTHERS:  Ms. Sugerman,
   24  I've asked you three times.  I'm going to have
00252
    1  to cut you off now.
    2                 Do you have written comments
    3  that you can leave with us?
    4            MS. SUGERMAN:  I do have a written
    5  comment.
    6            ALDERMAN CAROTHERS:  All right.  We
    7  appreciate it.  Thank you.
    8                 Any questions from the panel?
    9  Ms. McDonough.
   10            MS. McDONOUGH:  Do you know --
   11  because I've heard that there sometimes are
   12  challenges of finding women in specific trades,
   13  that they could actually utilize them if there
   14  are several -- and if there's a lot of work
   15  going on, it's hard to access them.
   16                 Are there certain categories in
   17  the skill trade that we need to recruit more
   18  women, or we have, you know -- what's your
   19  sense of where we've got sufficient numbers and
   20  where we need to be promoting women?
   21            MS. SUGERMAN:  Our experience is that
   22  those trades that have the most open and
   23  accessible application and selection process
   24  are the ones that have the largest numbers of
00253
    1  female and minority participants, so.  An
    2  example of that is the carpenters' union, which
    3  has an open application process every day of
    4  the year.  An example on the other end is the
    5  ironworkers, which takes applications maybe
    6  once a year, has a much more limited pool of
    7  job opportunities and so it's a much more
    8  challenging process to get people in.
    9                 But we do know that when you
   10  establish targeted training programs that are
   11  linked to targeted jobsites, for example
   12  McCormick Place or Soldier Field or any of the
   13  big projects, the airport expansion project,
   14  you can both identify the preparatory training,
   15  the outreach to engage people, and the linkage
   16  to jobs.  And that makes the difference.
   17            MS. McDONOUGH:  I also agree with
   18  your comment that I think maybe the Judge did
   19  sort of miss the boat.  If you're in the
   20  construction trades, a logical progression for
   21  you is to move up and eventually be a business
   22  owner, and he's pretty much discounted that.
   23  And I'm not exactly sure why, but I think it
   24  wasn't a correct evaluation of how this
00254
    1  industry operates.
    2                 Thank you.
    3            ALDERMAN CAROTHERS:  Ms. Sugerman,
    4  thank you for coming.
    5                 Mr. Shalabi, followed by Babette
    6  Peyton, followed by Ashraf Abdelhamid, followed
    7  by Muhied-Din Arman, in that order.
    8                 Mr. Shalabi, your name and who
    9  you represent, please.
   10            MR. SHALABI:  Good afternoon.  My
   11  name is Roy Shalabi, and I'm here as President
   12  of the Arab American Bar Association of
   13  Illinois.  Thank you for your time and for
   14  listening to us.
   15                 Just a little bio about myself.
   16  I'm a life-long Chicagoan, first generation,
   17  the product of parents who migrated to this
   18  country looking for a better way of life and
   19  found it here.  And you've heard many speakers
   20  with regard to the issue of Arabs and this
   21  particular issue, and I will not dwell on it
   22  because I'm sure you have it down.  But I do
   23  want to emphasize that even being born here and
   24  raised here and being part of the system,
00255
    1  things have dramatically changed not only since
    2  9-11, but before that, since the first Gulf War
    3  in 1990 or '91.
    4                 And to answer your question
    5  posed earlier, there is -- our community is
    6  disadvantaged and it has been penalized.  We
    7  have submitted some information, and we will be
    8  happy to provide more, that all we're asking
    9  for is a study to determine exactly if we fit
   10  into the minority status, which we believe we
   11  do.
   12                 Someone posed the question
   13  earlier about numbers, and I believe we do have
   14  the numbers.  Unfortunately, the census itself
   15  is not accurate at all and, in fact, in this
   16  day and age did not even have a criteria for
   17  people of our ilk.  And therefore, we had to
   18  either put an X and write in who we are, or not
   19  have that opportunity at all.
   20                 In light of 9-11, even under the
   21  Profiling Act where police were required to put
   22  in the race of those people they issued
   23  citations to, incredibly our community is not
   24  even mentioned there.  So it's faulty on its
00256
    1  face.  For example, if someone were to stop a
    2  Middle Easterners or a Muslim or an
    3  Arab-American, there is no place to put that in
    4  there.  So, invariably they'll be placed as
    5  White, which defeats the entire purpose of the
    6  profiling issues.  So I believe we do have the
    7  numbers, and I believe that a study will verify
    8  that we fall under this.
    9                 We're happy -- Chicago has
   10  always been the front-runner in including our
   11  community.  The Commission on Human Relations
   12  has an Advisory Council on Arab Affairs.  Every
   13  one -- all the other groups are classed out as
   14  minority:  Women, gay, lesbian,
   15  African-American, Hispanic, and Asian, and we
   16  were also included in that.  We were very happy
   17  with that.  In fact, I had the honor of serving
   18  as the First Chair of the Advisory Council as
   19  the first Arab-American appointed to the
   20  Commission on Human Relations.  And I currently
   21  serve as the first Arab-American on the Chicago
   22  Park District Commission.
   23                 So we look to Chicago to lead
   24  the way in recognizing and acknowledging our
00257
    1  community.  I am speaking to you as President
    2  of our Bar Association, and in no other
    3  capacity other than being a Chicagoan and
    4  Arab-American.
    5                 But do I want to emphasis that
    6  this is very important.  I think our numbers
    7  are there.  We certainly are disadvantaged and
    8  we certainly have been penalized.
    9                 And with that, I thank you for
   10  your time.  Thank you.
   11            ALDERMAN CAROTHERS:  Thank you,
   12  Mr. Shalabi.
   13                 Ms. Peyton.
   14            MS. PEYTON:  Thank you very much,
   15  Mr. Chairman, the Aldermen, the Executives,
   16  business advocates, directors, fellow
   17  contractors, and other interested people.
   18                 My name is Babette Peyton.  I'm
   19  the President of Peyton Elevator Company.
   20  Peyton Elevator Company is a general contractor
   21  specializing in vertical transportation.
   22  That's things like elevators, escalators,
   23  dumbwaiters, moving sidewalks, stairless and
   24  motionless.
00258
    1                 We were organized over 15 years
    2  ago.  And our company, Peyton Elevator Company,
    3  is the first minority company in the world to
    4  be a minority, female, and veteran-owned, as
    5  well as build an elevator from the ground up.
    6  We were not the first minority elevator
    7  company, but other companies were in the repair
    8  business only.  We decided to build, and that's
    9  when we gained our national attention.
   10                 Also, I'd like to say that I'm
   11  President of the Illinois Association of
   12  Minority Contractors, which was one of the
   13  original interveners in this case as a friend
   14  for both the City and the County, as well as
   15  some of my other colleagues that I see sitting
   16  here.  And so we have a vested interest in
   17  what's going on.
   18                 My remarks are going to be brief
   19  because I know it's late.  Thank you.
   20                 The issues is money and people's
   21  quality of life.  And so as we talk about all
   22  the things that are surrounding, let us not
   23  forget that everybody has to eat at the end of
   24  the day, everybody has to have a place to put
00259
    1  their head; they want to, if they have
    2  children, have them to go to college or a trade
    3  school or something.  And when companies are
    4  downsized, people want other places to go.  And
    5  business is a place where people can go where
    6  there should be a level playing field.  So when
    7  one business goes, it has a rippling effect,
    8  not just on dropping of employees, but also
    9  vendors that are affected.
   10                 I'll only say a couple of things
   11  about my background, and then I want to point
   12  to issues that you can maybe take a look at how
   13  you can remedy.
   14                 I was President of the South
   15  Shore Chamber of Commerce in 1982.  I was an
   16  elected delegate to the White House Conference
   17  on Small Business both in 1986 and 1995.  I
   18  have Certificates of Appreciation from the U.S.
   19  Small Business Administration, U.S. Department
   20  of Commerce, from the White House, and I have
   21  testified at Congressional levels, State
   22  levels, and City levels before.
   23                 With that said, my focus is on
   24  economic development and some structural things
00260
    1  that the new Ordinance might address to help
    2  equalize the playing field, whether or not
    3  affirmative action comes back in its natural
    4  state or not.  It's very important to note that
    5  I am African-American and I have suffered
    6  discrimination.  And my particular industry is
    7  non-traditional both for women and as well as
    8  minorities.  So I get it on both ends.
    9                 And my particular industry, I
   10  can tell you a couple of things which probably
   11  crosscut in other industries.  For example, in
   12  your purchasing contracts for construction
   13  there is -- at least in the elevator, I don't
   14  know in others, you may want to check -- there
   15  is discriminatory barriers that are there that
   16  can easily be remedied.  For example, where you
   17  have your manufacturer of products, for
   18  example, elevators, they traditionally have
   19  them their, the names of the traditional
   20  elevator companies.  Well, my company is an
   21  elevator company.  We manufacture elevators,
   22  escalators, et cetera, but they leave no room
   23  for "approved equal."  You only need to put in
   24  there for many contracts, "or approved equal."
00261
    1                 And some people might say, well,
    2  in the general conditions there's always the
    3  provision for substitution, but I'm here to
    4  tell you that the general contractors do not
    5  look at that, nor do the architects look at
    6  that in terms of your participation when it
    7  comes down to it.  I've spent hundreds of
    8  thousands of dollars preparing bids only to be
    9  told at the last minute, well, I'm sorry you
   10  can't do that because we weren't able to get a
   11  grant to allow you to participate as a prime on
   12  that contract in that particular division,
   13  number one.  These are structural things.
   14                 So just checking the wordage
   15  where it only provides for certain companies,
   16  unless there is materials and so forth, and
   17  then other contractors have access to that too.
   18                 Number two has to deal with your
   19  bonding, it has to deal with insurance, it has
   20  to deal with access to capital.  I think that
   21  you might want to have some type of -- look for
   22  best practices and organizations that you might
   23  already be a part of.  The Chamber of Commerce
   24  is across the country.  Other Aldermanic or,
00262
    1  you know, similar types around the country,
    2  county, state purchasing departments, they have
    3  best practices where some of them have already
    4  found remedies to get around this without
    5  having to try to invent the wheel.  And that
    6  also will cut down on the time since we have a
    7  limited time to put forth recommendations.
    8                 Also, in terms of the thing
    9  dealing with bundling --
   10            ALDERMAN CAROTHERS:  Kindly wrap it
   11  up, Ms. Peyton.
   12            MS. PEYTON:  I will.  Thank you very
   13  much.
   14                 Dealing with bundling, it's
   15  happening out in the private industry too.  So
   16  what I think the government is in a position to
   17  do is, since they continually contract out for
   18  consultants, to have a consultant contract out
   19  to look at developing some type of process for
   20  inclusion of -- if a company gets it.  I mean,
   21  you might say, well, we already have something
   22  but it's not working right now so let's take a
   23  look at an outside-the-box approach.  Again,
   24  best practices, to see how that's working in
00263
    1  other places and recommend it.
    2                 And lastly I'd just like to say
    3  that I think that you're in a position to look
    4  at contracts that are upcoming in the City of
    5  Chicago that have dollar amounts of 30 million
    6  or more attached to them.  And if you take just
    7  the statement of diversity and community in
    8  plain view and behind the scenes, diversity and
    9  community in plain view and behind the scenes,
   10  contracts, personnel out working, personnel
   11  with the company so that a company coming in to
   12  one community there should be some type of
   13  reflective after so that many people are
   14  working.  You shouldn't be able to go by tons
   15  and tons of projects in your own community and
   16  you can't find -- I don't care what community
   17  you come from -- and not find somebody from
   18  your community working.
   19                 I want to thank you for this
   20  opportunity.  I would like the opportunity to
   21  submit my report in full in a writing.  And
   22  again, I thank you.  I think it's wonderful
   23  what you're doing.
   24                 And I would like to remind you
00264
    1  if you know anybody that needs an elevator,
    2  escalator, stairlift, or lift, please call me.
    3  Thank you.  Babette Peyton, Peyton Elevator.
    4            ALDERMAN CAROTHERS:  Thank you,
    5  Ms. Peyton, for your testimony.
    6                 Mr. Ashraf Abdelhamid.
    7            MR. ABDELHAMID:  Good afternoon.  I'm
    8  going to be very brief and very to the point.
    9                 My name is Ashraf Abdelhamid,
   10  and I'm representing myself and my firm, my own
   11  firm, Gado Architects.
   12                 I came to this country about 14
   13  years ago.  I have been really struggling in
   14  the beginning to be part of this society, and I
   15  can comfortably say now that I'm proud of all
   16  the efforts that I have been put and my family
   17  put to be part of this society.
   18                 I established my business two
   19  years ago.  I'm looking for ways to grow my
   20  business.  I share the same opinions as my
   21  community that including -- being including in
   22  that program, it will give us really a great
   23  chance of growing.  And we have the
   24  qualification; we have the really great sense
00265
    1  of contributing to be part and be successful in
    2  this society, and that we're not asking for a
    3  preferred status, but we are asking to be
    4  treated equally as other minorities.
    5                 Thank you for your time.
    6            ALDERMAN CAROTHERS:  Thank you.
    7                 Mr. Arman.
    8            MR. ARMAN:  Good afternoon to all.
    9  My  name is Muhied-Din Arman.  I am American
   10  (indecipherable).  I migrate from Palestine in
   11  1989.  I have a wife and five children.  I'm
   12  also mechanical engineer, self-employed in
   13  Chicago.  My first time results for mechanical
   14  engineer, I graduated from UIC two years ago.
   15  I am currently the Vice President of E&M
   16  Plumbing Contractors and Corporation.  I'm also
   17  a member of Arab-American Engineer and
   18  Architects in the Chicago area.  I have E&M
   19  HVAC Incorporation jointly with my son.
   20                 Since I came to Chicago I have
   21  tried to find a job.  I applied for many
   22  governmental and non-governmental jobs.  Always
   23  I have been evaluated A-plus, but only once
   24  called for an interview.  I got the job in a
00266
    1  small engineering company.  I was way up on the
    2  pay.  Just imagine, $8 an hour.  Meanwhile, the
    3  new engineering school -- I mean the students
    4  of first year of engineering schools were paid
    5  in that firm $20 an hour.
    6                 Anyway, I got my plumbing
    7  license and started my own business.  The first
    8  year I barely survived.  I have to do all of my
    9  business with Clyde (indecipherable).  Why, you
   10  know it, because small businesses have no
   11  competition with big fishes -- with big stars,
   12  I mean to say.
   13                 And one example of what I think
   14  a big (indecipherable) for us as Americans, I
   15  have a cousin in Lowell, who is born in the
   16  city, graduated from UIC as a mechanical
   17  engineer, trying to find a job.  He's a little
   18  handicapped, but he's looking and he doesn't
   19  find any job.  He's working as security officer
   20  in one company.
   21                 I could continue with many
   22  examples relating to this issue.  And I am
   23  respectfully requesting the Chairman to pass
   24  the copies to the Task Force, and also
00267
    1  requesting the Task Force recommend that
    2  Arab-Americans be included with MBA -- DBA and
    3  MBA Ordinance.
    4                 Thank you for your time and for
    5  giving me this opportunity.
    6            ALDERMAN CAROTHERS:  Thank you for
    7  your testimony.
    8                 Committee, we're going to stand
    9  at ease for a moment to give the court reporter
   10  a break.  We will resume momentarily.
   11                 When we come back we will have
   12  Hayat Issa, Al Hasan, Khaled Elkhatib, Mohammad
   13  (John) Dasoqi, and in that order.
   14                 So we'll stand at ease for a
   15  moment.
   16                      (WHEREUPON, a break was
   17                      taken.)
   18            ALDERMAN CAROTHERS:  The meeting will
   19  come to order.
   20                 Mr. Issa, Al Hasan, Khaled
   21  Elkhatib, Mohammad (John) Dasoqi, in that
   22  order.
   23            CHAIRMAN BEAVERS:  Good afternoon,
   24  will you state your name and title for the
00268
    1  record, please?
    2            MS. HAYAT:  Good afternoon.  My name
    3  is Hayat Issa.
    4            CHAIRMAN BEAVERS:  Will you spell
    5  your last name for the court reporter?
    6            MS. ISSA:  Issa, I-s-s-a.
    7                 I am the President of HBM
    8  Engineering Group.
    9            CHAIRMAN BEAVERS:  You have to speak
   10  into the mic.  You have to speak a little
   11  louder; okay.
   12            MS. ISSA:  I am a (indecipherable)
   13  who immigrated for Lebanon.  I am a family of
   14  nine boys, and I am the only girl.  Because of
   15  the Civil War, my father send three of my older
   16  brothers to get their degrees from the U.S.A.
   17  After years, my turn came and they offered me
   18  the same chance to get my degree from the
   19  States.
   20                 So I did graduate from FSU
   21  (indecipherable).  And in 1993 I am electrical
   22  engineer.  From my high school days my dream
   23  was to establish an engineering firm since I
   24  grow up in an engineering family of seven
00269
    1  engineers.  The dream came true in December of
    2  2001 when I and one of my brothers established
    3  Hayat Engineers (indecipherable).
    4                 In this state we did small jobs.
    5  In February 2003 we invented Hayat and
    6  (indecipherable) Consultant, LLC, by adding two
    7  new partners, Ms. Brenda (indecipherable), an
    8  African-American.  She used to be our friend
    9  from Tallahasse while I was in school; and
   10  Dr. Etha, Dr. Luther Etha (phonetic),
   11  Arab-American, which is -- he is my brother.
   12  He talked before me.  And we changed the name
   13  then to HBM Engineering Group.
   14                 In April 2003 we rented an
   15  office in Hillside in anticipation of we
   16  growing the business.  HBM Engineering Group,
   17  LLC, to do set-aside construction and
   18  engineering services with IDOT, Stoneway
   19  (phonetic) and City of Chicago, and Illinois
   20  Capital Development.  And we also set-aside
   21  (indecipherable) from the CMS, the
   22  (indecipherable).
   23                 In June 2003 HBM applied for DBE
   24  status with IDOT.  We also applied for DBE
00270
    1  status with the City of Chicago and CTA.  In
    2  addition, HBM applied for WBE status with the
    3  City of Chicago.  Our firm meets the
    4  requirements for both DBE/WBE status since firm
    5  is 65, which is over 55, owned and managed by
    6  females, by two females, me and Ms. Brenda.
    7                 However, before I got with a
    8  group our third DBE application, the City of
    9  Chicago denied both DBE and WBE application.
   10  We applied with City -- through City of
   11  Chicago, and we are (indecipherable).  They are
   12  (indecipherable) send the decision back to the
   13  City of Chicago.  Last week -- last ten months
   14  applying for a DBE/WBE status and they still
   15  the application out (indecipherable).
   16                 In my opinion I feel that the
   17  DBE/WBE denied it while this is a
   18  discrimination.  I believe that the City was
   19  with (indecipherable) assumption that because I
   20  had a visa (indecipherable) of HBM Engineering
   21  of Arab culture, the men are in control in this
   22  firm.  This is not true.
   23                 As a result of this unfair
   24  denial of our firm's WBE/DBE application, our
00271
    1  firm is suffering.  Although we are a very
    2  small firm, 65 percent owned and controlled by
    3  females, we are not able to (indecipherable)
    4  MBE/WBE programs.  As a result we're supposed
    5  to compete with a larger, more established
    6  firm.  We have been doing this by submitting
    7  proposals to IDOT, Stoneway, and City of
    8  Chicago.  However, we didn't yet -- we did not
    9  yet receive any contract from IDOT, the City of
   10  Chicago, or to Stoneway, although we asked
   11  similar larger firms about including us in
   12  their team, not yet I believe since our firm is
   13  not certified as DBE/WBE firm.
   14                 I would like a fair opportunity
   15  to participate in and benefit from MBE/WBE
   16  program that has been established to help
   17  create our business.
   18            CHAIRMAN BEAVERS:  Do you have a copy
   19  of that statement?
   20            MS. HYATT:  Thank you very much.
   21            CHAIRMAN BEAVERS:  Have a seat, sir,
   22  and identify yourself for the record.  Spell
   23  your last name for the court reporter.
   24            MR. ELKHATIB:  Thank you very much.
00272
    1  My name is Khaled Elkhatib, K-h-a-l-e-d; last
    2  name is Elkhatib, E-l-k-h-a-t-i-b.
    3                 I work with (indecipherable) on
    4  Mayor Daley's Advisory Council on Arab Affairs
    5  on the Commission on Human Relations.  I was
    6  recently appointed the Chairman by the Mayor.
    7                 I'm formerly the Vice President
    8  of the Chicago Chapter of ADC.  ADC was
    9  mentioned earlier.  It's the American Arab
   10  Antidiscrimination Committee.  It's the
   11  nation's oldest and largest Arab-American grass
   12  roots civil rights organization, founded, I
   13  believe, in 1980.  And there are chapters in
   14  most big cities, and headquarters are in
   15  Washington D.C.
   16                 I'm also legal counsel to the
   17  Arab-American Democratic Club here in the
   18  Chicago Metropolitan area.  It's for the
   19  Democrats.  And I've worked with the ACLU, and
   20  I'm on the Board of the Arab Bar Association.
   21                 Through all of those
   22  organizations, I have seen a lot of -- we've
   23  seen a lot of different issues come up with the
   24  Arab community, and I'd like to address one of
00273
    1  the points that was made earlier with respect
    2  to over-achievers and being disadvantaged.  And
    3  I think the question here is, if the issue
    4  were, which I think it is, whether
    5  Arab-Americans should be included in the --
    6  strike that -- whether Arab-Americans should be
    7  included in the MBE program because we are
    8  disadvantaged, because we have issues that
    9  would allow us to be in there properly, then I
   10  think the answer is unequivocally, absolutely
   11  yes.  And some of the issues that come up,
   12  you've heard people talk about September 11th;
   13  a lot of issues that come up with racism.  I'll
   14  give you an example.
   15                 Somebody mentioned resumes.  I'm
   16  an attorney in private practice, and I still
   17  have difficulty job hunting, but don't tell my
   18  employer.  The problem comes up when I send out
   19  a resume and you see my name, Khaled Elkhatib.
   20  Some people say, Khaled Elkhatib; in Arabic
   21  it's Khaled Elkhatib.  To employers it's just
   22  too damn difficult and too hard to pronounce
   23  and too difficult to spell, and it gets tossed
   24  a lot.  I did the same thing.  I changed my
00274
    1  first name on a resume about ten years ago
    2  before law school when I was in college --
    3  actually after college.  I changed it from
    4  Khaled to I think Khal or something like that.
    5  But for the first hundred resumes I think I
    6  probably got three or four interviews; on the
    7  next 20, I believe I got five or six
    8  interviews.
    9                 So this really wasn't a
   10  coincidence, and I think that addresses
   11  directly the question of whether we are
   12  disadvantaged and whether we do face issues
   13  when it comes to job hunting, getting jobs,
   14  getting loans, getting contracts, and things of
   15  that nature.  Because when it comes down to it,
   16  when the question comes down to somebody
   17  awarding a contract to any regular company that
   18  they're used to seeing the name, that they're
   19  used to seeing or (indecipherable), it's easy
   20  to say, well, you know what, that name is a
   21  little bit too difficult.  And it's unfortunate
   22  because a lot our people are losing jobs and
   23  are losing contracts and are losing business.
   24  And you need no further than to step out on
00275
    1  LaSalle Street, step in probably half the cabs,
    2  and you'll see a lot of folks, many of whom the
    3  drivers are Arab-Americans who have, in some
    4  cases, Master's Degrees and PhDs who can't find
    5  jobs because there's issues in the work place.
    6                 And we believe, obviously, those
    7  issues are discrimination related.  And if
    8  those people didn't face discrimination, their
    9  qualifications are impacable.  In many cases
   10  they have better qualifications than a lot of
   11  other folks, but they're not getting the jobs
   12  because their names aren't common enough and
   13  because their skin is too dark or their
   14  features are too Arab or too Middle Eastern.
   15                 We had a lot of issues that
   16  pertain specifically to the Arab community.
   17  And if you remember, a few years ago the
   18  Federal government wanted to interview 5,000
   19  Arab-Americans.  They didn't say we want to
   20  interview anybody else; they specifically said,
   21  we are going to go after Arab-Americans.  And I
   22  worked with the ACLU and the Arab Bar
   23  Association and ADC and a couple of other folks
   24  in trying to get those interviews through the
00276
    1  FBI.  The FBI was conducting those interviews
    2  under the auspices of the U.S. Attorney
    3  General's Office, John Ashcroft's office.  And
    4  a lot of people were terrified.  And they said,
    5  what the heck kind of a country is this when
    6  the Attorney General comes on television and
    7  says, we're going to come after Arab-Americans.
    8  And if your name is (indecipherable) or
    9  something like that, essentially -- these are
   10  not his words, I'm not quoting Ashcroft -- but,
   11  essentially, you'd better watch out.
   12                 And a lot of people lived in
   13  fear.  It was a very scray time.  And it's a
   14  little bit better now, but there's still a lot
   15  of those same issues.
   16                 Ashcroft again stated that, I
   17  think at one point, there were 310,000 people
   18  who had been adjudicated deportable in the
   19  United States from all over the world, from
   20  every country.  And he said of those 310 --
   21  there were 320,000 people -- 6 or 8,000 are
   22  Arab.  We're going to start with them.
   23                 And how does it feel when the
   24  Attorney General of the United States goes on
00277
    1  national television and says, we're going to
    2  interview 5000 Arab men; we're going to send
    3  the F.B.I. to your homes, and we're going to
    4  start deporting you first.  I mean, that's the
    5  very definition -- that's the essence of
    6  singling out and profiling.
    7                 Obviously we have become victims
    8  of racial profiling, not to the degree, I
    9  think, that the African-American community has
   10  suffered, and we're certainly not equating it
   11  to that, but that's obviously a travesty in and
   12  of itself.  But we are certainly facing a lot
   13  of similar issues.
   14                 In my private practice in the
   15  law firm we've seen a lot of people come to us
   16  with cases of discrimination.  We had one
   17  gentleman who was Iraqi who worked in a
   18  hospital, and unfortunately he was
   19  discriminated against.  And, you know, a lot of
   20  stereotypical comments of, hey, you're a
   21  terrorist; hey, you're going to blow something
   22  up; hey, you're a sheik, and, you know, clearly
   23  rude and obnoxious comments, which, if they
   24  were made to a lot of other races or a lot of
00278
    1  other ethnicities people would be offended.
    2  People would be offended on behalf of the
    3  target.  But when it comes to Arab-Americans, a
    4  lot of people say, well, it's not a big deal.
    5  And it doesn't help that Hollywood, since the
    6  turn of the century --
    7            CHAIRMAN BEAVERS:  You have to bring
    8  it to a close now. Your time is up.
    9            MR. ELKHATIB:  I'm sorry.  Thank you,
   10  Alderman.  I will wrap it up.
   11                 Since the turn of the century
   12  with movies starring Rudolph Valentino, Arabs
   13  are always portrayed as either savages, or as
   14  sexist, or wife-abusers.  It's been nonstop,
   15  and it's been systemic throughout Hollywood and
   16  throughout the media and television.  And think
   17  about your own experiences and the hundreds of
   18  movies we've all seen and the hundreds of
   19  television programs, how many times have there
   20  been Arab characters that have been positive,
   21  not the terrorists, not the oil rig sheiks, not
   22  the crazy people, not the stereotypical.  How
   23  many times has it been just a normal Arab?
   24  Almost never.  I mean, if you remember, you
00279
    1  probably can count them on one hand.
    2                 I will wrap it up and just tell
    3  you that if you remember, I'll take one more
    4  minute, with your permission Chairman.
    5            CHAIRMAN BEAVERS:  Hurry up, because
    6  I want to ask you about Rudolph Valentino.  As
    7  far as I was concerned that was a great movie,
    8  and he was a hell of a star.  So I didn't look
    9  at him as an Arab, I looked at him as a movie
   10  star, as a Hollywood star.
   11            MR. ELKHATIB:  Mr. Chairman, I would
   12  submit you are more intelligent than a lot of
   13  people in this country who use that stereotype
   14  against them.
   15                 Secret evidence was brought up
   16  about three or four years ago when secret
   17  evidence was happening a lot more, when it was
   18  rampant.  Of the 22 cases in the country where
   19  Judges allowed secret evidence -- I believe of
   20  the 22 cases 20 were against Arabs or Muslims.
   21  Again, these are not coincidences, this is
   22  really systemic.  I'm trying to think of what
   23  else.  I've just got some notes.
   24            CHAIRMAN BEAVERS:  Okay.  Thank you.
00280
    1  Anyway, the FBI is looking for you now.  They
    2  want to bring some Arabs in the -- they want to
    3  get some Arab FBI agents that speak the
    4  language, so right now you can go and get you a
    5  good job; okay.
    6            MR. ELKHATIB:  Thank you.  Any
    7  questions from the --
    8            CHAIRMAN BEAVERS:  Thank you.
    9            MR. GHOULEH:  I'm here on behalf of
   10  John Dasoqi.  My name is (indecipherable)
   11  Ghouleh.
   12            CHAIRMAN BEAVERS:  Spell your last
   13  name for the court reporter.
   14            MR. GHOULEH:  G-h-o-u-l-e-h.  John
   15  apologized he had to leave -- I should say
   16  Mohammad Dasoqi.  He was mentioned earlier.
   17                 Mohammad had a very hard time
   18  getting a job, as many of the Arab engineers
   19  do.  It was a dry spell and he changed his name
   20  on the resume to John Dasoqi, and the offers
   21  started coming in.
   22                 I can also mention Mohammad Zuli
   23  (phonetic), who is now Mike Zuli.  And
   24  (indecipherable), and also all the other
00281
    1  Mohammads and Osammas.  Your parents named you
    2  Osamma 30 years ago, and Husein, and all the
    3  others who are now in the industry because they
    4  changed their names.  So that's one big hurdle.
    5  Of course, language is also, among features,
    6  and all of that.
    7                 So, just, basically, I've been
    8  in the business for 14 years and from the
    9  customer end of construction contracts.  And
   10  unfortunately, I'm sure that there are some out
   11  there, but I have never met any superintendents
   12  or estimators or project managers or partners
   13  of contractors who are Arab.  I just haven't
   14  come across them yet.
   15                 From the Arab-American
   16  Association, I know they do exist.  It's at a
   17  small number.  I believe there is a fear of
   18  getting into the business they will not
   19  succeed.  Most of the larger contracts are
   20  dominated by the same general contractors for
   21  government work.  Some of the smaller
   22  contractors, you might be able to compete.  And
   23  I've seen some minority contractors on the
   24  smaller jobs, and it's my personal opinion that
00282
    1  the Black firms and Hispanic firms and women
    2  firms would only be getting mostly that work
    3  because of this program.  So from that aspect,
    4  I think that it should remain for all those
    5  groups, and also, as previous people have said,
    6  that Arabs should be included in that.
    7                 It's just that there is a
    8  hurdle.  I know of some positions out there and
    9  I've recommended people, and I have a song and
   10  dance; people who have experience outside of
   11  Chicago who wanted to come to Chicago from
   12  smaller towns, and they had impressive resumes,
   13  in my opinion.  And I was told there is no
   14  position, and then I would find out later of
   15  positions being hired not with non-minority
   16  groups.
   17                 So myself may be included I've
   18  been in this business a long time.  I think I
   19  can say we're into my own business, but I'm,
   20  just from a financial standpoint of view.  I
   21  would not go into something that there is no
   22  income for me.  So I'll stay with -- as a
   23  client of contractors and working for my
   24  company.
00283
    1                 And I thank you for your time.
    2            CHAIRMAN BEAVERS:  Thank you.
    3                 Next is Louise Cainkar, Mandeep
    4  Singh, Daniel Mays.
    5            MS. CAINKAR:  Good afternoon.  I am
    6  the final speaker of the Arab case.  I am
    7  senior research fellow at the University of
    8  Illinois.
    9            CHAIRMAN BEAVERS:  Can you state your
   10  name first, and spell your last name for the
   11  record.
   12            MS. CAINKAR:  C-a-i-n-k-a-r.
   13                 I'm a senior research fellow at
   14  the University of Illinois Chicago, Gracie's
   15  Institute.  I am one of the nations top
   16  scholars on Arabs and Muslims in the Untied
   17  States, and I recently received the prestigious
   18  Carnigee Scholar Award in recognition of this
   19  work.
   20                 I've conducted research in
   21  Chicago's Arab community since the 1980's, and
   22  I am currently conducting a study of the impact
   23  of September 11th on the Arab and Muslim
   24  communities in Chicago.  I am attaching my
00284
    1  vitae and some articles I have published in the
    2  last few years for your record.
    3                 What's interesting to me is that
    4  the testimony we've heard today is really
    5  consistent with the findings of my research.  I
    6  think this testimony should convince you that
    7  Arabs and Muslims are a group that are now much
    8  a minority group in the United States, since
    9  most Muslims in the Chicago area are either
   10  African-American, Asian, or Arab.  The Arabs
   11  and the African-Americans are covered -- the
   12  Asians are covered but the Arabs are not.  And
   13  Arabs are from Africa and Asia, so what
   14  happened that historically they were excluded
   15  from this consideration?
   16                 For too long Arabs and their
   17  treatment in this society have been invisible.
   18  They are the minorities minority.  They are not
   19  even on the radar screen.  Their historical
   20  experiences with stereotyping, prejudice and
   21  discrimination have been well-documented, and
   22  they spread through at least the late 1960's
   23  when the terrorists and greedy Arab oil sheiks
   24  were rolled to the American public to consume.
00285
    1                 It's part, as a result of this
    2  othering of Arabs, that they are more likely to
    3  be found in self-employment than as employees
    4  of companies.
    5                 I heard the term "established
    6  White firms" talked about today; they are
    7  definitely not established White firms.  In
    8  fact, Arabs are rarely hired by established
    9  White firms, which I think you also heard about
   10  today.  My current study has present
   11  conditions, but I must note that these
   12  conditions represent an enticification to prior
   13  patterns.
   14                 Many Arabs report to me that
   15  they are afraid to change their jobs they
   16  currently hold for fear they'll have no chance
   17  of being hired by a new company simply because
   18  they are Arabs.  Many Arabs feel they must
   19  change their names, and I think we've heard
   20  ample evidence of this, to escape prejudice and
   21  discrimination in their current jobs, to escape
   22  discrimination in hiring and promotion, and for
   23  fear that they can't get another job in another
   24  sector.
00286
    1                 Their contractors and companies
    2  report losing contracts because they are not
    3  White, and yet they are not minorities,
    4  eligible minorities, or losing contracts
    5  without explanation but with the hidden
    6  undercurrent of being collectively punished or
    7  feared for actions that they had absolutely
    8  nothing to do with.  Isn't this how prejudice
    9  and discrimination work, the actions of a few
   10  people are held against an entire group of
   11  people?  Individual identity track record being
   12  meaningless in a sea of stereotypes and false
   13  assumptions.
   14                 Overall, Arabs are a
   15  well-educated population, although there are
   16  many members with high school educations.  But
   17  the American-born generation of Arabs has a
   18  trajectory that's not as good as the immigrant
   19  generations.  This is not good.  This is not a
   20  good sign for what's happening to Arabs in this
   21  country.
   22                 Census data show that Arabs'
   23  incomes do not match their education levels.
   24  They do not have the median household incomes
00287
    1  that would be expected of people with this
    2  education level.  Again, this is a sign,
    3  classic sign, of discrimination.  The causes
    4  and consequences of this require the further
    5  in-depth study we are asking for.
    6                 More than 80 percent of the
    7  Arabs I've interviewed reported being subject
    8  to hate speech or insidious comments and jokes
    9  that signal prejudice.  These include:  You
   10  raghead, go back where you came from; we should
   11  kill all of you.  Many have received anonymous
   12  phone calls telling them to leave the country.
   13                 It's important to note that
   14  these comments, go back to where you came from,
   15  are frequently shouted at American-born,
   16  American citizen Arabs.  Even the right to live
   17  in this country is now being questioned.  I
   18  call this homeland insecurity.
   19                 This type of discrimination is
   20  most closely matched by the treatment of
   21  Japanese-Americans during World War II, a
   22  treatment considered shameful in the annals of
   23  American history.
   24                 The prejudicial comments and
00288
    1  jokes mustered in the work and professional
    2  context include, hey Mohammad, where were you
    3  on September 11th; or, what's Osamma up to
    4  these days; or, have you got a bomb in that
    5  purse?  What are your chances for promotion or
    6  successfully bidding for a contract when these
    7  types of ideas are widely held by the people
    8  you work with?
    9                 Have these phenomenons stopped;
   10  no.  Some Arabs, especially women, report
   11  feeling fear of attack in public places to this
   12  day, in shopping malls, in parks.  The most
   13  violent attacks appear to have ended, but the
   14  verbal insults continue.  And every time
   15  there's an orange alert or an alarming event in
   16  the media, Arabs once again have to go on the
   17  alarm and wonder what's going to happen to
   18  them.
   19                 I think it's interesting that a
   20  lot of Arab kids tell people they are Latinos
   21  because they think that that's a better image
   22  in this country than being an Arab.
   23                 I wonder if the panelists are
   24  aware that more than 15,000 Arab and Muslim men
00289
    1  have been ordered removed from the United
    2  States in the past two years?  All of these men
    3  have been cleared of any crime or any
    4  connection to terrorism.  If you're not aware
    5  of this massive removal of the Arab and Muslim
    6  men from this country, then you can understand
    7  what it means to be invisible and what silent
    8  discrimination means.
    9            CHAIRMAN BEAVERS:  You have to bring
   10  it to a close, Ms. Cainkar.
   11            MS. CAINKAR:  Okay.  I shall close.
   12                 We must acknowledge the systemic
   13  discrimination against people of color in the
   14  United States has many faces and many tactics,
   15  and that recognizing the prejudice and
   16  discriminations Arabs face in no way denies the
   17  discrimination that other communities in this
   18  country face.  But it is time to affirmatively
   19  recognize it.
   20                 The City of Chicago must support
   21  a study that should be conducted to examine
   22  whether this community merits recognition as a
   23  minority group and qualifies for M/WBE
   24  programming.  The Council in its Ordinance
00290
    1  should include a provision that allows for,
    2  when the results of this study comes out if
    3  Arabs are determined to qualify, that they
    4  should be allowed these programs.
    5                 Thank you.
    6            CHAIRMAN BEAVERS:  You're quite
    7  welcome.
    8                 Have a seat and state your name.
    9            MR. MAYS:  My name is Daniel Mays.
   10  I'm a resident of the 16th Ward, and I'm a
   11  member of the United Brotherhood of Carpenters
   12  and Jointers.  I'm a journeyman-carpenter.  I'm
   13  going to speak fast and try to get through all
   14  of the points that I have written down.
   15                 I'm trying to speak to the issue
   16  of direct discrimination, and I'm speaking as
   17  an included group in the context of Moran's
   18  decision.  And I'm in favor of the WBE and the
   19  MBE programs of the City.  I'm a second
   20  generation carpenter.
   21                 Some of these construction
   22  companies, that -- the Builders' Association
   23  that brought this suit, my father worked for
   24  those construction companies.  Passion
00291
    1  (phonetic), one of those, is part of that
    2  group.  My father used to say that I
    3  remember -- as I was a child, I remember him
    4  saying, as soon as he got out of the hole doing
    5  the dirty and filthy and sweaty work he was
    6  laid off, the same experience that I'm
    7  experiencing today on Millennium project.  I'm
    8  doing the dirty work; I'm doing the dangerous
    9  work; and then I look up and steel work is
   10  being done by all White males on that same job.
   11  Black females have to take nails out of their
   12  nail pouches and throw them in the face of the
   13  White carpenters because they're sexually
   14  harassing them.  I have seen carpenters, male
   15  carpenters, say about female carpenters, send
   16  the woman that they've had some sexual
   17  innuendos against them; that, I've got all out
   18  of her all I want.  And when she doesn't
   19  respond to what -- his sexual advances he won't
   20  help her because she's an apprentice.  He won't
   21  train her.  This is what I'm trying to speak to
   22  ultimately, the issue of direct discrimination.
   23                 Out of the apprenticeship
   24  program I went to the University of Chicago.
00292
    1  That was where I was first assigned as an
    2  apprentice.  And that was during the Clinton
    3  Administration; okay.  I've always suspected
    4  that the only reason I was working again as an
    5  apprentice was because of the climate.  And
    6  what I'm trying to say is that this, we are in
    7  a societal racism.  It's running rampant
    8  throughout the society.
    9                 The reason that I can identify
   10  why I was at the University of Chicago is
   11  because I became one of the apprentices that
   12  had to take attendance and read the safety
   13  notes to journeymen carpenters.  On that sheet
   14  was the issues of, are you an African-American
   15  carpenter?  Are you an African-American
   16  apprentice?  Are you a White male apprentice?
   17  Are you a female?  They were directed -- they
   18  were responding because they had to respond,
   19  because how many of these minorities do you
   20  have in your program?  That was something that
   21  they had to legally do.  So that's what gave me
   22  the idea that I was there because the MBE and
   23  the WBE program worked.
   24                 I went from there, because of my
00293
    1  outstanding behavior, I went to Northwestern as
    2  a result of being -- of my majority firms being
    3  forced to include us.  I was able to show that
    4  I was capable of doing it.
    5                 The fact of the matter is, I was
    6  almost a journeyman-carpenter before I went
    7  into the apprenticeship program.  That's what
    8  the Arab brothers and sisters are speaking to.
    9  I have 2000 hours sitting in actual classes as
   10  a carpenter-in-training through the
   11  apprenticeship program, six months at the
   12  non-union program; but being a second
   13  generation carpenter, I was on a back porch
   14  learning how to cut stairs at nine years old.
   15  So carpentry has been something all of my life.
   16  But for the last two years, I worked two weeks
   17  as a union carpenter.  And I'm looking in the
   18  gates in my own community, West Engelwood and
   19  Engelwood, and seeing everybody working except
   20  myself; okay.  I'm going to end it at that.
   21                 Thank you very much.
   22            CHAIRMAN BEAVERS:  You're quite
   23  welcome.
   24                 Lon Brown, Calvin Bankhead,
00294
    1  Ronald Parker.
    2                 State your name and spell your
    3  last name for the court reporter.
    4            MR. BROWN:  Ron Brown, B-r-o-w-n.  I
    5  have been in the construction business as a
    6  corporation since 1990.  The affirmative
    7  action, in my opinion, not only needs to be
    8  very very strong, it needs to be much stronger
    9  than it is.  I have been the object of a lot of
   10  racism on jobs in the City of Chicago.  And I
   11  have some recommendations because of some of
   12  the problems that I have run up on.
   13                 The jobs should be monitored by
   14  somebody in authority.  Right down here at
   15  State and Madison we was working this job on
   16  Sears, the Sears building.  I was locked out of
   17  the site.  And I wasn't -- they was trying to
   18  not let us go up on the elevator so we had to
   19  kind of threaten some guys in order to get the
   20  job done, because we had to get up on the 17th
   21  floor and we couldn't take the elevator up to
   22  the 17th floor do we would have lost too much
   23  time.
   24                 The payment should be on time.
00295
    1  On one job I've had to wait two and a half
    2  years on a school job.  Two and a half years.
    3  And then another case --
    4                 I recommend that we should have
    5  projects, and I'm speaking -- now, I know we
    6  got other nationalities that's been
    7  discriminated against, but I don't know too
    8  much about that but what I'm going to do is I'm
    9  going to speak for the African-Americans.
   10                 We should have projects in the
   11  neighborhood.  What we get, if you just take a
   12  tour of the whole City, which I have been over
   13  the whole City working jobs, what you see is --
   14  and it don't take a genius to see this -- you
   15  got Black guys standing on the corner, most of
   16  them selling drugs, and the White guys working
   17  projects in the communities.  And that is a
   18  disgrace.  And the jobs should be performed --
   19  the construction jobs in this City,
   20  unemployment is so rampant, should be performed
   21  by the people in this City.
   22                 I have met guys at the bidding
   23  process and on jobsites, they live in
   24  Wisconsin, Indiana, and Michigan.  And some of
00296
    1  those guys was nice enough, White guys, that
    2  they would talk to me.  They'd say, I don't
    3  know why we are here because we got more work
    4  than we can handle.  So this is something that
    5  the committee should address.  We have a lot of
    6  people from out of state coming to the City of
    7  Chicago and employment is at an all time high,
    8  and that's another disgrace.  That is a
    9  disgrace.
   10                 We worked on one job at 26th and
   11  California.  And what I understand from talking
   12  to some of the guards, we was the first Black
   13  outfit to have -- we was out there for about a
   14  month.  We had a -- it was a difficult job.
   15  Those people would not move they cars, so we
   16  had to work on Saturday and Sunday to make up
   17  on that job.  Some of the guards, even the
   18  White guards, would come up to us and say, hey,
   19  how come they don't move these cares?  That's a
   20  blatant case of racism in this City of Chicago
   21  in these times.  And that shouldn't be.
   22                 There should be more trade
   23  schools, because unemployment and lack of skill
   24  is rampant.  I have worked in
00297
    1  Neighborhoods where guys didn't have no job;
    2  women and men walk up to me and say they'll do
    3  anything for 4 or $6.  I have worked jobs in
    4  the neighborhood training people, taking time
    5  out to let these people -- to give them a
    6  chance.  Some of the guys, they hardly knew how
    7  to pick up a shovel.  But I took time out -- we
    8  took time out, me and my guys, took time out to
    9  let these people work.  And that is what's
   10  happening in the City of Chicago.
   11                 So I took time out today to come
   12  down here because the people who are against
   13  affirmative action, to me, is unhuman, because
   14  affirmative action needs to be ten times
   15  stronger than it is now.  And we have too many
   16  barriers and small contractors --
   17                 I'm a small contractor.  And I'm
   18  going to name a few barriers here for the
   19  second time.  Bonding.  I got highly insulted
   20  and offended by bonding because on those jobs
   21  what we have to do, we have to put the money
   22  down for material and labor and then you have
   23  to wait on your money.  Somebody with some
   24  common sense should stop this kind of barriers.
00298
    1                 And it's a lot of paperwork.  We
    2  have been -- that's another barrier.  That's
    3  another trick that's being used.  We have
    4  paperwork on top of paperwork.  And that
    5  shouldn't be.
    6                 One job that I had with the
    7  Water Reclamation -- I was bidding on a job
    8  with the Water Reclamation.  And on those jobs,
    9  if you don't win a bid as a minority you got to
   10  come low.  If you don't come low, you will not
   11  get the job.  One bid that we won -- and I have
   12  to the name this company, they were Water
   13  Reclamation -- we was the low bidder.  We won
   14  the bid.  I was telling my wife, I was saying,
   15  hey, we've got to come in low if we're going to
   16  get any work.  We came in low; we was rejected.
   17  The reason why we was rejected, because we
   18  didn't put "minority" on that application.  We
   19  had the right numbers, we had our paperwork
   20  filled out, and we had to do it fast, and we
   21  missed putting down "minority" and that was
   22  rejected.
   23                 I went down and I tried to talk
   24  to people, to no avail, because these people
00299
    1  are racist.  And it's a disgrace, and we should
    2  do something about it.  And the committee here
    3  has the opportunity to make some changes.  We
    4  have time and the opportunity to make some
    5  changes.  Because we are all human beings.  In
    6  the sight of God, we are all human.  And we
    7  should act like we human.  And act like we got
    8  some sense.  And that's what we haven't been
    9  doing in the City of Chicago.
   10                 Thank you for your time.
   11            CHAIRMAN BEAVERS:  All right.
   12            MR. BANKHEAD:  My name is Calvin
   13  Bankhead.  I'm president of The Bankhead Group,
   14  which is a consulting company and also an
   15  environmental company.
   16                 I just found out about this
   17  hearing today, roughly about an hour and a half
   18  ago so I didn't really prepare any notes.  As I
   19  sat and listened to the other ladies and
   20  gentlemen who were testifying, I was just
   21  writing down a couple of general ideas.
   22                 I've also worked in and out of
   23  CEDA programs since the '70's, so I think I'm
   24  pretty versed in terms of economic employment
00300
    1  and economic development and employment, having
    2  done it for the last 30 years.  I've worked
    3  with several of the Aldermen; Alderman Lyle,
    4  Alderman Beavers.  I've worked with Mr. Griggs
    5  before.
    6                 One of the problems that the
    7  playing field is not level is because of the
    8  bonding and insurance and operating capital
    9  issues.  It just seems to me that enough
   10  vehicles are in place where if we just tweak
   11  the tools that the City already has, for
   12  example, you've already got technical
   13  assistance.  If some economic dollars would go
   14  to underwrite bonding, insurance, and operating
   15  capital at least long enough for companies to
   16  get their first couple will of draws, I think
   17  that would help level the playing field,
   18  because there is no way that minority
   19  companies, African-American companies, Asian
   20  companies -- when traditional companies have
   21  been, you know, making hundred of millions of
   22  dollars over the years, there's no way that
   23  minority companies can -- or disadvantaged
   24  companies, I should say, can compete.
00301
    1                 The unions have to be brought
    2  the table.  I think the City could be very
    3  instrumental in bringing the unions to the
    4  table to implement legitimate training programs
    5  for a lot of the  members of the communities
    6  that are about to be displaced and have been
    7  displaced.
    8                 I think there are a number of
    9  disadvantaged companies who have the experience
   10  and are teetering right on the brink of making
   11  it or not.  And i think with the bonding
   12  assistance, operating capital, which could be
   13  forward funding, I think that they can in turn
   14  help bring companies that are working -- that
   15  are trying to work who into the system behind
   16  them.  For example, they could subcontract to
   17  other Black contractors.  The majority
   18  companies can mentor/protege the stronger
   19  disadvantaged companies.
   20                 In other words, those programs
   21  are already set in place.  It's just a matter
   22  of obtaining them.  So whether they're a
   23  mentor/protege programs or a joint venturer on
   24  a particular project.  And that way as a
00302
    1  company completes those types of projects,
    2  their capacity increases not only in terms of
    3  financing, but also in terms of bonding, also
    4  in terms of insurance, also in terms of trained
    5  and skilled workers in particular fields, you
    6  know.  This, I mean, I could go on for hours,
    7  but I just wanted to make those observations --
    8            CHAIRMAN BEAVERS:  No, you got five
    9  minutes.  That's all you got.  And your five
   10  minutes is just about up.
   11            MR. BANKHEAD:  Actually, Alderman,
   12  I'm finished now.  I just wanted to make those
   13  points because it seems like we need to think
   14  outside the box that we traditionally have been
   15  thinking in in order to make this work.
   16                 Thank you.
   17            CHAIRMAN BEAVERS:  All right.  Is
   18  there anybody else here that would like to
   19  testify?
   20                      (No audible response.)
   21                 Hearing none, recess until the
   22  call of the Chair.
   23                      (Which were all the
   24                      proceedings had in the
00303
    1                      above-entitled cause.)
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00304
    1  
    2  STATE OF ILLINOIS   )
                           )
    3  COUNTY OF C O O K   )
    4  
    5                 I, BERNA DAVIS, being first duly
    6  sworn on oath, says that she is a Certified
    7  Shorthand Reporter; that she reported, in
    8  shorthand, the proceedings given at the taken
    9  of said hearing, and that the foregoing is a
   10  true and correct transcript of her shorthand
   11  notes so taken as aforesaid, and contains all
   12  the proceedings given at said hearing.
   13                 IN WITNESS WHEREOF, I have
   14  hereunto set my hand this 5th day of April,
   15  A.D., 2004.
   16  
   17  
   18  
   19  
   20  
   21            __________________________
                 Berna Davis
   22            C.S.R. License #084-004057
   23  
   24