Abuse found in program steering work to disadvantaged businesses
The Advocate (Baton Rouge, La.)
November 27, 2003
Estimated printed pages: 2
NEW ORLEANS - Programs at three New Orleans-area public agencies that steer work to companies owned by women or minorities were rife with abuse and poorly run, according to an investigative report from the federal Transportation Department.
The investigation covered disadvantaged business enterprise programs operated by Louis Armstrong New Orleans International Airport, the Regional Transit Authority and the Orleans Levee Board.
All three agencies receive money from the federal transportation agency.
In all, the investigation examined more than $100 million in contracts between 1999 and 2002 and the DBE certifications of the companies receiving them.
The investigation found deficiencies and outright violations of federal regulations at all three agencies, officials said.
Program managers at the Levee Board and the RTA did not conduct required site visits for as many as 50 percent of the companies they certified, the report said.
Several certified firms were controlled by nonminorities and, in some cases, the firms were merely fronts, the report said.
The agency's investigation was requested by U.S. Rep. David Vitter, R-Metairie, in 2001 after The Times-Picayune of New Orleans ran a series of articles questioning the operation of the disadvantaged business program.
"Our investigation substantiated many of the alleged abuses in the DBE programs reported in the Times-Picayune series, and we encountered many of the same problems in the DBE programs in New Orleans as we have seen in other DBE programs across the country," said the report, signed by Transportation Department Inspector General Kenneth Mead.
Vitter credited the local agencies for reforms they have already initiated and said the administration of New Orleans Mayor Ray Nagin is "moving in the right direction."
Earlier Tuesday, Nagin announced a series of changes to the city's DBE programs. Nagin has sharply criticized the way his predecessor, Marc Morial, awarded some DBE contracts.
But Nagin said his overhaul should be seen as an effort to improve and expand the programs, not as an indictment of them. The goal, he said, is for New Orleans "to become the entrepreneurial capital of America."
The transportation department said it believed that more than 60 percent of the contracts awarded under the program were influenced by political patronage. The investigation also found several DBE company owners who exceeded the department's $750,000 limit on net worth.
U.S. Attorney Jim Letten also has been exploring aspects of the city's DBE programs as part of a criminal probe into corruption at City Hall. Letten's office has subpoenaed various documents, including the applications of numerous businesses seeking to be certified as disadvantaged.
Vitter said the Transportation Department report in some ways is "astounding" because 60 percent of vendors interviewed said they believed they needed to make political contributions to get work.
But Vitter said there already has been "enormous improvement and cleanup" of oversight at the three agencies studied.
"The real victims here are minority and other disadvantaged businesses that this program is supposed to help," Vitter said.
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They've been having quite a party down there, for several decades it seems.
I've got a feeling that the party takes a big hit tonight. Maybe not on the surface, but I just can't see where Dub's going to hand a hundred bill to known crooks.