| The fraud and
corruption face of Chicago's quotas is best represented by the Duff family businesses of
Chicago. The Duff case involves alleged mob ties, money, political
influence, and old-fashioned fraud. It seems that the Duffs, who are "white",
earned over $100 million in city contracts by, ahem, misrepresenting two of their
businesses as woman-owned and black-owned, respectively.
|| The other face of
Chicago's quota programs is represented by the Builders Association of Greater Chicago
which has successfully sued both the city and Cook County for reverse
White mobsters cashing in on minority contracts through fraud versus honest contractors
being forced to sue to stop discrimination against white-owned businesses.
Under the rules of Chicago's quota program -- which appear to be forcibly changing -- the
"disadvantaged" companies owned by women and minorities could have annual sales
as high as $27.5 million and still qualify for the city's racial quota preference.
A. THE DUFFS
|[Editor's Note: In the months immediately after the federal
investigation into the Duff family began, the Richard Daley administration suddenly found
it necessary to reject over 880 potentially fraudulent applications for minority and
woman-owned certification. How many of those firms would have been approved if not
for the political heat brought by the Duff investigation?]
In September 2003 the Duffs were indicted on charges of fraud for misrepresenting that one
of their businesses was owned and controlled by 75-year-old Grandma Duff (Patricia Green
Quotas Story Index:
This enabled the
Duffs to cash in on Chicago's lucrative female-owned business quota which sets aside $5.00
of every $100 of city business for women-owned firms under greatly relaxed bidding
|| Stated another way,
a woman-owned business in Chicago had the advantage of relaxed bidding requirements on 5%
of all available city contracts - - bidding only against other woman-owned businesses IF
any competition existed at all - - AND they could also bid on the other 95% of city
business if they chose. But white-male-owned business could only bid on the tougher
95% of contracts in open competition against ALL bidders.
To add insult to injury, a woman-owned firm could submit a higher-cost contract bid to
Chicago and still win a competition against a lower bid by a male-owned business.
The Duffs also are charged with lying about another family business which they allegedly
misrepresented as being owned and controlled by a black man.
A 62-year old black friend of the Duffs, Mr. William E. Stratton, happens to be listed as
the owner/operator of another Duff business. By putting black Mr. Stratton in charge
of the company, the Duffs sought to cash in on Chicago's very lucrative black-owned /
minority-owned business quota which reserved $25 of every $100 of city contracts for such
Stated another way, in Chicago a black-owned business had the advantage of relaxed bidding
requirements on 25% of all available city contracts - - bidding only against other
minority-owned businesses IF any competition from other minority firms existed at all - -
AND they also could bid on the other 75% of city business if they chose.
But white-owned businesses in Chicago could only bid on the tougher 75% of contracts in
open competition against ALL bidders whether they were minority-owned or not. In fact, a
higher-cost bid by a minority-owned firm could, and often did, win a competition against a
lower bid by a white-owned business.
All of that may change, however, due to the efforts of the Builders Association of Greater
B. THE BUILDERS ASSOCIATION OF GREATER CHICAGO
| In 1996 the
Builders Association of Greater Chicago filed two lawsuits in U.S. District Court.
One suit was against Cook County, Ill. (in which Chicago is located), and the other suit
was against the City of Chicago. The Builders Association argued -- successfully --
that the minority and woman business quota programs operated by the county and the city
|Cook County's Program: According to the Boston Globe "In 2000, the program
for Cook County was ruled unconstitutional because it did not gather the necessary
evidence to show that discrimination existed and that the program was needed. That suit
also was brought by the Builders Association of Greater Chicago."*
The Association of General Contractors (AGC), a national trade group headquartered in DC,
helped finance the legal battles in Chicago, and summed up the Cook County ruling in their
2002 Annual Report:
"U.S. Court of Appeals for
the Seventh Circuit affirmed that Cook County cannot lawfully require the
chapter's members to subcontract at least 30% of their county contracts to minority and
women business enterprises." [Emphasis added.] (The AGC has long
been an advocate for fair and equal bidding requirement for all bidders
regardless of race or gender of the owners.)
|Chicago's Program: "... Chicago's set-aside program, as it is known, has
been called into question after a federal judge ruled last week [on 12/29/03] that the
program is illegal because, among other things, it amounts to a quota system. ... The
judge, James B. Moran, stayed his order for six months, meaning that the program can
remain in effect until early summer while city officials work on amending it."*
Quotas Story Index:
"The judge ruled the city program cannot stand," said Tim Conway, a lawyer who
represented the Builders Association of Greater Chicago, which brought the suit against
the city in 1996. "Formulistic percentages cannot survive strict scrutiny."*
*From the Boston Globe story 1/4/04.
Last known link to the Globe story:
END: 1. Introduction to Chicago racial quota corruption