Case 39: Chicago and Cook County Racial Quotas
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1. Introduction

Forward: Fraud in Chicago's quota program
White-male-owned firms are excluded from 30% of Chicago business.
Chicago's "targets" for selected races and genders exclude white, male-owned businesses.
          Chicago's racial quota program for contractors has two faces.  One face is the corruption and fraud which such programs encourage.  The other face is represented by the lawsuits for reverse discrimination which always accompany such programs.

          But fair, equitable, and race blind contracting may be winning in Chicago!

          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 discrimination.  

          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.

Chicago is located in Cook County, Illinois.


[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 Duff). 

Chicago 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 requirements.

Minority firms with higher bids could win in Chicago.           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 businesses.

          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 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 were unconstitutional. Racial preferences are unconstitutional.
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."*

Chicago 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 and lawsuits


Chicago racial quota corruption and lawsuits
Corruption and fraud in Chicago's racial quota program
Lawsuits against Chicago and Cook County racial quotas

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*  We use the term reverse discrimination reluctantly and only because it is so widely understood.  In our opinion there really is only one kind of discrimination.