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Calif. diversity push could run afoul of state law

Judy Lin

SACRAMENTO — The state Department of Transportation has created a plan to boost hiring of minority firms for work on road projects, a development that affirmative action opponents said might violate California law.

The Federal Highway Administration last week formally approved the department’s minority business contracting plan. It seeks to award more transportation contracts to firms owned by blacks, Asians, Native Americans and women as part of an ongoing effort to increase diversity.

Opponents of affirmative action have warned the department that proceeding with the minority contracting goals potentially violates the provisions of Proposition 209, California’s 12-year-old ban on considering race in student admissions and public hiring.

Ward Connerly, who led support for Proposition 209, said he thinks the department’s approach is wrong and could expose the state to a lawsuit. Connerly, who is black, is an anti-affirmative action advocate who has pushed for laws in a number of states to ban preferential treatment based on race, gender or ethnicity.

“This seems to be an end-run around Prop. 209 and what we believe to be a violation of the federal Constitution that demands everybody be treated equally,” said Sharon Browne, an attorney with the Sacramento-based Pacific Legal Foundation who defends Proposition 209.

Voters approved the initiative in 1996 with 55 percent support. Specifically, it prohibits state and local governments and schools from discriminating or granting preferential treatment based on race, sex or ethnicity.

State transportation director Will Kempton defended the department’s minority contracting goals as part of an ongoing effort to increase diversity in hiring for state transportation projects.

The department has set a goal of having 13.5 percent of all contracts going to minority firms, Kempton said. It would use a combination of quotas — known as a “race-conscious” effort — and outreach to small businesses, which the department refers to as a “race-neutral” effort.

Kempton said by using only the “race-neutral” approach in recent years, the department’s minority contracting rate had fallen to just 2 percent of all contracts. Since the early 1980s, the federal government has encouraged states to try giving at least 10 percent of federally funded transportation projects to women- and minority-owned firms.

It has said federal funding could be jeopardized if states fail to show a good-faith effort to do so.

“I think the state has been very committed to meeting the federal requirement, and certainly the governor has been committed to including small and disadvantaged businesses into the program,” Kempton said.

The department’s figures show that about 2,000 minority- and women-owned businesses are certified to bid on road projects. The number of all subcontractors was not immediately available, department spokesman Matt Rocco said.

Its new minority-hiring directive was given conditional approval by the Federal Housing Administration in late February, a decision that was affirmed last Thursday. It does not apply to firms operated by Hispanics or those whose origins are from India. The department says those groups already are sufficiently represented in state highway contracts.

Kempton said California had been mandating contracts for minority-owned firms until a 2005 ruling by the 9th U.S. Circuit Court of Appeals. That ruling prohibited nine Western states from using racial preferences in awarding contracts unless the state had a history of discrimination.

The other states covered by the ruling are Alaska, Arizona, Hawaii, Idaho, Montana, Nevada, Oregon and Washington.

Kempton said California is adhering to the court ruling and Proposition 209 and can legally implement the new plan.

The transportation department conducted a so-called disparity study to comply with the federal court ruling and determined that its level of minority contracting was insufficient and could be construed as discriminatory.

It was that study that led the department to develop the new hiring guidelines.

The department maintains that its minority contracting goals are allowed under a provision of Proposition 209 that grants exemptions when federal transportation funding might be jeopardized, said Olivia Fonseca, the department’s deputy director of civil rights.

Browne, of the legal foundation, said the department’s study provides insufficient proof. She said it should have exhausted all its race-neutral approaches before greatly expanding its affirmative action program.

State officials are trying to act quickly to qualify for as much federal aid as possible under the economic stimulus package, which is expected to provide $2.6 billion for transportation projects over the next year, on top of the roughly $3 billion the state receives annually.

A Feb. 25 letter from the Federal Highway Administration to Kempton granted conditional approval to California’s minority hiring guidelines but also said failure to implement the goal could result in the “withholding federal funds.”

Nancy Singer, a spokeswoman for the highway administration, downplayed the likelihood that the federal government would withhold money if California did not implement race-conscious contracting goals.

“It’s an aspirational goal,” Singer said. “It’s not a drop-dead goal that you’re losing your federal funds if you don’t meet that goal.”

The state transportation department has notified road construction companies about its hiring goals and has given local agencies until June 2 to implement the requirements, which would be noted in their request for bids.

In a Sept. 24, 2007, letter to Kempton, contractors expressed concern that mandating subcontracts with minority-owned businesses might prevent general contractors from choosing the most economical subcontractor, costing taxpayers more.

Tom Holsman, chief executive of the Associated General Contractors of California, said concerns over minority contracting mandates are nothing new.

“We’re trying to do what we can to help the department respond to this demand,” he said. “But we are also concerned that the program is not fully thought through.”

(Associated Press)