Black leaders call for end to MBE “slave tax,” more opportunity

The proposed $4.7 billion Chicago Bears lakefront complex, the $1.7 billion Bally’s casino and recently announced $7 billion United Center campus proposal by sports magnates Jerry Reinsdorf and the Wirtz family, on top of another $7 billion for a new White Sox stadium in the South Loop will provide $20.4 billion in contracting opportunities alone. But the question many leaders in Chicago’s business, construction and contracting sectors are questioning is how much of that will filter into the hands of the Black community.

Omar Shareef, president of the African American Contractors Association (AACA), told the Chicago Crusader that “no mayor, after Harold Washington, has done anything to ensure Black contractors are on a level playing field” when it comes to securing participation in public works projects or securing opportunities in the construction, trades and business services fields.

“There are billions of dollars coming down the pipeline and we aren’t at the table,” he said. “The 78 megadevelopment is promising tens of thousands of jobs and billions in annual revenue, how much of that will come back to the South and West sides? The city should be actively out here promoting this to Black vendors, service providers, business owners and contractors. We shouldn’t be last on the opportunity list.”

AACA was founded 31 years ago to provide job training and professional development to people seeking to do business with the public sector. The advocacy group has led hundreds of demonstrations to break the barriers in the construction industry and call attention to the racism, bias and “dirty tricks” played on the Black community by “elected officials, white labor unions and construction companies,” he told the Crusader.

The Crusader reached out to the mayor’s office for comment but did not receive a response before the print deadline, July 24. Mayor Brandon Johnson has been vocal about his support for minority- and Black-owned businesses and active in ensuring participation since taking office in May 2023. Under his leadership, the city invested nearly $18 million in Black and Hispanic businesses to aid in the migrant crisis.

However, Shareef said his 2,500 members continue to decry the “difficult and confusing process” in qualifying their services, suppliers, and contracting firms for city business. One such barrier, according to AACA, is the fee associated with becoming a qualified Minority Business Enterprise (MBE).

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“We are the only group of people who have to not only prove we are Black, but we also have to pay to register our services to do business with the city where we pay taxes,” he said. “White contractors don’t have to prove they are white. All they have to do is go downtown and show their business license and they qualify as a general (contractor) or a sub. In order for us to do business, we have to pay a slave tax. It is a separate and unequal system.”

Currently, the city charges $250 for MBE certification according to its procurement website and vendors. In stark contrast, a recertification service offered by the nonprofit Chicago Minority Supplier Development Council, which works closely with the city, may range between $300 to $950.

“It doesn’t make sense that we’ve got to pay to prove we are Black. But, they don’t require the same thing if you’re white,” Shareef said from his headquarters at 514 E. 95th Street. “The fee needs to be abolished. The process is already complex for small and disadvantaged contractors. Call it a ‘slave tax’ or a ‘freedom price’—whatever it is, it should be abolished.”

Eddie Read, president of Chicago Black United Communities (CBUC), an organization founded by the late Lu Palmer, agreed. “The barriers are numerous, yet the ordinances already in place are not being enforced,” he said. “Mayor Harold Washington implemented an ordinance to ensure our community can work and participate in contracting opportunities, but after his death, no mayoral administration has sought to enforce it.”

In 1983, Mayor Harold Washington kept good on his promise to champion Black participation in city public works projects. During a contentious fight, he convinced the City Council to pass an ordinance that requires that 50 percent of the jobs on all city projects be reserved for city residents at all levels and at various rates of pay. However, the contentious Council, led by a recently convicted felon, ex-Ald. Ed Burke, never enforced the measure. White-owned construction companies either hired local Black residents for low-paying janitorial or administrative jobs or didn’t hire them at all. African American neighborhoods continued to see a majority white or Latino workforce on local street improvement and construction projects.

A decade later following a string of disruptive demonstrations by Black advocacy groups, Mayor Richard M. Daley tried to spark life into the ordinance when in May 1994 the City Council set in rules a measure that requires half the jobs on city-funded construction projects also be reserved for Chicago residents. It, too, was not enforced, according to Read. “The ordinance still hasn’t stopped city contractors from hiring most of their people from Indiana, Wisconsin and the suburbs,” he said. “The elected officials are not holding them accountable. It is time to go back to ‘if we can’t eat, nobody will eat’.”

In 2018, Chicago launched numerous measures to ensure equity and inclusion in city contracts and development opportunities. One ordinance ensures pay equity and prevents city contractors from basing a salary offer on previous employment. Another offers bidders an incentive of up to 4 percent if the bidder has a diverse management and another financial incentive of up to 6 percent if the contractor has a diverse workforce.

Yet another directive, built into the city’s municipal code calls for full disclosure of ownership interest in doing business with Chicago, to prevent “front companies” or “pass throughs,” which appear to be owned by a minority, but all senior management and financial controls are by whites.

Even though Black-owned construction companies have been publicized as leading major construction projects, such as the Obama Presidential Library in Woodlawn, advocates say there are enough projects to go around. “It’s the same three or four guys getting those contracts,” Shareef said. “We are glad they are getting the work, some of them are our members—but there are hundreds of others looking for opportunities.”

The activists also said it should be noted that diversity initiatives are not exclusive to African Americans prospects. Latinos, Asians, Native American/Indigenous, women, veterans and other economically marginalized groups, including those with disabilities, are also a focus of concern.

“It might also include these illegal, non-U.S. citizens who are being given full benefits and opportunities that Black people have been denied,” Read said. “Every mayor or council member will talk about so-called diversity, but few, if any of them, will stand up specifically for the Black community. They are pawns of the apparatus which is the Democratic machine.”

Both Read and Shareef reiterated that one ordinance calls for “50 percent of residents—that means people who reside or have an address in the city limits,” Shareef said. “The people who were shipped here from Texas and are not citizens of this country are now residents. Think about that for a second. For me, it’s not about a political party, it’s about justice, jobs and real equity no matter who delivers it.”

Cheryl Blackmond, chief executive with Deborah Staffing Agency and leader of the Chicago Peace Initiative in the Englewood neighborhood, has been working to put ex-felons to work in the trades, manufacturing, transportation and construction industries.

According to the Prison Policy Initiative Illinois releases nearly 219,818 men and 58,038 women from its prisons and jails each year. In 2023, Cook County announced the launch of Cook County Reconnect: Rental Assistance and Services for Returning Residents, after President Toni Preckwinkle allocated $23 million of American Rescue Plan Act funding toward the initiative. It will provide rental assistance and services to residents returning to Cook County from periods of incarceration until 2026.

In 2019, Johnson, then serving as a Cook County Commissioner, was lead sponsor of the Just Housing Amendment which prohibits housing and rental discrimination against people with arrest and/or criminal records. Landlords are now required to provide an individual assessment of an individual’s rental application and character, rather than blanket rejection due to a prior conviction or arrest.

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Blackmond told the Crusader that not only do people returning from prison face barriers in housing and employment, but those who seek to start businesses are also locked out. “How can someone afford rent if they have no income,” she asked. “How can they buy food or medicine? We are working with people who can’t find employment because of a box on the application that asks if you’ve been convicted of a crime. When people can’t work, they try to open their own businesses. But that box still keeps them from getting financing and local opportunities. The government has the policy in place but those things aren’t being felt by the people on the street.

“We need to remove that box off of applications and remove the slavery clause from the 13th amendment,” she said. “We also need a clear process on how this large population of Chicago residents can participate in public works projects. The big dollars go to the bigger agencies—and that money doesn’t reach any of us who are doing the direct service work in the neighborhoods. If you aren’t politically connected or willing to sell out the people, you have to find the money to do it on your own.”

Blackmond’s staffing agency was founded by, and named for the mother of Jeff Maxwell, after he returned from prison. The organization works specifically to put ex-felons or people with arrest records to work in factories around Chicagoland.

Despite the company’s success, Blackmond said the recent influx of “undocumented migrants and non-citizens from other countries has begun to take a toll on how many people the agency can place in jobs. “We had 75 jobs at a warehouse and 1,200 people showed up when we put the call out. They should stop saying Black people don’t want to work. That’s a lie. Now the employers are telling us that they have to make the migrants a priority,” she added.

Shareef added, “That’s part of the game: The applications will all ask if people are bilingual, knowing full well that most of our people didn’t take Spanish or foreign languages in school,” he said. “They are giving these people all the rights and gains we fought for. We aren’t angry at them or blaming them—they need to feed their families too—but what about the Black people who demonstrated, who advocated, and even lost their lives so our people can stop being treated as second-class citizens?”

All three leaders voiced concern that the Johnson administration will “talk about inclusion” but “wind up doing very little,” Shareef said. “None of the Black mayors since Harold has done anything substantive. They push the blame back to Black contractors and say we aren’t getting certified, or we are failing to do this or that. They seem to think we’re looking for handouts, which isn’t true.

“Why don’t (local elected officials) get up and actively present opportunities to us,” he asked, rhetorically. “When was the last time your alderman knocked on your door to tell you about economic opportunity on the table like they do when they canvass for votes? Why is there no concerted effort to aggressively ensure that Black-owned businesses, contractors, and even the artists or sculptors who can beautify these projects have a seat at the table that isn’t some sort of highchair.”

AS ONE OF Chicago’s Black newspapers with a citywide distribution, our mission is to provide readers with factual news and in-depth coverage of its impact in the Black community. This examination is funded in part by a grant from the Inland Foundation and the Chicago Crusader Newspaper.

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