PROVIDENCE — After two Black and civil rights organizations alleged last week that Rhode Island’s public contracting system has continued a pattern of discrimination against minority-owned businesses, Governor Dan McKee’s administration has fired back.
While defending the state’s contracting system, McKee officials are now asking how one of the complaining groups has spent public dollars the state allocated to it, which the group’s attorneys call “a deflection.”
“In recent years, to support their work, the [Rhode Island Black Business Association] has been allocated more than a million dollars and we look forward to getting updates about [how] this funding is impacting the small businesses your organization is supporting,” wrote Tomás Ávila, the associate director of Rhode Island’s Division of Equity, Diversity, and Inclusion, or DEDI, in a letter to the association’s CEO, which was obtained by the Globe.
Ávila’s letter was in response to a letter that the Rhode Island Black Business Association and Lawyers for Civil Rights sent to the governor and other state officials on Sept. 18 alleging that the state had continued to violate federal antidiscrimination laws by systemically excluding minority-owned businesses from state contracts.
Tasheena Davis, a litigation fellow at Lawyers for Civil Rights, said that Ávila’s letter showed that the state was ignoring “the substantial evidence of discrimination in its contracting system” to instead “point fingers at the community-based organization that is sounding the alarm.”
“It is a deflection from the immediate issue of discrimination in state contracting,” said Davis.
In 1986, lawmakers required that at least 10 percent of state contracts go to women- and minority-owned businesses. In the 37 years since the Minority Business Enterprise was written into state law, the state has met or exceeded that requirement only three times — in fiscal years 2018, 2019, and 2022.
In 2021, a scathing report looking into the program found significant inequalities across all sectors in Rhode Island’s public contracting practices, prompting advocates and some lawmakers to repeatedly call for reform.
But when RIBBA and Lawyers for Civil Rights cited the 2021 study in their letter last week, Ávila said the study was outdated, and that the data used was “almost 10 years old.”
“The claims you made in your letter are factually inaccurate,” wrote Ávila.
In a letter to the two groups, which was dated Sept. 20, McKee officials pointed to the administration’s “proactive” effort to increase the participation of women- and minority-owned businesses in state contracting to 13 percent in 2022.
“As you have been informed in multiple meetings, under the McKee Administration, DEDI has diligently followed the guidance provided by this most recent disparity study and taken affirmative steps to rectify disparities in state contracting by adopting a combination of race-neutral reforms and race-conscious remedies,” wrote Ávila. “These measures are specifically designed to counteract the historical exclusionary practices that have hindered minority-owned businesses in our state.”
“And instead of just being satisfied with exceeding the state mandated minimum, it was the McKee administration’s FY24 budget that” increased the participation requirements for women- and minority-owned businesses for state and municipal procurement activities from 10 percent to 15 percent, wrote Ávila.
RIBBA president and CEO Lisa Ranglin said the recent improvements are “not enough.”
“We will continue to fight for these businesses to have opportunities to participate and to call out Rhode Island officials who fail to make that a reality,” she said. “Our focus is on enforcement and utilization.”
In his letter, Ávila also listed a number of programs created by Rhode Island Commerce, a quasi-public agency, that could have provided support to minority-owned businesses, including $6 million appropriated in the Fiscal Year 2023 budget for Commerce to provide technical assistance and access to capital for minority- and women-owned businesses. So far, the agency’s Minority Business Accelerator Program has awarded $2.8 million to “address inequities in business ownership and strengthen the minority business community.”
“Within this allocation, Commerce awarded $500,000 directly to RIBBA to ensure more minority businesses are bankable by partnering with local banks and credit unions,” wrote Ávila. The dollars were awarded in two rounds of funding.
The Board of the Rhode Island Commerce Corporation, which McKee is the chairman of, also approved RIBBA as a “partner” to help administer RI Rebounds grants, which were provided to hospitality- and tourism-related businesses negatively impacted by COVID-19 in late 2021 and early 2022, wrote Ávila. “Unfortunately, RIBBA did not utilize that funding.”
Davis did not answer questions related to the groups’ next steps and whether they plan to take the state to court over the matter, as Lawyers for Civil Rights did in Boston. But she said Ávila’s letter is a “thinly veiled attempt to muzzle” RIBBA’s concerns about how taxpayer funds are being “funneled into a discriminatory contracting system.”
“LCR and RIBBA are not deterred but will continue to work to break down the ‘old boys network’ that stands in the way of equal contracting opportunity in Rhode Island,” said Davis.