Chicago City Council OKs Tougher Ordinance To Penalize Front Minority Companies

Jet, August 7, 2000

Fulfilling Chicago Mayor Richard M. Daley's promise of cracking down on front companies posing as minority- and women-owned businesses, the Chicago City Council passed an ordinance to levy stiff financial penalties against contractors that fail to meet their goals for subcontracting to minority- and women-owned (MBE/ WBE) businesses.

"This new ordinance further displays our commitment to full participation by minority- and women-owned companies in city contracts," said Daley.

The city of Chicago also released its year-to-date figures of MBE/WBE activity. For the period from January 1,2000 to June 30, 2000, the city has awarded 44% of contract dollars, $284 million, to minority firms. This far exceeds the city's stated goal of awarding 25% of contract dollars to MBE firms and 5% to WBE firms.

Year-to-date, Chicago has awarded 16% of contracts to Black firms, 15% to Hispanic firms, 5% to Asian firms and 6% to women firms.

The mayor's ordinance, which received full support by the City Council, will impose penalties from fines to bans on companies that fall short of MBE/WBE goals or misrepresent themselves to the city.

Under the new ordinance, any contractor that fails to meet MBE/ WBE goals or fraudulently misrepresents the amount of MBE/WBE participation in a city project will be banned from doing business with the city for up to three years.