Summa-Harrison scandal - Summa-Harrison Metal Products Inc. financial improprieties investigation

Black Enterprise, April, 1993 by Anthony Neely

Following a bizarre sequence of events that includes a bankruptcy filing, the loss of minority ownership status and a criminal investigation, Summa-Harrison Metal Products Inc., ranked No. 60 on the 1992 BE INDUSTRIAL/SERVICE LIST, was sold to a white-owned auto industry supplier. The January sale of the $20 million metal stamping and auto-parts maker to Stamping Equipment Leasing Co., an affiliate of Ecorse, Mich.-based Bennett Equipment Co., ends its two-year run on the BE 100s.

The demise of the black-owned manufacturer is linked to the relationship between Summa-Harrison CEO Charlie Harrison Jr. and Donald Nick, a white Detroit-area businessman. Harrison, a black Michigan state representative, bought Summa-Harrison from Nick in 1988, after they incorporated the firm together in 1977.

The company's troubles seemed to begin when a subsidiary, Ben G Industries Inc., was sold in May 1991. Soon, money woes developed, and the company filed for Chapter 11 bankruptcy protection last September.

Leading up to the bankruptcy filing, things started to unravel. Court documents showed that Harrison was "terminated" from Summa-Harrison last June, although he was kept on the payroll until the Sept. 24 bankruptcy filing. A Summa-Harrison attorney also revealed that last June, Harrison sold the company to a firm controlled by Nick for $1. Furthermore, allegations resurfaced that $458,000 had been stolen from Ben G Industries before it was sold.

To top off the fiasco, last October, the Michigan Minority Business Development Council (MMBDC), a private agency viewed as the state's top certifying body, revoked Summa-Harrison's status as a minority-owned and -operated firm. Ronald Hall, MMBDC executive director, says Summa-Harrison "didn't reply" to the agency's questions about who actually ran the company. Minority certification officials have been concerned about Nick's possible control of the firm's daily operations because Nick remained a Summa-Harrison consultant even after Harrison became sole owner.

Last spring, Ford Motor Co. dropped Summa-Harrison's minority certification, expressing similar doubt that Harrison was running the company day-to-day. Last October, Chrysler Corp., Summa-Harrison's biggest customer, also decided to purge the firm from its minority supplier program. At press time, the Macomb County prosecutor's office was probing Harrison's and Nick's possible connection with the $458,000 allegedly stolen from Ben G Industries. Shirley Gibson, former Ben G bookkeeper, is preparing to stand trial for embezzling the money. In September 1991, Gibson, who was hired at Summa-Harrison after being fired at Ben G, told investigators that Harrison and Nick were among three people who received money after the subsidiary was sold.