JUST PASSING THROUGH

AFTER A FLURRY OF ALLEGED ABUSES, TIME MAY BE RUNNING OUT ON THE CITY'S MINORITY CONTRACTING PROGRAM.

Haji S. Adnan appeared to symbolize everything that was right about the city of Denver's controversial minority contracting program.

Adnan, who died of lung cancer this summer at the age of 67, had come to the United States from Indonesia in the 1950s, educated himself at the Colorado School of Mines and then established his own engineering firm in south Denver. As a minority-owned business, Adnan's AA Engineers & Associates had an inside track on more than $1 million in city work over the years, but Adnan endeavored to help others as well. He founded the Asian Chamber of Commerce in Denver, and he lobbied public officials to make sure other minority companies got a piece of the pie. At his memorial service on July 28, Mayor Wellington Webb took time from a busy schedule to pay tribute to Adnan. Governor Roy Romer made sure to send a representative to the service, and U.S. Senator Ben Nighthorse Campbell did the same.

But a recent probe by city auditor Bob Crider charged that the Webb administration improperly allowed AA to work as a supplier of concrete pipe on public works projects, including Denver International Airport. And Crider, it turns out, isn't the only one who's raised questions about the company. One of Haji Adnan's competitors has been complaining to city officials for years about the firm, claiming that AA worked as a "conduit" that merely "passed through" pipe supplies from one white-owned business to another. Two years ago the State of Colorado revoked AA's certification as a supplier of concrete pipe on jobs for the Department of Transportation. Today a major pipe manufacturer that had a longstanding relationship with AA openly admits it used the company as a conduit to meet government-mandated minority-participation objectives.

"They're nothing more than a broker," says Don Grzesiek, vice president of sales for the Littleton-based Carder Concrete Products Company. "The only reason you would [use AA Engineers as a pipe supplier] would be to meet the goals."

AA Engineers insists it is a genuine supplier of concrete pipe, not a mere broker. "I suppose there are companies like that, but we aren't," says Rosalie Adnan, Haji Adnan's widow and a vice president of the company. "Ours has been legitimate [and] above-board from day one." Webb administration officials also defend the company, saying they've thoroughly checked AA's credentials as a supplier and that it meets city specifications.

Critics of Denver's minority contracting program, however, say AA Engineers and companies like it are abusing their minority status in the construction-supply industry. A host of conduits and front companies, these critics say, have combined with large white-owned firms to make money as suppliers without providing any real, commercially valuable service. Even some minority- and woman-owned businesses say the practice has gotten out of hand.

"It's a real big problem," says Robert Chavez Jr., president of Chavez Sheet Metal in Denver. "But so many people get away with it."

For Denver's affirmative action contracting program, 1994 has been a bad year pretty much all the way through.

The program was founded in the early 1980s to promote business ownership among minorities and women, and city officials insist it has been a tremendous success overall. Under current rules, the city mandates that 16 percent of the money it spends annually on construction go to so-called "minority business enterprises" (MBEs). Twelve percent is set aside for "women business enterprises" (WBEs). The city has separate, slightly lower goals for engineering, consulting and other kinds of taxpayer-funded "professional service" work.

But a series of media investigations this year has severely tarnished the program's image. In February the Denver Post reported that the city had awarded almost $30 million worth of work at DIA to thirteen companies whose applications for "disadvantaged" status had been rejected by the State of Colorado. One business owner, Anthony Falcone, was certified by the city as Hispanic even though state regulators determined Falcone was actually Italian. The paper also said the program boosted costs at the airport by as much as $384 million.

That same month, the Rocky Mountain News reported that Willie Kellum, the black owner of a Five Points clothing store, was awarded a substantial share of a DIA concession deal even though he'd been on the brink of financial collapse at the time and owed the city more than $200,000 in economic-development loans.

KMGH-Channel 7 last month aired a report claiming that BAE Automated Systems, the company building DIA's computerized baggage system, used a minority-owned "front company" to circumvent the city's affirmative action goals. BAE received credit for hiring millwrights employed by Chicago-based Harrell Inc., the station said, when in fact the workers were all former employees of BAE who were moved to Harrell's payroll on paper only.

And most recently, the Post ran another story reporting that Minnesota-based CSI Trucking Inc., a Hispanic-owned firm, had admitted in court papers that it posed as a materials supplier for a white-owned firm providing runway concrete at DIA.

On top of all the media reports has come the recent release of Crider's audit. Crider, a political foe of the mayor who hopes to unseat Webb in next May's election, ordered his staff to review Denver's MBE/WBE program from September 1990 to December 1993. The audit, released in November, came to a number of what Crider called "extremely disturbing" conclusions. Among them: that a review of 65 randomly selected companies approved for the program by the city showed that more than 70 percent did not meet certification criteria; that almost 10 percent of companies surveyed appeared to be mere "fronts" for companies owned by white men; and that the Mayor's Office of Contract Compliance (MOCC), the agency charged with administering the program, had been so lax with its procedures and record-keeping that it was incapable of "effective decision-making."

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1 comments
michaelnicholas57
michaelnicholas57

Having worked in an online sphere of electrical supplies and wholesalers, I think that such misreporting by businesses has become more common in all parts of the world. More people buy electrical products online than how many of them buy these products from their local markets. That's what poses new challenges to the local sellers and they are getting involved into such crimes. On behalf of http://schnap.com.au/ which is one of the leading electrical suppliers of Sydney, Melbourne and Brisbane, Perth, etc. I would never say these practices are good from any angle. 

 
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