10/20/00 9:00 a.m.
Racial Spoils in Fed Contracting
An executive order for balkanization.

By Roger Clegg, general counsel of the Center for Equal Opportunity & John Sullivan, associate director of the Project on Civil Rights and Public Contracts

n October 6, President Clinton signed an executive order which, the White House declared, "directs Federal departments and agencies with procurement authority to take aggressive and specific actions" to make sure that certain racial and ethnic groups get an increased share of federal contracts. The order specifically "direct[s] each agency to establish goals" and to make clear "that these are minimum goals and are not considered a ceiling for such contracting."

The odor of election-year politics is strong in the order. Vice President Gore joins President Clinton in the press release's headline and throughout its body; the order was pushed by Democratic congressmen seeking reelection; and agencies are given 90 days — that is, just enough time to make sure the next president is stuck with their product — to submit a "a long-term comprehensive strategic plan." This is serious election-year pork. One federal program alone awards more than $5 billion in contracts annually.

The federal government is encouraging public and private actors to divide up contracting and jobs along racial and ethnic lines. The White House, moreover, says the order "directs federal departments and agencies to ensure that all creation, placement, and transmission of federal advertising are fully reflective of the nation's diversity." It trumpets as well a recent report by Vice President Gore's "National Partnership for Reinventing Government" and the Department of Commerce that encourages "holding managers responsible for building diverse staffs."

The civil-rights establishment agrees with this approach. Three days after President Clinton signed his executive order, the NAACP issued its annual report card on the "lodging industry." Different hotel chains were graded on, for instance, their "willingness to explore incentives and to establish programs to increase the number of African-American franchisees" and "to utilize African-American owned agencies and media in advertising campaigns." Other people of color are not mentioned.

Of course not. They have to look out for themselves — and they will. The Arab-American Business & Professional Association is now circulating a letter announcing its plans to "obtain official minority status for Arab Americans" in order to get designated as a "socially and economically disadvantaged group" eligible for the Small Business Administration's 8(a) program — that's the $5 billion-a-year one. Their timing is propitious, given the recent actions by President Clinton and the NAACP.

Let's consider how such a claim is made. At first blush, it might seem that Arab-Americans will have a tough row to hoe in demonstrating "economic" disadvantage. According to 1990 census data — the 2000 results are not yet available, of course — Americans of Middle Eastern descent are more likely to own businesses than most European-Americans, and are, in fact, almost twice as likely to be business owners as Irish-Americans, who are not regarded as economically disadvantaged.

In Detroit, home to the country's greatest concentration of Arab-Americans, the average annual income of all residents was just over $30,000, while for Arab-Americans it was nearly $40,000. The average annual income of Arab-Americans also exceeds the average incomes of other residents in, for instance, Washington, D.C.

But the SBA defines economic disadvantage generously: $250,000 in assets, not counting house and business. Indeed, more than 90 percent of all American families would qualify — only their skin color and ancestry remain as a stumbling block. So the relative affluence of Arab-Americans will not be determinative.

Then what about "social" disadvantage? Sure, why not? Is any there any group more consistently vilified in movies and television than the Arab terrorist? Recall, for instance, that immediately after the Oklahoma City bombing, suspicion was directed (wrongly) at a "Middle Eastern looking man." During the Gulf War, Mayor Coleman Young of Detroit was asked to call in the National Guard to protect Arab-Americans from attacks against them. While blacks point to the lack of black actors on television, for Arab-Americans the absence is almost total. Over the past four decades, the only Arab-American characters on TV that spring immediately to mind are Danny Thomas and Corporal Klinger from M*A*S*H. But Thomas was Roman Catholic and Klinger, one hopes, was also not exactly representative either.

The Census Bureau does not have a category for Arab-Americans, who traditionally have had to classify themselves as white. When the bureau releases the results of the 2000 census, the only way the agency will be able to determine the number of Arab-Americans in the United States will be to analyze 85 separate ancestry codes (one of which, incidentally, is for those Americans claiming their ancestry derives from "occupied Palestine").

At least six other nationalities or ethnic groups have tried to obtain the certified status that Arab-Americans are now seeking. Four succeeded: Asian Indians, Sri Lankans, Indonesians, and Tongans. (The Tonga Islands, incidentally, are located 1,700 miles from New Zealand; most Tongans who immigrate to this country do so after converting to Mormonism, and settle in Utah.)

But the two other groups failed. Hasidic Jews applied to the SBA in 1979. Their application had generated letters of support from senators and congressmen, but also sparked opposition, much of it from the black community. Indeed, Parren Mitchell, chair of the Congressional Black Caucus, led the opponents. He cited the separation of church and state, as well as the more pragmatic concern that the Hasidim's inclusion "would dilute further the small percentage of existing resources earmarked for Blacks and other minorities."

Ten years later, Iranian-Americans were also turned down by the government. Like the Hasidim before them, Iranian-Americans were rejected despite ample evidence of discrimination, including widespread assaults during the hostage crisis of the Carter administration.

The logical conclusion is that the government has drawn a color line across the world map. Those immigrants from countries with people of color will be deemed disadvantaged; those from countries populated by lighter-skinned people will not. As was true for economic disadvantage, social disadvantage is ultimately irrelevant: Every group in this country can point to some history of discrimination, so that issue becomes bureaucratic cover for a decision really driven by racial politics.

But, with so much money at stake, expect other groups to petition for minority status. It is ironic that as courts are ending preference programs in public contracting around the country, there is simultaneously a more aggressive effort to enlarge federal preferences, as the president demonstrated in his recent executive order. It is even more ironic that, as race and ancestry matter less and less to most Americans in their private lives, the government insists on playing the race card politically.