RTC shuts its doors: lucrative program helped many Black-owned firms.

With little fanfare, the federal government recently closed an agency that pumped over a billion dollars into minority-and female-owned businesses over the last seven years, an agency that propelled many African Americans into professions that had been historically exclusive.

The agency is the Resolution Trust Corp., created in 1989 to deal with insolvent savings and loan institutions. When RTC shut its doors in December--its goals accomplished and funding ended--minority businesses lost a major source of big government contracts.

The combination of a strong-willed program director and a contracting system with bonus points for women and minorities channeled $1.6 billion in service and legal contracts to companies headed by minorities and women. The program, using incentives that would still protests in today's anti-affirmative action climate, coerced major firms into joint business ventures in areas including legal, accounting, asset management and bond underwriting. For instance, all RTC contracts for $500,000 or more required a minority or female subcontractor. The method was blunt, but it worked. With the program now terminated, the FDIC will absorb the past duties of the RTC in dealing with the few remaining insolvent savings and loans. But officials are not expected to simulate the RTC's aggressive affirmative action program.

Johnnie Booker, the RTC executive in charge of the program, says joint-venturing became an effective tool, one that allowed smaller firms to pick up experience they would not have received otherwise. Ms. Booker put the teeth in RTC regulations, ensuring that minorities and women got their share of contracts. "There was a real move afoot to derail the whole notion of this program," she says. "But we prevailed."

The RTC helped turn tiny businesses into booming firms, making dreams come true for entrepreneurs, including Carylon Alexander of Dallas. This black woman left the S&L industry in 1984 and, sensing the industry was buckling, positioned herself to take advantage of the fall. She started MRC Resources Group Inc., a human resources firm that grew from a one-person operation to a company which peaked at $15.8 million in revenues in 1992. In fact, the RTC paid her $33 million to provide management teams for thrifts it seized. Now, Alexander finds that her RTC experience is helping her snag clients from the private sector. "It impacted my company immensely. We now have a track record in financial services management through our RTC work," she says. And in turn, Alexander has been able to put others to work. She has had as max as 62 corporate employees, and a 500-member interim staff at public and private sector job sites.

Yet, the next generation of black businesses and law firms must scout elsewhere for that experience; Big Brother RTC has faded into the sunset.