Setting the Black agenda: B.E. 100's CEOs outline what political measures would be necessary to bolster Black-owned businesses.

AFFIRMATIVE ACTION, welfare reform, sweeping tax cuts and urban revitalization are just some of the critical measures at stake as the presidential elections quickly approach. As both political camps recently broke from their tightly rehearsed conventions, where catchphrases like "diversity" and "a big tent" were bandied about, the real competition is set to come to a head shortly.

But whether Bob Dole or Bill Clinton are in the White House in November. it's clear the objective remains the same for black business owners--survival. So today, when the phrase "set-aside" has become a dirty word in many circles of power, many black business leaders are justifiably wary of what lies ahead in 1997.

Those black business leaders, many of whom appear on the BLACK ENTERPRISE list of the largest black-owned businesses in the country, have specific agenda items of their own. Many believe there are avenues that could be explored in helping to foster and strengthen black-owned businesses. Rotan E. Lee, COO of the Marlton, New Jersey-based information and technology company RMS Technologies Inc., (No. 14 on the BEINDUSTRIAL/SERVICE 100) would strongly urge Congress to mandate strategic alliances between minority businesses and the federal government. "Congress needs to ensure that alliances are established," Lee says. "Both the Congress and the President also need to look carefully at how the Supreme Court is now determining public policy, when it comes to something like the Adarand vs. Pena decision."

The Supreme Court's decision in Adarand vs. Pena, which required affirmative action programs to meet stricter scrutiny standards, was considered by many as signaling open season on affirmative action i the U.s. "It was perhaps the final nail in the coffin," says Lee. "And the courts must not be allowed to be the final arbiters. Legislators need to show they have more grit in managing the policy of the country."

CAN THE 8(a) PROGRAM BE SAVED?

Following on the heels of Adarand vs. Pena was the turmoil involving the SBA's 8(a) program, which helped minority business secure $4.5 billion in U.S. contracts last year alone. Yet 8(a) teeters on the brink of elimination as many in the House and Senate are lobbying for it to be scrapped. Loudest among its critics is Rep. Jan Meyers of Kansas, who, at a Small Business Committee hearing last December, deemed the program "corporate welfare in the worst sense of the term." But Meyers isn't alone in her criticism. Even a BE 100s CEO whose company had thrived while under the SBA is now calling for some changes.

Joshua Smith, CEO of the Lanham, Maryland-based Maxima Corp. (No. 38 on the BE 100s list) addressed the Senate's Small Business Committee last year. He talked about how 8(a) could be revamped to make it more effective for business and palatable for those seeking to eliminate it. "The 8(a) program is an avenue full of opportunities. But it has its share of problems," he says. "Once you get large and have to leave the program, you see your business retract because normally you're not going to experience the same type of growth." Maxima was a part of the program for six years, and Smith says the first year after leaving, his company experienced a painful retraction. "The six years in the program were both great and, to some extent, horrible. We got experience, but we also felt tied to a rubber band because we never really got outside the rules and regulations."

Others disagree. Paul King, chairman of Chicago-based UBM Inc., a former BE 100s company, believes that at its best, 8(a) allows larger black companies to mentor up-and-coming firms. " [Maxima] has gone back and gotten younger, smaller firms to joint-venture with them. But we can't do that in a nonexistent 8(a) market."

King also believes that before any action is taken, there has to be a fundamental shift in the way most minority firms are perceived by the general public. He says the first thing is to recognize that African Americans have been "uniquely discriminated against," so special attention needs to be paid to their problems. Once that perception is changed, King would like to see an effort to expand the special minority business programs aimed at providing opportunities m the public sector. "There must be an emphasis on expanding these programs instead of retracting them. There must be a mandate that requires the utilization of minority businesses.

Samuel Metters, CEO of the McLean, Virginia-based Metters Industries Inc., (No. 44 on the BE 100s list), is also a strong proponent of the 8(a) program, in which his company participated for nine years before graduating in 1992. He says 8(a) is vital if the playing field for black businesses is to be leveled. "As long as I don't have the same access to capital as my small business counterpart does, black or white, then the playing field is not level. It taught me how to set up an infrastructure, how to develop a proposal, how to keep up with my competitors.

THE DIVERSITY ISSUE

Metters also has specific items he'd like to see incorporated into the national agenda following the presidential elections. Serious attempts, he says, must be made to induce corporations to embrace diversity within their ranks. Metters says he's looked at both California and Texas as two different examples of how the diversity issue is being played out.

On one side is California, which has been leading the pack in efforts to eliminate affirmative action on a state level. With a governor who eagerly signed an executive order virtually eliminating affirmative action programs in every state agency and department, the issue is coming up once again with an upcoming vote on the California Civil Rights Initiative, which would eliminate affirmative action in public contracting and university admissions.

On the flip side is Houston. Under the efforts of Mayor Bob Lanier, the city's expanded affirmative action goals translated into 21% of the city's construction contracts going to minority- and women-owned firms in 1995. Fifteen percent of the city's purchasing contracts and 25% of the professional services contracts also went to women- and minority-owned firms. But even in Texas there are problems. In March, a federal appeals court overturned the affirmative action program at the University of Texas School of Law in Austin. The case will now most likely head to the Supreme Court. Metters believes there must be a middle ground. "What we need is for Congress to step forward and help bring these two factions together," he says. And just how will greater diversification help a company like Metters?

"When I'm dealing with an IBM and trying to work through a deal that would be beneficial to my company, I'm interacting with people who are not of color," he says. "If I'm dealing with people from a similar background, then I have that much better a chance of getting business from those Fortune 500 companies if they already have blacks incorporated into their firms."

Another issue that many CEOs say deserves some consideration is the flat tax. Although Forbes quickly faded from the political landscape, some CEOs, like RMS chairman and founder David Huggins, see benefits to incorporating a flat tax measure into the national agenda. "The flat tax could be a help to black-owned businesses in general. The first thing I would like to be changed is for businesses to be taxed once rather than three or four times. By the time corporations are taxed and then your dividends are taxed, you've been hit three or four times, which keeps your interest rates higher," Huggins says. "Businesses are going to be taxed whether you're black-owned or green-owned. But it's usually the black-owned businesses that are scrambling for capital."

Thomas J. Burrell, chairman and CEO of the Chicago-based Burrell Communications Group (No. 7 on the BE 100s list) says that while neither Congress nor the President may welcome their suggestions with open arms, cooperation from Capitol Hill is vital if black businesses are to thrive in the next millennium.

"Our society is not color-blind," Burrell says. "And until things become evenhanded in terms of how minority businesses are treated, there will be a need for the government to set a tone and a direction for the public and private sector." The federal government has to take the lead in leveling the playing field, he adds. If not, "then those with the greatest resources will always have the greatest advantage. And, unfortunately, black businesses just don't have that advantage to begin with."

RELATED ARTICLE: Keeping ahead of the PAC

MOPAC continues fundraising efforts, eyes November elections

Its formation was announced with great fanfare just a year ago. The Mobilization for Economic Opportunities Political Action Committee (MOPAC), based in Washington, D.C., trumpeted the announcement that some of the biggest dealmakers in black business decided it was time to pool their collective resources and contacts to stop the backlash against affirmative action programs nationwide.

Indeed, MOPAC's steering committee reads like a who's who of black business leaders, including: Motown Chairman Clarence Avant, Robert Johnson of BET Holdings, J. Bruce Llewellyn of the Philadelphia Coca-Cola Bottling Company, Emma Chappell of United Bank of Philadelphia, Loida Lewis, chairman and CEO of TLC Beatrice International and headed by BLACK ENTERPRISE Publisher Earl Graves. From its inception, MOPAC seemed primed to live up to its mandate--to counter attacks against affirmative action and set-aside programs as well as to provide a vehicle to financially support candidates and politicians who support black business development.

"It is very important for us as African Americans to be able to raise our own money, but it will take time," say MOPAC member and Essence magazine Publisher and CEO Edward Lewis, who hosted a MOPAC fund-raiser in New York in March. "Our biggest hurdle is just getting African Americans to understand that we need to support each other and the causes that best work toward our collective best interest."

Among those attending the fund-raiser, which raised over $20,000 were Graves, Llewellyn and Lewis. "All of us here have been beneficiaries of affirmative action because it has been a successful program," says Lewis. "But because of it success, people in Washington say `Hey, that's enough. They've arrived, so finish it,' without realizing that for 200 years they have had affirmative action. That's not fair."

Adds Graves, "At American corporations, when they start talking about corporate killers, the people being killed across-the-board are us. Look at housing in terms of where we live and where we're going to live. Is it getting any better? When there is talk about cutting health care and Medicaid, they're talking about us. All of this comes back to affirmative action."

Thus far, MOPAC has been working quietly behind the scenes and concentrating on fundraising. To date, the organization has raised nearly $250,000.

Paul King, chairman of UBM Inc., a Chicago-based construction company, says that although the organization has been relatively laid-back, outsiders shouldn't take MOPAC lightly. "We're in place to help protect, defend and advance programs that aid black economic development." King says MOPAC can best accomplish its mission by pinpointing politicians that have targeted affirmative action programs for elimination as well as by making donations to various political candidates that support affirmative action programs.

So far, MOPAC has made one significant contribution to the campaign fund of Sen. Carol Moseley-Braun (D-Illinois). It's a contribution that pays back heavily in dividends, says King. "When we support someone like Sen. Moseley-Braun, we don't just send her a check," says King. "We elevate issues that are relevant to black economic development to her and we provide a link to a decision maker form a voiceless mass."

For more information on MOPAC, call 202-2965-5089.