What's up at the MBDA?

Then newly named Commerce Department Secretary Ronald H. Brown spoke of the Minority Business Development Agency (MBDA) in an exclusive interview with BLACK ENTERPRISE last year (see "America's Top Business Advocate," June 1993), he acknowledged the frustration of minority business owners and expressed a desire to give MBDA the economic policy-making clout long denied the agency during the Reagan/Bush era. A top priority asserted by Brown during that interview: "MBDA must have clear and aggressive leadership."

More than a year later, MBDA is still without a director. The issue is a focal point of frustration for minority business owners. It has increased doubts among these entrepreneurs that the agency will ever have the funding, leadership and economic policy influence to be a truly effective advocate for minority-owned businesses. "Is there a leadership gap within MBDA?" asks Andre Carrington, a vice president at Maxima Corp., a Lanham, Md.-based BE 100s technology company. "And where is the central focal point within the federal government for minority business development?"

CLEANING UP A DUMPING GROUND

As this issue went to press, Brown told BE that the naming of a nominee to the directorship of MBDA was imminent. Yet business owners still ask: What's taking so long? "I don't understand why this appointment can't be made," says Bud Ward, president of Symbiont, a computer engineering company in Washington, D.C. This sentiment is echoed by other business owners, who believe there must be several qualified candidates who could fill MBDA's top job. It begs the question, adds Ward, of whether the agency is about to be eliminated.

While Commerce officials say MBDA is in no danger of being wiped out, visibility and respect have long eluded the agency. During the Reagan/Bush years, MBDA and Commerce, which oversees it, were widely viewed as dumping grounds for political appointees. MBDA has also been criticized for being underfunded. Commerce's budget for fiscal 1994 is $3.6 billion, with $42.1 million allocated to MBDA. Of the $4.2 billion requested by Commerce for fiscal 1995, $44.7 million has been earmarked for MBDA.

But with President Clinton's appointment of Brown to head Commerce, business owners began to hope for a newly empowered agency, led by a director qualified to be a strong advocate for minority business development. Those hopes were bolstered by acting MBDA Director Gilbert Colon at a meeting at the National Minority Supplier Development Council (NMSDC) convention in Orlando, Fla., last October. When Colon announced that a permanent director would soon be named, he drew cheers and applause from entrepreneurs gathered to listen to him and Small Business Administration (SBA) head Erskine B. Bowles.

WANTED: A DIRECTOR

But hopes were dashed when the nominee, Gabrielle Greene, withdrew her nomination in March, forcing the selection process back to square one. (See "One That Got Away," next page.) When MBDA celebrated its 25th anniversary in March, many minority business owners were feeling like they'd been left at the altar.

"Almost from the beginning," says Jim Hackney, counselor to Secretary Brown, "we started focusing on MBDA and on finding the right person." And although a director has not been appointed, adds Brown's senior policy adviser Larry Parks, "It doesn't mean that the Secretary hasn't been moving forward on the minority business agenda."

Some business owners believe that from a practical standpoint--given how far we are into the administration's first term and the lengthy White House personnel vetting White House in 1992. According to both Hackney and Parks, it was evident when they came on board that the Republican administration had left MBDA "to die on the vine." So in addition to refocusing the agency to ensure that minority entrepreneurs are prepared to compete, Brown says he has worked to make the agency a more integral part of Commerce. For example, he has included several minority entrepreneurs on trade missions to Mexico, South Africa, the Middle East and Russia. "Minority business development remains my No. I priority as Commerce Secretary," Brown asserts. "It is crucial to the national economy and to minority communities all over America."

THE VISION THING

Vision is a word that is frequently heard when talking to just about anybody about MBDA. But can Commerce and the agency translate vision into action? It already has, says Gilbert Colon, who seems perplexed by the notion that business owners feel a lack of leadership. Under his direction, he says, the agency has launched a comprehensive capital-access strategy for minority firms. This strategy focuses on working with financial institutions to open up the marketplace, including a research project to test the hypothesis that commercial lending institutions discriminate. In addition to his focus on debt capital and surety bonding, Colon says he's begun to persuade other federal agencies, such as the Economic Development Administration and the Department of Agriculture, to co-finance joint minority business development and job creation programs with MBDA. Unfortunately, it's too soon to measure the impact of these initiatives.

If MBDA is in fact being revitalized, refocused, redefined and reinvigorated, why doesn't anybody know about it? "Everything is re-, re-, re-," says Ward. "Consequently, a lot of things have come to a standstill. "

Part of the problem is that MBDA doesn't do a good job of promoting itself, says Maxima's Carrington. "People really don't understand what MBDA is and what it's supposed to do," he asserts. "Not only is it a failure of MBDA to advertise itself and promote the things it does, but it's also the fault of the Department of Commerce for not advertising the value of MBDA within."

THE NEED FOR CODIFICATION

There is also a need to clarify the MBDA's role in relation to the SBA. It is difficult to tell where the federal government's small business agenda ends and where its minority business agenda begins. Many of the programs key to minority business development, such as the 8(a) federal contract set-aside program, are SBA, not MBDA, programs. What else does the SBA have that the MBDA doesn't? For one, it is mandated by law, while the MBDA exists by an executive order that can be revoked at the whim of the president. The message this sends: Small business development is crucial to the economic health of the nation. As for minority business development--it's nice, but not necessary.

Codification of the MBDA, an idea which is endorsed by Brown, would give the agency permanent status under federal law. Not only would codification make MBDA a key player among other Commerce agencies (including SBA), but as a permanent legislative entity, its budget could more than double.

Brown insists that Commerce is not sleeping on the concerns of minority-owned businesses, but minority entrepreneurs are sending a wake-up call nonetheless. In spite of its limitations, asserts Carrington, MBDA "is a necessary entity within Commerce."

It's a Catch-22: MBDA needs a strong director who can help the agency establish a reputation for effectiveness and influence within the Clinton administration and among business owners. Yet, that the reputation of MBDA is lacking may be hindering the agency's ability to attract the right person to the job.