MBE, WBE, DBE: Why Are Such Programs Often Rife with Fraud?

Government contracting requirements that encourage the growth of minority-owned businesses are laudable, says Patrick Kerkstra, but such programs are rife with abuse. What makes them so susceptible to fraud and what can be done?
May 14, 2013, 11am PDT | Jonathan Nettler | @nettsj
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"Philadelphia Inspector General Amy Kurland announced last week that local contractors have used 'sham minority subcontractors' on 19 projects to skirt antidiscrimination requirements," reports Kerkstra. "In New York, investigations into fraudulent hiring of minority- and women-owned subcontractors are so common that they have become something of a specialty for local prosecutors."

"The story is the same in ChicagoSeattle and Dallas. And that’s just in the last few years. Go back further, and it’s the rare city or state that hasn’t endured a scandal or four tied to well-intentioned minority contracting regulations."

"What is it about minority contracting programs that makes them such persistent sources of fraud and corruption?"

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Published on Monday, May 13, 2013 in Next City
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