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?

1 minute read

May 14, 2013, 11:00 AM PDT

By Jonathan Nettler @nettsj


"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?"

Monday, May 13, 2013 in Next City

Aeriel view of white sheep grazing on green grass between rows of solar panels.

Coming Soon to Ohio: The Largest Agrivoltaic Farm in the US

The ambitious 6,000-acre project will combine an 800-watt solar farm with crop and livestock production.

April 24, 2024 - Columbus Dispatch

Large blank mall building with only two cars in large parking lot.

Pennsylvania Mall Conversion Bill Passes House

If passed, the bill would promote the adaptive reuse of defunct commercial buildings.

April 18, 2024 - Central Penn Business Journal

Workers putting down asphalt on road.

U.S. Supreme Court: California's Impact Fees May Violate Takings Clause

A California property owner took El Dorado County to state court after paying a traffic impact fee he felt was exorbitant. He lost in trial court, appellate court, and the California Supreme Court denied review. Then the U.S. Supreme Court acted.

April 18, 2024 - Los Angeles Times

Texas

Dallas Surburb Bans New Airbnbs

Plano’s city council banned all new permits for short-term rentals as concerns about their impacts on housing costs grow.

57 minutes ago - FOX 4 News

Divvy Chicago

Divvy Introduces E-Bike Charging Docks

New, circular docks let e-bikes charge at stations, eliminating the need for frequent battery swaps.

1 hour ago - Streetsblog Chicago

Freeway sign with "severe weather - use caution" over multilane freeway in rainy weather.

How Freeway Projects Impact Climate Resilience

In addition to displacement and public health impacts, highway expansions can also make communities less resilient to flooding and other climate-related disasters.

2 hours ago - Transportation for America

News from HUD User

HUD's Office of Policy Development and Research

Call for Speakers

Mpact Transit + Community

New Updates on PD&R Edge

HUD's Office of Policy Development and Research

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.