Is it fair to set aside taxpayer money to ensure that women and minority-owned businesses get a cut of Washington state's highway spending?
Many viewers and online readers raised that question in response to KING 5's series that uncovered serious problems in how one state agency decides which companies are eligible for lucrative highway construction projects.
KING 5 found that the agency -- the Office of Minority and Women Business Enterprises -- ignored fraud by contractors that gained access to the program when they shouldn't have, punished employees who tried to follow the rules and disqualify contractors who were in violation of state and federal rules, and ignored the Washington State Department of Transportation when its own inspectors and compliance officers found fraud and violations.
But companies that play by the rules and benefit from the minority contracting program say OMWBE's failures shouldn't put an end to the set-aside program. They say discrimination is still widespread in the highway construction sector, and the DBE program helps by requiring primary contractors on big projects to farm out a certain percentage of the work to so-called Disadvantaged Business Enterprises (DBE). Primary contractors are required by federal law to set a goal to hire a certain percentage of DBE’s on projects funded with federal dollars.
One such company is DBE Electric, a Covington-based company owned by Mary Guthmiller.
"Without goals, there are projects that I certainly wouldn't be on," said Guthmiller, whose company has landed work on some of the state's biggest transportation projects, including the 520 bridge pontoons and the tunnel that will replace Seattle's aging waterfront Viaduct.
"The fact of the matter is construction is still unfortunately one of the male dominated industries," Guthmiller said.
After a 2005 federal court case forced the state to drop the DBE goals, the use of minority contractors on state projects plummeted from 12 percent of total project work force to less than 4 percent.
Jenero Castaneda worked in minority outreach programs for WSDOT and OMWBE before retiring in 2008. He saw discrimination first hand out in the field.
"I have had contractors and state purchasing agents tell me not only no, but, 'Hell no! No, I will not hire minorities.'"
Castaneda said some big contractors would rather hire their friends, who they believe will do the job right, then take a chance on an unknown, small, minority-owned company.
Guthmiller said she still sees the "good old boy network" in action.
"They think I'm there to get coffee or take notes and that I'm not one on one involved in my projects and I am."
Castaneda offered this assessment of companies in the minority contracting program: "They're not looking for a hand out, just an opportunity."
Eliminating the program would be costly for Washington state, as the allocation of federal highway funds is tied to the state's compliance with minority contracting goals.
As for OMWBE, the agency veteran who was elevated to the directorship in 2010 by Gov. Gregoire, left the job on June 1; Cathy Canorro announced her resignation in May after the KING 5 series began airing. A new director, former Director of Washington’s Lottery, Chris Liu, is set to take over on June 15.
In the meantime, state and federal investigators are looking into OMWBE's activities to determine if any laws were violated. Gov. Chris Gregoire requested that the Washington State Patrol launch a criminal investigation after KING 5's first story ran. The State Patrol has responded to the governor’s office to say that it will play a supporting role to the federal investigation of the state’s DBE program, which is being conducted by the FBI and the inspector general of the U.S. Department of Transportation.