Fullilove v. Kreps Brief of the NAACP Legal Defense and Educational Fund et al. as Amici Curiae
Public Court Documents
January 1, 1979
Cite this item
-
Brief Collection, LDF Court Filings. Fullilove v. Kreps Brief of the NAACP Legal Defense and Educational Fund et al. as Amici Curiae, 1979. eace877e-b29a-ee11-be36-6045bdeb8873. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/cd251d71-6d41-40c1-a12f-ed454262571f/fullilove-v-kreps-brief-of-the-naacp-legal-defense-and-educational-fund-et-al-as-amici-curiae. Accessed April 29, 2025.
Copied!
I n the
§>upmn? (Emirt ni % Initeft Males
October T erm, 1979
No. 78-1007
H. E arl F ullilove, et al.,
Plaintiffs,
v.
J xjanita K reps, et al.
ON WRIT OP CERTIORARI TO
THE UNITED STATES COURT OE APPEALS EOR THE SECOND CIRCUIT
BRIEF OF THE
NAACP LEGAL DEFENSE AND EDUCATIONAL FUND, INC.,
THE NATIONAL URBAN LEAGUE, INC., THE NATIONAL
BANKERS ASSOCIATION, INC., AND THE NATIONAL BAR
ASSOCIATION, AS AMICI CURIAE
E gbert L. H arris
W illiam A. B orders, J r.
Of Counsel
J ack Greenberg
J ames M. Nabrit, I I I
Deborah F ins
E ric Schnapper
Suite 2030
10 Columbus Circle
New York, New York 10019
Vernon E. J ordan, J r.
500 E. 62nd Street
New York, New York 10021
Counsel for Amici Curiae
I N D E X
I n t e r e s t of Amici .......................................................... • 1
Summary o f Argument ............................................................. 4
ARGUMENT
I . THE APPLICABLE CONSTITUTIONAL
STANDARD ..................................................... 5
I I . THE ORIGIN OF THE MBE
PROVISION ........................................................ 15
I I I . THE PURPOSES OF THE MBE
PROVISION ...................................................... 30
(1) Overcoming D i s c r i m i n a t i o n -
Based Prob lems o f M inor
i t y B u s i n e s s E n t e r
p r i s e s ................................................. 31
(2 ) Reducing Black Unemploy
ment ...................................................... 36
(3 ) The Lack o f A v a i l a b l e
A l t e r n a t i v e s ................................... 38
CONCLUSION ................................................................. 42
Page
TABLE OF AUTHORITIES
Cases
A lb e m a r le P a pe r C o .v . Moody,
422 U.S. 405 (1975) ....................................... 2
F e r g u so n v. Sk rupa , 372 U.S.
726 (1963) .................................... ............................ 30
Gr iggs v . Duke Power C o . , 401 U.S.
424 (1971) ........................ .................. ................ .. . 2
Lochner v . New York , 198 U.S. 45
(1905) .............. 30
R egen t s o f U n i v e r s i t y of C a l i f o r n i a
v. Bakke, 438 U.S. 265 (1978) . . . . . . 4 , 5 , 6 , 7
U n i t e d J e w i sh O r g a n i z a t i o n s v. C a rey ,
430 U.S. 144 (1977) .......... 4 , 5
S t a t u t e s and C o n s t i t u t i o n a l P r o v i s i o n s
F o u r t e e n t h Amendment t o t h e U.S.
C o n s t i t u t i o n ............................ 4 , 6 , 7 ,
12-14
15 U.S .C . § 63 7 (a ) . . . . . . . . . . . . . . . . . . . . . . . . 27,41
42 U.S .C . § 6703 ...................................................... 18
42 U.S .C . § 6704 ............................................ 18
42 U.S .C. § 6705(d) ......................................................... 18
42 U.S .C . § 6706 ................................................................ 18
42 U.S .C . § 6707(a ) ( i ) ..................................... 28
Page
- i i -
Page
26 U.S .C . § 6709 ............................................................... 26
42 U.S .C . § 6721 ............................................................... 19
13 S t a t . 507 (1865) ........................................................ 4
14 S t a t . c . 200 (1866) ................................................ 8
14 S t a t . Res. 368 (1866) ............................................ 8
15 S t a t . Res. 4 (1867) ................................................ 8
C i v i l R i g h t s Act o f 1866,
14 S t a t . 27 13
Loca l P u b l i c Works C a p i t a l Development
and I n v e s tm e n t Act o f 1976, 42
U.S .C. § 6701, e t s e q ................................... Pa ss im
P u b l i c Works Employment Act o f 1977,
91 S t a t . 116 ........................................................ Pa ss im
L e g i s l a t i v e M a t e r i a l s
123 Cong. Rec. (1977) ....................................... 2 0 - 2 2 ,2 6 - 2 8
3 1 - 3 2 ,3 5 - 3 7 ,
39
Cong. Globe , 39 th C ong . , 1 s t S e s s .
(1866) ........................................................................... 9 -14
Cong. Globe , 38 th C ong . , 1 s t S e s s .
(1864) ........................................................................... 8
S. Rep. 95-38 (1977) .................................................... 21 ,23
S. Rep. 94-636 (1976) .................................................. 39
S. Rep. 91 -1343 (1970) ............................................... 34 ,39
H. Rep. 95-20 ( 1977) ................................................. 21
H. Rep. 94-1791 (1977) ............................................... 34 ,39
- i i i -
Page
H. Rep. 94-468 (1975) ........................ .. 33 ,3 9
H. Rep. 92-1615 (1972) .................................... ........... 39
H. R. Rep. No. 2, 38 th C ong . ,
1 s t S e s s . (1864) ................................................... 10
H. Doc. 95 -68 , 95 th C ong . , 1 s t S e s s .
(1977 ) ............................................................... .. 21
H. R. Exec . Doc. No. 11, 39 th Cong . ,
1 s t S e s s . (1865) ...................... ............................ 8
J o i n t H e a r in g on M i n o r i t y C o n t r a c t i n g
B efo re t h e S e n a t e S e l e c t Committee
on Small B u s i n e s s and t h e Sub
comm it tee on M i n o r i t y E n t e r p r i s e
and G e n e r a l O v e r s i g h t of t h e House
Small B u s i n e s s Commit tee , 95 th Cong . ,
2d S e s s . (1978) ..................................................... 27
H e a r i n g s , B e fo re t h e Subcommit t ee oh
Economic Development of t h e House
Committee on P u b l i c Works and
T r a n s p o r t a t i o n , 95 th C o n g . ,
1 s t S e s s . (1977) ................. ................................. 25, 26
H e a r in g s on t h e Conduct o f Moneta ry
P o l i c y B e f o re t h e House Commit tee on
Banking , F i n a n c e and Urban A f f a i r s ,
95 th C ong . , 1 s t S e s s . (1977) ...................... 21
H e a r in g s on t h e Small B u s i n e s s A d m i n i s t r a
t i o n 8 ( a ) C o n t r a c t Procurem en t
Program B e f o re t h e S e n a t e Com
m i t t e e on Sm all B u s i n e s s , 94 th
Cong . , 2d S e s s . (1976) ................... ........... .. 38 ,39
i v -
Page
H e a r in g s on SBIC and SBLC Programs
and S e l e c t e d SBA A c t i v i t i e s B e fo re
t h e Subcom mit tee on SBA
O v e r s i g h t and M i n o r i t y E n t e r p r i s e s
of t h e House Commit tee on Small
B u s i n e s s , 94 th C ong . , 1 s t S e s s .
(1976) ........................................................................... 40
O v e r s i g h t H e a r in g s on Small B u s i n e s s
A d m i n i s t r a t i o n Programs and A c t i v i t i e s
B e fo re t h e Subcommit t ee on
SBA O v e r s i g h t and M i n o r i t y E n t e r p r i s e s
o f t h e House Commit tee on Small
B u s i n e s s , 94 th C o n g . , 1 s t S e s s .
(1976) ......................................................................... 40
H e a r in g s on P rocu rem en t A s s i s t a n c e Programs
of t h e S n a i l B u s i n e s s A d m i n i s t r a t i o n
B efo re t h e S e n a t e Commit tee on
Small B u s i n e s s , 94 th C ong . , 1 s t
S e s s . (1975) .................................................................... 40
H e a r in g s on M i n o r i t y E n t e r p r i s e and A l l i e d
Problems o f Sm all B u s i n e s s B e fo re t h e
Subcom mit tee on SBA O v e r s i g h t and
M i n o r i t y E n t e r p r i s e o f t h e House
Commit tee on Sm all B u s i n e s s ,
94 th C ong . , 1 s t S e s s .
(1975) ............................................................................. 40
H e a r in g s on Government M i n o r i t y E n t e r p r i s e
Programs — F i s c a l Year 1974, B e fo re
t h e Subcommit t ee on M i n o r i t y B u s in e s s
E n t e r p r i s e and F r a n c h i s i n g of t h e
House Commit tee on Sm all B u s i n e s s ,
93rd Cong . , 2d S e s s . (1974) .......................... 40
H ear ings on SBA's 8 ( a ) S u b c o n t r a c t i n g
Program —• M i n o r i t y E n t e r p r i s e
B e fo re t h e Subcommit tee on Government
P rocurem ent o f t h e S e n a t e Commit tee on Small
B u s i n e s s , 92nd Cong . , 1 s t
S e s s . ( 1 9 7 1 ) ................................................................. 40
- v -
Page
O the r A u t h o r i t i e s
E x e c u t i v e Order 11458 .................................... 32
P u b l i c P a p e rs o f t h e P r e s i d e n t ,
Jimmy C a r t e r , 1977 ............................................ 23
V I I I Messages and P a pe rs of t h e
P r e s i d e n t s (1914) .............................................. 9 ,1 2
C o m p t r o l l e r G e n e r a l , M i n o r i t y Firms on
Loca l P u b l i c Works P r o j e c t s —
Mixed R e s u l t s (1979) . . . . . . . . . . . . . . . 2 4 , 2 8 , 3 8
40 ,41
C o m p t r o l l e r G e n e r a l , A Look At How The
Small B u s i n e s s A d m i n i s t r a t i o n ' s
I n v e s t m e n t Company Program For
A s s i s t i n g D i s a d v a n t a g e d
Bus inessm en i s Working (1975) ................... 40
Economic R e p o r t of t h e P r e s i d e n t ,
1979 ........................................................................... 1 6 ,1 7 ,1 9
2 4 ,2 5 ,3 7
Economic R e p o r t o f
1977 . . . . . . . .
t h e P r e s i d e n t ,
18
Repor t of t h e Task Force on E d u c a t i o n
and T r a i n i n g f o r M i n o r i t y
B u s i n e s s E n t e r p r i s e (1974) ........................... 34
U.S. Depa r tm en t o f Commerce, O f f i c e
o f M i n o r i t y B u s i n e s s E n t e r p r i s e ,
F e d e r a l A s s i s t a n c e Programs f o r
M i n o r i t y B u s i n e s s E n t e r p r i s e s
(1977) ........................................................................... 34
U.S. Commission on C i v i l R i g h t s , M i n o r i t i e s
and Women as Government C o n t r a c t o r s
(1975) ................................................... .......................... 28 ,35
v i
U.S. Commission on C i v i l R i g h t s , The
C h a l l e n g e Ahead: Equa l Oppor
t u n i t y i n R e f e r r a l Unions (1976) ............ 37
G. B e n t l e y , A H i s t o r y o f The F re e d m e n ' s
Bureau (1955) .......................................................... 8
T. J e f f e r s o n , Manual of P a r l i a m e n t a r y
P r a c t i c e (1977) ............................. 29
T. Murphy, P o l i t i c s o f C o n g r e s s i o n a l
Commit tees (1978) ................................................. 30
R. Nader , R u l i n g C ongress (1975) ....................... 30
N. O r n s t e i n , Changing C ongre s s :
t h e Commit tee System (1974) ............................. 30
P. P i e r c e , The F r e e d m e n ' s Bureau
(1904) ........................................................................... 30
H. R o b e r t , Rules o f Order ......................................... 30
H. S p e n c e r , S o c i a l S t a t i c s ..................................... 30
J . t e n B ro e k , Equa l Under Law (1965) ................ 12
New York Times, J a n u a r y 26, 1977 ........................ 20
New York Times, J a n u a r y 8, 1977 ........................... 20
- v i i -
IN THE
SUPREME COURT OF THE UNITED STATES
O c to b e r Term, 1979
No. 78-1007
H. EARL FULLILOVE, e t a l . ,
Plaintiffs,
v .
JUANITA KREPS, e t a l .
On W ri t of C e r t i o r a r i t o t h e U n i t e d
S t a t e s C our t o f Appea ls f o r the
Second C i r c u i t
BRIEF OF THE
NAACP LEGAL DEFENSE AND EDUCATIONAL
FUND, INC., THE NATIONAL URBAN
LEAGUE, INC., THE NATIONAL BANKERS
ASSOCIATION, INC., AND THE NATIONAL
BAR ASSOCIATION, AS AMICI CURIAE
INTEREST OF AMICI
The N.A .A.C .P . L e ga l Defense and E d u c a t i o n a l
Fund, I n c . , i s a n o n - p r o f i t c o r p o r a t i o n e s t a b
l i s h e d u n d e r t h e laws of t h e S t a t e o f New York.
I t was formed to a s s i s t b l a c k p e r s o n s t o s e c u r e
t h e i r c o n s t i t u t i o n a l r i g h t s by t h e p r o s e c u t i o n of
l a w s u i t s . I t s c h a r t e r d e c l a r e s t h a t i t s p u r p o s e s
i n c l u d e r e n d e r i n g l e g a l s e r v i c e s g r a t u i t o u s l y t o
2
b l a c k p e r s o n s s u f f e r i n g i n j u s t i c e by r e a s o n of
r a c i a l d i s c r i m i n a t i o n . For many y e a r s a t t o r n e y s
o f t h e L e ga l D efense Fund have r e p r e s e n t e d p a r t i e s
i n l i t i g a t i o n b e f o r e t h i s C o u r t a nd t h e l o w e r
c o u r t s i n v o l v i n g a v a r i e t y o f r a c e d i s c r i m i n a t i o n
i s s u e s r e g a r d i n g employment . See, e . g . , Gr iggs
v . Duke Pow er C o . , 401 U . S . 4 2 4 ( 1 9 7 1 ) ; A l b e
m a r l e P a pe r Co. v. Moody, 422 U.S. 747 (1 9 7 6 ) .
The L e g a l D e f e n s e F und b e l i e v e s t h a t i t s e x
p e r i e n c e i n s u c h l i t i g a t i o n and t h e r e s e a r c h
i t has done w i l l a s s i s t t h e Cour t i n t h i s c a s e .
The p a r t i e s h a v e c o n s e n t e d t o t h e f i l i n g o f
t h i s b r i e f and l e t t e r s of c o n s e n t have been f i l e d
w i t h t h e C l e r k .
The N a t i o n a l Urban League , I n c . , i s a c h a r i t
a b l e and e d u c a t i o n a l o r g a n i z a t i o n e s t a b l i s h e d as a
n o t - f o r - p r o f i t c o r p o r a t i o n u nde r t h e laws o f t h e
S t a t e o f New York. For more t h a n 69 y e a r s , t h e
League and i t s p r e d e c e s s o r s have a d d r e s s e d them
s e l v e s t o t h e p rob lems o f d i s a d v a n t a g e d m i n o r i t i e s
i n t h e U n i t e d S t a t e s by i m p r o v i n g t h e w o r k i n g
c o n d i t i o n s o f b l a c k s and o t h e r m i n o r i t i e s , and by
f o s t e r i n g b e t t e r r a c e r e l a t i o n s and i n c r e a s i n g
u n d e r s t a n d i n g among a l l p e r s o n s .
The N a t i o n a l B a n k e r s A s s o c i a t i o n , a n o n
p r o f i t o r g a n i z a t i o n i n c o r p o r a t e d i n 1972 unde r
t h e laws o f the D i s t r i c t of Columbia , was founded
3
i n 1927 as t h e N a t i o n a l Negro Banke rs A s s o c i a
t i o n . The N a t i o n a l B a n k e r s A s s o c i a t i o n i s a
n a t i o n a l t r a d e o r g a n i z a t i o n f o r m in o r i t y -o w n e d
and c o n t r o l l e d b a n k s . The p u r p o s e s o f t h e
A s s o c i a t i o n i n c l u d e s t r e n g t h e n i n g m i n o r i t y
f i n a n c i a l i n s t i t u t i o n s s o t h a t t h e y c a n , i n
t u r n , p r o m o t e e c o n o m i c p r o g r e s s i n m i n o r i t y
c o m m u n i t i e s and by m i n o r i t y b u s i n e s s e s . The
A s s o c i a t i o n h a s a p a r t i c u l a r i n t e r e s t i n t h i s ca se
b e c a u s e o f i t s p o s s i b l e impac t on ongoing f e d e r a l
e f f o r t s t o i n c r e a s e government d e p o s i t s i n m in o r
i t y banks .
The N a t i o n a l B a r A s s o c i a t i o n f o u n d e d i n
1925, i s a p r o f e s s i o n a l membership o r g a n i z a t i o n
which r e p r e s e n t s more t h a n 10 ,000 b l a c k a t t o r n e y s ,
j u d g e s a n d law s t u d e n t s i n t h e U n i t e d S t a t e s .
I t s p u r p o s e s i n c l u d e a c h i e v i n g e q u a l o p p o r t u
n i t i e s f o r m i n o r i t i e s in t h e l e g a l p r o f e s s i o n ,
and p r o t e c t i n g t h e c i v i l a nd p o l i t i c a l r i g h t s
o f a l l c i t i z e n s . The A s s o c i a t i o n ha s a p a r t i c u l a r
i n t e r e s t i n t h i s c a s e b e c a u s e of i t s b e l i e f i n t h e
im p o r t a n c e o f a f f i r m a t i v e a c t i o n as a means of
s o l v i n g A m e r i c a ' s r a c i a l p ro b le m s . The A s s o c i a
t i o n ' s o f f i c e r s a r e R o b e r t L. H a r r i s ( P r e s i d e n t ) ,
W i l l i a m A. B o r d e r s , J r . ( P r e s i d e n t - E l e c t ) , George
R. B u r r e l l , J r . , W a r r e n H. Dawson , S t u a r t J .
Dunnings , J r . , Renee Jones Weeks (Vice P r e s i d e n t s ) ,
A r n e t t e R. Hubbard ( S e c r e t a r y ) and A r t h e n i a L.
J o y n e r ( T r e a s u r e r ) .
SUMMARY OF ARGUMENT
The u se o f r a c i a l c l a s s i f i c a t i o n s f o r b e n ig n
p u r p o s e s i s c o n s t i t u t i o n a l l y p e r m i s s i b l e where i t
s e r v e s i m p o r t a n t p u r p o s e s and does no t r e p r e s e n t a
s l u r o r s t i g m a on any g ro u p . Tha t c o n s t r u c t i o n o f
t h e F o u r t e e n t h Amendment, advanced by f o u r members
of t h e C o u r t i n R egen t s o f U n i v e r s i t y o f C a l i f o r
n i a v . B a k k e , 438 U . S . 2 6 5 , 361 ( 1 9 7 8 ) , was
s u p p o r t e d by two a d d i t i o n a l J u s t i c e s in U n i t e d
Je w i sh O r g a n i z a t i o n s v. C a r e y , 430 U.S 144, 164
( 1 9 7 7 ) . T h i s s t a n d a r d i s c o n s i s t e n t w i t h t h e
l e g i s l a t i v e h i s t o r y o f t h e Amendment , w h i c h
was framed and app roved by t h e same C ongress t h a t
a d o p te d a number o f r a c e - c o n s c i o u s laws d e s i g n e d
t o a m e l i o r a t e t h e c o n d i t i o n o f b l a c k s .
The f a c t t h a t t h e MBE p r o v i s i o n was n o t
c o n s i d e r e d d u r i n g t h e h e a r i n g s on t h e 1977 P u b l i c
Works A c t i s n o t f a t a l t o i t s v a l i d i t y . The
e x i g e n c i e s o f t h e t h e n - e x i s t i n g economic c i r c u m
s t a n c e s c o m p e l l e d C o n g r e s s t o a c t w i t h e x t r a
o r d i n a r y speed t o e n a c t t h e 1977 A c t , and p r e
c l u d e d as a p r a c t i c a l m a t t e r i n q u i r y i n t o t h e
e x p e r i e n c e of m i n o r i t i e s u n d e r t h e 1976 P u b l i c
Works A c t . M i n o r i t y s e t - a s i d e s were by 1977 a
r e m e d i a l d e v ic e a l r e a d y i n use by and f a m i l i a r t o
t h e f e d e r a l and s t a t e gove rnm e n ts .
The d e b a t e s on t h e MBE c l a u s e r e v e a l t h a t i t
was i n t e n d e d t o overcome b o t h p r e s e n t d i s c r i m i n a
t i o n a n d t h e c o n t i n u i n g e f f e c t s o f p a s t d i s
5
c r i m i n a t i o n a g a i n s t m i n o r i t y b u s i n e s s e s and
m i n o r i t y em p loyees . Each o f t h e s e p rob lems had
been th e s u b j e c t o f r e p e a t e d and e x h a u s t i v e p a s t
c o n g r e s s i o n a l h e a r i n g s and r e p o r t s , which s u p
p o r t e d t h e d e c i s i o n o f C o n g r e s s . P r o p o n e n t s of
t h e c l a u s e a l s o m a i n t a i n e d t h a t i t a lo n e would
s u f f i c e t o r e s o l v e t h e p rob lem s w i t h which i t was
c o n c e r n e d . While t h i s c o n c l u s i o n was not e s s e n
t i a l t o t h e c l a u s e ' s v a l i d i t y , i t t o o was f u l l y
s u p p o r t e d by p a s t c o n g r e s s i o n a l h e a r i n g s and
r e p o r t s .
ARGUMENT
I . THE APPLICABLE CONSTITUTIONAL STANDARD
R e s o l u t i o n o f t h e i n s t a n t c a s e r e q u i r e s a
d e t e r m i n a t i o n of t h e s t a n d a r d by which t o measure
t h e c o n s t i t u t i o n a l i t y of a r a c i a l c l a s s i f i c a t i o n
e s t a b l i s h e d f o r a b e n ig n r e a s o n . T h i s i s s u e was
c o n s i d e r e d b u t n o t f i n a l l y d e c i d e d i n R e g e n t s
of U n i v e r s i t y o f C a l i f o r n i a v . Bakke, 438 U.S. 265
( 1 9 7 8 ) . I n Bakke o n l y f i v e members o f t h e
C o u r t r e a c h e d t h i s q u e s t i o n ; f o u r e x p r e s s l y
r e j e c t e d t h e t r a d i t i o n a l s t r i c t s c r u t i n y t e s t ,
h o l d i n g i n s t e a d t h a t such a c l a s s i f i c a t i o n need
on ly meet t h r e e l e s s s t r i n g e n t r e q u i r e m e n t s : (1)
t h e r e m u s t be " a n i m p o r t a n t and a r t i c u l a t e d
p u r p o se f o r i t s u s e , " (2 ) i t must no t " s t i g m a t i z e
any g r o u p , " (3) i t must no t " s i n g l [ e ] o u t t h o s e
6
l e a s t w e l l r e p r e s e n t e d i n t h e p o l i t i c a l p r o c e s s t o
b e a r t h e b r u n t o f a be n ig n p r o g r a m . " 438 U.S. a t
361 ( o p i n i o n of J u s t i c e s Brennan , W hi te , M a r s h a l l
and Blackmun). The u s u a l s t r i c t s c r u t i n y t e s t was
a l s o r e j e c t e d by two a d d i t i o n a l members of t h e
C o u r t i n U n i t e d J e w i sh O r g a n i z a t i o n s v. C a r e y ,
430 U.S. 144 ( 1 9 7 7 ) . P a r t IV o f J u s t i c e W h i t e ’s
o p i n i o n i n t h a t c a s e , w h i c h was j o i n e d i n by
J u s t i c e s S t e v e n s and R e h n q u i s t , u p h e ld as c o n s i s
t e n t w i t h t h e F o u r t e e n t h Amendment t h e r a c e - c o n
s c i o u s d raw ing o f d i s t r i c t l i n e s so lo n g as such a
p l a n r e p r e s e n t e d no " r a c i a l s l u r o r s t i g m a w i t h
r e s p e c t t o w h i t e s o r any o t h e r r a c e . " 430 U.S. a t
165. T h i s seems i d e n t i c a l t o t h e second r e q u i r e
ment l i s t e d by t h e p l u r a l i t y o p i n i o n in Bakke .
Thus a b e n i g n r a c i a l c l a s s i f i c a t i o n which s a t i s
f i e d t h e t h r e e r e q u i r e m e n t s o f t h e Bakke p l u r a l i t y
w o u l d a p p e a r t o command t h e s u p p o r t o f a s i x -
member m a j o r i t y o f t h e C o u r t.—
T h i s c o n s t i t u t i o n a l s t a n d a r d i s s t r o n g l y
s u p p o r t e d by t h e l e g i s l a t i v e h i s t o r y o f t h e
F o u r t e e n t h Amendment, which we s e t ou t a t l e n g t h
l_/ The s t a n d a r d s i n Bakke and U n i t e d J e w i s h
O r g a n i z a t i o n s a r e n o t l i t e r a l l y t h e same, a l t h o u g h
as a p r a c t i c a l m a t t e r a c l a s s i f i c a t i o n f a i l i n g t h e
f i r s t o r t h i r d Bakke r e q u i r e m e n t would p r o b a b ly
f a i l as w e l l t h e U JO t e s t . The d i s t i n c t i o n
b e t w e e n t h e s e s t a n d a r d s d o e s n o t a f f e c t t h e
d i s p o s i t i o n o f t h e i n s t a n t c a s e , and would n o t
a f f e c t t h e v a l i d i t y o f t h e r a c i a l c l a s s i f i c a t i o n s
w i th which we a r e f a m i l i a r . A c c o r d in g l y we t a k e
no p o s i t i o n on t h e s e a l t e r n a t i v e a r t i c u l a t i o n s o f
t h e u n d e r l y i n g r u l e .
7
i n our b r i e f amicus c u r i a e i n B a k k e See 438
U .S . a t 3 9 6 - 9 8 ( M a r s h a l l , J . ) T h a t h i s t o r y
r e v e a l s t h a t t h e C ong res s which framed t h e F o u r
t e e n t h Amendment c o n te m p o ra n e o u s ly d e b a t e d and
o v e r w h e l m i n g l y a p p r o v e d a v a r i e t y o f p r o g r a m s
l i m i t e d t o b l a c k s , and r e g a r d e d t h e Amendment as
p r o v i d i n g a c o n s t i t u t i o n a l b a s i s f o r such p r o -
gr ams.
I n t h e y e a r s i m m e d i a t e l y p r e c e d i n g and
f o l l o w i n g t h e f r a m in g o f t h e F o u r t e e n t h Amendment,
t h e Congress which a u t h o r e d t h a t p r o v i s i o n a l s o
e n a c t e d a s e r i e s o f r a c e - c o n s c i o u s s o c i a l p r o
grams . The combined impac t o f t h e s e programs was
f a r g r e a t e r t h a n th e a f f i r m a t i v e a c t i o n m easu res
which h a v e come b e f o r e t h i s C o u r t . The r a c i a l
c l a s s i f i c a t i o n s i n t h o s e n i n e t e e n t h c e n t u r y
programs were f a r more e x c l u s i v e t h a n t h e m easu res
common t o d a y ; t h e y were e i t h e r l i m i t e d t o b l a c k s
a l o n e , o r i n c l u d e d w i t h i n t h e i r ambit on ly b l a c k s
and a n o m i n a l n u m b er o f w h i t e l o y a l i s t s who
3/
had f l e d t h e S o u t h . — The 1865 F re edm e n 's Bureau
A 4 / . . .
Act— e s t a b l i s h e d th e Bureau t o p r o v i d e p r o v i s i o n s ,
c l o t h i n g and f u e l f o r f r e e d m e n , t o l e a s e and
2 / B r i e f of NAACP Lega l Defense and E d u c a t i o n a l
F u n d , I n c . , a s Amicus C u r i a e , No. 7 6 - 8 1 1 , pp .
1 0 - 5 3 ( h e r e i n a f t e r c i t e d a s "Amicus B r i e f " ) .
3 / Amicus B r i e f pp. 19-42.
4 / 13 S t a t . 507-508 (1865 ) .
8
u l t i m a t e l y s e l l t o them up t o 40 a c r e s o f l a n d ,
a n d t o " c o n t r o l . . . a l l s u b j e c t s " r e l a t i n g t o
f reedmen . A l though t h e B u r e a u ' s a u t h o r i t y a l s o
e x te n d e d t o w h i t e r e f u g e e s , n e i t h e r C o n g re s s —̂ nor
. . . 6 /
h i s t o r i a n s — r e g a r d e d t h i s p r o v i s i o n as i m p o r t a n t ,
and t h e B u r e a u ' s p r o g ra m s , a s C ong res s was aware ,
were i n o p e r a t i o n u s u a l l y l i m i t e d t o f r e e d m e n .—̂
The 1866 F r e e d m e n ' s B u r e a u A c t , e n a c t e d o v e r
P r e s i d e n t J o h n s o n ' s v e t o , a u t h o r i z e d e d u c a t i o n a l
programs which were e x p r e s s l y l i m i t e d t o " f r e e d -
„ 8/
men. — I n 1867 C ongres s a p p r o p r i a t e d funds " f o r
t h e r e l i e f o f f reedm en o r d e s t i t u t e c o l o r e d p e o p le
9/m th e D i s t r i c t o f C o l u m b ia , " — w i t h no p r o v i s i o n
f o r a i d t o d e s t i t u t e w h i t e s . In t h e same y e a r
Congress e n a c t e d t h e C o l o r e d S e r v i c e m e n ' s Claim
A c t , p r o v i d i n g f o r b l a c k v e t e r a n s , and f o r them
a l o n e , s p e c i a l a s s i s t a n c e i n o b t a i n i n g funds owed
them by t h e g o v e rn m e n t.— • The F r e e d m e n ' s B u r e a u ' s
programs f o r b l a c k s were u l t i m a t e l y phased o u t by
_5 / Cong . G l o b e , 3 8 t h C o n g . , 1 s t S e s s . 693
( 1 8 6 4 ) ; s e e Amicus B r i e f , pp. 21-23 .
_6_/ G. B e n t l e y , A H i s t o r y o f t h e F r e e d m e n ' s
Bureau 47 -49 ( 1 9 5 5 ) ; P. P i e r c e , The F re edm e n 's
Bureau 42 -45 (1 9 0 4 ) .
2J H.R. Exec . Doc. No. 11, 39 th Cong, 1 s t S e s s .
( 1 8 6 5 ) .
8 / 14 S t a t . c . 200, 174-176 ( 1 8 6 6 ) .
9/ 15 S t a t . Res. 4 , 20 ( 1 8 6 7 ) .
10/ 14 S t a t . Res . 368 (1 8 6 6 ) .
9
C ongress on t h e a s s u m p t io n t h a t i t s work would be
c o n t i n u e d by t h e s t a t e s , an e x p e c t a t i o n t h a t went
u n f u l f i l l e d f o r a c e n t u r y .
The r a c i a l c l a s s i f i c a t i o n s i n t h i s e a r l y
l e g i s l a t i o n d i d not go u n n o t i c e d , b u t were the
s o u r c e o f r e p e a t e d b u t i n e f f e c t i v e o p p o s i t i o n i n
t h e C ong res s and on t h e p a r t o f P r e s i d e n t J ohnson ,
who tw ice v e t o e d t h e 1866 F r e e d m e n ' s Bureau b i l l
. 11/ . . .on t h a t b a s i s . — The a rgum en ts v o i c e d m v a i n
a g a i n s t t h i s l e g i s l a t i o n c l o s e l y r e s e m b l e t h e
c o n t e n t i o n s r a i s e d a g a i n s t a f f i r m a t i v e a c t i o n
programs i n our own t im e . C h a r a c t e r i z i n g t h e s e
1 2 /m e a s u r e s as " c l a s s l e g i s l a t i o n " , — o p p o n e n t s
o b j e c t e d t h a t no com parab le a i d was b e in g p ro v id e d
13/
t o e q u a l l y needy w h i t e s . —
A p r o p o s i t i o n to e s t a b l i s h a b u r e a u of
I r i s h m e n ' s a f f a i r s , a b u r e a u o f Dutchmen 's
a f f a i r s , o r one f o r t h e a f f a i r s o f t h o s e of
11/ V I I I Messages and P a p e rs of t h e P r e s i d e n t s ,
3610-11 (1914 ) .
12/ See e . g . , Cong. Globe , 39 th Cong. 1 s t S e s s .
37 (1866) ( rem arks o f Congressman L e B l o n d ) ; V I I I
M e s s a g e s and P a p e r s o f t h e P r e s i d e n t s , 3623
( 1 9 1 4 ) ; Cong . G l o b e , 4 0 t h C o n g . , 1 s t S e s s . 79
(1867) ( r e m ark s of Sen. G r im es ) .
13/ See e . g . , Cong. Glove 39 th Cong . , 1 s t S e s s .
297 ( re m arks o f Sen. S t e w a r t ) , 319 ( rem arks o f
Sen. H e n d r i c k s ) , 372 ( re m ark s of Sen. J o h n s o n ) ,
372 ( re m ark s o f Sen. D a v i s ) , 401 ( rem arks o f Sen.
McDouga l l ) , 629 ( re m arks of Rep. M a r s h a l l ) ; App.
71 ( re m ark s of Rep. C h a n l e r ) (1866 ) .
10
C a u c a s i a n d e s c e n t g e n e r a l l y , who a r e i n
c a p a b l e of p r o p e r l y managing o r t a k i n g c a re
o f t h e i r own i n t e r e s t s by r e a s o n o f a n e
g l e c t e d o r d e f i c i e n t e d u c a t i o n , w o u l d , i n
[ o u r ] o p i n i o n . . . , b e l o o k e d u p o n a s t h e
v a g a ry o f a d i s e a s e d mind. Why t h e f reedmen
o f A f r i c a n d e s c e n t s h o u ld become t h e marked
o b j e c t s o f s p e c i a l l e g i s l a t i o n , t o t h e
d e t r i m e n t o f t h e u n f o r t u n a t e w h i t e s , [we]
f a i l t o comprehend . 14/
I t was u r g e d t h a t such programs would u l t i m a t e l y
p r o v e h a r m f u l t o b l a c k s , e i t h e r by i n c r e a s i n g
t h e i r dependence—- ^ o r by p r o v o k in g w h i t e r e s e n t -
16/
m e n t .— Taxing w h i t e s t o s u p p o r t programs a i d -
17/m g on ly b l a c k s was c r i t i c i z e d as u n f a i r , — and
as g i v i n g b l a c k s an u n f a i r c o m p e t i t i v e a d v a n ta g e
18/o v e r w h i t e s . —
P r o p o n e n t s o f such r a c e - c o n s c i o u s l e g i s l a
t i o n , h o w e v e r , s u c c e s s f u l l y a r g u e d t h a t s u c h
r a c e - c o n s c i o u s l e g i s l a t i o n was j u s t i f i e d by th e
14/ H. R. Rep. No. 2 , 38 th C ong . , 1 s t S e s s . 2, 4
(1 8 6 4 ) .
1 5 / Cong . G l o b e , 3 9 t h C o n g . , 1 s t S e s s . 401
TFemarks of Sen. McDougal l ) ( 1 8 6 6 ) .
1_6_/ Id_. a t App. 69-70 ( re m arks o f Rep. R o u s s e a u ) .
1 7 / I d . a t 362 ( r e m a r k s o f Sen . S a u l s b u r y ) ,
634, 635 ( rem arks o f Rep. R i t t e r ) ; App. 83 ( r e
marks of Rep. C h a n l e r ) .
18/ "Mr. S p e a k e r , when I was a boy, and in common
w i t h a l l o t h e r K e n t u c k y b o y s was b r o u g h t i n
company w i t h n e g r o e s , we u se d t o t a l k , as t o any
p r o j e c t , a b o u t h a v in g ' a w h i t e m an 's c h a n c e . ' I t
seems t o me now t h a t a man may be v e r y happy i f he
can g e t ' a n e g r o ' s c h a n c e . ' " Id .
11
s p e c i a l needs o f b l a c k s — and i n t h e long t e r m
r . 20 /i n t e r e s t o f a l l c i t i z e n s . — They e m p h a s i z e d
t h a t t h o s e s p e c i a l needs were t h e r e s u l t o f a long
h i s t o r y o f d i s c r i m i n a t i o n , and t h a t t h e a i d would
2 2 /h e l p b l a c k s t o become s e l f - s u p p o r t i n g . — A
d i s t i n c t i o n was drawn be tw een such b e n ig n r a c e
c o n s c i o u s m e a s u r e s and i n v i d i o u s d i s c r i m i n a t i o n .
One o b j e c t o f t h i s b i l l i s t o a m e l i o r a t e
t h e c o n d i t i o n o f t h e c o l o r e d men . . . . [ I t s
op p o n e n t s a s s e r t ] t h e b i l l p r o v i d e s one law
f o r o n e c l a s s o f m e n , a n d a n o t h e r f o r
a n o t h e r c l a s s . The v e ry o b j e c t o f t h e b i l l
i s t o b r e a k down t h e d i s c r i m i n a t i o n be tween
w h i t e s and b l a c k s . T h e r e f o r e I r e p e a t t h a t
t h e t r u e o b j e c t of t h i s b i l l i s t h e a m e l i o r a
t i o n o f t h e c o n d i t i o n o f t h e c o l o r e d p e o p l e . 23 /
1 9 / S e e , e . g . , i_d_. a t 365 ( r e m a r k s o f Sen .
F e s s e n d e n ) , 568 ( re m arks of Rep. D o n n e l l y ) ; App.
75 ( re m ark s o f Rep. P h e l p s ) .
20 / See e . g . , Cong. Globe, 4 0 th C ong . , 1 s t S e s s .
444 ( re m ark s of Rep. S c o f i e l d ) ( 1 8 6 7 ) .
21 / See e . g . , Cong. Globe, 39 th C ong . , 1 s t S e s s .
322 ( re m ark s o f Sen. F e s s e n d e n and Sen. T rum bu l l )
("We s h a l l no t long have to s u p p o r t any o f t h e s e
b l a c k s o u t of t h e p u b l i c T r e a s u r y i f we e d u c a t e
and f u r n i s h them w i t h l a n d upon which th e y can
make a l i v i n g f o r t h e m s e l v e s . " ) (1866) .
2 2 / S e e , e . g . , i d . a t 589 ( r e m a r k s o f Sen .
D o n n e l l y ) , 630 ( re m arks of Rep. Hubbard) .
2 3 / I d . a t 6 3 1 - 3 2 ( r e m a r k s o f R ep . M o u l t o n ) .
12
This d i s t i n c t i o n was a p p a r e n t l y a c c e p t e d by th e
m a j o r i t y o f C o n g r e s s , which c o n s i s t e n t l y v o t e d t o
a d o p t such r a c e - c o n s c i o u s l e g i s l a t i o n .
The F o u r t e e n t h Amendment was f a s h i o n e d and
app roved by t h e same C ongres s which had c o n s i s
t e n t l y a d o p te d l e g i s l a t i o n w i t h such " a m e l i o r a
t i v e " r a c i a l c l a s s i f i c a t i o n s . The Amendment was
a d o p t e d i n p a r t t o r e m o v e d o u b t s a s t o t h e
c o n s t i t u t i o n a l i t y o f t h e F r e e d m e n ' s B u r e a u
24 /
b i l l s , — which P r e s i d e n t Johnson had a rg u e d e x -
25/ceeded t h e a u t h o r i t y o f C o n g r e s s . — The F r e e d
m e n ' s B u r e a u A c t o f 1 8 6 6 , t h e R e c o n s t r u c t i o n
m e a s u r e w h i c h p r o b a b l y c o n t a i n e d t h e m o s t im
p o r t a n t r a c e - s p e c i f i c p r o v i s i o n s , was c o n s i d e r e d
and a p p ro v e d by C ongres s s i m u l t a n e o u s l y w i th t h e
2 6 /
F o u r t e e n t h A m e n d m e n t .— The same l e g i s l a t o r s
24 / J . t e n B r o e k , Equa l Under Law 201, 203 (1 9 6 5 ) ;
Cong. G lobe , 39 th C ong . , 1 s t S e s s . 1088 ( rem arks
o f Rep. W oodbr idge ) , 1092 ( re m ark s of Rep. Bing
ham) ( 1 8 6 6 ) .
25 / V I I I Messages and P a p e rs of t h e P r e s i d e n t s
3599 (1 9 1 4 ) .
26 / The House p a s s e d th e Amendment on May 10,
1866, t h e S e n a te v o t e d a m o d i f i e d v e r s i o n on June
8, 1866, and th e House a c q u i e s c e d i n t h e S e n a te
c h a n g e s on J u n e 13 , 18 6 6 . Cong . G l o b e , 3 9 t h
Cong . , 1 s t S e s s . 2545, 3042, 3149 (1866 ) . The
House a pproved t h e F r e e d m e n ' s Bureau Act on May
29, 1866, t h e S e n a t e v o t e d a m o d i f i e d v e r s i o n on
J u n e 26 , 1 8 6 6 , and t h e C o n f e r e n c e R e p o r t was
a c c e p t e d on J u l y 2 and 3, 1866. I d . , a t 2773,
13
who c om pr i se d t h e t w o - t h i r d s m a j o r i t y n e c e s s a r y t o
o v e r r i d e P r e s i d e n t J o h n s o n ' s second v e t o o f t h e
F r e e d m e n ' s Bureau b i l l a l s o com pr i sed th e two-
t h i r d s m a j o r i t y t h a t a p p r o v e d t h e F o u r t e e n t h
Amendment. Of t h e 33 S e n a t o r s and 104 R e p r e s e n t a
t i v e s who v o te d to o v e r r i d e t h a t v e t o , e v e r y one
who was p r e s e n t f o r t h e v o t e a l s o s u p p o r t e d the
2 7 /
F o u r t e e n t h A m e n d m e n t .— C o n g r e s s m a n S t e v e n s ,
i n t r o d u c i n g t h e F o u r t e e n t h Amendment t o t h e House,
d e s c r i b e d i t s b a s i c p u r p o s e a s p r o v i d i n g f o r
" t h e a m e l i o r a t i o n o f t h e c o n d i t i o n of t h e f r e e d -
men., , 2 8 /
T h e s e w e r e t h e e x a c t w ords u s e d o n l y
t h r e e months e a r l i e r t o d e s c r i b e t h e F re ed m e n ' s
29 /
Bureau b i l l . T h i s i d e n t i t y o f p h r a s i n g u n d e r
l i n e s t h e p e r c e i v e d c o m p a t i b i l i t y o f t h e two
m e a s u r e s . The s u p p o r t e r s of t h e Act and Amendment
r e g a r d e d them as bo th c o n s i s t e n t and compl imen
t a r y , w h i l e opponen ts viewed t h e two, t o g e t h e r
w i th t h e C i v i l R i g h t s Act of 1866, as p a r t o f a
26/ c o n t ' d .
3413, 3524, 3562. On s e v e r a l o c c a s i o n s t h e Act
was b e in g d e b a t e d i n one h o u s e a t t h e same t ime
t h e Amendment was b e i n g d e b a t e d i n t h e o t h e r .
See, e . g , i d . a t 2799, 2807, 2869, 2977.
27 / I d . a t 3042, 3149, 3842, 3850.
28/ I d . a t 2459.
29 / See p. 11, s u p r a .
- 14 -
s i n g l e c o h e r e n t , t hough in t h e i r v iew u n d e s i r e -
, , . . 30 /a b l e , p o l i c y . —
The T h i r t y - N i n t h C o n g r e s s , w h i c h was w e l l
aware o f t h e r a c e - c o n s c i o u s rem ed ies and l i m i t a
t i o n s c o n t a i n e d i n t h e F r e e d m e n ' s Bureau b i l l s i t
p a s s e d i n F e b r u a r y and J u l y o f 1866, c a n n o t c on
c e i v a b l y h a v e i n t e n d e d by i t s a p p r o v a l o f t h e
F o u r t e e n t h Amendment on J u n e 12 , 1 8 6 6 , t o i n
v a l i d a t e o r f o r b i d such r e m e d i e s . The d e b a t e s
i n t h a t C ongress have an u n c a n n i l y modern t o n e ;
t h e o p p o s i t i o n t o r a c e - s p e c i f i c r e m e d i e s was
e x p r e s s e d i n much t h e same t e rm s as t h e contempo
r a r y a r g u m e n t s a g a i n s t m e a s u r e s s u c h as t h e
m i n o r i t y s e t - a s i d e p rogram. But t h e f r a m er s of
t h e F o u r t e e n t h Amendment c l e a r l y r e g a r d e d i t as
n o t m e r e ly p e r m i t t i n g , b u t a f f i r m a t i v e l y a u t h o r i z
in g such p rogram s. Many o f t h e r a c e - c o n s c i o u s
p r o v i s i o n s a d o p t e d d e a l t w i t h t h e p r o b l e m s o f
b l a c k f a r m e r s , t h e most i m p o r t a n t group o f m in o r
i t y b u s in e s s m e n i n n i n e t e e n t h c e n t u r y America. In
a s s e s s i n g t h a t a m e l i o r a t i v e l e g i s l a t i o n , t h e
T h i r t y - N i n t h C o ngre s s a p p l i e d no s p e c i a l s t r i n g e n t
s t a n d a r d , b u t i n q u i r e d o n l y w h e t h e r i t was r e a s o n
a b ly c a l c u l a t e d t o s e r v e an a m e l i o r a t i v e p u r p o s e .
Tha t i s t h e s t a n d a r d which t h i s C our t s h o u ld app ly
3 0 / Cong . G l o b e , 3 9 t h C o n g . , 1 s t S e s s . 2501
( r e m a r k s o f Rep . S h a n k l i n ) , 2 5 3 7 - 8 ( r e m a r k s
of Rep. R o g e r s ) , 2941 ( re m ark s of Sen. H e n d r i c k s ) ;
App. 239-40 ( rem arks of Sen. D a v i s ) .
15
in a s s e s s i n g t h e c o n s t i t u t i o n a l i t y o f such meas
u r e s .
1 1 • the o r i g i n of the mbe p r o v is io n
The p e t i t i o n e r s fo c u s t h e i r c o n s t i t u t i o n a l
a t t a c k on the MBE p r o v i s i o n on the c o n g r e s s i o n a l
p r o c e s s e s l e a d i n g t o i t s a d o p t i o n , c l a i m i n g t h a t
t h e l a c k o f h e a r i n g s on t h i s p r o v i s i o n i s u n j u s t i
f i a b l e and v i r t u a l l y f a t a l t o i t s v a l i d i t y . They
r e g a r d t h e a d o p t i o n of t h a t m easu re i n 1977 on t h e
f l o o r s o f t h e House and S e n a t e as i n e x p l i c a b l e and
h a s t y , r e p r e s e n t i n g m ere ly a s e i z u r e o f f e d e r a l
funds f o r t h e b l a c k community t o which t h e m a j o r
i t y o f C ongress i n c o m p r e h e n s i b l y , and e r r o n e o u s l y ,
a g r e e d . We s u g g e s t t h a t t h e a c t u a l o r i g i n o f t h e
MBE p r o v i s i o n i s somewhat d i f f e r e n t . In a d o p t i n g
th e 1977 A c t , Congress was r e q u i r e d t o a c t w i th
e x t r a o r d i n a r y s p e e d t o d e a l w i t h t h e c r i t i c a l
e c o n o m i c s i t u a t i o n . H e a r i n g s c o n c e r n i n g t h e
e x p e r i e n c e o f m i n o r i t i e s u n d e r t h e 1976 Act were
n o t p o s s i b l e b e c a u s e i m p l e m e n t a t i o n o f t h a t
s t a t u t e was on ly j u s t b e g i n n i n g . Congress a c t e d
r e a s o n a b l y i n c h o o s in g a s e t - a s i d e p r o v i s i o n , an
e s t a b l i s h e d f e d e r a l and s t a t e d e v i c e , t o d e a l w i t h
t h e w e l l - k n o w n g e n e r a l p r o b l e m s o f m i n o r i t y
c o n t r a c t o r s .
The P u b l i c Works A c t s o f 1976 and 1977 were
a d o p te d t o a d d r e s s problems c r e a t e d by t h e r e c e s -
16
s i o n w h i c h b e g a n i n 1 9 7 4 , t h e w o r s t e c o n o m i c
d o w n t u r n w h i c h t h e c o u n t r y ha d s u f f e r e d i n
t h e p a s t 40 y e a r s . F o l l o w i n g t h e l i f t i n g o f
w a g e - p r i c e c o n t r o l s , and s p u r r e d by t h e d r a m a t i c
i n c r e a s e i n o i l p r i c e s i n e a r l y 1974, t h e a n n u a l
i n f l a t i o n r a t e of t h e consumer p r i c e i n d e x r o s e
f r o m 3.4% i n 1972 t o 8 .8% i n 1973 and 12.2%
31 /
m 1974. The F e d e r a l R e s e rv e Board , w i th t h e
s u p p o r t of t h e a d m i n i s t r a t i o n , r a i s e d th e d i s c o u n t
r a t e f rom 4.5% i n 1972 t o 7.8% i n 1974, i n t h e
h o p e o f c o o l i n g o f f t h e e c o n o m y . — T h i s i n
t u r n c aused t h e pr ime r a t e t o r i s e i n t h e same
p e r i o d from 5.25% t o t h e t h e n u n h e a rd o f l e v e l o f
3 3 /
1 0 .8 1 % . • T h i s g r e a t l y i n c r e a s e d t h e c o s t o f
b o r ro w in g , s low ing down c a p i t a l i n v e s t m e n t , which
f e l l 12% i n r e a l t erms in 1974 .— H ig h e r i n t e r e s t
r a t e s , t o g e t h e r w i th t h e r e d u c t i o n in bank d e
p o s i t s due t o t h e h i g h e r r a t e s of r e t u r n a v a i l a b l e
e l s e w h e r e , r e d u c e d h o u s i n g s t a r t s by 34% i n t h a t
3 5 /
y e a r . T h e s e e v e n t s c o m b i n e d t o p r o d u c e i n
1974 a r e d u c t i o n in the g r o s s n a t i o n a l p r o d u c t ,
31/ Economic R epor t o f t h e P r e s i d e n t , 1979, p.
244. The s ame d a t a can be found i n e d i t i o n s from
1975 throu ;gh 1978.
32/ I d . p . 258 •
33/ I d .
34/ I d . p . 235
35/ I d . p. 224.
17
and an i n c r e a s e i n t h e unemployment r a t e f rom 4.9%
„ - 36/t o 5 .6%.—
By J a n u a r y o f 1 9 7 6 , t h e s e e c o n o m i c and
f i s c a l p o l i c i e s had r ed u c e d t h e i n f l a t i o n r a t e
37/
from 12.2% t o 7.0%,— bu t the unemployment r a t e
f o r 1975 had r i s e n t o 8.5% and 7 . 8 m i l l i o n pe o p le
r 38/
were ou t o f w o r k ,— a lm o s t t w i c e as many as m
1973. Unemployment b e n e f i t s i n 1975 had t o t a l e d
$16 .8 b i l l i o n , and were on t h e v e r g e o f b a n k r u p t
in g s e v e r a l s t a t e unemployment a g e n c i e s . I n t h e s e
d i f f i c u l t c i r c u m s t a n c e s a d e b a t e b e g a n a s t o
w h e t h e r f e d e r a l p o l i c i e s s h o u ld c o n t i n u e to focus
on t h e p r o b l e m o f i n f l a t i o n , a t t h e r i s k o f
c o n t i n u i n g t h e r e c e s s i o n , o r s h o u l d e m p h a s i z e
i n s t e a d s t i m u l a t i n g t h e economy and r e d u c i n g
u n e m p l o y m e n t . The P r e s i d e n t u r g e d t h e f o r m e r
a p p ro a c h , w h i l e a m a j o r i t y o f Congress s u p p o r t e d
t h e l a t t e r . To implement i t s p r e f e r r e d p o l i c y
Congress began work on a p u b l i c works program,
w h i c h w o u l d i n j e c t a d d i t i o n a l f u n d s i n t o t h e
economy and which p e r m i t t e d t h e f o c u s i n g o f t h o s e
funds on t h e c o n s t r u c t i o n i n d u s t r y , p a r t i c u a r l y
h a r d h i t by t h e r e c e s s i o n . C ongress a d o p te d i n
J u l y 1976, o v e r t h e P r e s i d e n t ' s v e t o , t h e Loca l
36/ I d . P- 217.
37 / I d . P- 244.
38/ I d . pp. 216, 221.
18
P u b l i c Works C a p i t a l Deve lopment and I n v e s t m e n t
Act o f 1976. 90 S t a t . 889. The 1976 Act manda ted
t h e g r a n t i n g o f $2 b i l l i o n i n a i d t o s t a t e and
l o c a l g o v e r n m e n t s . The e f f e c t i v e n e s s o f t h i s
p rogram r e q u i r e d t h a t t h e funds be s p e n t imme
d i a t e l y , w h i l e t h e economy was s t i l l s t r u g g l i n g t o
p u l l o u t of t h e r e c e s s i o n , and t h a t t h e y be s p e n t
o v e r a s h o r t p e r i o d o f t ime so as n o t t o d i s s i p a t e
t h e i r s t i m u l a t i v e e f f e c t . C o n g r e s s t h e r e f o r e
r e q u i r e d t h e Economic Development A d m i n i s t r a t i o n
("EDA") t o p u b l i s h im p le m e n t in g r e g u l a t i o n s w i t h i n
30 d a y s , 42 U . S . C . § 6 7 0 6 , an d t o a c t on any
a p p l i c a t i o n w i t h i n 60 d a y s , 42 U .S .C . § 6706, and
p r o v i d e d t h a t any p r o j e c t f o r which funds were
awarded must b e g i n w i t h i n 90 days of EDA a p p r o v a l ,
42 U .S .C . 867 0 5 (d).— '
The economic s i t u a t i o n c o n f r o n t i n g t h e incom
in g a d m i n i s t r a t i o n i n J a n u a r y , 1977, was even more
complex . The unemployment r a t e i n December, 1976
was 7.8%, t h e same l e v e l as J a n u a r y , 1976, and
h i g h e r t h a n t h e 7.3% r a t e r e a c h e d i n May o f t h a t
4 0 / m
y e a r . — The g r o s s n a t i o n a l p r o d u c t , which had
3 9 / F u n d i n g was a l s o a v a i l a b l e f o r p r o j e c t s
f u n d e d i n p a r t by o t h e r f e d e r a l l a w s i f t h o s e
o t h e r funds were a v a i l a b l e " i m m e d i a t e l y . " 42 U.S .C .
§ 6 7 0 3 . The f u n d i n g o f p r o j e c t s j o i n t l y w i t h
s t a t e or l o c a l c o n t r i b u t i o n s was p e r m i t t e d on ly i f
t h e needed c o n t r i b u t i o n s were a v a i l a b l e "imme
d i a t e l y . " 42 U .S .C . § 6704.
4 0 / Economic R e p o r t o f the P r e s i d e n t , 1977, p.
2 2 1 .
19
i n c r e a s e d a t a h e a l t h y 9.2% a n n u a l r a t e d u r i n g t h e
f i r s t q u a r t e r o f 1976, had r i s e n on ly 3.0% d u r i n g
4 1 /
t h e l a s t q u a r t e r . — The C o u n c i l o f E c o n o m ic
A d v i s o r s c o n c lu d e d t h a t t h e d e c l i n e o f t h e GNP
growth r a t e was t h e r e s u l t in p a r t o f s l u g g i s h
s p e n d in g by f e d e r a l , s t a t e and l o c a l g ove rnm e n ts ;
g o v e r n m e n t p u r c h a s e s i n c o n s t a n t d o l l a r s h a d
f a l l e n 4.9% d u r i n g t h e f i r s t q u a r t e r , a n d h a d
4 2 /
r i s e n on ly 0.4% o v e r t h e e n t i r e y e a r . — ' The i n
f l a t i o n r a t e had f a l l e n c o n s i d e r a b l y , f rom 7.0% i n
43 /D e c e m b e r , 1975 t o 4 .8% i n D e c e m b e r , 1 9 7 6 . —
Under t h e s e c i r c u m s t a n c e s t h e new a d m i n i s t r a
t i o n , which had b e e n e l e c t e d on a p l a t f o r m p l a c i n g
u n e m p l o y m e n t a h e a d o f i n f l a t i o n as i t s f i r s t
p r i o r i t y , d e c i d e d t h a t s t r o n g m e a s u r e s w e r e
n e c e s s a r y t o s t i m u l a t e t h e economy. I t was a l s o
aware , however , a s was C o n g r e s s , t h a t t ime was of
t h e e s s e n c e ; i f a d d i t i o n a l f e d e r a l sp e n d in g were
t o h a v e t h e d e s i r e d e f f e c t , i t h a d t o o c c u r
w h i l e t h e economy was s t i l l i n i t s t h e n s l u g g i s h
c o n d i t i o n . I f t h e funds were n o t a c t u a l l y
expended u n t i l a f t e r a h e a l t h y growth r a t e had
41 / I d . p. 59.
4 2 / Economic R e p o r t o f t h e P r e s i d e n t , 1979, p.
244. The 1977 Act had found t h a t r educ e d s t a t e
and l o c a l government s p e n d in g t e n d e d " t o u n d e r
mine t h e F e d e r a l G ove rnm e n t 's e f f o r t s t o s t i m u l a t e
t h e economy." 42 U.S .C . § 6721.
4 3 / Id .
- 20
begun, t h o s e f u n d s , f a r f rom h e l p i n g t h e economy,
w o u l d t e n d t o o v e r h e a t i t and c a u s e i n c r e a s e d
i n f l a t i o n .
A c c o r d i n g l y , b o t h t h e incoming a d m i n i s t r a t i o n
and t h e C o n g r e s s a c t e d w i t h u n p r e c e d e n t e d b u t
e s s e n t i a l s p e e d . On J a n u a r y 4, 1977, Congressman
Roe, c h a i rm a n o f t h e Economic Development Subcom
m i t t e e o f t h e House P u b l i c Works C o m m i t t e e ,
i n t r o d u c e d H 7 8 , c a l l i n g f o r a n a d d i t i o n a l $4
4 4 /b i l l i o n i n p u b l i c w o r k s e x p e n d i t u r e s . — On
J a n u a r y 7, 1 9 7 7 , t h e P r e s i d e n t - e l e c t m e t w i t h
c o n g r e s s i o n a l l e a d e r s and a g r e e d upon an economic
s t i m u l u s package t h a t i n c l u d e d t h a t $4 b i l l i o n f o r
e m e r g e n c y p u b l i c w o r k s .
4 5 /
A s i m i l a r b i l l was
i n t r o d u c e d i n t h e S e n a te on J a n u a r y 25 by S e n a t o r
46 /
Randolph . The d e t a i l s o f t h e a d m i n i s t r a t i o n ' s
4 7 /p r o p o s a l s becam e known t h e n e x t d a y . — On
J a n u a r y 27, t h e S e c r e t a r y o f t h e T r e a s u r y t e s t i
f i e d i n s u p p o r t o f t h e s t i m u l u s package , u r g i n g
t h a t t h e f u n d s s h o u l d be s p e n t " a s q u i c k l y as
good management a l l o w s " and t h a t " speed i s c l e a r l y
44 /
1977)
123 Cong. Rec. H 78 ( d a i l y ed . J a n u a r y 4,
45 / New York Times, J a n u a r y 8, 1977, 1 : 5 , 6 : 3 .
46 /
1977)
123 Cong. Rec. S 1349 ( d a i l y ed. J a n u a r y 25,
4 7 / New York T i m e s , J a n u a r y 26 , 1 9 7 7 , 1 : 6 .
21
o f t h e e s s e n c e . " — The P r e s i d e n t ' s Message on
t h e Economic Recovery Act s t r e s s e d " t h e need f o r
an im m edia te s t i m u l u s to government p u r c h a s i n g
4 9 / 5 0 /p o w e r " and u r g e d " p r o m p t " a c t i o n . — H o u s e —
an d S e n a t e — ̂ h e a r i n g s on t h e p r o p o s a l s w e re
c o m p l e t e d on F e b r u a r y 4 , 1 9 7 7 , b a r e l y a mon th
a f t e r t h e p r o p o s a l was i n t r o d u c e d i n t h e House,
and on ly 10 days a f t e r i t s i n t r o d u c t i o n i n t h e
S e n a t e . The House r e p o r t was i s s u e d on F e b r u a r y
16 ,1 977 , and t h e b i l l r e a c h e d t h e f l o o r and was
4 8 /
p a s s e d on F e b r u a r y 24 , 1 9 7 7 .
5 2 /
The S e n a t e
R e p o r t was r e l e a s e d on M arch 4 , 1 9 7 7 , and t h e
53/
S e n a te app ro v e d t h e b i l l 6 days l a t e r . —
4 8 / H e a r in g s on t h e Conduct o f Monetary P o l i c y
B e fo re t h e House Commit tee on Banking , F in a n c e
and Urban A f f a i r s , 95 th C ong . , 1 s t S e s s . 3, 12
(1977 ) .
4 9 / H. Doc. 9 5 - 6 8 9 5 t h C o n g . , 1 s t S e s s . 1 2 3 ;
Cong. Rec. H 653 ( d a i l y ed . Feb. 1, 1977) .
50 / H. Rep. 95-20 , p. 2 (1977) .
51 / S. Rep. 95 -38 . (1 9 7 7 ) . The r e p o r t s t a t e d
t h a t t h e Funds w e r e " u r g e n t l y n e e d e d . " I d .
p . 3.
52 / 123 Cong. Rec. H 1401-H 1462 ( d a i l y e d . , Feb.
2 4 ,1 9 7 7 ) .
53 / 123 Cong. Rec. S3851-S3928 ( d a i l y ed . March
10, 1977) .
22
In u r g i n g q u i c k p a s s a g e o f t h e b i l l S e n a t o r
Randolph e x p l a i n e d :
The t i m i n g o f p u b l i c w o r k s p r o j e c t s , o f
c o u r s e , i s v e r y i m p o r t a n t . T he re a r e economic
peaks and v a l l e y s i n Am erica , which we c a l l
r e c e s s i o n or d e p r e s s i o n . . . Today . . . we have
unemployment of p e r h a p s 8 m i l l i o n p e o p l e . We
now u n d e r s t a n d t h a t t h e s e t y p e s o f p u b l i c
works p r o j e c t s do much t o o f f s e t t h e f l u c t u a
t i o n o f b u s i n e s s c y c l e s . We n e e d t h i s
l e g i s l a t i o n now, b e c a u s e i n m o s t o f o u r
c o u n t r y , a t l e a s t a c o n s i d e r a b l e p o r t i o n , t h e
s p r i n g i s t h e t ime when t h e s e p r o j e c t s can
g e t underw ay . We do n o t want t o w a i t u n t i l
t h e m id d l e o f t h e summer and l e t t h e f a l l and
t h e c o l d e r months o f t h e y e a r a p p ro a c h a g a i n .
We want t h e b e g i n n i n g of t h e s e p r o j e c t s i n
w h a t I c a l l t h e c o n s t r u c t i o n s e a s o n . 5 4 /
Congressman Roe c a l l e d f o r
[ p ] r o m p t e n a c t m e n t [ t o ] e n a b l e t h e EDA t o
i m m e d ia te ly r e l e a s e t h e a d d i t i o n a l funds f o r
t h o s e a p p l i c a t i o n s a l r e a d y on f i l e , and put
ou r p e o p l e back t o work . . . . [T]he Commit tee
. . . v e r y c a r e f u l l y d e s i g n e d t h i s program so
t h a t i t c o u ld be implem ented as e f f i c i e n t l y
and e x p e d i t i o u s l y as p o s s i b l e , a v o i d i n g t h e
l o n g l a g t i m e s o m e t i m e s a s s o c i a t e d w i t h
p u b l i c works c o n s t r u c t i o n . We d e s i g n e d t h i s
program t o have an immed ia te a n t i - r e c e s s i o n -
a ry impact on t h e economy. 55/
54 / 123 Cong. Rec. S3858 ( d a i l y ed . March 10,
1977) .
55 / 123 Cong. Rec. H 1401 ( d a i l y ed . Feb. 24,
1977) .
23
In s i g n i n g t h e 1977 P u b l i c Works Act t h e P r e s i
d e n t e m phas ized t h a t i t would p r o v i d e " im m ed ia te
f u n d i n g " f o r c o n s t r u c t i o n p r o j e c t s . ——̂
I t was i n t h e c o n t e x t of t h i s w i d e ly r e c o g
n i z e d n e e d f o r e x t r a o r d i n a r i l y p r o m p t a c t i o n ,
r e s u l t i n g i n t h e e na c tm e n t o f a m a jo r p i e c e of
l e g i s l a t i o n w i t h v i r t u a l l y u n p r e c e d e n t e d b u t
c l e a r l y e s s e n t i a l s p e e d , t h a t t h e MBE p r o v i s i o n
was a d d e d t o t h e b i l l . U n d e r t h e 1976 P u b l i c
Works Act t h e f i r s t g r a n t s were on ly announced on
5 7 /
D e c e m b e r 26 , 1 9 7 6 . — The House and S e n a t e
h e a r i n g s h e l d b a r e l y a month l a t e r d e a l t a lm o s t
e x c l u s i v e l y w i t h t h e f o rm u la s and c r i t e r i a u s e d t o
p i c k t h e p r o j e c t s chosen on December 26, 1976. To
a s i g n i f i c a n t d e g r e e t h e s e f o rm u la s and c r i t e r i a ,
which were w i d e l y c r i t i c i z e d as d i r e c t i n g funds t o
a r e a s w i th v e ry l i t t l e unemployment , were known
f r o m r e g u l a t i o n s i s s u e d by EDA w e l l p r i o r t o
December. On the o t h e r h a n d , b e c a u s e t h e f i r s t
g r a n t s t o s t a t e and l o c a l governments were on ly
announced i n l a t e December, t h e p r o c e s s o f l e t t i n g
o f c o n t r a c t s by t h o s e g o v e r n m e n t s c o u l d o n l y
commence a f t e r t h a t d a t e , an d t h o s e c o n t r a c t s
g e n e r a l l y r e q u i r e d a t im e-consum ing c o m p e t i t i v e
b i d d i n g p r o c e s s ; t h u s t h e a c t u a l a w a r d i n g o f
c o n t r a c t s was on ly j u s t b e g in n i n g on F e b r u a r y 4,
1977, when th e c o n g r e s s i o n a l h e a r i n g s e nded . The
56/ P u b l i c Pape rs o f t h e P r e s i d e n t , Jimmy C a r t e r ,
1977, p. 870.
57/ S. Rep. 95 -3 8 , p. 2 (1977) .
24
h i r i n g o f t h e w o r k e r s who u l t i m a t e l y r e c e i v e d
employment u n d e r t h e 1976 Act was on ly t o o c c u r
l a t e r y e t . And a l t h o u g h EDA k e p t d e t a i l e d s t a t i s
t i c s on which c i t i e s and s t a t e s won g r a n t s , i t
does n o t a p p e a r t o have had s i m i l a r d a t a a v a i l a b l e
r e g a r d i n g t h e r a c e o f c o n t r a t o r s o r t h e i r em-
. 58 /
p l o y e e s .—
Thus t h e d e t a i l e d h e a r i n g s and r e p o r t s
w h i c h p e t i t i o n e r s u r g e s h o u l d h a v e p r e c e e d e d
a d o p t i o n o f t h e MBE p r o v i s i o n were u t t e r l y i n c o n
s i s t e n t w i t h t h e economic e x i g e n c i e s w i t h which
C o n g r e s s was c o n c e r n e d . Such a c o n g r e s s i o n a l
i n q u i r y r e g a r d i n g m i n o r i t y c o n t r a c t o r s and employ
e e s u n d e r t h e 1976 Act would have r e q u i r e d mon ths ,
an d C o n g r e s s d i d n o t h a v e m o n th s t o s p a r e .
Because o f t h e d i s p a t c h w i t h which i t was e n a c t e d ,
funds f o r t h e 1977 P u b l i c Works Act became a v a i l
a b l e i n t h e l a t e s p r i n g and e a r l y summer of 1977,
when t h e unemployment r a t e a v e ra g e d o v e r 7% and
t h e i n f l a t i o n r a t e was f a l l i n g t o u n d e r 5%. But
had t h e Act been d e l a y e d s i x mon th s , i t p r o b a b l y
would have been c o u n t e r p r o d u c t i v e . By J a n u a r y
59/
1978, t h e unemployment r a t e had f a l l e n t o 6.3%,—
t o t a l unemployment had f a l l e n by 8 0 0 , 0 0 0 , — ^and
58 / See C o m p t r o l l e r G e n e r a l , M i n o r i t y Firms on
Loca l P u b l i c Works P r o j e c t s — Mixed R e s u l t s , p . 8
(1 9 7 9 ) . E x p e r i e n c e Under t h e 1977 Act i n d i c a t e d
m i n o r i t y p a r t i c i p a t i o n u n d e r t h e e a r l i e r Act was
low. I d .
59 / Economic Repor t o f t h e P r e s i d e n t , 1979, p.
217.
60/ I d . p . 216.
- 25
i n f l a t i o n was up t o 9 .6%.— In 1978 t h e admin
i s t r a t i o n s h i f t e d i t s economic p o l i c i e s away from
s t i m u l a t i o n o f t h e e c o n o m y , r e d u c i n g f e d e r a l
s p e n d i n g and t i g h t e n i n g f i s c a l and m o n e t a r y
. 6 2 /
p o l i c i e s . — Thus t h e d e l a y r e q u i r e d f o r an
i n q u i r y i n t o t h e a d m i n i s t r a t i o n of t h e 1976 P u b l i c
Works Act would have d e f e a t e d t h e e n t i r e pu rpose
o f t h e 1977 A c t .
The l i m i t e d i n f o r m a t i o n which was a v a i l a b l e
a t t h e t i m e o f t h e F e b r u a r y , 1 977 h e a r i n g s ,
i n d i c a t e d t h a t EDA's a l l o c a t i o n p o l i c i e s had had a
p ronounced d i s c r i m i n a t o r y impact a g a i n s t p r e d o m i
n a n t l y b l a c k co m m u n i t i e s . A s tu d y by t h e M ich igan
A dv i s o ry Commit tee t o t h e U n i t e d S t a t e s Commission
on C i v i l R i g h t s r e v e a l e d t h a t t h e a v e r a g e p e r
c a p i t a g r a n t i n towns o v e r 90% w h i t e was a lm os t
t h r e e t im e s as h ig h as t h e a v e r a g e g r a n t i n towns
6 3 /
u n d e r 90% w h i t e . — M i n o r i t i e s made up 22.5%
of t h e p o p u l a t i o n i n t h e funded d i s t r i c t s , bu t
64 /
r e c e i v e d o n l y 12.3% o f t h e f u n d i n g . — T h i s
o c c u r r e d d e s p i t e t h e f a c t t h a t unemployment was
f a r h i g h e r i n p r e d o m i n a n t l y b l a c k c o m m u n i t i e s
61 / IdL p. 244.
62 / I d . pp. 25, 28.
63 / The a v e ra g e p e r c a p i t a g r a n t was $47 .32 i n
towns ov e r 90% w h i t e and $16 .4 8 i n towns unde r 90%
w h i t e . H e a r i n g s b e f o r e t h e S u b c o m m i t t e e on
Economic Development o f t h e House Commit tee on
P u b l i c Works and T r a n s p o r t a t i o n , 95 th C o n g . , 1 s t
S e s s . p. 814 (1977 ) .
64 / I d . p. 825.
26
t h a n i n p r e d o m i n a n t l y w h i t e com m un i t i e s . Con
g r e s s m a n C o n y e r s o f M i c h i g a n , who t e s t i f i e d
a b o u t t h i s a l l o c a t i o n p r o b l e m , a l s o e x p r e s s e d
c o n c e r n a b o u t m i n o r i t y c o n t r a c t o r s and em ployees .
I h a v e b e e n c o n t a c t e d by i n d i v i d u a l s who
b e l i e v e t h a t m i n o r i t i e s and women have been
d e p r i v e d o f e m p l o y m e n t and c o n t r a c t i n g
o p p o r t u n i t i e s on LPW-funded p r o j e c t s . I have
n o t h a d t i m e t o i n v e s t i g a t e t h e i r a l l e g a
t i o n s , b u t t h e h i s t o r i c a l p a t t e r n o f d i s
c r i m i n a t i o n w i t h i n t h e c o n s t r u c t i o n i n d u s t r y
l e n d s c r e d e n c e t o t h e i r c h a r g e s . F o r t h e
n e x t few d a y s , my s t a f f w i l l s t u d y t h i s
m a t t e r . I f i t a p p e a r s t h a t m i n o r i t i e s and
women do s u f f e r d i s c r i m i n a t i o n u n d e r t h i s
p r o g r a m , I w i l l p r o p o s e an amendm ent t o
s t r e n g t h e n t h e n o n d i s c r i m i n a t i o n p r o v i
s i o n c o n t a i n e d in t h e c u r r e n t A c t . (Emphasis
i n o r i g i n a l ) . 65/
But the h e a r i n g s ended on t h e day R e p r e s e n t a t i v e
Conyers t e s t i f i e d , and th e House comm it tee i s s u e d
i t s r e p o r t s h o r t l y t h e r e a f t e r . Thus t h e o n l y
r o u t e open f o r p r o t e c t i n g m i n o r i t y c o n t r a c t o r s and
employees was t o o f f e r an amendment on t h e f l o o r
o f t h e House.
Conyers r e p o r t e d t o t h e House t h a t :
EDA's O f f i c e o f C i v i l R i g h t s a p p a r e n t l y made
l i t t l e e f f o r t to c l o s e l y r e v i e w a f f i r m a t i v e
a c t i o n and c i v i l r i g h t s c o m p l i a n c e d a t a
w i t h i n i n d i v i d u a l a p p l i c a t i o n s . 66 /
He a l s o n o t e d h i s o f f i c e was " r e p l e t e w i t h
e x a m p l e s " o f m i n o r i t y c o n t r a c t o r s u n a b l e t o
65 / I d . p. 939. The 1976 Act c o n t a i n e d a g e n e r a l
p r o h i b i t i o n a g a i n s t d i s c r i m i n a t i o n . 42 U.S .C. §
6709.
6 6 / 123 Cong . Rec . E 973 ( d a i l y e d . F e b . 24 ,
1977) . _____________ ___________
27
w i n c o n t r a c t s b e c a u s e o f t h e " i n t r i c a c i e s " o f
67/
t h e b i d d i n g p r o c e s s . —
The s o l u t i o n s u p p o r t e d by Conyers was t h e MBE
p r o v i s i o n w h i c h i s t h e s u b j e c t o f t h e i n s t a n t
a c t i o n . The amendment was o f f e r e d by Congressman
M i t c h e l l , r a t h e r t h a n by C o n g r e s s m a n C o n y e r s ,
a p p a r e n t l y b e c a u s e M i t c h e l l was t h e l e a d i n g House
p r o p o n e n t o f m i n o r i t y b u s i n e s s e n t e r p r i s e s ,
and had l e s s t h a n a month b e f o r e he o f f e r e d a b i l l
t o r e q u i r e t h a t v i r t u a l l y a l l f e d e r a l p rocu re m e n t
and c o n s t r u c t i o n c o n t r a c t s be s u b j e c t t o a m i n o r -
68/l t y s e t - a s i d e r e q u i r e m e n t . — G i v i n g m i n o r i t y
b u s i n e s s e n t e r p r i s e s p r e f e r e n t i a l t r e a t m e n t in
b i d d i n g f o r f e d e r a l l y - f u n d e d c o n t r a c t s was n o t
a n o v e l p r o p o s a l . S ince 1968 th e Small B u s i n e s s
A d m i n i s t r a t i o n , a c t i n g u n d e r s e c t i o n 8 ( a ) o f t h e
Small B u s i n e s s Act of 1953, 15 U .S .C . § 6 3 7 ( a ) ,
had a r r a n g e d f o r p rocurem en t c o n t r a c t s t o be l e t
t o m i n o r i t y f i r m s w i t h o u t any r e q u i r e m e n t o f
c o m p e t i t i v e b i d d i n g . The c o n t r a c t s l e t i n t h i s
manner i n v o l v e d th o u s a n d s of m i n o r i t y f i r m s and
. . 69/hu n d red s o f m i l l i o n s of d o l l a r s . — O th e r f e d
e r a l a g e n c i e s m a i n t a i n e d v a r i o u s programs s e t t i n g
67/ I d . H 1440.
68 / 123 Cong. Rec. H 611-H 613 ( d a i l y ed . J a n .
31, 1977) .
69 / See J o i n t H e a r in g on M i n o r i t y C o n t r a c t i n g
B e f o r e t h e S e n a t e S e l e c t C o m m i t t e e on S m a l l
B u s i n e s s and t h e S u b c o m i t t e e on M i n o r i t y E n t e r
p r i s e and G e n e r a l O v e r s i g h t o f t h e House Small
B u s i n e s s Commit tee , 95 th C ong . , 2d S e s s . 5 (1 9 7 8 ) .
28
minimum l e v e l s o f m i n o r i t y c o n t r a c t o r p a r t i c i p a -
70/
t i o n . — The c o m m it t ee d r a f t o f t h e 1977 P u b l i c
Works Act a l r e a d y c o n t a i n e d a s e t - a s i d e p r o v i s i o n ,
r e s e r v i n g 2 1/2% o f the funds f o r p u b l i c works
p r o j e c t s f o r " I n d i a n t r i b e s an d A l a s k a N a t i v e
, ,71/V i l l a g e s . " — In p r o p o s i n g u t i l i z a t i o n o f t h i s
a p p r o a c h , Congressman M i t c h e l l and S e n a t o r Brooke
e m p h a s i z e d t h a t i t h a d l o n g b e e n u s e d by t h e
7 2 /
f e d e r a l g o v e r n m e n t , — and t h a t s p e c i f y i n g t h e
p o r t i o n o f government c o n t r a c t s t o be so s e t a s i d e
was a l r e a d y a common p r a c t i c e among s t a t e g o v e r n -
7 3 /
m e n t s . — T h u s , when C o n g r e s s a d o p t e d t h e MBE
p r o v i s i o n t o a c h i e v e i t s p u r p o s e s , i t invoked not
a r a d i c a l and u n p r e c e d e n t e d s o l u t i o n , b u t a
w e l l - e s t a b l i s h e d d e v i c e w i t h w h ic h b o t h t h e
f e d e r a l and s t a t e g o v e r n m e n t s h a d s u b s t a n t i a l
e x p e r i e n c e .
U n d e r t h e t h e n - e x i s t i n g e c o n o m i c c i r c u m
s t a n c e s , t h e p r o c e d u r e s l e a d i n g t o t h e a d o p t i o n of
70 / C o m p t r o l l e r G e n e r a l , M i n o r i t y Firms on Loca l
P u b l i c Works P r o j e c t s - - M ixed R e s u l t s , p . 5
(1979 ) .
71/ See 42 U.S .C . § 6 7 0 7 ( a ) ( 1 ) .
72/ 123 Cong. Rec. H 1437 ( d a i l y e d . Feb. 24,
1 9 7 7 ) ; 123 Cong . Rec . S 3910 ( d a i l y e d . March
10, 1977) .
73/ I d . H 1437-38 , H 1440. S e t - a s i d e programs i n
I l l i n o i s and C o lo rado were d e s c r i b e d in U n i t ed
S t a t e s Commission on C i v i l R i g h t s , M i n o r i t i e s and
Women as G o v e r n m e n t C o n t r a c t o r s , pp . 1 0 2 - 1 0 4
(1975 ) .
29
t h e MBE p r o v i s i o n were no t m e r e ly u n d e r s t a n d a b l e ,
b u t t h e on ly manner i n which C ongress c o u ld have
a d d r e s s e d t h e u n d e r l y i n g p r o b le m s . I f , as p e t i
t i o n e r s s u g g e s t , C ongress can on ly adop t r a c e
c o n s c i o u s r e m e d i e s a f t e r e x h a u s t i v e c o m m i t t e e
h e a r i n g s an d d e t a i l e d c o m m i t t e e r e p o r t s , t h e n
C o n g r e s s w o u ld b e p o w e r l e s s t o a d d r e s s s u c h
r a c i a l i s s u e s d u r i n g an economic o r o t h e r c r i s i s .
I t i s i n c o n c e i v a b l e t h a t t h e F o u r t e e n t h Amendment
compels such a c o n c l u s i o n . When t h a t Amendment
was a d o p te d , c o n g r e s s i o n a l h e a r i n g s were i n f r e
q u e n t and comm it tee r e p o r t s were o f t e n p e r f u n c
t o r y . C o n s t i t u t i o n a l c o n s t r a i n t s on c o n g r e s s i o n a l
p r o c e d u r e s a r e s p e l l e d ou t e x p r e s s l y i n A r t i c l e I ,
w h i c h r e q u i r e s n e i t h e r h e a r i n g s n o r r e p o r t s ,
b u t o n ly a m a j o r i t y v o t e of b o t h h o u s e s t o adop t
7 4 / . . .l e g i s l a t i o n . — I t w o u l d be i n c o n s i s t e n t w i t h
t h e s e p a r a t i o n o f powers f o r t h i s C ou r t t o impose
on C o n g r e s s o t h e r m ore d e t a i l e d r u l e s f o r t h e
f a s h i o n i n g o f l e g i s l a t i o n . Congress r e g u l a r l y
a d d s and d e l e t e s b i l l i o n s o f d o l l a r s f r o m t h e
f e d e r a l b u d g e t on t h e f l o o r o f t h e House o r
S e n a t e b a s e d on d e b a t e s c o m p a r e d t o w h i c h t h e
i n s t a n t l e g i s l a t i v e h i s t o r y i s fu l som e. Momentous
l e g i s l a t i o n o f t e n comes i n t o b e i n g a s a f l o o r
74/ J e f f e r s o n ' s Manual of P a r l i a m e n t a r y P r a c t i c e ,
u s e d by b o t h h o u s e s i n t h e e a r l y y e a r s o f t h e
R e p u b l i c , r e g a r d e d r e s o r t t o com m it tees as op
t i o n a l . S e c t i o n XXVI ( 1 9 7 7 ) .
30
a m e n d m e n t ; t h e 1968 f a i r h o u s i n g l e g i s l a t i o n ,
f o r e x a m p l e , was a d o p t e d by t h e S e n a t e as an
amendment t o a b i l l d e a l i n g p r i m a r i l y w i t h r i o t s ,
I n d i a n r i g h t s , and v i o l e n t i n t e r f e r e n c e w i t h
f e d e r a l l y p r o t e c t e d a c t i v i t i e s . C o n g r e s s i o n a l
c om m it t ee s have been b o th r o u n d ly condemned as
i n e f f i c i e n t and p r a i s e d a s e s s e n t i a l ~ — ̂ and
c o g e n t a r g u m e n t s c o u l d d o u b t l e s s be made f o r
i n c r e a s i n g o r d e c r e a s i n g t h e i r r o l e , b u t t h a t i s a
m a t t e r c o n f i d e d t o t h e d i s c r e t i o n of t h e C o n g re s s .
The F o u r t e e n t h Amendment no more e n a c t e d G e n e r a l
Henry R o b e r t ' s Rules o f Order t h a t i t e n a c t e d Mr.
j
H e r b e r t S p e n c e r ' s S o c i a l S t a t i c s . —
I I I .
H I . THE PURPOSES OF THE MBE PROVISION
The p u r p o s e s w h i c h p r o m p t e d C o n g r e s s t o
a d o p t t h e MBE p r o v i s o n were c l e a r l y a r t i c u l a t e d on
t h e f l o o r s o f bo th t h e House and t h e S e n a t e . Be
c a u se of t h e t im e c o n s t r a i n t s n o t e d above , l i t t l e
i n f o r m a t i o n was a v a i l a b l e ab o u t t h e a d m i n i s t r a t i o n
75/ See , e ■g ■, R. Nader , R u l i n g Congress ( 1 9 7 5 ) ;
T. Murphy, P o l i t i c s o f C o n g r e s s i o n a l Commit tees
( 1 9 7 8 ) ; N. O r n s t e i n , Changing C o n g r e s s : The Com
m i t t e e Sys tem (1 9 7 4 ) .
76 / Lochner v . New Y o r k , 198 U.S. 45 , 75 (1905)
(Holmes, J . , d i s s e n t i n g ) ; F e rg u so n v . Sk rupa , 372
U . S. 726, 728-733 ( 1 9 6 3 ) .
31
o f t h e 1976 P u b l i c Works Act i n p a r t i c u l a r , and
C ongress r e l i e d p r i m a r i l y on i t s knowledge of t h e
g e n e r a l p r a c t i c e s of c o n t r a c t i n g o f f i c i a l s and
f e d e r a l c o n t r a c t o r s . The d i s m a l r e c o r d t h a t had
been com pi led by t h o s e p a s t p r a c t i c e s had been t h e
s u b j e c t o f r e p e a t e d r e p o r t s by o r t o t h e C o n g r e s s ,
and was a r e c o r d w i t h which t h e C ongress was q u i t e
f a m i l i a r . No r e a s o n a p p e a r e d th e n o r s i n c e to
b e l i e v e t h a t t h e a d m i n i s t r a t i o n of t h e 1976 P u b l i c
Works A c t h a d b e e n s i g n i f i c a n t l y b e t t e r t h a n
t h a t g e n e r a l r e c o r d , and t h e p e t i t i o n e r s do not
a s s e r t t h a t Cong res s was no t j u s t i f i e d i n r e l y i n g
on t h e b r o a d e r r e c o r d .
(1 ) Overcoming D i s c r i m i n a t i o n - B a s e d Problems
o f M i n o r i t y B u s i n e s s E n t e r p r i s e s
Both th e House and S e n a te p r o p o n e n t s o f t h e
MBE p r o v i s i o n b a s e d i t i n p a r t on t h e n e e d t o
a s s u r e m i n o r i t y b u s i n e s s m e n a " f a i r s h a r e " o f
f e d e r a l p u b l i c works f u n d s . — Congressman B ia g g i
u r g e d ,
F i s c a l y e a r 1976 f i g u r e s i n d i c a t e t h a t l e s s
t h a n 1 p e r c e n t of a l l F e d e r a l p rocurem en t
c o n t r a c t s went t o m i n o r i t y b u s i n e s s e n t e r
p r i s e s . Th is i s a s i t u a t i o n which must be
r e m e d i e d . . . . [ W j i t h o u t a d o p t i o n o f t h i s
amendment, t h i s l e g i s l a t i o n may be p o t e n
t i a l l y i n e q u i t a b l e t o m i n o r i t y b u s i n e s s and
w o r k e r s . 78/
7 7 / 123 Cong . R e c . H 1436 ( r e m a r k s o f Rep .
M i t c h e l l ) ( d a i l y ed. Feb. 24, 1977) .
78/ I d . H 1440.
32
S e n a t o r Brooke a l s o n o t e d w i t h a l a r m t h e sm a l l
number of m i n o r i t y b u s i n e s s e s among f e d e r a l c on-
79/
t r a c t o r s . —
These s t a t e m e n t s r e f l e c t no t t h e un in fo rm ed
whim o f l e g i s l a t o r s s e e k i n g f a v o r s f o r t h e i r
c o n s t i t u e n t s , b u t t h e c u l m i n a t i o n o f a l m o s t a
decade o f c o n g r e s s i o n a l i n q u i r y and a c t i o n con
c e r n i n g m i n o r i t y b u s i n e s s e s . The p r o b l e m s o f
m i n o r i t y b u s i n e s s f i r s t became a m a jo r f e d e r a l
p r i o r i t y i n 1969 when P r e s i d e n t N i x o n s i g n e d
E x e c u t i v e Orde r 11458, p r o v i d i n g f o r t h e d e v e l o p
ment of a n a t i o n a l p rogram t o a s s i s t " t h e e s t a b
l i s h m e n t , p r e s e r v a t i o n and s t r e n g t h e n i n g o f
m i n i o r i t y b u s i n e s s e n t e r p r i s e . " S e c t i o n 1 ( a ) ( i ) .
I n 1971 and 1972 t h e s u b c o m m i t t e e on M i n o r i t y
S m a l l B u s i n e s s E n t e r p r i s e o f t h e House S m a l l
B u s i n e s s Commit tee c o n d u c te d e x t e n s i v e h e a r i n g s on
t h e o b s t a c l e s f a c i n g m i n o r i t y b u s in e s s m e n . I t
c o n c lu d e d t h a t t h e o b s t a c l e s had t h e i r r o o t s i n
p a s t r a c i a l d i s c r i m i n a t i o n . " T h e s e p r o b l e m s ,
which a r e economic i n n a t u r e , a r e t h e r e s u l t of
p a s t s o c i a l s t a n d a r d s which l i n g e r a s c h a r a c t e r i s
t i c s o f m i n o r i t i e s as a g r o u p . " H. Rep. 92-1615 ,
p. 3. The " lo n g h i s t o r y o f r a c i a l b i a s " t o which
m i n o r i t i e s had b e e n s u b j e c t e d i n v a r i a b l y l e d , i t
found , t o t h e l a c k o f c a p i t a l and e x p e r i e n c e which
s e r i o u s l y h a n d i c a p p e d t h e e f f o r t s o f m i n o r i t y
e n t r e p r e n e u r s . I d . a t 3 -4 .
79/ 123 Cong. Rec. S 3910 ( d a i l y e d . March 19
19 7 7 ) .
33
I n 1 975 t h a t H ouse s u b c o m m i t t e e a g a i n
c o n d u c te d s e v e r a l days of h e a r i n g s on t h i s s u b
j e c t , and found th e c o n t i n u i n g problems o f m i n o r
i t y b u s i n e s s e s t o have t h e same o r i g i n .
The e f f e c t o f p a s t i n e q u i t i e s stemming from
r a c i a l p r e j u d i c e h a v e n o t r e m a i n e d i n
t h e p a s t . The C ongress has r e c o g n i z e d th e
r e a l i t y t h a t p a s t d i s c r i m i n a t o r y p r a c t i c e s
h a v e , t o some d e g r e e , a d v e r s e l y a f f e c t e d
our p r e s e n t economic sys tem .
While m i n o r i t y p e r s o n s c om pr i se abou t
16 p e r c e n t of t h e N a t i o n ' s p o p u l a t i o n , o f
t h e 13 m i l l i o n b u s i n e s s e s i n t h e U n i t e d
S t a t e s , o n l y 382 ,000 , o r a p p r o x i m a t e l y 3 .0
p e r c e n t , a r e owned by m i n o r i t y i n d i v i d u a l s .
The most r e c e n t d a t a f rom t h e Depar tm ent o f
Commerce a l s o i n d i c a t e s t h a t t h e g r o s s
r e c e i p t s o f a l l b u s i n e s s e s i n t h i s c o u n t r y
t o t a l s abou t $ 2 , 5 4 0 . 8 b i l l i o n , and of t h i s
am o u n t o n l y $ 1 6 . 6 b i l l i o n , o r a b o u t 0 . 6 5
p e r c e n t was r e a l i z e d by m i n o r i t y b u s i n e s s
c o n c e r n s .
These s t a t i s t i c s a r e n o t t h e r e s u l t o f
random c h a n c e . The p r e s u m p t i o n must be made
t h a t p a s t d i s c r i m i n a t o r y s y s t e m s h a v e
r e s u l t e d i n t h e p r e s e n t e c o n o m i c i n e q u i
t i e s . 80/
The s u b c o m m i t t e e r e i t e r a t e d t h a t c o n c l u s i o n
on J a n u a r y 3, 1977, two y e a r s l a t e r :
The v e r y b a s i c p r o b l e m d i s c l o s e d by t h e
t e s t i m o n y i s t h a t , ov e r t h e y e a r s , t h e r e h a s
d e v e lo p e d a b u s i n e s s sys tem which h a s t r a d i
t i o n a l l y e x c l u d e d m e a s u r a b l e m i n o r i t y p a r
t i c i p a t i o n . I n t h e p a s t more t h a n t h e
p r e s e n t , t h i s s y s te m o f c o n d u c t i n g b u s i n e s s
t r a n s a c t i o n s o v e r t l y p r e c l u d e d m i n o r i t y
i n p u t . C u r r e n t l y , we more o f t e n e n c o u n t e r
80 / H. Rep. 94 -468 , pp . 1 -2.
34
a b u s i n e s s s y s te m which i s r a c i a l l y n e u t r a l
on i t s f a c e , b u t b e c a u s e o f p a s t o v e r t s o c i a l
and e c o n o m i c d i s c r i m i n a t i o n i s p r e s e n t l y
o p e r a t i n g , i n e f f e c t , t o p e r p e t u a t e t h e s e
p a s t i n e q u i t i e s . 81 /
T h i s l a t t e r r e p o r t was i s s u e d l e s s t h a n two
months b e f o r e t h e a d o p t i o n o f t h e MBE p r o v i s i o n by
t h e House.
To e l i m i n a t e t h e c o n t i n u i n g e f f e c t s on
m i n o r i t y b u s i n e s s e s o f p a s t d i s c r i m i n a t i o n ,
t h e f e d e r a l g o v e r n m e n t h a d a d o p t e d o v e r 100
p r o g r a m s t o a i d m i n o r i t y b u s i n e s s e s . T h e s e
programs i n c l u d e d f i n a n c i a l , m a r k e t i n g and b u s i -
8 2 /n e s s m a n a g e m e n t a s s i s t a n c e . — But d e s p i t e t h e
s u b s t a n t i a l f e d e r a l e f f o r t s to c r e a t e and s u s t a i n
m i n o r i t y b u s i n e s s e s , t h o s e f i rm s r e c e i v e d l e s s
t h a n on e p e r c e n t o f a l l f e d e r a l c o n t r a c t s .
Congressman M i t c h e l l a rg u e d t h a t such c o n t r a c t i n g
p r a c t i c e s were f r u s t r a t i n g f e d e r a l p o l i c y :
81 / H. Rep. 94 -1791 , p. 182; s e e a l s o S. Rep.
9 1 - 1 3 4 3 , p . 45 ( 1 9 7 0 ) . A f e d e r a l t a s k f o r c e
r e a c h e d th e same c o n c l u s i o n . R epo r t o f t h e Task
F o r c e on E d u c a t i o n and T r a i n i n g f o r M i n o r i t y
B u s i n e s s E n t e r p r i s e ^ pu T7 (1974) ( "Decades oT
p r e j u d i c e , poor e d u c a t i o n a l o p p o r t u n i t y , l i m i t e d
a c c e s s to r e a l management p o s i t i o n s w i t h i n Ameri
c a n b u s i n e s s and i n d u s t r y h a v e c o n s p i r e d t o
r e s t r i c t t h e e n t r y o f m i n o r i t i e s i n t o t h e main
s t r e a m o f t h e n a t i o n ' s f r e e e n t e r p r i s e s y s t e m . " )
82 / U.S. Depar tm ent of Com m erce ,O ff ice o f M in o r
i t y B u s i n e s s E n t e r p r i s e . F e d e r a l A s s i s t a n c e
Programs f o r M i n o r i t y B u s i n e s s " E n t e r p r i s e s (1977) .
35
We spend a g r e a t d e a l of F e d e r a l money u n d e r
t h e SBA program c r e a t i n g , s t r e n g t h e n i n g and
s u p p o r t i n g m i n o r i t y b u s i n e s s e s and y e t when
i t comes down t o g i v i n g t h o s e m i n o r i t y
b u s i n e s s e s a p i e c e o f t h e a c t i o n , t h e
F e d e r a l G o v e r n m e n t i s a b s o l u t e l y r e m i s s .
A l l i t does i s say t h a t , "We w i l l c r e a t e you
on th e one hand and , on th e . o t h e r hand , we
w i l l d e n y y o u . " T h a t d e n i a l i s m ad e
a b s o l u t e l y c l e a r when one l o o k s a t t h e
amount o f c o n t r a c t s l e t in any g iv e n f i s c a l
y e a r and t h e n one looks a t t h e p e r c e n t a g e of
m i n o r i t y c o n t r a c t s . 83 / . . . . [W]e approve
a b u d g e t f o r OMBE [ O f f i c e o f M i n o r i t y
B u s i n e s s E n t e r p r i s e ] , we approve a budge t
f o r t h e SBA, and we a p p ro v e o t h e r b u d g e t s t o
run t h o s e m i n o r i t y e n t e r p r i s e s , t o make them
become v i a b l e e n t i t i e s i n o u r sys tem , bu t
t h e n on th e o t h e r hand we say no , t h e y a re
c u t o f f from c o n t r a c t s .
M i t c h e l l u r g e d t h a t l e g i s l a t i o n m an d a t in g t h a t
c o n t r a c t s be awarded t o m i n o r i t i e s were needed
b e c a u s e " e v e r y agency o f t h e Government h a s t r i e d
t o f i g u r e o u t a way t o a v o i d d o i n g t h i s v e r y
84 /t h i n g . " — The U n i t e d S t a t e s Commission on C i v i l
R i g h t s h a d r e p o r t e d t o C o n g r e s s l e s s t h a n two
y e a r s b e f o r e t h a t m i n o r i t y - o w n e d f i rm s fac e d a
s e r i o u s p r o b l e m o f i n t e n t i o n a l d i s c r i m i n a t i o n
b e c a u s e " [ g ] overnment c o n t r a c t i n g o f f i c e r s e x -
, ,85 /
p r e s s e d b i a s e s a g a i n s t m i n o r i t y f i r m s . . . . —
83/ 123 Cong. Rec. H 1436-7 ( d a i l y ed . Feb. 24,
1977) .
84 / 123 Cong. Rec. H 1438 ( d a i l y ed . Feb. 24,
1977) .
85 / M i n o r i t i e s and Women as Government C o n t r a c -
t o r s , p . 1 12 ( 1 9 7 5 ) ; s e e a l s o pp . i , 2 0 - 2 2 .
- 36
Thus t h e MBE p r o v i s i o n was a d o p t e d and
ne e ded t o overcome bo th on g o in g d i s c r i m i n a t i o n and
t h e c o n t i n u i n g e f f e c t s o f p a s t d i s c r i m i n a t i o n .
(2 ) Reduc ing B lack Unemployment
The c e n t r a l fo c u s of t h e h e a r i n g s and d e b a t e
r e g a r d i n g t h e 1977 P u b l i c Works Act was t h e need
to a s s u r e b e t t e r t a r g e t i n g of t h e c o n s t r u c t i o n
funds t o a r e a s o f h i g h unemployment . The h e a r i n g s
i n d i c a t e d t h a t funds had to o o f t e n gone t o a f
f l u e n t w h i t e a r e a s w i th l i t t l e , i f any , unemploy
m ent . Th i s was n o t on ly u n f a i r , b u t e c o n o m i c a l ly
unsound , s i n c e i n c r e a s e d demand f o r l a b o r i n a r e a s
o f low unemployment was l i k e l y t o be i n f l a t i o n a r y .
S e n a t o r Brooke u r g e d t h a t t h e MBE p r o v i s i o n
was an i m p o r t a n t way t o i n s u r e "moneys a r e p r o p e r -
, , . .86 /l y t a r g e t e d . —
I t i s an a p p r o p r i a t e c o n c e p t b e c au s e
m i n o r i t y b u s i n e s s ' w ork f o r c e s a r e p r i n
c i p a l l y drawn from r e s i d e n t s of comm unit ies
w i t h s e v e r e and c h r o n i c unemployment . With
m ore b u s i n e s s , t h e s e f i r m s c a n h i r e e v e n
more m i n o r i t y c i t i z e n s . Only w i th a h e a l t h y ,
v i t a l m i n o r i t y b u s i n e s s s e c t o r can we hope
t o make d r a m a t i c s t r i d e s i n o u r f i g h t
a g a i n s t t h e m a s s i v e and c h r o n i c unemployment
which p l a g u e s t h r o u g h o u t t h i s c o u n t r y . 87 /
86/ 123 Cong. Rec. 3910 ( d a i l y ed . March 10,
1 9 7 7 ) .
87/ I d .
37
Congressman B i a g g i , a r g u i n g i n a s i m i l a r v e i n ,
n o t e d t h a t unemployment among m i n o r i t y g roups was
r u n n i n g " a s h i g h as 35 p e r c e n t " , and t h a t t h e
amendm en t was n e e d e d t o a v o i d " p o t e n t i a l i n
e q u i t i e s t o . . . w o r k e r s " and would p r o v i d e " g r e a t
8 8 /
b e n e f i t t o t h e e n t i r e m i n o r i t y c o m m u n i t y . " —
C o n g r e s s ' c o n c e r n abou t m i n o r i t y unemploy
ment was w e l l founded . In J a n u a r y , 1977, unem
p loyment was 12.7% among n o n - w h i t e s , compared to
89 /
6.8% among w h i t e s . — By March of t h a t y e a r w h i t e
unemployment was f a l l i n g w h i l e n o n - w h i t e unemploy-
. . 90 /ment was a c t u a l l y r i s i n g . — Teenage unemployment
e xc ee de d 36% among n o n - w h i t e s , o v e r t w i c e t h e r a t e
91/among w h i t e t e e n a g e r s . — The h i s t o r y and m ag n i
t u d e o f d i s c r i m i n a t i o n a g a i n s t m i n o r i t i e s i n t h e
c o n s t r u c t i o n i n d u s t r i e s was w e l l - d o c u m e n t e d and
92 /
w e l l - k n o w n . — C o n g r e s s was j u s t i f i a b l y c o n
c e r n e d t h a t a f e d e r a l s p e n d in g p rogram i n v o l v i n g
c o n s t r u c t i o n was e s p e c i a l l y l i k e l y t o a f f o r d a
d i s p r o p o r t i o n a t e l y s m a l l number o f j o b s t o m i n o r -
88 / 123 Cong. Rec. H 1440 ( d a i l y ed . Feb. 24,
1 9 7 7 ) .
89 / Economic Repor t o f t h e P r e s i d e n t , 1979, p.
218.
9 0 / I d . By Novem ber w h i t e u n e m p l o y m e n t h a d
f a l l e n t o 5.9%, w h i l e t h e n o n - w h i t e r a t e had r i s e n
t o 13.5%.
91 / I d .
92 / See , e . g . , U n i t e d S t a t e s Commission on C i v i l
R i g h t s , The C h a l l e n g e Ahead: Equa l O p p o r t u n i t y i n
R e f e r r a l Unions (1976 ) .
38
i t i e s among whom unemployment was t h e h i g h e s t .
The p r o p o r t i o n o f m i n o r i t y employees i n m i n o r i t y -
owned f i r m s i s s u b s t a n t i a l l y h i g h e r t h a n i n
93/
w h i t e -o w n e d f i r m s . — Under t h e s e c i r c u m s t a n c e s
C ong res s p r o p e r l y r e s o r t e d t o " t a r g e t i n g " m i n o r i t y
b u s i n e s s e s as a method o f t a r g e t i n g unemployed
m i n o r i t i e s .
( 3 ) The L a c k o f A v a i l a b l e A 1 t e r n a t i v e s
The p e t i t i o n e r s u r g e t h a t the MBE p r o v i s i o n
m u s t b e s t r u c k down b e c a u s e i t was n o t t h e
" l e a s t o n e r o u s " m e t h o d o f a c h i e v i ng C o n g r es s '
94 /
such r e q u i r e m e n t ,p u r p o s e s . ■— No i n ou r v iew,
i s imposed by th e C o n s t i t u t i o n on b e n ig n r a c i a l
c l a s s i f i c a t i o n s . M oreover , no r e a s o n a p p e a r s t o
c h a r a c t e r i z e t h e MBE p r o v i s i o n as l e s s " o n e r o u s "
t h a n t h e a l t e r n a t i v e s p r e s s e d by p e t i t i o n e r s , such
, , . . 9 5 /a s c a s h a d v a n c e s t o m i n o r i t y c o n t r a c t o r s . —
I f such a l t e r n a t i v e s were s u c c e s s f u l , t h e y would
s t i l l r e s u l t i n r e c i p i e n t m i n o r i t y b u s in e s s m e n
w in n in g c o n t r a c t s , and w h i t e b u s in e s s m e n l o s i n g
them, b e c a u s e o f t h e r a c e o f ea ch . The e f f e c t
93 / See , e . g . , H e a r ings on SBA's 8 ( a ) Subcon
t r a c t i n g P r o g r a m B e f o r e t h e S u b c o m m i t t e e on
G o v e r n m e n t P r o c u r e m e n t o f t h e S e n a t e S m a l l
B u s i n e s s C o m m i t t e e , 92nd C o n g . , 1 s t S e s s . 83
( 1 9 7 1 ) . The MBE p r o v i s i o n i n f a c t " p r o v i d e d
employment f o r m i n o r i t i e s t h a t o t h e r w i s e would n o t
h a v e b e e n a v a i l a b l e . " C o m p t r o l l e r G e n e r a l ,
M i n o r i t y F i r m s on Loca l P u b l i c Works P r o j e c t —
Mixed R e s u l t s , p. 14 (1 9 7 9 ) .
94/ B r i e f f o r P e t i t i o n e r s , pp. 21-28 .
95/ I d . p. 22.
39
on t h e l o s i n g b i d d e r would be no l e s s s u b s t a n t i a l ,
b u t on ly l e s s o v e r t .
I n any e v e n t , C o n g r e s s c l e a r l y b e l i e v e d
t h a t o n l y t h e MBE c l a u s e would s u f f i c e t o a c h i e v e
i t s p u r p o s e s . R e p r e s e n t a t i v e M i t c h e l l a r g u e d
t h a t s e t - a s i d e s were " t h e on ly way we a r e going to
9 6 /g e t m i n o r i t y e n t e r p r i s e s i n t o o u r s y s t e m " . —
S e n a t o r Brooke u r g e d t h e p r o v i s i o n was
n e c e s s a r y b e c a u s e m i n o r i t y b u s i n e s s e s have
r e c e i v e d o n l y 1 p e r c e n t o f t h e F e d e r a l
c o n t r a c t d o l l a r , d e s p i t e r e p e a t e d l e g i s l a
t i o n , E x e c u t i v e O r d e r s , and r e g u l a t i o n s
m a n d a t i n g a f f i r m a t i v e e f f o r t s t o i n c l u d e
m i n o r i t y c o n t r a c t o r s i n t h e F e d e r a l c o n
t r a c t s p o o l . 97 /
The f a i l u r e o f t h e a l t e r n a t i v e a p p ro a c h e s u r g e d
by p e t i t i o n e r s , and a t t e m p t e d i n t h e p a s t , was
documented i n d e t a i l by a s e r i e s of c o n g r e s s i o n a l
9 8 / 9 9 /
r e p o r t s ---- and h e a r i n g s — an d a r e p o r t o f t h e
96 / 123 Cong. Rec. H 1437 ( d a i l y ed . Feb. 24,
1977) .
97/ 123 Cong. Rec. S 3910 ( d a i l y ed . March 10,
1977) .
98/ S. Rep. 94 -636 , pp . 221-227 ( 1 9 7 6 ) ; S. Rep.
9 1 - 1343, pp. 45 -50 ( 1 9 7 0 ) ; H. Rep. 94-1791 , pp.
124-149 ( 1 9 7 7 ) ; H. Rep. 94 -468 ( 1 9 7 5 ) ; H. Rep.
9 2 - 1615 (1 9 7 2 ) .
99 / H e a r in g on the Small B u s i n e s s A d m i n i s t r a t i o n
§ 8 ( a ) C o n t r a c t P rocurem en t Program b e f o r e t h e
S e n a te Committee on Small B u s i n e s s , 94 th Cong . , 2d
S e s s . ( 1976) ; H e a r in g s on SBIC and SBLC Programs
- 40 -
U n i t e d S t a t e s Commission on C i v i l
need f o r im m edia te e x p e n d i t u r e of
i n g r a n t s d u r i n g t h e s p r i n g and
Ri gh t s . -
t h e $4
s umme r
100/ The
b i l l i o n
of 1977
99 / c o n t ' d .
and S e l e c t e d SBA A c t i t i t i e s B e fo re t h e Subcom
m i t t e e on SBA O v e r s i g h t and M i n o r i t y E n t e r p r i s e s
of t h e House Commit tee on Small B u s i n e s s , 94 th
C ong . , 1 s t S e s s . ( 1 9 7 6 ) ; O v e r s i g h t H e a r in g s on
Small B u s i n e s s A d m i n i s t r a t i o n Programs and A c t i v i
t i e s B e fo re t h e Subcommit tee on SBA O v e r s i g h t and
M i n o r i t y E n t e r p r i s e s o f t h e House Commit tee on
S m a l l B u s i n e s s , 9 4 t h C o n g . , 1 s t S e s s . ( 1 9 7 6 ) ;
H e a r in g s on P rocu rem en t A s s i s t a n c e Programs o f the
Sm all B u s i n e s s A d m i n i s t r a t i o n B e f o re t h e S e n a t e
Commit tee on Small B u s i n e s s , 94 th C ong . , 1 s t S e s s .
( 1 9 7 5 ) ; H e a r in g s on M i n o r i t y E n t e r p r i s e and A l l i e d
Problems o f Small B u s i n e s s e s B e f o re t h e Subcom
m i t t e e on SBA O v e r s i g h t and M i n o r i t y E n t e r p r i s e of
t h e House Commit tee on Small B u s i n e s s , 94 th Cong.
1 s t S e s s . ( 1 9 7 5 ) ; H e a r in g s on Government M i n o r i t y
E n t e r p r i s e Programs —* F i s c a l Year 1974, b e f o r e
t h e S u b c o m m i t t e e on M i n o r i t y S m a l l B u s i n e s s
E n t e r p r i s e s a n d F r a n c h i s i n g o f t h e H ouse Com
m i t t e e on Small B u s i n e s s , 93rd Cong . , 2d S e ss .
( 1 9 7 4 ) ; H e a r i n g s on SBA's 8 ( a ) S u b c o n t r a c t i n g
Program — M i n o r i t y E n t e r p r i s e b e f o r e t h e Subcom
m i t t e e on Government P rocu rem en t o f t h e S e n a te
C o m m i t t e e on S m a l l B u s i n e s s , 92nd C o n g . , 1 s t
S e s s . ( 1 9 7 1 ) ; H e a r in g s B e fo re t h e Subcom mit tee on
M i n o r i t y S m a l l B u s i n e s s E n t e r p r i s e s o f t h e
House Commit tee on Small B u s i n e s s , 92nd Cong . , 1 s t
S e s s . ( 1 9 7 1 ) .
1 0 0 / M i n o r i t i e s and Women as Government C o n t r a c
t o r s ( 1 9 75) ; s e e a l s o C o m p t r o l l e r G e n e r a l ,
A Look a t How t h e Small B u s i n e s s A d m i n i s t r a t i o n ' s
I n v e s t m e n t Company P r o g r a m f o r A s s i s t i n g D i s a d
v a n t a g e d Bus inessmen I s W ork ing , pi T) IT (1975).
- 41
p r e c l u d e d f u r t h e r e x p e r i m e n t a t i o n w i t h r e m e d ia l
d e v i c e s . I t was t o o l a t e f o r new t r a i n i n g o r
a i d f o r m i n o r i t y e n t e r p r i s e s t o have any im apc t ,
and t h e r e was no t ime t o s e t up or o p e r a t e any
complex a d m i n i s t r a t i v e m a c h i n e r y . The 10% s e t -
a s i d e p r o g r a m was i n d e e d f a r m ore e f f e c t i v e
t h a n t h e e a r l i e r p rog ram s , c h a n n e l i n g more con
t r a c t d o l l a r s t o m i n o r i t y b u s i n e s s e s i n a few
months t h a n th e y had r e c e i v e d in 10 y e a r s u n d e r
t h e s e c t i o n 8 ( a ) p rogram of t h e Small B u s i n e s s
AJ . . . 101/A d m i n i s t r a t i o n .------
Under t h e s e c i r c u m s t a n c e s , C ong res s had on ly
two a l t e r n a t i v e s — t o ad o p t t h e m i n o i t y s e t - a s i d e
c l a u s e , as an e f f e c t i v e bu t s h o r t t e rm e x p e d i e n t ,
o r t o i n c r e a s e s p e n d in g u n d e r t h e P u b l i c Works Act
w i t h o u t t h a t c l a u s e , knowing t h a t t o so so would
b o th underm ine p a s t c o n g r e s s i o n a l e f f o r t s t o a id
m i n o r i t y b u s i n e s s e s and d e f e a t t h e p r e s e n t c o n -
101/ C o m p t r o l l e r G e n e r a l , M i n o r i t y Firms on Loca l
P u b l i c Works P r o j e c t - - M ixed R e s u l t s , p. 9
(1979 ) .
- 42 -
g r e s s i o n a l p u rp o se t o r e d u c e m i n o r i t y unemploy
ment . N e i t h e r t h e C o n s t i t u t i o n n o r c o n s i d e r a t i o n s
o f p u b l i c p o l i c y c o m p e l l e d t h e l a t t e r c o u r s e .
CONCLUSION
For t h e f o r e g o i n g r e a s o n s i t i s r e s p e c t f u l l y
s u b m i t t e d t h a t the judgment o f t h e c o u r t below
s h o u l d be a f f i r m e d .
R e s p e c t f u l l y s u b m i t t e d ,
JACK GREENBERG
JAMES M. NABRIT, I I I
DEBORAH FINS
ERIC SCHNAPPER
S u i t e 2030
10 Columbus C i r c l e
New York, New York 10019
VERNON E. JORDAN, JR.
ROBERT L. HARRIS 500 E. 62nd S t r e e t
WILLIAM A. New York, New York 10021
BORDERS, JR.
Of Counse l
Counse l f o r Amici C u r i ae
MEILEN PRESS INC. — N. Y. C. 219