State Improperly Inflates Minority Small Business Engagement
New Data Reveals the Baker Administration Has Inflated the Amount of State Money Going to Minority-Owned Small Businesses in Massachusetts
Lawyers for Civil Rights (LCR) strongly condemns the Baker Administration’s misrepresentation of state contracting with minority-owned small businesses in Massachusetts. In recent reporting, WGBH found that “the state has inflated the totals by adding hundreds of millions of dollars of ‘indirect spending’” thus “taking credit not only for its purchases from businesses run by people of color, but for any payments state contractors have made to minority-owned firms, regardless of whether the payments relate to a specific contract” with the state.
This is tantamount to fraud. Far from a victimless crime, the Baker Administration’s misrepresentations harm small businesses by depriving them of economic opportunity. This fundamentally undermines communities of color and impoverishes our Commonwealth.
By failing to accurately account for minority engagement, the Baker Administration is depriving the state, including taxpayers and businesses, of data needed to make relevant policy decisions and to design meaningful interventions surrounding public contracts. The process cannot be made more accessible, fair, or equitable without accurate information, especially demographic data. This perpetuates exclusion, particularly along racial lines.
Instead of leading by example by actually hiring minority-owned small businesses, the Baker Administration is allowing contractors to count payment of goods and services — unrelated to state contracts — with businesses that are often, as WGBH found, “outside Massachusetts, not certified as being minority-owned, or appear to barely exist at all.”
“Inflating these numbers in this fashion is shameful,” says Priya Lane, BizGrow Director at Lawyers for Civil Rights. “The state should be actively building wealth in communities of color by encouraging the growth of minority-owned businesses. Instead, the Baker Administration is artificially inflating the numbers. Instead of boasting about fake figures, the state should do the right thing: help small businesses to fuel the growth of our Commonwealth. The state can start by actively promoting contracting with the businesses that most need the support, particularly during the COVID-19 pandemic.”
Lawyers for Civil Rights provides free legal support and technical assistance to small businesses in low-income communities. As part of this vital work, LCR has long championed public contracting for minority-owned businesses. The organization has been advocating and urging the City of Boston to increase contracting with minority-owned and women-owned small businesses (see open letter and recent advocacy). LCR will continue monitoring the Baker Administration and the City of Boston for greater transparency and diversity in public contracts.