Four years and $388.6 million later, the Beaumont Independent School District has abandoned its controversial and ultimately unconstitutional affirmative action programs that directed tens of millions of dollars to companies owned by minorities who may not have otherwise been qualified for the job but were given preference because of race and gender, according to court records in a recent legal settlement.
Known as the Local/Minority/Woman-owned Business Enterprise Program and the Minority Business Enterprise policy, the initiatives were created by members of the board prior to citizens passing a $388.6 million bond initiative in 2007. The policy and program were designed to direct money to businesses that included Walker’s Electric Company, owned by Calvin Walker, who is facing a 37-count felony indictment in federal court; WB Construction, owned by Wallace Batiste, whose company was once barred from bidding on federal contracts after it was caught in a bid rigging scheme; and CN & B Development Group LLC, owned by Curtis Lee, the husband of former Jefferson County purchasing agent Naomi Lawrence-Lee, who now works for BISD after being forced to leave the county when she was caught using county-owned equipment to print brochures for her husband’s company. Both Walker and Batiste received money from the bond due to their status in the LMWBE list. It is not known how much money, if any, was paid to Lee’s company because records were not immediately available. In all, there are several hundred companies on BISD’s approved LMWBE list of contractors, and not all of them got BISD work.
The principle of the program was to ensure at least 25 percent of the $388.6 million bond proceeds were paid to companies on the list, states a copy of the methodology posted on BISD’s Web site.
“It is the policy of Beaumont Independent School District (BISD) to form business alliances with Local, Minority and Woman-Owned Business Enterprises (LMWBE) that result in successful opportunities for certain categories of products and services. This policy is designed to involve the largest possible audience to participate in BISD’s LMWBE plan,” states the program’s policy statement. “The district-wide goal is 25 percent for the construction related portion of the Capital Improvement Program (CIP) with workforce inclusion and participation from the adjacent counties. BISD will exercise a good faith effort regarding LMWBE inclusion with the scope of the consumables, materials and services.”
The validity of the program was questioned before it was ever formally implemented because BISD had not done the proper disparity studies or found trending data showing minorities and women were being discriminated against in an effort to exclude them from business deals. But no formal action was taken against the district until local attorneys Mike Getz and David Vann deCordova, representing GADV Inc., DBA L&L Construction, filed a lawsuit because their client was skipped over by the district in order to select a lesser-qualified company.
“GADV contends BISD wrongfully awarded a contract to build a new field house for West Brook High School to a rival contractor based on racially discriminatory motives,” states the lawsuit, which BISD voted to settle last week. “GADV also contends BISD’s Minority Business Enterprises (MBE) and Local/Minority/Woman-Owned Business Enterprise (LMWBE) Policies violate the Equal Protection and Equal Rights Clauses of the United States and Texas Constitutions.”
Getz and deCordova said their client had already obtained a permanent injunction in federal court that prevented BISD from moving forward with the West Brook field house because the district did not hire the proper company.
“(Federal) Judge Ron Clark found that the BISD violated state bidding laws when it bypassed the No. 1 ranked L&L to select the No. 4 ranked minority firm,” Getz said. “L&L had originally been recommended to the BISD board by the construction management firm Parsons. However, at a school board meeting in January 2011, school board president Woodrow Reece complained openly that Parsons was not recommending enough minority contractors and threatened Parsons with the termination of their management contract unless they followed the board’s directive.”
The precise wording of Reece’s comment was, according to the video still posted on the district’s Web site, “Board policy was hiring local. Local means local, not Houston. Minority means minority – black folk.” Reece paused then added minority also included Hispanics and women.After a yearlong battle with BISD and a settlement agreement, clear language was drafted demanding that BISD end the program.
“BISD will terminate (or cancel) its current LMWBE Policy adopted April 17, 2008, and its MBE Policy outlined in CH (LOCAL)-X (Exhibit 24 admitted at the May 23, 2011, trial in the Civil Action), said action to occur at the April 19, 2012, Board meeting of the BISD Board of Trustees,” states the terms of the settlement. “The agreement to terminate or cancel BISD’s current LMWBE and MBE policies shall be enforceable by injunction in the event of breach”
Getz and deCordova had again forced the district’s hand – either take the deal or go to court and face losing on grounds the program was unconstitutional and unlawful.
The board agreed and its attorney filed the following response: “BISD will agree to a final judgment ordering the recission and cancellation of its LMWNE policy adopted April 17, 2008, as well as the recission and cancellation of its MBE (Minority Business Enterprise) policy outlined in CH LOCAL-X (local policy code).”
That section of the local policy code encouraged other contractors to use minority businesses rather than the most qualified or those with the lowest bid.
“Every effort shall be made to secure bids or proposals from qualified minority business enterprises seeking to serve as prime contractors on District projects,” the policy stated. “In the event a minority business enterprise is not determined to be the lowest responsible bidder, every effort shall be made to persuade the successful bidder to retain, when available, subcontractors that are qualified minority business enterprises.”
The attorneys put emphasis on the use of the word “shall” in the policy. According to deCordova, the settlement, in addition to compensating L&L for the lost profits that they would have received if they had been awarded the West Brook contract, also resolved L&L’s claim to permanently enjoin the operation of BISD’s affirmative action programs.
“The BISD Board is required by the settlement to officially terminate its minority preference policies,” deCordova said. “We would have shown at trial, which was scheduled to begin April 12, that the policies were offensive to the equal protection guarantees of our Constitution, and BISD failed to legally justify its adoption of the programs favoring certain minorities in the first instance. BISD had no legal justification for adopting the program in conjunction with the 2007 bond program.”
Getz said the financial ramifications of the settlement weren’t astronomical but significant to his client – $85,000 including attorney fees – and forcing BISD’s hand and ensuring that all contractors are treated fairly in the future was the ultimate goal.
“Hopefully, the settlement and termination of the minority preference policies will help level the playing field with contractors – that they will be treated the same regardless of their race. It should be about qualifications, not skin color. No doubt other bond contractors were impacted by the Board’s minority hiring directive. L&L saw the injustice, was courageous and stepped forward not only for itself but for all contractors doing business with BISD. Local contractors should give L&L a big thank you.”
A final hearing was held last week to close out the case, but BISD’s legal counsel did not show up for court. An angry Judge Clark called BISD attorney Melody Chappell’s office expressing his displeasure and instructing the law firm to send someone to his court.
BISD assistant spokesperson Craig Eichhorn referred calls for comment Melody Chappell. She was not available at press time.