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JASON DESOMER

The City of Portland has spent decades creating policies and programs meant to break down inequities long-maintained by the city's traditional government structure. Now, in the midst of a global movement for racial justice, an examination into one of those city programs shows that even well-meaning racial equity work can leave white, middle-class people benefitting the most.

"It takes more than good intentions to repair historical inequities," wrote City Auditor Mary Hull Caballero, in a press release announcing her team's newest audit, released Wednesday.

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The audit digs into a 2012 plan—established by the Portland City Council—to work with more contracting firms owned by women and people of color on city construction projects.

The intentions were clear: Use the city's purchasing power to hire more firms with more diverse owners, support these firms with additional technical assistance, and fund grants and apprenticeship programs to help women and people of color succeed in contracting careers. But Caballero's audit finds that, because the plan was mostly driven by "aspirational goals" instead of clear outcomes, the program has done little to level the playing field for non-white contractors vying for city projects.

"The result is dissatisfaction from top to bottom, inside and outside the government," the audit reads.

For instance, the plan includes a development program created to support small, "historically disadvantaged" contractors. But that label could be applied to veteran-owned businesses and new small businesses, both which can be owned by white men. As a result, $33.6 million in city dollars distributed through this program, called the Prime Contractor Development Program, went directly to white-owned construction firms. In comparison, $9.5 went toward Black-owned firms, $7 million went to Asian-owned firms, $5 million went to Hispanic-owned firms, and firms owned by Native Americans received no funding.

"This happened even though the Council designed the program to expressly benefit minority- and women- owned businesses," the audit reads.

This result didn't come as a surprise to LatinoBuilt, an association that represents Latino contractors in Oregon.

"The Prime Contractor Developer Program intended to develop capacity for local minority and women-owned small contractors and build generational wealth has long been one sided," wrote LatinoBuilt in a statement sent to the Mercury. "At a time when Latinos are the largest ethnic minority group both in Portland and across Oregon, the 10-year program has failed miserably in our Latino-contracting community and the audit continues to highlight this."

LatinoBuilt was created in 2019 with the sole purpose of improving opportunities for the many Latino-owned firms across the state. The group said it's the very disparities highlighted in the audit that inspired them to create an official organization.

The audit found that the City's Procurement Services department, which oversees this equity program, did not follow City Council's direction to set concrete goals for improving contractor equity, nor create a tracking system to measure the program's success.

These disparities weren't an accident. In many cases, the audit found that white-owned companies intentionally manipulated the city program to make it work in their favor—sometimes with the assistance of city employees.

Auditor staff found several instances of construction firms lying about their owner's gender to benefit from the program, or non-eligible firms falsely operating under the name of a minority-owned firm. In some cases, the audit notes, "we found evidence that Procurement staff assigned to improve contracting equity gave preferential treatment to individual contractors."

Formal complaints based on these problems were not investigated by city staff, even though it was their explicit responsibility.

Kenechi Onyeagusi is the director of Professional Business Development Group, a Portland trade association that works to improve opportunities for construction firms owned by "disadvantaged, minority-, women- and service-disabled veteran-owners." Onyeagusi said the audit shows how tokenization seems to take precedent over actual equity within the city's contracting program.

"Communities of color cannot continue to be divided by the action of the old school ways of wheeling and dealing," wrote Onyeagusi in a statement sent to the Mercury. "When processes are not fair or transparent, it creates an atmosphere of strife, fertilized by the desire to influence those in seats of power and buoyed by the perception of resource and economic scarcity that cause infighting in our communities of color."

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The audit did find the program meeting some of the city's initial goals, like hiring companies that employed minority contractors. But these wins are diluted by the program's larger failures. The audit provides 16 recommendations to city officials on how to improve the flawed system, including data collection, mandatory investigations into complaints, regular progress reports, and a centralized system to share information about upcoming construction projects to all interested companies.

For Onyeagusi, change doesn't mean rewriting the rulebook. It's as simple as just ensuring staff are following the already established rules.

"Now, more than ever, as our country goes through social reforms and a revolution that has spurred the need for the highest degree of accountability," she writes, "we urge our city to do the same."

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