Unequal Opportunity

Does who you know -- not what you are -- open the door to affirmative action business in Houston?

Sure, Tony Brigham was hoping to make some money when, in May 1992, he sent a letter to Mayor Bob Lanier and the Houston City Council asking that they consider him for a piece of city business. But Brigham, a black man struggling to make ends meet with a small collection agency, also saw some side benefits for the city if it hired his company to help track down traffic-ticket scofflaws -- such as a little extra cash for crime prevention, not to mention the creation of a few jobs.

Brigham received a reply from Lanier informing him of an upcoming contract to collect delinquent tickets. Encouraged, Brigham readied a proposal from his Enforce By Law Recovery, which was one of ten collection companies that sent bids to the city that November.

In March 1993, Brigham was disappointed to learn that the bulk of the city contract had gone to Municipal Collections Inc. His disappointment turned to outrage when he found out that the remainder -- 19 percent that had been set aside for a minority-owned firm -- went to Bayou City Enterprises, a company, Brigham learned, partly owned by the uncle of a city councilman.

As a small business, his Enforce By Law Recovery was, Brigham knew, a long shot to become the primary collector of delinquent tickets. But Brigham finds it hard to believe that Bayou City -- a firm that's been asked by City Controller George Greanias to prove it didn't get thousands of city dollars for doing little or nothing -- was a better choice to meet the contract's minority participation goal. After all, unlike Bayou City, his collection agency had been "certified" to get business under the city's Minority, Women and Disadvantaged Business Enterprise program, long before the contract was awarded.

In Brigham's view, Bayou City's owners were opportunists looking to cash in on their connections.

"I'm sitting here," he says, "watching people make a mockery of the system."
Brigham's situation -- and, by extension, that of the 1,500 other businesses certified in the city's MWDBE program -- has largely been ignored in a standoff that began a month ago when Greanias began withholding payments to Bayou City after his office questioned whether the firm was performing any duties as the MWDBE component of the ticket-collection contract. Greanias has asked for documentation that proves Bayou City is actually doing what it claims, supervising the printing and mailing out of delinquent notices. At press time, the company had yet to produce the requested documentation.

Instead, the firm's principals -- lawyers John Davis, Ray Shackelford and Walter Strickland -- have been joined by a few of the city's African-American leaders in accusing Greanias of playing "plantation politics" and creating the controversy as a prelude to a run for mayor. They have even challenged his right to review Bayou City's work, for which it was being paid roughly $25,000 a month.

"Without question, he has overstepped the bounds of what the city controller does," Shackelford told KCOH/1430 AM talk-show host Michael Harris on January 10.

Shackelford has done more than simply question the city bill-payer's right to audit a city contract; he's also charged that Greanias is trying to undermine the entire MWDBE concept. "This is the larger picture, in my mind," Shackelford told Harris. "Where it stands basically throughout the United States is that minorities are being attacked in every city on what right do they have to a certain piece of the pie."

Greanias rejects Shackelford's assertion. "What hurts the program," he says, "is if you don't do everything you possibly can to assure its integrity, to be able to give assurances that it's being run absolutely aboveboard, with no favoritism."

Which leads to the question on Tony Brigham's mind: how, exactly, did Bayou City Enterprises get a piece of this particular pie?

It's a question worth asking, because in awarding the collection contract the city appears to have ignored its own affirmative action rules, opening the door for a company that has since all but admitted that its sole expertise is an ability to farm out work to another firm. That story, coupled with a rather detailed defense of the company's role by Mayor Bob Lanier, unfortunately has cast a shadow on a program that indeed is under attack from outside the minority community.

"Everybody's crying about the black and white issue," Brigham says. "But what's the right issue? That's all I want to know. If you're going to go by the guidelines, then go by the guidelines. If not, then throw [those guidelines] away."

The somewhat inconsistent explanations of how Bayou City ended up part of the contract for the collection of tickets up to 210 days delinquent suggest that "thrown away" is an accurate description of what happened to the MWDBE guidelines in March 1993.

Here's a brief synopsis of who's said what about the deal and the ongoing controversy:

* Benjamin L. Hall III, who resigned as Lanier's city attorney on December 31, has said he wrote Bayou City into the contract. But Hall has variously said that either Bayou City's involvement was a "joint-venture kind of deal" with Municipal Collections; or that Municipal Collections lacked a minority subcontractor and Bayou City fit the bill; or that he was only following orders.

* Davis and Shackelford have insisted their firm carries out "notice management" duties for Municipal Collections. On Harris' radio show, Davis described that job as a "compilation of things." That was a slight improvement over the explanation he gave to the Press in October: "I don't want to specify ... uh ... uh ... you know, work varies, and I wouldn't want to get into commenting on that. I'm sure we're doing our share of the work." Whatever it is the work entails, Davis recently said that it doesn't produce much in the way of supporting documentation.

* Private investigator Clyde Wilson, an original principal of Municipal Collections, has said he quit that company shortly after it won its contract because it was forced by Hall to give Bayou City a piece of the business.

* Lanier's explanation for how Bayou City became involved in the ticket collection contract is that the firm, which originally bid on the prime contract, had so much Council support that it was decided that the only fair thing to do was to satisfy the MWDBE goal by giving it 19 percent of the tickets to collect. But upon further consideration, the mayor says, it was decided that Bayou City would instead be assigned "specific contractual duties."

The contract, however, only defines those duties as "including but not limited to the provision of professional services, labor, equipment or supplies ...." That has since been clarified to mean the printing and mailing of delinquent notices, though in his review Greanias found that the actual printing and mailing is being done by a woman-owned firm, Premier Printing.

Lanier has said that as far as he can tell Bayou City is within "the rule of law" by subcontracting out the work. He further defended the firm when he recently appeared on Jon Matthews' KPRC/950 AM talk show, saying that "the proof is in the pudding .... We're getting roughly 40 percent more money on the contract than we were getting from the prior contract."

That's not exactly true. According to records of the municipal courts department, the city has so far realized a net revenue increase of less than 10 percent -- and that's when the results of a second ticket-collection contract are factored in.

When Matthews asked Lanier whether the purpose of the MWDBE program was to help three lawyers, the mayor replied, "Well, you ... let me finesse for a moment, treating the entire affirmative action program. I'll come back and do that in a minute."

He still hasn't.

City records show that a selection committee of the municipal courts department, which administers ticket-collection contracts, didn't consider the prime-contract proposal from Bayou City's principals good enough to make the list of five finalists from which the winner was eventually chosen.

And Bayou City wasn't the first choice of Municipal Collections either, according to Clyde Wilson. The prime contractor's minority participation plan listed six companies, but Bayou City wasn't among them. Wilson told the Houston Chronicle that Municipal Collections was forced to remove a Hispanic-owned firm from its plan to make room for Bayou City.

Yet John Davis has said that both Municipal Collections and the city wanted his firm in on the contract because "there was a need, obviously, for the MWDBE component." But he has offered only a vague explanation as to why Bayou City was chosen to fill that need. "At that time," he has said, "someone contacted someone to see if we could fit the whole thing together."

Tony Brigham thinks it was the connections of Bayou City principals such as Davis, who is the uncle of Councilman Judson Robinson III, that helped the company get the business. "Municipal Collections was supposed to look in the directory [of MWDBE certified firms] and see if they could find a minority company that was capable of fulfilling their needs," Brigham says. "I was one of the only companies at that time certified in collections. They [Bayou City] were not."

In fact, Bayou City had no MWDBE certification, nor was it registered to do business in Harris County until a few days before Council approved the ticket collection contract. Indeed, on Michael Harris' show, Davis noted that he and his partners "didn't know what the name [of their company] would be" until they were chosen as a subcontractor. And in fact, when the three attorneys submitted their bid for the prime contract on November 27, 1992, they made no mention of Bayou City Enterprises.

That's notable, because later during the MWDBE certification process, Davis and his partners told the city that Bayou City "commenced business" on November 1, 1992. They even produced documents to verify that start-up date -- including a copy of a check for Davis' $1,000 investment in the company and a lease agreement for office space at 1306 Rosedale, which is listed in the residential pages of the phone book under Walter Strickland's name. (The company now lists Davis' law office as its address.)

In Bayou City's MWDBE file are copies of several invoices on the firm's letterhead. One, dated November 15, 1992, is for carrying out eviction services, presumably for a company called Distinctive Dwellings, which is listed on the MWDBE application as one of Bayou City's two clients. The other client was the National Bar Association, for which Bayou City apparently organized part of a conference. Perhaps coincidentally, Bayou City principals were on the boards of both "clients."

Russ Reiter of the city's Affirmative Action/Contract Compliance office told the Press in October that one requirement of MWDBE certification is the assurance that a company had previously done the type of work for which it wants to be certified. He added that before his office would grant certification, it would require "support with references" to prove the company had a business address, a work history and clients.

Bayou City apparently met those standards well enough to be certified, but not before the collection contract originally went to Council. The vote was postponed for two weeks, which gave Bayou City enough time to secure its certification. A week after it was granted, the Council voted 10-0 to award the contract to Municipal Collections, with a written clause stating that the MWDBE component go to Bayou City. Judson Robinson III was one of five councilmembers absent that day.

Shackelford argued on Harris' show that Bayou City "brought a certain amount of expertise" to the contract. He later defined that expertise to include making a slight change to a notification form already in use and picking up and "reviewing" the city's computer tape listing scofflaws.

As for why Bayou City contracts out the printing function it was assigned, Davis said his company did not possess the needed equipment -- or the $600,000 to buy it. "This is the 21st century," he added. "It is not uncommon for someone to outsource one particular function of this [contract]."

But is it any way to run an affirmative action program? Lanier seems to think so. He told Matthews that the "critical issue" now is whether Bayou City has supervised the firm that is actually doing the printing and mailing. He does not see the controversy as an indictment of affirmative action, though he thinks there will come a time when such programs aren't needed. Until then, he said, "the idea is that after [minority firms] perform a certain number of subcontracts, then they'll be qualified to move in as prime bidders."

If it didn't make him so angry, Brigham -- who's still waiting for his first piece of MWDBE business from the city -- might find Lanier's optimism laughable.

"This thing is a joke," he says. "It stinks. If this is going to be the bid process, I'll take that minority certification I've got and I'll tear it up on national television.

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