By RON AIKEN
Millions in ‘minority’ contracts flow to powerful senator’s coffers
A federal program designed to put African-American and female businesses on a competitive footing with their white male counterparts in one of the largest “good ol’ boy” networks around (highway construction contracts) is profiting the most powerful white male legislator in South Carolina – the goodest, oldest boy around, one might say.
Last month, The Nerve reported that the business founded by Sen. Hugh Leatherman (R-Florence) – Florence Concrete Products – was operating as a “disadvantaged business enterprise,” a designation designed to assist minority businesses “at a social and economic disadvantage” by requiring that 10 percent of all federal contracts through the Federal Aviation Administration (FAA), Federal Highway Administration (FHWA) and Federal Transit Administration (FTA) go to contractors and businesses certified as DBEs.
What wasn’t known at the time was just how much business Florence Concrete was doing – if any – by virtue of that designation.
Thanks to a Freedom of Information Act request filed by The Nerve, that picture is clear.
Since March 1, 2012, when Leatherman’s company first obtained DBE status by virtue of it having hired a female president, Florence Concrete has received $1.9 million in funds that otherwise would have gone to minority businesses more fully meeting the spirit, not just the letter, of the DBE program.
As it stands, Leatherman maintains “minority” stockholder status in Florence Concrete, according to his 2015 Statement of Economic Interest form filed with the S.C. Ethics Commission. How much stock he holds isn’t known, as the form only requires disclosure of stock holdings if they are “5% or more of the total (stock) issued AND which constitute a value of $100,000 or more.” Thus, he could own 5 percent or 49.9 percent.
Leatherman also lists himself as the “President and Owner” of Leacon of Florence, Inc., a business which a scouring of the internet found only one job ever performed. That was a $6,000 home-remodeling project in Charleston in 2006 on a home across the street from a house he once owned but sold to his daughter, a review of property records in Charleston County by The Nerve found. What amount of stock, if any, in Florence Concrete is held by Leacon also is unknown.
In 2012, the first year of DBE certification, Florence Concrete received $802,746.21 from a single federal contract in the Sixth Congressional District, which includes most of I-26 from Columbia to Charleston and all of I-95 from Florence to the Georgia border near Savannah.
While Florence Concrete received no new DBE contracts in 2013, in 2014 it won three new bids, for $140.332.50 in Fairfield County, $225.092.70 in Kershaw County and $$71,916.25 in the Seventh Congressional District which takes in Florence and surrounding counties.
This past year, Florence Concrete was awarded four more DBE contracts – a $161.833.36 project in Cherokee County, a $104,891.03 contract in Lancaster County and two other projects totaling $377,014.38.
Nationally, the Department of Transportation alone awards $20 billion in contracts nationwide, with 85 percent of that total going toward construction, according to Federal Transit Administration figures. The DBE program was launched in 1983 to ensure that minority businesses received a percentage of that business. In 1987, Congress amended the statutory language to include female-owned businesses to those “presumed to be disadvantaged” to “ensure non-discrimination.”
From FY Oct. 2014-Sept. 2015. a total of $65.1 million in DBE contracts was awarded in South Carolina. Of that total, $39.6 million (61 percent) went to non-minority female businesses, while $12.2 million (18.7 percent) went to African-American owned businesses
J.T. McLawhorn, president and CEO of the Columbia Urban League, says such skewed percentages are the rule rather than the exception in a system in South Carolina and nationally where DBE contracts go predominantly to non-minority female businesses rather than the racial minority businesses they were set up to aid.
“There’s nothing unique about what Florence Concrete is doing,” McLawhorn said. “It’s totally legitimate and just exposes one of the flaws in the focus of the program that is evident in the data across the country.
“If you want to level the playing field for minorities, that takes looking beyond the designation to the businesses themselves. I can’t criticize a company for working a system. In this case, the system itself doesn’t recognize that non-minority female businesses or those led by a non-minority female have advantages and a support system than many minorities do not have.”
In other words, most DBE’s don’t have the backing of the oldest, most powerful legislator in South Carolina.
“What’s within the legal limits of the law isn’t the same thing as truly enhancing opportunities for disadvantaged businesses and minority owners. We need to go back and fine-tune the system.”
Reach Aiken at 803-254-4411 or email him at ron@thenerve.org. Follow him on Twitter @RonAiken or @TheNerveSC.