Opportunities for Minority Contracts in TARP Limited

Minority firms relegated to sub-contractors for bailout services

treasuryseal

The Treasury Department has been busy recruiting firms to help execute the Troubled Asset Relief Program that came out of the $700 billion Emergency Economic Stabilization Act of 2008, but some minority- and women-owned business enterprises have complained that the criteria under the requests for proposals excluded minority participation.n

As a result of frozen credit markets, Congress and President George W. Bush rushed to pass the EESA on Oct. 3 after several prominent but over leveraged financial institutions collapsed. The government’s hope is that the EESA will reduce the debt burden of ailing banks by purchasing toxic mortgage-backed securities so all banks will be confident in loaning money to individuals and businesses.

But first, the Treasury had to engage legal, accounting, and asset management firms to do the legwork to buy back debt from faltering banks. Due to the urgency of the situation Congress gave the Treasury permission in the EESA to limit competition for these contracts, a contingency that does not enforce minority participation regulations.

The Treasury set a high standard for procurement eligibility. It required that firms interested in establishing infrastructure services such as accounting must have at least $500 billion in domestic assets under custody; those financial institutions wanting to manage securities must have $100 billion in dollar-denominated fixed income assets under management; and $25 billion in assets under management to provide modifications, restructurings, re-sales, and foreclosure mitigation for residential and commercial loans.

“They could have parceled out the allocations in smaller portions,” says Fred Parks of Toussaint Capital Partners (No. 10 on the B.E. 100s Investment Banks list with $31 million in co-managed issues). “By the sheer management of those numbers it precludes the participation of a number of minority and women-owned enterprises that are in asset management.”

The top black-owned asset manager on the B.E. 100s list, Earnest Partners, manages no more than $22.4 billion and the largest black-owned investment bank Sibert Brandford Shank & Co. LLC has $64 million in co-managed issues.

“Treasury believes that it would not be fiscally prudent to ask a firm that only had experience managing only a few billion to manage $100 billion. It could put the taxpayers at unnecessary risk,” said

Kashkari , a former employee of Goldman Sachs, who leads the Office of Financial Stability, an office created to manage the bailout.

Marc Morial, president of the National Urban League worked with Rep. Maxine Waters (D-CA), Rep. Gregory Meeks (D-NY) and the National Association of Security Professionals, a non-profit association of minority and women professionals in the securities industry, to make sure that the $700 billion bailout would include economic opportunities for minority-owned businesses. Before his group introduced the idea, minority firms had not been considered at all in Congress’ legislation, according to Morial. The law that Congress passed doesn’t contain specifics on how to increase minority participation in the rescue plan.

“We think that these steps violate the spirit of what Congress intended,” says Morial. “This ensures that

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  • Williba Brogdon

    To whom it may concern,

    I’m interested in attaining a Minority Contract. I am the owner of a full service real estate firm here in Charlotte, NC and am in the process of attaining my General Contractor’s License, please send me the neccessary information I need, thanks in advance.

    Williba Brogdon
    BIC/ Broker
    Brogdon/Lee Realty Group Inc.

  • Williba Brogdon

    Thanks in advance for sending me the neccessary info, I need in order to attain a minority contract.

  • Williba Brogdon

    My mailing address is 11018 Tara Glenn Ct.#616, Charlotte NC, if you have any mailings that need to be sent, again thanks in advance.

    Williba

  • Drucella W. Smothers

    I am asking if you have a copy of a contract that I may view as a guide to prepare one as we out source work to a company. Is there a web site available with a sample contract. Thanks for your immediate assistance in this matter.

  • R. Tartt

    Please send any helpful info in attaining a minority contract to: 7005 Crescent Boat Ln. Canal Winchester,Oh 43110…

  • http://www.gatewaymortgageforveterans.com Dafydd

    Well said, finally a good report on this stuff

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    The quality of the info is what keeps me on this site, thanks!

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