Opportunities for Minority Contracts in TARP Limited - Black Enterprise
Black Enterprise Magazine January-March 2019 Issue

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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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Marcia Wade Talbert

Marcia is a multimedia content producer focusing on technology at Black Enterprise Magazine. In this capacity she writes and assigns stories to educate readers about social media; digital integration; gadgets, apps, and software for business and professional development; minority tech startups; and careers in STEM (Science, Technology, Engineering, and Mathematics). In 2012, she received two Salute to Excellence Awards from the National Association of Black Journalists and was recognized by Blacks in Technology (BiT) as one of the Top 10 Black achievers in the tech arena for 2011 at SXSW in Austin, Texas. She has spoken about technology on panels for New York Social Media Week, at The 2012 Rainbow/PUSH Wall Street Summit, as well as at Black Enterprise’s Entrepreneurs Conference and Women of Power Summit. In 2011, SocialWayne.com chose her as one of 28 People of Color Impacting the Social Web, and through crowdsourcing she was listed as one of BlackWeb2.0's/HP's 50 Most Notable African American Tastemakers in Social Media and Technology for 2010. Since taking on the role of Tech editor in September 2010, she has conceived and produced five cover stories on Technology and/or STEM and countless articles, videos, and slideshows online. Before joining BlackEnterprise.com as an interactive general assignment reporter in 2008, she freelanced with Black Enterprise beginning in 2003 while working as the technical editor at Prepared Foods magazine. There she further honed her writing skills and became an authority on food ingredients, including ingredients used in food fortification and enrichment. Meanwhile, her freelancing with Black Enterprise and BlackEnterprise.com helped her stay current on issues pertaining to the financial and business welfare of African Americans. As a general reporter for Black Enterprise she attended and reported on the Democratic and Republican National Conventions, where she interviewed Valerie Jarrett, senior advisor and assistant to President Barack Obama and U.S. Attorney General Eric Holder. Marcia has a Bachelor of Science degree in Agriculture with an emphasis in food science from the University of Minnesota, and a Master of Science degree in journalism from Roosevelt University in Chicago. En route to her secondary degree, she served as the editor-in-chief of the Roosevelt University Torch, a weekly, student-run newspaper. An avid photographer and videographer, Marcia is one of several employees at BLACK ENTERPRISE who interned for the publishing company as a college student. She lives in New Jersey with her husband, a food scientist; her seventeen-month-old daughter; and “The Cat”, but still considers Chicago home.

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