The Magazine

Where Everybody Is Disadvantaged

Postcards from the diversity follies.

May 25, 2009, Vol. 14, No. 34 • By MATT LABASH
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The opening-night reception is a boozy, cheese-plate affair. Musical entertainment is provided by one of the conference co-hosts, the lovely Ericka Dunlap, the first black woman to be crowned Miss Florida, who went onto become Miss America 2004.

"You weren't the one who fell onstage?" I ask her. That was Miss USA, she tells me. "Can't walk and chew gum at the same time. We're the smart ones, they're the hot ones." She tells me what her platform was: "United we stand, divided we fall behind." "Sure, I could've gone with diabetes," she says. "Many of my family members have it." But because of the way she lives her life, diversity was the only call. She's ready to do another song, which she'll dedicate to me. I request a good diversity song. "We Are the World?" she asks. How about "Ebony and Ivory?" I counter-offer, since world hunger makes for downer party music. She settles for Patsy Cline's "Walking After Midnight," as she's trying to break into the rather nondiverse country music business.

I take a cheese plate to a stand-up table and get down to networking with a guy in a loud Hawaiian shirt, who served in the Special Forces in Vietnam. He's Raymond Jardine of the subtly named Native Hawaiian Veterans LLC, which does not, as it might sound, run Pearl Harbor bus tours, but provides services such as setting up security systems for the State Department. "I'm Hawaiian, and I'm Cherokee," he tells me. "Actually, there's four total designations: 8(a), Small Disadvantaged Business Status, Service-Disabled Veteran Status, and uhhhh, what's the other one? Native status!"

In the "diversity-owned" small-business world, this is the equivalent of a mating call to companies of all sorts, looking to check off their subcontracting diversity blocks for everything from women to disabled-service veterans to every other imaginable minority. It's desirable in the private sector and even more so in the Beltway Bandit government-contracting sector, where lots of business comes in the form of set-asides, specifically designated quotas for these disadvantaged subgroups.

By "disadvantaged," I mean no disrespect. For that is the actual language of the Small Business Administration's 8(a) Business Development program, which equates minority status with having a handicap. To qualify for 8(a) status--what one federal procurement consultant calls the "golden ticket"--companies must prove themselves either socially or economically disadvantaged. And who are "socially disadvantaged individuals?" Well, pretty much every nonwhite person in America, according to the SBA.

It's not just the province of blacks, whom the program, born in the 1960s, was originally intended to help, nor just that of Hispanic or Native Americans. The roll call of SBA-designated sufferers has become rather long and grows ever longer, lately including persons with origins from Samoa, Brunei, Republic of the Marshall Islands, Federated States of Micronesia, Macao, Tonga, Kiribati, Tuvalu, Bhutan, and the Maldives. "In the absence of evidence to the contrary," says the SBA, "individuals who are members" of these "designated groups are presumed to be socially disadvantaged."

But no worries, angry white male. Those who haven't had the advantage of being disadvantaged can also "claim social disadvantage." They just "must establish social disadvantage on the basis of a 'preponderence of evidence.' " This can come in the form of everything from job-application rejection letters to "contemporaneous records memorializing meetings." It explains why a white male former neighbor of mine, who does big construction contracts for the federal government in D.C., would brag to me that he made his female black secretary a business partner: Companies of all hues now seek to collect Rummy hands of disadvantage.

Especially as I had thought Jardine was repeating himself when he said he was both 8(a) and a Small Disadvantaged Business, which seemed a bit like calling yourself both fat and tubby. But the Small Business Administration assures me there are distinctions, they just neglected to clearly articulate what they are. According to the definitions on my DiversityBusiness.com glossary, a certified 8(a) firm is "owned and operated by socially and economically disadvantaged individuals and eligible to receive federal contracts" under the SBA's 8(a) Business Development Program. Whereas a Small Disadvantaged Business concern "is at least 51 percent unconditionally owned by one or more individuals who are both socially and economically disadvantaged." See the difference? Me neither. But as long as it represents more money for everyone from small businesses, to lawyers, to the consultants paid to figure this stuff out, nobody seems to mind.

As one foreign-born diversity consultant tells me one night in the hotel bar when he's in his cups: "All this certification stuff is bulls--. It all happens because Africans were once slaves. But you get well-educated eastern Asians, for instance, who come in and can capitalize on all this. Or a lot of times it's just pass-throughs, big companies hire little minority companies so they can get in under the dollar limit" to win government set-asides for small businesses.

Such coveted status also explains why companies in DiversityBusiness.com's universe, even if they are multimillion-dollar companies, seek to advertise, rather than hide their "disadvantage." So, for instance, it is not uncommon to see press releases such as, "Cherokee Data Solutions is a SBA Federal 8(a) certified, Minority-owned Business Enterprise (MBE), HubZone [Historically Under-utilized Business], Woman Owned and Native-American Owned company." If the federal procurement sphere was a singles bar, the only question that would come next is "Your place or mine?"

The next morning, the sassy black television judge Glenda Hatchett is set to open the festivities. Assuming all television judges know each other, I ask her how Judge Wapner's trusty sidekick on The People's Court, Rusty the Bailiff, is doing, and if she has any plans to use him on her new show. "Get a diverse team!" she jokes. (Sadly, I find out later Rusty actually died in 2002, which would lend a sort of diversity to the proceedings that even the Small Business Administration doesn't provide for.)

The registration desks and vending tables are thick with minority-owned business advertising flyers, as well as those from places like the Department of Labor. "We've got stimulus money to spend!" a DOL carny barks at passersby. "We're giving out contracts!" Indeed, as Ralph Thomas, a contract lawyer who came to the conference to lecture on teaming agreements says to me, always, but especially under the free-spending Obama administration, "The government contracts industry is as close to being recession-proof as possible."

I pick up an armful of reading in case the conference gets slow, magazines brimming with minority-solicitation ads from the likes of the Secret Service, the LAPD, and the CIA. They have titles like Hispanic Network Magazine and the Black EOE Journal. Their pages are full of people accepting prestigious awards for promoting diversity, like the coveted Utility Marketplace Access Partnership award from the National Association of Regulatory Utility Commissioners. These magazines also carry inspirational business profiles, like a cover story on Stedman Graham, who is "Building Visions and Foundations for a Successful Future," which you too can do by dating Oprah.

I take a seat in the cavernous Fantasia ballroom next to Kimberly Ganem, who's a systems engineer with Raytheon. The leader of their diversity council couldn't be here, so she's come to "absorb information" and take it back. We make polite diversity small talk. She's Italian and Lebanese-American, and I'm part Italian too. Already, we have plenty of mutual disadvantage to celebrate.

But Ganem doesn't just stick with her own. She belongs to just about every group imaginable. At Raytheon, "I'm on the board of the multicultural/multilingual one because I'm multicultural," she says. She's a member of RAYBEN, the Raytheon Black Employee Network. And HOLA, the Hispanic something-or-another--she can't remember all the acronyms. "I'm also a part of the Asian-Pacific group, a woman's network--I have to think, there's so many of them. I'm part of a group that's for gays, lesbians, transsexuals, and allies. Just people that support them," she says, so I don't get the wrong idea. I tell her I didn't make her for a trannie. "You never know," says the black woman sitting next to her. "I was watching Tyra Banks yesterday, and oh my goodness, they looked better than most women!"

Ganem says she goes to all the foreign-language presentations, even though some of the languages aren't spoken in any countries where Raytheon does business. "Teach me a swear word in Hindi," I beg. She doesn't know any. But they have different language libraries. "I keep the Asian-Pacific one at my desk," as well as a "Hindi language learning CD." Her schedule's pretty full, as a result of all these memberships. Cinco de Mayo's coming up, so she has to attend the presentation on what that "means to the Mexican culture." For Black History Month, there was the costume contest to see who had the best African attire. Her Asian group likes to have successful Asian professionals come in and talk "about their journey." Also, they're having a dragon boat race this weekend. Last year, they had two or three practices for it. This year, they had six.

I tell her this all sounds like loads of multicultural fun. But when does she find time to actually--how to put it, uhhh--work? It's mostly done on her own time, she says, but also a good many are lunch events. Plus, she adds, "I get training credit for some of it. It doesn't look bad." Just then, she smacks her head as though she's been horribly negligent, reaches for a pen, and scribbles down another Raytheon diversity group to which she belongs: the YESNet Young Employee Support Network. "That's one I forgot," she apologizes.

The presentations are largely tiresome. Kevin Brown, the chief procurement officer at Dell, fire-hoses us with lots of inspirational/managerial paperback pap. "I see a roomful of dreamers and game-changers," he says. He quotes a lot from his betters as cover for the rhetorical mediocrity: Oliver Wendell Holmes, Michelangelo, Emily Dickinson, who said, "We never know how high we are, till we are called to rise."

Judge Hatchett is awed. "You really ought to write a book," she tells him.

I think he already did and I read it. It was called Bartlett's Familiar Quotations. (Excellent, incidentally.)

Phoebe Eng, vice chair of the Ms. Foundation for Women whose writings can be found in collections such as That Takes Ovaries! Bold Females and Their Brazen Acts, has us chant "We have arrived!" Eng propounded elevating diversity concerns beyond the realm of the warm'n'fuzzies. "What if we started to retool the bottom line itself?" she asks. What if to gain business, companies "were obligated to meet a blended bottom line, a term of art that is rising in the corporate dialogue? Where a measure of economic bottom line has to dovetail with social-benefit bottom line. .  .  . If you didn't meet that criteria, you aren't worthy of the support. Wouldn't that be interesting?" She says this will be a slow process. Not that slow, it turns out: "In five years time, we're going to see this required on our SEC reports."

She probably explained how we could better enforce this, which I'd be able to pass on if I hadn't become distracted mapping out my next year's calendar with the help of an invaluable resource I picked up in the lobby, The Source Book of Multicultural Experts. Black History Month, I was down with already. But now June's shot, because I'm all booked up with Gay and Lesbian Pride Month, and I'll probably have to take my kids trick-or-treating in November, because October is National Disability Employment Awareness Month.

The real star of the show, however, is former supermodel and current supermom, Kathy Ireland. The anticipation of her arrival is probably best articulated by a young female photographer who points to Ireland in my program, saying: "I want to sleep with her, and I'm not even a lesbian."

A spank-bank staple of every 16-year-old boy in America during her Sports Illustrated swimsuit days, the 46-year-old Ireland's moved on from bikinis. She's produced fitness videos. She's written numerous books like Real Solutions for Busy Moms (first solution: hire a ghostwriter). But most important, she's become a $1.4 billion empire, with her Kathy Ireland Worldwide brand. If you like Ireland, and moms everywhere do, you can now buy anything from her from furniture to socks.

Recently, she garnered some rare negative publicity when photos ran showing her after a 25-pound weight gain. Her taxed baby tee made her belly look like a half-digested goat that had been partially swallowed by a python. But she's slim again. And while she unfortunately did not show up in a swimsuit, she did wear a smart pantsuit with black cowboy boots.

"Let's talk about challenge," she intones, with her helium-kissed baby voice. "Let's tell the story of a little girl who had no reason to believe that she'd ever be joining you here today." That little girl, you might have guessed, was her. For though on her face, the billion-dollar entrepreneur, who rose from the trying circumstances of a multi-million-dollar supermodel, might seem to have it all, she too has seen disadvantage. When she took on a paper route as a kid, a really mean man told her it was a boy's job.

She thanks that really mean man today. Because he inspired her to overcome. Just like the people in that song. So that now, everybody throughout the world can buy Kathy Ireland's scented, time-released aloe vera lo-cut socks, with an arch brace for support, and a deeper heel cup for added stability.

And we all, in the certified 8(a) disadvantaged community, have experienced rejection, God knows. But as Ireland says, "We can't let that rejection destroy us. We cannot let that rejection define us. We cannot allow it to cause us to become a bitter brand."

I no longer nurse the schoolboy crush I had on Ireland. I've grown up and have moved on to other things, like supermodel Alessandra Ambrosio (a diverse pick, I might add, as she's Brazilian). Still, I kneel next to Ireland at the book-signing table, and ask her with the whole of corporate America fighting for their financial hides, will such absolute emphasis on diversity fall by the way? She fixes me with an intense gaze, her crystalline irises betraying not even a hint of doubt. "That's why events like today are so important," she says. "Because it brings it to the top of minds, the necessity and importance. It's important to me. It's important to God."

Ireland, it turns out, is a woman of faith. I, coincidentally, am a man of faith. As persons of faith, I thought about exploring that vein, asking her if she read the part in the Bible about God's Chosen People, who enjoyed the Old Testament equivalent of Pentagon set-asides--and who didn't have a lot of supplier diversity procurement officers seeking to do business with the Philistines. I let it drop, however. She has a plane to catch.

Her words stay with me, though, words such as: "Each person here is a hero." Judging by the number of awards given, Ireland is only slightly exaggerating. There are "Champions of Diversity" awards, awards for Top Businesses and Top Organizations for Multicultural Business Opportunities. Every year, company names are submitted online so that DiversityBusiness.com can give awards to the top 500 women-owned businesses, top 500 small businesses, and top 500 diversity-owned businesses in the United States, which are further expanded to the top 100 in each category, in each state. There are hundreds of awards for disabled-veteran businesses, disabled-owned businesses, and 8(a) businesses. And that's just a partial list.

A few back-of-the-envelope calculations, and I figure out that DiversityBusiness.com's main business seems to be the awards-giving business. They give them every year, and this year no less than 2,700 of them. I start to feel self-conscious, as I am one of the only people in the room who hasn't won some kind of diversity award. When carrying food from a lunch buffet back to our table, three out of the five people I'm eating with have award plaques waiting for them next to their name cards, as though they are chargers meant to sit under the salmon plates.

And if you don't think these are important to companies, you haven't read their press releases. Even companies about to go down the chute, like Chrysler (a regular DiversityBusiness.com winner which filed for Chapter 11 bankruptcy during the conference), constantly extol their supplier-diversity awards and initiatives, no matter how minor or obscure. In a 2006 press release publicizing its DiversityBusiness.com Top 50 Diversity Corporations award (one they earned by doubling the dollars spent with minority suppliers from $1.7 billion in 1998 to $3.8 billion in 2005), Chrysler also listed 56 other diversity awards it had won since 1998, coming from such distinguished entities as the Wisconsin Minority Supplier Development Council and OnWheels magazine.

While watching the assemblage take photos with Ireland and Miss America, proudly clutching awards that almost everybody else had too, one entrepreneur drove home to me how important they were.

Karen Caruso, the white, female founder of Mind Your Business, a company that performs background screenings, just saw her company named one of the top 100 women-owned companies in North Carolina by DiversityBusiness.com. She was inspired to start the company 15 years ago after watching a "Nightmare Nannies" episode of Oprah, and now Mind Your Business does background checks for clients such as the Washington Metropolitan Area Transit Authority. Caruso stresses, "We've never been awarded a contract based on our female status. NEVER. EVER." Of course, when I ask her how much business she's gotten since the award was announced, she turns to an employee, asking, "We've signed on how many clients in the last four weeks?" Fourteen, it turns out. She says business is up "probably 35 percent" as a result of the publicity during the worst recession in recent memory. And they haven't even applied for 8(a) status, what Caruso calls "the Maserati of procurement," though "we'll have certification by the end of the year."

I turn to a white, male employee of Caruso's, named Michael Kaplan. He recently used the award publicity to sign up an energy company in Texas. I ask him, as a white male, what he thinks of such exploitation of Caruso's woman-owned status. "I think its great!" he says. "From my perspective, it's wonderful, it's an opportunity to make a tremendous living."

I ask Caruso if it's fair that your average white male Beltway Bandit has to compete with everyone they compete with, but is not allowed to compete for no-bid set-asides. Aren't white guys essentially playing a game in which they don't have access to the entire-field? Caruso twists up her face, leans in close to mine, and says, "Wahhhh! Wahhh! Wahhhh! How many years have women and minorities been playing on that same field?"

Kaplan laughs and elbows one of his colleagues, motioning at me as if I'd picked a fight with the wrong woman. "He didn't know," he says.

That evening I drink with two hearty businessmen. One is an Indian software mogul with a thick accent, named Shre Thammana. He jokes that he doesn't get out of bed for "less than $5,000 an hour." His Connecticut company, Virpie Tech, is worth about $20 million (in the bar, he picks up all the checks, and we don't protest). The other is his friend, Dan Robinson, manager of global purchasing and market access for Xerox, which means he is essentially in charge of finding suppliers with diverse backgrounds. He is black and has a dry-witted, hang-dog demeanor.

Robinson is constantly on the lookout for suppliers like Thammana. But not just like Thammana. As Robinson explains Xerox's diversity initiatives to me while nursing a Bacardi and Coke, what becomes clear is that Xerox has gone about as diverse as you can possibly get--by shipping roughly 80 percent of the jobs responsible for producing their components over to China. "Well," I say mockingly, "I guess that's diversity."

It is, Robinson says: "There are 55 minority groups in China," and Xerox belongs to the national minority-supplier development councils. He can't name the Chinese minorities, but by God, some of the jobs that aren't going to American minorities are at least going to Chinese ones. Now that's a commitment to diversity. Xerox, he explains, is on the cutting edge. "We have the LGBT, the lesbians and gays. This is the one area of opportunity we continue to work at."

I say surely a company like Xerox can't be looking for vendors based on their transgenderhood. But I am wrong. "Oh yeah," says Robinson chipperly. "I go to their business expos." I look at Thammana in disbelief, and ask if he'd ever pretend to be transgendered to get Xerox's business. "No way," he says, though he adds, "Once they form a polygamy group, then I will be part of that! Talk about diversity. I love women in all shapes, sizes, and colors!"

Thammana emphasizes that he is there to network and gain business, possibly from Robinson, but not to dunk his biscuit in the minority gravy boat of 8(a) government contracting, which he seems to detest as a form of welfare. To get it, he says, "They need to know if I was discriminated against and accent that. A lot of people will write baloney. They make up fake stuff. So I don't want to do that. You have to be a disadvantaged person. C'mon! I'm not disadvantaged. I'm very happy and grateful for what this country has given me."

Indeed, Peggy Norris, a private-sector contract consultant who used to work on the government side in procurement, tells me that another consultant, after getting one of her clients through the 8(a) process, told her he could get her the certification as well, since she's from West Virginia. Another 8(a) guru I found after the conference, Vincent Villa, whose website is literally 8aguru.com, says he once got a woman through 8(a) certification who claimed a sexual harassment disadvantage. "She did wear dresses you could have said were revealing," says Villa. "And she had big tits. But so what? .  .  . You shouldn't be looking!"

The next morning, on the final day of the conference, organizers have slated sessions with procurement spokespeople from government agencies coaching attendees on how to get business. But a golf outing is concurrently scheduled. The latter seems to clear out most of the white people. "The golf course--that's where I have my impact," one white guy from a Philippines-based call-center business tells me.

After listening to a representative from the Army & Air Force Exchange Service talk about how they "have very strong diversity-spend goals," I fall into conversation with Phil Dorsinvil, the wiry black owner of Fleet Doc Inc., a professional fleet management service, which he describes as "a cross between a Triple A and a local repair station." Dorsinvil has a machine-gun delivery, speaks knowledgeably and assuredly about whatever he addresses, and relates the details of his entrepreneurial ascent.

After graduating from school, he thought he was headed toward a career in the hotel and hospitality industry. But he had a change of heart and taught himself auto and truck repair. "Everything's on the Internet these days," he says, as though it's no big deal to learn how to repair a schoolbus. He now has five garages, has brought on a female partner who specializes in finding more environmentally friendly vehicle maintenance options, and works so hard and long that he's lucky to see his children. He often leaves before they wake up, and returns well after they've gone to sleep. "Which is why we're going to Disney now," he smiles, the guilty father.

Dorsinvil feels like a man who is on the verge of something larger. His challenge is finding someone as driven as he is who can do the work he's currently doing, so he can manage more effectively. He has designs on going national, has applied for his 8(a) certification, and for months now has been clocking the bidding process, waiting for his spot. He's put out trial bids elsewhere for practice, hoping he doesn't get them, just to get the feel. He believes that he's now ready and is about to bear down on a $5.76 million contract to service the entire bus fleet at West Point.

Dorsinvil is smart, capable, bold, and has any number of the attributes you need to be a successful entrepreneur. His business has gone gangbusters without the benefit of preferential treatment, and in an open market, he seems like the last guy you'd want to compete against, whatever your color might be.

I don't ask him if he feels disadvantaged. To do so would almost seem an insult after all he's just told me. Nor do I make him for a cynic, though he's obviously not above gaming a system that invites cynical exploitation.
So I rib him a little instead. "Let me get this straight," I say. "You're a minority-owned business. You've partnered with a woman, and she's gone green .  .  ." I don't finish my thought, before a broad smile crosses Dorsinvil's face, as though he's holding three aces, and the fourth one could be next out of the dealer shoe. "All I need is a disabled vet," he jokes, about the surreal advantages of being disadvantaged, "and I'm in the money."

Matt Labash is a senior writer at THE WEEKLY STANDARD.