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Aldermen fear setting aside contracts for gay-owned businesses could lead to fraud, fewer contracts for people of color

The City Council signed off on a study of the idea proposed by Chicago’s first openly-gay mayor.

Jerome Holston, director of the LGBT Chamber of Commerce of Illinois, talks to the City Council’s Committee on Contract Oversight and Equity on Tuesday about a mayoral study that could be a prelude to gay set-asides. On the left is Jonathan Lovitz, senior vice president of the National LGBT Chamber of Commerce. On the right is Julie Langrehr, general counsel for the city’s Department of Procurement Services.
Fran Spielman/Sun-Times

In 2007, Adam Sandler and Kevin James made a movie about a pair of New York City firefighters who pretend to be a gay couple to secure health insurance coverage for one of their children.

Ald. Walter Burnett (27th) on Tuesday made reference to that film, “I Now Pronounce You Chuck and Larry,” during a City Council debate about the possibility of creating set-asides for gay business owners in Chicago.

Chicago’s first openly-gay mayor has ordered up a study that, she hopes, will be a prelude to revisiting the politically-volatile idea of giving gay-and-transgender-owned businesses a leg up on city contracts.

Sixteen years ago, Ald. Tom Tunney (44th) broached the subject of gay set-asides only to drop the idea like a hot potato after plenty of pushback from inside and outside the gay community.

Critics argued then that Chicago already had contract earmarks for businesses with owners of color and women and that carving out another piece of the pie for gay-owned companies would benefit one rather privileged group: gay white men.

The same controversy surfaced Tuesday before the City Council’s Committee on Contract Oversight and Equity agreed to launch the mayoral study.

Burnett said he was worried about the possibility of someone fraudulently claiming they were gay to take advantage of the program.

“I think about that movie about the two firemen where they were faking like they were gay …to get benefits. That’s a concern of mine. How do you distinguish that?” Burnett said.

Burnett noted the controversy has been a hot topic on black talk radio ever since Lightfoot proposed the study.

“They’re concerned this is another way for white males to get more contracts. … That was the same concern that some African-Americans had about white women being considered a minority. And after that, we started getting fraud where white women were fronting for white males. We found a lot of corruption,” Burnett said.

“Women are already considered a minority. African Americans, Latinos and Asians — all of them are considered a minority. The only ones in the LGBT arena that are not considered as a minority is the white male.”

Ald. Jason Ervin (28th), chairman of the City Council’s Black Caucus, was equally concerned about fraud and about the possibility that gay set asides would come at the expense of African Americans.

“There have been a lot of groups that have bandwagoned on the pain and suffering that our community has faced historically throughout our existence,” Ervin said.

“When it comes down to procurement and dollars, I do have some concerns [about] …creating a situation where individuals could fraudulently assert themselves to be something that they’re not in order to get a financial gain [by claiming] something that has a lot of subjective qualifiers, but there truly is not an objective point ... to affirm someone’s sexuality.”

Little evidence of fraud, business group says

Jonathan D. Lovitz, senior vice-president of the National LGBT Chamber of Commerce, argued that fraud concerns are unfounded.

“In 20 years of certifying with every major Fortune 500 company that you can think of, we’ve yet to come across a situation where there was fraud of any kind, misrepresentation of any kind, because the certification process is so thorough,” Lovitz said, noting that a “photo with my boyfriend” is nowhere near enough.

Lovitz argued that similar programs across the country demonstrate that gay-owned businesses “don’t participate unless you call out a community by name and add that check-box ... to procurement programs the way you do women, people of color, veterans, etc.”

Lovitz said California saw a 240 percent increase in certifications of LGBT business enterprises (LGBTBEs) when the state launched its program.

“These weren’t people who picked up and moved there. These were businesses who were living there the entire time who said, `You finally see me.’ You called me out. I’m willing to share my data,’ “ Lovitz said.

Discrimination against gay and transgender people is still not illegal nationwide, he said.

“There’s only 15 states in the entire country where an LGBT person can walk into a bank [to] get a loan and not be threatened with discrimination from a bank manager and have it be perfectly legal.”

Lovitz argued that the Chicago study is only “the beginning of step one” toward gay set-asides.

“You have cities like Nashville, Los Angeles, Baltimore, Tampa, Orlando. All of these other cities have skipped this part and immediately said, `On day one, we need to start recognizing this community, accepting the certification and letting you right into the procurement program,’” he said.

“This is years in advance of that.This is thoughtful, conscientious study in close partnership with the city. For all of the reasons you just laid out, we want to be methodical about this.”

Lightfoot has made no bones about her desire to create gay set-asides in addition to the 26 and 6 percent of city contracts already earmarked for minorities and women.

But the resolution approved Tuesday is only a first step.

It calls for technical assistance and training programs to build capacity and “increase the potential for successful bidding on city projects.”

More importantly, it states that the city’s Chief Procurement Officer, in consulting with the Department of Law “shall gather all relevant data that may assist the city in determining the need for a citywide program to promote opportunities in city procurement for LGBTBEs.”

The resolution sets a Sept. 23 deadline for submitting a written report to the mayor.

Julie Langrehr, general counsel for the Department of Procurement Services, said Tuesday it’s too soon the say whether the study will be a prelude to meeting the rigid burden of proof — a documented history of past discrimination — that the U.S. Supreme Court has long demanded to justify contract set-asides. That depends on what the data shows, she said.