Verdict on J.E. Dunn's minority hiring put off again
Wed., May. 27 2009 @ 4:50PM
The Kansas City Tax-Increment Financing Commission delayed a final judgment on J.E. Dunn's alleged use of front companies to meet minority hiring goals during its construction of H&R Block's world headquarters.
Allegations that Dunn overreported minority participation on the Block project first surfaced in a 2005 lawsuit filed by a group of Hispanic contractors. The suit turned up evidence that several minority contractors served as fronts for non-minority businesses. In the most striking example, a minority electrician, Ralph Rodriguez, repackaged a bid from R.F. Fisher with a small markup for "minority participation." Rodriguez later stated in an affidavit that he did not perform significant work on the nearly $3 million contract.
Last December, the city's Human Relations Department concluded that Rodriguez did not perform a "commercially useful function." Dunn representatives said Rodriguez had "duped" J.E. Dunn and H&R Block, the party ultimately responsible for compliance with the affirmative-action policy.
In January, the TIF Commission determined that minority-hiring goals for construction services on the Block project were not met. This left open the possibility that Block would have to pay a penalty.
The Human Relations Department conducted a second investigation and determined that Dunn engaged in tactics designed to "artificially boost" the participation of minority- and woman-owned businesses. Lawyers for Dunn and Block asked for time to respond.
At today's meeting, Block lawyer Allan Hallquist faulted the city's analysis for attempting to determine if "best faith" efforts were made when the development agreement with the TIF Commission called for "good faith" efforts. In addition to making technical arguments, Hallquist tried to suggest Block was not responsible for the "apparent wrongdoing" of Rodriguez Electrical and R.F. Fisher.
Jim Sullivan, Dunn's attorney, had the harder job. Dunn officials handled paperwork in which Rodriguez Electrical's minority status was actually a line item for which the company received compensation. Under questioning from TIF Commissioner Warren Adams-Leavitt, Sullivan conceded that Rodriguez Electrical's 2.25 percent markup looks peculiar in hindsight.
In the end, one question is really all that matters: What did Dunn officials know, and when did they know it?
Was Dunn only aware that Rodriguez Electrical and R.F. Fisher had entered into a "joint venture deal," as Sullivan put it? Or did people at Dunn contract with Rodriguez knowing full well that he would shuffle paper while an R.F. Fisher crew performed the actual work?
The commissioners, alas, withheld judgment. Instead, they instructed Phillip Yelder, the city's Human Relations Department director, to conduct yet another analysis and look at the work performed by other minority subcontractors on the Block project.
After the meeting, TIF Commission Director Joe Gonzales suggested that the commissioners were being cautious in order to gird the verdict against a legal challenge. If the commissioners feel a remedy is needed, Block could be forced to pay millions of dollars.
The commission will take up the matter again at its August meeting.
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Last December, the city's Human Relations Department concluded that Rodriguez did not perform a "commercially useful function." Dunn representatives said Rodriguez had "duped" J.E. Dunn and H&R Block, the party ultimately responsible for compliance with the affirmative-action policy.
In January, the TIF Commission determined that minority-hiring goals for construction services on the Block project were not met. This left open the possibility that Block would have to pay a penalty.
The Human Relations Department conducted a second investigation and determined that Dunn engaged in tactics designed to "artificially boost" the participation of minority- and woman-owned businesses. Lawyers for Dunn and Block asked for time to respond.
At today's meeting, Block lawyer Allan Hallquist faulted the city's analysis for attempting to determine if "best faith" efforts were made when the development agreement with the TIF Commission called for "good faith" efforts. In addition to making technical arguments, Hallquist tried to suggest Block was not responsible for the "apparent wrongdoing" of Rodriguez Electrical and R.F. Fisher.
Jim Sullivan, Dunn's attorney, had the harder job. Dunn officials handled paperwork in which Rodriguez Electrical's minority status was actually a line item for which the company received compensation. Under questioning from TIF Commissioner Warren Adams-Leavitt, Sullivan conceded that Rodriguez Electrical's 2.25 percent markup looks peculiar in hindsight.
In the end, one question is really all that matters: What did Dunn officials know, and when did they know it?
Was Dunn only aware that Rodriguez Electrical and R.F. Fisher had entered into a "joint venture deal," as Sullivan put it? Or did people at Dunn contract with Rodriguez knowing full well that he would shuffle paper while an R.F. Fisher crew performed the actual work?
The commissioners, alas, withheld judgment. Instead, they instructed Phillip Yelder, the city's Human Relations Department director, to conduct yet another analysis and look at the work performed by other minority subcontractors on the Block project.
After the meeting, TIF Commission Director Joe Gonzales suggested that the commissioners were being cautious in order to gird the verdict against a legal challenge. If the commissioners feel a remedy is needed, Block could be forced to pay millions of dollars.
The commission will take up the matter again at its August meeting.
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