On paper, the plan to recruit companies owned by minority-group members and women to work on the $205 million addition to McCormick Place seems to be a model.
The affirmative-action strategy, drawn up last year by the convention center`s governing board, contains more than 100 pages of goals and procedures.
A recent status report says the effort is on target, with 20 percent of construction funds flowing to minority-owned firms and more than 2 percent to companies owned by women.
The report predicts that by May, 1986, when the new annex, across Lake Shore Drive from McCormick Place, opens, minority- and woman-owned firms will have won about $30 million worth of subcontracts.
In practice, however, the McCormick Place ”set-aside” program raises difficult questions, not about the desirability of spreading more public-works dollars to blacks, Hispanics and women, but about the results of such programs.
For instance, does the awarding of a contract to a firm that lists a black as its majority owner guarantee that blacks, as a group, will benefit?
How can any government screen out minority ”fronts”–firms set up by whites solely to satisfy set-aside requirements or companies created by blacks who turn the work over to white tradesmen?
Those questions have taken center stage in Chicago now that Mayor Harold Washington has urged that 30 percent of city contract dollars go to firms headed by minority group members or women.
The McCormick Place expansion is being built not by the city but by the Metropolitan Fair & Exposition Authority. The governor and the mayor each appoint 6 people to the 12-member board.
To win a piece of the $175 million in construction work, white-owned firms must both underbid competitors and team up with subcontractors or suppliers whose ownership is at least 51 percent in the hands of minority group members or women. The remainder of the project`s cost goes to pay consultants and others.
In some cases, low bidders without minority subcontractors have been disqualified and contracts let to higher-bidding firms that had the requisite number of minority-owned firms on their team.
McCormick Place officials do not check ownership but rely on lists of qualified minority- and female-headed companies maintained by Illinois`
highway construction program and by the city`s Purchasing Department.
”We don`t go out and investigate who`s who,” said F.R. ”Rick” Duran, the convention center official in charge of the project. ”We just check to make sure the prime contractors pay the required amount to firms on the state and city lists.”
But a closer look at some of the firms working on the McCormick Place project shows that fine distinctions of race and sex may not mean much in a construction industry in which ownership is often blurred.
In one case, a small, black-owned steel erection firm has strong connections to a much larger, white-owned company that does the same type of work.
In another, a trucking firm that hauls steel to the site qualifies as a
”women`s business enterprise” because the married couple who run the company switched ownership from husband to wife.
Another female-owned construction firm is technically headed by a 73-year-old woman who inherited the company years ago from her husband`s estate. But even her son acknowledges that she has turned day-to-day operations over to him and other white male directors, including the law partner of a Democratic ward committeeman.
And there is the case of Louis Jones, the black construction executive who until recently was ”project director” for Schal/McHugh, the white-owned partnership hired to oversee all McCormick Place construction. At the same time, however, Jones` company, Louis Jones Enterprises Inc., was a
subcontractor to O`Hare Associates, a partnership that includes the Schal firm and is supervising the expansion of O`Hare International Airport.
Jones did not respond to a reporter`s telephone calls, but other minority contractors were quick to explain and defend their claim of minority status.
”I`ve been in ironwork for 18 years and in business for myself for 11,” said Glen Harston, whose Archway Steel Construction Co.`s $4.9 million subcontract is one of the larger awarded to a black-owned firm on the McCormick project.
But Harston says he once worked for, and later rented office space from, Midwest Steel Erection Co., a white-owned firm that has worked on numerous public works here, including the new State of Illinois Center.
Harston now works out of an office at 2118 S. Michigan Ave., the address carried by the city`s registry of minority firms. But state corporation records list Archway at the Midwest Steel location, 440 W. 43d St.
Records show that the two firms have the same attorney-agent, Thomas Carey, an officer of Midwest Steel whose family owns Hawthorne Race Course in Stickney. They also show that Midwest Steel`s president, Robert Zahorik, was a cofounder, with Harston, of Archway.
But Harston, who is president of a group called Black Contractors United, insists that he owns 60 percent of his firm`s stock, and is buying more from his white partner.
”My credentials stand on their own,” said Harston, whose capabilities as a contractor were praised by other black construction executives interviewed. He conceded that finding enough black ironworkers to fill out his construction crews is difficult but said 48 percent of workers on the McCormick Place project are black.
Harston agreed, however, that there is no shortage of ”front” firms in the Chicago area. ”Sometimes you see office clerks set up these companies. Let`s face it, you`re making $300 a week and somebody comes along and offers you $10,000 to start a company on your own. You`re going to take it.”
If the independence of some minority-owned firms is open to question, the existence of husband-wife or mother-son ownership arrangements makes female-owned status doubly hard to pin down.
”I put more money in it than my husband, and I have all the capital as of now,” said Dorothy Lashmett, president of Lashcon Inc., a Downstate trucking company that hauls structural steel to the McCormick Place site. State records show that she took over as president in a 1980 reorganization in which her husband, Jack, was demoted to corporate secretary.
”I`m just as much a part as he is,” Mrs. Lashmett contended. ”I always handle the inside, and he always handles the field.”
A mother-son ownership arrangement is what qualified NU-Way Contracting Corp. as a female-owned enterprise.
”We fall well within the definition, well within the letter of the law,” said Richard Kruse, part-owner and secretary of the firm, which is doing more than $1 million worth of work on the McCormick Place project.
He explained, and state records verify, that his late father willed half the company`s stock to his mother and split the remainder evenly among three children, including himself, a brother and a sister, who now lives in California.
”My mother and sister own more than 60 percent of the stock,” Kruse said.
