Loose Lips

Gray Asks Foxes to Arrange CBE Henhouse

Mayor Vince Gray has been seeking reforms to the embattled Certified Business Enterprise program for nearly nine months now and so far has precious little to show for it.

The beefed-up enforcement of CBE rules and regulations by the Department of Small and Local Business Development that Gray announced in October? The department is still staffing up to do that, its director, Harold Pettigrew, said today.

A set of legislative fixes that Gray said would improve the program? Gray vetoed a bill last month that contained many of the provisions he sought, because he says the D.C. Council's changes to his bill made it unworkable. (Also, several business groups pushed hard for Gray to veto the bill.)

So what's a mayor to do? Gray's response was to announce at a news conference today that he's asked 17 "prominent business leaders"  to form an informal "advisory group" to guide Gray as he crafts new CBE-reform legislation.

Sounds reasonable, except that Gray's panel will be full of individuals with ties to companies that have either ignored CBE rules or actively helped companies that critics say have purposely and improperly gamed the CBE program. 

Take Rod Woodson, one of Gray's favorite lobbyist and a partner at Holland & Knight. Woodson has worked for two out-of-District construction companies that have drawn the ire of D.C. councilmembers. Woodson represented Virginia-based Sigal Construction, which forms joint ventures with District-based GCS Construction on city school projects. Both companies share employees and are owned by the same person: Gerry Sigal. Since the whole purpose of CBE-certified joint ventures is to help local companies build capacity, one could very reasonably argue that this arrangement between GCS and Sigal subverts the program's intent. In fact, that's what the city argued in 2010, when it try to decertify GCS-Sigal's CBE status, an effort Woodson successfully fought off. Councilmember Vincent Orange has said he's asked the city's inspector general to look into how GCS-Sigal joint ventures are able to qualify as CBEs.

Woodson has also represented Forrester Construction, whose joint venture partnership at Anacostia High School was the subject of a Washington City Paper cover story by LL and has been called a "scam" by the Council. The D.C. attorney general is currently investigating whether the city will sue Forrester for violating the CBE program.

Also on Gray's advisory panel is Deryl McKissack of McKissack & McKissack and Natalie Ludaway of Leftwich & Ludaway, two firms that City Administrator Allen Lew has given enormous leeway to manage many public construction projects, including public school construction. Those two firms either missed or ignored CBE-related problems for Forrester, Sigal, and other firms. In fact, in the Forrester case, one Leftwich & Ludaway attorney tried use $250,000 in public funds to make the problem go away.

Asked about these members of his advisory group, Gray replied: "I'm satisfied with the group we have."

Photo by Darrow Montgomery

  • Drez

    I suppose one way of increasing compliance with the law is to allow those who regularly break it to rewrite it to suit thier convenience.

  • B

    this isn't about those contractors. when does the government employee who let's this happen get named or fired? The money comes from the government. Who is saying these fraudulent bills can be paid?

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  • A CBE

    The first thing Study group should do is change the program to Local Business Certification..Let the CFO certify Local Companies and only ones allowed should be the ones who have paid real DC Taxes for last 2 years. No Joint Ventures allowed only subcontracting..Allow Local companies to buy shares in big city developments. Give first opportunity for Local Business to bid on the projects and if the company is within budget with 12 points then qualify and then award..Keep it simple and it will bear good taxes..and if it does reduce Local Citizen tax...

  • LOL

    B -

    Easy answer to your question(s): Allen Lew

  • Citizen Cope

    Fired? Lew should be indicted!

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