Mayor Muriel Bowser and Ward 2 Councilmember Jack Evans are pushing a $5.9 million tax break for an international company that has a history of racially discriminatory hiring practices in D.C.
In 2016, Chemonics International agreed to pay nearly $500,000 to settle a U.S. Department of Labor finding that the company denied jobs to qualified African-Americans. The DOL found that of the 124 African-Americans who applied for entry-level jobs in 2011, none were hired.
Earlier this week, Evans proposed the Bowser-backed tax abatement for Chemonics, which currently employs about 1,200 people between its two offices in the District and Crystal City. The abatement, Evans argues, would lure the company to establish a new headquarters in the District and could potentially bring 500 new employees.
Some councilmembers expressed concern about the DOL’s finding, and At-Large Councilmember Elissa Silverman introduced an amendment to quash the deal. The underlying bill includes an abatement for EAB Global. Silverman’s bill would remove the abatement for Chemonics.
“We haven’t had time to vet them,” Silverman said from the dais. “Maybe they’ve changed their hiring practices, so let’s vet them before we vote to give them a tax abatement.”
Evans has scheduled a public roundtable for Dec.12, which seemed to satisfy councilmembers for now.
“I don’t want to foreclose the possibility of the 600 employees of this company, together with perhaps 600 more employees who would move here, would be lost to the District,” Ward 3 Councilmember Mary Cheh said from the dais. “So I’m taking a cautious approach here.”
Silverman’s amendment failed, and the Council ultimately passed the underlying bill by a vote of 8-2. Silverman and Ward 8 Councilmember Trayon White dissented; At-Large Councilmembers Robert White and David Grosso voted present. Ward 5 Councilmember Kenyan McDuffie did not attend Tuesday’s meeting.
In response to councilmembers’ concerns, Chemonics has said that it did not have the capability to effectively track applicants in 2011, but has since installed a new system and updated its hiring practices.
“We have improved our ability to track applicant data, which in turn has allowed us to better gauge our efforts to recruit and employ a workforce which reflects the diversity of the community in which we live and the communities in which we work,” Chemonics president and CEO Susanna Mudge wrote in a letter addressed to Evans.
The letter also attempts to refute Silverman’s earlier assertion that Chemonics “systematically excluded African-American job applicants,” saying “the audit did not reveal any statistical anomalies at any other level or in any other parts of the company.”
According to the company’s internal data, 63 percent of its D.C. employees are women and 39 percent identify as racial minorities.
Deputy Mayor for Economic Development Brian Kenner says he is satisfied with the steps Chemonics has taken to address the DOL finding, adding that there have been no related issues in the time since.
“This company that has been located in the District is considering its options and could leave the District, which would take tax revenue out of the District,” Kenner tells LL. “This is an opportunity to secure that they’re staying here.”
In exchange for the millions in tax breaks, Chemonics would agree to employ at least 1,000 people, 500 of whom must be D.C. residents. The company would also agree to sponsor at least four diversity-related nonprofit events and would agree to develop a tech training program for District high school students through the Summer Youth Employment Program, according to a preliminary copy of the deal obtained by City Paper.
Chemonics is a huge private development consulting firm and has received a $9.5 billion contract with USAid, according to Devex. The Guardian has reported on other potential problems with Chemonics, including an audit of a $196 million contract to help rebuild Haiti in after the 2010 earthquake. The audit found Chemonics had hired only one-third of the Haitians it was supposed to.