The latest hurdle thrown in the path of California's high-speed rail project arrived Wednesday when a statewide group of minority-owned companies and small businesses demanded the federal government pull $3 billion from the initiative.
The complaint filed with the U.S. Department of Transportation on Wednesday alleges that the California High-Speed Rail Authority "utterly failed" to attract a diverse group of businesses while handing out more than $500 million in contracts.
Although not accusing the rail authority of deliberate discrimination, the Bay Area-based group, a nonprofit coalition, said planners put no effort into advertising and encouraging companies owned by minorities to apply and bid on the contracts. The group said the agency's "laissez-faire" attitude led to an unfair disadvantage to a minority group and that it violated Title VI of the Civil Rights Act of 1964.
They are asking the U.S. transportation officials to freeze $3 billion in federal funds awarded to California, almost all of which is being saved for the start of construction in 2012, until minorities are no longer "left out" of the contracting process.
The complaint also asks the federal government to stop any future grants. The rail authority is hoping for at least $12 billion in additional federal funds this decade to complete the $43 billion line between San Francisco and Anaheim.
The complaint cites the same law used against BART for its Oakland
Airport Connector people-mover project. Federal authorities in February pulled $70 million in stimulus funds from the undertaking after their investigation concluded the transit agency did not adequately study the development's impact on minority communities.
Rail authority leaders defended their record Wednesday, saying they fully comply with the law and that all "contracts are awarded in a very public and transparent manner."
The plaintiffs, an Oakland-based nonprofit called Associated Professionals and Contractors, include minority-owned and small businesses, trade groups and individuals from around the state. Leaders from black, Latino and Asian organizations advocated for their case during a call with reporters to announce the action Wednesday.
Their attorneys at the Lawyers' Committee for Civil Rights of the Bay Area, a San Francisco-based nonprofit that offers free legal assistance, analyzed the 10 biggest contracts the authority has handed out in the past few years. Of the 134 companies given work, 12 were owned by minorities, the complaint says.
In addition, they point to rail authority records that show that $18 million, or less than 4 percent, of $522 million in contracts awarded in the past six years were given to small or micro businesses. Small businesses are likely not covered under the Civil Rights Act, but the attorneys argue that many of them are minority-owned.
"We are frankly appalled at the fact that the high-speed rail is setting upon one of the largest public works projects in the nation and totally excluding minority businesses. This is unconscionable," said Diana LaCome, president of the group and head of the National Concilio of California.
The rail authority issued a statement saying it will form a small business advisory committee and launch a "formal, ongoing process" to connect with all companies before spending $4.15 billion to start construction in the Central Valley in 2012.
"We are proud of the diverse and dynamic team of Californians working hard to build this system, and generations of Californians -- from every community -- will prosper and benefit from it," said Valerie Martinez, the agency's state small business liaison and Southern California outreach manager.
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