News Column

Wash. State Minority-contracts Director Resigns Under Fire

May 10, 2012

Brad Shannon

Washington state seal

The director of Washington state's minority-contracting agency has resigned amid complaints about the agency's performance and allegations of fraud. Cathy Canorro sent Gov. Chris Gregoire her resignation letter today.

The resignation comes after a series of problems at the Office of Minority and Women Owned Business Enterprises, including Canorro granting a no-bid contract for $65,000 to a consultant and separate television reports about fraudulent contractors.

The alleged fraud involved contractors certified to be eligible for a share of government contracts because they were minority or women-owned, but that should not have qualified. Several state ethics investigations are under way involving the agency.

Gregoire spokeswoman Karina Shagren said no decisions on the future of the agency have been made.

"A structural review of OMWBE is still underway, as is a top-to-bottom performance review. Once those reviews are complete, we'll have a better idea of how the state will conduct the duties of OMWBE moving forward," Shagren said in an email. "In the meantime, a search will begin to identify candidates to replace Cathy."

In her letter, Canorro said her resignation takes effect June 1 after a 21-year career at the agency, which she said "has not been without struggles" that predated her brief time as director. She said the agency has been making "strides" but that much is left to do.

"Now is the time to pass the reins to a new leader who can continue to turnaround the agency."

Progress or not, customers of the agency have not been happy about its operations.

The OMWBE certifications are required by federal law. They not only help small businesses get a piece of government contracts but are relied on by general contractors, governments and others who must meet federal requirements for giving a share of subcontracted work to historically disadvantaged groups.

Gregoire gave Canorro and her agency an order on April 17 to shape up or face being broken up.

Gregoire's very public ultimatum came just before KING-5 television began airing reports detailing allegations of fraud by certified contractors. KING today said the resignation came a day after its third installment of reports about fraud at the agency.

Three weeks ago Gregoire threatened to carve out a portion of OMWBE's work to let the state Department of Transportation do its own certifications on major transportation projects. DOT had been asking to do that for more than a year, due to problems getting timely and accurate certifications.

OMWBE entered into a contract in February 2011 with DOT pledging to meet terms of a corrective action plan. It had been failing for as long as five years to complete certifications on time for the DOT, which is one of OMWBE's biggest customers, accounting for 25 percent to 30 percent of its work. After a report showed OMWBE was slipping again after showing progress last year, Gregoire put the agency on notice.

"In my estimation ... time is up. Change has to be made," Gregoire said in her blunt, televised exchange with Canorro during a meeting of Gregoire's GMAP, or Government Management Accountability and Performance program last month.

Source: (c) 2012 The Olympian (Olympia, Wash.)

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