Obama Administration Shuts Down Minority Biz Dev Offices

Obama Administration Shuts Down Minority Biz Dev Offices


Officials from the Commerce Department briefed members of Congress yesterday to inform them that the Obama Administration plans to close all five regional Offices of the Minority Business Development Agency.

According to members at the briefing the reason given was cost savings. The Office of Minority Business Development has a total budget of $30 million dollars. The five regional offices are located in Atlanta, Chicago, Dallas, New York, Los Angeles and San Francisco.

The Office of Minority Business Development‘s mission is to promote competitiveness and provide access to capital and contracts to minority businesses.  In 1969 Richard Nixon established the Office of Minority Business Enterprise by executive order.  During the Carter Administration the name was changed to the Office of Minority Business Development.

Present at the meeting with Commerce officials were Congressional Hispanic Caucus Chair Charlie Gonzalez (D-TX), Congressional Asian Pacific American Caucus Chair Judy Chu (D-CA) and Reps. Grace Napolitano (D-CA), Judy Chu (D-CA), Mike Honda (D-CA), Yvette Clarke (D-NY), Bobby Scott (D-VA), G.K. Butterfield (D-NC) and Bobby Rush (D-IL) among others.

Several members were unhappy with the decision.

“It sends the wrong message to entrepreneurs and businesses in our community at this time when we need to have an expansion,” Rep. Bobby Rush (D-IL) said.  Rush offered legislation to increase funding to the Minority Business Development Agency.

“This is message administrating, message management and message politics. It doesn’t have anything to do with the bottom line. The best message is one of expansion of the MBDA so it can do its work and meet its mission on the ground level and on the local level on the front line,” Rush added.  Rush added that he has had a great working relationship with the regional office in Chicago.

Rep. G.K. Butterfield (D-NC) who is a member of the House Energy and Commerce Committee said, “I’m terribly upset about this. The explanation we received yesterday did not satisfy my objections.” Butterfield indicated strongly the offices are important to minority businesses.

“My regional office is in Atlanta. To just have a hub in Washington that services the whole country will not be an efficient use of that office,” the North Carolina congressman and longtime state judge added. Butterfield’s sentiments were repeated by other members.

Asked whether this was something that could effect minority business contracting Butterfield said, “Without question. It will lead to nothing but utter confusion. All in the name of 30 million to 29 million. So it’s not a substantial cut in the agency. Not enough to close five offices,” Butterfield added.  Several members mentioned that the “cost savings” argument was unsatisfactory.

Congressional Black Caucus Chairman Emanuel Cleaver said he has a regional hub in Kansas City.  Cleaver was not at the briefing and was generally unaware of the details of the decision.  He was unenthusiastic about the office running out of Washington. “People in Washington have no idea what’s going on in Kansas City and St. Louis and DesMoines and Omaha,” he said.

House Small Business Committee member Rep. Yvette Clarke (D-NY) was also very concerned saying she feared the regional closings might be, “the beginning of the demise of the agency.”

When the views of his colleagues were relayed to him, CHC Chair Charlie Gonzales said he shared the concerns of his colleagues.  He added, “Where do you see the model that is being proposed in other areas that provide services to minority communities? Just about every meaningful agency and department has regional presence — SBA has regional offices.”

Rep. Allen West (R-FL), who is a member of the House Small Business Committee was unaware of the decision to close the offices but echoed the sentiment of several Democrats. West said he was concerned because, “we have to do something about urban economic development.”

Rep. Jose Serrano, a senior member of House Appropriations was unaware of the regional office closings but said generally, “it would not be a good idea” if the offices were closed.

Several members who attended the meeting expressed concern about the regional offices closing and were unenthusiastic upon hearing the news.  The members cited concerns that contracting for minority business is already challenging and may be made even more problematic by the closings.

Rep. Maxine Waters (D-CA) who added language to create an Office of Minority and Women Inclusion to the Dodd–Frank Wall Street Reform bill, commented on the closings.

Like many other members, Waters was unsure of what the effect of the closings would be.  She said she would talk to business leaders in her district saying, “I’ll be calling my Chamber of Commerce people” and several others. Waters was not at the briefing but had heard of the closings before yesterday’s member briefing.

Rep. Nydia Velazquez (D-NY) who is the ranking Democrat on the House Small Business Committee said the move was an effort to consolidate offices and bring “things under one umbrella.”  Though Velazquez was not in the briefing with Commerce officials she was aware that the five offices would be closed.

Several members pointed out that the the work of the regional offices might be best done on the local office level but still fear the office closings would effect minority businesses.  They were also concerned about whether the current employees will be reassigned to local offices or cut completely.  Rep. Butterfield said he’d been told the employees could possibly relocate to Washington.

Several members of Congress sent a letter dated February 10 to Commerce Secretary John Bryson expressing concerns on minority business efforts and the Minority Business Development Agency. The meeting yesterday was effectively the answer to that correspondence.

Neither Secretary Bryson or the National Director of the Minority Business Development Agency, David Hinson was at the member briefing. The press contact for the Offices of Minority Business Development was unavailable at the time of this filing.

LAUREN VICTORIA BURKE, Politic365 Chief Congressional Correspondent, publishes the blog Crewof42 on the Congressional Black Caucus.  She is heard every Tuesday on WMCS 1290 in Milwaukee on Earl Ingram’s show The Evening Rush as well as on WHUR and WPFW in Washington DC. You can follow her on twitter at @crewof42


  1. When will blacks stop propping up the democratic party which is still by and large run by eastern white elites? 15% black unemployment and nothing from Obama, Reid or Pelossi. All Americans are hurting, yet we keep importing more foreign workers. VOTE.

  2. Too bad this article is full of egregious errors and portrays the members as ill informed cry babies. Maybe they would prefer MBDA was simply abolished.

  3. This is very unfavorable. These ofcs were created to ensure and increase competitive fair gain in the world of business. Minority biz were unable to get proper opportunities due redlining, marginaling and many other tactics including lack of training and devlp. These ofcs are hubs and clearinghouse for minority to get assistance they need to survive and thrive. These ofcs have served as Watch Towers to ensure compliance in the contract/bid sectors affording greater oppty for SMBs, MBE, LSBE to gain access to supply chain, logistics and many other oppty. This is a major concern. Rb

  4. There are 35 MBDA offices. The Obama Administration has proposed closing five, but just closed a bid window for 3 *new* offices in Houston, TX, the state of Louisiana, and either Tennessee or Mississippi. It's possible the regional offices in question have become redundant, given several factors.

    I'm starting to wonder if any of the contributors to this site do their homework.

    • You must be assuming that 8 members of Congress — including a senior member of the Small Biz Committee in the House — haven't "done their homework" either…

      • I don't know whether they have or haven't. Have you thought to ask them?

        The report here notes their reaction to the closure of 5 MBDA regional offices, but doesn't say anything about the opening of new offices, or whether any of them know about the opening of new offices.

  5. Been in corporate purchasing capacity for more than 30 years. Fact is regardless of the agency program really does not work. The decision of whom to purchase is determine by the local buyer not by policy makers.
    All Fortune Companies Diversity Spend Initiatives has this disclaimer. We reserve the right to purchase from any supplier regardless of MWOB program at the time of purchase. Houston Oil Industry annual spend average 300 plus Billion. Minority spend all groups less than 8 percent. Black less than 1 %.

    I suggest…Don’t depend on set-a-sides earn a side with on time delivery with competitive pricing. Buyers are graded and on cost savings.