Bob Johnson, Billionaire founder of BET, notes that white consultants control access to capital for venture funds seeking pension fund investments. Diamond Ventures filed a $100 million discrimination lawsuit against SBA by not approving Diamond's black management team while allegedly approving similar or less skilled white management teams. Senators Kerry and Snowe have held hearings or inquired to SBA on why more blacks and minorities are not approved to run SBA licensed venture firms and why approved firms finance few blacks and minorities. The House will take up the issue in upcoming hearings. Kerry and Snowe announced new legislation.
Washington, DC (PRWEB) June 25, 2007 -- Billionaire Bob Johnson, discussing access to capital from pension funds who traditionally invest in venture funds in the June issue of Black Enterprise, lamented that pensions funds are controlled by consultants who are "almost all" white companies with "white employees."
The article quotes Johnson noting that pension funds will give you a "little bit" of money while a "significant" amount of pension money comes from black and Hispanic workers. With all of Bob Johnson's accomplishments in BET, RLJ, the NBA Charlotte Bobcats, and other ventures, he has a similarity to a tiny venture firm waging a war against SBA for discrimination in its venture capital program that provide access to capital for mostly new venture firm managers. The SBA has ignored court rulings, rebuffed U.S. Senators who have inquired into the program's licensing activities for the Small Business Investment Company (SBIC) program, and even sought to change its court proposed protections to look at materials that would potentially expose why it typically doesn't invest in or select managers for it's venture capital programs who are Black, Hispanic, Asian-America, Women, or minority owned.
Diamond Ventures, a majority black-owned investment group that focuses on investing in inner-city underserved areas, maintains that SBA has reserved SBIC funds for white managers and companies run by white men.
Diamond filed a $100 million discrimination lawsuit against SBA in 2003 (Diamond Ventures, LLC V SBA-Case #03-1449) and is in protracted litigation to know why with 70 years of experience and having done over 1,000 financings it can't be approved to run a venture capital firm like its white counterparts.
"We wonder what SBA is hiding," said C. Earl Peek, one of Diamond's managers. "You have asked for the information dozens of times,'" said U.S. Attorney Alan Burch. Joshua Rose, Diamond's legal counsel stated, "We were hopeful to get the records and perform a review for bias and discrimination after a July 2006 Appeals Court approved SBA's proposed procedures to confidentially review the information."
"The impact is in the hundreds of millions in underinvestment of capital to deserving firms," said Robert Green, former president of the National Association of Investment Companies (NAIC), the main trade association for minority and women led firms.
Senator John Kerry, D-Mass., Chairman of the Small Business Committee held hearings in May on minority contracting and access to capital. Diamond was the only firm noted in litigation against SBA for discrimination and lack of access to capital. SBA denied Diamond a license saying that "community impact was not an objective of the program."
See SBA comments at http://www.diamondventuresllc.com/news/SBA%20Comments.pdf. Senator Kerry and Senator Snowe, R-Maine jointly introduced legislation Friday to expand the SBIC program for investing in Low-Moderate Income Communities.
See announcement at http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/06-21-2007/0004612937&EDATE=.
Diamond has been contacted by the General Counsel of the House Small Business Committee to examine its matter as part of a upcoming hearings on the SBIC program, said a source close to the matter. Senator Orrin Hatch, R-Utah, has asked SBA to "to address these concerns beyond the pursuit of litigation."
The SBA Inspector General found serious fault with the agency's review and consideration of Diamond's application concluding that "SBA managers did not use appropriate policies, procedures and criteria in processing Diamond's application or even in rejecting it", and cited numerous areas where SBA even added criteria "that it did not apply to other teams".
See the Inspector General report at http://www.diamondventuresllc.com/news/InspectorGeneralReport.
# # #
Trackback URL: http://www.prweb.com/pingpr.php/WmV0YS1NYWduLUxvdmUtQ291cC1UaGlyLVplcm8=
|
