SBA Sued for $100 Million
The NAACP and other consumer and civil rights organizations have joined to advise and monitor litigation in the case which is supported by SBA's Inspector General report which finds bias in the license process in the Diamond case.
The SBA has allegedly rebuffed inquiries on the program by Senator Orrin Hatch, R-Utah, a member of the Senate Finance Committee, and Senator John Kerry, D-Mass, the chairman of the Senate Small Business Committee. In a February 2006 letter to SBA Administrator Hector Baretto, Kerry attacked the abysmal distribution of dollars to firms owned by minorities and women. Hatch asked former Administrator Baretto to address the "concerns...beyond the pursuit of litigation." The new administrator has not responded.
"Study after study finds access to capital is the number one issue in the development of minority and women owned businesses. The root of this is a lack of qualified managers systematically excluded form the very programs designed to invest in and lend to this group," said General Counsel for the NAACP Dennis Hayes. "It's a new paradigm shaped by the ability to finance businesses and create wealth," noted Bruce Gordon, NAACP president. In a reference to Bill Gates, Microsoft founder and Oracle's co-founder and CEO Larry Ellis, Gordon stated that when two people have more business wealth than a nation of 30 million, then something is wrong with making capital meet opportunity and result in the creation of wealth.
The National Community Reinvestment Coalition (NCRC) has recently joined on Diamond's behalf as experts and advisors.
"Access to capital and credit is a basic right," stated Reginald Ritcher, senior vice president of the NCRC. "NCRC has sued banks and various financial institutions for discrimination, redlining, and unfair treatment of minorities and women."
Diamond has won a series of district court decisions since filing the SBA suit, including the request for SBA records on SBIC applications and licensure practices, particularly for minority applicants and Diamond's attorneys will begin an analysis this week of documents of firms that applied and were SBA licensed.
Diamond Venture has the long-term goal of joining with other firms in an effort to finance inner-city, underserved, and women and minority-managed firms that parallel the success of firms like FedEx, Intel, and others that were financed by the SBIC program.
Anthony Robinson, president of the Minority Business Legal Defense and Education Fund (MBELDF), created by former Congressman Parren Mitchell of Maryland, said, "I see no position to support more worthily than to break the hold on capital held by SBA and its Small Business Investment Company venture capital program that has little to no representation by minorities and women."