Spencer Flip-Flops on MWBE Program, Questions Remain
After weeks of pushback from minority contractors and the public, the city has abandoned its previous plan to discontinue race- and gender-based hiring and procurement goals for projects with city financing. The mayor’s newly released executive order appears to shelve the city’s previous plan to move towards a “community-centered” program that wouldn’t include explicit goals around race and gender. A month previously, Mayor Spencer released an open letter that stated, “Enforcement actions may be brought against not just the City, but also its hardworking employees and anyone who signs a grant agreement while the City implements programs with race- or gender-based goals. Such penalties include fines and imprisonment.” This followed an earlier announcement by St. Louis Development Corporation (SLDC) that it was halting new certifications for the program.
At the time of the program’s suspension, Mayor Spencer told St. Louis Public Radio, “We have some discretionary allocations from FEMA. We have discretionary allocations from Community Development Block Grant funds. We have debris removal and a whole host of other things that we are looking to the federal government to provide us and to provide our residents to get through this exceptionally trying time. If we don’t get these funds, I don’t see how we’re going to be able to rebuild our community.” The city then retained the services of a high-profile, Atlanta-based law firm to craft a new system that would meet the Trump administration’s anti-DEI demands.
What changes happened?
This latest decision is a dramatic about-face for the Spencer administration and appears to be a major victory for minority- and women-owned contractors who stood to lose out on millions of dollars in revenue. Instead of the dramatic change to a “race- and gender- blind” program, the MWBE ordinance will be updated to note that the goals for projects are set on an individual contract basis, rather than in a blanket manner. The latest executive order does not specify a new process to determine these individual contract diversity goals. Rather, the executive order states that the new program “shall attach M/WBE subcontractor goals on a contract-by-contract basis consistent with the recommendation of Keen Independent Research in its 2024 Disparity Study.” This would seem to indicate that there will be little to no functional difference between the new program and the previous iteration.
Both the mayor and local NAACP leadership believe that this tweak will be all that is needed to survive a challenge by the Trump administration. The St. Louis Post-Dispatch reports the mayor stating, “I feel very confident that this is on sound legal ground.” For his part, NAACP leader Adolphus Pruitt told the Post-Dispatch that he believed the tweak “provides a level of assurance,” while the President of the Board of Aldermen told the Post-Dispatch, “most of us who were grumpy with the initial decision are happy with this one.”
What questions remain?
As the study’s findings will be used to set these goals, it is unclear how this will differ from the previous program. It is also unclear why the administration and allies believe that this seemingly minor change in process will shield it from the Trump administration’s drive to eliminate Diversity, Equity, and Inclusion (DEI) programs. The updated rule in no way stops the usage of racial or gender in setting contracting and procurement goals for city-funded projects, seemingly leaving it open to challenge by the Trump administration.
Just weeks ago, the mayor’s office justified the mayor’s legally questionable decision to stop the program, stating that continuing it might “subject the City to monetary damages or loss of federal funding” and that the mayor was “duty-bound” to end the program. Presumably, the mayor is now no longer concerned that using race and gender to set hiring goals will run afoul of the Trump administration. This follows Attorney General Pam Bondi’s letter stating that “Using race, sex, or other protected characteristics for employment, program participation, resource allocation, or other similar activities, opportunities, or benefits, is unlawful, except in rare cases where such discrimination satisfies the relevant level of judicial scrutiny.” Why the mayor’s office believes this new formulation will avoid challenge is unclear, as just weeks prior she stated that the city had to take drastic action due to what her letter called “escalating changes in guidance from the federal government”. The mayor’s office was twice asked for comment on this reversal, but declined to respond.
Above and beyond the questions of how this functionally differs from the previous program, questions of the legality of the mayor’s actions continue. The ordinance setting out the MWBE program does not allow the mayor to unilaterally change the program. The program’s previous suspension was without action from the Board of Aldermen, potentially putting the city in jeopardy of lawsuits from firms seeking certification. Likewise, the mayor’s new executive order seems to rest on questionable legal grounds. It is unclear why the mayor’s office believes that this executive order supersedes the existing ordinance. The ordinance codifying the MWBE program did not have a provision allowing the mayor to unilaterally change or stop the program, barring a court ruling invalidating the program. For the program to be legally changed, the Board of Aldermen must take action. To this point, the text of the new executive order explicitly states that it will lapse “on the effective date of such legislation adopted by the Board of Aldermen.” The President of the Board of Aldermen’s office has not responded to our questions about a timetable for the introduction of a new ordinance matching the executive order.
The biggest non-legal question remaining is who in the mayor’s inner circle convinced her that this course of action was prudent. Neither Kansas City nor the Missouri Department of Transportation suspended their programs. Like most jurisdictions, they appear to be waiting for the result of court challenges to the Trump administration’s interpretations of the nation’s civil rights laws, which is the basis of its anti-DEI campaign. This shows that the city’s leadership was a clear outlier compared to the two other Missouri agencies that provide certification for these programs.
Repercussions still to come?
While many welcome the administration’s change of course, the reversal carries its own potential hazard. It is unclear how the Trump administration will respond, given that the city has now decided to very publicly defy the Trump administration’s drive to end race- and gender-based hiring and procurement programs. This concern was aired by former school board member and current African American Business and Contractors Association spokesperson David Jackson in the Post-Dispatch, which quoted him as saying, “I just can’t see the administration not smacking St. Louis. It’s like we just played a game with them.” When contacted for further comment, Mr. Jackson responded, “First, the Mayor never did issue an Executive Order to pause the program, so one is definitely not needed to restart it. Secondly, there’s two issues here: the City Law relating to MWBE Inclusion on City construction projects and then there’s the component of the law, which is the MWBE Certification Program, which was paused. I believe because of the press and the ill advisement given to the Mayor, the Federal Government is preparing a penalty for restarting the MWBE Inclusion.” He concluded the email stating, “I’m expecting the City will receive a letter from the Department of Justice, the US Attorney issuing a Cease and Desist letter regarding the restarting of the MWBE Law, or face Federal penalties regarding any Federal Funding assistance.”
