Fraudulent “Disadvantaged” Businesses Taint City Set Aside Program

Three subcontractors on City of Chicago contracts worth millions of dollars have been accused in federal criminal complaints of defrauding the taxpayers by falsely claiming to have worked as certified woman owned or disadvantaaged businesses for which a percentage of work is set aside in City of Chicago contracting requirements. Perdel Contracting and Accurate Steel Installers, owned by Elizabeth Perino of Lockport and Diamond Coring, owned by Anthony Cappello of Homer Glen, are accused of submitting false invoices and purchase orders in support of minority and disadvantaged business set aside requirements on City of Chicago contracts with major Chicago area construction businesses.

In addition to evidencing how deeply political corruption runs through Chicago and Illinois public contracting, these criminal informations, unsealed last week, demonstrate that the laudable policy goal of making the American construction industry more minority and gender inclusive is often corrupted in the execution, to the considerable disadvantage of both the public and those honest business owners who go to the trouble of obtaining proper minority or woman owned, and disadvantaged business certifications from government agencies, and then submit genuine bids to general contractors to work on federal, state and local government projects.

Energy Policy Nightmares Will Stall Construction Investment

Congressional confusion and infighting over the details of national energy development policy continue to stall investment in all forms of energy production construction, and will continue to do so until there is a clear policy direction from Congress and the administration. Republican leaders, including Senator John McCain and Senate Energy and Natural Resources ranking member Lisa Murowski are pushing for inclusion of nuclear electric power plants in the definition of "renewable energy" which Congress wants to mandate for more than 20% of electric power production. Senate Energy and Natural Resources Chairman Jeff Bingaman has excluded nuclear power from his version of the "renewable energy" definition. McCain points out that the Obama administration and Senate Majority Leader Harry Reid want to scrap the $11 billion already invested in development of the Yucca Mountain disposal facility for spent reactor fuel rods.

Meanwhile, infighting over the details of carbon cap and trade legislation, and unintended consequences of earlier hastily passed "alternative fuel" legislation are eating up the time and resources of Congressional staffs which should be formulating a forward looking energy policy direction for the country. Tax incentives for "alternative fuel" production passed in 2005 have allowed paper mills to take enormous unintended "alternative fuel" tax credits for mixing a few tablespoonfuls of diesel oil with the black liquor pulp production byproduct they have burning to generate power for paper mills since the 1930's. Recent Congressional efforts to close what many environmentalists see as a tax loophole are strongly opposed by the ailing U.S. paper industry, which says mills will have to be closed and workers laid off if the industry is stripped of this tax benefit. To further complicate matters, Canadian paper mills are complaining to their government that the tax break is an unfair subsidy to American mills over their Canadian competitors.

Until Congress can wake up from these nightmares and work with the administration on formulation of a consistent, well thought out energy policy for America's future, this sort of thing will make investment in construction of new power plants and alternative fuel refineries a very iffy proposition at best, and construction businesses and trades workers who could be building these facilities of the future will continue sitting on the sidelines and collecting extended unemployment benefits.

US Housing Policy Favors Rent Checks Over Construction Investment

In a speech to the annual conference of the National Low Income Housing Coalition in Washington, D.C. on Tuesday, HUD Secretary Shaun Donovan announced that the Obama administration's new focus on housing for lower income Americans will shift away from home ownership and towards rent subsidies for families too poor to afford home ownership. Donovan told the Coalition that the $14 billion in spending appropriated for low income housing assistance in the American Recovery and Reinvestment Act will be divided into a $1 billion investment in the National Affordable Housing Trust Fund, which pays for construction and rehabilitation of low income housing units, with the remainder of $13 billion being devoted to extended housing aid to Katrina victims and additional Section 8 rent subsidy payments for occupants of existing rental housing units. While this allocation of the money by HUD may be good news for low income housing renters, it is certainly bad news for the construction industry.