Several small business owners testified in Olympia on Wednesday to support a proposed piece of legislation which they say should help them get work on government funded construction jobs like the 520 bridge and the Alaskan Way Viaduct project.
HB 1674 would create a never-before fraud unit inside the Office of Minority and Women's Business Enterprises (OMWBE). That's the agency the decides which businesses qualify for the program, known as the Disadvantaged Business Enterprise (DBE) program. It's set up for small, struggling businesses who have historically been discriminated against, such as minority-owned and women-owned businesses.
"If anyone opposed this bill, 1674, I'm sorry but they must represent firms that abuse the small minority program. Wasting our tax dollars is not an option anymore. Please vote yes," said Elton Mason, who owns a small trucking company.
Last year the KING 5 Investigators exposed rampant fraud in Washington state's DBE program in the series, "Fraud on the Job." KING found some businesses lied, hid assets or acted as pass-throughs to get in and stay in the program. The series also showed that OMWBE was ignoring the state's own reports which provided evidence of the fraudulent activity.
"This legislation recognizes that too many people have been able to game the system. To circumvent the rules without any fear of retribution or punishment," said Rep. Sharon Tomiko Santos, (D) Seattle. Santos is the bill's prime sponsor.
"Fraud on the Job" showed that companies gaming the system were raking in millions of dollars in government contracts while small, legitimate firms were having a hard time getting any work on public works projects.
"It's been a long time coming (this type of legislation). This has been happening for years," said Grover Johnson, a representative of the National Association of Minority Contractors.
The legislation also provides severe penalties that the state could impose for those caught defrauding the government and taxpayers. They range from fines to debarment from state contracting altogether.
"This legislation clearly says if you violate the law, then the agency has at its disposal the tools and the clear authority to enforce the law and in fact to disbar you from the game if you don't play nice," said Rep. Santos.
"I think it's a very good bill and I support it. But it is a shame that we have to bring it up in a special bill to say you will, not you may, but you will prosecute fraud," said Jim Medina, a former Director of OMWBE.