Getting it twisted
Getting caught in the heart of the division within communities. Communities of Race, or Communities built on Equity.
BEMA International
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CORONAVIRUS
A COVID-19 relief fund was only for Black residents. Then came the lawsuits.
By JOHN
ELIGON
THE NEW YORK TIMES | JAN 04, 2021 AT 1:07 PM
Black civic
leaders in Oregon heard the alarm bells early in the pandemic.
Data and
anecdotes around the country suggested that the coronavirus was
disproportionately killing Black people. Locally, Black business owners had
begun fretting about their livelihoods, as stay-at-home orders and various
other measures were put into place. Many did not have valuable houses they
could tap for capital, and requests for government assistance had gone nowhere.
After convening
several virtual meetings, the civic leaders proposed a bold and novel solution
that state lawmakers approved in July. The state would earmark $62 million of
its $1.4 billion in federal COVID-19 relief money to provide grants to Black
residents, business owners and community organizations enduring
pandemic-related hardships.
“It was finally
being honest: This is who needs this support right now,” said Lew Frederick, a
state senator who is Black.
But now
millions of dollars in grants are on hold after one Mexican American and two
white business owners sued the state, arguing that the fund for Black residents
discriminated against them.
The dispute in
Oregon is the latest legal skirmish in the nation’s decades long battle over
affirmative action, and comes in a year in which the pandemic has starkly
exposed the socioeconomic and health disparities that African Americans face.
It has unfolded, too, against the backdrop of the Black Lives Matter movement,
with institutions across America — from corporations to city councils —
acknowledging systemic racism, and activists demanding that meaningful steps be
taken to undo racial inequities.
A COVID-19 relief fund was only for Black residents. Then came the lawsuits.
THE NEW YORK TIMES | JAN 04, 2021 AT 1:07 PM
Nkenge Harmon Johnson, the president and chief executive of the
Urban League of Portland, in Portland, Ore., Dec. 28, 2020. The State of Oregon
earmarked $62 million to explicitly benefit Black individuals and business
owners. Now some of the money is in limbo after lawsuits alleging
discrimination. (Tojo Andrianarivo/The New York Times)
Politicians,
social scientists and jurists have long clashed over how far the government and
institutions should go to repair the harm caused by racial discrimination — and
the extent to which past racism should influence today’s decisions. In creating
the Oregon Cares Fund, lawmakers took the rare step of explicitly naming a
single racial group as the beneficiary, arguing that Black residents have been
subjected to unique discrimination that put them at a disadvantage during the
pandemic.
Over the
decades, various remedies to address discrimination have been met with legal
challenges. Supreme Court rulings have established that race-based policies are
constitutional only if they achieve a compelling governmental interest and are
narrowly tailored to do so. The court has most notably allowed race to be used
as a factor in college admissions to achieve student diversity. But the court
in recent decades has also sided against one of the original rationales for
affirmative action policies — to undo past discrimination and its lingering
effect.
“You have to show that there’s this
really close nexus between why you’re using race and the outcome you’re
seeking,” said Melissa Murray, a professor of law at New York University. “And
I think here it’s going to be a real question as to whether funding just Black
businesses through this Cares fund is actually the only way that you could
address the problems that Black Oregonians have experienced during this
particular period.”
In Oregon, the
stakes are dire. Nearly $50 million worth of grants have been awarded, but a
court has frozen $8.8
million, the remaining amount minus administrative costs, until the litigation
is resolved, a process that could take years.
With Congress having recently
extended the deadline to the end of this year for states to spend their CARES
Act funds or return what remains to the federal government, some worry that
lengthy litigation could mean the money is lost for good.
Oregon’s long history
of anti-Black racism has fueled much of the advocacy for the state’s fund. And
while other racial groups have said they supported it, critics have argued that
Black people are not the only ones who have faced discrimination in the state.
Some Black
residents, who make up about 2% of the state’s population, said that argument
was a distraction.
“As a state, as a country, it is
unusual for us to provide adequate resources to Black people,” said Nkenge
Harmon Johnson, president and chief executive of the Urban League of
Portland. “For some folks, it’s shocking, it’s distasteful.”
But Edward
Blum, a white conservative activist whose organization, Project on Fair
Representation, is underwriting one of two lawsuits challenging the fund,
said the opposition was about preventing racial exclusion.
“It is like, in the employment arena,
going to apply for a job and seeing a sign on the employment office that reads,
‘No Asians need apply,’” said Blum, who has led efforts to challenge race-based
admissions policies at universities, including a high-profile case against
Harvard. “Your race and your ethnicity should not be used to help you or harm
you in your life’s endeavors.”
Walter Leja, a
plaintiff in one of the lawsuits, said he might be on the verge of laying off
employees from Dynamic Service Fire and Security, the small electrical services
company he started in Salem in 2007, if he did not receive relief money soon.
An earlier loan of about $20,000 from the federal Paycheck Protection Program,
he said, was just enough to cover payroll for about two months.
Leja, who is 64 and white, said he could not say whether historic discrimination put Black business owners at a disadvantage. But a particular fund, he said, was not warranted.
“It’s discriminatory,” he said. “It’s
locking up a bunch of funds that can only be used by Black businesses when
there’s a ton of other businesses out there that need access to those funds.
It’s not a white or Black thing. It’s an everybody thing.”
That lawsuit
— a class-action case led by Leja and the white owner of a logging
company, Great Northern Resources, based in the city of John Day — is one of
two that challenges the fund. The other, underwritten by the Center for
Individual Rights, a nonprofit law firm advocating limited government,
involves a Mexican American owner of the Revolucion Coffee House, in Portland,
who has claimed discrimination.
Many of today’s
economic and health disparities stem from past policies and practices that were
explicitly racist, some social scientists say, arguing that measures aimed at
particular races were necessary to undo the damage. But courts have set a high
bar for allowing the clear use of race in legislation. To get around the legal
hurdles, policymakers tend to rely on proxies for race — like ZIP codes and socioeconomic status —
when designing measures they hope will benefit marginalized racial groups.
But Akasha
Lawrence Spence, a state representative, said subtle measures were not enough
for the current crisis. Specifically targeting Black Oregonians for relief was
an important step in forcing people to grasp the effects of racism, she added.
“This fund says that we understand that
for no other reason than the color of your skin, you have been restricted and
prohibited from accessing the tools to economically mobilize,” she said. “For
that reason, we’re not going to create any veiled language. We as the Black
community are tired of that.”
Supporters of
the fund argued that the $62 million accounted for about 4.5% of what the state
received, leaving plenty for residents who are not Black. They also noted that
other COVID-19-related funds were tailored in a way that allowed them to almost
exclusively benefit particular racial or ethnic groups — a $10 million fund
created by the state that largely benefits Latino immigrants in the country
without permission and one created by Portland officials to aid a district of
largely Asian-owned businesses.
Designing measures in that way to target Black residents would be difficult and fail to have a significant impact, they said.
Oregon’s
history of racism predates its statehood. As a territory in 1844, it passed a
law banning African Americans from settling there.
The state’s
Black population ballooned in the 1940s as many Southerners migrated West for
jobs in the wartime industries. Like in many other parts of the country, the
new Black settlers in Oregon were restricted to certain areas. In 1990, 80% of the state’s Black population was
confined to two ZIP codes in Northeast Portland, according to
Stephen Green, a Portland native and former banker.
Banks and other investors
largely avoided doing business in those communities. Residents were
also displaced when parts of those neighborhoods were razed at different times
to build a highway, a sports arena and a hospital.
That history
robbed many African Americans of opportunities to build wealth, historians say,
a legacy that continues. The racial wealth gap in Multnomah County, which
includes Portland, is larger now than it was 40 years ago, with Black residents
holding fewer assets than other racial groups.
In 2019, Black Oregonians received four
of the 984 loans that the Small Business Administration issued statewide, according to
The Portland Business Journal.
Without traditional banking relationships,
Black business owners often have had to reach into their own pockets or seek
other avenues to finance startup costs, civic leaders said. That left many
unable to get pandemic relief loans offered by the federal government because
the loans required going through lending institutions.
Early in the
pandemic, various indicators appeared to show that Black businesses were
suffering more severely than others. A Stanford University study found that the
number of Black business owners nationwide dropped by 41% from February to
April, compared with a 32% decrease for Latinos, 26% for Asians
and 17% for white owners.
Lawyers
defending the Oregon Cares Fund have argued that the state has a duty to ensure
that the distribution of COVID-19 relief funds does not perpetuate the disparities
Black residents face. That means targeting Black residents for relief because
other efforts to address inequality have failed, said Janelle Bynum, a state
representative who is Black.
“Without that intentionality, without
them actually caring that the money flows through our communities, they’ll
never have to do anything to change the status quo,” she said. “I’m not OK with
that.”
But some legal
scholars and a lawyer for the state Legislature said the fund could violate the
14th Amendment’s equal protection guarantees.
Clark D.
Cunningham, a law professor at Georgia State University, was dubious of the
14th Amendment claims. About a month after the amendment passed Congress in
1866, those same politicians reauthorized the Freedmen’s Bureau, an agency
meant to primarily help formerly enslaved African Americans, he said.
“The idea that, in this case, a lumber
company could use the 14th Amendment as a weapon to prevent the descendants of
slaves from receiving an economic benefit in a time of disaster is utterly
inconsistent with the historical context,” Cunningham said.
In Portland,
Joy Mack said the pandemic rekindled the stress she felt when she opened the
Jayah Rose Salon in 2008. She and her husband, an engineer, are both Black and
solidly middle class. But after visiting more than 10 lending institutions to
try to get startup funding, she received only two loans, she said. One of the
lenders kept asking for more financial information, so they eventually walked
away from the relationship.
In trying to
keep her hair salon afloat amid the pandemic, Mack, 45, said she applied for a
forgivable federal government loan but was turned down because she had about
$5,000 in tax debt. She got a $5,000 grant from the city and a $10,000 disaster
loan from the federal government. She also has had to take out lines of credit.
Mack eventually
received a grant from the Oregon Cares Fund. Although she would not say how
much she received, she said it saved her from having to close down under the
weight of tens of thousands of dollars of debt.
“Honestly,” she said, “that is what
just helped us get over that COVID hump.”
c.2021 The
New York Times Company
Leja, who is 64 and white, said he could not say whether historic discrimination put Black business owners at a disadvantage. But a particular fund, he said, was not warranted.
Designing measures in that way to target Black residents would be difficult and fail to have a significant impact, they said.
