Drafting Reagan administration's blueprint for aiding minority business
Victor M. Rivera faces a thankless charge on behalf of the Reagan administration. His job is to prove to the nation's skeptical minorities that President Reagan will support economic progress for the nation's blacks and Hispanics.
The federal government will continue its support of black and minority enterprise "with vigor" and with slightly increased financial support, says Mr. Rivera, Mr. Reagan's appointee for director of the Minority Business Development Agency (MBDA).
Two months ago Reagan told the national convention of the National Association for the Advancement of Colored People (NAACP), "Just as the Emancipation Proclamation freed black people 118 years ago, today we need to declare an economic emancipation."
With these words the President hoped to convince a polite, but unbelieving audience that his administration is committed to helping black people and other minorities make economic progress.
"Prove it with action," says civil rights critics as they express outrage over what they call an "overdosage of budget cuts" for human rights and social service programs supported by the federal government in the past.
The NAACP, the National Urban League, and Operation PUSH (People United to Save Humanity) have held conventions this summer, and all have labeled "Reaganomics" as "insensitive" to the needs of minorities.
As head of MBDA, the one agency specifically established to help the nation's minority-owned businesses, Mr. Rivera says, "We shall advocate for minority business, and we shall help these firms acquire mainstream, nonminority owned operations available for acquisition."
Advocacy will be the basic tool of the MBDA, says Rivera, a Puerto Rican born in the Bronx whose parents ran a neighborhood store. "We shall advocate expansion through acquisition of going operations, through support from major corporations, through upgrading of management skills, through technical help from the public sector," he said.
Acquisition is the new thrust.
A month ago the MBDA announced that it has contracted three consulting firms specializing in acquisitions -- Duff & Phelps Inc. of Chicago and Arthur Young & Co., and Watson, Rice & Co. of Washington, D.C. -- at $200,000 each -- to help where needed, he says.
"We support acquisitions," Rivera says, "because they give monority firms a bigger piece of the pie, and the more they grow, the more people they hire."
Although black businesses are growing because they are "getting back to basics," says Black Enterprise magazine, they still need a boost from the federal government.
Stephen Gayle wrote in the June 1981 issue of Black Enterprise, "Black businesses dependent on government contracts should beware the ideologues in Washington who would drastically reduce aid to small-business men."
In that issue, which featured the 1981 Black Enterprise "Top 100" black businesses, publisher Earl Graves noted that federal programs to help black businesses "were formed because of the failure of the private sector to address all the needs of the minority entrepreneurial community." He added that small minority firms still must enter the mainstream of American business to be truly successful.
As the only federal agency specifically geared to help minority entrepreneurs , the MBDA has survived the Reagan budget cuts.
Rivera says he cautiously accepted the MBDA post after working more than a decade with the Small Business Administration (SBA).
"I did not jump to accept this position," he says. "First, I looked at the budget. The President did not reduce our funds. Second, I wondered whether he was sincere. President Reagan wants minority people to expand their economic operations. This is not a social program; this is business.
"Third, I wanted minority firms to develop jobs, to be effective in reducing unemployment, which hits minorities twice as hard as it does the general population. MBDA can help minority firms expand and diversify, thus creating more jobs."
But MBDA is not "all peaches and cream," says Mr. Rivera. He suggests these issues to be resolved:
* Legislative authorization. The MBDA was established in 1971 by an executive order from President Nixon. Its original name was the Office by Minority Business Enterprise. The agency was placed under the aegis of the US Department of Commerce. The MBDA still owes its existence to presidential executive order. Rivera believes the MBDA would have more clout if Congress established it as a line agency of the US Department of Commerce.
* Broader outreach. MBDA activities are targeted toward the nation's 100 largest standard metropolitan statistical areas, in which are located 77.6 percent of the nation's minority-owned firms. This leaves out the nearly 25 percent of minority businesses located in areas not serviced by the MBDA, says Rivera. MBDA operates regional offices in New York City, Chicago, Atlanta, Los Angeles, Dallas, and Washington, D.C.
* Stable budget. The MBDA's fiscal 1982 budget of $57.4 million represents a slight increase over its fiscal 1981 budget. The $1.5 million gain is earmarked for the $35.2 million Office of Enterprise Development.