Drive for More Minority Contracts : Mergers Targeted for Affirmative Action

A leading civil rights lawyer said Monday that his firm is preparing federal legislation that would require businesses seeking government approval for mergers to submit along with their applications “effective affirmation action” programs similar to those recently set for California’s largest utilities.

Robert Gnaizda of the San Francisco-based Public Advocates Inc. also said a drive will soon get under way to extend to a variety of other businesses last week’s agreement with six of the state’s largest utilities to set a five-year goal giving 20% of all their contracts to minority- or women-owned firms.

Gnaizda said a special focus should be placed on defense industries because they largely depend on federal dollars and should be subject to stringent regulation making sure that they practice fair employment and procurement policies.

Gnaizda said these measures would be a quick way to extend billions of dollars of new business opportunities to economically disadvantaged groups. A precedent exists, he said, in requirements that banks and other financial institutions seeking mergers demonstrate that they have served the entire community.

Private Meetings Scheduled

Gnaizda is scheduled to speak privately to 40 affirmative action officers of large California corporations, including defense contractors, oil companies, banks and utilities, at a Los Angeles meeting today on the implications of last week’s agreement.

The setting of the 20% goal by Southern California Gas Co., Southern California Edison Co., Pacific Gas & Electric Co., San Diego Gas & Electric Co., Pacific Bell and GTE of California came four months after civil rights groups represented by Gnaizda had asked the state Public Utilities Commission to order executive salaries frozen unless substantial affirmative action progress was made.

Gnaizda said that minority business enterprise programs set up by the Reagan and other national administrations have proved such dismal failures that he is convinced that any new administration taking office in 1989--no matter whether Democratic or Republican--will be seeking new means of encouraging economic development among minorities and women.

Last week’s utilities agreement envisioned $1.2 billion in annual contracts being given by 1993 to firms owned at least 51% by minorities or women. Gnaizda said he hopes to extend this to $20 billion in California alone by including other kinds of businesses.