Utility Awards to Minorities, Women Rise

Times Staff Writer

Southern California’s biggest investor-owned utilities--under intense pressure from state legislators and civil rights groups to strengthen their affirmative action programs--posted a 25% increase last year in their contracting with women- and minority-owned vendors, according to reports newly filed with the California Public Utilities Commission.

One year into a PUC-mandated timetable for giving 20% of their business to such firms by 1993, the six companies, as a group, already have met the goal of spending 5% of their contracting dollars with women vendors. But the reports indicate that they remain far short of the 15% goal for minority businesses.

For the record:
12:00 AM, Mar. 04, 1989 FOR THE RECORD
Los Angeles Times Saturday March 4, 1989 Home Edition Business Part 4 Page 2 Column 3 Financial Desk 2 inches; 44 words Type of Material: Correction
A table accompanying a story on minority contracting at Southern California utilities contained 1987 and 1988 spending figures that were in error. The numbers shown should have been expressed “in thousands.” For example, 1987 spending on white-male owned firms would be $4,040,136,000, not $4,040,136 as shown.

The results--reported by Pacific Bell, Southern California Edison, GTE California, Southern California Gas Co., AT&T; and San Diego Gas & Electric Co.--drew mostly positive first impressions from critics who for years have assailed the utilities for relying on “old-boy” networks of white, male suppliers. (San Francisco-based Pacific Gas & Electric Co., which also is under the affirmative action mandate, has not reported its 1988 performance.)

Asian-Americans’ Share Down


“I’m encouraged, at least by some of the mechanisms that have been put in place in terms of outreach and in terms of the particular goals and commitments from people higher up in the organizations,” said Assemblywoman Gwen Moore (D-Los Angeles), who last year persuaded the utilities’ top officers to commit to the 20% goal.

Together, the six utilities spent 29% more with minority-owned businesses in 1988 than a year earlier and 21% more with firms owned by white women. Of $3.66 billion in total contract spending, they gave $226.9 million in contracts to minority vendors and $194.7 million in contracts to women vendors.

The only minority group whose share of the utilities’ spending fell was Asian-Americans--a result that could stem, in part, from the discontinuation of the practice by some utilities of counting U.S. subsidiaries of Asian-owned firms in that category, Moore said.

All the figures are subject to doubt because the utilities have not cleansed their minority contracting programs of “fronts"--companies owned or controlled by white males that masquerade as minority- or woman-owned. Not until this summer will a clearinghouse, jointly funded by the utilities to verify contractors’ minority status, go into operation.


Pacific Bell and GTE California, the two firms that have conducted the most complete audits of their programs, said they did not count a total of $53 million toward the PUC goals because of questions about certain suppliers’ status.

According to the corporate reports, GTE recorded the biggest gains in 1988. The Thousand Oaks-based telecommunications firm said its contracting with minority-owned firms boomed to $44.5 million from $16.3 million--more than 10% of total spending.

Meanwhile, GTE’s contracts with woman-owned firms jumped from $20.8 million in 1987 to $38.7 million last year, or nearly 9% of the company’s spending.

GTE Accounting Change

While GTE’s minority contracting rose substantially, its spending rose close to the 20% goal, in part because of a corporate reorganization that cut the company’s overall contract spending by nearly half. With lower overall spending, the minority contracting dollars became a bigger percentage of the whole.

That accounting change was one reason GTE’s figures drew a scornful reaction from Robert Gnaizda, the San Francisco attorney who has represented a coalition of civil rights groups in PUC and legislative hearings that pressed for heightened minority contracting by the utilities.

“We don’t believe the General Telephone data is true at all,” said Gnaizda. “I think it makes a mockery of the PUC proceedings and jeopardizes the integrity of the PUC process.”

Gnaizda said the magnitude alone of GTE’s claimed increases in its contracting with firms owned by blacks, Latinos, Asians, American Indians and women made him skeptical of the data’s accuracy. Although GTE said it had not counted $18 million in contracts with firms whose minority- or woman-owned status was challenged by auditors, Gnaizda said it appeared that GTE was continuing to count business with so-called fronts in several categories.


Goal Met

Civil rights groups will ask the PUC to conduct a hearing on GTE’s claims, Gnaizda said. If the achievements are false, they will demand censure of GTE, he said; if genuine, they will ask that all the utilities be forced to meet a 30% goal for woman- and minority-contracting by 1993, rather than the current 20% goal.

Larry Cox, a GTE spokesman, said the utility invited further scrutiny of its performance.

“We hit our five-year goal in one year. I think that record is excellent and speaks for itself,” Cox said.

Rather than allow GTE to exaggerate its performance, Cox added that the company’s recent reorganization actually had left it unable to count many large minority contracts toward the PUC goals.


Spending reported by six biggest investor-owned utilities operating in Southern California

SHARE OF 1987 1988 % 1988 CATEGORY SPENDING SPENDING CHANGE SPENDING White males $4,040,136 $3,215,473 -20% 87.8% White females 161,342 194,737 +21 5.3 Latinos 77,126 105,860 +37 2.9 Blacks 33,191 60,805 +83 1.7 Asians 51,945 41,522 -20 1.1 Other minorities 14,292 18,729 +31 0.5


Source: Reports filed with the California Public Utilities Commission by Pacific Bell, Southern California Edison, Southern California Gas Co., GTE California, AT&T; and San Diego Gas & Electric Co.