Cup Groups Failed to Reimburse Minority Business

The America’s Cup Organizing Committee, which last week drew a reprimand from Port Commissioner Clifford Graves for failing to direct enough contracts to minority businesses, recently failed to reimburse the publishers of a minority business directory for advertisements the committee placed in it.

Tanya Brown, founder and president of San Diego-based Ethnic Resources Unlimited, said the ACOC and its America’s Cup Services marketing organization failed to provide her firm with membership benefits that were promised in return for two full-page ads in the 70-page directory that was published in August.

Brown said that Ethnic Resources Unlimited, which was founded to publish the San Diego County Ethnic Business Directory, solicited the ads, valued at more than $3,000, from the organizing committee, which “never got back to us” with information about membership benefits.

The two full-page ads in the newly published directory urge local businesses to sign on as “official hosts” of the America’s Cup yachting race. One of the ads notes that the organizing committee “welcomes business from certified Disadvantaged Business Enterprises.”

ACOC Vice President Jay Belby acknowledged Wednesday that the organizing committee and America’s Cup Services had made a mistake. The organizations “dropped the ball,” he said, adding, “It shouldn’t have happened, but it did.”

Belby said the ads were arranged by a former employee who, along with 10 others, was laid off last summer when the organizing committee was struggling to correct serious cash-flow problems. The former employee failed to “pass along enough information” before leaving, Belby said.

America’s Cup Services then failed to list Ethnic Resources Unlimited as a sponsor in a recently published visitors guide. And the marketing organization’s officials have no record of Ethnic Resources Unlimited being a sponsor, Belby said.

The organization intends to “make amends in a hurry” with Ethnic Resources Unlimited, he said.

Meanwhile, Belby said, the organizing committee is using the company’s directory to help locate minority-owned businesses.

Brown said she mailed a free copy of the directory to the organizing committee last summer.

During a San Diego Unified Port District meeting earlier this month, Graves criticized the organizing committee, which is receiving $6.7 million in port funds to help market and stage the races, for failing to fulfill its pledge to steer a good portion of that money toward minority-owned firms.

Belby acknowledged that relatively little of the port funds went to minority businesses. But he said the failure was driven by the “nature of (the contracts awarded). . . . There wasn’t always the opportunity to go out and do (minority) business as much as we would have liked.”

While a relatively small portion of port funds have ended up with minority firms, overall the ACOC and ACS have done some $450,000 worth of business with minority businesses, Belby said.

The Cup organizations are giving serious thought to contracting with a minority-owned firm in San Diego to publish the next edition of ACS’ glossy, four-color tourist directory, he said.