Minority groups disagree on casino contracting policies

David Strow

Thursday, June 29, 2000 | 11:13 a.m.

The NAACP's push for more spending with black-owned businesses by MGM MIRAGE has set off a furious debate in the Las Vegas minority community, as leaders debate over the best way to help blacks and other minorities gain a larger foothold in the city's booming economy.

At the center of the MGM Grand debate is a long-standing discrepancy in business investments in the black community compared to the rest of Las Vegas, a discrepancy no one denies. It's an issue that goes far beyond a single company, and one that infuriates many black leaders. Local officials say that former congressman Kweisi Mfume, now president of the NAACP, may become involved in their campaign.

"Economics brings about independence, and independence brings about freedom," said Gene Collins, president of the local chapter of the NAACP. "If you allow African-Americans to get involved in the mainstream, there's a certain amount of freedom. There's a certain segment of society that doesn't want to see (blacks) enjoy that certain amount of freedom."

But leaders for other segments of the minority community say the problem is the same for all Las Vegas minorities -- and that the NAACP's black-only proposal will only create more divisions.

"If we're going to try to deal effectively with some of the (problems) in Southern Nevada, we should be all inclusive, not with just one segment of society," said Otto Merida, executive director of the Latin Chamber of Commerce, which represents Hispanic business interests in the Las Vegas area. "That brings discord, and it doesn't bring any unity, which we need to be effective."

The 10-point proposal forwarded by the NAACP, from its $100 million investment program to its demands for more high-level executives at MGM MIRAGE, all focus squarely on blacks, not other minorities.

The $100 million fund, for example, would be used to invest in heavily black west Las Vegas. The NAACP also demanded that MGM MIRAGE appoint one black businessperson to serve on its board of directors, and contribute $25,000 annually to at least four community organizations "designated by the NAACP."

Though MGM MIRAGE has voiced its commitment to increasing minority opportunities, Collins said a focus on the black community is needed, saying that many businesses include women of all ethnic backgrounds as a "minority."

"Everyone wants to say minorities," Collins said. "Minorities have done very well. Blacks have been left out. We don't have a problem with minority participation, we have a problem with blacks being left out of the minority."

It's a view shared by the Las Vegas chapter of the Urban Chamber of Commerce, which backs the NAACP's position "100 percent."

"For the last 40 years in the civil rights movement, we've been the ones shaking the tree, and everyone else runs under the basket and picks up the fruit," said Urban Chamber Executive Director Louis Overstreet. "We're tired of shaking the tree. We'd like to pick up some of the fruit.

"It's a (gaming) industrywide situation, as I understand it. The question is, does MGM take the lead? In all honesty, (MGM MIRAGE Chairman) Terry Lanni has a good reputation, and we're pleased they'll take constructive steps to correcting the issue."

As justification for its proposal, the NAACP points toward the long deterioration of west Las Vegas, as billions of dollars were invested in Strip properties and new neighborhoods sprang up throughout the Las Vegas Valley. The organization argues that as much as $2 billion a year is spent in the Las Vegas gaming industry by black customers.

"We have a right for you to invest in our community, the way you invest in the Strip," Collins said. "Black businessmen and women can't even get a loan to expand their businesses."

The NAACP also pointed to the small fraction of minority spending that the MGM Grand has made with black-owned businesses. By its own estimation, the MGM Grand spent $1.64 million with black-owned businesses since 1997 -- roughly 4 percent of its total minority spending.

The NAACP's estimates are far lower, at $890,000. It derived this number after excluding companies with any non-minority involvement and excluding spending with Las Vegas companies in out-of-town markets, such as Detroit.

The NAACP's decision to exclude these companies has drawn the fury of Diane Fontes, president of the Nevada Minority Purchasing Council. She estimates the MGM Grand has spent upwards of $45 million with black-owned businesses since 1997.

"There's a real difference of opinion between us on what (the NAACP) includes or doesn't include," Fontes said. "I take real offense at that. (MGM MIRAGE) really tries to do a good job of outreaching."

The council operates by certifying minority-owned companies, then assisting them in getting contracts with local companies. MGM MIRAGE, she said, is one of the most aggressive companies in making sure minority companies are involved in the bidding process.

"If you have your ducks in a row, you're usually successful," Fontes said. "Business is still based on qualifications, not ethnicity."

Cornelius Eason, president of Las Vegas-based Priority Staffing -- which has contracted with the MGM Grand for the past two years -- echoed Fontes' stance.

"I do business with them, but I do business with them as a business that competes with (other vendors)," Eason said. "I don't know if they (the MGM Grand) count me as a black-owned business, to tell you the truth. In the past, I was just a guy that won a contract."

The owner of one of the companies on the NAACP list -- A-1 Janitorial Services Inc. of Las Vegas -- said the $16,000 figure cited by the NAACP is far below the actual revenues her company receives for performing janitorial services at the MGM Grand Lion Habitat.

"I'm torn, because I'm African-American, and I certainly think we should be getting a bigger piece of not only MGM's pie, but everyone else's pie," said Pam Washington. "But I must say MGM has bent over backwards to be of aid to me.

"I don't know. I'm sure they could do more, but it's been a very pleasant experience for me. They've been very accommodating."

Despite the successes of these companies, Fontes says black businesses have struggled in Las Vegas to a greater extent than other minorities.

"They've definitely struggled more ... they haven't been part of that good old boy network," Fontes said. "They're often not able to get the bonding and insurances they need (to handle contracts). Some would have to sell their last born to get bonding.

"If some of those doors were opened a little wider, (black-owned businesses) would be a little more successful."

But Merida isn't convinced Hispanic businesses are faring that much better than their black counterparts.

"If we have in fact done better than blacks, it's (a difference) that's nothing to be amazed about," Merida said.

"When I hear Lanni talk, he speaks about (assisting) minorities," Merida said. "Hopefully, he's thinking about all groups ... Asians, Hispanics, women-owned businesses and African-Americans. I haven't talked to Mr. Collins, so I don't know why he only refers to African-Americans."

Bobby Siller, a member of the Nevada Gaming Control Board and one of the gaming industry's most prominent black officials, has spoken out publicly before about the lack of minority involvement in the gaming industry. He said he understands the frustrations that triggered the NAACP's complaint, saying "it doesn't take a brain surgeon" to see that few top gaming officials in Nevada are black.

"Having minorities in executive offices creates an automatic awareness," Siller said. "If you get to a certain level in a property, you don't see any minorities or women. This is a growing community. All of our citizens should benefit from that ... no one should be left out."

But Siller isn't convinced the NAACP's proposed reinvestment fund is the solution, particularly if west Las Vegas residents don't own what's being built in their community.

"You can build that thing ... but five, six, eight years from now, it's all abandoned and nothing's accomplished," Siller said. "We should establish educational programs and scholarships that challenge people. (Education) eliminates poverty, helps people better themselves."

Gaming companies should also consider extending loans to small businesses in west Las Vegas, so that ownership remains local, Siller said.

"What gaming needs to do is create an environment where people can prosper and better themselves," Siller said. "We can take it a step further by providing some opportunities, (such as) business loans for people who want to ... do business with the industry, and helping them become viable businesses."

MGM MIRAGE, Siller said, has been one of the leading gaming companies in their awareness of the issue.

"I've discussed this with Danny Wade (co-CEO of MGM MIRAGE), and I've been quite impressed," Siller said.

When asked why MGM MIRAGE was selected as the focus of the NAACP's initiative, Collins said the issue came to the forefront while the NAACP was investigating how the MGM Grand-Mirage Resorts merger would affect black employees.

"We knew there was very minute participation with African-American companies," Collins said. Once the NAACP examined the numbers, it complained about the issue to the Nevada Gaming Control Board during hearings to approve the merger between MGM Grand and Mirage.

But Collins vowed the NAACP won't rest.

"We're going to ask the other properties to sit down and talk with us, and make sure the discrepancies that took place with MGM won't happen again," Collins said. "We know the numbers aren't favorable, and we want to start the dialogue. We'll only mention them (publicly) if they don't want to sit down and do what's right.

"I don't think we'll have a problem with any other hotel property in Las Vegas. I think they will make a conscious decision to do what's right."

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