Biden’s SBA chief, in New Orleans for Essence Fest, decries attacks on diversity programs

The Biden administration’s small business chief, Isabel Casillas Guzman, was in New Orleans on Friday for the Essence Festival of Culture with a message of support for diversity programs that have been under attack in the federal courts.

Guzman, who has held the cabinet post since March 2021, toured the $1 billion River District development site adjacent to the Ernest N. Morial Convention Center and met with Iam Tucker, the project’s prime civil engineering contractor. 

“This administration is fighting hard to ensure that we can have equity across all of our programs against attempts in the courts to roll them back,” she said. “It’s been a clear message against (diversity, equity and inclusion, or DEI, programs), whereas in America, diversity is our strength.”

The River District is the largest non-oil public-private development in Louisiana history and Tucker, who was named SBA’s 2024 National Small Business Person of the Year, said she would not have been able to win the contract if she hadn’t been part of the SBA’s 8(a) business development program for disadvantaged businesses.

Some version of the 8(a) program has been around since the inception of the SBA during the Eisenhower administration. However, the current version is a nine-year program that pairs socially and economically disadvantaged businesses with large, established firms and helps them win government and private sector business.

Last year, decisions by both the U.S. Supreme Court and a federal court in Tennessee were widely seen as undermining long-standing efforts to promote diversity. 

In June, the Supreme Court ruled that race-based affirmative action in college admissions is unconstitutional, a decision that is seen by legal experts has having broad implications for diversity efforts.

Court rulings

Then in July, in Ultima Services Corporation vs U.S. Department of Agriculture, the U.S. District Court for the Eastern District of Tennessee ruled that the SBA could not determine eligibility for the 8(a) program based on the assumption that race or ethnicity automatically meant a business owner was socially disadvantaged. The owner of Ultima who brought the lawsuit is a White woman.

Guzman noted that the SBA quickly moved to issue new rules for firms to apply to the program, which included explanations specifying how they were disadvantaged.

Guzman was also scheduled to speak on Friday at the Global Black Economic Forum, as part Essence Fest’s programming at the convention center. Essence Fest has in recent years expanded its events from mostly entertainment to economic, social and cultural offerings.

The three-day economic forum will include national figures like voting rights activist Stacey Abrams, the Rev. Al Sharpton and U.S. Congress member Ayanna Pressley.

Guzman said her message at the forum would also be about the risks diversity programs are facing. She noted that Black business ownership is growing at the fastest pace in 30 years, and the share of Black households owning a business has more than doubled, from 5% to 11% between 2019 and 2022, according to SBA data.

“We have to make sure that (disadvantaged business owners) have pathways to success and can get access” to government and private sector contracts, she said. “Programs like 8(a) — and Iam is a great example — really provide the on-ramps to get into a system that historically has built up barriers to prevent that.”

Tucker said that her firm, ISIL, which was started 30 years ago by her father, Robert H. Tucker, has won only about eight private sector contracts in that time, relying mostly on federal mandates for growth during that time. She said she resents any implication from those trying to roll back diversity initiatives that she has won business on anything other than merit.

“We have to work three times as hard to get half the distance as anybody else,” she said. 

“I want to diversify my business even more, but it’s hard for us to break into that private sector when everything is already bundled up and everybody uses the same people every time,” she said. “That’s why these programs are so important.”