Diversity Disclosure Sought for Deals With Chicago Sister Agencies

CHICAGO — Financial and legal firms that do bond work for Chicago's sister agencies would face greater diversity disclosure requirements under a bill introduced last month to the Illinois General Assembly.

The Chicago Local Government Vendor Diversity Act — House Bill 5000 — would require firms that do business with agencies like the Chicago Public Schools and Chicago Housing Authority provide information about the racial, ethnic and gender makeup of the teams assigned to work with on deals. The data would be submitted to the Illinois Department of Central Management Services and enforcement would be overseen by a task force.

Companies with state and municipal contracts would be required to report the data or risk losing their business. The bill, sponsored by state Sen. Iris Martinez, D-Chicago, and state Rep. Pamela Reaves-Harris, D-Chicago, is modeled somewhat after the city's 2014 Diversity in Non-Minority Owned Firms Disclosure ordinance.

"The city of Chicago has made great strides to promote and encourage the open access in the awarding of governmental contracts to businesses with diverse hiring practices," Martinez said. "We have seen how such legislation led to businesses developing, training and growing minority talent from within, ultimately laying the foundation for minority and women leadership within such internationally recognized law firms and banks.

"We must not stop there," she said. "The state must do its duty and mandate such racial/gender disclosure upon all Chicago political subdivisions to increase government's leverage over contractors to further hire and promote minorities and women. We want to see those firms and contractors who are enriched from these transactions better reflect the racial makeup of the taxpayers who are paying their salaries and bonuses."

The reporting requirement would apply to any law firms, financial advisors, banks, underwriters, and trustees working on bond deals for the city's sister agencies. The rule would also apply to brokerage services.

The city has long sought to boost the amount of bond work that goes to minority and women-owned firms and the 2014 ordinance sponsored by a group of aldermen extended those efforts to press for greater inclusion of minorities and women on teams working with the city at non-minority owned firms. The city also over the last several years has sought information from firms on the size of their local work force.

Under the city ordinance, firms are required to report to the city's chief financial officer the gender, role and race or ethnicity of those who will directly provide services for any particular transaction and the CFO in turns shares the information with the council. If a firm fails to accurately comply, it can lose out on city business.