'It's nonsense': PR firm owned by state rep's wife dubbed 'disadvantaged' to win giant government contracts
Chicago's Morreale Communications is certified as a Disadvantaged Business Enterprise (DBE), meaning that it’s listed among other minority firms that by law must receive a certain percentage of any contracts bid out by the Illinois Tollway.
In the past year, the company earned $636,000 from the tollway as part of a no-bid contract, according to a Daily Herald report.
Owned by Kim Morreale, the firm exemplifies why the 1989 Supreme Court decision that led to the DBE program should be revisited, one business lawyer who has written extensively about it said.
“Under DBE, any firm owned by a woman or minority is automatically presumed to have faced discrimination,” Wally Zimolong, of Philadelphia’s Zimolong LLC, told Prairie State Wire. “It’s nonsense. You can have a woman or minority from a wealthy family, attending the best schools in the country, yet they are still considered a discriminated party.”
Or you can be politically well-connected.
Kim Morreale is married to state Rep. Michael McAuliffe, Chicago’s only Republican representative. During McAuliffe’s 21 years in office, Morreale went from being a reporter and news anchor in Rockford to obtaining a director position with the Illinois Department of Transportation under then-Gov. Rod Blagojevich. The tollway's board of directors is appointed by Republican Gov. Bruce Rauner.
Morreale’s contract with the tollway wasn't competitively bid. Instead, proposals were vetted and ranked by a committee of tollway executives and an engineering professor, according to the Daily Herald report.
Moreover, her client list includes Pace and the City of Chicago, who along with METRA, Chicago Transit Authority and the tollway established a one-stop certification process for DBEs.
DBEs stem from a 1989 Supreme Court ruling, City of Richmond, Va. v. J.A. Croson. The decision provided the rules that all state and local DBE programs must be judged against.
“The court said that if Richmond could show that there existed a significant statistical disparity between available minority-owned firms and the percentage of subcontracts awarded to such firms that may support a finding of discrimination,” Zimolong said. “After the ruling, local and state government began commissioning disparity studies to use as evidence to support their DBE programs. Preparing disparity studies has since become a cottage industry.”
He added that DBE is now often used not to remedy past discrimination but “to further a political agenda designed to direct maximum public funds to female and minority-owned businesses.”
The program does have caps on personal and business income, and minority contractors are meant to graduate from the program. But Zimolong said those rules are rarely enforced.
“The program has become untethered from its constitutional foundation,” he said.
In the tollway contract, Morreale Communications was approved along with 15 other subcontractors as part of a $84.5 million consulting contract with the engineering firm WSP USA Inc. in June 2017.
The Daily Herald reported that from July through February, the Morreale firm billed more than 6,000 hours, approximately 770 work days. The amounts billed by the firm average $80,000 a month, although in January and February amounts surpassed $100,000.
“The company's work included writing speeches for tollway Chairman Robert Schillerstrom and executives; preparing briefings and talking points for senior staff and board members; spearheading the ‘Give Them Distance’ campaign reminding drivers to move over for emergency and stopped vehicles; securing media spots on radio to promote the tollway; monitoring community meetings for towns on tollway corridors; providing copy editing and graphics support; and helping to craft a new vision statement for the diversity department,” the report said.