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For Dunn, ignorance continues to serve as a defense.
A group of Hispanic contractors filed a lawsuit in 2005 alleging that Dunn had made a mockery of the city's affirmative-action policy while completing the H&R Block Building. In one instance, Dunn awarded a $3 million contract to a minority electrician who lacked the required expertise. A Dunn representative says the electrician duped the company.
The lawsuit, which is still being contested, has received attention from the media as well as the city. Last December, the city's Human Relations Department recommended that the TIF Commission not pay H&R Block for the $3 million electrician's contract it would otherwise have reimbursed.
Pleased to see some action being taken, the Hispanic contractors say the use of fronts is more widespread than anyone in power wants to acknowledge.
Reforming the system is not easy, however, in part because victims of the scam are also participants. Minority businesspeople may hate being used by white-owned companies. But at least the jobs pay a little.
While extravagant, the subsidies that helped H&R Block move its headquarters north three and a half miles came with conditions.
Developers who benefit from tax-increment financing and other forms of assistance pledge to hire minority- and women-owned businesses. Construction goals for the Block Building were set at the standard 15 percent for minority-owned and 7 percent for women-owned subcontractors.
J.E. Dunn, Block's contractor, made an attempt at outreach when it asked Armando Diaz to consider bidding on masonry work.
Diaz tempered his excitement. He'd had a long and, by his measure, not very satisfying relationship with Dunn. He had worked at the company from 1986 to 1991. While on Dunn's payroll, Diaz learned about concrete and stone and how to develop scopes of work (the divisions of tasks necessary to move from groundbreaking to ribbon-cutting). He quit, feeling he had been underpaid.
Diaz went into business for himself. In a way, he still answered to Dunn. If they wish to stay busy, owners of small construction companies must work for Dunn as subcontractors.
Dunn drives a hard bargain. In the mid-1990s, Diaz bid on masonry work at the Swope Parkway Health Center, which Dunn was building. Diaz says he got the job with the condition that he rent scaffolds and other equipment from Dunn. Diaz arrived on-site and found that Dunn had sent what seemed to be the oldest forklift in its fleet. "It looked like a dinosaur," he says.
Years later, Johnson County Community College officials asked Dunn to build a museum. Diaz says he submitted the low bid to do the masonry on certain parts of the project, only to watch Dunn do the work. Diaz was familiar with this routine. He could recall a former supervisor at Dunn who had said, "We're like pigs. We have to have it all." (General contractors can earn more profit on a project if they know economical ways to complete some of the work.)
Leery from past experience, Diaz went ahead and bid on the H&R Block headquarters on January 13, 2005. Diaz thought he was in position to get the contract. Marvin Carolina Jr., Dunn's director of diversity, led him to believe that the job was his, he says.
But Dunn said the bids it received were too high. Dunn then re-scoped the work and asked for new proposals. Ultimately, Dunn performed most of the work. Diaz did not bid on the amended package, thinking it futile.
