A US District judge in Texas last week ordered a US Commerce Department agency initially created to boost minority-owned businesses to make its services available to business owners of all races, the Washington Post reported.
The Minority Business Development Agency (MBDA) was first established by executive order in 1969 by then-President Richard Nixon to help minority-owned businesses access capital, market opportunities, and government contracts.
The MBDA was made a permanent government agency as part of the bipartisan infrastructure law signed by President Biden in 2021.
In 2023, a conservative legal group sued the Biden administration on behalf of a group of white business owners, arguing that the agency violated the Fifth and Fourteenth Amendments to the Constitution.
The plaintiffs were informed by the MBDA that they were not among the races or ethnicities included in the agency’s list of qualified applicants presumed to be disadvantaged and therefore were not eligible for MBDA assistance.
In a March 5 opinion, US District Judge Mark Pittman ruled that the MBDA’s presumption that minority-owned businesses were disadvantaged violated the equal protection clause of the US Constitution.
Judge Pittman permanently enjoined the MBDA’s business centers from extending its services based on race.
Pittman wrote that the federal government could not “flagrantly violate” constitutional rights and protections “with impunity,” something he said the MBDA had been doing for years.
Judge Pittman based his ruling in part on the US Supreme Court’s landmark ruling declaring race-based college admissions unconstitutional.
Pittman said in his ruling that the government could only take race-based action under the Constitution to address specific instances of discrimination. He wrote that while racial minorities may have difficulty obtaining business loans or could face higher interest rates, there was no evidence that the government “contributed to such disparities.”
Pittman wrote that while the government discriminating against white business owners may have helped to “alleviate” disparities faced by minority business owners, “two wrongs” did not “make a right.” He argued that the MBDA’s “racial presumption” was one of those wrongs.
