Herman Malone, an evolving provocateur

Herman Malone is a provocateur. He wants to incite the Colorado business community to eliminate racism from its ranks.

Al Lewis, who writes in the Denver Post for Dow Jones Newswires, once turned down an opportunity to write about Malone's book (and mine), "Lynched by Corporate America," because he decided the word "lynched" in the book title was too provocative to be used atop Malone's story.

Yet over the years of a sometimes controversial and always entrepreneurial career, Malone has made it his business to be provocative, and it would be unlike him to give up his principles in the face of press criticism. (Or even the absence of it, since Lewis essentially kept a review of Malone's book -- and mine -- out of the pages of the Post.)

But I write here now about Malone's business for the same reason I co-wrote our book with him.

Black-owned businesses in Colorado are being discriminated against now; they were discriminated against when Malone's story of discrimination by U.S. West started in 1992; and they probably will continue to be discriminated against in the future, at least by the state of Colorado, because Colorado has taken no steps to eliminate discrimination in the state purchasing process.

And there is a documented history of discrimination against minority-owned and women-owned businesses by state purchasers.

Malone's primary business, RMES Communications Inc., self-described on its website as "Your Interactive Multimedia Solutions Provider," sells Internet-based business and entertainment services through kiosks at Denver International Airport.

It used to provide pay phones at DIA, and still owns a few there, using the most advanced model of public pay-phone available, but pay-phones are a dying business now, eliminated largely, but not entirely, by the ubiquitous use of private cell phones.

Malone said RMES posted more than $2 million in revenue in 2008, although 2009 sales have been hit hard by the tough economic and travelling environments caused by the recession.

"We continue to evolve," he said, describing how he has moved the company into digital signage, music downloads, and social-networking applications for travellers as well. He's also hoping to expand RMES kiosks into public-transportation facilities, perhaps into future Fastracks stations for example.

But all that work of RMES is largely being delegated nowadays to employee family members.

Malone is concentrating now on a public-speaking career, taking the message of his book and a personal message about contracting and surviving prostate cancer on the road to businesses and business-student audiences.

"I will be talking about two things that stop people in their tracks," he said. "Racism and cancer."

He has found that race infects the treatment of cancers for both black men and black women, just as it has infected business conducted across America, which is basically what his story is about in "Lynched by Corporate America." The book is the first and only one ever written about discrimination in contracting against minority-owned businesses.

The former U.S. West, now Qwest, has taken steps to eliminate the discrimination against black contractors that is documented in Malone's (and my) book. But the recent $9 million local settlement of an employee-discrimination lawsuit filed against Idaho-based grocer Albertsons, over allegations of ethnic slurs, graffiti and abuse of African-American and immigrant employees at a distribution center in Aurora, illustrates one of Malone's primary speaking-tour messages:

Racism is still alive in Corporate America, and it eats away at the nation's business community just as cancer devours its victims of all races -- from the inside out.

"And I have a solution," says Malone. "The solution I am talking about is a very simple one. We've got to talk.... We gotta' talk about our differences."

Citing President Barack Obama's "teachable moment" of having a beer at the White House with Cambridge, Mass., police Sgt. James Crowley over differences roused by the policeman's arrest of African-American Harvard scholar Henry Lewis Gates Jr., Malone said the only way to end racism in America is by talking about it. The only way to eliminate discriminatory treatment of cancers is by talking about how that discrimination occurs and what treatments work best, he says.

"So I'm going to be talking about all the things you see every day in the news," Malone said. "We've been afraid to have those kinds of discussions.... I want to be part of that dialog."

Yet, for Malone, his speaking tour is really just an extension of the provocative business career he started when he opened Rocky Mountain Electrical Supply (the previous name of RMES) back in 1976. Marketing remains a key ingredient.

Malone says candidly that sales of "Lynched by Corporate America" are not what he had anticipated when he paid for publication of 3,000 copies.

But during the three years since the book was published, Malone has studied the book-publishing trade. "Ninety-nine percent of all authors' sales are less than 5,000 copies," he's learned. "The problem is you need to have more promotional dollars.

"You've got to have that -- or a publishing company that is willing to invest those dollars.... The other way you [can market the book] ... is that you do public speaking, which is what I'm embarking on right now."

Marketing. It's an essential business ingredient Malone has been teaching me ever since we first sat down together to begin writing "Lynched."

As for myself, I'm only beginning to learn the lessons he teaches.

Small business catches the president's eye

"Obama Offers Help for Small Businesses," shouts the headline atop The New York Times story that inspired me to get back to business with this blog.

I've been covering small business for most of the last third of my nearly 40-year journalism career, and I have to wonder how much national resolve is actually behind the words atop Jackie Calmes' story. If the president is serious, small business could show the nation the way out of the economic quagmire we are in.

Calmes covered President Barack Obama's speech at the Brookings Institution on Tuesday about job creation. Obama suggested eliminating capital gains taxes on small business investment -- as if many small businesses have money lying around to invest or still have it invested after the two-year stock-market crash; extending a stimulus-bill tax break through 2010 that allows small firms to write off $250,000 in qualified investments; and providing increased tax deductions of capital expenses.

My experience with small businesses suggests that no small-business owner worth his or her salt would turn down any kind of tax break made available to them; but that most owners would also view proposed tax incentives to increase hiring a kind of a "cart-before-the-horse" proposition.

Many owners, too, would simply complain that the paper work necessary and accounting expense of filing for the tax breaks eliminates the true incentive to taking advantage of them.

What small businesses need in terms of relief from this recession is lots of cash and a stimulated consumer and business marketplace for their goods and services.

Obama said his Treasury Department would step up loans to small businesses using unspent TARP funds. The assurance of such loans might indeed incent a small business owner to add an employee or two to his or her workforce.

But credit relief for consumers and existing small businesses -- how about a reinstatement of the credit-card-interest tax deduction? --might open more wallets more quickly to increased consumer and business-to-business buying and spending in 2010.

And more buying and spending, after all, is the best kind of economic stimulus a country can enjoy. Even, I might add, if it's government doing the spending.

My point, here, however, was not to suggest ways to extricate the economy from its worst recession in 50 years. It was to point out that Obama has small business on his mind.

The president never made small business much of an issue during his campaign, but since taking office, it seems, he has drunk the potion that opens one's eyes to the value of the job-creation engine that the nation's small firms have always been.

If more liberal lawmakers would taste the potion, too, this country might just pick itself up fast enough to keep from crying about a continuing economic downturn next Christmas.

And conservatives, by then, might be joyfully aghast at how fast Obama's administration is making progress at cutting into the huge deficits inherited from the last president's reign.

Back to a capitalist future

"In American history, fundamental shifts in the economic orthodoxy usually did not occur until after there was a large and painful calamity.... The awful consequences from such an experience discredited the prevailing wisdom and suddenly opened the way for new thinking."

-- William Greider, "Secrets of the Temple" (1987)

Yes, I'm still reading Greider's book, and it still keeps telling me the lessons learned during the 1982-1984 recession are being used by Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner to solve the nation's current economic crisis.

Ronald Reagan was president during that time, and Paul Volcker, now a financial advisor to President Obama, was Fed chairman. Volcker had squeezed the economy so tight that interest rates as well as unemployment rates had reached double digits. The quote atop this blogspot represents Grieder's conclusion that even that stiff a punishment for the American economy was not enough to convince politicians to regulate Wall Street strongly enough to prevent another financial collapse.

That recession, by the way, was the worst then since the Great Depression, just as the Great Recession now that we are all living through has topped that harsh mid-80s downturn.

And once again experts are begging Congress to rein in Wall Street traders, to reform the national financial regulatory system, to protect consumers and Main Street business from the ravages and risks of an unfettered market, and to eliminate taxpayers as the default bailout for failed money managers.

And once again lobbyists are hissing and pissing away at any congressional resolve to prevent a "next time" from happening again.

Greider's opened door for "new thinking," in fact, is closing fast. The monied establishment that increased it's wealth so greatly during the Bush administration -- to the great expense of the poor and middle class -- will try to convince Obama's experts that Wall Street itself is smart enough to heal itself. Don't let your congressmen and women buy into that argument.

Wall Street for the sake of Main Street needs to be put on a short leash. No talent needs to be paid so much that it forgets the greater good. Capitalists in America should be required to have a conscience.

Bill Ritter for governor in 2010

Right here, right now, I'm endorsing Bill Ritter for re-election as governor.

The Republicans made me do it.

The news today, according to the banner headline across the front page of the Denver Post, is "United GOP targets Ritter."

And right below that headline the Post encapsulates the Colorado Republican Party's 2010 "Contract for Colorado," which leads off with the promise (I would call it a threat) to "Limit taxes and state spending."

As if the perennially Republican-defended Taxpayers Bill of Rights didn't already prohibitively limit Colorado's business growth and progress.

As if the perennial Republican criticism of Amendment 23, the only bulwark against legislative raids on public-school funding for the state, were not promise enough from their party that the children of Colorado can be ignored in order to uphold the wealth of the establishment.

No, none of that has been enough for Republicans in Colorado.

Now, they want to re-impose a "limited-government, no-government" regime on the state, apparently not satisfied with the deep hole the former Owens administration dug for Colorado through its frivolus spending on inefficient computers, its promotion of an Internet network that failed to deliver on its promises, its complete abrogation of public health programs and higher-education funding, and its total disregard for racial discrimination in state contracting.

That was once Colorado's contract with Republicans.

I, for one, would rather see Democrats in charge of making government mistakes.

At least they err on the side of ordinary people.

Government at work for its people

Budget-strapped Colorado government worked behind the scenes to protect the state's drinking water over the past year, demonstrating why Colorado citizens pay taxes and what kind of valuable regulation they get for their money.

On Wednesday, the state's Department of Public Health and Environment reported it has withdrawn disinfection waivers for 72 public drinking water systems around Colorado in the wake of its investigation of the 2008 Salmonella outbreak in Alamosa. That outbreak claimed one life and sickened an estimated 1,300 of Alamosa's 8,900 residents that spring.

Gov. Bill Ritter can claim the subsequent health department action as a victory for his administration.

But if Ritter faces a "limited-government" Republican opponent come the fall 2010 campaign, the incumbent governor may be reluctant to speak up for his regulators because such government services cost money, and "limited-government" candidates never advocate raising the taxes needed to pay for them.

Yet those are the services Colorado taxpayers expect of its government. Just like they expect affordable in-state tuitition for its college students, mosquito-abatement in West Nile virus season, and sufficient state support for primary and secondary public-school education.

The state's voters elected Ritter in 2006 to make sure Colorado's government apparatus would be used for such purposes, and most of what Ritter has been criticized for by Republican opponents during his first term has been aimed at his efforts to fulfill that broad, generalized 2006 election promise.

You can bet whoever may be Ritter's Republican opponent in 2010 will try to label him as an overspender of what money the state was able to collect during the 18-month economic downturn that has caused drastic revenue shortfalls.

But don't forget that the "limited-government" Owens administration was responsible for the state's not jumping on programs that might have prevented or reduced the many deaths and hundreds of serious illnesses suffered in Colorado as the initial epidemic of West Nile virus swept east to west across the nation earlier this decade.

Regulators are employed by a state to protect its citizens from failures of business and industry that can affect large parts of the population. When regulators don't do their jobs, people often get hurt, and taxpayers don't get what they pay for.

Let's hope Colorado's current budget cutting doesn't set us up for more West Nile or Alamosa-style public-health failures. The health department's withdrawal of disinfection waivers, forcing public water systems to purify their drinking water, represents taxpayer money well spent.

Don't let anyone try to convince you otherwise.

Business needs a Broncos win

Colorado's business community needs a Broncos' win against the San Diego Chargers on Sunday.

I have learned since arriving in the state in 1988, the morale of Colorado business takes a cue from the success of the Denver Broncos, and I have come to believe that the success of all the state's professional sports teams seems to set a tone for the success of the entire state.

I know that sounds crazy, but give me a listen.

When I was the night city editor of the Denver Post, I would drive to work on Sundays at a time when those lucky enough to attend Broncos games had already found their parking spots at Mile High Stadium, and the rest of the city was already positioned in front of its TV sets.

Central Denver was hushed and quiet in the middle of the day, waiting the kickoff.

After a loss, on Monday's in the middle of the day, the city was almost as quiet and palpably depressed.

Then the Avalanche came to town and promptly won the city's first national professional sports title. The Broncos followed with two consecutive Super Bowl championships (it should have been three, but the Broncs were beaten by Jacksonville in the first year they also should have won the championship, which, with the next two wins, would have made history).

The Rockies made the playoffs early on and two years ago went to the World Series. The Nuggets made the playoffs several times since I have been in Colorado, but never with as strong a team as they have now, one with a realistic opportunity to take an NBA championship.

Yet it's the Broncos that still set the tone, and you could feel that already this year when they surprisingly won six games in a row as Colorado was feeling the first little urges of a national business recovery. Once again, the state was leading the nation and gathering praise for its growing alternative energy industry, school reform and even health-care delivery on the Western Slope.

Then the Broncos lost to Baltimore. Winter had come early. National unemployment hit 10 percent. Stimulus dollars were being reported to have hired way too many people than seemed realistic.

And the Broncos dropped two more, while the Chargers kept winning.

For some reason, the Broncos and other winning sports franchises in Colorado seem to inspire business and political leadership in the state. There's no objective proof for that, but the winning lifts a burden that winter's snow and cold often impose.

Colorado needs the Broncos to beat the Chargers at home to show the state's business and political communities that the team's improvement over the off-season wasn't just a mirage. And that the inklings of economic improvement in Colorado weren't just false positives.

When the state's professional sports teams are winning, Coloradans, their business leaders and their political leaders are energized. And right now, Colorado cannot afford to let its energy and leadership slip.

Business needs a Broncos win on Sunday.

Where's the path to stimulus dollars?

On Monday, I ducked my croquet game to attend a presentation on the Auraria campus about "How Your Business Can Benefit from Federal Stimulus Money." I was hoping to see for myself what advice was being given to small business owners by a state official, Maranda Pleau, who has been touring the state to speak on the topic. (Photo: Mark Martinez; Credit: mscd.edu)

You might remember that on Aug. 14 I posted a blogspot on the distribution of $87 million from a state/federal capital construction program for San Luis Valley schools, and I connected the funding to Pleau's tour, assuming that her presentation would tell small business owners in the Valley how they might get a piece of that action.

I was wrong, and I was told I was wrong by Pleau's communications manager Myung Oak Kim, who read the blog and told me I should attend one of Pleau's presentations to find out what she was saying in them.

So I did. And frankly, I was disappointed.

Pleau, who is formally called the Director of Small Business and Minority Outreach for the Governor's Economic Recovery Team, told an audience of about 60 people, some of whom were minority business owners or women business owners, that her team's tasks so far had been difficult, especially the "very arduous" process of tracking stimulus dollars. That is one of her missions: to tell the people of Colorado how stimulus dollars are being spent.

The problem with her presentation, however, is that mission seems to be her only mission. She does not offer specific advice, other than recommending business owners check out the recovery team's website, www.colorado.gov/recovery, that might land a small business a grant or a contract to keep they're business going.

In fact, one business owner at the Nov. 9 presentation complained that she had run through all the traps on the website, searched out grants and contracts that might get her new business, but that all the material she searched seemed to suffer a basic "disconnect" from the information she really needed. She needed direct paths to bidding for work, and she wasn't finding them.

Mark Martinez, regional president of Solera National Bank, which has capital available to lend to qualified business borrowers, helped sponsor Pleau's presentation but came away from it as disappointed as I was.

"It's total spin," said Martinez. "All I was told was here's all these millions of dollars and here's how they're being allocated, by category, but there's no discussion as far as ... where those dollars are landing and how those dollars are ending up in the pockets, or potentially in the pockets, of small business or business in general."

"You sit through the presentation, and at the end of the day you're sitting there thinking: I didn't learn anything."

Martinez, who has served on the board of trustees of Metro State College, where Pleau gave her talk, said he knows that education stimulus dollars have been used to "backfill" against budget cuts, a strategy school administrators claim is the only way to protect current programs and jobs.

But the banker asks: "Where's the stimulus in that?"

And he's right. He said he has no clients who have reported to him that they have been able to tap into stimulus dollars, and he said SBA loans cited by Pleau in her talk would have been been made to qualifying businesses despite the stimulus effort. Martinez did acknowledge, however, the federal government has made it easier for banks to make some SBA-guaranteed loans.

Small, $35,000 loans being made available through SBA to small businesses as emergency funding are not profitable to banks and are designed to go to businesses who are poor loan prospects, Martinez said. You can read more about the limited success of that SBA emergency loan-program in today's Denver Post, http://www.denverpost.com/.

Banks across the country have been reluctant to loan money through the program. "We're not a charitable organization," Martinez he added. "We're a financial institution."

But to get back to Pleau's small-business coaching, or lack of it, there are some legitimate reasons for state government to not hold hands with businesses seeking federal money to fund new growth. The press and political critics could perceive the help as favored treatment.

But Pleau's "outreach" efforts need to go beyond talking about where the stimulus money is being spent.

Minority-owned businesses have historically been left out of Colorado's procurement process, and true "outreach" will help small businesses directly connect with state agencies and other organizations distributing stimulus dollars through grants and contracts.

There's no sense in talking to small businesses about $87 million to be spent on school construction work in the San Luis Valley unless small businesses, minority-owned businesses, and women-owned businesses can share a piece of the $87 million pie.

The state, so far, has failed to open up a direct path for small business to such work.