For Immediate Release: May 5, 2009

For further information:
Marc Violette: 518-257-3382

Gov. Paterson M/WBE Task Force Takes Broad Approach to Create Opportunities for Minority and Women Financial Services Professionals

New York City - - Members of a state Task Force appointed by Gov. David A. Paterson heard from panels of financial service professionals about best practices in the industry for increasing the participation of minority and women-owned firms in providing a range of financial services to public authorities.

The panels covered four sectors of the financial services industry that are used by New York State’s debt-issuing authorities:

• Accounting
• Banks, Trusts, and Money Market Funds
• Financial and Swap Advisors
• Broker Dealers

This Task Force examination of participation by minority and women-owned business enterprises (M/WBE) in state contracting for professional financial services continues the historic work it has undertaken in the underwriting and legal services sectors.

In broad terms, the themes that run through the Task Force efforts in various industry sectors include leveling the playing field, eliminating barriers to entry, providing opportunities to firms to demonstrate their qualifications, skills and expertise, measuring performance, encouraging joint ventures, and prime contract opportunities.

Information gathered during the April 30 panel discussions will be used by Gov. Paterson’s Executive Order 10 Task Force to write a set of recommendations for issuers of state-supported debt to consider in their procurements for outside financial services. State authorities routinely contract with private-sector firms to supply them with a wide range of professional financial services in the course of their operations.

“Under Governor Paterson’s leadership and through the recommendations of the Task Force, we are setting a new game plan for New York,” said Paul T. Williams, Jr., Chairman of the Task Force, and Executive Director of the Dormitory Authority of the State of New York. We are clearly establishing once and for all that all firms in the financial services sector will have an equal opportunity to compete for state business. A robust M/WBE financial services sector can and should be a major asset to New York. These firms will create needed jobs, generate new ideas, and sharpen competition among all firms for state business.”
More than 200 industry professionals attended the series of panel sessions which were titled: “Supporting Diversity in Government Contracting of Financial Services: Challenges and Opportunities.”

Attendees at the sessions - - which were held at the New York County Lawyer’s Association -- included financial services professionals from both M/WBE regional and national firms; New York State public authorities; M/WBE financial services trade associations; and large financial service providers who discussed best practices for increasing the utilization of minority and women financial services professionals by state entities.

Discussion during the four panel sessions frequently turned to the need for state authorities to reduce bureaucratic barriers that can either deter M/WBE firms from seeking state contract work or prevent them from successfully competing for such work when they do seek it.

Among other concerns, panel participants said that:

• The Request for Proposals (RFP) cycle used by state entities to engage firms is too long - - often five years -- to permit firms the opportunity to frequently compete for state work.
• State entities sometimes require that a service provider have prior experience with it in order to compete for work, creating a Catch-22 situation in which the firm cannot win a contract because it has not previously done work for the authority.
• Some state entities place too much emphasis on engaging firms with deep capitalization, rather than seeking firms with a proven performance record in the service area.
• State authorities too often retain one large company to provide a wide range of services rather than seeking out smaller firms that can supply exemplary service in their specialized areas of expertise.

“One hurdle that sticks out like a sore thumb is that you have to be green (highly capitalized). Judge us by our expertise and record, not solely on our level of capitalization,” said Stanley Weeks, Executive Vice President and Chief Credit Officer of City National Bank of New Jersey.

Seema Mohanty, Managing Director of Mohanty & Associates LLC, said state entities seeking professional financial service providers would do well to “hire those best qualified for each specific service rather than bundle it all up” with one large company that might not deliver top-notch results across a wide range of service areas.

J. Donald Rice, Jr., President and CEO of Rice Financial Products, said: “Look at (hiring) firms that are very specialized and very good at understanding what states do and what they need. Small firms that understand that business very well do very well.”

The focus of the Task Force in seeking greater opportunity for M/WBE firms in the financial services industry to compete for work with state agencies and authorities follows its work in the underwriting and legal services sectors. In October 2008, the Task Force issued historic recommendations to boost opportunity for M/WBE underwriting firms seeking to participate in issuances of state-supported debt. And the Task Force is expected to issue similar recommendations later this month covering state entity procurements of outside legal services.

On April 28, Task Force members delivered to Governor Paterson their interim report charting progress made to date in the area of underwriter participation. Specifically, the report notes that designations to M/WBE underwriting firms as a percentage of total designations for all firms by the five issuers of state-supported debt rose from 4 percent in 2007 to 23 percent in 2008. Designation fees paid to M/WBE underwriting firms rose from a total of $507,000 out of $11.8 million in 2007 to $5.1 million out of a total of $21.9 million in 2008.

“We are going boldly, and unapologetically where no one, at least in New York State, has gone before in search of contract opportunities for M/WBE firms,” said Michael Jones-Bey, a member of the Task Force and Executive Director of the Division of Minority and Women’s Business Development at the Empire State Development Corp.

James Gebhardt, a Task Force member and CFO of the New York State Environmental Facilities Corp., said that through the work of the Task Force, “We are communicating to the marketplace that New York State is open to all firms regardless of their makeup. This is bringing a lot of new firms into the marketplace. We’ve seen a real shift.”

Paul T. Williams, Jr., Chairman of the Task Force, noted that the Task Force is working to create an environment, “… where our sons and daughters can not only aspire to be whatever they want to be, but also have the opportunity to be whatever they want to be. Our groundbreaking efforts in New York State are being studied in other jurisdictions and we expect our successful actions will serve as a model to spur the growth and development of a vibrant M/WBE financial services industry.”

Gov. Paterson created the Task Force in June 2008 under Executive Order 10 and named Dormitory Authority Executive Director Paul T. Williams, Jr. to chair it.

The Task Force is comprised of the executive directors or presidents of the Dormitory Authority, the New York State Housing Finance Agency, the New York State Thruway Authority, the Empire State Development Corp., the Environmental Facilities Corp., and three members appointed by Gov. Paterson.

The Task Force will meet next on May 11 in Albany.

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From left to right:
Frederick E. Davis, Jr.: Partner, Mitchell and Titus, LLP
Lorna l. Stark: Partner, KPMG
Richard Levychin: Managing Partner, KBL, LLP
Paul T. Williams, Jr: Chairman Gov. Paterson’s Executive Order 10 Task Force, and Executive Director of the Dormitory Authority of the State of New York
Peter A. Aqunio: Managing Partner, Torres Llompart, Sanchez Ruiz, LLP

Governor David A. Paterson’s E.O. 10 MWBE Task
Force presents: