For Immediate Release

February 5, 2021

SAN DIEGO, CA -- February 5, 2021- At 6 pm on February 8, the California Office of the Small Business Advocate (CalOSBA) will conclude its second round of applications for the Covid-19 Relief Grant Program. Californians for Equal Rights (CFER) is alarmed by CalOSBA's potential violation of the California Constitution by prioritizing minority and women-owned businesses (MWBEs) in its selection process. In good-faith trust of CalOSA's upholding of the state constitution, CFER calls upon small businesses impacted by the pandemic to apply to the grant program and to request equal treatment by the state.

CFER warns CalOSBA against potential engagement in illegal preferential treatment and encourages small business owners to contact us at info@cferfoundation.org if you think you have been discriminated against in seeking state grants based on race or color.

"We trust that the State Government would not play political favoritism in its Small Business Relief Grant Program," said Frank Xu, president of CFER, "rather than engaging in unconstitutional preferences, we urge a focus on merit, business prospects or need in the program's distribution of much-needed assistance to small businesses."

Designed to offer financial assistance to California's micro and small businesses and nonprofits, this Relief Grant Program will distribute a total of $475 million public funds through Lendistry, a self-identified minority-owned financial institution. More than 330,000 applications were submitted during the first round and only a tiny fraction received grants.

Article I Section 31 (a) clearly requires the state to refrain from granting preferential treatment on the basis of race, sex, color, ethnicity or national origin in public contracting. Need-based consideration is legal but race- and sex- preferences are strictly prohibited. Henceforth, CalOSBA's Small Business Relief Program must strictly observe the State Constitution.

The Covid-19 pandemic has considerably hurt California's 4.1 million small businesses, and their recovery is vital to the well-being of the state economy. Small business owners, regardless of race or sex, should have equal access to public assistance, while those who have been impacted disproportionately should be given a reasonable priority status. But race and sex are poor and illegal indicators of impact or disadvantage.