A civil rights group is challenging the Florida Attorney General’s Office to be more “consistent” in its campaign against corporate “raced-based decision-making” by investigating venture capital firms that appear to avoid investments in minority-owned companies.
Earlier this month, the nonprofit Southern Poverty Law Center (SPLC) in Atlanta sent a letter to Florida Attorney General Ashley Moody to request a probe of race-based decision-making among venture capital funds in the state that seem to favor investing in “majority-white-owned businesses over businesses owned by people of other races.”
The letter, authored by the SPLC’s chief legal officer, Derwyn Bunton, indicates that public financial information about companies such as Weatherford Capital, Krillion Ventures and Newgate Capital Partners seems to show the firms are supporting primarily white-led businesses, to the detriment of firms owned by people of color.
Moody’s office has complained to the Florida Commission on Human Relations that Starbucks Coffee Co.’s employment policies discriminate on the basis of race. Starbucks has a goal of having indigenous people and people of color in 30% of its corporate positions by 2025, according to the Attorney General’s Office. Such policies, which amount to racial quotas, fly in the face of recent U.S. Supreme Court decisions, the office said in a May 22 letter.
“As the sworn officer and chief defender of the rule of law, it is your duty to challenge unlawful actions,” the SPLC letter states. “To be consistent and avoid the appearance of arbitrariness, we would expect you to be concerned with and moved to respond to possible instances of white race favoritism that run afoul of the law and/or application of it for which your office advocates.”
The purpose of the letter was not to say conclusively that certain venture capital firms, or the portfolio companies they support, are engaged in intentional discrimination or violations of Florida civil rights statutes, according to the SPLC’s deputy legal director for LGBTQ rights and special litigation, Scott McCoy.
“What we’re saying is that we would hope that the Florida attorney general would put the same amount of time and attention and resources into looking into what is possibly white favoritism as she does being concerned about race-based decision-making and programs she believes favor people of color,” McCoy told the Florida Record. “So really it's a matter of being consistent.”
Black-owned company owners could file a civil action against venture capital firms they feel are intentionally denying them a fair shot at investor funds, he said, but the SPLC does not comment on whether the nonprofit has plans to develop such litigation.
The Attorney General’s Office should devote the same amount of time investigating venture capital funds catering to white-owned businesses as it does investigating companies seeking to create a diverse workforce, according to McCoy.
The SPLC supports providing more economic opportunities to people of color who have faced historic disadvantages and were denied opportunities to receive funding in the past, according to the SPLC’s Aug. 5 letter.
“The problem we’re identifying in this context is one where less than 1% of venture capital in the country goes to Black women-owned businesses,” McCoy said. “... We live in a world where race-based decision-making has a part to play” due to years of institutional racism.
The Attorney General’s Office did not immediately respond to a request to comment about the SPLC letter.