In an effort to promote equity and opportunity, the Port Authority of New York and New Jersey’s (PANYNJ) Minority and Women-Owned Business Enterprise (MWBE) program was created to help level the playing field for historically marginalized business owners. But behind the promise of progress lies a pattern of troubling allegations—of front companies, favoritism, and financial mismanagement—casting a long shadow over some of the region’s most expensive infrastructure projects.
Critics say the program has become a loophole-laden system that allows major contractors to skirt rules, inflate costs, and sideline genuine MWBE firms. Several investigations, audits, and whistleblower complaints over the past decade suggest that abuse of the program may be more than just an isolated issue.
One common scheme involves so-called “pass-through” companies—shell firms owned by women or minorities that exist only on paper. These companies are listed on contracts to help large firms meet MWBE participation quotas, while the real work—and profits—are handled by non-MWBE entities. The certified MWBE firm may collect a small administrative fee, but contributes little or no labor to the project. In some cases, these firms have no physical office, no employees, and no relevant experience.
Reports from outlets like the Daily News and City Journal in 2019 uncovered numerous examples of such arrangements, including at major airport redevelopment sites. One former contractor told reporters that his company routinely “rented” MWBE partners in name only, simply to meet the paperwork requirements for public bidding.
Oversight appears to be a persistent issue. The Port Authority reportedly relies heavily on self-reporting from prime contractors, with little in the way of random inspections, financial audits, or performance verification. This lack of due diligence allows firms to list subcontractors that may never set foot on a job site.
Questions of political favoritism have also emerged. Some MWBE-certified firms with strong political connections have received a disproportionate number of high-value contracts, despite having limited track records. Critics argue this undermines the goal of fair access and raises questions about the program’s vetting procedures.
Perhaps most alarming are allegations of kickbacks and contract steering. In one 2014 whistleblower lawsuit, an insider at a major airport contractor alleged the firm submitted false MWBE documentation to win bids for JFK and LaGuardia projects. The complaint triggered an internal review, but details of the outcome were never made public.
The cost of these abuses isn’t just theoretical. Inflated contracts and reduced competition mean taxpayers foot the bill—often without the intended social benefit. Meanwhile, legitimate MWBE firms find themselves boxed out of opportunities by better-connected or outright fictitious competitors.
Several watchdog groups and public officials have called for reform, including mandatory site visits, tighter auditing, and harsher penalties for firms found to be gaming the system. Advocates are also pushing for a publicly accessible performance database to distinguish active, contributing MWBEs from those that exist only on paper.
Until such reforms are adopted and enforced, critics say the MWBE program may continue to enrich the wrong players—while the businesses it was meant to uplift remain grounded.