Federal authorities continue to implement Diversity, Equity, and Inclusion practices within their ranks.
In a surprising turn of events, the federal wire-fraud charges against Sidarth Chakraverty and Victor Alston, St. Louis-based developers, have been dismissed. The decision was made by Thomas Albus, the new interim U.S. Attorney, who filed paperwork to drop the charges against the developers.
The indictment against Chakraverty and Alston concerned their alleged misrepresentation of their eligibility for the city's Minority Business Enterprise and Women Owned Business Enterprise (M/WBE) program. The M/WBE program, administered by the St. Louis Development Corporation (SLDC), set participation targets for racial minorities and women in development projects in exchange for eligibility for tax abatements.
However, the program's race- and sex-based preferences have been under scrutiny. The M/WBE program's guidance was deemed to be obscure, arbitrary, and constantly shifting, making it difficult for businesses to comply. Furthermore, the Supreme Court has repeatedly held that sovereign regulatory decisions and "right to control" theories do not suffice as grounds for wire-fraud charges.
The case of Kousisis v. United States underscores that misleading statements about race- and sex-based preferences cannot make it easier to receive tax abatements under federal law. The M/WBE program's race- and sex-based preferences were also found to be unconstitutional.
The Trump administration has been actively seeking to clamp down on DEI (Diversity, Equity, and Inclusion) programs, with the city of St. Louis suspending the M/WBE program due to anti-DEI executive orders and Justice Department guidelines. The administration has also been bringing corporations and universities to heel for unlawful DEI programs.
Chakraverty and Alston, who developed housing in blighted neighborhoods of St. Louis, hired widely from the area, making good-faith efforts to meet the M/WBE program's goals. The prosecution of these developers has been questioned due to the Supreme Court's decision in Students for Fair Admissions v. Harvard, which suggests that conditioning tax benefits on race- and sex-based preferences is unconstitutional.
Ilya Shapiro, the director of constitutional studies at the Manhattan Institute and author of "Lawless: The Miseducation of America's Elites", has expressed concerns about the role of DEI in ensnaring innocent Americans. Shapiro also writes the "Shapiro's Gavel" newsletter.
Hal Goldsmith, a federal prosecutor in St. Louis, initially indicted Chakraverty and Alston on wire-fraud charges. Goldsmith filed responses to defense motions in the Chakraverty/Alston case before the extensions he himself had requested expired.
Thomas Albus, who was involved on July 1, 2020, in the accusations against Chakraverty and Alston, withdrew the charges on the same day. The Trump administration's intervention in the case has led to the dismissal of the charges, providing a reprieve for the developers.
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