Executives at companies that receive billions of dollars in federal contracts were less likely to reflect America’s diversity than their employees, according to a first-ever analysis by USA TODAY and Reveal from The Center for Investigative Reporting. Some have been sued for workplace discrimination.
In 2020, 21 companies each were paid more than $3 billion by the federal government, including defense contracting giants like Lockheed Martin and pharmaceutical companies like Moderna, one of the pioneers of the COVID-19 vaccine.
People of color were underrepresented among executives at these corporations compared with the rest of their workforce, the analysis showed. And women were less likely than men to break into top ranks, particularly those of color. Such disparities have long been documented by researchers and in the historically limited public information about demographics at American companies, including a USA TODAY database of S&P 100 corporations.
Why does the diversity of companies receiving public dollars matter?
The disparities highlight how tax dollars can reinforce gaps in wealth and opportunity for women and people of color.
Joseph Bryant Jr., who leads the Rainbow PUSH Silicon Valley diversity project founded by the Rev. Jesse Jackson, said public money should advance equity in the country.
“Either the government should be giving more money to minority businesses or the government should be giving money to businesses that make diversity and inclusion a priority,” he said.
Donald Tomaskovic-Devey, who runs the Center for Employment Equity, said making the data public allows people to compare companies and hold them accountable for their hiring practices. He said diversity, equity and inclusion officers also could use the data to benchmark their companies’ performance against competitors.
“I hope that in the long run this empowers the DEI staff in these firms to push their firms to do better,” said the sociology professor from the University of Massachusetts, Amherst.
Why is this the first time this information has been available about federal contractors?
The data is the largest trove of corporate diversity information ever made public after a yearslong legal battle by Reveal seeking the reports filed by government contractors each year to the Equal Employment Opportunity Commission. It includes more than 19,000 federal contractors. More than 4,000 others have objected, and their information remains in limbo pending further litigation.
The Department of Labor has argued it can’t release contractor diversity reports without notifying each company. It has so far sided with companies that argue the reports should be considered confidential business information – even though a federal judge has ruled those records should be made public.
Could this lead to more public information about company demographics?
Researchers say Monday’s release could be a crucial step toward the public being able to see all summary diversity data collected on this federal form, not just the demographics of government contractors.
“This could be what breaks the logjam,” Tomaskovic-Devey said. “If the vast majority of firms were willing to release these data, what does that say about the defense that this is a trade secret? ”
What does the new data show about the diversity of federal contractors?
Many of the companies receiving the most money from federal contracts do work for the Department of Defense.
Topping that list in 2020 at more than $51 billion in public money is Lockheed Martin, the Washington, D.C.-based aerospace and security giant. That figure does not include its subsidiaries. For instance, Sikorsky Aircraft received $4.6 billion in federal contracts that year, ranking 11th.
Neither company appeared in the five years of data released Monday by federal officials. But Lockheed Martin has published a copy of its demographic report online since its 2020 filing. That document shows White, non-Hispanic or Latinx men held 68% of executive jobs despite being 34% of the U.S. workforce. They had no executives who were Pacific Islander or American Indian. And Hispanic or Latinx women held just two of the 356 executive jobs despite accounting for 7% of the U.S. workforce.
“At Lockheed Martin, we believe that our commitment to diversity and inclusion is a business imperative, helping to drive our innovation and global leadership,” wrote company spokesman Richard Sant.
Our analysis found similar trends – White men holding a disproportionate number of top jobs and women of color having the least representation – at other companies receiving billions of dollars, such as Boeing, Raytheon, Humana, General Electric and Honeywell.
A Texas father-daughter attorney team of Elizabeth “BB” and Brian Sanford represent employees suing major defense contractors.
Brian Sanford says the Pentagon should do more to audit employment relations from its largest contracts.
“Just hold them to the basic standard. It’s our tax dollars – they should be following the law,” Sanford said. “There is a lot of power in saying ‘You don’t get this $1 billion contract if you do this.’ They’ll listen to that.”
What do companies have to say about this release?
Few of the 21 companies that received the most federal contract money in 2020 returned a request for comment about their diversity track record.
Companies often argue that the reports must be kept secret because they could give competitors valuable information about their workforce, even allowing other firms to lure away diverse talent.
For example, Oracle has objected to the release of its data in the past by saying it could lead to a “raiding of minority or female employees,” though the company posted a more recent copy of its federal report online.
This article was produced in collaboration with USA TODAY.
This story was updated to include a comment from a Lockheed Martin spokesperson.
Jessica Guynn contributed to this report.
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