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NEW UPDATE

APPEALS COURT STOPPED THEM.





ajc.com

BREAKING | Appeals court pauses Atlanta VC fund grant for Black women​

Mirtha Donastorg
4–5 minutes

The Atlanta Journal-Constitution and Report for America are partnering to add more journalists to cover topics important to our community. Please help us fund this work by donating at ajc.com/give.
The 11th Circuit Court of Appeals in Atlanta on Saturday ordered Atlanta-based venture capital firm Fearless Fund to pause grant applications supporting Black female founders while a lawsuit alleging racial discrimination works its way through the court.
The ruling is the first legal win for the nonprofit American Alliance for Equal Rights, a conservative group started by Edward Blum, a key activist in the successful challenge of affirmative action in college admissions. The Alliance sued Fearless in early August, alleging their $20,000 small business grant program was racially discriminatory because it was only for Black women.
The grant application was supposed to close on Saturday, Sept. 30, but must now remain open until further order of the court. No grant winner can be decided yet.
On Tuesday, the Alliance and Fearless met in federal court for the first time, where lawyers for the Alliance asked U.S. District Court Judge Thomas Thrash Jr. to bar Fearless from enforcing the racial eligibility criteria for the grants. But Thrash denied the motion, saying the program sends a message that Fearless wants to support Black women business-owners and that message is protected free speech. In his written opinion, Thrash said the Alliance “failed to carry its burden to clearly show a likelihood of success on the merits and irreparable harm.”
Later Tuesday, the Alliance filed an emergency motion with the 11th Circuit and a three-judge panel overturned Thrash’s ruling. Two judges sided with the Alliance, saying “the plaintiffs have established an irreparable injury,” calling the grant program “racially exclusionary.” One judge dissented, siding with Fearless. :snoop:
“We respectfully disagree with this court’s decision, appreciate the important points raised by the dissent, and look forward to further appellate review. We remain committed to defending the meaningful work of our clients,” Alphonso David, president and CEO of the Global Black Economic Forum and one of the lead lawyers for Fearless, said in a statement.
ExploreUPDATED: Judge dumps injunction bid in Atlanta VC fund discrimination case
Similar conservative organizations have also targeted major corporations like McDonald’s, Target and Progressive, moves that are widely seen as an attack on affirmative action programs in business.
But some venture capitalists who invest in Black founders are now doubling down on their work. Jewel Burks Solomon is a co-founder and managing partner at Collab Capital, an Atlanta-based VC firm that invests solely in Black-led companies. This week at the Intentionally Good Summit, a gathering for diverse founders that was held inside of the Venture Atlanta conference, Burks Solomon was defiant when talking about the recent spate of lawsuits.
“It would not be true to why we started [Collab], why we got in this business, if we made any tweaks or adjustments out of fear,” Burks Solomon said during a panel discussion. “The mission has to stay the same and how we communicate around it, how we collaborate around it should also stay consistent.”
ExploreAtlanta VC fund swept up in fight targeting corporate diversity programs

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Fearless Fund barred from awarding grant to Black women founders
A panel of judges released a preliminary injunction against the fund's Strivers Grant program

Dominic-Madori Davis3:42 PM EDT•October 2, 2023
Arian Simone, left, President and Chief Executive Officer of Fearless Fund, and attorney Ben Crump, speak during a Fearless Fund town hall meeting at The Gathering Spot in Atlanta, Georgia, August 17, 2023.
The Fearless Fund suit is heating up in Atlanta’s 11th Circuit.

A panel of three appellate judges on Saturday temporarily blocked Fearless Fund from awarding its $20,000 Fearless Strivers Grant to Black women entrepreneurs as the lawsuit filed against it makes its way through the courts.

The American Alliance for Equal Rights (AAER), led by Edward Blum, who was behind the efforts to overturn affirmative action, sued Fearless Fund in August, alleging that its Strivers Grant program discriminates against non-Black women. Judge Robert Luck and Andrew Brasher, both appointed by President Donald Trump, agreed with the AAER, calling the grant “racially exclusionary” and said it likely violated Section 1981 of the Civil Rights Act of 1866, which barred racial discrimination in contracts.

But another judge, Judge Charles Wilson, who was appointed by Bill Clinton, dissented and criticized the AAER for “weaponizing” the Civil Rights Act of 1866, as it was initially targeted to help the formerly enslaved. “AAER fails as an organization bringing a Section 1981 claim on behalf of white members. The inclusion of Asian business owners, while a racial minority, does not cure the inclusion of white business owners,” Wilson wrote in his dissent.

The ruling halts the grant process until a separate panel of judges decides whether the Strivers Grant can be deployed while the suit is played out in district courts. There is no date on when that panel of judges will convene.

Last week, Clinton-appointed Judge Thomas Thrash initially denied the AAER’s request to halt the Strivers Grant and said the fund was protected under the First Amendment because its deployment counted as charitable giving. The AAER then filed an emergency motion to appeal that decision, leading to the three-judge panel that eventually overturned Thrash’s ruling 2-1.

Alphonso David, Fearless Fund’s legal counsel and CEO of the Global Black Economic Forum, released a statement saying the fund and its legal team “respectfully disagree with this Court’s decision, appreciate the important points raised by the dissent, and look forward to further appellate review.” He added, “We remain committed to defending the meaningful work of our clients.”

“The members of the American Alliance for Equal Rights are gratified that the 11th Circuit has recognized the likelihood that the Fearless Strivers Grant Contest is illegal. We look forward to the final resolution of this lawsuit,” Blum told TechCrunch.

The website to apply to the Fearless Strivers Grant was taken down as of Saturday.

Meanwhile, experts and industry insiders following the case remain dumbfounded as it continues to unfold. Thomas Dorwart, founder of his law firm Thomas C. Dorwart Law, agreed with Wilson’s dissent. The whole point of Section 1981 was to protect Black Americans from economic disparity and discrimination after the Civil War and Reconstruction, giving them the opportunity to engage in the same contracts as white Americans, he said.

“The whole purpose of the statute is turned on its head by the argument of the plaintiff, and it is a perversion, the Justice says, to apply it this way because it’s actually supposed to do what Fearless Fund is doing, which is to provide economic opportunity for Black Americans,” he said.

And that’s especially useful, given the fact that less than 1% of all venture capital goes to Black women and less than 2% goes to Black founders overall. Dorwart is doubtful that Fearless Fund can now win in the 11th Circuit, given that it is a conservative court. Already, as seen with the preliminary injunction, the issue has split along party lines.

“It’ll eventually go to the Supreme Court, and maybe there’s a bit of a chance there,” he said, pointing out the fact that there are a few moderate Supreme Court justices.

TechCrunch previously reported nervousness throughout the ecosystem. Funds that focus on backing founders of color are wondering what will happen to them as overall exasperation spreads throughout the Black tech community. Chauntelle Lewis, a diversity advisor within the U.K. tech landscape, said Black eyes abroad are even following the case, as the U.S. ecosystem serves as a signal for the European market.

“While nobody will explicitly utter the words, ‘we’re no longer investing in Black initiatives because the majority of the U.S. no longer cares,’ that sentiment seems to be lurking beneath the surface,” she said. “We built our own tables, and now it seems like everyone is cutting off the legs.”
 

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imrs.php


“The whole secret of politics is knowing who hates who.”

That insight was the brainchild of Kevin Phillips, the longtime political analyst who passed away this week at 82 years old. Phillips’s 1969 book, “The Emerging Republican Majority,” provided the blueprint for the “southern strategy” that the Republican Party adopted for decades to win over White voters who were alienated by the Democratic Party’s embrace of civil rights in the 1960s.
Phillips advised Republicans to exploit the racial anxieties of White voters, linking them directly to issues such as crime, federal spending and voting rights. The strategy, beginning with Richard M. Nixon’s landslide victory in the 1972 presidential race
, helped produce GOP majorities for decades.
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Though Phillips later reconsidered his fealty to the GOP, updated versions of the “southern strategy” live on in today’s Republican Party, shaping the political world we inhabit today. So I asked historians and political theorists to weigh in on Phillips’s legacy. Their responses have been edited for style and brevity.

Kevin Kruse, historian at Princeton University and co-editor of “Myth America”: Kevin Phillips was a prophet of today’s polarization. He drew a blueprint for a major realignment of American politics that is still with us. For much of the 20th century, Democrats dominated the national scene, because of the reliable support of the “Solid South.”
But the “Negro problem” of the 1960s, Phillips argued, presented Republicans an opportunity to take the South and Southwest, too, a new region he anointed “the Sun Belt.” All they had to do was appeal to the hatreds of White voters there, through racially coded “law and order” appeals.

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Phillips, of course, proved correct about the regional realignment. Republicans won every single state in the South in the 1972, 1984, 1988, 2000 and 2004 presidential campaigns. Today, Republicans dominate the region partly because they still employ Phillips’s polarizing politics of resentment and reaction, from complaints about Black Lives Matter to panics about “woke” education. Donald Trump’s continued dominance of the GOP shows that the underlying instinct to exploit division and inflame hatred remains.

Nicole Hemmer, author of “Partisans: The Conservative Revolutionaries who Remade American Politics in the 1990s”: Phillips helped shape how the Republican Party navigated the last 50 years of U.S. politics. His big contribution was the idea that White southerners could be potential voters for the GOP, because the solid Democratic South had become newly fractured after President Lyndon B. Johnson signed the Civil Rights Act and the Voting Rights Act.
Phillips argued that the Republican Party needed to change the way it conducted politics to reach out to disaffected White southerners. For Nixon, that was “law and order,” something Ronald Reagan used to great effect along with stories about “welfare queens.” George H.W. Bush’s campaign ran the “Willie Horton” ad, which played up fears of Black criminality.

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Trump picked up this rhetoric. He launched his campaign on the ideas of Mexican migrant and Muslim criminality — that all these minority populations needed to be under much stricter surveillance.

The strategy that Phillips helped popularize worked just as well with some northern White voters as it did with southern White voters. It helped solidify the Republican Party’s base as almost exclusively White even as the nation has grown more diverse.

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Bill Kristol, a former Republican turned Never Trump conservative: It was happening already in 1968, but Phillips’s book and his subsequent promotion of the southern strategy did have the effect of making that reaction to the civil rights movement more coherent. It gave politicians a way to think about shaping that reaction politically.

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Newt Gingrich, who defeated lots of Democrats in southern House seats in the 1994 midterms, was in spirit a Phillips protégé. That culminated in 2010, when Democrats got obliterated, and in the red state-blue state divide today.

From Phillips to Ron DeSantis and Greg Abbott, there is a through line. DeSantis, Abbott and others are operating in a world anticipated and partly created by Phillips. The reaction of much of the White working class and Republican politicians to Black Lives Matter and “cosmopolitan elites” is a close cousin of what Phillips predicted and helped shape.

Michael Barone, senior political analyst for the Washington Examiner: I think Phillips was noticing what was happening rather than causing it to happen. Dwight D. Eisenhower got 49 to 50 percent of the popular vote in the South in 1952 and 1956; Nixon got nearly that much in 1960. When the national Democratic Party became more dovish, circa 1967, reacting against the Vietnam escalations of its own presidents, Southern Whites — always the most hawkish voters — turned away from national Democrats not so much because of civil rights but because of dovishness. It’s what Tom Eagleton later told Robert Novak: “acid, amnesty, and abortion.”

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Corey Robin, political theorist and author of “The Reactionary Mind”: Phillips understood that the old Republican Party establishment could not begin to take on the New Deal and Great Society until it developed a mass popular base. He saw that the White working class — not just in the South, but in the North — was growing disaffected with the New Deal on economic and racist grounds, and that Republicans could turn that dissatisfaction into governing majorities.
Beginning in 1972 with the reelection of Nixon, Republicans built this majority in the spirit of what Phillips imagined. George W. Bush, the last Republican president to get a popular majority, was the last spasm of that vision. The irony is that, under Phillips, the idea was to expand the Republican Party into a permanent governing majority.

But once the White working class diminished, the electoral return of that resentment dramatically dwindled. As a result, instead of relying on robust electoral majorities, the Republican Party, to win power, relies on the electoral college and the malapportioned Senate. Phillips’s blueprint made the heyday of Republican power — and ultimately unmade it.
 
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