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Barnini Chakraborty, Senior Investigations Reporter


NextImg:Georgia venture capital fund for minorities sued over reverse discrimination

An Atlanta-based black women-founded venture capital firm is on the receiving end of a renewed effort to dismantle affirmative action in corporate America and is gearing up to defend itself in court next week.

Fearless Fund is being sued by the American Alliance for Equal Rights, a nonprofit group founded by anti-affirmative action activist Edward Blum, a former stockbroker backed by wealthy conservative donors. Most recently, Blum gained notoriety for winning a Supreme Court case that dismantled college race admission policies. Blum has now turned his attention to diversity-focused funds and programs that provide seed money to entrepreneurs and small businesses.

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Blum has filed more than two dozen reverse discrimination cases since the 1990s in his campaign to remove race from America's laws, eight of which have made it to the nation's highest court. Now Blum, a soft-spoken former Democrat raised by liberal Jewish parents in Texas, is turning his sights on corporate America and vowing to root out what he believes are unfair opportunities based on skin color.

Fearless Fund disagrees and claims it is being unfairly targeted.

“We are inaugural defendants in one of the most defining lawsuits of our time,” Arian Simone, CEO and co-founder of Fearless Fund, said during a speech in August at the 60th anniversary of the March on Washington.

Alphonso David, president and CEO of the Global Black Economic Forum and one of the lead lawyers for Fearless Fund, told the Atlanta Journal-Constitution that the case could have a ripple effect throughout the country.

“You take a case like this very seriously because it seeks to strip away fundamental legal protections that black and brown people have in this country,” he added.

The threat of legal action has prompted some businesses to revamp their hiring processes. Other conservative organizations have targeted corporations such as McDonald’s and Target.

Edward Blum speaks during a news conference.

This summer, 13 GOP state attorneys general sent a letter to the heads of the top 100 U.S. companies, warning them to stop giving certain groups an alleged leg up, "whether under the label of 'diversity, equity, and inclusion.'"

In an Aug. 23 letter, Republican attorneys general from Montana, Arkansas, Kansas, Iowa, and Kentucky sent a similar message to the top 100 law firms in the country, prompting one, Gibson Dunn & Crutcher, a multinational firm founded in 1890 and headquartered in Los Angeles, to change its eligibility criteria for diversity scholarships on its own before being dragged into court.

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Gibson Dunn & Crutcher's $50,000 diversity and inclusion scholarship goes to students “who have demonstrated resilience and excellence on their path toward a career in law,” under the new language, which is a change from “students who identify with an underrepresented group."

“Our program has always been — and remains — open to all law students who demonstrate a commitment to diversity in the profession,” Zakiyyah Salim-Williams, Gibson Dunn’s chief diversity officer, told Bloomberg Law. “It is one of many ways we try to reach the best and brightest and encourage them to come work with us.”

Back in Georgia, Anthony Michael Kreis, an assistant professor of law at Georgia State University, said he doesn't see the threat of lawsuits going away. “This lawsuit [against Fearless Fund] is part of a broader attempt to litigate the next wave of anti-affirmative action cases,” Kreis told the Atlanta Journal-Constitution. “I think that you’ll see this as part of a broader litigation theme or litigation strategy by anti-affirmative action, anti-DEI groups … to try to get rid of these programs in the private sector.”

Fearless Fund has made it clear it is not going down without a fight and is being represented by Gibson Dunn & Crutcher, the Global Black Economic Forum, and civil rights lawyer Ben Crump. Two other law firms, as well as the National Women’s Law Center and the NAACP Legal Defense Fund, are also consulting on the case.

Attorney Ben Crump speaks as Ayana Parsons, left, and Arian Simone, right, of Fearless Fund, listen during a news conference.

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Crump, who courts the media on a regular basis, said he believes the Fearless Fund was targeted by Blum to set an example.

“The conclusion seems to keep coming back to the fact that he thought they would be the easiest ones to pick off," Crump said. "Oh, was he wrong."