HOWARD FINE

Staff Reporter

In the world of women-owned businesses, things are not always as they appear.

Topping the Business Journal's list of 100 largest women-owned businesses in L.A. County this year is Don Kott Auto Center. "I run the company on a daily basis and have invested a lot of my own money in the company," said Margaret Kott, wife of Don Kott (now retired), who owns 51 percent of the well-known auto dealership that motorists see traveling through Carson on the San Diego (405) Freeway.

In the No. 72 position is Joe Cerrell's political consulting firm, which is actually 51 percent owned by his wife, Lee Cerrell. "We started the company on a 50/50 basis," Joe Cerrell said. "But a few years back, I decided to give 1 percent of my share to Lee because she's actually the brains behind the organization."

On the Business Journal's list of the 100 largest women-owned companies in L.A. County, 22 of the firms are either 50 percent or 51 percent owned by women.

Determining what is or isn't women-owned is more than an academic exercise. Even in California's post-affirmative action era, businesses that are owned and operated by women (or minorities) can get a leg up on hundreds of millions of dollars in federally funded contracts and untold millions more in private-sector work.

In a few cases, companies cheat. That has led to skepticism about the entire system of preferences for "disadvantaged" businesses owned by women or minorities.

"Whenever you have a system like this, it brings into play those who would take advantage of it for less-than-noble reasons," said Al Osborne, director of the Harold Price Center for Entrepreneurial Studies at UCLA.

The stakes are considerable. At the Metropolitan Transportation Authority, which doles out more than $1.5 billion a year in federal funds to contractors, officials set a 1998 goal of having 23 percent of those dollars or $350 million go to minority- and women-owned businesses. About 21 percent of the total dollars or $315 million actually went to such firms last year, according to Carey Peck, the MTA's manager of vendor services and outreach.

Peck said the MTA typically rejects 5 percent to 10 percent of the firms that apply to be certified as "disadvantaged," but that percentage spiked in 1997, just after the passage of Proposition 209, which banned set-asides in state contracts.

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