The Detroit Free Press featured an article August 19 (“Ex-Kilpatrick aide faces corruption probe”) about a wide-ranging and ongoing investigation in Detroit by the Federal Bureau of Investigation that apparently involves “informants and scrutiny of several multimillion-dollar deals such as the Synagro Technologies sludge removal contract,” not to mention secret videotaping.
Two items in this story caught my attention. The first was the apparent connection to the “Asian Village,” a development that was supposed to contribute to Detroit’s revitalization, rebirth, or renaissance. The village went belly up within in a year. In the Detroit probe federal agents had been looking for records involving a businessman’s firm that had ties to the Asian Village.
As I write this I do not know if there were government funds or favors involved at all with the Asian Village, and this brings me to my first point. Government development officials are not the only people who make poor investment choices. It can and does happen in the private sector too. The difference of course is that investors are risking their own money and not that of a stranger. Moreover, when it becomes evident that a project is failing it is easier to change the development’s direction. For instance, the investors can pull the plug on the project.
The second item that caught my attention was the use of “undercover videotaping” in its probe. This reminded me of a 2005 development-related corruption story humorously dubbed “Operation Tennessee Waltz,” that also involves a videotape.
According to the online encyclopedia Wikipedia, Operation Tennessee Waltz involved a fake company called “E-Cycle” whose fictional officers asked lawmakers to push legislation designed specifically to benefit their company. Of the 10 people arrested, seven were state lawmakers who “agreed to do so if they were to be paid for their introduction of legislation.” You can watch the video of ringleader John Ford taking a bribe by watching the imbedded video, below. Money changes hands at about the 3:55 mark.
Imagine how often the opportunity exists for politicians across the globe to exchange favors under the guise of creating jobs or facilitating development of some sort for cash or other gifts. States run scores and scores of programs designed to encourage cozy relationships between business and government. This, one would think, would increase the likelihood that one side will try to game that system to illegally or unethically advance their self-interest and do so under the very public illusion that it facilitates economic development and creates jobs for people desperate to acquire them.
It doesn’t have to be economic development legislation that makes such corruption easy, either. It could be any subject. That is why it is so important to strictly limit what government can and should do. Moreover, even a government with strictly limited powers should try to conduct its business with the greatest transparency possible.
Good point. There are all kinds of statutory and admimistrative safeguards against corruption in the awarding of government contracts, but we're supposed to just take it on faith that eco-devo officials never stray from the path of righteousness . . .
Posted by: Jack McHugh | September 01, 2008 at 06:06 PM
While Jack's point holds, what went on with Tennessee Waltz was corrupting the straight path of righteousness.
What the feds at E-Cycle were doing was trying to get a law that forced school districts and state agencies to use E-Cycle. It did so by playing around with bid rules. It just made the requirement that "the recycling company shall have conducted business for a period of at least one (1) year prior to participating under this section"
Think about that next to all the nuances, priorities and preferences listed in, say, the 21st Century Jobs Fund. While eco devo officials may administer those programs to the letter of the law, the politicians that created it gave them a corrupt game to play.
Posted by: James Hohman | September 02, 2008 at 05:22 PM
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