making local government more ethical

Don't Take Anything For Granted

The Grants of a Conflicted Board of Insiders
Sometimes conflicts can cause a city or county serious problems with such things as state and federal grants. This is what has happened in Brockton, MA (pop. 94,000), according to an article in the Enterprise-News.

The board of the city's redevelopment organization, Building a Better Brockton (BBB), which oversees state and federal grants, has several members with direct connections to companies seeking money from BBB. Those members include two bankers, two local business owners, and the directors of the local housing authority, health center, business association, and YMCA. They are expected to resign soon.

The state Department of Housing and Community Development has withheld a $1 million grant from BBB. On the same day, the federal Department of Housing and Urban Development (HUD) rejected a request for a conflict waiver involving a YMCA grant request in the amount of $600,000.

From the article, everyone seems clueless about the situation. The mayor appears to have been perfectly comfortable with having potential grant recipients decide who the BBB's grant recipients would be. This is true even after a HUD audit last fall that found possible conflicts and put into jeopardy a $22 million grant, according to an article in the Boston Globe.

When cities do not take conflicts seriously, it can lead to a great deal of trouble. Politicians need to think outside the box, the box, in this context, being the idea of appointing board members who are powerful community insiders.

The Abuse of Grants Placed in Special Funds
Special funds are a bad idea. Special funds are to misuse of office what catnip is to cats. Take the Miami-Dade police department's environmental fund.

According to an article in Friday's Miami Herald, the fund was created in 2000 to pool together federal, state, and local resources intended to combat environmental crime. The fund had three big problems:  (i) hardly anyone knew about it, (ii) only two people had authority over it, and (iii) there was a lot of money in it.

What do people with authority over a secret fund intended for a purpose not central to their department do with the money? "Purchase cars for top commanders, high-tech surveillance equipment, DirecTV subscriptions, iPhones, office furniture, boats and pricey laptop computers." In short, Christmas time!

Ten SUVs were purchased for the top police officials, and none for environmental officers.

As more money went into the fund, fewer environmental arrests were made.

What is the police department's reaction to all this? First, it says it's waiting until the audit is complete before officially commenting. Second, top brass deny that they knew where the stuff came from. Third, the police director until a week ago insists he had the discretion to use the funds for any law enforcement purpose. Fourth, give the SUVs to environmental officers now that the top brass can't have them anymore. No one seems to have said what's going to be done with the flat-screen TVs.

The county's director of Environmental Resources Management seemed unashamed not to know how the fund was used. No one seems to be very curious in Miami-Dade. When the top brass suddenly got brand new SUVs, when all they needed was police cars, didn't anyone feel he had the obligation to ask where the money came from?

If it's truly necessary to set up a special fund, all expenditures should be reviewed and signed off on by an oversight committee or the council, and by an auditor/controller, in addition to the department head. The fund should not be buried in a budget, but highlighted, with more detail about its expenditures than are provided with respect to expenditures from the general fund. And an annual fund report should be drafted, justifying all expenditures and outlining the plan for the following year's use of the fund. The report should be formally accepted by the council, after review by the relevant committee, as well as by the mayor or manager.

Robert Wechsler
Director of Research, City Ethics
rwechsler@cityethics.org
203-230-2548
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