making local government more ethical

It's Gray Between the Cracks

Gifts to a local official can fall between jurisdictional cracks, as shown in an article today in the New York Times. They can also fall between definitional cracks. And between these cracks it's gray.

The article reports that, a couple of years ago, Newark NJ's mayor, Cory Booker, who is running for U.S. Senate, was given money by several high-tech executives to found a high-tech company.

The definitional issue is whether the mayor received gifts. The money was not given to the mayor, but to a company in which he has a financial interest. And the money was not given, but invested. What was actually given to the mayor was not money, but the opportunity to make money and the opportunity, even if he doesn't make money, to have a high-tech company without having to do much of the work (since he has a full-time job and lacks much of the necessary expertise or experience).

These are not your typical gifts. But it would certainly not be stretching the definition too far to consider them gifts. They certainly have the appearance of being gifts.

The jurisdictional issue (which is partly also a definitional issue) involves the fact that the gift givers are not restricted sources. That is, they are (presumably) not seeking any special benefit from the city of Newark, nor are they or their companies regulated by the city. Gift bans are not designed to prevent gifts from people whose gifts would not even appear to be bribes, at least with respect to the government the official is serving.

What these people want in return for their generosity is not something from the mayor of Newark, but something from a future U.S. Senator, or other high position if Booker is not successful in this election. In fact, the transaction would be better for Booker if Booker were not elected this year. This is a special election, being held because the prior holder of the position died in office. To the extent the transaction was a gift, it would have been expected that the business would be going strong by the time Booker reached higher office, and that he could then sell his interest in it, to his benefit, which would likely be required by law. At this point, the company is going nowhere.

Until Booker does achieve higher office, the investments in his company and any benefits he gets from them are not illegal. But they create an appearance that high-tech executives are trying to buy his support for their goals, or reward him for his very public support for social media and its interests. This support has little to do with his position as mayor, but it is his position as mayor that has put him in the public light, so that his support matters.

In other words, it's gray in this place between the cracks. And where there's gray, it's best to steer clear.

Robert Wechsler
Director of Research, City Ethics