Elected Officials and No-Bid or Improperly Bid Contracts: Two Case Studies

A no-bid or improperly bid contract cannot help but create an appearance of impropriety. And yet not only do elected officials keep defending them, but they also refuse to acknowledge the appearance of impropriety that surrounds every one of them, especially when elected officials and their family members are involved. Here are two current examples, one in Dallas, the other in Richmond, KY, a city of 33,000 about 90 miles from Churchill Downs.

Dallas
In Dallas, the no-bid contract involves an effective 18-19-year renewal of airport concessions. According to an article in today's Dallas Morning News, the two concessionaires are partly owned by a congressional representative (through a blind trust), a state representative, and a big Dallas political player, former head of the Dallas Citizens Council, a business group.

When political figures such as these are involved in a no-bid contract, you'd think they'd recognize the problem. Well, here's the state representative's take on the appearance of impropriety.

My integrity has been impugned for no particular reason. I am sick and tired of reading in the Dallas Morning News my name. We need to be sure we don't allow the newspapers to lynch people in this town.

Here's Mayor Leppert's take on the problem:

The perception is so important because perception drives credibility and credibility drives confidence.

The mayor opposes no-bid renewal, and with the support of Southwest Airlines, which is paying for airport renovation, he won a partial victory yesterday by having the vote on the contract delayed in favor of a special committee of executive and council members to look further into the matter.

Richmond, KY
In Richmond, the issue, according to an article in yesterday's Richmond Register, is an improperly bid café concession at a city golf course. In some ways, improperly bid contracts are worse than no-bid contracts, because there is a gulf between the intended appearance of a fair bid process and the perceived reality of the transaction. In other words, it looks more devious.

The café contract was advertised for only seven days, and only one bid was received other than the concessionaire's. Both bids were rejected and, instead of re-bidding the contract, both bidders were asked to make new bids with new guidelines. The city commission's golf committee recommended that the concessionaire's bid be accepted.

The concessionaire happens to be the wife of a city commission member. The city's ethics code states that:

No officer or employee of the city or any city agency shall directly or through others undertake, execute, hold or enjoy, in whole or in part, any contract made, entered into, awarded or granted by the city or a city agency...

Although contracts made prior to taking office are not included in this prohibition, contract renewals are expressly included.

Here's the concessionaire's take on the conflict problem:

Everything that we’ve always done [referring to herself and her husband] has been separate. He’s never worked at Gibson Bay in the 15 years, he’s never taken any money from me in any way. We’re separate completely with that. I don’t see where there’s anything to testify about. I don’t even know why such a big deal was made of it.

The testimony she referred to was before the city's ethics board in a matter brought by the losing bidder. See the article for some of the testimony.

The concessionaire does not show any understanding of appearances or of the city's contract provision. She says that she doesn't give any of her money to her husband, but unless she never spends a cent of her money on anything her husband would not otherwise spend his money on, then he is "enjoying" the contract, as the ethics code's contract provision says.

And everyone knows this is how marriages work. Separate accounts do not mean that there is not a sharing of resources, an "enjoying" of each other's income. This would be true no matter what the ethics code's language was.

These appearance problems are only exacerbated by attacking the press and acting as if nothing's wrong. Something's wrong because something appears to be wrong. Dealing responsibly and professionally with these appearances is what government ethics is about. Only that will lead people to trust that their government is not being misused by officials for their own benefit.

Robert Wechsler
Director of Research-Retired, City Ethics

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