A New Report and New Book on State and Federal Ethical Misconduct

The Privatization of Economic Development
A fascinating report has just been published by Good Jobs First, entitled "Creating Scandals Instead of Jobs: The Failures of Privatized State Economic Development Agencies." Good Jobs First describes itself as "a national policy resource center for grassroots groups and public officials, promoting corporate and government accountability in economic development and smart growth for working families."

The report's executive summary concludes that, "These experiments in privatization have, by and large, become costly failures. Privatized development corporations have issued grossly exaggerated job-creation claims. They have created 'pay to play' appearances of insider dealing and conflict of interest. They have paid executives larger salaries than governors. They have resisted basic oversight."

The report also concludes that "the real agenda behind these [public-private partnerships] was not to make economic development efforts more effective but rather to more tightly concentrate the control over—and credit for—job creation events in the hands of governors and their appointees."

For a detailed look at the problems that have arisen with respect to Florida's public-private economic development body, Enterprise Florida, see two recent reports from Integrity Florida: Enterprise Florida: Economic Development or Corporate Welfare? and Corruption Risk Report: Enterprise Florida.

At the local and regional level, the privatizing of economic development, or keeping it officially within the government but essentially turning it over to realtors and others who benefit directly from new businesses coming to town, can also lead to ethical misconduct, especially self-dealing.

Extortion
A government ethics book is big news this week. It is Peter Schweizer's Extortion: How Politicians Extract Your Money, Buy Votes, and Line Their Own Pockets (Houghton Mifflin Harcourt). Its focus is solely on the federal government, and by the language it employs, its author appears to be trying to undermine government rather than improve trust in it. Accusing politicians of "extortion" and "shakedowns," although sometimes accurate, is essentially doing what they do to each other during ugly election battles.

Schweizer's solution – placing restrictions on allowing legislators to receive contributions while their legislature is in session – may or may not work for federal and state legislators, but in any event it is limited. At the local level, it doesn't work at all. It would mean that incumbent council members would have to resign in order to run for office, or the council would have to close down for a few months before every election. And what about mayors, board of education, zoning board, and other board and commission members?

In short, there is little in this book that is useful at the local level. However, it does do one useful thing for local government ethics:  it emphasizes that what is often portrayed as industries, business groups, contractors, developers, and grantees doing everything they can to influence government decisions is sometimes actually officials requiring these entities to make campaign contributions, give their own companies business, hire their family members, and send or invite them to lavish events.

In short, the pay-to-play side of ethical misconduct is too often ignored. The influence story is the one that gets told more often. For the most part, government ethics ignores the distinction. This is, I think, the best approach.

Robert Wechsler
Director of Research-Retired, City Ethics

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