The good, the bad, and the ugly: the way "business" gets done by government in DC

Because of the recent shenanigans of Councilmember Barry of hiring a girlfriend (see "Hiring Girlfriend Was Legal, Barry Says: D.C. Council Member, Subject of Ethics Probe, Adds That He Would Do So Again" from the Post) and funding neighborhood organizations with ties to his office (see "Barry Involved in Suspect Nonprofit Dealings" from the Washington City Paper), the City Council has launched an investigation (see "Call in the Prosecutors: Dubious earmarks add to the case for a criminal investigation" from the Washington Post).

In themail, the local e-letter on good government, editor Gary Imhoff writes:

...in the last issue of themail, I wrote that “the city council’s investigation called for by Chairman Gray has been carefully proscribed and limited to Barry’s contracts with Ms. Watts-Brightwood.” There was something of a public outcry about that limitation, and Gray has responded to a degree. The “Council Contracts and Grants Investigation Authorization Resolution of 2009” still reads as though it is aimed specifically at Councilmember Barry and his contracts with Ms. Watts-Brightwood, but Councilmember Gray has introduced some loopholes in the law that will allow Robert Bennett to do a more thorough investigation of the city council’s contracting and grants, at his discretion... For example, Sec. 2(f) reads, “As part of the investigation, Mr. Bennett may examine any personal service contract or grant awarded by the Council, including any documents relating to the award. ” This is an opening that we should take advantage of. If you have information about irregularities in any council contract or grant that would be helpful to Mr. Bennett, please send it to Robert S. Bennett, Skadden Arps, 1440 New York Avenue, NW, Washington, DC 20005 or to robert.bennett@skadden.com,

Relatedly, Councilmember Michael Brown has introduced legislation (although I don't think it's written very well) to put more controls on tax relief bills initiated by City Council (see "Make developer tax breaks more transparent" from Greater Greater Washington).

A few years ago, people paid a bit more attention to eminent domain deals after the fallout over Kelo vs. City of New London, where the Supreme Court ruled as legal takings of property for projects that would boost the economic returns of local governments--even if it was to the benefit of one developer at the expense of others. (See "Justices Rule Cities Can Take Property for Private Development" from the New York Times).

In the Washington Business Journal, Jonathan O'Connell writes about problems with the community benefits agreement process, in "Zoning Changes for Cash." Also see "Link probed between D.C. councilman's support, developer dollars," from the Examiner.

And there has been plenty in the WBJ (and this blog) in the past over the Florida Market redevelopment scheme, where DC City Council, through legislation designated a master developer and authorized eminent domain land seizures, without having first put out a tender for proposals, and without an open and transparent evaluation process. What the City Council is allowed to do is illegal for the Executive Branch of the DC Government.

And there are plenty of other examples of problems with property disposition and the like over the years. Not to mention the ongoing issues with earmarks to organizations, both by the Executive Branch and the Legislative Branch.

As I have said from time to time in dealing with planning, zoning and development matters in the city, a lot of the time it makes me feel incredibly "dirty" as a citizen and as a believer in good government and participatory democracy.

Harvey Molotch's seminal paper, "City as a Growth Machine: Toward a Political Economy of Place" explains why this is so. From the abstract:

A city and, more generally, any locality, is conceived as the areal expression of the interests of some land-based elite. Such an elite is seen to profit through the increasing intensification of the land use of the area in which its members hold a common interest. An elite competes with other land-based elites in an effort to have growth-inducing resources invested within its own area as opposed to that of another. Governmental authority, at the local and nonlocal levels, is utilized to assist in achieving this growth at the expense of competing localities. Conditions of community life are largely a consequence of the social, economic, and political forces embodied in this growth machine.

In short, local economies are based on local real estate, municipalities compete within regions for development, and within communities, despite seeming differences, the local economic and political elites are united in supporting a pro-growth, pro-economic development agenda.

The paper has been expanded into a book, Urban Fortunes: The Political Economy of Place, which I highly recommend to anyone involved in local planning and development matters.

As far as explaining how things work in DC, probably the best description is chapter four, on real estate development in DC during the mayoralty of Marion Barry, fromDream City: Race, Power, and the Decline of Washington, DC. The book is reviewed in this long piece from Washington Monthly, which is easier to obtain than the book, which is out of print. If you can find a copy in a bookstore or yard sale, buy it. Online prices for copies start at about $32.

Dream City needs to be updated and taken forward, because the reality is that graft and corruption and shady dealings weren't about Marion Barry as much as they were about local government. And those problems continue regardless of who is in office.

Much of the time, government isn't about fairness and equality, it's about using the process and politicians for personal benefit.

As far as the community benefits process goes, I have written extensively about how the process can be improved and regularized, in "Community Benefits Agreements."

Similarly, as far as the earmarks to organizations process is concerned, I have written about this extensively as well. What we need to do is move away from earmarks and towards the development of a fair, open, and transparent process for developing and funding programs and organizations.

The problems we have are related to a weak civic culture and weak capacity building institutions in the city. And I have argued that is why we need to address (re)building civil society within the city, a move towards self-help and independent organizations rather than a reliance on government. At the same time we must recognize that unlike cities which had an industrial base, the Washington region doesn't have a strong philanthropic community and the community that exists tends to have derived from real estate and development and government contracting, making the philanthropic community less willing to fund challenges to the status quo.

So what do we need to do?

Put into place strong controls over grant funding and earmarks and make sure that City Council isn't exempt from laws covering the rest of the City Government in terms of earmarks, grant funding, hiring, and designating developers. The TIF process needs to become an open and fair process as well, rather than the casino it is today. And the community benefits process needs to be structured into a fair process that starts with a calculation of the financial benefits resulting from zoning changes and includes a process of setting neighborhood and citywide priorities, and then ensuring that these priorities, not organizations, are funded.

In the aftermath of Kelo, there was an excellent op-ed in the Boston Globe, "Make Eminent Domain Fair for All," which made these suggestions for tightening the process of eminent domain to ensure fairness:

-- Requiring, as Justice Anthony M. Kennedy suggested in his Kelo concurrence, that any exercise of eminent domain for economic development have a primarily public purpose rather than a merely incidental one.
-- Requiring the government to demonstrate the public benefit through a full-scale financial analysis that could be challenged in court.
-- Requiring that eminent domain not be used for a solely fiscal purpose and that it instead must be part of a comprehensive land use plan.
-- Requiring that the affected neighborhood have adequate participation in the planning process, a right that would be backed up by state-provided technical assistance upon the neighborhood's request.

I argue that providing a similar kind of structure should be put into place for dealing with all of these matters involving the exercise of the power and authority of the municipal government: TIFs; community benefits; property disposition; master developer awards; and funding for projects and programs managed and/or controlled by non-government entities.

DC argues that it should be awarded statehood while in some respects the governing structures and systems are not much better than the days of Boss Tweed.

We have the opportunity to do better. And we should take this opportunity and do so.