The Growth Machine and public graft

Harvey Molotch's classic journal article, "City as a Growth Machine," explains how the grouping of local economic and political elites, despite what might appear to be seeming differences, is mostly united on a pro-growth agenda, centered around real estate development and land use intensification.

How it works between the politicos and the developers is generally unseemly.

Even so, I am constantly amazed that in Maryland, politicians get investigated and sometimes lose their positions, when these unseemly relationships cross the line into corruption. See "State looking into Prince George's County bribery complaints, source says: American Hospitality owner, staff member to testify before grand jury on lawmakers' alleged dealings" from the Gazette, including this:

Luthra's company filed a lawsuit Jan. 19 against the county alleging Johnson and Prince George's council members collectively pushed Luthra during a year-long period to spend more than $900,000 preparing the Four Points building so the housing department could lease space. Johnson allegedly assured Luthra the lease was "a done deal" and allegedly used his personal attorney to conduct negotiations outside of the public process, according to the lawsuit.

American Hospitality Management also alleges that council members Marilynn M. Bland (D-Dist. 9) of Clinton, Camille Exum (D-Dist. 7) of Capitol Heights, Tony Knotts (D-Dist. 8) of Temple Hills and Ingrid Turner (D-Dist. 4) of Bowie pushed the company to hire former councilman Michael Arrington as a lobbyist to handle the negotiations to move the county housing department to Four Points, a mixed-use development that includes office space, a Sheraton hotel and commercial spaces. ...

The lawsuit also states that several council members worked through Arrington to push Luthra and associates to buy tickets for political events in exchange for consideration of the lease. In another claim, Luthra said in court papers that the council wanted him to give commissions from the lease to their political allies, including Arrington and Charles Dukes, a real estate broker with W.F. Chesley Real Estate of Crofton.

Luthra's lawyers say the developer was caught in a "power struggle" between Johnson and the council over who gets to collect favors from business contracts in the county. "This system of corruption and graft has, upon information and belief, been in place for many years," lawyers for the company wrote in a new complaint filed June 1.

I wrote about this story earlier in the month. But what amazes me is that this kind of behavior is seemingly legal in DC. At least, how could steering millions of dollars of contracts to friends of the Mayor, by diverting contracts in one government agency (Parks and Recreation Department), to a nonprofit organization controlled by another government agency (DC Housing Authority), without oversight, be legal? Why aren't people going to jail?

There is a series of postings in themail by John Hanrahan about alleged conflicts of interest by Councilman Jack Evans (the third installment is in this issue) and he laments the lack of interest by local journalists:

As a former reporter for the Washington Star and Washington Post, I frequently investigated and reported on conflicts of interest and ethical problems in the Maryland General Assembly. I also am the former executive director of the Fund for Investigative Journalism. I think I have enough reporting experience to know when an elected official appears to have crossed the line into a conflict of interest and to point out that the local mainstream press is inexplicably giving Evans a free pass on this issue. Over the last two months I have sent this information to five reporters or editors at four different news organizations, and have had no response thus far.

Probably if it weren't real estate oriented (say like this issue, "Wasting Away: The Squandering of D.C.'s AIDS Dollars") the Post would get more energized. But the Post is part of the Growth Machine too and less likely to criticize development-related "suasion."

A disgusting example of how connected groups game the DC budget and legislation system

(While bad, this doesn't even enter the league of disgustingness as it relates to the urban renewal plans mandated by DC City Council legislation for the Florida Market.)

Michael Neibauer has a great piece, "Odd deal sends D.C. fire truck, ambulance to Dominican town" in the Examiner about the ridiculousness of giving a DC fire engine (admittedly they have more pieces of "apparatus" than they need, because they went through a massive purchase of new equipment during the Williams Administration) to some town in the Dominican Republic at the behest of the incredibly well-connected group, Peaceaholics, which deals with crime issues.

Now, don't forget that in the U.S. we have separation of church and state. Here is the "legislative intent" for the boneheaded decision:

“Even though it’s $340,000, we see the city getting a lot back from it,” said Peaceoholics co-founder Ron Moten. “And it’s just a good deed. We believe if you can help anybody, God blesses you 10 times over.”

But the donation has struck numerous city officials as unusual, if not unprecedented. According to the Office of Contracting and Procurement’s Web site, all surplus government supplies are subject to auction so the District can recoup some of its costs.

This is another example of how DC City Council itself is exempt from the contracting requirements that all other agencies of the DC Government must follow.

This decision should be overturned. It is ridiculous.

District of Columbia fire department personnel respond to smoke coming from the Eisenhower Executive Office Building in Washington, Sunday, Jan. 25, 2009. Washington fire officials say the Eisenhower Executive Office Building near the White House was evacuated briefly after smoke from a fireplace clouded one of the floors. (AP Photo/Lawrence Jackson)

How come no one is asking me to submit a contract to run the Office of Planning or the Department of Transportation?

This is totally and completely insane. Is the DC Public School System truly incapable of running the schools? See "Rhee Lists 6 Firms Eyed To Help Run 10 Campuses" from the Washington Post.

There may not be a plan for improving the public schools under the jurisdiction of the DC Public School System (see "GAO report criticizes D.C. schools' lack of strategic plan," from the Washington Post about the GAO audit of the school system, which declared that they could find no plan in place for school improvement), but it appears that there definitely is a plan for outsourcing, if not destroying the public school system.

From the article:

An official from Friendship Public Charter Schools in the District, one of the organizations asked to submit a proposal, said Rhee wants contractors to take over one grade in the fall and then run entire schools beginning in 2009. ...

In the 30-page plan Rhee sent to schools, which was obtained by The Washington Post, she for the first time names the six companies under consideration and outlines the areas the companies would oversee. Rhee wrote that she does not consider the arrangement "privatizing the schools." The schools, she said, would remain under her control and enter into a partnership with the companies.

"The partner must have responsibility for school operations, managing all aspects of the school," Rhee wrote. "Different partners approach this task differently. Some largely work with existing teachers and administrators, helping them learn more effective ways of increasing student achievement. . . . And some will ask for a fresh start, asking to hire teachers and administrators who have not worked at the school."

Although this is about schools failing under the terms of the No Child Left Behind Act, and this is not an unheard of step. And we can't argue that either the DCOP or the DDOT are failing organizations. Still, in some states, the historic preservation office is contracted to nonprofit organizations, such as the Ohio Historical Association.

Does absolute power corrupt absolutely?

That's the question that has to be answered when considered Post business columnist Stephen Pearlstein's piece from Friday "The Mayor's Advantage" about how to (re)create an economic deveopment instrumentality out of the NCRC and AWC.

One point I definitely agree with--do you need to pay lots of people lots of money for two organizations.

On the other hand, Pearlstein suggests:

Fenty should suggest that the new agency be freed from the full complement of city procurement and contracting rules that are, at best, cumbersome and, at worst, prevent the city from getting what it needs, when it wants it.

Given the kind of contract steering that the DC government is known for, and the current Adminsitration efforts in many areas that seem more oriented to the consolidation of power rather than to "good government," not to mention the many examples of concern from Baltimore and the operations of the Baltimore Development Corporation, this track is somewhat worrisome, although sure, it would be much better for such an organization to be under the control of the Executive Branch rather than City Council, which is so focused on greasing the rails that it's time for an update of the book Dream City...

Mayor Adrian Fenty, left, with Deputy Mayor Neil Albert. Photo Credit: By Rich Lipski -- The Washington Post.

Also see "Deputy mayor lobbied for company ," from the Examiner.