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That Toddlin’ Town

City scandal rocks Chicago, a lesson for Charlotte?

Want to feel really good about local government? Read up on the unfolding trucking scandal in Chicago and then thank your lucky stars you have the good sense to live in Charlotte, North Carolina.

Even considering Chicago’s reputation and long history as a crooked machine-run municipality the charges are fairly staggering. Hard to stun FBI agents are agape over the degree to which the $38 million Hired Truck Program went awry. Incredibly, the corruption continued even after it was clear federal agents were on the case.

One trucking company owner stands accused of bribing a top city water department official in order to win some $2.8 million in city contracts. Another trucking company official is charged with routing almost $20,000 to a city official then lying to federal agents. Former first deputy water commissioner Donald S. Tomczak stands accused of taking payoffs in various forms and two other city officials are also facing charges. In all, seven individuals have been indicted in the case.

“For more than a decade, Donald Tomczak was effectively running the water department and giving out city contracts to line his pockets with bribes,” U.S. Attorney Patrick J. Fitzgerald alleged at a news conference after Tomczak was formally charged.

The Chicago truck program has clouds round it since January, when a Chicago Sun Times investigation found that the hired trucks did little actual work and that the program operated without any competitive bidding. Questions were also raised about phony minority-owned and women-owned companies using the program’s built-in preference for those groups to help win city money.

Clearly, if the allegations prove true, the people in charge of the Hired Truck Program couldn’t be trusted to run a lemonade stand. But some contributory city policy is also a factor that should not be overlooked.

Like nearly every state and locality, Charlotte and Chicago both attempt a little social engineering via city contracts. After running into potential legal trouble with a system that overtly sought out minority-owned contractors, Charlotte’s new policy only talks of “goals” for participation and instead explicitly targets the size of contractors. Still, the motivating idea is that as traditionally disadvantaged entities, minority and women-owned businesses merit some special attention.

Even assuming such outreach is laudable and desirable, there are perils in implementing such programs. By definition certification programs require some sort of certification process for businesses to go through to receive their official minority-status designation. Despite certification processing which can be quite lengthy and involved — itself using up valuable private and public resources, do not forget — certification often boils down to a judgment call on the part of government bureaucrats. That presents a possible point of abuse.

As certification carries with it distinct competitive advantages, it has real value. People tend to want to pay real money for real value. Unscrupulous people will take real money, and ignore the law. At a minimum, when government contract begin to be let on something other than objective measures like the actual cost of the service great care is needed.

In addition, when programs exist that invite cheating or cutting corners in order to win contracts, incentives exist for bad behavior. Respect for the law is weakened when “everyone” uses a minority front to wins government business. Soon “everyone” is sending Christmas gifts to government officials, then “everyone” sends in cash, “everyone” knows it is just a cost of doing business.

Thankfully, there is no sign that such thinking has taken hold in Charlotte even as the city wrestles with how best to spend its money. Surely fiscal responsibility should remain the fundamental goal. Government attempts to explicitly favor one class of citizens can blow up into a messy, corrupt free-for all.