Selected Skirmishes: Local Heroes

The HUD scandal has revitalized those of us who had assumed the spirit of enterprise to be dying in America; that old Yankee hustle still has some life. Why the headlines are filled, however, with such dog-bites-man fare as "Ex-Sen. George Murphy May Have Used Influence to Gain HUD Subsidies" is curious. Who did you think were keeping all those simply exquisite Washington, D.C., eateries in the black, if not the influence peddlers from Terms Past? Perhaps all those current public servants who attempt to privatize public resources by dancing around the lines of conflict-of-interest law?

Yet, the federal government, I am convinced, is a piker in the corruption game. It's just too competitive a market. Too many competing interests; too many competing sellers of the public interest (535 in Congress alone); too many competing news snoopers. The real seat of our government, in every sense, is City Hall, which barely noses out state legislatures in a bruising Corruption Bowl. For all the right-wing grousing about the horrors of Washington and the majesty of the government "closest to the people" (yeah, like right inside their wallets), state and local governments in America are notoriously shady enterprises, demonstrating the twin evils of local monopoly and a cozy-with-the-powers press.

It is not just the Koch scandals in New York, epic corruption in its own right, or that Washington Mayor Marion Barry could easily lay claim to the "Noriega of North America" title were there to be any unfixed competition for the honor, or the legacy of Mayor Daley I in Chicago. It's that even the straight arrows in local government have such abundant opportunities for cash—and so little oversight from lazy and generally incompetent City Hall reporters—that they'd have to be constantly on their toes to avoid having some unearned income land in their money market accounts. And virgins are no match for the politically macho down at the zoning board.

Take the stench emanating from the California state capitol. When the feds set up a sting operation in 1986, to see if it was really possible to corrupt the democratic system, they were astonished at how far their dollars would stretch. Establishing a phony private firm, Gulf Shrimp Fisheries Inc., the G-men requested legislation entitling the company to government subsidies. In a tribute to responsive government, the bill was drawn in a flash and zipped through both houses without opposition. The FBI agents, worried that they had tampered with the process, then notified the governor, who vetoed the measure. But they had to tell him.

The feds are now attempting to prove to a grand jury that key legislators took the campaign money, just a few thousand, in fact, in exchange for legislative favors. The Democratic state senator who carried the 1986 bill (similar legislation sailed through in 1988 with different backers) holds that the firm received the legislative grant on its own merits, by portraying itself as "a poor little outfit that hadn't a pot to cook in and wanted to borrow money to set up a little organization and hire a few unskilled folks." (Just as on game shows, the legislature makes you answer a quiz question before it doles out the cash.)

Note the sort of tale that merits taxpayer dollars; note further the sort of empirical investigation that accompanies legislative action. Given that this enterprising image was woven out of whole cloth, one may infer precisely how diligent the legislature is in separating bona fide claims from superfluous ones.

In Los Angeles, mayor-for-life Tom Bradley (just reelected to his fifth term in a pro forma procedural balloting), has been using his position to collect multiple $18,000-a-year fees to either "consult" or serve on the boards of financial institutions. These institutions, coincidentally, happen to be lucky enough to land million-dollar city deposits in non-interest-bearing accounts.

Once this came to the very lethargic attention of the Los Angeles Times (the story was broken by the far lesser Herald), Bradley reacted in a strange variety of ways, declaring there was no conflict of interest—but resigning his banking posts and denying that anything untoward had been involved. One piece of evidence was sensational: Someone used white-out in an attempt to erase "per the mayor" notation on documents instructing the city to shift L.A. funds into Far East National Bank, a Bradley consulting client.

No kidding. White-out. As a former semibearded president (who once used 18 minutes of audio white-out) said, "it only makes it worse when you cover it up."

I'd give Pete Rose 8–5 that Tom Bradley's not any lower than the median local official, or state legislator, in America. Take the recent mayor of Syracuse, Lee Alexander. He was convicted last year of extorting a wide range of city contractors for $1.2 million. What is noteworthy is that this felon was thought by his peers to be highly honorable—he was elected president, in fact, of the U.S. Conference of Mayors. But give a man a 16-year municipal incumbency and it becomes cloudy as to where public dealing stops and private wheeling begins. I believe the confusion is wide-spread.

Statistical evidence exists to support this view. In 1987, the FBI conducted a sting investigation involving New York City public servants. They offered bribes to 106 civic leaders; 105 grabbed them instantly. But the 106th refused to be pulled into the net. He insisted upon holding out for a higher offer.

Contributing Editor Thomas W. Hazlett teaches economics and public policy at the University of California, Davis.