"Another corruption scandal involving kickbacks for developers breaks news, this time in ... "

Ohio.

Toledo, to be exact.

"I think it’s a mistake to imply that we have the same type of issues other communities may be experiencing," said Kim Jong-un, Supreme Leader of North Korea, by Zoom feed from Toledo, where he is on a fact-finding mission.

More City Councilmembers Arrested on Corruption Charges—This Time in Toledo, James Brasuell

Four members of the Toledo City Council were arrested this week, accused of accepting bribes and extortion. The arrests follow similar events in Los Angeles earlier this month.

Bid rigging, corruption, procurement fraud and red flags -- apropos of nothing, or something; whatever.

Corruption happens because there is impunity. That's the reason why corruption is widespread at all levels - from the person who asks for a bribe on the street to those who hold prominent positions.
-- João Manuel Gonçalves Lourenço

Most of us assume that a system of competitive bidding for government contracts precludes chicanery. Here's an excerpt about bid rigging from Wikipedia.

Bid Rigging as acts of corruption[edit]

• Change order abuse occurs when a contractor colludes with project officials, wins a low bid, then asks to change the contract afterwards. This is approved by officials, resulting in a much higher bid being retroactively approved.^[1]
• Bidder Exclusion allows project officials to essentially choose their bid. There are multiple methods to achieve this end including:
  • Instituting unreasonable qualification parameters, excluding non-preferred firms, or effectuating the same by shortening the time of acceptance periods for new bids following a request.
  • Advertising projects to select bidders or bidding markets, thereby reducing publicity of bid procurement.
  • Bundling of contracts to exclude bidders.
  • Coercion and intimidation can also be used or simply rejection of individual bids over trivial matters.^[2]
• Purchase splitting to reduce the minimum bid amount. This functions as contracts are split up to reduce the actual procurement amount and keep it under a threshold value. This reduces competitive bidding and enables less oversight at the project level as bid prices drop and kickbacks can be allotted.^[3]
• Leaking of bid information, which requires a relationship of some degree between the project and a bidder as the bidder is handed information to gain an unfair advantage.^[4]
• Bid Manipulation is another method for officials to choose the bidder of their choice but occurs after receipt of bids. The methods for this would include either changing bid parameters, evaluation processes, or other activity to effectively select the bidder of choice.^[5]
• Rigged Specifications allow more bidder exclusion by officials by either tailoring requests to individual bidders or creating a vague criterion to reasonably choose a preferred bidder.^[6]
• Unbalanced bidding involves high bid prices for commencing phases of development and low prices for later stages. This effectively increases the flow of funds for the bidding firm. This occurs when bidders cite high prices for items, intending to raise the number of units and purchase them at a competitive rate while simultaneously skimming profits from the artificially high bid price. Additionally, bidders may give low quotes for non-necessary items (knowledge gained through collusion or experience) to disadvantage other firms as their bid amount is more competitive. This also serves to increase the cost of entry for new firms.^[7]
• Unjustified Sole Source Awards are bids chosen on criterion unrelated to their competitiveness. This can be performed either blatantly, by falsifying bids, or by price splitting.^[8]

And another: THE MOST COMMON PROCUREMENT FRAUD SCHEMES AND THEIR PRIMARY RED FLAGS, by W. Michael Kramer (International Anti-Corruption Resource Center)

BRIBES AND KICKBACKS

A bribe is usually defined as the giving or receiving of a “thing of value” to corruptly influence the actions of another, most commonly to influence a contract award or the execution of a contract.   A “kickback” is a bribe paid by the contractor after it is paid.  Most bribes in exchange for large contract awards in international development projects are paid as kickbacks, usually 5%-20% of the contract value.

Corrupt payments

The bribe need not be in money or cash, and often is not.  Any benefit given or received with the intent to corruptly influence the recipient can be a bribe.
“Things of value” that have been given and received as bribes include:

• Expensive gifts, free travel and lavish entertainment
• “Loans,” whether or not repaid
• Use of credit cards
• Sexual favors (hiring of prostitutes, etc.)
• Overpaying for purchases, e.g., paying $20,000 for a car worth $5,000
• Cash
• Fees and commissions, even if recipient allegedly provided services to the payer
• Hidden interests in business transactions

Often the payments follow the general sequence outlined above, with the amount and form of payments becoming more significant and incriminating as the scheme progresses.

Corrupt influence

• Corrupt influence often is reflected as, among other things:
• Qualifying an unqualified or untested company to bid or be a vendor
• Improper or non-competitive contract awards
• Paying too much for goods or services
• Buying too much of an item, or buying inappropriate items
• Continued acceptance of low quality or non-compliant goods or services

As the corruption continues, the abuses often turn into fraud, such as fictitious invoices, with the parties conspiring to split the profits.   Eventually the excesses of the scheme lead to its detection, as the mounting evidence of favorable treatment and fraud, and the conspicuous expenditures of the conspirators, call attention to their behavior.

The major red flags of bribes and kickbacks

• Improper (e.g., non-competitive) selection of a contractor Unjustified favoritism of a certain contractor, e.g. approval of high prices, excessive purchases, continued acceptance of low quality goods, etc.
• Unnecessary broker or middleman involved in transactions
• Procurement official accepts inappropriate gifts and entertainment
• Unexplained increase in wealth by procurement official

Ribbon cuttings and back alley slush, or "How Corruption in Public Investment Hurts Growth."

Yesterday we took a look at branding and personality cults.

Jeff Gahan has been branding the city in his own image, and using our money to do it, but we need collective thinking, not the shoddy veneer of a personality cult.

Next, on the general topic of corruption in public investment, here's a two-decade-old analysis that hasn't aged a day.

This paper contends that such corruption increases the number of capital projects undertaken and tends to enlarge their size and complexity. The result is that, paradoxically, some public investment can end up reducing a country’s growth because, even though the share of public investment in gross domestic product (the total of all goods and services produced in a country in a given year) may have risen, the average productivity of that investment has dropped.

Consider the way Strong Towns addresses the issue of scale.

We all know that it makes more sense to work incrementally, to make many small investments to shore up and strengthen our core neighborhoods. How do we do that when every mechanism we use to deliver projects — from funding sources to regulations to the project advocates themselves — pushes us into a few large endeavors we hope will trickle down to something resembling success.

In a place like New Albany, mayors like Jeff Gahan utilize mechanisms like Tax Increment Financing for the funding of large capital projects, seeing as the general fund already is spoken for.

Because most current spending by governments reflects entitlements or previous commitments—such as pensions, interest payments on public debt, salaries, and subsidies—politicians have, in the short run, limited discretion to influence it. 

The amount of money available for large capital projects via TIF runs into the tens of millions, and boards appointed by the mayor to do the his bidding rubber stamping these decisions.

Senior officials may have complete discretion over these decisions, especially when a country’s controlling or auditing institutions are not well developed and institutional controls are weak.

Precisely because the nickels and dimes of these large expenditures are not being overseen by elected officials, there is the very real possibilities that size and scale are inflated. After all, those small and sustainable projects generate too few headlines, and too little beak-wetting.

For a private enterprise, getting a contract to execute a project, especially a large one, can be very profitable. Therefore, managers of these enterprises may be willing to offer a "commission" to politicians who help them win the contract. Conversely, in many cases the act of bribery may not start with the enterprise but with the officials who control the decisions—in some countries it is apparently impossible to win a government contract without first paying a bribe. The payment of such a bribe is illegal in very few countries.

Are campaign contributions merely the cost of doing business? As the authors make clear, chicanery reduces the ultimate value of the investment; it also contributes to under-funding of maintenance and repair costs, another reality seldom discussed at the ribbon cutting.

As noted previously, the clearest way for any local candidate to demonstrate his or her understanding of the possibilities for abuse inherent to promiscuous fundraising is to embrace a higher ethical bar.

With David White as mayor we'll have ethical standards from the get go -- not Jeff Gahan's pay-to-play cesspool on the down low.

Gahan ethics? You might as well try to teach your dog to sing opera. Read the report, reprinted below.

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Roads to Nowhere: How Corruption in Public Investment Hurts Growth, by Vito Tanzi and Hamid Davoodi (International Monetary Fund; March 1998)

Roads to Nowhere: How Corruption in Public Investment Hurts Growth
Ribbon-cutting ceremonies marking the opening of investment projects—such as roads, dams, irrigation canals, power plants, ports, airports, schools, and hospitals—are every politician’s dream. These occasions present splendid photo opportunities, while the very act of cutting the ribbon seems to identify the shear-wielding politician as a contributor to the future growth of the economy. In some countries, however, corrupt politicians appear to choose investment projects not on the basis of their intrinsic economic worth, but on the opportunity for bribes and kickbacks these projects present.

This paper contends that such corruption increases the number of capital projects undertaken and tends to enlarge their size and complexity. The result is that, paradoxically, some public investment can end up reducing a country’s growth because, even though the share of public investment in gross domestic product (the total of all goods and services produced in a country in a given year) may have risen, the average productivity of that investment has dropped.

This conclusion runs counter to the bias of many economists. The conventional wisdom of the economics profession is that countries need capital to grow and, more important, that a direct relation exists between capital spending and growth. In other words, if a country engages in capital spending, growth is likely to follow. As a consequence of this belief, the economics profession has been strongly biased in favor of capital spending by governments. When economists evaluate the allocation of public money between current spending (for recurring, day-to-day expenses) and capital spending in government budgets, they tend to be critical of countries that allot a large share of government expenditure to current spending, but to applaud countries that refuse to stint on capital spending.

This bias is enshrined in the "golden rule" often advocated by economists. The rule states simply that only current expenditure needs to be balanced by ordinary revenue, but that a country can—within limits—safely run a fiscal deficit (an amount it must borrow from domestic or foreign investors) equal to the capital spending of the government. You should cover the current budget with government revenues, but borrow whatever you can for the capital budget. Thus, it is all right to borrow to finance the building of new roads but not to finance the repair of existing roads, or to borrow for building a new hospital but not for hiring doctors or nurses or for buying medicines. This rule continues to be evoked as a good guide to policy even in the face of much evidence that some current expenditure—such as on operation and maintenance that keeps existing infrastructure in good condition or that contributes to the accumulation of human capital—can promote growth more effectively than capital expenditure.

Politicians have been quick to internalize this bias and have sensibly learned to exploit it. This pro-investment bias bloats the investment budget.

A Wealth of Opportunity and Vice Versa
Because most current spending by governments reflects entitlements or previous commitments—such as pensions, interest payments on public debt, salaries, and subsidies—politicians have, in the short run, limited discretion to influence it. Individual politicians generally lack the power or will to change the salaries or pensions of specific public employees or to alter subsidies to individuals. In contrast, there is nothing routine about the capital (investment) budget and its composition: capital spending is highly discretionary. In formulating the capital budget, senior political figures must make the basic decisions. These decisions determine the size of the total public investment budget, the general composition of that budget (the broad allocation among different categories of capital spending), the choice of specific projects and their geographical location, and even the design of each project. Senior officials may have complete discretion over these decisions, especially when a country’s controlling or auditing institutions are not well developed and institutional controls are weak.

Who Benefits?
Public investment projects tend to be large and, sometimes, very large. Since their execution is generally contracted out to domestic or foreign enterprises, the first step is choosing a firm to undertake the project. For a private enterprise, getting a contract to execute a project, especially a large one, can be very profitable. Therefore, managers of these enterprises may be willing to offer a "commission" to politicians who help them win the contract. Conversely, in many cases the act of bribery may not start with the enterprise but with the officials who control the decisions—in some countries it is apparently impossible to win a government contract without first paying a bribe. The payment of such a bribe is illegal in very few countries. In fact, the laws of certain major industrial countries regard commissions paid by domestic enterprises to foreign politicians as not only legal but also tax deductible, although this is changing, as discussed below.

A commission of even a few percentage points on a project that costs millions or even hundreds of millions of dollars can be a large sum, one large enough to exceed the temptation price for many otherwise reputable individuals. When commissions are calculated as a percentage of project costs, the politicians or public officials who receive payment for helping the enterprise win the bid will have a vested interest in increasing the scope or the size of the project so they can get larger commissions. A commission of 2 percent of the cost of a four-lane road is understandably more tempting than 2 percent of the cost of a two-lane road.

The process of approving an investment project can be an irresistible temptation for the unscrupulous. For example, a civil construction project (a road, building, or port) requires decisions related to specification and design issues, issue of tender (limited to a single firm or open to all), tender scrutiny, tender negotiations, and tender approval and contracting process. The completion of the project will require verification that the work has been done according to the contract. It will also require some arbitration about points of disagreement. The writing of contracts for complex projects is difficult and inevitably many areas of uncertainty and eventual disagreement will need to be resolved through negotiation.

In some of these phases, a strategically placed high-level official can manipulate the process to select a particular project. He can also tailor the specifications of the design to favor a given enterprise by, for example, providing inside information to that enterprise at the time of issuance of tender.

Who Pays?
The enterprise that pays the commission rarely suffers from the payment of the bribe, since it is usually fairly simple to recover that cost. First, if it is assured by corrupt officials of winning the bidding competition, the enterprise can include the cost of the commission in its bid. Second, it can reach an understanding with the influential official that the initial low bid can be adjusted upward along the way, presumably to reflect modifications to the basic design. Third, it can reduce its spending on the project by the amount of the bribe by skimping on the quality of the work performed and the materials used. Fourth, if the contract is stipulated in a cost-plus fashion, the enterprise can recover the cost of the commission by overpricing.

In all these alternatives that require the collaboration of a corrupt politician or official, the taxpayers will end up with either a more costly project—or a bigger or more complex project than necessary—or a project of inferior quality that will require costly upkeep and repair. Experience with public sector projects, especially in developing countries, is replete with stories about roads that are pocked with potholes soon after completion, power plants that experience regular blackouts, and sewer systems that don’t work.

So What?
Why does it matter when this happens? It matters because the productivity of capital spending is reduced, which in turn lowers the growth rate of the country. When corrupt politicians influence the approval of an investment project, the rate of return as calculated by cost-benefit analysis (a method of determining just how much each dollar invested will increase output) ceases to be the criterion for project selection. Corruption distorts decisions about the investment budget. When corruption plays a large role in the selection of projects and contractors, some projects are completed but never used. Others are so poorly built that they will need continuous repair and their output capacity will disappoint. In these circumstances, it is not surprising that capital spending often fails to generate the growth economists expect.

Side Effects
Widespread corruption in the investment budget will not only reduce the rate of return to new investment in a country, but will also affect the rate of return the country gets from its existing infrastructure. To the extent that corruption has been around for some time, the existing infrastructure has also been contaminated because past investments were also misdirected or distorted by corruption. Moreover, higher spending on capital projects will reduce the resources available for other spending. Of the other spending categories, one not protected by entitlements or implicit commitments is operation and maintenance—the current public spending required to keep the existing physical infrastructure in good working order. Too often, new projects are undertaken while the existing infrastructure is left to deteriorate. In cases of extreme corruption, operation and maintenance on the physical infrastructure of a country are intentionally neglected so that some infrastructure will need to be rebuilt, thus allowing corrupt officials the opportunity to extract additional commissions from new investment projects.

A country can squeeze more output out of existing infrastructure by keeping it in good working order. It is easy to think of situations in which the deterioration of infrastructure retards growth more than new capital projects add to growth. In addition, when generalized corruption in a country reduces resources because corrupt tax administrators skim off or fail to turn in tax revenues, operation and maintenance will be reduced far more than public investment because of the intellectual bias that supports borrowing for capital projects but not for current expenditure.

Empirical Analysis
Is the discussion so far merely theoretical or anecdotal? Unhappily, enough information has been gathered on corruption not only to justify the above observations but also to allow the formulation of several hypotheses about a symbiosis between high-level corruption and specific aspects of public spending and revenue collection. A principal source of assessments of the degree of corruption in various countries is Business International and Political Risk Services, Inc., which publishes an annual index, International Country Risk Guide, covering the 1982–95 period for 42 to 128 countries, depending on the year. In this index higher corruption indicates that "high government officials are likely to demand special payments" and "illegal payments are generally expected throughout lower levels of government" in the form of "bribes connected with import and export licenses, exchange controls, tax assessment, police protection, or loans." Data on specific aspects of government spending and revenue collection, meanwhile, may be drawn from the IMF’s Government Financial Statistics.

An examination of the data from these two sources suggests the formulation of several clear hypotheses concerning the relationship between corruption on the one hand and (1) public investment, (2) government revenue, (3) operation and maintenance expenditures, and (4) the quality of infrastructure on the other. The authors test the hypotheses against statistical evidence, analyzing cross-country data through the use of a statistical tool called regression analysis to estimate the strength of the relationship between corruption and these four variables. In guarding against spurious regression results, and depending on the regression, the researchers controlled for other variables, such as real per capita GDP, the ratio of government revenue to GDP, and the ratio of public investment to GDP. Their hypotheses follow.

Corruption and Government Investment
Hypothesis 1. Other things being equal, high corruption is associated with high public investment.

The governments of most countries are honest and responsible, but in some countries the government is not above suspicion of serious corruption. For these latter countries, regression analysis shows that the above hypothesis cannot be rejected. ("Cannot be rejected" is a somewhat off-putting term of art in regression analysis indicating a high correlation between variables: where you have one, you probably have the other.) The data also suggest the unfortunate corollary that corruption reduces private capital investment by more than it increases public capital investment.

Corruption and Government Revenue
Corruption can reduce government revenue if it contributes to tax evasion, improper tax exemptions, or weak tax administration. This leads to a second hypothesis.

Hypothesis 2. Other things being equal, high corruption is associated with low government revenue.

The analysis indicates that this hypothesis cannot be rejected either.

Corruption and Operation and Maintenance Spending
Since corruption and bribery are more effectively related to (that is, it is easier to extract bribes from) new investments (as opposed to infrastructure already in place), corruption may result in lower operation and maintenance expenditure on existing investments. This observation leads to a third hypothesis.

Hypothesis 3. Other things being equal, high corruption is associated with low operation and maintenance expenditures.

Since direct cross-country data on operation and maintenance expenditures are not available, the analysis uses two statistical proxies: (1) IMF Government Financial Statistics "expenditures on other goods and services," which include operation and maintenance expenditures, and (2) wages and salaries expressed as a fraction of current expenditure, because governments tend to cut operation and maintenance expenditures when they award salary increases. Hence, increases in wages and salaries can be interpreted as cuts in operation and maintenance expenses.

The analysis shows that high corruption is indeed associated with low operation and maintenance expenditures. Although the first proxy (expenditure on other goods and services) does not support this correlation, the second shows a positive correlation: countries with high corruption do tend to have a high ratio of wages and salaries to current expenditure. (Note that this result does not mean that the level of salaries of government officials in corrupt countries is higher.)

Corruption and the Quality of Public Investment
It has been known for some time that corruption is most prevalent in infrastructure projects, usually large civil engineering projects. Current evidence, however, has linked corruption only to the quantity of investment and not its quality. It was argued above that high-level corruption induces countries to increase the quantity of infrastructure because of the bribery potential of new infrastructure investment. In addition, the quality of existing infrastructure will tend to deteriorate if corruption leads to cutbacks on operation and maintenance expenditure. These observations lead to a fourth hypothesis.

Hypothesis 4. Other things being equal, high corruption is associated with poor quality of infrastructure.

The data analyzed in this hypothesis (referred to as performance indicators of infrastructure) are measured from the perspective of both infrastructure providers and users. They cover a large number of countries and have many characteristics that make them the responsibility of governments. These data are taken from the International Telecommunications Union and the World Bank’s World Development Indicators database. The analysis shows that this hypothesis cannot be rejected: countries with high corruption do tend to have poor-quality infrastructure. The impact of corruption is statistically strongest on the quality of roads (paved roads in good condition), power outages, and railway diesels in use. An important implication of the results is that the costs of corruption should also be measured in terms of deterioration in the quality of existing infrastructure, since these costs can severely inhibit economic growth.

Reprise
Evidence presented in this paper supports four arguments.

1. Corruption can reduce growth by increasing public investment while reducing its productivity.

2. Corruption can reduce growth by increasing public investment that is not adequately supported by nonwage expenditure on operation and maintenance. Evidence also shows that higher corruption is associated with higher total expenditure on wages and salaries. Wages and salaries are a large component of government consumption, and higher government consumption has been shown to be unambiguously associated with lower growth.

3. Corruption can reduce growth by reducing the quality of the existing infrastructure. A deteriorating infrastructure increases the cost of doing business for both government and the private sector (congestion, power outages, accidents) and thus leads to lower output and growth.

4. Corruption can reduce growth by decreasing the government revenue needed to finance productive spending.

In sum, economists should be more restrained in their praise of high public sector investment spending, especially in countries where high-level corruption is a problem. Although this paper focuses on the problem of corruption and not on its solutions, concern about the issues discussed here appears to be gaining currency. On December 17, 1997, for example, ministers of 34 countries—of which 29 are members of the Organization for Economic Cooperation and Development (OECD)—signed an agreement aimed at eradicating bribery of foreign officials. The agreement encourages its signatory countries to introduce legislation making payments of bribes to foreign officials no longer tax deductible, and criminalizing the payment of bribes to foreign government officials. The agreement is limited, however, as it does not apply to the payment of bribes to foreign political parties or to private individuals. Moreover, it must be ratified by the legislative bodies of each signatory country. The initiative represents, however, an encouraging start in eliminating the corruption of political leaders.

Author Information
Vito Tanzi is Director of the Fiscal Affairs Department of the IMF. He holds a Ph.D. in economics from Harvard University.

Hamid Davoodi is an economist in the Fiscal Affairs Department of the IMF. He graduated from the London School of Economics and Political Science and holds a Ph.D. from the University of Wisconsin, Madison.

ASCE on kickbacks: "Spiro Agnew: Ethics Case Study No. 3," or when is group-think not the right think?

This pleasant suited engineer explains Spiro Agnew's insatiable taste for "5% Gravy," a practice that persists in New Gahania.

Agnew's speechwriters also coined the phrase "nattering nabob of negativism," which the soon-to-be-disgraced VP used to insult ink-stained wretches who insisted on following his money.

It isn't known if Agnew preferred anchor-shaped tie clips. Shane, is this something you're familiar with?

Thanks for the link, N.

Terry Neimeyer, P.E., CEO and Chairman of the Board for KCI Technologies, describes the Spiro Agnew kickback scandal and the types of financial and environmental pressures that can drive engineers to skirt their ethical obligation in the drive to compete for work.

ON THE AVENUES: Love in the time of choleric Coffey, though it's nice of Deaf Gahan to support the K of C's political agenda.

ON THE AVENUES: Love in the time of choleric Coffey, though it's nice of Deaf Gahan to support the K of C's political agenda.

A weekly column by Roger A. Baylor.

Tonight there'll be a city council meeting, and I wouldn't miss it for the world.

Never mind the bobble-heads, it's Non-Binding Resolutional Culture Wars Night, and the potential for legislative grandstanding approaches solar eclipse levels of suggested pre-meeting martini consumption, toward which I pledge my last full measure of devotion.

New Albany city council, this Thursday: "Resolution Expressing Solidarity with the People of Charlottesville, Virginia, and a Public Condemnation of Racism, White Supremacy, and Neo-Nazi Ideology in Our Community, the Nation and the World."

As we've seen, autonomous councilman-for-hire Dan "Total Eclipse of the Heart" Coffey -- who on occasions as widely scattered as Monday's coming solar event actually stoops to represent the 1st District -- is organizing his own celebration of ragpicker's diversity.

Dan Coffey plans his own unity rally, because why should those smarty pants Democrats have all the fun?

Bring your own hoods, folks. There'll be barbecued bologna and toadstool crepes ... but alas, I digress. Let's begin with this excerpt from last week's column:

ON THE AVENUES: Super Tuesday shrapnel – or, tiptoeing through the tulips with Dan Coffey, now THE face of historic preservation in New Albany.

Glorious Stated Aim #2: Give the Knights of Columbus (Main Street) a new façade.

Translation: … since Coffey is a tremendous backer of the K of C, he’s neutralized and back on the mayor's payroll, at least for the moment.

Meanwhile: Deaf Gahan is Catholic … and the Democratic Party has been holding gatherings in Catholic-affiliated venues since the long ago days when bona fide Democrats like FDR walked the earth ... and that pesky priest at St. Mary’s keeps breathing down Team Gahan’s tight collars about the original sin of the two-way streets conversion … so POOF; all dissonance disappears, just like that, and to such a pervasive extent that we now see Coffey taking pride of place in the mayor’s MTV video touting Super Cash Stuffed Envelope Tuesday.

That’s right, folks. By means of just a teensy tiny bit of façade cash awarded to an organization that maintains an anti-abortion monument out front, welcome to a gay-baiting, venom-spewing, ward-heeling councilman forever in service to the highest bidder becoming the poster child of historic preservation in New Albany … but Gahan isn’t finished yet.

Absolutely no one doubts that as an entity, the Knights of Columbus does charitable works. Last week on Super Tuesday, when Coffey shuffled humbly to the anchor-bedecked podium to accept his cash-stuffed envelope (psst -- the one intended to pay for the K of C's facade work comes much later), he made it a point to emphasize this fact.

With the Knights of Columbus, it'll give a better appearance in the neighborhood, but the Knights of Columbus also does an enormous amount of charity work.

More accurately stated, it'll give a better appearance to Dan Coffey, because if there is any one cardinal rule to fathoming the Byzantine intrigues, gleeful backstabbings and gold bullion transfers inherent in the bottomless cesspool of New Albany politics as usual, it is this:

Never, ever accept a Coffeyism at face value. It will contort your face, and annoy the Wizard.

With still more money hoisted from the Redevelopment Commission, and alongside valued institutional cover from Indiana Landmarks, Jeff Gahan has struck another of his trademark political stink-bomb deals, enabling Coffey's ongoing jihad against modernity by blithely ignoring the separation of church and state -- a concept Coffey openly derides, of course, but the sort of appeasement legerdemain that democratic Democrats (where?) condone at their own peril.

However, Gahan's never met a ward-heeler he wouldn't fluff, and that old bromide about non-profits refraining from involvement in the political process? Think again.

online.org/news/politics/knights-columbus-leader-says-catholics-cannot-vote-abortion-advocates">Knights of Columbus head says Catholics cannot vote for abortion advocates (National Catholic Reporter, August 2, 2016)

Carl Anderson, leader of the Knights of Columbus fraternal order and one of the most influential lay Catholics in the church, has said that abortion outweighs all other issues in the presidential campaign and Catholics cannot vote for a candidate who supports abortion rights.

Much more detail is to be found here.

How One Religious Organization Bankrolls America’s Social Conservative Movement, by Josh Israel (Think Progress)

... But while much of the Knights’ charitable efforts in recent years have supported purely altruistic causes such as the Special Olympics and Habitat for Humanity, millions of their charitable dollars have funded a very socially conservative ideological agenda: opposing abortion, LGBT rights, euthanasia, embryonic stem cell research, and pornography, while supporting public funding for religious organizations.

(While legally independent from the Catholic Church, the Knights of Columbus entities call themselves the church’s “strong right arm.”)

The Knights also operate a legally-separate but affiliated charitable arm called the Knights of Columbus Charities Inc. That tax-exempt non-profit organization made about 57 percent of its annual grants in 2013 to efforts to “promote matters affective life family, marriage and similar priorities in building a culture of life.” More than $1 million of that went to support “Crisis Pregnancy Centers,” a network of facilities that dissuade women from choosing to terminate their pregnancies, often by sharing misinformation.

Tonight's council meeting should be a fascinating test of New Gahanian dysfunction.

Under normal circumstances, forced to endure another effete expression of council support for people and ideas he loathes, Coffey would be spewing, fulminating and dropping an occasional sotto voce hint of imminent violent revenge against the gays, libtards and drunkists.

But Coffey's also enjoying the sweet tea-laced post-coital glow of yet again maneuvering Gahan into merrily compromising everything the Democratic Party should stand for by indulging the councilman's Generalissimo Francisco Franco fetish.

Gahan should have had the good sense to accompany his ill-considered largess with a temporary gag order, but of course, it was chronologically impossible to anticipate Charlottesville, which led to the solidarity resolution, and which gives Coffey a convenient "get out of handshake free" card to play this evening.

Perhaps Coffey will choose to avoid the meeting entirely, as he did on March 6, the last time such a threatening resolution occurred, after white supremacist handbills were duct-taped to local alley walls.

Seize the gesture and read the city council's non-binding "Resolution Condemning the Promotion of Intolerance."

Will the serial bigot Coffey support a resolution in support of human rights? Contractually, he'll have to vote yes if Gahan demands it. But does the mayor even care? Will Scott Blair abstain, citing his oft-stated principle of eschewing non-binding resolutions?

To paraphrase Chico Marx: "Coffey -- he-a no show up."

THE COMMON COUNCIL OF THE CIVIL CITY OF NEW ALBANY, INDIANA, HELD A REGULAR COUNCIL MEETING IN THE THIRD FLOOR ASSEMBLY ROOM OF THE CITY/COUNTY BUILDING ON MONDAY, MARCH 6, 2017 AT 7:00 P.M.

MEMBERS PRESENT: Council Members Mr. Caesar, Mr. Phipps, Mr. Nash, Mr. Blair, Mr. Aebersold, Mr. Barksdale, Dr. Knable and President McLaughlin. Mr. Coffey was not present.

In spite of it all, there remains a valid reason to commend Coffey for a certain consistency of action. The second cardinal rule of New Albanian political geography is that Coffey's always in it for himself; consequently, he might be the only politician in town who is consistent with his gestures.

He may be repugnant, and quite possibly horrendous, but he's not hypocritical.

There's something to be learned from this, but is it too early to start drinking?

Events got all topical on us, but next week I hope to return to "Mr. Duggins Goes to Bob Lane's Old Office and Mistakes the Bidet for the Toilet." 

Yesterday:

SHANE'S EXCELLENT NEW WORDS: I'll match your customary gesture politics and raise you a spate of virtue signaling.

FLASHBACK: You say you want a resolution? Ya gotta take yer growth industries where ya find 'em.

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Recent columns:

August 10: ON THE AVENUES: Super Tuesday shrapnel – or, tiptoeing through the tulips with Dan Coffey, now THE face of historic preservation in New Albany.

August 3: ON THE AVENUES: On the importance of being ancient.

July 27: ON THE AVENUES: Irish history with a musical chaser.

July 20: ON THE AVENUES DOUBLEHEADER (2): A book about Bunny Berigan, his life and times.

"Revitalized into oblivion": An astoundingly synonymous cautionary tale about Gah ... sorry, I mean Stephen Reed, former mayor of Harrisburg PA.

Last September, the Confidentials drove through Harrisburg, capital of Pennsylvania. We were road-tripping from Massachusetts to Maryland, and as we looked around, I harbored a vague notion that Harrisburg was somehow famous (or infamous) for malfeasance. The details eluded me at the time.

Only now does it come full circle with me. We'll begin this amazing story with a new post at CityLab.

The Mayor Who Broke Harrisburg, by Brentin Mock

Stephen Reed used to be known as Harrisburg’s “Mayor for Life.” His tenure as head of the Pennsylvania capital spanned almost 30 years, and in some quarters he still holds that title, even after he was voted out of office in 2009. Now he may be known as the “Mayor Who Avoided Life,” after dodging a sentence of thousands of years in prison for a 499-count indictment of theft, bribery, and corruption while he was mayor.

Today, Reed was sentenced to two years probation after pleading guilty to 20 counts of the least-serious crimes on his docket. Earlier this week, he admitted that part of his small collection of artifacts was bought with taxpayer money. The stolen items were part of an even larger collection of Civil War-era trinkets, documents, statues, and other memorabilia left over from Reed’s failed campaign to make Harrisburg a “city of museums.” Reed began siphoning taxpayer money into a secret account that he used to purchase heaps of 19th century American relics, all in an effort to transform the city into a “Westworld” of the East.

This was just one of Reed’s poorly (and criminally) conceived schemes that brought Harrisburg to the brink of bankruptcy—and almost landed the ex-mayor a 2,439-year jail sentence. How he got off with a two-year no-prison cakewalk instead is owed to a unique confluence of circumstances ...

The writer Mock makes several references to an article written last year by David Gambacorta at The Baffler, and as a resident of New Albania, I felt my neck hair doing calisthenics while reading it.

No, the billion-dollar economy of scale isn't the same. But the parallels are eerie, indeed. We pick up the narrative several paragraphs into Gambacorta's essay. I've marked certain passages in bold. Be sure to click through a read this in its entirety.

Called to Purchase: How mayor Stephen Reed shopped Harrisburg, PA, straight to hell, by David Gambacorta

 ... No one was really prepared to question Reed, or to peek behind the curtain of his kindly, eccentric persona. If they had, they would have found a petty autocrat hunkered down on a pile of redevelopment schemes, mistaking hoarding for a model for governance—a scenario only too possible in municipal America, the land that term limits forgot. The artifacts? Oh, they were just the spoils of a spending bender fueled by hundreds of millions of dollars in debt. When the spree was over, Reed would end up facing hundreds of criminal charges, and Harrisburg would be left in fiscal ruin.

The shared rise and fall of Reed and Harrisburg was decades in the making, a story of ambition and corruption that stands out even in Pennsylvania, a state that can’t go more than a few years without seeing one of its political giants succumb to arrogance, egotism, or the irresistible urge to take, take, take. As Reed prepares to finally go to trial on 114 charges, including theft, his case offers a stark reminder that the urban renewal and revitalization initiatives of the last century continue to dog our cities—and that too many of those initiatives turned out to be rip-offs, luring tourists to urban “playgrounds” at the expense of existing residents.

Sound familiar? Bright shiny objects, rather than daily nuts and bolts.

... According to state prosecutors, in the decades that followed (Reed's election in 1981), he set out to seize the puppet strings of anyone who had a say in the city’s financial decisions.

To the public, he appeared to use this power for good. Eateries and museums cropped up, along with hotels and a university. Reed was like a gleeful patriarch who continually surprised his children with vacations and shiny new toys—just never mind about how any of it would be paid for.

Imagine how many boards Reed packed. He was mayor for life, but elsewhere it was poverty for life.

Reed sometimes ran unopposed for reelection, earning the “mayor for life” tag from the media along the way. And why not? The ongoing projects seemed to prove that Harrisburg was a city on the rise. But with at least 33 percent of its residents now living in poverty, according to 2014 census data, and with state-owned tax-exempt land comprising a significant portion of the capital, where was the money coming from to cover the cost of these huge efforts?

“Nobody asked those questions,” sighs Patty Kim, a Pennsylvania state representative who worked with Reed when she served as a Harrisburg city councilwoman from 2005 to 2012. “He was able to play a shell game. He always had a new project to distract people.”

Note the connection between Reed's Special Projects Fund and the city's bond-compounded debt.

So money began to flow into the Special Projects Fund from every imaginable direction. Mealy said Reed began tacking on inexplicable “administrative fees” to the multitude of bond sales and debt that the Harrisburg Authority incurred at the mayor’s direction, and those fees were routed directly to the fund, according to the grand jury records.

Not unexpectedly, enforced loyalty maintains the cult of personality. Remember when Diane Benedetti and own John Gonder were messily deposed for failing to agree often enough?

“It was always, ‘You vote with me or you are the enemy,’” former Harrisburg City Council president Richard House told state investigators, according to the records. But Reed, apparently, had a lighter touch too. House said Reed offered him a community relations coordinator job in 2001 with the Harrisburg Senators—a position that previously didn’t exist—with the understanding that Reed was buying House’s votes, and the votes of other council members.

In the end, the accumulated debt could no longer be hidden.

... After a month of combing through handwritten records, (Eric Papanfuse) pieced together the big picture: Harrisburg was fucked. Everyone knew the incinerator was costing the city a fortune, but it seemed no one had done the math on the years and years of bond and debt deals that had built the city’s new attractions and also covered the cost of Reed’s artifact obsession. The total sum was north of a billion dollars—for a city with a population that couldn’t fill up a professional football stadium.

Such was Reed's hold that it took several years for Papenfuse to interest anyone in investigating, but once the state attorney general intervened, the house of cards collapsed. Reed was defeated for re-election.

(Linda) Thompson, at least, broke the “mayor for life” cycle, lasting only one term. She took heat for spending $35,000 to renovate the mayor’s office, after complaining about the inescapable cigarette odor that Reed left behind—and was replaced by Papenfuse, who was tasked with rescuing a city that had been revitalized almost into oblivion.

Looking for epitaphs?

Maybe Reed’s growing pile of dead-end revitalizing fantasies, tied more to his idiosyncratic understanding of leisure than to the interests of his city, was firmly in line with late twentieth-century urban-planning trends, which held that no city was too small to bet the farm on tourism-first redevelopment projects, the benefits of which would somehow trickle down.

Lots and lots of similarities, don't you think?

Hmm. Does Harrisburg have a luxury doggie park?