Showing posts with label corruption. Show all posts
Showing posts with label corruption. Show all posts

Wednesday, July 29, 2020

iPhone.



It's not entirely accurate to suggest that conservatism has no coherent response to COVID-19. "Death Cult" is coherent. Horrible, but coherent. 


Conservative Incoherence, by Sam Adler-Bell (Dissent)

The conservative response to COVID-19 has been defined by its heterogeneity: a blur of contradictory recriminations, confirmation biases, and conspiracy peddling.

... All told, there has been no coherent response to the COVID crisis from the right. But when it comes to conservative ideology, incoherence is a feature, not a bug. Where liberals fantasize that precedent and logic are binding forces in our political life—that there exists some epistemological authority that will arbitrate facts and fiction, punish those who’ve contradicted themselves, and reward those who have not—conservatives have long since abandoned such notions. Reactionary thought, as Corey Robin has argued, is dynamic and mutable by nature, responsive to minute changes in the political weather, sensitive to every threat to order and hierarchy, primed to spring into action to meet the discursive necessities of the moment.
Like many, I experienced acute frustration at Trump’s tweets in support of protests to “liberate” states from the onerous lockdowns he and his medical advisers have counseled. But it doesn’t matter. Contradiction is no obstacle. There is no New York Times bombshell or Mueller indictment or impeachment article coming to right the wrongs of Trump’s hypocrisy, no scorekeeper, no manager. There is only power, those who wield it, and those who are subject to it. This, at least, our gun-toting libertarian friends in Michigan understand. It will take wielding our own sort of power to escape this crisis with our communities intact and safe. What form that power could take, I don’t yet know ...

Thursday, July 02, 2020

"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.

Tuesday, October 22, 2019

GIVE GAHAN A PINK SLIP: (Tuesday) In 2015 roughly 14% of New Albany's eligible voters opted for the Anchor Deity, and they’re getting exactly what they deserve – good and hard.


Last week was so much fun, let's do it again. As a run-up to Decision 2019, I'm headed back into the ON THE AVENUES archive for five straight days of devastatingly persuasive arguments against four more years of the anchor-imbedded Gahan Family Values™ Personality Cult.

I've already made the case for Mark Seabrook as mayor. Now let's return to the voluminous case against Gahanism in five informative and entertaining installments -- at least until next week, when I may decide to do it all again. Heaven knows we have enough raw material. Following are last week's hammer blows.

GIVE GAHAN THE BOOT: (Monday) The Reisz Mahal luxury city hall, perhaps the signature Gahan boondoggle.

GIVE GAHAN THE BOOT: (Tuesday) Gahan the faux historic preservationist demolishes the historic structure -- with abundant malice.

GIVE GAHAN THE BOOT: (Wednesday) The shopping cart mayor's cartoonish veneer of a personality cult. Where do we tithe, Leader Dearest?

GIVE GAHAN THE BOOT: (Thursday) That Jeff Gahan has elevated people like David Duggins to positions of authority is reason enough to vote against the Genius of the Floodplain.

GIVE GAHAN THE BOOT: (Friday) Slick Jeffie's hoarding of power and money is a very real threat to New Albany's future.

And this week's pink slip chronicles:

GIVE GAHAN A PINK SLIP: (Monday) No more fear, Jeff. This isn't East Germany, and you're not the Stasi.

GIVE GAHAN A PINK SLIP: (Tuesday) In 2015 roughly 14% of New Albany's eligible voters opted for the Anchor Deity, and they’re getting exactly what they deserve – good and hard.

Today's column is so good that I keep using it.

---

May 5, 2019


ON THE AVENUES REWOUND: Our great and noble leader soon will be going away, so let's break out the țuică and make a joyful noise.

A weekly column by Roger A. Baylor.

---

I. May, 2019: the column introduction 

The following column was written in 2017 and repeated in 2018, and our city's anchor-laden civic idiocy has continued to proliferate.

We've witnessed the final Reisz Mahal luxury city hall fix, the death of a skateboarder on uncalmed city streets, a planned sixty-mile recreational trail to nowhere, David Duggins' piece-by-piece dismantlement of Riverview Tower, the Colonial Manor public relations catastrophe and Jeff Gahan on the verge of $600,000 in career earnings from pay-to-play political patronage.

NA Confidential has documented Gahan's bullying of a street department worker and a career policeman, and we've watched with dismay as the News and Tribune continues to duck, cover and abdicate its responsibility to cover news in New Albany.

There have been Kool-Aid blackouts and loaded Rice Krispies Treats freakouts, and all the while the insider Democrats keep doubling down on Dear Leader -- and why not? They're at the apex of a cliquish and privileged pyramid looking down at the people they're supposed to be serving, but have been too busy implementing Gahan's luxury enhancement program to give a damn.

Now they're nervous, aren't they?

---

II. April, 2018: the column introduction 

Early this morning I began writing the weekly column over kippers and coffee, and after 300 words, a pervasive feeling of déjà vu began furrowing my brow. Sure enough, upon comparative examination, I'd been there before -- 13 months ago, to be exact.

In which case, why not just repeat the original?

I tend to refrain from reruns of such recent vintage, but as Year Zero approaches, there has been a noticeable resurgence of sheer, unmitigated hubris on the part of Team Gahan's increasingly vacuous functionaries, including (though not limited to) Pat McLaughlin's malicious Knable censure resolution, the shameless and bullying pilferage of intellectual property rights on the part of Develop New Albany's tittering second-raters, a rumored million-dollar cost overrun on the mayor's luxury city hall reclamation, and politically motivated harassment and intimidation of city employees.

There's a great deal of talking down, and too little talking to or with. The stench emits from the top, from Jeff Gahan himself and the Floyd County Democratic Party.

Local Democrats are feeling cornered, and like animals, their fangs are being bared. Decades of ward-heeling patronage and forever merrily wetting beaks is at last threatened by a gradual rising tide in the form of the municipal wing of the Republican Party.

Unfortunately, ranking local Democrats remain enamored of center-right pandering spiced with occasional whiffs of gesture-laden identity coding to entice the two-person-strong East Spring Street Neighborhood Association -- and they're as terrified by the likes of Dan Canon in 2018 as they were by Bernie Sanders in 2016.

Straight up: Gahan's all the Democrats have; this is an apocalyptic Alamo in the making, and doubling down is their only real choice. The re-election tactics already are nasty, and they're going to get worse, because the institution is incapable of reform as constituted, on the fly, but the problem goes far deeper, because in addition to the usual petty graft and high school city council chicanery, the power elite -- Gahan, Dickey, Gibson and Duggins, among others -- truly believe they're infallible.

They aren't. Furthermore, neither am I.

Returning to March of 2017 and rereading what I wrote last year, it occurs to me that the odds of regime change have improved. The more we point at the deficiencies of Gahan's megalomania, and to the absurdity of a veneer peddler's innate perfection, the more numerous are those heads nodding in agreement.

They may or may not vote, but there'll be two chances to topple the statue and begin papering over those anchors.

---

III. March, the 2017 original column

Țuică is plum brandy, and sweeping generalizations tend to be insupportable. Seeing as I’m in no mood to be dainty, let's have a drink of the firewater and stumble into the breach.

As human beings go, the late Romanian communist dictator Nicolae Ceaușescu (1918-1989) was a regrettable and unfortunate piece of work.

Yes, Ceaușescu was canny and possessing the survivor’s keen animal instincts, but offered few redeeming qualities otherwise. He was brutal, long-winded and poorly educated, though slightly brainier than his wife, Elena, a semi-literate bumpkin who built her own cult of personality around pretending to be a superstar scientist.

To read about the despot Ceaușescu nowadays is to constantly find yourself asking, “How could this nondescript dullard of a rural functionary be called the Genius of the Carpathians?”

Even apart from Ceaușescu being an installed and pliant cog in a closed international geopolitical system, itself constructed to institutionalize precisely such non-ironic chicanery, the very thought is breathtaking – and almost surely he believed every word of it.

While shaving each morning, the Conducător (leader) gazed into the mirror not unlike Wile E. Coyote, and paused to admire the length and breadth of his genius.

And why not? A quasi-feudal collection of stooges, sycophants and “yes men” surrounded Ceaușescu, assuring him constantly that he was every bit the ranking luminary ever to have emerged from the dark, forested Transylvanian mountains, overshadowing even the legendary Vlad Tepes – historical basis for the character of Dracula.

In turn, these assurances became the substance of propaganda, including press clippings about himself that Ceaușescu read eagerly over his daily breakfast of luxury foods generally unavailable to his subjects, as well as ubiquitously placed visual reminders of his presence.

Propaganda was the source for parroted and fluttering expressions of fealty on the part of those Romanian citizens who grasped the obvious, and cheerily rebroadcast the boilerplate from a desire to stay out of prison – and of course some of them ended up there, anyway.

What a vicious and dreary fraud, that Ceaușescu.

For 25 years, he was a veritable anchor of vapid tastelessness, mired in the mud flats of the Danube River delta, surrounded by clueless henchmen and corrupt vandals who enriched themselves at the expense of the common man.

Hmm. I’m not sure what made me think of all this, but did I tell you there was a ceremony at the amphitheater on Tuesday morning?

---

As we enter Year VI in the Chronicles of New Gahania, the only major surprise is that Mayor Jeff Gahan hasn’t yet designed a logoed scepter.

On Tuesday morning, Gahan – our Genius of the Floodplain – bounded to a podium hastily erected at the underused amphitheater, chosen for this occasion because the river looks so “cool” behind it, though it remains unfit for the dashing Team Gahan otherwise.

Giggling and gesticulating in a paroxysm of agoraphobic ecstasy, Gahan thanked the Horseshoe Foundation board members who he’d either had appointed or strong-armed, or both, and accepted a check for $5 million from the only Floyd County politician whose compliance really mattered, his neighbor and arch-rival Mark Seabrook, who from this moment forward will be utterly forgotten as Gahan claims full credit for the foundation’s largess.

Gahan proceeded to run down the list of previous multi-million dollar quality-of-life luxury improvements, praising the investments while never revealing their true cost in terms of municipal subsidies and post-ribbon-cutting maintenance.

Verily, Gahan’s done it all; laid the bricks, moved the dirt, smoothed the asphalt, sold hot dogs and swept the floor. It was repulsive and sickening, and within a few seconds it became evident to me as never before that short of getting caught in bed with a known book reader, Gahan has emerged as the odds-on favorite to serve indefinitely as New Albany’s de facto mayor-for-life.

The list of baubles, glitz and glitter – of bright, shiny objects that function as Potemkin facades, suggesting municipal progress while obscuring the ongoing rot proceeding apace underneath – has become as lengthy as Shane Gibson’s arm.

Concurrently, Gahan’s increasingly pedestrian press releases clearly indicate that he’s efficiently cured our city of the social ills that plague the remainder of the planet, apart from a handful of Scandinavian towns and the acreage of various Disney properties.

We have no crime, drug abuse, homelessness, poverty or red lights being run by speeding vehicles. Litter? It isn’t really there, you know. Perhaps you imagined it.

It is left to vicious scandal-mongering dissidents like Jeff Gillenwater to challenge the status quo.

With what's potentially the most significant political upheaval in several decades currently taking place, New Albanians can take solace in the fact that both city and school corporation leaders have ensured an equally significant lack of flexibility going forward with hundreds of millions of dollars in debt payments coming due over the next two or three decades. If you're planning on having any good civic ideas in 2027, tough cookies.

The problem for Bluegill, and for me, and for anyone else who pays close attention, is that in the main, New Albanians seem perfectly content with the Ceaușescu-like tendencies of King Gahan.

After all, in 2015, roughly 14% of the city’s eligible voters opted for the anchor, and as with Donald Trump nationally, they’re getting exactly what they deserve – good and hard.

It’s increasingly difficult to imagine a scenario in which Gahan loses a third term in 2019. Try as he might, Seabrook won’t ever be able to shake the ignominy of smiling weakly while handing Gahan what amounts to five million free clams to campaign for re-election.

At the same time, the current crop of potential Republican challengers has largely chosen to play along with Gahan’s beautification-over-substance shell game.

Granted, the rules of this game have been written to exclude elected officials and empower political appointees, and there isn’t much the minority party can do, but when push comes to gag, the nominal opposition will be depicted as having been complicit.

Just remember: The Bicentennial Boondoggle was very bipartisan.

---

Consider one of Gahan’s chief acolytes, self-important councilman Bob Caesar, who formerly served as nominal Ceaușescu of the Bicentennial Commission.

Most readers are aware of my two-year-long struggle to wrest public Bicentennial Commission financial records, first from Caesar and then the city itself, only to be dismissed with supreme condescension by both.

To repeat: The celebration of New Albany’s two-hundred-year birthday cost several hundred thousand dollars, and was funded in part with taxpayer funds. I’m a citizen of New Albany. Caesar refused to show me the records, and the city attorney Gibson said the city doesn’t have the records to show.

In short: Go peddle your papers, insufferable peasant.

This is amazing, and it should be unacceptable; absolute power corrupts absolutely, and any mayor who takes seriously his obligation to enforce the law shouldn’t allow it.

However, I’m happy to announce that the Green Mouse has obtained these Bicentennial records. Fascinating revelations lie within, and copies currently are in my possession, illustrating plainly that while Caesar and Gibson may not have lied outright, they certainly have acquiesced in a cover-up, and are guilty of consciously subverting the intent of state laws governing freedom of information and public access to records.

This should disturb all of us, and both should be cashiered. If they’ll resort to evasions and subterfuge to obscure Caesar’s handling of relatively paltry Bicentennial funds, just think what they’ll do to obscure the leakage from the many yearly millions going toward feel-good, beautification projects.

And yet … you’re bothered, but only a bit, and not enough to rock the boat, right?

The newspaper doesn’t ask these questions, does it?

In more candid moments, it may seem like smoke and mirrors, but just enough of that magic pixie dust is being spread around to encourage acceptance.

Isn’t it?

And you’re fine with it, aren’t you?

The fact is, if I were to spend 40 more hours of my own time, gratis, to sifting through the records the Politburo has denied exist, in order to show that lots of Bicentennial bucks were hemorrhaged this way and that, often straight to community pillars and/or political party stalwarts who nuzzled up to wet their beaks – as I'm completely confident I could – nothing at all would happen, would it?

They wouldn’t concede error or apologize, would they?

You wouldn’t expect it, would you?

And this is a slight problem, isn’t it?

I’m not ruling anything out, or in. I might take the time to sort through those records, or maybe use those precious hours to drink beer and watch documentaries about tin horn dictatorships the world has known.

But there isn’t much one person alone can do to prevent Jeff Gahan from redesigning New Albany in his own beige image, and as the sainted Bob Knight once implied, if tacky Disney totalitarianism is inevitable, then we might as well escalate plans for a new barroom in order to have somewhere to seek refuge from the sheer indignity of it.

That's exactly what I'm working to achieve, and when it finally comes to pass, I promise to place portraits of Ceaușescu and Gahan right where they belong, at the entrance to the toilets.

Or better yet, inside them.

Sunday, September 29, 2019

Hunter Biden, et al: "Donald Trump committed an impeachable offense, but prominent Americans also shouldn’t be leveraging their names for payoffs from shady clients abroad."


More essential reading. If we're to endure this impeachment process, it seems a shame to condone one variety of corruption while prosecuting a second, merely to suit the political objectives of the two-party duopoly.

Anyone got a big-ass broom for both?

Hunter Biden’s Perfectly Legal, Socially Acceptable Corruption, by Sarah Chayes (The Atlantic)

Donald Trump committed an impeachable offense, but prominent Americans also shouldn’t be leveraging their names for payoffs from shady clients abroad.

How did this get to be standard practice?

The whistle-blower scandal that has prompted the fourth presidential impeachment process in American history has put a spectacle from earlier this decade back on display: the jaw-smacking feast of scavengers who circled around Ukraine as Viktor Yanukovych, a Moscow-linked kleptocrat, was driven from power. Ukraine’s crisis was the latest to energize a club whose culture has come to be treated as normal—a culture in which top-tier lawyers, former U.S. public officials, and policy experts (and their progeny) cash in by trading on their connections and their access to insider policy information—usually by providing services to kleptocrats like Yanukovych. The renewed focus on Ukraine raises jangling questions: How did dealing in influence to burnish the fortunes of repugnant world leaders for large payoffs become a business model? How could America’s leading lights convince themselves—and us—that this is acceptable?

Voicing this question now invites an immediate objection: “false equivalence.” Let’s dispense with it. What Donald Trump has done—in this case, according to the summary of a single phone call, lean on a foreign president to launch two spurious investigations in order to hurt political rivals, offering the services of the U.S. Department of Justice for the purpose—is shockingly corrupt, a danger to American democracy, and worthy of impeachment.

But the egregiousness of these acts must not blind us to the culture of influence-peddling that surrounds and enables them. That culture is fundamental to the cynical state we are in, and it needs examining. All too often, the scandal isn’t that the conduct in question is forbidden by federal law, but rather, how much scandalous conduct is perfectly legal—and broadly accepted ...

Saturday, September 28, 2019

"Right now, the grim fact is that the Democratic Party has been constructed to lose, and we should stop acting surprised if it keeps on doing so."


Pretty much.

Doomed, delusional, divided and corrupt: How the Democratic Party became a haunted house, by Andrew O'Hehir (Salon)

Conflicted about ideology and identity and deeply compromised by history, the Democratic Party is built to lose

 ... I’m also not just talking about the party’s steadfast refusal to adopt coherent, progressive and broadly popular positions on issues like health care, gun control, marijuana legalization and electoral reform. But it’s important to grasp why Democrats in power won’t embrace those things — as opposed to embracing them on the campaign trail, which really doesn’t count — because the reasons go well beyond ideological confusion or political cowardice and into deeper, darker places.

Over the last 40 years, the Democrats have become an increasingly awkward coalition of affluent, cosmopolitan whites and urban people of color, and have largely abandoned their previous mistrust of corporate power, Wall Street and big capital in general. Go down the list of powerful congressional Democrats — especially the committee chairs and members of leadership — and pay attention to where and how they raise money, and who their major donors are. The corruption is widespread and deeply rooted, and it cannot be dislodged simply by anointing a reformer or “socialist” as the presidential nominee. If anything, that should be the end point of a renovation or redemption project that has not happened.

I’m not just talking about the peculiar fact that the 2020 Democratic campaign will likely boil down to a contest between three white people in their 70s, each of them with glaring and obvious flaws. I’m not talking about the unresolved post-2016 tactical and ideological struggle between “progressives” and “moderates,” which was a long time coming and is now playing out in the nomination contest. I’m also not talking about the exaggerated infighting on the left between supporters of Elizabeth Warren and Bernie Sanders, which represents both substantive and symbolic divisions — and which, on both sides, also represents a profoundly unrealistic view of the nature of political power.

Those things can all be pulled apart and argued over individually, of course. But I am truly and honestly not arguing here for the victory of a particular candidate or faction or strategy. I don’t know how impeachment would turn out, and neither do you. I have no idea whether Sanders or Warren or Biden or Kamala Betogieg is the best bet to defeat Trump next year, and nobody else does either. That leaves us with the radical proposition that people should support the candidate they like best and we’ll see what happens, which I realize is deeply unsatisfactory punditry.

But all such questions, when considered piece by piece, ignore the deeper underlying narrative that frames them in the first place. They all signal toward the Democratic Party’s remarkable ability to manufacture defeat, even (or perhaps especially) when objective conditions seem overwhelmingly favorable to victory. The real problem here, I’m afraid, admits of no easy solution: The Democratic Party comprises a wide range of views and voices, some of whom are vigorously trying to change its direction. But all of them are trapped inside a haunted house. Troubled by the ghosts of the past and clinging to useless rituals, Democrats appear largely unable to perceive actually existing reality or react to it appropriately.

This is not exactly a new idea ...

Saturday, September 14, 2019

Scammers, fraudsters, and the task of "Un-Corrupting City Hall."


This long read helpfully explains why New Albany's Ethics Commission was stillborn.

Un-Corrupting City Hall, by Ethan McLeod (CityLab)

These cities all suffered notorious municipal scandals. What have officials and voters done to tackle corruption and keep it from happening again?

H. Philip West Jr. breathed a sigh of relief in June when Providence’s 294-room Graduate Hotel decided to remove the portraits of Vincent “Buddy” Cianci from its guestrooms. The longtime mayor, who died in 2016, is an iconic character in the Rhode Island capital’s history. But as far as West is concerned, Cianci is a stain on Providence—one that he’s spent years trying, unsuccessfully, to scrub away.

It was only five years ago that Cianci—out of prison after a racketeering conspiracy conviction in 2007 and twice forced to resign from office due to felony convictions nearly two decades apart—mounted a third run for mayor. He lost, but West, former director of Common Cause Rhode Island, was still troubled to see him draw 45 percent of the vote.

“When you’ve dealt with such a brilliant scammer and fraudster, how can you convince people that they should not support him? I’m not sure you ever can,” says West, who helped write a new city ethics code and create a municipal investigatory body after Cianci’s 2001 indictment. “Ultimately you just have to say, ‘We’re going to build a structure that’s going to hold anybody who’s elected going forward accountable.’”

That’s the same pledge that voters and leaders have made in other places where civic corruption has been a chronic issue. Weary from national embarrassment and seeing history repeat itself, cities like Baltimore, New Orleans, and Chicago have responded to political scandals with charter overhauls and executive orders, empowered independent investigators to probe corruption, and challenged problematic local political traditions.

But successfully leading a wave of reform can be a tall order, with human nature and deeply entrenched political culture standing in the way. “This is about personal greed,” Tim Krebs, chair of the University of New Mexico’s political science department, says. “As long as you have human beings in government, you’re not going to be able to root [corruption] out entirely.”

Boosting oversight doesn’t always work, and for some, the jury is still out as reforms await testing. But in cities large and small, when voters and officials commit to challenging corruption and embracing transparency, they’re seeing results.

Examples are offered from Chicago, Baltimore, Detroit, Greater Los Angeles and New Orleans, before the narrative turns back to Providence.

The Providence Ethics Commission didn’t actually meet until 2015 ... West said he’s proud of the ethics code and other reforms he helped with, but is bothered that he hasn’t yet seen the commission enforce the new rules for any violations. “With a power, you can’t really know what it is until you exercise it and you find out what the resistance is. I really can’t say that they’ve got decent enforcement power until I see that they’re using it.”

The coda.

“It takes a long time to build good government, and sadly, a clever, corrupt official can do great damage in short time,” he says. “Until those people retire and are gone, corruption will still have its presence, its taint.”

Sunday, May 05, 2019

ON THE AVENUES REWOUND: Our great and noble leader soon will be going away, so let's break out the țuică and make a joyful noise.


Header corrected from the original.

ON THE AVENUES REWOUND: Our great and noble leader is here to stay soon will be going away, so let', so let's break out the țuică and make a joyful noise.

A weekly column by Roger A. Baylor.

---

I. May, 2019 Preface to Rewind

Perhaps as many as two-thirds of our 2019 primary election votes will be cast on Tuesday. Regular readers already know my choice.

ON THE AVENUES: It's time for a change, and David White understands that change begins with a whole lotta scrubbing.


The following column was written in 2017 and repeated in 2018. In the year since then, the anchor-laden civic idiocy has continued to proliferate.

We've witnessed the final Reisz Mahal luxury city hall fix, the death of a skateboarder on uncalmed city streets, a planned sixty-mile recreational trail to nowhere, David Duggins' piece-by-piece dismantlement of Riverview Tower, the Colonial Manor public relations catastrophe and Jeff Gahan on the verge of $500,000 in career earnings from pay-to-play political patronage.

NA Confidential has documented Gahan's bullying of a street department worker and a policeman, and we've watched with dismay as the News and Tribune continues to duck, cover and abdicate its responsibility to cover news in New Albany.

There've been Kool-Aid blackouts and loaded Rice Krispies Treats freakouts, and all the while the insider Democrats keep doubling down on Dear Leader -- and why not? They're at the apex of a cliquish and privileged pyramid looking down at the people they're supposed to be serving, but have been too busy implementing Gahan's luxury enhancement program to give a damn.

Now they're nervous, aren't they?

II. April, 2018 Preface to Rewind

Early this morning I began writing the weekly column over kippers and coffee, and after 300 words, a pervasive feeling of déjà vu began furrowing my brow. Sure enough, upon comparative examination, I'd been there before -- 13 months ago, to be exact.

In which case, why not just repeat the original?

I tend to refrain from reruns of such recent vintage, but as Year Zero approaches, there has been a noticeable resurgence of sheer, unmitigated hubris on the part of Team Gahan's increasingly vacuous functionaries, including (though not limited to) Pat McLaughlin's malicious Knable censure resolution, the shameless and bullying pilferage of intellectual property rights on the part of Develop New Albany's tittering second-raters, a rumored million-dollar cost overrun on the mayor's luxury city hall reclamation, and politically motivated harassment and intimidation of city employees.

There's a great deal of talking down, and too little talking to or with. The stench emits from the top, from Jeff Gahan himself and the Floyd County Democratic Party.

Local Democrats are feeling cornered, and like animals, their fangs are being bared. Decades of ward-heeling patronage and forever merrily wetting beaks is at last threatened by a gradual rising tide in the form of the municipal wing of the Republican Party.

Unfortunately, ranking local Democrats remain enamored of center-right pandering spaced with occasional whiffs of gesture-laden identity coding to entice the two-person-strong East Spring Street Neighborhood Association -- and they're as terrified by the likes of Dan Canon in 2018 as they were by Bernie Sanders in 2016.

Straight up: Gahan's all the Democrats have; this is an apocalyptic Alamo in the making, and doubling down is their only real choice. The re-election tactics already are nasty, and they're going to get worse, because the institution is incapable of reform as constituted, on the fly, but the problem goes far deeper, because in addition to the usual petty graft and high school city council chicanery, the power elite -- Gahan, Dickey, Gibson and Duggins, among others -- truly believe they're infallible.

They aren't. Furthermore, neither am I. Returning to March of 2017 and rereading what I wrote last year, it occurs to me that the odds of regime change have improved. The more we point at the deficiencies of Gahan's megalomania, and to the absurdity of a veneer peddler's innate perfection, the more numerous are those heads nodding in agreement.

They may or may not vote, but there'll be two chances to topple the statue and begin papering over those anchors.

III. March, 2017 Original Column

Țuică is plum brandy, and sweeping generalizations tend to be insupportable. Seeing as I’m in no mood to be dainty, let's have a drink of the firewater and stumble into the breach.

As human beings go, the late Romanian communist dictator Nicolae Ceaușescu (1918-1989) was a regrettable and unfortunate piece of work.

Yes, Ceaușescu was canny and possessing the survivor’s keen animal instincts, but offered few redeeming qualities otherwise. He was brutal, long-winded and poorly educated, though slightly brainier than his wife, Elena, a semi-literate bumpkin who built her own cult of personality around pretending to be a superstar scientist.

To read about the despot Ceaușescu nowadays is to constantly find yourself asking, “How could this nondescript dullard of a rural functionary be called the Genius of the Carpathians?”

Even apart from Ceaușescu being an installed and pliant cog in a closed international geopolitical system, itself constructed to institutionalize precisely such non-ironic chicanery, the very thought is breathtaking – and almost surely he believed every word of it.

While shaving each morning, the Conducător (leader) gazed into the mirror not unlike Wile E. Coyote, and paused to admire the length and breadth of his genius.

And why not? A quasi-feudal collection of stooges, sycophants and “yes men” surrounded Ceaușescu, assuring him constantly that he was every bit the ranking luminary ever to have emerged from the dark, forested Transylvanian mountains, overshadowing even the legendary Vlad Tepes – historical basis for the character of Dracula.

In turn, these assurances became the substance of propaganda, including press clippings about himself that Ceaușescu read eagerly over his daily breakfast of luxury foods generally unavailable to his subjects, as well as ubiquitously placed visual reminders of his presence.

Propaganda was the source for parroted and fluttering expressions of fealty on the part of those Romanian citizens who grasped the obvious, and cheerily rebroadcast the boilerplate from a desire to stay out of prison – and of course some of them ended up there, anyway.

What a vicious and dreary fraud, that Ceaușescu.

For 25 years, he was a veritable anchor of vapid tastelessness, mired in the mud flats of the Danube River delta, surrounded by clueless henchmen and corrupt vandals who enriched themselves at the expense of the common man.

Hmm. I’m not sure what made me think of all this, but did I tell you there was a ceremony at the amphitheater on Tuesday morning?

---

As we enter Year VI in the Chronicles of New Gahania, the only major surprise is that Mayor Jeff Gahan hasn’t yet designed a logoed scepter.

On Tuesday morning, Gahan – our Genius of the Floodplain – bounded to a podium hastily erected at the underused amphitheater, chosen for this occasion because the river looks so “cool” behind it, though it remains unfit for the dashing Team Gahan otherwise.

Giggling and gesticulating in a paroxysm of agoraphobic ecstasy, Gahan thanked the Horseshoe Foundation board members who he’d either had appointed or strong-armed, or both, and accepted a check for $5 million from the only Floyd County politician whose compliance really mattered, his neighbor and arch-rival Mark Seabrook, who from this moment forward will be utterly forgotten as Gahan claims full credit for the foundation’s largess.

Gahan proceeded to run down the list of previous multi-million dollar quality-of-life luxury improvements, praising the investments while never revealing their true cost in terms of municipal subsidies and post-ribbon-cutting maintenance.

Verily, Gahan’s done it all; laid the bricks, moved the dirt, smoothed the asphalt, sold hot dogs and swept the floor. It was repulsive and sickening, and within a few seconds it became evident to me as never before that short of getting caught in bed with a known book reader, Gahan has emerged as the odds-on favorite to serve indefinitely as New Albany’s de facto mayor-for-life.

The list of baubles, glitz and glitter – of bright, shiny objects that function as Potemkin facades, suggesting municipal progress while obscuring the ongoing rot proceeding apace underneath – has become as lengthy as Shane Gibson’s arm.

Concurrently, Gahan’s increasingly pedestrian press releases clearly indicate that he’s efficiently cured our city of the social ills that plague the remainder of the planet, apart from a handful of Scandinavian towns and the acreage of various Disney properties.

We have no crime, drug abuse, homelessness, poverty or red lights being run by speeding vehicles. Litter? It isn’t really there, you know. Perhaps you imagined it.

It is left to vicious scandal-mongering dissidents like Jeff Gillenwater to challenge the status quo.

With what's potentially the most significant political upheaval in several decades currently taking place, New Albanians can take solace in the fact that both city and school corporation leaders have ensured an equally significant lack of flexibility going forward with hundreds of millions of dollars in debt payments coming due over the next two or three decades. If you're planning on having any good civic ideas in 2027, tough cookies.

The problem for Bluegill, and for me, and for anyone else who pays close attention, is that in the main, New Albanians seem perfectly content with the Ceaușescu-like tendencies of King Gahan.

After all, in 2015, roughly 14% of the city’s eligible voters opted for the anchor, and as with Donald Trump nationally, they’re getting exactly what they deserve – good and hard.

It’s increasingly difficult to imagine a scenario in which Gahan loses a third term in 2019. Try as he might, Seabrook won’t ever be able to shake the ignominy of smiling weakly while handing Gahan what amounts to five million free clams to campaign for re-election.

At the same time, the current crop of potential Republican challengers has largely chosen to play along with Gahan’s beautification-over-substance shell game.

Granted, the rules of this game have been written to exclude elected officials and empower political appointees, and there isn’t much the minority party can do, but when push comes to gag, the nominal opposition will be depicted as having been complicit.

Just remember: The Bicentennial Boondoggle was very bipartisan.

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Consider one of Gahan’s chief acolytes, self-important councilman Bob Caesar, who formerly served as nominal Ceaușescu of the Bicentennial Commission.

Most readers are aware of my two-year-long struggle to wrest public Bicentennial Commission financial records, first from Caesar and then the city itself, only to be dismissed with supreme condescension by both.

To repeat: The celebration of New Albany’s two-hundred-year birthday cost several hundred thousand dollars, and was funded in part with taxpayer funds. I’m a citizen of New Albany. Caesar refused to show me the records, and the city attorney Gibson said the city doesn’t have the records to show.

In short: Go peddle your papers, insufferable peasant.

This is amazing, and it should be unacceptable; absolute power corrupts absolutely, and any mayor who takes seriously his obligation to enforce the law shouldn’t allow it.

However, I’m happy to announce that the Green Mouse has obtained these Bicentennial records. Fascinating revelations lie within, and copies currently are in my possession, illustrating plainly that while Caesar and Gibson may not have lied outright, they certainly have acquiesced in a cover-up, and are guilty of consciously subverting the intent of state laws governing freedom of information and public access to records.

This should disturb all of us, and both should be cashiered. If they’ll resort to evasions and subterfuge to obscure Caesar’s handling of relatively paltry Bicentennial funds, just think what they’ll do to obscure the leakage from the many yearly millions going toward feel-good, beautification projects.

And yet … you’re bothered, but only a bit, and not enough to rock the boat, right?

The newspaper doesn’t ask these questions, does it?

In more candid moments, it may seem like smoke and mirrors, but just enough of that magic pixie dust is being spread around to encourage acceptance.

Isn’t it?

And you’re fine with it, aren’t you?

The fact is, if I were to spend 40 more hours of my own time, gratis, to sifting through the records the Politburo has denied exist, in order to show that lots of Bicentennial bucks were hemorrhaged this way and that, often straight to community pillars and/or political party stalwarts who nuzzled up to wet their beaks – as I'm completely confident I could – nothing at all would happen, would it?

They wouldn’t concede error or apologize, would they?

You wouldn’t expect it, would you?

And this is a slight problem, isn’t it?

I’m not ruling anything out, or in. I might take the time to sort through those records, or maybe use those precious hours to drink beer and watch documentaries about tin horn dictatorships the world has known.

But there isn’t much one person alone can do to prevent Jeff Gahan from redesigning New Albany in his own beige image, and as the sainted Bob Knight once implied, if tacky Disney totalitarianism is inevitable, then we might as well escalate plans for a new barroom in order to have somewhere to seek refuge from the sheer indignity of it.

That's exactly what I'm working to achieve, and when it finally comes to pass, I promise to place portraits of Ceaușescu and Gahan right where they belong, at the entrance to the toilets.

Or better yet, inside them.

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Recent columns:

May 3: horse-race-rehash-sadly.html">ON THE AVENUES HORSE RACE REHASH: Sadly, the Kentucky Derby no longer is decadent and depraved. It’s just another vacuous capitalist bait ‘n’ switch.

April 30: ON THE AVENUES: Greg Pennell tells his story.

April 23: ON THE AVENUES: Gehenna, Franklin Graham, Jean-Paul Sartre and Fred Astaire lead us straight to Hell.

April 16: ON THE AVENUES: Amid Deaf Gahan's "victory" over grassroots activists at Colonial Manor, the toxic paranoia is no less rancid.

April 9: ON THE AVENUES: It's time for a change, and David White understands that change begins with a whole lotta scrubbing.

April 2: ON THE AVENUES: Donnie Blevins tells his story.

Sunday, April 28, 2019

The blog that dares not speak its name, although this doesn't prevent the professional from asking the amateur for help.

Deaf to Bill, 2019.

A polemic (/pəˈlɛmɪk/) is contentious rhetoric that is intended to support a specific position by aggressive claims and undermining of the opposing position. Polemics are mostly seen in arguments about controversial topics. The practice of such argumentation is called polemics. A person who often writes polemics, or who speaks polemically, is called a polemicist.

With voting underway, and election "day" just around the corner, you'll have noticed that the News and Tribune has had almost nothing to say about the candidates and issues.


This has been true about New Albany, the newspaper's most consistently neglected coverage area, as well as for races in Clark County, where the newspaper now allocates most of its sadly flagging energies.

Let's delve into double standards, but first, as a citizen polemicist, I don't mind being held to a higher bar when it comes to submissions. Still, the hypocrisy gets to me at times.

My letters to the editor, which are not allowed to bear a signature that includes "NA Confidential" as identifier, always are subject to scrupulous editing for proof and evidence -- even as Bill's and Susan's Excellent Adventure runs two weekly Christianity columns and permits numerous Christian advocacy letters to the editor, one imagines without the same scrupulous fact checking, because if such were to be applied to the absence of facts ... well, you know.

It's faith, isn't it?

At times even an "online comment" merits a follow-up, hence an amusing exchange from March. I'd mentioned Jeff Gahan's pay-to-play corruption in this comment about Chris Morris' abortion column.


Note the irony of the first example in this definition of corruption.

1. dishonest or fraudulent conduct by those in power, typically involving bribery.

"the journalist who wants to expose corruption in high places"

synonyms: dishonesty, dishonest dealings, unscrupulousness, deceit, deception, duplicity, double-dealing, fraud, fraudulence, misconduct, lawbreaking, crime, criminality, delinquency, wrongdoing, villainy

2. the process by which something, typically a word or expression, is changed from its original use or meaning to one that is regarded as erroneous or debased.

synonyms: alteration, falsification, doctoring, manipulation, manipulating, fudging, adulteration, debasement, degradation, abuse, subversion, misrepresentation, misapplication; rarevitiation

"these figures have been subject to corruption"

Corruption is a many-splendoured concept, gloriously mutable for the purpose of polemics. Less so any newspaper blithely content to be a feel-good lifestyle publication to the exclusion of its duty to afflict the comfortable while comforting the afflicted.

Here is our cyber trail.

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From: Susan Duncan
To: Roger Baylor
Cc: Bill Hanson - NT

Mar 22 at 3:40 PM

Roger,

Your online comment references “corruption,” indicating criminal wrongdoing. Where is your proof?

Susan

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From: Roger A. Baylor
To: Susan Duncan
Cc: Bill Hanson - NT

Mar 22 at 5:48 PM

Don’t worry, guys. I protected your star mayoral $ advertiser by not mentioning his name. I could be talking about any mayor, couldn’t I? Now can you give us a reporter, as opposed to a crusading anti-abortionist steno?

R

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From: Susan Duncan
To: Roger A. Baylor
Cc: Bill Hanson - NT

Mar 22 at 6:45 PM

You could be referencing any mayor; however, you posted the comment on a column by our assistant editor based in New Albany.

I’m not worried about advertising money from anyone, including mayors — nor do we make coverage decisions based on who does or doesn’t advertise in the newspaper.

If you have any evidence of criminal wrongdoing by any mayor in Southern Indiana, we would be interested in looking at it.

Susan Duncan

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From: Roger Baylor
To: Susan Duncan
Cc: Bill Hanson - NT

Mar 22 at 8:54 PM

Wearily ... and if I have such evidence, why on earth would I share it with the News and Tribune? How could I ever trust you to do anything with it?

In spite of my antipathy amid indefensible blathering like Morris' abortion piece today, for almost 15 years I've been linking my readers to your newspaper, thereby exposing them to the contagion of Gahan's self-congratulatory daily newspaper ads, and yet not once has anyone at the newspaper said something along the lines of "thanks for the traffic - here's a complimentary on-line subscription."

You said it yourself a while back: you're just not giving free blurbs to a mere blogger. That's hunky dory, but know that it's fairly obvious to the blogger and HIS readers when your reporters get their ideas from perusing my material. I'm down with it, too; at least (the reporters) will engage in conversation and be human, and as a former business owner, I've generally refrained from critiquing the shop floor, because the buck stops with management.

As it does in this instance. To reiterate, if I had solid evidence of criminal wrongdoing, why would a degraded alcoholic blogger like me give it to the News and Tribune when it's the News and Tribune's job to do things like that -- you know, reporting -- in the first place?

Sincerely,

R

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Here's the thing. I understand perfectly well that as a blogger, there are natural limitations.

I'm solo, pro bono and periodically loco. Conversely the newspaper's readership may have declined precipitously, but it's still more broadly distributed across various segments of the local populace than NA Confidential's -- though I surely have a loyal audience here, too. Just think about these two conditions, working together.

I do, often. They don't, ever. That's too bad, isn't it?

At any rate, we might spend the remainder of the day arguing about the meaning of journalism, and whether blogger can be journalists, and what a newspaper like the News and Tribune can be expected to accomplish in this day and age. I suspect the day would be wasted, and I'd be drinking by 5:30 p.m.

The point remains: If they won't allow me to identify myself as the NA Confidential blogger in a letter to the editor of the News and Tribune, it's some massive cheek to ask me to share "evidence of criminal wrongdoing" when I've put lots more time into exploring the preconditions of this topic than their entity has -- and they're far better placed to find it than me, given our respective economies of scale and potential magnitude of our bully pulpits.

I contend, and I will continue to contend, that in a time when local governments hire PR fluff firms to purchase advertising in newspapers, while continuing to pay classified rates for mandated notices and announcements, any insistence by a newspaper editor to the effect of revenue streams having no bearing on editorial decisions is disingenuous at best.

Although perhaps it's not indicative of corruption, only deferring to financial reality. Who knows? After all, I'm merely a blogging polemicist -- and the supposed local newspaper of record is allowing another election cycle to pass in a position of supine disengagement.

Here's a thought. Maybe if they find evidence of criminal wrongdoing, it will be shared with NA Confidential, the blog that dare not speak its name in the News and Tribune?

Now if you'll excuse me, I'm off to look for "proof" in today's multiple religion columns. Not holding my breath, though.

Thursday, February 14, 2019

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.