Pay to Play Feedback

After my blog about municipal audits and their relationship with pay to play in New Jersey, I received an interesting phone call. An influential state legislator who shall go nameless reached out to me, scolding me for "going after" Plainfield's audit firm.

It's as if he wanted to confirm my problem with the way Plainfield selects its auditor. Clearly his constituent for this phone call was the audit company and not the taxpaying citizens of Plainfield. That's the problem in a nutshell. The interests of the few come before the interests of the people.

For the record, I have absolutely no problem with the work of this audit firm. They have always answered my questions about the annual audit and budgets in a professional manner.

I do have a problem when a local political leader who does a good deal of fundraising calls to pressure a Councilman simply because that Councilman is advocating a position for limits on pay to play. I have an even bigger problem when that state legislator admits to me that he has received contributions from the very same audit firm I mentioned in my recent blog.

Let me be very clear: my problem is not with the audit firm. They are in the same boat as all New Jersey audit firms serving the public sector. My problem is with the few legislators who get the benefits of pay to play at the expense of the citizens of New Jersey.

Muhlenberg For Sale: clarification needed

Today's Courier News front page story is about Muhlenberg Hospital as discussed by City Council members and citizens at last nights Plainfield Council meeting. At the meeting I stated that the sale of the hospital is a private transaction but that the hospital and the Solaris system is so heavily funded/subsidized by taxpayer monies and supported by a property tax exemption that citizens have a financial interest in the sale. I asked the Council committee on Muhlenberg to take this into consideration as an issue to pursue. I stated that this could be an action item to bring to the regulators and legislators who have oversight on the hospital.

After the meeting I was asked by the Courier News reporter to explain my statement. He quoted me in the news story accurately. Unfortunately he mistakenly said I was calling for legal action by the council. I have called the Courier and asked for a follow-up correction to be made to clarify my position. News flash - after writing this blog the Courier reporter called to acknowldge the mistake and said the correction would be printed in Thursdays paper.

My position is that the Council committee on Muhlenberg seriously consider recommending back to Council the following: we request the Commissioner of Health to work with us and Solaris to make the hospital sale a more public process. This can be done in a number of ways. One would be to have an appraisal done to set a minimum bid for Muhlenberg and then do a competitive bidding process - all bids to be opened in public. There are others options such as legislative action by the New Jersey Legislature to make this sale process transparent. That will be up to the Council's Muhlenberg committee to consider.

Another point of clarification: when I say "minimum bid" I am referring to more than just the dollar amount. I mean medical services as well.

Pay to Play and audit firms

I read with interest a story in the Ledger about cosy deals between local governments and the firms that do their annual independent financial audits. It triggered some thoughts about Plainfield's audits:

1. Suplee Clooney have done Plainfields' municipal audits for many years. Are they a pay to play vendor? In order to be a successful government contractor in New Jersey, which they are, the answer is almost assuredly yes. Check the ELEC campaign contribution reports for Assemblyman Green, the state Democratic and Republican parties, etc. They should be there. Don't get me wrong. They seem to do a good job in Plainfield.

2. There are many good audit firms with municipal experience in New Jersey. I think Plainfield should go out to bid. Nothing against Suplee Clooney. Maybe when we've used a different firm for a number of years, we might want to go out to bid again and Suplee Cloney would win. And they are good enough that if pay to play was abolished, they'd do just fine. My guess is they would probably appreciate life without pay to play. But my concern is not just pay to play - see next.

3. Our city financial audit reflects on the entire municipal operation. It reflects on Mayor, Council and staff. But practically speaking the staff handle the fiscal transactions so the audit, to a large degree, is about the staff performance. And when the same audit firm is used for many years, a friendliness, even a cosiness develops between auditor and the staff. For that reason, fiscal oversight experts recommend changing audit firms every so often. I suggested this a few years ago. The response - why change when they do such good work. What do you think, reader?

4. Which brings me to my last thought. I said the audit is mostly on staff performance. It also reflects on the governing body's fiscal oversight performance. We, the City Council, vote to approve the annual audit and corrective action plans for any "findings" by the auditors. We could take it one step further. We councillors could initiate a bidding process for the audit contract and actually select the audit firm. It doesn't quite seem right that the staff recommend the firm that is mostly paid to audit them. This approach is not required by state law but it does pass the test of good fiscal oversight.

So pay to play and familiarity are obstacles to a truly independent audit. The first problem is more complex and ultimately needs a system wide solution. The second could be solved locally any given year.

Pay to Play, continued

Sorry for the long delay. It's a hectic time of year.

Since my last blog, the City Council has taken up several agenda items related to "pay to play". First is approval of the list of administration recommended professional services vendors under the so-called "Fair and Open" option of the state pay to play law. I always refer to this as "so-called" because it is not what it says it is.

Professional services provided to government entities in New Jersey do not have to go out to bid. This is a gigantic lapse in government ethics that allows the exchange of campaign donations for lucrative legal, engineering, architectural and accounting/auditing contracts. Our state legislature has been under pressure to do something about it thanks to negative press and good government advocacy groups. The legislature came up with this "Fair and Open" process to mollify the public.

Under this option, Plainfield can advertise professional services opportunities in the most minimal way. If most vendors are unaware of the brief window in which we advertise, they are out of luck. And Plainfield doesn't even have to advertise in the Ledger or Courier-News. We use the city website, notorious for its inadequacy and infrequent usage. But we do seem to attract the interest of vendors who have already made donations to certain political campaign funds. Competition be damned. Adam Smith would be rolling over in his grave if he knew.

At Monday's Agenda Fixing meeting, I asked the Council to table this list of vendors so we could do more advertising. No takers.

The second Council item of business is a $1,000,000 engineering contract to Remington and Vernick. No typo, that is a million dollars. Not going out to bid. On Monday, I suggested a competitive bidding process. No takers. It would slow down road construction, it was said. That is a valid point. Another Councilman commented that we consider competitive bidding in the future. Here is why I am not happy with that response: I have brought this up before and heard this response. There hasn't been a real interest in follow-up from previous requests for action. So would that change going forward?

Why is it difficult for elected officials to confront pay to play directly. Two reasons. One is that high level officials and party leaders benefit from pay to play , leveraging large election war chests into real power. This is perfectly legal under current law. The party in power generally benefits more.

The other reason, more applicable in Plainfield, is that elected officials low on the totem pole like Plainfield City Council members, are under pressure from party leaders to keep the flow of pay to play contributions going. There could even be consequences for trying to close some of the loopholes in our current pay to play laws.

There is some good news. The Center for Civic Responsibility is holding education sessions for citizens who want to learn about citizen empowerment and good government. Google them to learn more about their campaign and the date of their next session in Plainfield. I think it is August 12 in the Public Library at 7 pm.

Next blog on pay to play: solutions.

Pay to Play, Part 1 - the corruption tax

We all read the headlines with great anticipation when US Attorney Chris Christie indicts yet another public official for breaking the law. Yet the cost to the public for fraud and other illegal activities in actual dollars is very small compared to the total cost of government. A much more significant cost to the taxpayers comes from legal and "necessary" campaign contributions from the companies and individuals that do business with state, county and local government. This is true all over New Jersey.
Common Cause estimates the cost to New Jersey taxpayers to be close to $1 billion a year. One needs to go no further than Plainfield to illustrate the costs of pay to play.

But first, for the uninitiated, a little q & a:

1. Is pay to play "necessary"? - from the perspective of vendors, it is a necessary evil. Many government contracts do not require competitive bids and donations to the party in power can lead to lucrative business deals. A prominent New Jersey business cut back on pay to play donations a few years ago and lost significant business. They had to get back in this game to keep their business afloat (I did not have permission to use their name).

2. I thought that there are limits to campaign donations that level the playing field in the struggle for influence? - there are loopholes that allow companies to donate through each business partner, spouses and other family members. Donations can also be maximized by giving money to many campaign committees that are affiliated. Last but not least, there are a few campaign committees that have no limits for donations - these are the state Democratic and Republican Committees and the committees for the legislative leaders of each party.

3. What is wheeling? - that is how money, coming through the loopholes mentioned above can be funnelled from all over the state into select election campaigns. Big money was wheeled into Plainfield from south jersey Democrats to defeat Mayor Al McWilliams 3 years ago. I heard estimates of $100,000 to $200,000 but its hard to confirm facts given the convoluted paths this money follows.

4. What does this money get spent on in election campaigns? Mailings, robo-calls, lawn signs, television commercials, political polling, campaign consultants and much more.

Ok - so how does pay to play work in Plainfield?

In a mostly one party town, the primary, especially a contested primary, is where the action is. The Plainfield 2008 primary was a battle between the Regular Democrats, with pay to play money, and the challengers who got mostly local donations from residents. Why did the Regular Dems get all the pay to play money? Very simple. The Mayor and Plainfield Democratic City Committee chairman are Regular Democrats. The Mayor signs city contracts. If you want to get elected in Plainfield, it really helps to have support from the City Committee chair. That person decides your fate in the primary election: he or she decides who gets the party line on the ballot, a huge advantage in Plainfield.

The vendors know this and of course they want to back the winners. So when they have to choose between attending the Jerry Green fundraiser for the Regular Democratic candidates or the challengers event, its a no brainer. So if you were wondering why the incumbents could run numerous tv commercials and the challengers could not, wonder no more. In my 6 City Council campaigns, I've been on both sides of this situation. Feast or famine. But I was very careful not to take money from the party for anything more than lawn signs. Didn't want to owe too much to people whose agenda was not clear to me.

This kind of political fundraising is part of the American landscape. Why should we care? Because cost are high and guess who pays?

We taxpayers do in several ways. First, the vendors must build their donations into the cost of doing business with government. That road project includes the cost of engineering, a profession well known to make big pay to play donations regularly. Attorneys and auditors get no bid contracts so they have to play this game, like it or not.

The second way taxpayers/citizens are affected has to do reduced value for the services we pay for. If a business can get the contract through donations rather than offering the best price and value, there is less incentive for high performance to get and keep Plainfield's business.

To sum up, pay to play results in paying more and getting less. This is the corruption tax and it is perfectly legal.

In my next blog I will provide some details on local pay to play. If you like internet research, google NJ ELEC for a search engine that will locate the money and you can start to understand how it flows. Warning - you may get the feeling you are only scratching the surface by doing this.

Plainfield Democratic Party: Can we kiss and make up?

This is the question of the day. It will take leadership to bring us all together. We elected officials will have to take the credit or blame for how it turns out. I want to highlight one recent small step that points the way.

On election night, after the results were totaled and the McWilliams-Mapp celebration was in full swing, Don Davis, City Councilman, 3rd ward and candidate in the election, came over and personally congratulated the winners. I know Don and his family. They have deep roots in the community. There is a lot family pride here and it wasn't easy for him to come over and face the group that beat him in a heated campaign, especially after the painful hits he took near the end of the campaign.

It was a classy thing to do. We all need to follow his example. I wish Don the best in everything and lets not forget he continues to serve Plainfield until his term ends December 31. After that, I know he will stay involved as will the rest of his family.

We Democrats will have to take baby steps to rebuild our team. At McWilliams-Mapp headquarters, in the middle of the victory celebration, Don Davis said this to me: "Whats done is done. Lets move on. Its all about Plainfield"

Plainfield's Primary Election: What does it mean?

Congratulations to the Democratic Party winners who will be on the ballot for City Council in November: challengers Annie McWilliams for Council at large and Adrian Mapp for 3rd Ward. Lets not forget Bill Reid, who ran uncontested in the 1st ward. And there still is a Republican Party in town, to be represented by Deborah Dowe for the Council at large seat in November.

Some of my fellow Democrats are now cringing. I made the mistake of mentioning the opponents name, a no no in campaign tactics. I will make up for it by campaigning hard for Annie McWilliams who will be running against ......?????. Is that better?

It's hard to draw conclusions from election results in Plainfield because we are such a diverse town. And I don't just mean diversity along the black-white-hispanic-asian dimension. We are diverse socio-economically, culturally and politically.

By the way, can you name the Plainfield ward that is the most diverse along the racial, ethnic and family income dimensions? Hint - it is the same ward for all three dimensions. The answer will be in my next blog.

Here is my take on the election results:

1. A good door to door campaign trumped pay to play money this time around. I have yet to see the final spending reports but my guess is that the incumbents outspent the challengers by a 3 - 1 or 4 - 1 margin. Good news for good government!

2. Direct voter contact led our walkers to believe that people are impatient with local government. Mayor Robinson Briggs, who was campaigning actively for the incumbents, apparently did not deliver many votes. Significant pluralities for McWilliams and Mapp bear this out. They were not easy to find on the ballot but people were looking for their names. McWilliams' 1800 to 1000 vote victory over Gibson would have been much greater if we factored in ballot position.

3. Lack of action on roads was a concern over and over again. Taxes also. The incumbents campaigned on "the lowest tax increase in the county". The voters didn't care or didn't believe it.

4. The McWilliams name is still important. Not to take anything away from Annie. She ran a very good campaign as her own person.

5. The New Democrat label, thought by some to have suffered irreparable damage in the last few years, did not harm McWilliams and Mapp. On the other hand, it is not clear if it helped them either. The challengers did not use it much and the incumbents actually did use it, thinking it would work against McWilliams and Mapp.

6. Adrian Mapp's vote total might have been even higher if not for Olive Lynch's candidacy. She made a surprisingly strong showing.

One of the best comments I heard on election day was from a local resident who works for the state legislature in Trenton. He said the total Plainfield vote is more important than who wins local elections. Resource allocation decisions at the county, state and even national levels are influenced by the size of the voting public. How are we doing so far this year? Barack Obama certainly benefited from a very good Plainfield turnout in February. In the June primary, a slow year for local elections, Plainfields turnout was better than expected. McWilliams and Mapp get much of the credit for that. Our man in Trenton predicted a Plainfield vote total of 1600 based on his analysis of previous years voting totals. It was close to 3000. The challenge for all Plainfield Democrats is how to come together to maximize our potential influence.