True, private business often involves promises, curious deals, lavish gifts heaped on those being courted for contracts, and so on. But in the world of private business, if the brokered deal results in a less satisfactory or more costly product provided to the consumer, it’s not likely the deal will continue.
In municipal business, this model does not apply. A consumer in the private marketplace can choose among brands for a given product, but taxpayers (consumers) rely on government officials to choose among firms and entrepreneurs (brands). Corrupt officials know that, unlike in private business, consumers of city services have no way of knowing whether they are receiving the best product for the lowest price. Thus, various outsiders such as the media, watchdog groups, and law-enforcement officials are forever examining government deals looking for explicit and de facto cases of bribery, extortion and cronyism.
After so many years of pay-to-play culture, Philadelphia taxpayers have no way of calculating how much business, and thus tax revenue, has been lost because good firms stayed away from bidding for city contracts because they do not want to engage in such political chicanery. There’s also no way to estimate how much the costs of goods and services are inflated because the bidding process was fixed or otherwise illegitimate. U.S. Attorney Patrick Meehan, in announcing indictments in June 2004, decried this city’s corrupt political system and its penchant for producing inferior work and chasing good firms away: “Who can blame them? When the game is rigged, why play at all?”
Some of the scams are rigged in a special Philly way. These concern the city’s Minority Business Enterprise Council (MBEC) apparatus. Other cities have seen crooked manipulations of the MBEC process by non-minorities. But in Philadelphia, it’s different. The city’s MBEC problems include racketeering schemes in which legitimate companies were effectively precluded from obtaining municipal work unless they dealt with specific MBEC-certified firms. In several cases unearthed by the Inquirer and other media, this has meant that otherwise above-board municipal contracts were tainted by no-show jobs and cost increases. Thus, instead of the more usual “donations” to gain access to government contracts, individuals have had to enlist the “services” – real or fictitious – of a politically connected minority subcontractor.
It’s pay-to-play with a savvy twist, since the outward appearance is morally and politically powerful. Politicians can claim they are champions of the “disadvantaged,” all the while conniving to funnel significant MBEC work to their wealthy, powerful, connected pals. This often results in kickbacks to these politicians or their political machines. All of this, of course, harms the real MBEC populations, while the pols pulling the strings claim more such deals are needed to reach the (legitimate, unconnected) minority-run firms that get shut out of the process.
Such scams have a long, too long, pedigree in this town. In their heyday 30 years ago, the city’s notorious Black Mafia similarly exploited government initiatives for poor, inner-city minorities, led by their infamous – and bogus – “community development” organization, Black Brothers, Inc. As I traced its contemporary ties to “legitimate” society through dizzying lists of corporate and nonprofit boards, it became clear that there was a remarkably tight-knit core of power brokers in the city. The city seems more like a small town with small-town politics orchestrated by long-standing ties among a select, powerful few.
Many Philadelphians have accepted cronyism. Others seem to take a bizarre, macho pride in the wink-and-a-nod status quo. So it’s not entirely surprising that a prominent civic leader recently suggested renaming Spring Garden Elementary School in honor of the late power lawyer Ron White, whose name is now closely linked with the corruption scandals.
Because of Philadelphia’s decades-long single-party rule, the ingrained political culture, and the lack of public outrage (other than from those who have fled the city), I believe convicted former City Treasurer Corey Kemp when he says – from his jail confines – “I didn’t think I was doing anything criminal.” After all, to him it was probably just business.