The Cost Of Corruption

Pay-To-Play Government Is Bad For Business

Eric Griego
5 min read
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Buddy Cianci was one of the country’s most successful mayors. He took a struggling post-industrial Providence, R.I., and rebuilt it from the ground up. A new thriving downtown. A booming new high-tech industry and a renewed sense of civic pride. But a not-so-funny thing happened to Buddy Cianci on the way to his success. Buddy Cianci was convicted of public corruption.

Apparently, on the way to rebuilding one of America’s great cities, Cianci thought it was his right to get a piece of the action. Kickbacks, bribes and related improprieties left Cianci serving time in a federal prison on racketeering charges.

I spoke to his successor, Mayor David Cicilline, a former city councilman who was the lone early voice questioning Cianci’s dealmaking. He said something striking to me. “Corruption hurts the economy.”

The reputation city hall had under Cianci was one of pay-to-play and back-room deals. For all Cianci’s successes, the city’s reputation lost many deals because of the reputation of the city’s political establishment. It was bad for business.

Down the road on I-95, Connecticut Gov. John Rowland resigned and was sentenced to a year in prison for accepting bribes. The list goes on. From disgraced former House Majority Leader Tom Delay to Congressman Duke Cunningham, who accepted gifts including a boat from defense contractors in exchange for supporting favorable legislation. The public is fed up with high-level corruption.

Many polls show the public, especially in states like New Mexico, figures corruption is part of the dirty game of politics. However, that may be changing. New polls show that ethics and political reform are becoming a key determinant in how voters will select their leaders in the future.

With an ever-growing list of indicted or soon-to-be indicted current and former elected officials here in New Mexico, it is time to consider a major overhaul in the city and state’s public ethics and campaign finance laws. As other cities like Providence and states like Connecticut have learned, public corruption hurts your economy.

As we try to compete with other cities and states based on our workforce, incentives and quality of life, one thing we have to put on the table is our political culture. Whether it is the remnant of the Mexican patron system, or the lawlessness of the Wild West, New Mexico’s political culture needs reforming. It is often a topic in conversations with business leaders inside and outside the state. That must change.

Political corruption hurts economic development. With all the places to invest or build a business, companies and entrepreneurs will look for places where the rules are predictable. Where being coerced to give to a political campaign or a favorite charity or an inauguration party are not acceptable.

The pay-to-play economy affects business. Many investors have shied away from some Latin American countries because of the perception and often the reality that kickbacks, bribes or shakedowns are part of doing business. Companies that can operate anywhere will look for countries, states and cities where good infrastructure exists not just in technology and finance, but also in government. One where public services can be counted on regardless of who runs government.

In response to the growing scandals in the state, Gov. Bill Richardson has set up an ethics task force that is looking at some ways to make New Mexico’s political system more accountable. They are considering changes including enacting public financing, gift bans, contribution limits and an independent ethics commission. Similar changes are being proposed at the local level by City Councilor Brad Winter. These potential changes would go a long way to restoring or, sadly, in many cases, establishing public confidence in our political system.

Let’s hope for the sake of our economic future that our political leaders have the courage to change our compromised political culture. We need stronger ethics rules at all levels of government. We need to increase the accountability of public officials. We need tougher penalties for public corruption.

With all the pressure placed on companies to pay for junkets, parties or other perks, you would think business groups would be leading the fight for campaign finance and ethics reform. They end up picking up most of the tab. Although some of them consider these questionable practices part of doing business, it affects their bottom line and corporate reputation.

If Albuquerque and New Mexico truly want to lead the way in the new global economy, we have to innovate in the public arena as well. Our history of good old boy, patron politics has to change. Entrepreneurship cannot happen in the private sector unless our political leaders are prepared to take the same kind of risks to reform our political system.

Opinions expressed are solely those of the author.

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