Jurisdiction and Oversight Over Nonprofits Doing Local Government Work

Privatizing local government functions can cause conflict of interest problems, but at least contractors can be held to contracts and replaced when they run afoul of ethics or other laws or requirements. The same is not necessarily true when non-profit organizations take over local government functions not as contractors or grant recipients (as with social service agencies), but as partial or full replacements.

This week the New York Post ran an article about one such instance of this:  New York City's park conservancies. The article details several conflicts of interest in these groups, each of which raises money for a city park, oversees upkeep of the park and, in some cases, obtains city grants for the park. The principal conflict appears to be concessions given to board members and officers of the conservancies. For instance, one founder and board member has an "inside track" to food concessions in the park and for conservancy events. Another's executive director hired her sister for a lucrative position.

Another problem is said to be high salaries for non-full-time managers.

Geoffrey Croft, president of watchdog group NYC Park Advocates, is quoted as saying, "These parks have become the conservancies' own private fiefdoms. There is no transparency. There is no consistency." It's worth noting NYC Park Advocates' motto: Non nobis, sed omnibus - Not for ourselves, but for all.

The conservancy that employs the director's sister defends their salaries by arguing that it is a privately funded organization. The fact that it does the city's work is not considered an issue.

The head of one conservancy also works for the Parks Department, but the department did not consider this a conflict. The Post considers this effectively being paid twice for the same work, noting that two comptroller audits have considered this situation a conflict.

The Parks Commissioner "said the conservancies are private initiatives and don't require any government oversight. 'There is a mistake in the notion that there is a long line of candidates who want to take an active role in maintaining public parks. It's not the city's place to meddle. That would be the quickest way to kill the entrepreneurial spirit of these organizations.'"

It's a tough call. When a local government allows an organization to do its work, sometimes giving it grants to help out, does it have any responsibility to provide oversight, to make sure that the government's ethics laws apply to the organization? Perhaps high salaries and some nepotism might be tolerable if those who give to the organizations know about these situations. But wouldn't there be intolerable situations, such as, for example, the Parks Commissioner placing his family members or employees in various conservancy positions?

It's hard to believe that there is no situation in which the local government would want to meddle, no matter how useful the organizations are. Meddling is not, after all, destroying. And conflicts are hardly part of any common notion of "entrepreneurial spirit." An absolute defense such as the Parks Commissioner's is inappropriate in this situation, and I believe it requires an appropriate response from the mayor. This is especially true because the Parks Commissioner is an ex officio member of the boards of every conservancy organization and is, therefore, responsible for the oversight he does not recognize as valuable, or even valid.

Robert Wechsler
Director of Research-Retired, City Ethics

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