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Influence vs. Pay to Play
Friday, August 10th, 2012
Robert Wechsler
A big controversy surrounding the race for mayor of Honolulu is
focused on the state's pay-to-play culture of the past, and what pay
to play actually is. The reason for this is that a former Hawaii
governor is running for mayor, and he is being supported by Bob Watada, a former
state Campaign Spending Commission executive director who is
known for bringing the state's pay-to-play culture to its knees
during his 1994-2005 term in office.
According to a November 2005 look at the executive director's career in the Hawaii Reporter, he fined nearly 100 companies for making "false name" contributions and excessive contributions primarily to the then Honolulu mayor and the then governor, who is now running for mayor. "The city prosecutor and federal government took over some of Watada’s cases charging corporate executives of those companies with money laundering, making illegal campaign contributions and tax evasion. The companies participated in the scheme to boost their chances of getting government contracts, concession rights or zoning clearances. Watada also either headed investigations, or uncovered information, that led to a long line of powerful politicians going to jail."
One politician who was not prosecuted was the then governor. Watada says that he was clean, that he didn't know who made contributions, that he didn't know about the illegal contributions made to his compaign, and that the fact that he closed down his committee rather than returning illegal contributions was common practice and perfectly legal.
According to an article last week in the Hawaii Reporter, Watada said that those attacking the mayoral candidate "think that a governor or mayor can stop ‘pay to play.’ This is really disingenuous. Pay to play is not illegal, and is a part of the political process in almost every campaign for elective office in the United States. Simply, people, contractors, unions and most other donors make contributions (PAY) in the hopes or expectation that they will get something in return (PLAY) once the candidate is elected into office." According to the article, "Watada said the real illegal problem is 'quid pro quo,' a direct connection between the giving and receiving."
In the same article, an executive with one of the rail system contractors involved in pay to play described the system differently:
Watada's view of pay to play is of companies doing everything they can in the hope that they will get something in return, and that's okay as long as there isn't a quid pro quo, that is, a promise that they will get something in return. I call Watada's view of pay to play an attempt to influence. It is common, usually legal (except when the contributions or gifts are illegal), but undermines trust in government because it makes it look as if there is a market in getting officials to hand out contracts to those who support them. There is an implication that the public will pay more for their services due to the contributors' influence on officials.
Pay to Play
The contractor's view of pay to play is that government officials showed favoritism in return for contributions (and possibly other gifts), and that because these gifts were expected, no one who wanted a contract could either fail to make the gifts or speak out publicly about them or the favoritism they led to. This is the traditional view of pay to play. It differs in two important ways from Watada's view. One, the initiative is taken by the officials, not the companies. Requests are made to companies seeking benefits from the government (often the requests are tacit; the expectations are commonly known) to make sizeable contributions and often other sorts of gifts to officials responsible for approving or with influence over contracts, permit requests, and grants. Two, there is a culture of intimidation that prevents companies from making the system public, as the contractor suggests.
The Difference
Here's another way of looking at the difference. It is easy for officials to deal with attempts to influence: all they have to do is return contributions from those the public might see as seeking to influence them. They can even say at the beginning of a campaign that they will not accept contributions from any individual or company that does business or is seeking business with the city or county. Candidates actually do this.
Of course, it puts them at a disadvantage. But one, the ones given such contributions are usually incumbents, so they already have an advantage. And two, they can always push for public campaign financing, which will make the contributions of contractors and developers much less important.
With influence, the official is in control. Despite what Watada says, a mayor can stop what Watada calls "pay to play". He can stop it by choosing not to accept anything from anyone seeking to influence him. He can stop it by creating a culture of openness and the responsible handling of conflicts in his government. A mayor has more control over a city's ethics environment than anyone else.
With pay to play, the official takes control. He misuses his position to strengthen his position. He actively creates or sustains the culture in his government, a culture of favoritism and intimidation.
Contractors and their attorneys are always letting themselves off the hook when it comes to influence/pay to play. They always say what happened was pay to play. What I hate to see is a government ethics professional letting officials off the hook with talk about quid pro quos. Whether it is influence or pay to play, officials have a special obligation to the public not to participate, not to create the appearance that their influence and decisions are for sale. Or worse. After all, their only argument for inaction is the need to ensure their personal victory. As long as there are alternative ways to victory, there is no responsible argument for inaction.
Robert Wechsler
Director of Research-Retired, City Ethics
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According to a November 2005 look at the executive director's career in the Hawaii Reporter, he fined nearly 100 companies for making "false name" contributions and excessive contributions primarily to the then Honolulu mayor and the then governor, who is now running for mayor. "The city prosecutor and federal government took over some of Watada’s cases charging corporate executives of those companies with money laundering, making illegal campaign contributions and tax evasion. The companies participated in the scheme to boost their chances of getting government contracts, concession rights or zoning clearances. Watada also either headed investigations, or uncovered information, that led to a long line of powerful politicians going to jail."
One politician who was not prosecuted was the then governor. Watada says that he was clean, that he didn't know who made contributions, that he didn't know about the illegal contributions made to his compaign, and that the fact that he closed down his committee rather than returning illegal contributions was common practice and perfectly legal.
According to an article last week in the Hawaii Reporter, Watada said that those attacking the mayoral candidate "think that a governor or mayor can stop ‘pay to play.’ This is really disingenuous. Pay to play is not illegal, and is a part of the political process in almost every campaign for elective office in the United States. Simply, people, contractors, unions and most other donors make contributions (PAY) in the hopes or expectation that they will get something in return (PLAY) once the candidate is elected into office." According to the article, "Watada said the real illegal problem is 'quid pro quo,' a direct connection between the giving and receiving."
In the same article, an executive with one of the rail system contractors involved in pay to play described the system differently:
Pay-to-play is real and has been part of Hawaii's political culture for decades. ... I retired in May of 2010 and witnessed favoritism in the A&E [architects & engineers] selection process on numerous occasions, practiced by previous administrations in both the state and city governments. Few bothered to challenge the awarding of contracts to those who 'paid to play' because speaking out would guarantee no future work on government projects.Influence
Watada's view of pay to play is of companies doing everything they can in the hope that they will get something in return, and that's okay as long as there isn't a quid pro quo, that is, a promise that they will get something in return. I call Watada's view of pay to play an attempt to influence. It is common, usually legal (except when the contributions or gifts are illegal), but undermines trust in government because it makes it look as if there is a market in getting officials to hand out contracts to those who support them. There is an implication that the public will pay more for their services due to the contributors' influence on officials.
Pay to Play
The contractor's view of pay to play is that government officials showed favoritism in return for contributions (and possibly other gifts), and that because these gifts were expected, no one who wanted a contract could either fail to make the gifts or speak out publicly about them or the favoritism they led to. This is the traditional view of pay to play. It differs in two important ways from Watada's view. One, the initiative is taken by the officials, not the companies. Requests are made to companies seeking benefits from the government (often the requests are tacit; the expectations are commonly known) to make sizeable contributions and often other sorts of gifts to officials responsible for approving or with influence over contracts, permit requests, and grants. Two, there is a culture of intimidation that prevents companies from making the system public, as the contractor suggests.
The Difference
Here's another way of looking at the difference. It is easy for officials to deal with attempts to influence: all they have to do is return contributions from those the public might see as seeking to influence them. They can even say at the beginning of a campaign that they will not accept contributions from any individual or company that does business or is seeking business with the city or county. Candidates actually do this.
Of course, it puts them at a disadvantage. But one, the ones given such contributions are usually incumbents, so they already have an advantage. And two, they can always push for public campaign financing, which will make the contributions of contractors and developers much less important.
With influence, the official is in control. Despite what Watada says, a mayor can stop what Watada calls "pay to play". He can stop it by choosing not to accept anything from anyone seeking to influence him. He can stop it by creating a culture of openness and the responsible handling of conflicts in his government. A mayor has more control over a city's ethics environment than anyone else.
With pay to play, the official takes control. He misuses his position to strengthen his position. He actively creates or sustains the culture in his government, a culture of favoritism and intimidation.
Contractors and their attorneys are always letting themselves off the hook when it comes to influence/pay to play. They always say what happened was pay to play. What I hate to see is a government ethics professional letting officials off the hook with talk about quid pro quos. Whether it is influence or pay to play, officials have a special obligation to the public not to participate, not to create the appearance that their influence and decisions are for sale. Or worse. After all, their only argument for inaction is the need to ensure their personal victory. As long as there are alternative ways to victory, there is no responsible argument for inaction.
Robert Wechsler
Director of Research-Retired, City Ethics
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