The Value of Jurisdiction Over Contractors in Projects Paid For with Local Government Funds

An important issue in local government ethics is how far jurisdiction should go. Recently, I did a blog entry on jurisdiction over those doing government-approved work. An article in today's New York Times raises another important jurisdictional question:  should a local government have ethics jurisdiction over those contracted to do work supported by city funds, but not paid directly by the city?

The context of the article is work done on the building of two new baseball stadiums, Citi Field and the new Yankee Stadium. According to the article, contractors the city is not doing business with were hired to do extensive work that was substantially funded by the city. The New York City Economic Development Corporation oversaw the projects, but it only looked at the contractors, not the subcontractors that, in many cases, did most of the work.

It would appear that all contractors and subcontractors on any job done with local government funds should be subject to all of the local government's ethics laws and to all lists of companies barred from doing business with the city.

But in most cities and counties, even contractors paid directly by the government are not subject to ethics jurisdiction. They are not prohibited from giving gifts to officials. They are not prohibited from using confidential information. They are not prohibited from promising jobs to officials. Ethics jurisdiction over them should be taken before (or at the same time, if need be) a local government considers having jurisdiction over contractors in projects using local government funds.

The article quotes James B. Jacobs, an NYU law professor, talking about why jurisdiction over and regulation of contractors in these projects is so important to a local government's own contracting work, as well as that of the entire community. “We’re talking about the nature of the whole construction industry, which affects public construction, private construction, not-for-profit construction, and the whole economic viability of the city ... there ought to be a commitment to do what we can to purge corrupt influences out of that industry.”

In addition, there should be a commitment to purge influences that might corrupt government officials and employees.

Jurisdiction over local government contractors and subcontractors, including full disclosure and agreement to ethics rules before bidding, is extremely important to a community's ethical environment, and it should cover all contractors paid directly or indirectly by the local government.

Robert Wechsler
Director of Research-Retired, City Ethics

---