Cities Indirectly Accepting Funding from Interested Parties

When the economy is booming, local government corruption feeds off the sale of government land, development projects, and construction contracts. When the economy is doing poorly, there is usually less money floating around to fund corruption. But in bad times, local governments are willing to accept the help of companies and nonprofits, which might have (or appear to have) their own interests at stake in what they fund for local governments. This leads to another set of problems.

An example of the sort of thing that might happen can be found in a complaint that was filed with Philadelphia's ethics board yesterday by a group called Parents United for Public Education and the local NAACP branch. The complaint alleges that a foundation not only funded, but also entered into a separate contract with, a consulting firm hired by the city to make recommendations to its school district regarding issues ranging from financial planning to charter schools.

In addition, the complaint alleges that other donors were involved, including real estate developers, who may or may not have an interest in using closed schools, and organizations and individuals involved with charter schools, which have an interest in how much the recommendations may lead to an increase in charter schools in Philadelphia.

The complaint is not alleging conflicts of interest. Rather, it is alleging that the consulting company was a lobbyist, and the foundation that primarily funded it a principal, and that neither of them filed or made quarterly disclosures under the city's lobbying law. This is an interesting way to get the ethics board to investigate this situation. If it were to find conflicts, the complaint could presumably be expanded.

For more on the complaint, read this article from yesterday's Newsworks, an online news site related to the public radio station WHYY.

Robert Wechsler
Director of Research-Retired, City Ethics

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