Learning and Forming a Local Government's Unethical Environment

Anonymous

Sat, 10/09/2010 - 06:28

City Related

I chose to specialize in local government ethics because this is where
it all starts. This is where the individuals who become our
representatives experience their first unethical environment, become
team players, learn the rules of the game, and begin to feel a special
entitlement. 
 
One good thing about election time is that we sometimes get the back stories of
individuals running for higher office. We get to see how they started. One such individual is Carl
Paladino, a candidate for governor of New York State. 
 
A Local Developer Regulating Local Development 
According to <a href="http://www.nytimes.com/2010/10/09/opinion/09sat1.html" target="”_blank”">an
editorial in today's New York Times</a>, although Paladino "was an
owner of several downtown parking lots [in Buffalo], he won a seat on
the city’s parking board, resigning in 1994 amid charges of conflicts
of interest. He still serves on the board of the nonprofit corporation
[Buffalo Civic Auto Ramps, Inc. (BCAR)] that manages parking lots
for the city."

According to <a href="http://www.democratandchronicle.com/apps/pbcs.dll/article?AID=201010060…; target="”_blank”">an
article this week in the Rochester Democrat and Chronicle</a>, parking
lots are more important a part of urban development than most of us
realize. The article quotes Aaron Siegel, the head of a Buffalo
investment firm and member of the city Parking Board, talking about
Paladino:<ul>
"This guy is the biggest conflict of interest on the planet. As the
biggest landlord in the city he controls BCAR. And if you control
parking, you control development."</ul>
Paladino's response is pretty weak: "Don't you think that if there was some reality to (the accusations)
that the people of Buffalo would have done something about it?" 
 
According to the article, "public scrutiny over
his parking concerns grew so intense in the mid-1990s that the city of
Buffalo ethics panel launched an investigation and Paladino resigned
from the Parking Board after a decade of service." This sounds like
Buffalo did do something about Paladino's conflict, but only about his
governmental involvement with it. I doubt that the ethics commission
has jurisdiction over the nonprofit, which is a government contractor. 
 
By the way, the names of the individual members of the BCAR board do
not appear on <a href="http://www.bcarparking.com/" target="”_blank”">the BCAR website</a>,
but there is <a href="http://www.bcarparking.com/about_us.php" target="”_blank”">a list
of the "major Building owners and banks" </a>who have representatives
on the board. It's telling that a company that runs city parking lots is run by those who have commercial interests in development. 
 
Paladino also said in his defense "that Buffalo's municipal parking
prices are below market rates to attract business, and said that he has
been forced to lower rates at several downtown parking lots he owns to
stay competitive." 
 
But according to the Democrat and Chronicle article, "a Buffalo News
columnist ... singled out Paladino as [the BCAR's] biggest beneficiary,
speculating that by effectively controlling cheap, city-owned parking
he can use the spaces to entice tenants to his downtown office
building, muscle out his competitors, and gouge users of several street
parking lots that he owns.<ul>
"'That's where the conflict is,' said Pat Hotung, owner of Main Place
Mall and a former member of BCAR. 'When I was on the board, and I'd say
even now, Carl is by far and away the most influential player. Who is
he looking out for, Carl Paladino, the city or BCAR? In his case, I'd
say he's looking out first and foremost for Carl Paladino.'"</ul>
BCAR's executive director says this isn't true, that BCAR doesn't even
set parking prices, and there are 15 other individuals on the board.
That seems reasonable. But powerful individuals, especially those who
make large campaign contributions and threaten (and take) action when
opposed, find ways to make their influence felt out of proportion to
their vote on a board. 
 
For example, "when Buffalo was preparing six years ago to bid out
management of the city's lots for the first time since BCAR was formed
50 years earlier, Paladino pressured then-Mayor Anthony Masiello to
yank the proposal before it went public. A modified version was
eventually released and BCAR won the contract." 
 
Sowing Campaign Contributions 
Speaking of Paladino's influence, according to <a href="http://www.nytimes.com/2010/09/27/nyregion/27paladino.html" target="”_blank”">an
article in the Times</a>, Paladino, the largest landowner in Buffalo,
"lavished campaign contributions on city and county leaders, and reaped
handsome benefits: appointments to the city parking board and a
financial planning commission; and repeated extensions of development
deadlines. When he fenced off a city street to use as a parking lot,
officials looked the other way. When an out-of-town company was chosen
to redevelop a defunct department store, Mr. Paladino somehow wrested
the assignment away. And dozens of local, county, state and federal
government agencies filled huge spaces in his office buildings, vastly
enhancing the value of his portfolio." 
 
Unethical Environments Spawn Unethical Fish Who Swim Upstream 
Although I have focused on Paladino, he's the spawn of Buffalo's
ethical environment at least as much as its creator. He acted in an
ethical environment that allowed a major developer, even an owner of
parking lots, to sit on a parking board and on a nonprofit that manages
parking lots for the city that compete with his own and serve his
tenants. He acted in an ethical environment that allows government
officials to place government offices in the buildings of a developer
who gives them large campaign contributions. He acted in an ethical
environment that would allow officials to talk with, and be influenced
by, the most powerful member of the board of a city contractor about a
contract his company would be bidding on, and to change the bid so that
his company would win it. 
 
Paladino likely helped to form Buffalo's unethical environment, but it
helped to form his conduct, as well. And if he wins the election, even
as he castigates the corruption in Albany, he will likely continue to
put his personal interests, and his bullying style, ahead of the public
interest, tainting any improvements he might actually make. 
 
When government officials, worried about having a powerful developer
support their opponents, give in to that developer, they create and
continue a pattern of unethical conduct that is very difficult to stop.
It takes moral courage to create an ethical environment. Without moral
courage, Paladinos are created and they use their power to further
their personal interests. No one can do this without the acquiescence
and support of dozens (in cities and large counties, hundreds) of government officials. And it all starts at
the local government level, the level where, if the spawn are not
stopped, they will usually swim upstream to the state and federal
levels. 
 
Robert Wechsler 
Director of Research-Retired, City Ethics 
 
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