New Robert S. Bennett Report on D.C. Council Earmark Grants et al.
Special Counsel <a href="http://en.wikipedia.org/wiki/Robert_S._Bennett" target="”_blank”">Robert S. Bennett</a>'s
<a href="http://www.washingtoncitypaper.com/blogs/citydesk/files/2010/02/bennett…; target="”_blank”">report</a>
on the District of Columbia council's earmark grants and personal services
contracts was <a href="http://www.politicsdaily.com/2010/02/17/between-the-lines-ethics-report…; target="”_blank”">made
public yesterday by the Washington City Paper</a>. Before discussing
Bennett's recommendations, I should disclose that City Ethics was asked
by the D.C. council to advise them on related ethics issues, and we met
shortly with two of Mr. Bennett's associates, but were not involved in
any way in the investigation or preparation of the Bennett report.<br>
<br>
It's an excellent report, and its recommendations, especially regarding
council earmark grants, are must reading in any city that allows or is
contemplating this sort of grant. The earmark recommendations start on p.
97 of the report (p. 100 of the PDF file).<br>
<br>
An earmark grant is defined on p. 45 of the report as “an approved
measure by the Council, which results in the appropriation of funds for
a specific purpose . . . . direct[ly to] organizations, institutions,
and private sector entities.” It should be added that these
organizations must be nonprofit organizations, and that the source of the grants is one or two council members, and/or the mayor.<br>
<br>
Bennett notes that the current earmark process "effectively permits
each Member to designate individual programs for funding on an ad hoc
basis without prudently establishing spending priorities. Council
Members, moreover, are understandably not equipped to fully and
carefully vet individual grantees, and the legislative 'logrolling'
inherent in the earmark appropriations process inhibits thorough
scrutiny of proposed grant recipients. The informal method by which
grantees are selected clearly does not ensure that public funds go to
the best or most effective organizations to deliver the intended
services or accomplish the stated goals of the grant."<br>
<br>
On p. 75, Bennett also points out that "an inherent feature of the
earmark process is the mutual support between the Mayor and the
Council, and among the Council Members themselves, for each other’s
earmarks. Because of this mutuality of interest, there is little
incentive for a Council Member to closely scrutinize or oppose
another’s earmarks." This is the problem I identified in <a href="http://www.cityethics.org/content/council-fiefdoms-and-unethical-behavi…; target="”_blank”">a
blog post</a> on a proposal to get the approval of three Dallas council
members on zoning decisions, decisions that in the past have been made by the local council
member alone.<br>
<br>
Despite the fact that the D.C. council has greatly reformed the earmark
process since last year, Bennett recommends that the making of earmark
grants be discontinued. "The rules, policies, and procedures currently
in place have not and will not prevent conflicts of interest,
waste, fraud, or abuse. Further, the Council’s rules do not ensure that
earmark grants are thoughtfully awarded or subject to effective
oversight by professional grant managers."<br>
<br>
But Bennett recognizes that this may not happen, even though earmarks
increased 38 times between the 2005 and 2009 fiscal years, according to
a chart on p. 46 of the report (from $1.25 million to $47.9 million).
Therefore, he makes detailed recommendations for ensuring
accountability to as great an extent as possible.<br>
<br>
Bennett's principal recommendation is that earmarks be
competitively bid. He feels that competitive bidding would make it
"substantially more likely that tax dollars will go to programs that
are sufficiently well-managed and competent to satisfy the requirements
of a competition, and that grant recipients are vetted by experienced
grant managers prior to receiving a grant. The additional time and
effort involved in awarding a grant through competition is worth the
investment because it is more likely to result in the award of public
funds to capable and effective organizations. It would also minimize
the duplication and misapplication of funds inherent in the earmark
process."<br>
<br>
If the council were to reject competitive bidding of earmarks, Bennett
has a number of other recommendations:<br>
<br>
1. Eliminate new organizations' fiscal agents, which not only have failed to ensure proper
management, but have sometimes themselves been a source of waste and abuse of
public funds.<br>
<br>
2. Limit earmarks to §501(c)(3) charitable organizations that have
been incorporated for at least three years, excluding unproven
organizations. This prevents not only incompetent use of earmarks, but
also the creation of organizations specifically to get earmark grants.<br>
<br>
3. Require formal grant requests to the council committee charged with
the subject of the grant, including testimony before the committee.
This helps set funding priorities, vet grantees, and provide
transparency.<br>
<br>
4. Limit the percentage of budget dollars that can be allocated to
earmarks, so that they do not continue to increase.<br>
<br>
5. Extend the current ban on consecutive annual earmarks to a ban on
more than three earmarks to any entity.<br>
<br>
6. Require disclosure by council members and staff, as well as by
officers and directors of grantees, of any personal, familial, or
financial relationships between them.<br>
<br>
7. Inform grantees that they are subject to oversight and to the
guidelines set forth in the new (December 2009) <a href="http://www.opgd.dc.gov/opgd/cwp/view,a,1316,q,648427,opgdNav,%7C33041%7…; target="”_blank”">grants
services sourcebook</a>.<br>
<br>
8. Require that council members and staff not interfere in any way in
the grant administration process, especially in grant manager
enforcement of the grant guidelines.<br>
<br>
9. Provide more resources to agencies charged with monitoring earmarks,
so that they can provide effective oversight (unbid grants are far
harder to monitor than bid grants).<br>
<br>
The recommendations for personal services contracts, that is, contracts
for services given directly to council members, can be found at p. 96ff
of the report. And the findings regarding council member Marion Barry's
earmarks and personal service contracts, which led to the hiring of Mr.
Bennett, can be found throughout the report.<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
<br>
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