An Obligation Not to Be Complicit in Misconduct at Other Governmental Levels
<a>An
investigative piece in yesterday's New York <i>Times</i> </a>raises
an interesting issue regarding complicity in ethical
misconduct: is there an obligation not to be complicit with
misconduct at a different governmental level when, arguably, that misconduct
financially benefits one's own government?<br>
<br>
According to the article, when Bayonne, NJ was in deep financial
trouble in 2010, with the state talking about bailing it out
the way it had bailed out Camden in 2002, the Port Authority of New
York and New Jersey purchased a piece of land from the city (1) that
the port authority had no use for and (2) at a price substantially
higher than it was worth (in fact, the year the purchase was made, the port authority wrote down the
value of the property). This apparently
fraudulent purchase meant that the city would be in solid financial
shape, at least for the short run.<br>
<br>
The apparent purpose of this purchase was not only to help the city
of Bayonne, but to solve a dilemma for New Jersey's governor, who
"was confronting a huge deficit in New Jersey’s budget, while trying
to keep a campaign promise to not raise taxes." The purchase shifted
the problem from the state to the port authority.<br>
<br>
The governors of the two states appoint the members of the port
authority board, and have an unspoken agreement to trade projects.
That is why there was apparently no opposition by the New York
members of the board or the New York appointees on its staff.<br>
<br>
The land was actually owned by a city redevelopment authority, not by
the city itself. But it was the mayor who, according to the article,
directed the redevelopment authority's attorney to contact the port
authority. And the mayor was involved in the secret negotiations, in
which the price of the property kept going up until it went far
beyond its appraised value, even though the port authority had no
use for it (almost nothing has been done with it in the four years
since the purchase). The negotiations went on at the same time as
the state takeover of the city was moving forward; the deadline for
takeover was put off while the negotiations continued.<br>
<br>
The question is whether the mayor and the redevelopment authority
board members had an obligation not just to help their city keep its
head above water, but also to refuse to engage in the sale of land
for a price far beyond its value to an authority that had no clear
use for it, in order to help the governor's short-term desire to
keep taxes from rising his first year in office.<br>
<br>
The city would have been bailed out one way or the other. But this
way was fraudulent, secret, and for political purposes rather than
to fulfill the mission of either the port authority or the
redevelopment authority (which had been given the property by the
army, with limitations on what it could do with the property).<br>
<br>
<b>The Public Interest</b><br>
This situation is valuable in considering what "the public interest"
means. Many people say that the term is extremely vague and, therefore, of little
meaning or value. With respect to local government, many say that it involves
what is best for the community (this is an ends-based,
"consequentialist" ethics approach).<br>
<br>
But in this situation, it is
clear that even though the land sale was good for Bayonne, in the
short-term financial sense, it was wrong in many ways. It was not in
"the public interest" in the greater sense. This shows that "the public interest" involves more than the financial good of the community; it also involves doing what is right in an ethical sense. After all, if the transaction had been in the public interest, officials would have been done it in the public eye, the army would
have been included in the transaction, and the port authority would
have proudly begun work on expanding New York's port. This is not
what happened.<br>
<br>
<b>Ends-Based vs. Rules-Based Thinking</b><br>
One reason a government ethics approach is so important in
government is that it does not take an ends-based, consequentialist
approach, but rather a rules-based, "deontological" approach. This
approach enables government officials to determine that, even when a
transaction is financially valuable, if it is fraudulent, if it must
be kept secret (unless national security or private matters are
involved), and if its motives are questionable, government officials
should not be involved, even if all the bad stuff involves other
agencies and governments. Complicity with ethical misconduct, even
if financially beneficial to one's community, is wrong.<br>
<br>
However, even an ends-based approach to this situation should have
led officials to determine that it was not the best solution to a
serious problem. Bayonne may have been saved financially, but the
state would have bailed it out. This solution meant that the city
would lose a valuable piece of property that it may have developed
for the benefit of the community, and that its reputation would be
harmed if the truth came out. Certainly, the reputations of the
mayor and of the redevelopment authority, and of all those who
worked with them and supported this effort, have been seriously
harmed. If they had sacrificed their reputations for the good of the
community, to save it from bankruptcy, there would be an ends-based
argument in favor of what they did. But had they refused the
transaction up front, the community still would have been bailed
out, and it would have had the property to build on (it was supposed
to be turned into "a 430-acre residential community, with shopping,
entertainment and park destinations, and links to downtown Bayonne,
light rail, and New York City," <a href="http://www.njfuture.org/smart-growth-101/stories/2005-award/peninsula/&…; target="”_blank”">according
to NJ Future</a>).<br>
<br>
<b>The Devilish Duo</b><br>
As in so many situations, a principal problem here is the influence and
involvement of high-level elected officials in transactions that
should be handled independently by authorities. The mayor got
involved with the redevelopment authority, and the governor's office
apparently got involved with the port authority. When development
decisions are politicized, bad things can happen, especially if the
decision-making and negotiations are done secretly.<br>
<br>
High-level official involvement and a
lack of transparency are a duo that often leads to ethical
misconduct and scandals. Any government official who encounters
a situation characterized by this devilish duo should recognize her obligation
not to be complicit in the misconduct and that she will be held responsible for any damage and scandal
that occurs.<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
<br>
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