Trust in the Face of Disaster
With apologies to Louisiana, since this week I've already focused on its legislators' dispute with its Board of Ethics, I'm going to return to the state to discuss a situation where local government ethics can make a great difference.
On the front page of today's New York <i>Times</I>, <a href="http://www.nytimes.com/2007/03/31/us/31fema.html?_r=1&hp&oref=slogin">an article</a> looks at reasons why so little money has made it from Washington to local government infrastructure projects in Louisiana (the article ignores Mississippi and Alabama). One of the principal reasons is a lack of trust in Louisiana's local governments, both at the federal and state levels. I am not saying that the lack of trust is warranted; its existence, like citizens' lack of trust, is often a matter of perception, if not reality. But here is a case where perception engenders a terrible reality.
<a href="http://www.cityethics.org/node/266">Click here to read the rest of this blog entry.</a>
The federal government has a law, the Stafford Disaster Relief and Emergency Assistance Act of 1988, which provides for federal financing of local government infrastructure rebuilding. In order to prevent fraud, the law requires that local governments put up 10% of the cost and that they advance money, to be reimbursed to them later. This is a heavy, often impossible burden for governments in disaster areas, and therefore the rule has been waived both for New York City after Sept. 11 and for Florida after Hurricane Andrew. But not for Louisiana after Katrina.
FEMA, the Federal Emergency Management Agency, has given Louisiana $2.83 billion to cover emergency operating costs, but only $1.28 billion has been passed on to local governments, because the state does its own screening to make sure projects are eligible and, presumably, requests are not fraudulent.
There is also a lot of politics involved. In fact, a provision to waive the 10% local matching requirement has been attached to the Iraq spending bill, which President Bush (who has opposed the waiver) says he will veto. It is disgusting to play politics with an issue such as this.
But it is likely that if Louisiana had a better reputation for good government, the waiver would have been given right away and the state level of the process would have gone more smoothly. Unethical governments may push projects through quickly to benefit politicians and their friends, but when it's other people's money, they are less likely to be trusted and this creates obstacles, delays, and extra costs.
Lack of trust is an enormous burden on our economy: think of what is paid for guards, home security, internet security, and then there's all the time we spend locking (and opening) everything up and away. There is a similar burden that comes from lack of trust in local governments. Louisiana's local governments have a lot of people to blame for their plight, but they also have themselves to blame. Hopefully, they will clean up their act after they are done cleaning up after Katrina. And hopefully the state legislature will lead the way toward good government, not away from it.