Expediting Corruption: The Dangers of Expediters in Licensing Markets

The scheme was as simple as it was brazen, and as brazen as it was frightening. On April 24, 2018, a New York City jury convicted attorney John Chambers of bribing New York Police Department (NYPD) personnel in exchange for gun permits for his numerous clients. Calling himself a “gun license expediter,” Mr. Chambers acted as an intermediary for individuals hoping to pass the necessary background check and obtain the mandatory permit in order to legally own a firearm in the city. But in a decentralized scheme involving numerous individuals inside and outside the police department, NYPD officers approved hundreds of licenses while skipping background checks, shortening license suspensions, and waving through applications containing glaring red flags—including improperly approving licenses for individuals convicted of illegal weapons possession. In return, the officers received expensive gifts, tickets to sporting events, lavish vacations, envelopes stuffed with cash—and even free guns.

At the center of the web of bribery were so-called “gun license expediters” like Chambers, who advertised their ability to help clients navigate the demanding and complex process of obtaining, renewing, or retaining a handgun license in New York City. Several of the expediters indicted in the scandal were retired police officers who had served in the NYPD Licensing Division, bribing former colleagues after leaving the police force in order to open their own expediting businesses. Fees varied depending on the difficulty and timing of the requests, but clients were routinely charged thousands of dollars per license—on top of the hundreds of dollars in mandatory city-imposed application fees. By leveraging experience, relationships, and sometimes illegal gifts, expediters such as Chambers were able to not only expedite but also to influence the outcome of applications.

In response to the revelations, the NYPD announced substantial changes to its licensing program. First and foremost, the department barred any expediter from physically visiting the Licensing Division on behalf of a client—instead requiring that all applicants appear in person to submit their own paperwork. (Expediters, however, would presumably not be barred from contacting members of the Licensing Division or directing their clients whom to talk to when they arrive.) Second, the department mandated that all gun permit approvals could only be made by the top two officers in the unit. Despite these seemingly sweeping changes, the new policies sidestep the root causes of corruption in this instance—which reveal the danger of expediters in general.

Expediters often seem to be at the center of bribery scandals. In New York City, in addition to the recent gun licensing scandal, expediters have been found responsible for widespread bribery schemes in construction permitting—perhaps unsurprising given the byzantine bureaucracy of the New York City Department of Buildings. Given the difficulties of navigating ever-changing regulations, a vast array of paperwork, and long lines in government buildings, it is understandable why contractors, architects, and homeowners rely on the thousands of permitting liaisons to help them through the process. Nor is it surprising that these expeditors often help their clients by paying illegal bribes—while lining their own pockets in the process. Yet despite high-profile arrests and prosecutions, as well as a declared “crackdown” by the NYC Department of Buildings and the City Comptroller’s office, building permit expediters have endured.

Nevertheless, extensive corruption is not inevitable by the mere presence of intermediaries; nor are intermediaries necessarily socially harmful. Whenever ordinary citizens must navigate a complicated bureaucratic system, those with the knowledge, time, and expertise to assist with the process can perform a valuable function. (Consider, for example, that many citizens rely on professional tax preparers to assist them in filing their tax returns—what are these tax professionals if not “expediters”?) The root cause of the problem is not the presence of expediters per se, but rather it is the confluence of two factors that leads to a heightened risk that expediters will facilitate bribery:

  • Excessive Discretion. Behind all acts of bribery is a quid quo pro arrangement (or the perception of one). No one would pay bribes to an entirely powerless actor; there would be nothing to gain by doing so. In both the building permit and gun licensing realms, government actors had tremendous discretion over how to handle the paperwork that came across their desks. In the gun licensing case, for example, New York City regulations gave Licensing Division officers broad authority to decide the outcomes of permit applications, with denials allowed for such vague, undefined reasons as “poor driving history” or “other good cause.” Likewise, individual officers had the ability to raise (or ignore) apparent red flags in applications when reviewing them. Substantive decisions aside, the ability to simply move an application to the front of the stack can make a huge difference given the normally long response times for both gun licensing and building permit applications. While discretion is not a per se evil, it brings opportunities for differentiation, which can stem from any number of motives (good or bad).
  • Repeat Players. Discretion becomes all the more dangerous in situations involving repeat players. Corruption often requires a great deal of trust between actors—not only trust that the counterparty will come through for you, but also that he or she or they will not report you to the authorities. Indeed, the gun licensing scandal broke open when one of the expediters asked a police officer who had never before assisted in facilitating licenses if he would like to join the scheme; instead, the officer promptly reported the solicitation to his superiors. Corruption emerged in the NYPD Licensing Division and the Department of Buildings because the same counterparties—the expediters and the decisionmakers—dealt with each other repeatedly. The NYPD’s response to the scandal was, in part, to restrict permitting decisions to a smaller number of higher-ranking individuals. But who is to guard these guardians? Of course, there is no particular reason to doubt the integrity of these senior officers (except that among those charged with conspiracy was the second-highest ranking member of the License Division, who helped supervise the department and had final authority to approve or reject licenses and upgrade requests). But, all things being equal, more concentrated decision-making was one of the causes of corruption in this instance. When the costs of exposure are high, the trust necessary for corruption can far more easily arise when parties deal with each other regularly—as happens to be the case with professional bureaucratic expediters.

Expediters can perform valuable functions by doing work that their clients are unable or unwilling to do. Of course, that work should not be bribing government officials, especially not for weapons. Any industry that engages middlemen should look out specifically for situations where (1) government officials have broad discretion, and (2) the same expediters and government officials interact with each other repeatedly. It is these circumstances that provide the most fertile breeding ground for petty corruption.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.