“Municipal Takeovers”: Failing to Address Corruption While Threatening Democratic Self-Government 

The town of Mason is a small, majority-Black community in the State of Tennessee. For two decades, Mason’s municipal government has been afflicted with serious corruption and financial mismanagement, leading to the resignation a few years ago of almost all of Mason’s elected leadership following allegations of fraud and embezzlement. In the wake of these persistent problems, this past February the Tennessee State Comptroller, Jason Mumpower, sent a dramatic request to every property owner in Mason: vote to dissolve your town (in which case Mason would be absorbed into majority-White Tipton County, thus ending Mason’s 153 years of independent governance), or else the state government will exercise its legal authority to step in and take financial control of Mason’s town government—which would likely lead to drastic layoffs and cuts to municipal benefits. (Mumpower’s ultimatum may well have been influenced not only by Mason’s history of municipal corruption, but also by the fact that Ford Motors is set to open up a massive manufacturing plant nearby, which will bring in significant tax revenue that Mumpower claimed Mason’s town government can’t handle responsibly.)

The situation in Mason may seem extraordinary, but it is far from unique. Roughly twenty U.S. states have laws that permit the state government to take over municipal governments, although the specifics of the laws differ. (Municipal takeovers are often preceded, as in Mason, by presenting the municipality with the option to dissolve and be absorbed into the surrounding county.) Though municipal takeovers come in various forms, they generally entail the appointment of an “intervenor,” such as a state official, emergency manager, or financial control board. In some states, the intervenor’s powers are limited to financial oversight and technical assistance, but in other states (including Tennessee), the intervenor can take steps as radical as entirely dissolving a locality.

Municipal takeovers are, unsurprisingly, controversial. While pursuing a takeover is an extreme step, one can understand why some people might find it warranted, especially when corruption is so deeply embedded in a municipality that it seems inconceivable that the local government can clean itself up. But this view is misguided, at least in the U.S. context. (Municipal dissolution has been deployed and endorsed by some anticorruption advocates in other countries, such as Italy. While some of my arguments may apply in other contexts, this post focuses on the United States.) First, the costs of municipal takeovers are substantial and are often underestimated. Second, the purported benefits of municipal takeovers—at least with respect to addressing the underlying corruption and misgovernance problems in a given community—rarely materialize.

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Small Town Corruption: The Cautionary Tale of Jasiel Correia

Elected at the age of 23 to serve as mayor of Fall River, Massachusetts, Jasiel Correia looked like a wunderkind. A tech entrepreneur who founded his own startup, Correia was the youngest-ever mayor of his hometown, the golden boy who promised to use his technological prowess and puckish energy to bring his aging town into the 21st century

Then it all came crashing down. In 2018, Correia was charged with various personal misdeeds, including tax and wire fraud, related to his tech company. A defiant Correia maintained his innocence and rejected calls for his resignation. Then, a second round of charges hit, this time alleging public corruption. Correia purportedly took over $600,000 in bribes from marijuana business license applicants—including one marijuana business owner who paid the Mayor $100,000 and promised him 2% of his future sales revenue in exchange for a lucrative operating permit. By the time Mayor Correia went to trial, he faced 24 separate criminal charges, and on May 14, 2021, the jury found him guilty of 21 of those 24 counts.

Mayor Correia’s downfall might seem like a relatively minor matter involving local corruption in one small city. (Such stories are, alas, all too common.) But this incident usefully highlights the corruption risks associated with devolving regulatory authority to local governments. While there are certainly virtues of giving local governments power over local affairs, we need to be clear-eyed about the dangers that local control can pose, particularly in the context of regulating lucrative industries like legal marijuana. The Fall River example highlights several such risks:

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The Decline of Small Newspapers Means Higher Risk of Local Corruption in the U.S.

There is widespread consensus that a free, objective press plays an important role in fighting corruption and holding public officials accountable (see here, here, and here). That’s why, when countries with high levels of public corruption seek to silence investigative journalists or shutter unbiased news outlets, anticorruption organizations like Transparency International are vocal in their opposition. It’s a bit surprising, then, that so little has been said about how the decline of small newspapers in the United States has increased the risk of local corruption.

The decline of small newspapers in the United States has been precipitous. Between 2004 and 2018, there was a net loss of nearly 1,800 papers, over 1,000 of which had circulations under 5,000. Today, around half of all counties in the United States only have one local newspaper, often circulating only on a weekly basis, while nearly 200 counties don’t have a single newspaper—resulting in “news deserts,” defined as communities “with limited access to the sort of credible and comprehensive news and information that feeds democracy at the grassroots levels.” Furthermore, in many of the small- and medium-circulation outlets that remain, newsrooms have been gutted, often due to layoffs imposed by their parent companies. For example, Digital First Media, a publisher that owns more than 50 newspapers, has eliminated two-thirds of all newspaper staff since 2011.  Between 2001 and 2016, employment in the U.S. newspaper industry decreased by more than 50%.

The decline of small newspapers is just one component of a shifting media landscape in the United States. Some of the other trends, like the rise of social media and the proliferation of unverified and sometimes apocryphal online new sources, have been at the center of political discourse. The decline of small newspapers, on the other hand, is often lamented as a regrettable casualty of changing times, but there isn’t enough appreciation of the fact that the decline of small newspapers poses a risk of increased local corruption. Continue reading