Tag Archives: local government

Participatory Budgeting: A Way Forward for the Brazilian Anticorruption Agenda

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In Brazil’s presidential elections last month, former President Lula, leader of the left-wing Workers’ Party, narrowly defeated right-wing incumbent President Bolsonaro. But even though many Brazilian anticorruption scholars and activists, as well as members of the international anticorruption community (including on this blog), had endorsed Lula over Bolsonaro, there is considerable pessimism about the future of anticorruption reform in Brazil, at least in the near term. Although Lula’s previous administrations had advanced important anticorruption reforms, as well as broader institutional reforms to strengthen the independence and effectiveness of Brazil’s institutions of justice, the fact that Lula was himself incarcerated for corruption offenses until the Supreme Court voided his conviction on procedural grounds has made anticorruption such a polarizing issue—and so associated the anticorruption agenda with the right wing—that many believe that Lula will be much more hostile to an anticorruption agenda this time around. Moreover, even if President Lula were amenable to backing anticorruption reforms, the right wing dominates Congress, making such reforms even less likely to pass.

Although the prospects for significant advances in the anticorruption agenda at the national level are dim, there are more opportunities for progress than the dominant pessimistic view acknowledges. Importantly, Brazil is a federal republic, where both state governments and local municipalities have a considerable degree of autonomy. Furthermore, even if the rhetoric of anticorruption has become unhelpfully politicized in Brazil, there are many reforms that do not overtly target “corruption” but that nonetheless may have significant anticorruption benefits. So, the way forward for Brazilian anticorruption reformers over the next several years involves a shift in focus from federal-level anticorruption prosecutions to local-level institutional reforms with significant but indirect anticorruption effects.

One reform that fits the bill is participatory budgeting (PB). Brazil’s anticorruption community should make common cause with other good-government and pro-democracy advocates to push for the expansion of PB at the municipal level.

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

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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

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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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Fighting Corruption in Chicago Requires Fundamental Systemic Reforms to City Government

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Chicago, a city with an economy larger than that of countries like Thailand and Belgium, has won the title of the most corrupt city in America, with a total of 1,750 public corruption convictions between 1976 and 2018. (Los Angeles came in second with 1,547 convictions, while New York City (Manhattan) had 1,360.) There are numerous reasons why corruption is so pervasive in Chicago, many of which have roots in the city’s complicated history. But one particular institutional feature of Chicago city government appears to play a particularly important role: the system of so-called “aldermanic privilege” that allows local municipal representatives, known as aldermen, to operate their districts like discrete fiefdoms.

Chicago is divided into 50 political wards, each of which elects an alderman to represent the ward in City Council. Chicago differs from most other cities because an alderman can control virtually every aspect of zoning, licenses, and permitting within his or her ward. If, for example, a business needs a permit to hang a sign over its store or wants a license to sell liquor, the local alderman has to approve it. The aldermen also have broad authority to determine if a city block should be zoned as residential, commercial, or manufacturing, and to change zoning designations about how big a house can be, how many patrons a restaurant can serve, and what types of commercial properties are permitted. These powers, known collectively as aldermanic privilege, are not written anywhere in the city’s charter or ordinances. Rather, aldermanic privilege is a byproduct of Chicago’s longstanding political culture of deference and reciprocity: aldermen tacitly agree not to interfere with each other’s decisions, and the mayor cedes control of local wards to aldermen in exchange for the aldermen giving the mayor a wide berth on city-wide decisions. Some defend this system on the grounds that each alderman knows what is best for his or her own ward. And to be sure, aldermanic privilege can be used for good. But this system also fosters corruption, with alderman frequently using their power to extort bribes from local businesses. A particularly egregious illustration of such abuses came to light last year, when federal prosecutors charged Edward Burke, one of Chicago’s longest serving and most powerful alderman, with extortion and related offenses in connection with Burke’s alleged shakedown of local businesses in exchange for licensing and building permits. But Burke is hardly unique.

What can the city do about this problem? Last year, in part in reaction to the Burke Scandal, Mayor Lori Lightfoot successfully ran for mayor on a campaign that called for fighting corruption and ending aldermanic privilege. Mayor Lightfoot followed through shortly after her inauguration, issuing an executive order that stripped aldermen of their authority over permits and licensing decisions, and instructing city departments to stop deferring to aldermen’s wishes. The City Council also passed Mayor Lightfoot’s ethics package, which, among other things, gave Chicago’s inspector general greater powers to investigate aldermen, and banned alderman from having any outside employment that poses a conflict of interest.

This is a good start, but it’s insufficient to root out aldermanic corruption. Succeeding in that endeavor requires more fundamental reforms to Chicago city government. Two such reforms, individually or in combination, might help achieve this end:

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Municipal Dissolution as a Means of Combatting Criminal Corruption

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In December of 2019, the Italian government dissolved the municipal government of the Calabrian town of Africo, replacing it with a national governmentk commission that would run the city for the next 12 to 24 months. This drastic action, decried by (former) Africo city councilor Nicola Paris as “interrupting democracy,” was authorized by a special Italian law, adopted in 1991, that permits the national government to dissolve a local government if that local government has been infiltrated by the mafia. Since 1991, 341 such dissolution decrees have been issued (though 21 were cancelled by administrative courts), with 22 issued in 2019-2020 alone. Sixty-six communities have seen their local government dissolved more than once. (Africo’s city council, for example, has now been dissolved three times.) And the practice is spreading geographically. Between 1991 and 2011, the vast majority of city council dissolutions were in the three regions under the “traditional” sphere of mafia control (Campania, Calabria, and Sicily), with only three dissolutions outside of those regions. But since 2011, the Italian government has dissolved city councils in 21 municipalities outside of that traditional sphere.

The dissolution of city councils is a serious measure, and is strictly regulated. The process begins when concrete evidence emerges of links between town councilors and organized criminal elements that could bias political decision-making or affect public security. This evidence is submitted to the Prefecture, an administrative body responsible for implementing state functions at the local level. The Prefecture appoints a three-person Committee of Inquiry. After an investigation, which usually takes roughly 3-6 months, the Committee presents its findings to the Prefect, who presents them to the Minister of Interior within 45 days. The Minister of Interior, after deliberating with the Council of Ministers, then decides whether to issue a proposal of dissolution; a dissolution is only finalized when the President of the Republic issues a decree of resolution. The issuance of such a decree is judicially reviewable by the administrative courts (and, as noted above, 21 dissolution orders have been judicially nullified). When a municipal government is dissolved, the mayor, councilors, and members of the executive committee are removed from office, and a group of three individuals, known as the Extraordinary Commission, takes over all council activities for a period of up to two years. At the end of this time, new local elections are held.

Even with all of this process, dissolution of a local government is an extreme measure, but in Italy, where deeply-entrenched organized criminal groups are able to secure their control thorough corruption of local governments, such an extreme response is warranted. Indeed, other countries struggling with similar problems might consider adopting a similar mechanism. Continue reading →

Picking the Wrong Targets: Tirana Mayor Erion Veliaj’s Crackdown on Street Vendors Punishes the Victims of Corruption, Not the Perpetrators

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These days if you Google “Tirana,” Albania’s vibrant capital city, you will find a plethora of articles highlighting the city’s rapid transformation and reinvigoration, with much of this positive change attributed to the vision of its young, Western-educated mayor Erion Veliaj. Mr. Veliaj, who took office in 2015 after a career in the NGO world, was a political outsider and rose to power on a wave of hope that he would introduce a new brand of governance—one that included cleaning up entrenched, systemic corruption. Mr. Veliaj frequently emphasized this theme, together with the need for greater accountability more generally. He represents a cohort of young politicians in the region who promise radical change to voters craving leaders truly dedicated to fighting for everyday people instead of special groups and political machines.

Yet despite his professed commitment to clean government, Mr. Veliaj hasn’t been terribly vocal about high-level corruption (including the scandals within his own Socialist party), nor has he done much to address concerns about a lack of transparency in public procurement. Instead, he has focused on going after some of his municipality’s most vulnerable populations, like street vendors (see here). Yes, it’s true that these vendors typically do not have the requisite licenses, and some pay bribes in order to be able to operate. However, these street vendors, who work in the informal economy out of necessity, are hardly the engine of corruption in Tirana and wider Albanian society. Rather than treating the street vendors as criminals, Mr. Veliaj would do better to adopt an alternative strategy that would both protect this vulnerable population by integrating them into the formal economy, and tamp down the associated corruption problems. Continue reading →

I Caught the Sheriff: Why U.S. Anticorruption Officials Should Keep an Eye on Sheriffs

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An unusual feature of US law enforcement is the important role of the county sheriff. As of 2013, over 3,000 sheriffs’ offices across 47 U.S. states employed 352,000 people—roughly one-third of the country’s law enforcement personnel. The sheriff’s job varies from state-to-state, but the common denominator is responsibility over county corrections, including the operation of jails and transportation of inmates to and from court. In some states—Massachusetts, for instance—that’s essentially the extent of sheriffs’ duties. In other states, though, sheriffs wield much broader authority. Texas sheriffs, for example, can enforce the state’s criminal laws anywhere in their county, even where municipal police departments have jurisdiction. Most states are somewhere in the middle, tasking sheriffs with general law enforcement duties only in unincorporated parts of the county and sometimes with security for state government buildings, in addition to their correctional responsibilities.

Despite the variety of roles played by sheriffs, many commentators view sheriffs as merely another kind of police. After all, they wear badges, can legally use force, and, in many parts of the country, patrol the beat. But sheriffs are distinct from their police counterparts in significant respects. Most notably, whereas police chiefs are appointed by city officials, sheriffs are popularly elected by the county they serve. And, unlike police departments, which are creatures of state statute, the responsibilities of a county sheriff are often rooted in the state constitution.

These differences render sheriffs more susceptible than police to corruption for three reasons:

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Expediting Corruption: The Dangers of Expediters in Licensing Markets

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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. Continue reading →

Best Practices for a “Database of Deals”

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Last month, Joseph Percoco, former aide to New York Governor Andrew Cuomo, was found guilty of conspiracy to commit fraud and soliciting bribes for nearly $300,000 in connection to several multimillion-dollar economic development contracts in upstate New York. Next month, Alain Kaloyeros, the former President of the State University of New York Polytechnic Institute, will similarly go to trial on federal bid rigging, fraud, and bribery charges related to the upstate economic development project the “Buffalo Billion.” As I previously wrote, these are two of six high-profile corruption trials in New York this year—cases that have already generated calls for ethics reform (see here, here, and here). While similar calls for reform after the high-profile convictions of former New York state legislators Sheldon Silver and Dean Skelos were largely ignored, one modest proposal seems particularly promising: creating a public database of businesses and organizations that are awarded state economic development contracts and grants.

New York state and local governments spend over $8 billion on economic development programs each year, the most of any state in the country. However, little clarity exists about which companies receive subsidies, the value or amount of these subsidies, the employment and investment commitments tied to these subsidies, and whether these commitments are being met. This opacity not only makes it difficult to assess the successes and failures of development programs, but also creates opportunities for the type of corruption that ensnarled Mr. Percoco and Mr. Kaloyeros. Creating a database of all public economic development benefits (including grants, loans, or tax abatements) would increase transparency and accountability. Such a “Database of Deals” would provide a central source for authorities to monitor and flag irregularities, increasing public confidence in the procurement process, and deterring corruption by individuals who know that the public can assess the return on investment for each economic development project.

The recently passed 2019 New York State Budget included billions of dollars in new appropriations for economic development, yet bi-partisan legislation creating a “Database of Deals” was dropped from the budget the day before it passed. However, the New York state legislature still has several months to pass similar legislation. Moreover, six other states—including Florida, Maryland, Indiana, Illinois, and Wisconsin—have created and implemented similar searchable databases after calls for greater transparency and accountability. If and when New York, and other states, create similar databases, there are certain “best practices” that they ought to follow, to maximize the effectiveness of these databases in deterring corruption.

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