The Black Informant | African American Commentary, News and Community Building

As a follow-up to a post I did yesterday on this same issue, I decided to provide some examples of cities that have incorporated the “master planned community” concept. But first there are a couple of issues that need to be addressed.

Sidestepping accountablity

The reason why government waste is so common is because it lacks real time accountability that produces quick results. Consider Congressman William Jefferson (D-La)

(source: cleanupwashington.org)

* Rivals Duke Cunningham for the most outrageous bribery scandal allegations. Just when we thought the allegations of corruption could not get any more entertaining, the scandal stories of Rep. William Jefferson (D-La.) are keeping everyone tuned in to corruption sagas of Capitol Hill. The story includes $90,0000 in cold cash stuffed in a freezer, wiretaps and an FBI raid on Congress.

* The unfolding Jefferson scandal. In a guilty plea announced in January, 2006, former Jefferson aide Brett M. Pfeffer alleged that Jefferson demanded financial considerations in exchange for helping an investment firm establish a telecommunications company in Nigeria. Pfeffer, who served on Jefferson’s staff in the late 1990s, was the president of an investment company in McLean, Va., in 2004. Early that year, Jefferson told Pfeffer about a Kentucky-based company that held the rights to a technology that could be used to provide high-speed Internet service in Nigeria. Pfeffer, the founder of the Kentucky-based company, and an investor later held a meeting in Jefferson’s office.

The investor agreed to a plan to put $45 million into a new Nigerian internet company, primarily relying on a loan from the Export-Import bank. Jefferson allegedly aided the plan by traveling to Nigeria to meet with officials and holding meetings with Export-Import Bank officials to facilitate a loan. But Jefferson’s work on the Nigerian venture carried a price. In summer 2004, Jefferson allegedly said he would require that 5 percent to 7 percent of the newly formed Nigerian company be awarded to members of his family and that a family member receive $2,500 to $5,000 in monthly retainers

In July 2005, Jefferson, Pfeffer and an employee of the Kentucky-based company pursued a venture in Ghana similar to the effort in Nigeria. Jefferson allegedly traveled to Ghana, met with Ghanaian officials and met with representatives of the Export-Import bank to promote the deal. Pheffer believes that Jefferson also stood to gain financially by the Ghana deal, although he offered less specific evidence.

Both the Nigerian and Ghanaian deals collapsed after the investor pulled out. Jefferson has denied that he ever demanded or accepted “anything on behalf of myself, any member of my family or any third party.” [Statement of Facts, 1/11/2006; Times-Picayune, 1/12/2006and 1/14/2006; Washington Post, 8/13/2005]

* Investor turns informant and wears a wire. According to an FBI search warrant, Jefferson was videotaped accepting $100,000 in $100 bills from a Northern Virginia investor who was wearing an FBI wire. In one instance, at an unidentified D.C. restaurant, Jefferson allegedly exchanged cryptic notes with investor Lori Mody and discussed illegal kickbacks for his children in a telecommunications venture in Nigeria in which she had invested. “All these damn notes we’re writing to each other as if we’re talking as if the FBI is watching,” he told Mody, who was indeed wearing an FBI wire. The FBI probe began in March 2005 after Mody became concerned that Jefferson and others were trying to defraud her of millions of dollars that she had invested in iGate Inc., a Louisville high-tech company, the affidavit said. That was when the FBI and the U.S. attorney’s office in Alexandria set up a sting. [Washington Post, 5/22/2006]

* Cold cash in the freezer. As part of the investigation against Jefferson, on August 3, 2005, federal agents executed search warrants against Jefferson’s homes, car, and offices as part of an undisclosed investigation. The federal agents seized $90,000 in cash that was stuffed in plastic bags in Jefferson’s home freezer. This $90,000 was part of the $100,000 in cash that was handed over to Jefferson and videotaped in the sting operation. Five other offices were raided across the country in conjunction with the raid on Jefferson’s property.

* Former aide pleads guilty. Former Jefferson aide Brett Pfeffer, who was intimately involved in the scandal, pleaded guilty to conspiracy to bribe Jefferson as part of a plea bargain with the Department of Justice. On May 26, 2006, he was sentenced to eight years in prison.

* Looking out for himself. Jefferson was criticized by ABC News for the apparent misuse of National Guard resources to check on his personal belongings and property at the height of the Hurricane Katrina rescue efforts. According to a military source, Jefferson delayed two heavy trucks, a helicopter and several National Guard members for over an hour while he went back into his house to retrieve “a laptop computer, three suitcases and a box about the size of a small refrigerator.” [ABC News, 9/15/2005]

* Feds storm Capitol Hill. On May 20th FBI agents raided Jefferson’s Capitol Hill office and stayed for 17 hours collecting documents. This was the first time that the FBI had raided and searched a Congressional office. The raid followed explicit procedures laid out in a judge-approved search warrant. Nevertheless, it has created a furor on Capitol Hill as lawmakers from both parties have charged the FBI with violating the constitutional separation of powers between the congressional and executive branches. [Washington Post, 5/22/2006; Associated Press, 5/24/2006]

Congressman Jefferson is just one of many government officials who have been involved in criminal activity and yet has been able to hold on to their employment. Now compare the outcome of this case to the outcome of recent cases (such as Enron) where executives within the private sector have been found guilty of similar crimes. The private sector cannot afford to hold onto “liabilities” because it will affect their bottom line. Negative publicity means lower profits. Lower profits mean that the “tree” has to be trimmed in order to boost profits. While Enron executives had to endure a global media frenzy during their very public trial, many government officials are able to hide themselves in the bureaucracy of our government taking only some minor heat from the few voters who care enough to speak out.

What happens when your personal money is not on the line.

As I have been discussing thus far, the reason why the private sector is much better at handling money is because this sector is directly tied to individuals who have an incentive to ensure success. Hence the reason for the stock market. Here, investors can get real-time data on the performance of a particular company. If the stock of a particular company is up, investors will be happy. If they go down, executives automatically begin to look for “dead weight” within the company to boost up stocks. With government, there is no such detailed system of micro management. Waste can be excused in so many different ways while voters tend to look the other way just as long as THEIR issues are being addressed. Below is a press release that I posted about a month ago on the wasteful spending of your tax dollars for reconstruction in the Gulf coast.

“At last count, there were at least 785 criminal cases under investigation by the Hurricane Katrina Task Force, a joint effort of 19 federal agencies, including the Department of Homeland Security, the U.S. Postal Service, the Defense Department and even the Environmental Protection Agency. State prosecutors in Louisiana, Mississippi and Texas are similarly swamped. And scores more cases wait in the wings. … So far, FEMA and the Red Cross say they have amassed more than $8 million in disaster-aid funds that have been voluntarily returned by recipients. Some repayments have been accompanied by letters professing that they were mistakenly paid or confessing to fraud, while others have been anonymous remittances via money order. A few people have asked to arrange a payment plan for reimbursing the government for benefits they took but weren’t entitled to.”

- Scripps Howard News Service, 08/25/06

One year after America’s most destructive natural disaster, appropriators continue to ignore the physical and fiscal realities as families and businesses try to rebuild the Gulf Coast. Of the $20.8 million dollars in pork designated for the home state of Senate Energy and Water Appropriations Subcommittee member Mary Landrieu (D-La.), $13.5 million, or 65 percent, is for the J. Bennett Johnston Waterway, even though it is only used by 4 percent of Louisiana’s commercial traffic. Additionally, according to the Army Corps of Engineers, the waterway’s costs will not be justified until 2046.

- CAGW Pork Alert, 08/25/06

“Many federal relief dollars fail to reach their intended targets. Oxfam’s report points out that although $17 billion has been approved by Congress to rebuild homes in Louisiana and Mississippi, not one house has been rebuilt with that money in either state. A report from the Democratic members of the House Small Business Committee found that 80 percent of small businesses on the Gulf Coast have not yet received loans promised by the federal government. The Small Business Administration has approved loans in excess of $10 billion, but only $2 billion has found its way to business owners.”

- AP, 08/22/06

FEMA has implemented new procedures for dispensing emergency cash assistance to disaster victims. The procedures include: Computer background checks for applicants; the requirement that the affected state signs off on the program and agrees to cover 25 percent of the benefit; lowering the limit for immediate; unrestricted assistance from $2,000 to $500; Registration with FEMA before someone is allowed to check into a federally financed hotel room.

The agency also announced a procedure to work with local and state officials to identify available apartments or homes for the displaced, and then offer to pay the rent directly. That would eliminate the need for a financially complicated system like the one ultimately set up in Houston, where the city paid rent for 34,000 families and then sought reimbursement from the federal government.

FEMA also changed its debris removal policy. Local and state governments will be encouraged to arrange debris removal contracts in advance, with FEMA setting up a registry of companies to do the job. The old system sometimes created a financial incentive to turn the work over to the federal government, particularly to the Army Corps of Engineers.

- New York Times, 07/24/06

In an attempt to provide 18 months of free housing to Hurricane Katrina victims, th FEMA has deployed more than 160,000 trailers and mobile homes across the Gulf Coast region. First, some of the victims were issued key sets that could open as many as 50 different trailers, creating a serious security risk in heavily-populated trailer parks. Second, The Sierra Club has detected high levels of formaldehyde in the trailers. The gas is an airborne form of a chemical that is considered a human carcinogen, or cancer-causing substance. Air quality tests of 44 FEMA trailers conducted by the Sierra Club since April have found formaldehyde concentrations as high as 0.34 parts per million a level nearly equal to what a professional embalmer would be exposed to on the job.

- MSNBC, 07/24/06

A Government Accountability Office investigator Gregory D. Kutz told a hearing by the Senate Homeland Security and Governmental Affairs Committee a report on Homeland Security employers found many abusive and questionable expenses:

-More than 2,000 sets of dog booties, costing $68,442, that have sat unused in storage since emergency responders decided they were not suited for canines assisting in Gulf Coast recovery efforts.

-Three portable shower units for $71,170 from a contractor who investigators said overcharged the government. Customs and Border Protection agents could have gotten similar showers for nearly a third of the price – and faster.

-12 Apple iPod Nanos and 42 iPod Shuffles, priced at $7,000, for Secret Service “training and data storage.” Because the Shuffles cost less than $300, the Secret Service said they were not required to track them to ensure they were used properly.

-37 black Helly Hansen designer rain jackets, costing nearly $2,500, for use in a firing range that the Customs and Border Protection purchaser later acknowledged shuts down when it’s raining.

-Conference and hotel rooms at a golf and tennis resort at St. Simons Island in Georgia, worth $2,395, for training 32 newly hired attorneys when they could have used a nearby federal law enforcement training center.

-A beer brewing kit and ingredients for more than $1,000 for a Coast Guard official to brew alcohol while on duty as a social organizer for the U.S. Coast Guard Academy. “The estimated price for a six-pack of USCG beer was $12,” the investigators noted, adding: “Given that the six-pack cost of most beers is far less than $12, it is difficult to demonstrate that the Academy is achieving cost savings by brewing its own beer.”

-Investigators also noted that Customs and Border Protection wasted up to $464,586 by buying meals-ready-to-eat over the Internet instead of contracting through the Pentagon, as is standard procedure. And they found that the Federal Emergency Management Agency cannot locate 22 printers and two GPS units worth $170,000, as well as 12 of 20 boats the agency bought for $208,000.”

- AP, 07/19/06

A $10 billion federal program will give up to $150,000 to Gulf Coast residents to repair homes that were destroyed or damaged by Hurricane Katrina. In Louisiana, the grants will go to banks. The Mississippi grants will go directly to homeowners after they agree to guidelines on flood insurance and rebuilding design. “Putting the money in homeowners’ hands sparked concerns about fraud from mortgage companies and watchdog groups such as Citizens Against Government Waste. “

- USA Today, 07/19/06 [click here to read the rest]

The reason why contractors are so eager to secure government contracts is because in many cases it is viewed as “free money” with very little accountablitiy. Taxpayers are typically kept in the dark when it comes to government contractor activity or how much they are being paid to do a project

While most Americans will become upset after reading this rap sheet of wasteful spending, very few of us see the financial incentive to do anything about it. Government has been able to lull citizens to sleep on this issue because it knows that as long as the tax rate on your paycheck does not experience too many fluctuations, folks will see this as “government money” and not their money.

Good private sector examples of community development

Over the past few years, I have been very fortunate to live in areas where the master planned concept was being implemented. In short, the master planned concept is a concept in which shopping, recreation, schools and places of employment (especially if you have your own business) are placed within a reasonably close proximity of each other. The following excerpt provides a good explanation of the differences between a typical subdivision vs. a master planned community.

How do you know if you’re in a Master-Planned Community or simply a typical subdivision? Generally, they are distinguished by the tremendous number of amenities and conveniences, and the over-all enormous land area the community encompasses in a Master-Planned Community. For example, because of their sheer size, Master-Planned Communities will incorporate extensive recreational amenities like lakes, golf courses, and expansive parks with bike paths, and jogging trails. Alternatively, the typical subdivision may have an occasional smaller park or recreation area, and the size of the local neighborhood will be much smaller than found in a Master-Planned Community.

Subdivisions will be surrounded with general shopping, strip and/or commercial centers, but these local amenities are not part of the over-all original plan for the subdivision. Builders will build and hope/assume that retail and commercial development will follow. In the Master-Planned Community all these amenities are planned and included in the initial stages by the city and developers before shovel one is turned over in the development. (more…)

Unlike tax money that can be diverted to the bureaucratic “needs” within government , directly tied into the cost of living in these communities are things like park maintenance, security and landscaping. Some communities even provide after-school programs and minor weekend events for kids. The Stapleton project in Denver, CO is a great example of a master planned community because it is located within city limits (something that eliminates urban sprawl), and it incorporates low income housing. Dos Lagos of Corona, CA incorporates housing for the over 50 demographic by building homes that are in walking distance to shopping and walking trails.

The city of New Orleans is in a unique position because for the most part the entire city is going through reconstruction. While giving residents money to rebuild their homes provides a solution to those that lost their homes to Katrina, this solution in the long run will only continue to housing problems faced by residents before the storm. If state and local government have been unsuccessful ensuring proper housing and safe communities for these residents BEFORE Katrina, it would be only foolish for us to expect these institutions to perform any different in the reconstruction of this region.

We have the hundreds of empty trailer homes to prove it.