Follow the Money - Part 2 (Naming Names)

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In my previous blog we saw that from 2002 to 2008 city council members’ election committees accepted nearly $90,000 (we could trace) from people/businesses seeking contracts or concessions from the City, and the Council awarded these same people/businesses over $13,000,000 in contracts and who knows how many millions in concessions.

Let’s look at some specifics. Today our focus is on the comnpanies that sought contracts. Here are some of the companies, how much they paid, and how much they received in city contracts.

Who's Giving?

• Walf (aka Westrust Ventures) paid $4,990 to council members’ committees and received $811,708 in city contracts.

• Waste Management paid $12,500 and received $348,937

• Sun Pac paid $12,086 and received $35,400.

• Faubel Public Relations paid $6,150 and received $549,402

• Farino Construction paid $12,500 and received $53,750

Who's Getting?

Of course, we’re not as much interested in the companies as we are with the City Council members. Here’s a list of the city council members and how much their election committees pocketed between 2002 and 2008 from companies seeking contracts and/or concessions–

• Dixon - $25,929 (29%)

• Herzog - $22,498 (25%)

• Rudolph - $15,900 (18%)

• Tettemer - $12,761 (14%)

• McCullough - $11,250 (13%)

(PS – Scott Voigts doesn’t appear on this list because he wasn’t on the council when this study was done. He would definitely appear if this study was done today and judging by the data so far he would probably rank pretty high on the list)

How does it work?

Back in 2002, for example, Waste Management (WM) gave city council members Dixon and Herzog election committees $2000 and shortly after that they voted to give WM an 8-year contract worth $348,937. WM continued to make periodic payments to Dixon and Herzog’s election committees and then extended the money to cover committees for Rudolph ($2500), Tettemer ($2000), and McCullough ($1000). More than a decade later WM continues its contract with the City, and as soon as new Council member Scott Voigts joined the Council, WM gave his committee $1000 (5/21/2011). At this rate WM will probably be with the city forever.

Don’t get me wrong. I’m not complaining about WM’s practices nor am I complaining about the quality of WM’s work. In fact, I’m a shareholder. But something surely stinks (pun intended) when City Council members are taking money and then voting to give contracts to the people who are giving them the money. It may not be illegal, but…

Here’s another example. RBF Consulting gave $500 to Dixon and Herzog’s election committees in 2006, and in 2007 they were awarded a contract with the city. RBF kept the money flowing, and no sooner did Scott Voigts join the council then his committee got a $250 contribution.

RBF goes on to get millions from the City. In 2010 I looked at bids they made on 3 projects and I noticed that none of their competitors on these bids had given any money to any city council member’s committee. Guess who got the contracts? Duh! RBF of course.

The City prides itself on being a contract city, which means that millions of dollars are spent every year on contract agencies, leaving the door wide open for these companies to try to influence the decision making process by giving money to city council members’ election committees. When a company that doesn’t give money to a council member competes with a company that does, you can only imagine who is going to win the contract.

Why does it matter?

In an ideal world, a company stands on its merits. When companies compete for  city's business, we'd like to think that the only thing on the mind of our city council members is whether or not that company is going to do a good job at a fair price.

(Personally, I'd also like them to think about whether or not the money the city pays will stay in the city, and I've shared that with you in my blogs "Put Lake Forest First". But the main thing is "Will we get the quality job we want done at a good price.")

When money changes hands, the situation can change. Now one of the companies bidding on a project has given you hundreds if not thousands of dollars. Do you owe them your vote? If you vote against them, will they stop giving you any money in the future? Even worse, if you vote against them will they give their money to one of your opponents?

By accepting money from companies that are bidding for city business, city council members change the equation, and that addition, money, has got nothing to do with the welfare of the city and everything to do with the welfare of the council member. As I've said before, this isn't illegal, but is this any way to run a city government?

Is this the inevitable result of a free market?

No.

In a better world, a city council member would agree that if he/she accepted money from a company seeking a contract from the city, he/she would abstain from voting on that contract since it would be a conflict of interest, or at the very least, give the appearance of a conflict of interest. If that were the practice, how much money do you think these companies would give to city council members’ election committees?

This is the state of affairs with regard to the behavior of city council members and companies seeking contracts from the city - Over the 7 years of study, 12 companies made at least 80 payments, amounting to more than $60,000, to city council members’ election campaigns, and these same companies received more than $13,000,000 in payments from city contracts.

In our next blog we’ll take a look at companies/individuals seeking concessions from the city. What do you think we’ll find?