The City That’s Corrupt

Portland, whose slogan, “The City That Works,” was stolen from one of the most corrupt cities in America, has been rocked by a new scandal, this one involving actual charges of bribery and under-the-table dealings. The FBI raided the home and office of the city’s parking manager to investigate allegations that he accepted large bribes to turn the city’s parking meter business over to a particular company.

These allegations apparently go back several years, but only now are being investigated in detail. What is interesting is how many Portlanders read the headlines and say, “yep, it must be true,” rather than, “this would never happen in our city.” A city that wastes huge gobs of money on silly streetcar and light-rail projects just exudes a culture prone to corruption.

“Portland is one of the most corrupt and nepotistic city governments in America,” says former Portland planner Richard Carson, who walked away from a lucrative planning job because “I just could not compromise my principles for more money.” He specifically points to the city building a light-rail line after voters rejected it twice and taking money from water user fees to spend on pork-barrel projects as examples of that corruption.

He could also have mentioned doubling the size (and, ultimately, the vacancy rate) of the city’s convention center after voters rejected it; giving Bechtel a no-bid contract to build a light-rail line; claiming that streetcars stimulate economic development when in fact that development received hundreds of millions of dollars in subsidies; the transit agency general manager who oversaw millions of dollars in subsidies going to his family contracting business; and a 300 percent cost overrun on an aerial tram. The list goes on and on.

Portland Mayor (and alleged pedophile–and I don’t mean someone who loves bicycles) Sam Adams issued a statement saying that Portland and Oregon “prides itself on clean government,” but actually the city and state have a long history of corruption. There was the great land fraud scandal in which the state sold most of the land intended to support public schools for a song, which led to the indictment of most of the state’s congressional delegation. Most were convicted too, except Senator John Mitchell, who conveniently died before having to go to jail.

The city itself had a national reputation as a den of vice, with open bribery of elected officials, up through the 1950s, as documented in Portland Confidential, by reporter Phil Stanford, and Dark Rose by Gonzaga University history Professor Robert Donnelly. Until he was laid off at the beginning of the recession, Stanford’s column with the Portland Tribune frequently pointed out the direct links between the corruption of the 1950s and more-recent city governments.

By itself, a bribe for parking meter contract doesn’t mean much. But when it takes place in a city that reeks with corruption under the guise of sustainability, livability, and other well-intentioned but ultimately inane ideals, it is just one more demonstration that we can’t count on government to solve our problems.

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32 thoughts on “The City That’s Corrupt

  1. C. P. Zilliacus

    Randal, I know that you are writing about the municipal government of Portland itself here.

    But how does this compare to nearby and related government entities (and thanks to you, I know a fair amount about them, but this should inform newer readers) in particular:

    [No particular order]

    – Portland Metro
    – Tri-Met
    – Other county and municipal governments near Portland
    – State of Oregon

    And other public-sector entites that are relevant.

  2. Andrew

    he accepted large bribes to turn the city’s parking meter business over to a particular company

    Well, if public assets where not under such pressure for privitzation to the benefit of private profit due to a failure to assess taxes to pay for the demands of government spending, we wouldn’t be facing scandals like this. You can’t hand out bribes for a lucrative offer that isn’t being made and does not exist.

    Doesn’t the fault for the bribes occurring rests squarely on the “no new taxes/privatize everything” wing of American politics?

    When you put out opportunities for rent to be had, you are, shocked, SHOCKED, to find private rent seekers using bribes to get an advantage for a gauranteed monopoly revenue stream off the public? I mean, who would have ever thought THAT would occur!

    giving Bechtel a no-bid contract to build a light-rail line

    Wasn’t this one of those much beloved Public-Private-Partnerships, where Bechtel put up money to help build the line so that its land development scheme would be more attractive in return for financial assistance from the government to complete the light rail line? What other company was prepared to build the line for less but lost out from not getting to bid? I know that must be a painful example because it shows private capital thinks that a light rail line makes their land more valuable and the development was directly linked to getting light rail and Bechtel actually helped pay for the light rail line. Tri-Met’s website notes the cost as $125 million and that Bechtel funded 23% of that cost (essentially doing all engineering and construction management for free, plus providing some materials for free). This is a bad deal? Corruption at its worst?

  3. bennett

    Interesting post today. Portland is no Chicago, but a surprising history none the less. I do like the fact that the protagonist of today’s post is a professional planner. Maybe we should change the name of this blog to the Antipolitiker.

  4. Frank

    “Well, if public assets where not under such pressure for privitzation [sic] . . . we wouldn’t be facing scandals like this.”

    Nonsense.

    An immoral system based on coercion, force, and reallocation of resources will always ooze with corruption.

    So, here are a few federal examples to show that Andrew is talking out his @$$, that he is blindly biased, and that it “took all of two seconds to Google” political corruption scandals in history to show that corruption was rampant before recent calls for privatization.

    Whiskey Ring: Massive corruption of Ulysses S. Grant’s (R) administration involving whiskey taxes, bribery and kickbacks ending with 110 convictions. (1875)

    Sanborn contract: kickback scheme between William Adams Richardson(R) Grant’s Secretary of the Treasury and John D. Sanborn (1874)

    Black Friday (1869): When financiers Jay Gould and James Fisk tried to corner the gold market by getting Ulysses S. Grant’s brother in law Abel Corbin to convince Grant to appoint General Daniel Butterfield as Assistant to the Secretary of the Treasury where he could then give them insider information.(1869)

    Ezra Ayres Hayt, Commissioner of Indian Affairs under Rutherford B. Hayes was forced to resign by Secretary of Interior Carl Schurz due to allegations of rampant corruption. (1880)

    Nehemiah G. Ordway (R) Governor of Dakota Territory was removed by President Chester A. Arthur after he was indicted for corruption. (1884)

    John Hipple Mitchell Senator (R-OR) was involved with the Oregon land fraud scandal, for which he was indicted and convicted while a sitting U.S. Senator. (1905) [298]
    Joseph R. Burton Senator (R-KS) was convicted of bribery in 1904 on the charge of illegally receiving compensation for services rendered before a federal department and served five months in prison. (1904)

    Andrew J. May (D-KY) Convicted of accepting bribes in 1947 from a war munitions manufacturer. Was sentenced to 9 months in prison, after which he was pardoned by Truman (D) in 1952

    Frank Boykin (D-AL) Was placed on six months’ probation in 1963 following conviction in a case involving a conflict of interest and conspiracy to defraud the government. His prison sentence was suspended on age and health grounds and was fined $40,000 total.

    It goes on and on and this is just the federal level.

  5. Andrew

    Frank:

    Whenever there is a chance to throw the weight and power of government behind private profit, there will probably be some attempts at bribery.

    I don’t know where you get the idea this is the first scandal ever from my post. My main point was that these privitization efforts, which generally stink to high heaven like this, are being driven by a failure to raise taxes to support spending, and a conjoined desire to get the government out of enterprise activities.

    Why is Portland selling its parking meter income except for those reasons?

  6. C. P. Zilliacus

    Frank wrote:

    “Well, if public assets where not under such pressure for privitzation [sic] . . . we wouldn’t be facing scandals like this.”

    Hmm, would this be about the municipal government of Portland? I am shocked to read that!

    Nonsense.

    I agree with you, Frank.

    Privatization, if openly and transparently done, will frequently save money and provide better service to the persons (as in taxpayers) paying for the service.

    An immoral system based on coercion, force, and reallocation of resources will always ooze with corruption.

    So, here are a few federal examples to show that Andrew is talking out his @$$, that he is blindly biased, and that it “took all of two seconds to Google” political corruption scandals in history to show that corruption was rampant before recent calls for privatization.

    Excellent point.

  7. Frank

    “My main point was that these privitization [sic] efforts….are being driven by a failure to raise taxes to support spending, and a conjoined desire to get the government out of enterprise activities.”

    You have hand-flapped away from your ORIGINAL point: “Well, if public assets where not under such pressure for privitzation [sic] . . . we wouldn’t be facing scandals like this.”

    It’s not privatization that’s the problem. Corruption is inherent in the parasitic, transfer-seeking economy manufactured by a coercive system that forcefully reallocates resources.

    Kaufmann and Siegelbaum have shown that there are more incidents of corruption without privatization and that there is more corruption in government than private sectors: “…the assessment by experts regarding the relative incidents of corruption during the privatization process and the post-privatization environment is significantly less negative. In particular, privatization transactions appear to be less corrupt than transactions in the rest of the economy, and privatization programs have somewhat helped ameliorate the incidents of corruption in the post-privatization era as compared to the non-privatized past.”

  8. Dan

    I’m curious how Eastern Bloc countries are a good enough correlate to equate to Portland in a rational argument.

    Nonetheless, I’m curious about recent studies in N America attempting to compare levels of corruption – and scale and effects – between public and private sectors. Surely we should look at examples prior to the housing bubble, caused by private sector actors after their constraints were thrown off. I’m also curious to read studies comparing provision of public goods by private and public actors over the years.

    DS

  9. Frank

    I’m not comparing Eastern Bloc countries to Portland. I’m using evidence to refute the ludicrous assertion that without privatization efforts, government corruption wouldn’t exist.

    But having lived in both an Eastern Bloc country and Portland, I would be happy to discuss how the two correlate over a fine ale.

    Oh, and we can also talk about the ludicrous assertion there no constraints on private sector actors prior to the housing bubble. Maybe that requires discussion over a bong to quell nausea arising from the ad nauseum talking points about the mythical free market being the source of today’s economic problems.

    Never mind. Dan’s second paragraph is an interjection and red herring not worthy of any more of my time.

  10. Andrew

    Frank:

    It’s not privatization that’s the problem. Corruption is inherent in the parasitic, transfer-seeking economy manufactured by a coercive system that forcefully reallocates resources.

    Privitzation of government monopolies inherently creates an opportunity for monopolistic rent seeking behavior by private agents. So yes, it is the problem. If no one was trying to privatize Portland’s parking meters and their derived income stream, no one would be handing out bribes to obtain that income stream. Its that simple, end of argument.

  11. Frank

    Thanks for the thought-terminating cliche in all its ungrammatical glory, but it ISN’T that simple. Here’s a cliche: you’re putting the cart before the horse. You maintain that without a push to privatize (PLEASE notice the “a” in the middle of “privatize”), there would be no bribes. It is quite possible that bribes proceed the call for privatization to goad government to offload to their monopoly to favored private entities, thereby creating another monopoly.

    Furthermore, this story is about a man accused of taking bribes to reward a contract to a certain company, not about privatizing the entire parking meter monopoly:

    The city selected Cale Parking Systems USA Inc. to provide SmartMeter parking machines because of the product, not the personality behind the company, he said. “We select the contractor for the equipment, the technology,” he said. “It has nothing to do with the personality.”

    So this is yet another example of corruption in the awarding of government contracts, and all the squabble about privatization is hand-waving to distract away from the fact that government itself is corrupt.

  12. bennett

    Here’s another cliche: It takes two to tango. In other words, both the cart and the horse are guilty here. How can we blame one party for a bribe? A bribe is offered, and a bribe is accepted. It seems to me that both the private sector and government officials are equally culpable.

    I disagree that the push to privatize everything is why bribes happen. Bribes happen because cheaters never win, except in politics and big business. Put the two together and don’t be surprised that corruption runs ramped. It should be expected now days.

    I think the moral of this story is that the private sector actors and government officials need to start listening to the planners, instead of going after pet projects and trying to game the system. Here you have a planner screaming from the sidelines “Don’t do it,” they do it anyway, and then “government planning” is once again the fall guy. It’s actually government antiplanning that’s the problem here.

  13. Frank

    bennett, you had me until your last sentence, which left my head spinning. Thank you, though for pointing out that it’s the entire system that’s f¤©kd up. That’s something that I think pretty much everyone who participates here would agree. Label it an oligarchy or compare our system to corporatist Italy; the fundamental idea is the same: the system is broken.

  14. Dan

    I’m not comparing Eastern Bloc countries to Portland. I’m using evidence to refute the ludicrous assertion that without privatization efforts, government corruption wouldn’t exist.

    Frank, I asked how your reference was germane to a different sociopolitical system, and then I gave an example of an instance where it would be germane in our sociopolitcal system, as your reference was akin to apples and oranges.

    DS

  15. Scott

    Oh, politicians do not have the general public in mind?

    In addition to special interests, mostly for campaign financing (ie unions & business favoritism), that these elected individuals have personal gain & ideals in mind (more so for appointed, such as COGs & MPOs (often the same))– at the expense of unknowing taxpayers. Contrast that w/a free market in that people choose to buy things.

  16. metrosucks

    Here you have a planner screaming from the sidelines “Don’t do it,” they do it anyway, and then “government planning” is once again the fall guy.

    Bear in mind, bennett, that this was one planner who decided to rebel against the planning paradigm and side with common sense/what’s best for the public instead of delusional thinking. Please don’t try to paint this as a couple rogue elements in Portland sending the city careening down the gully. The entire planning profession in Portland is corrupt and evil. It’s fundamental to the system. Any good planner would rapidly be flushed out.

  17. bennett

    Scott says: “Oh, politicians do not have the general public in mind?… Contrast that w/a free market in that people choose to buy things.”

    … from entities that care less about them them the government. Not that it’s any worse of a situation. In one context you have a bade choice made for you. In another you get to choose between a handful of bad choices that have been made for you.

    metrosucks says: “The entire planning profession in Portland is corrupt and evil. It’s fundamental to the system. Any good planner would rapidly be flushed out.”

    Your missing my point entirely (or rather proving it). Don’t confuse the planning profession with corrupt political decisions. Look at the Austin commuter rail project for example. Most planners advised against it. it was done anyways. As planners they are there to try and implement it a best as possible. I’m not saying planning is perfect. There are many professional planning organization (many based in Portland) that advocate for the “social engineering” that y’all hate, but something tells me that most of the professional planners that work for Portland aren’t a whole lot different than planners in other cities. They’re probably good, not evil, people trying to complete a job as objectively as possible, despite the incredible lack of objectivity within the context in which they work. There may be corruption and evil in Portland, but I’ll bet it doesn’t reside in the City’s Planning Dept (it’s probably on a different floor in city hall).

  18. bennett

    I don’t think antiplanners understand the dynamics inside municipal planning departments. City/town planners are administrators who by and large are forbidden to express their opinion on planning issues, at the very least it’s frowned upon. So in public and professional settings they have to speak in code. If your ever at a city council meeting and they are discussing… let’s say a new light rail line, and they ask the planning director to give his initial assessment and he says something like,

    “Boy, that’s very ambitious,” that’s code for “good f’ing luck you yahoos, can’t wait to be bogged down with this for the next decade.” A lot of the things that frustrate antiplanners are the same things that frustrate planners. Often these things happen not because of the recommendations of planners, civil engineers, and traffic engineers, but because their recommendations are ignored.

  19. Scott

    bennett, You incoherently tried to disrespect business. Not sure what you are trying to argue. Would you like the USPS & DOT to provide many of our goods?
    How would that work out?
    You think that there are few consumers choices?
    There are many retail choices. Not true for the gov monopoly & its mob rule & ignoring many Constitutional principles, especially theft.

  20. bennett

    I was referring to transportation choices specifically. There are very few consumer choices when it come to commuting for example. I’m not sure choosing the size and availability of bells and whistles on your car is really a choice. You still choose car.

    Also, I’m not disrespecting business, just pointing out that they “don’t have the general public in mind,” (much like your claim about politicians). They do have your pocketbook in mind though (I suppose the same can be said for politicians).

    Also, please expand on your “theft” assertion. Are you stating that taxation and/or certain government programs are unconstitutional? How so?

  21. Dan

    Often these things happen not because of the recommendations of planners, civil engineers, and traffic engineers, but because their recommendations are ignored.

    Yup. And…

    City/town planners are administrators who by and large are forbidden to express their opinion on planning issues, at the very least it’s frowned upon.

    Yup.

    Many a planner out there who had to approve some cr*ptacular project while swallowing bile. If you’re lucky, you work in a place where you can approve some good projects every once in a while, or even better, can amend the development regs to allow good projects.

    DS

  22. Scott

    Bennett, Transportation is more by private companies than you might think — the tangibles (vehicles, rail, etc).
    Are you proposing something?
    Most bus & railroads used to be private.
    Are you aware that transit needs a minimum density of about 8,000/mi, & usually above (NYC is 26,000)?

    Most rail track is private & used for goods transport.

    You seem to have avoided other points.
    (That happens often, as I can easily slap down lefty points, especially by 3 nincompoops here.)

  23. Scott

    Companies producing & retailing products do not have consumers in mind?
    How do they sell?
    Business is a much better market compared to voting & mob rule in the all or mostly the wealthy pay for things.

  24. Frank

    Minority mob rule no less. 17% of the Seattle population voted on whether or not to continue the tunnel to replace the Viaduct, which is estimated to cost $2 billion. (Anyone want to start a pool on the final cost and/or completion date?) 60% of that 17% approved the project.

    That’s democracy inaction.

    Where’s Dan when you need him to use his “small minority” catchphrase. God, I love Dan’s catchphrases, and by gosh, I kind of miss them.

  25. Andrew

    bennett:

    Also, please expand on your “theft” assertion. Are you stating that taxation and/or certain government programs are unconstitutional? How so?

    No point arguing with people like Scott. He would never understand that our constitution was written precisely to be able to impose taxes and take on debt.

  26. bennett

    Scott says: “Companies producing & retailing products do not have consumers in mind? How do they sell?”

    Just to play devils advocate… Politicians don’t have the public in mind? How do the get elected?

    My point is this. Neither the private entities nor the politicians have the public’s “well being” in mind. They have them in mind only in ways that directly benefits themselves. Both groups will leave you for dead if you can’t give exactly what they want.

    The Randian Apocalypse is happening right before our eyes 😉

  27. rationalitate

    Randal – Adams is not, and has never been accused of, being a pedophile. Pedophile means sexually attracted to prepubescent children, and the kid he allegedly had sex with was slightly over the age of 18. Even having sex with a 16-year-old isn’t pedophilia, even though it may be illegal.

  28. Scott

    bennett, The Constitution has been avoided so much — the gov is doing so much beyond its authority — mainly protection.
    So many programs have become redistribution — taking from producers & giving to others.

    I never typed about the public’s interest. Businesses meet the wants of consumers whom choose to purchase. Many politicians meet the wants of some by charging others. Mob rule does not mean morality when 51% or often less elect politicians whom expand gov, usually at the expense of the non-user.

    What the heck is the meaning of “left for dead” & groups giving what you want?

    What is Randian Apocalypse?

  29. bennett

    My interpretation of the Randian philosophy, after hours and hours of debates with my libertarian peers is that those that subscribe to this philosophy believe that selflessness is a weakness. To the Rand disciples, the only reason to engage in any action is if it directly benefits you. That is, selflessness is a weakness, selfishness is a virtue.

    My Randian Apocalypse/left for dead statement (which was tongue and cheek) was about how the various actors we are discussing could care less about anybody unless they are giving them money, votes or both. But alas, it was a joke.

  30. Scott

    People act in their self-interest. Is that wrong?
    When one goes to harm, lie, fraud & cheat others, then that is wrong, and beyond the scope of the word. Preventing that injustice is the main purpose of gov.
    Getting paid? Do want a civilization built on charity?

    Do you care freely for people often, in offering tangibles?
    Who should & why & from where?
    Gov is trying to do much by taking from producers & taking away much incentive to be productive.

    What is Medicaid? Care forced by gunpoint — not to the doctor, but by the taxpayer.
    Some people need $100,000+ in medical care. Fair to charge others?
    Some ride transit which costs 4X the price paid. Fair to charge others?
    Many of those users are, commuting to an “office” in the CBD, owning a car too.
    If gov was much less than 40% of the GDP, more people could work & there would be a higher output. Other changes (culture, school-performance, motivation, understanding, non-jealousy) are needed too.

    Hong Kong is great at the gov having about 20% of GDP, but the property is an issue & they don’t have even have democracy (or a republic; even pre-China, SAP), which really helped because residents didn’t vote for stuff.

    For you transit-lovers, that’s your epitome — at 75,000/mi. –next is Singapore & Tokyo. London is dismaying being only medium-high density, but other factors apply. If you don’t know the density & other factors, then you have counted yourself out — as most people here — knowing “not so much” — Do you give engine repair advice when you know only change oil & tires? People think “common sense” & some knowledge goes long.

    Typical commentator or many blogger:
    “Let me give you my advice & input on subjects that I do not know in depth.”
    I have almost giving up here on discussion because of the lack of knowledge. On one hand, I’d like to type a 1/2 page primer on various principles being addresses, plus leave 10 links, but… alas…Few are interested in trueth, w/many being steadfast in big gov &/or seeing capitalism as a negative.
    Hey,
    Who is going to pay?
    Who is going to invent?
    Who is going to provide?
    Where are resources (energy) to come from?
    There are only so many “rich.”
    How did they become wealthy?
    Want to take away the products of Gates & Carrier? — Among many others…?

    A partial side: Look at prisoners. They live better than most did a century ago.
    How did the settlers live? Many perished & lived at <10% of the poverty level.
    Know that collectivism was tried then (1600s) & failed?
    http://www.lewrockwell.com/hornberger/hornberger153.html
    http://www.nocommunism.com/2010/11/the-real-story-behing-the-first-thanksgiving/
    http://www.personalliberty.com/personal-liberty-articles/a-thanksgiving-lesson/

  31. the highwayman

    Metrosucks; The entire planning profession in Portland is corrupt and evil. It’s fundamental to the system. Any good planner would rapidly be flushed out.

    THWM: Though you, CPZ & O’Toole are corrupt & evil.

    You want rail lines judged on a profit or loss basis, but roads roads are not judged on profit or loss basis.

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