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"A government that robs Peter to pay Paul, can always count on the support of Paul." George Bernard Shaw

Thursday, May 13, 2010

Ranking the states on corruption

Interesting but disturbing article that ranks the states from most corrupt (Tennessee) to least corrupt (New Hampshire).  A very important subject no matter if one agrees with their specific ranking methodology.

I would use a different ranking system because certain kinds of corruption are just more threatening than other types.  I am suspect of any ranking that shows Illinois as only the 47th most corrupt state.  I would rank corruption from most dangerous to least dangerous in these six major categories:

1.       Judicial corruption.  It doesn’t get any worse than when judges are taking kickbacks (think of the dirty judge in a John Grisham novel).  There is no place to turn in most cases because these folks have so much discretion and most of their decisions can not be appealed at a reasonable cost or in a timely way.  The case in Eastern Pennsylvania where two judges have been indicted for sending kids to a private juvenile hall for far longer than normal and then receiving kickbacks from the owner of the facility is particularly scary.  Another form of judicial corruption is when prosecutors determine whom to prosecute based primarily on political considerations or when they withhold evidence in discovery because it is inconvenient to their personal goals.   Think back to the county prosecutor, Mike Nifong, who withheld evidence that would have helped proven the innocence of the Duke Lacrosse players.
 
2.       The second worst kind of corruption is when the police are dishonest.  If these “enforcers” plant evidence, knowingly arrest and investigate the innocent or abuse the warrant system by lying to judges the system really looks far more like a KGB type operation.   If the police are getting kickbacks from one drug gang and putting the clams down on the rival gang, the net result is they are not working against gangs in general.  If you are arrested simply because you are disliked or are a minority, trust in the system absolutely breaks down.
 
3.       Political and regulatory corruption.  This by far the most common kind of corruption in our system.  Politicians sell their votes for campaign contributions all the time and get away with it. But too often politicians actually accept cash bribes (like former Massachusetts state senator  Dianne Wilkerson).   Illinois has had seven governors arrested or indicted for corruption since the 1850s.  When a politician lies about what legislation includes (think back to the recent health care bill) or plugs in something entirely unrelated to the legislation on page number 2050 this is pure deception.  When Alaska senator Ted Stevens was indicted for lying on his Senate financial disclosure forms how many times do you think he lied to the public or stole from the government and never got caught? In cash-strapped California, San Bernadino County District Supervisor Bill Postmus and his aide were arrested on charges of accepting $100,000 each to induce the Board of Supervisors to pay $102 million in 2006 to settle a dispute with a private developer.  That is expensive.
 
4.       Fraud by government workers.  Harriette Walters plead guilty in 2008 to issuing fraudulent property-tax vouchers (which generated cash for her and her friends) and stole $48 million from the city of Washington DC. 
 
5.       Fraud by the public against the government. From Medicare fraud where health care providers submit false claims or contractors that pad their invoices for work done on a public road project.  These are serious matters, but to the extent that we move more services from the government to the private sector and shrink government, this category becomes less significant.  When that happens, the private sector can use more common sense and intuition to sniff out when they are being defrauded.
 

6.       Fraud by and against the private sector.  At least in this segment, the buyer has civil remedies and can use common sense to fight it.  So even though I support more prosecution of private fraud, it is far less devastating to society than the public sector corruption above.  It is far harder to defraud a small businessman than a state government (although the consequences to the perpetrator are usually not nearly as severe).  Business is far more likely to keeping an eye on the details and looking for ways to make their businesses more profitable.  So the private sector  catches the scams far more frequently and far sooner than government bureaucracies. 

 

In the first three categories, the corruption rots the core of our society.  These services can generally not be outsourced or performed by the private sector; there is no alternative.  For fraud against the government by the private sector, this can be reduced dramatically by privatizing more services and getting the government out of our lives when we can.  And finally private fraud is a smaller problem and if the judicial and police functions are honest and efficient then they can sometimes assist the victim recover damages.

Posted via email from John's posterous

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