The Pa. Lottery -- who makes the deal?
January 23, 2013By Dave Davies
It's been fascinating to watch Gov. Tom Corbett tout his 20-year deal with a British firm to run and expand the state lottery, and to hear him complain that legislators have the effrontery to question the deal.
Privatization opponents argue that the existing public employees can do as well, or better, than Camelot Global Services in generating even more revenue.
Personally, I find it creepy that everybody's arguing over who'll do the best job of suckering poor and working Pennsylvanians into even more losing bets (keno, anyone?), but there's an interesting question lurking in the background here.
Should legislators have veto power over major government contracts?
In Philadelphia, the city charter gives City Council a say in any contracts lasting longer than a year, and I've seen plenty of battles over multiyear, multimillion-dollar contracts that mayors have wanted Council to approve.
Mayors and governors hate this crap. They get their smartest to people spend all this time thinking through how to handle some big project, and once they've done all their planning and bidding and negotiating, the last thing they need is some damn legislative committee nitpicking the deal and slowing everything down.
It's understandable. Nobody likes backseat drivers, especially if they can jam on the brakes when they want to.
But I've seen times when a City Council review has been enormously helpful and kept the city from making some big mistakes. One of the most memorable was a donnybrook in the mid-'80s when landfill space was scarce and expensive, and the city proposed investing in a massive trash-to-steam plant to solve the problem.
It was a 20-year deal that would have given the city a reliable dumping place for its trash, but also locked taxpayers into the fees that would fund construction and operation of the plant. The mayor wanted it. Business leaders wanted it. But City Council balked.
Turned out Council was right. Within a few years, more landfills were permitted and tipping fees came down. Council's intransigence probably saved taxpayers a bundle.
There have been other times Council members have asked good questions and made proposed contracts better.
On the other hand ...
But there's another side to it, too.
If bidders know that legislators will have their hands in contracts, it encourages them to hire lobbyists, make campaign contributions, and who knows what. It could mean that when a lawmaker asks tough questions about a contract, or speaks up in its favor, there might be something in it for him or his friends or supporters.
When Synagro Technologies was trying to score a major contract in Detroit, its operatives were caught spreading cash, booze, strip-club outings and trips to Vegas around (though the goodies went to Detroit's mayor, too, not just City Council leaders).
The same firm signed a major contract in Philadelphia. While no bribery was detected, the city's chief integrity officer Joan Markman discovered there was $400,000 in the contract to pay a guy whose role seemed to be mainly make political connections in the city. After Markman objected, the position was eliminated and taxpayers saved the 400 grand.
In general it seems to me that more eyes on a long-term, big money public contract is a good thing, as long as everybody's motives are transparent.