By Bill McCamley

“The accomplice to the crime of corruption is frequently our own indifference.” – Bess Myerson

Corruption has become a hot issue in New Mexico. Pay-to-play activities aren’t new, but recent convictions, indictments and investigations have brought what used to be a private phenomenon into the open.

Many believe corruption is bad, but since it is so hidden and hard to measure there is very little analysis of its actual effects. The result? Many citizens don’t comprehend its physical consequences, and ethics policies that could serve to curb this practice (independent ethics commissions, campaign finance reform, etc…) are left out of the public forum in favor of the usual hot-button issues like abortion, health care, gay marriage and energy.

While these are important topics, ethics reform should be considered so as well. Why?

Corruption can kill you

In early 2008, a massive earthquake rocked Western China, leaving 68,000 dead and another 4.8 million homeless. It also collapsed more than 7,000 school buildings, killing and injuring thousands of children.

While this might not seem out of place in a large disaster, buildings near the schools were untouched and studies of the collapsed schools’ construction showed that materials used in them were of substandard quality, leading them to be labeled as “tofu” buildings.

While details have still not been released, there have been accusations that government bribery was a main cause. How? If a company building a school paid off corrupt public officials to look the other way during inspections, they could spend much less on materials (such as steel rebar for earthquake reinforcement) and make a larger profit, since money spent on bribes is a fraction of what they would spend on materials.

Did it happen? We might never know, but the pattern of collapse, lack of reporting from officials and the discouragement of victims’ families from discussing the situation indicate a strong possibility of corruption.

Corruption that kills is not limited to bribery. It can also include patronage, the appointment of one’s supporters to political jobs regardless of qualification. Though this symptom is not exclusive to one party or the other, the biggest recent national example of this is Michael Brown, appointed to lead the Federal Emergency Management Agency in 2003.

Brown had no experience in emergency management before working at FEMA. His twelve previous years were spent as a high-level manager at the International Arabian Horse Association.

Joe Allbaugh, however, was his friend. Allbaugh managed George W. Bush’s Texas gubernatorial campaigns and was a senior advisor to Bush during his 2000 presidential run. He was appointed to run FEMA in 2001 (even though he, too, had no emergency experience), hiring Brown to be FEMA’s lawyer, then associate director, and leaving the job to Brown when he resigned.

Brown was directly responsible for the national response to Hurricane Katrina, and the consequences for this patronage appointment are apparent and appalling. He admitted underestimating the effect of rising waters, showed no understanding of the evacuee situation during nationwide TV interviews and ignored offers of help.

His management was so bad that he was criticized by both parties and resigned in disgrace.

Corruption is bad for business

I met a gentleman recently in New York who does compliance work for a large major bank. Though I tend to look at corruption’s effects from the government perspective, he illustrated how corruption can affect business from the local to the international level.

Earlier this year El Paso businessmen Steve Sambrano and Ramiro Guzman pled guilty to corruption charges for their efforts to bribe school officials in the Pharr-San Juan-Alamo Independent School District to take their bids over other, more competitive companies. Gifts to school board members included clothing and tickets to sporting events, including a trip to the Final Four worth over $14,000.

In 2008, the U.S. Department of Justice fined Baker Hughes, a Texas oilfield services company, more than $44 million for violations of the Foreign Corrupt Practices Act. Between 2001 and 2003, the company paid approximately $5.2 million to two people in Kazakhstan with the knowledge that some or all of that money would be funneled to officials of Kazakhstan’s state-owned oil company in order to receive state contracts.

Why should you care? Free market economics is based on the principle that competition allows a consumer to purchase the best product for the least price. Corruption blocks this process by eliminating competition.

If the people in the above examples were successful in their attempts at bribery, many businesses would choose not to compete for the work, taking them out of the free market. Whoever did get the contracts would raise their prices to make up for the loss of the cost of the bribe and to take advantage of the limited competition.

In these cases, the direct effect was a penalty to the taxpayer who did not get the most “bang for their buck.”

Corruption is bad for public trust

Both democracy as a government and capitalism as an economic theory derive their power from the trust of the average person. In democracy, policy is made by elected officials and implemented by regular folks. If individuals don’t believe the system is working for them, and not for limited special interests, then their belief will translate in to inaction, leaving the public sector stagnant.

A similar phenomenon happens when corruption is found in capitalism. People refuse to buy products they do not trust leaving a market with no purchasing power, and destroying the law of supply and demand.

Consider Sub-Saharan Africa. The region is considered the poorest area in the world, lagging behind others in infrastructure, health care, education and other areas necessary for economic growth. According to the World Bank, more than 70 percent of people under the age of 25 live on under $2 per day, while 146 out of every 1,000 children under the age of five die.

While some of this is rightly blamed on the after-effects of colonial practices, even President Obama recently laid much of the responsibility for Africa’s problems on corruption, saying that few or no institutions exist to provide economic transparency, accountability or efficiency.

Studies show that in Kenya 67 percent of people’s dealings with government include a bribe, while 66 percent of people in Ghana reported over 10 percent of their incomes being taken up paying bribes. A group called Transparency International issues a study called the Corruption Perception Index that shows a significant link between poverty and corruption.

Not surprisingly, almost all African nations score high in both.

Conclusion

So why should you care? New Mexico is constantly among the top five states for poverty-related statistics, and we have a long history of corruption at high levels (see Manny Aragon).

These are almost assuredly related, but both can be fixed. Citizens can aggressively advocate for mechanisms that will safeguard us from corrupt officials and bribers alike, bringing ethics reform to the same level as other emotional issues that tend to dominate national discussion.

If we can get policies like ethics commissions and campaign finance reform to the same level of public discourse as health insurance, the war and abortion, and then get them implemented, our society’s ability to make good decisions based purely on the good to the community — and not on what benefits the few and corrupt — will be improved, and so will our lives.

McCamley is a former Doña Ana County commissioner and current board member for Common Cause New Mexico.