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D.C.’s City Council must approve contracts for government business worth $1 million or more. When WAMU 88.5’s Patrick Madden dug into campaign data he found contributions to Council members from firms vying for these lucrative contracts often coincided with votes approving or rejecting them. We explore the optics, reality and implications of this data.
- Patrick Madden Reporter, WAMU 88.5 News
- Craig Holman Government Affairs Lobbyist, Public Citizen’s Congress Watch
Campaign Cash By The Numbers
Read the investigative report and explore an interactive database to see the percentage of fundraising that D.C. officials received from contractors and the top contractor contributors for each official.
MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. Later in the broadcast, the lasting effects of food on the brain, from childhood to old age.
MR. KOJO NNAMDIBut first, if you want something from someone, say a city contract, you're probably wise to stay on that person's good side. And if the person in question happens to be raising money, say, oh, for a political campaign, you'd be forgiven for thinking the best way to get on -- to get or stay on her or his good side is by writing a check.
MR. KOJO NNAMDIIn some states and cities, that would land you in hot water with the law, but a recent investigation by WAMU 88.5's own, Patrick Madden, finds that on the D.C. Council that kind of scenario just may be business as usual. Patrick Madden joins us to explore this, he is a reporter for WAMU 88.5 News. Patrick, always a pleasure.
MR. PATRICK MADDENGood afternoon, Kojo.
NNAMDIJoining us, by phone, from Capitol Hill is Craig Holman, he is a Government Affairs Lobbyist for Public Citizen, where he focuses on campaign finance and government ethics. Craig Holman, thank you for joining us.
MR. CRAIG HOLMANDelighted to be here.
NNAMDIYou too can join us if you'd like to join the conversation, have a question or a comment, call us, 800-433-8850, send us email, firstname.lastname@example.org, a tweet @kojoshow or go to our website, kojoshow.org, ask a question, make a comment there.
NNAMDIPatrick, before we can understand the potential problems here, help us understand how the District's contract approval process works and why it's set up that way?
MADDENRight. So, the District is like, pretty much, every other place, in that there are contracts and it can be, you know, whether it's to pick up garbage, healthcare contracts, street meter contracts, pretty much all the goods and services that our city government does. These all are -- they have to be contracted out. And so there's a normal procurement process.
MADDENThe city puts out a bid, company's look at the process and a winner is picked. That is all normal, like, many other places. What's different is that once a winner is picked for this contract, it has to be approved by the D.C. Council, if it's over a million dollars. If the contract's worth more than a million dollars, it goes to the D.C. Council for approval.
MADDENThe, sort of, history behind this is interesting, it goes back to the early 1990s, when the city was really facing a financial crisis and there was mismanagement with the administration's back then. So the Council was given this contracting authority as pretty much a check on the Mayor, to make sure that there weren't any improper contracts going forward, basically to remove, sort of, the politics of contracting.
MADDENOf course, it's ironic, fast-forward to where we are today and that's the real criticism of this, is that, it has injected politics into contracting and because of that there are implications with campaign cash.
NNAMDISo that procedure that was created in order to prevent the administration from giving out contracts on a political basis has resulted in the appearance of contracts being given out on a political basis by the very people, the Council, who are supposed to stop the -- Craig Holman, the District Government, there's a bit of a national anomaly anyway, but just how unique is the fact that a contract has to go to the Council here for approval?
HOLMANWell, that is quite unique among any kind of local government. The District of Columbia has set up a very unique and troubling way of issuing contracts, by getting the entire Council directly involved in approving these contracts. That, you know, spreads out the opportunity for Pay-To-Play corruption. Usually, the Pay-To-Play problems involve either a governor at a state level or the mayor at the city level.
HOLMANBut here, everyone gets involved in deciding who gets awarded these lucrative contracts. And as a result, the Council members are going to be the recipients of major campaign contributions from businesses trying to win lucrative contracts, as well as the mayor's office.
NNAMDI800-433-8850 is the number. We're discussing the culture of the -- of contract in the District which can lead to allegations of having a Pay-To-Play culture. We're talking with WAMU 88.5 News Reporter, Patrick Madden and Craig Holman. He's a Government Affairs Lobbyist for Public Citizen. He focuses on campaign finance and government ethics.
NNAMDIIf you have questions or comments, do you think D.C. is unique in having these problems? Does campaign contribution data influence your vote, whether for D.C. mayor or for Council member? Tell us why or why not, 800-433-8850. You can send email to email@example.com.
NNAMDICraig, the issue Patrick dove into is whether there is, as I've mentioned, a Pay-To-Play culture within the city. How do you define that phrase and what are the hallmarks of that, kind of, atmosphere within a government?
HOLMANPay-To-Play is a very subtle way of trying to unduly influence government. It's the practice of businesses giving campaign contributions to those who are responsible for awarding government contracts, in the hope of winning favoritism, in the whole bidding process.
HOLMANIt usually doesn't involve outright bribery. Bribery is already illegal everywhere and can be prosecuted, however, when it comes to Pay-To-Play it's, in a sense, legalized bribery because companies and individuals who own companies are permitted to make campaign contributions, and as long as they don't actually say, "I'm giving you this campaign contribution in exchange for a contract," it's perfectly legal and it's problematic.
HOLMANI, you know, I do want to emphasize, this has two very big problems that it poses to the government contracting process. First of all from the contractors perspective, it can rig the government contracting process so that contracts are awarded based on campaign contributions rather than merit, and that can waste a lot of taxpayer money.
HOLMANSecondly, it provides government officials with the opportunity to extort campaign contributions from those businesses that want lucrative government contracts, as we saw with Governor Blagojevich in Illinois. So this is a major problem that we see throughout the country and it's particularly acute here in D.C.
NNAMDINow, to the meat of the issue here in D.C., Patrick Madden, once you started sifting through this data and there is a lot of it, we've barely laid eyes on you for months now, what kinds of things did you start to notice and what do these things seem to indicate?
MADDENWell, when we looked at, as you mention, just a ton of data, we, you know, we weren't finding any cases of individual wrongdoing but we were finding a system where lawmakers are routinely approving contracts for their campaign contributors, you know, sometimes, within weeks, even days of when the contracts are going to the Council for approval. And we're just -- and when you actually -- you looked at all of the campaign contributions, our team had to sift through over more than a 100,000 campaign contributions to identify these contractors.
MADDENWe basically found that half the campaign cash was being donated within a year of when contracts were being approved, and so that tells you, that points to correlation between when contracts are going to the Council for approval and when campaign donations are being made.
NNAMDIYou talk about, within a year, you found that some of these campaign contributions were made within a week of a contract being approved, some of them on the day on which the contract was approved.
MADDENRight, and so, again, these are examples we highlighted because of how they look, the appearance of what this shows, when you have a contract being sent to the Council on the same day that campaign donations are being made and, you know, it -- you know, we found that, there were fundraisers, some of the candidates were running for mayor, so they were having to raise a lot of money at the time and some of these contractors were receiving a lot of contracts.
MADDENSo could be inadvertent coincidental, but the appearance is what campaign watchdog -- campaign finance experts are saying, that's -- even if it's just the appearance of it, that's a problem, 'cause it really -- it's -- what -- the message that it sends to the public is very bad.
NNAMDIWas there any evidence that a contractor or people associated with a contractor, because in a lot of these campaign donations, they came from friends and relatives of the contractors, was there any evidence that one stopped giving after a contract that was denied or discontinued?
MADDENThat's -- it's one of those things, it's hard to find that because we, basically, the data that we had and the contracting data with the city is not very good. So we had to look at legislative records. We could only look at the company's that won.
MADDENWe didn't know which company's lost, we only could look at the company's that won and then start from that point. So it was hard, from our perspective, to look at, you know, which company's didn't win or what, you know, that sort of thing. But, you know, we did talk to contractors, you know, who basically said that, you know, there is this, sort of, expectation out there, that if you're doing business with the city, you need to make campaign contributions. And it's mainly because they -- you just don't want your contracts to be interfered with.
NNAMDIYou talk to one contractor who was -- had a grass cutting contract with the city, who says, that as far as he knew, his contract was saving District taxpayers about $2 million a year. He declined to give a campaign contribution and he lost his contract, though you can't necessarily, easily make a connection between those two things.
MADDENNo, you can't. You can't make the connection here, and also there were other things going on with this specific contractor, it actually blew up in the news media, a couple of years ago. But he feels strongly that, you know, he -- that because he didn't make campaign contributions, he ended up writing them but then realized he didn't actually want to...
NNAMDIHe actually wrote the check and didn't send it.
MADDENHe actually wrote the check, he didn't want to go down that road, 'cause then he felt that...
NNAMDIThis is Joe Lorenz?
MADDENYeah, he would always have to pay each time his contract came up. He, you know, he feels strongly that that's one of the reasons why his contract wasn't renewed.
HOLMANAnd if I could add something, Kojo, I mean...
HOLMAN...this is a troubling trend that we see all around the country, wherever Pay-To-Play is a prevalent means of winning government contracts that, especially, the local or state levels, you find many legitimate businesses deciding, they just don't want to play. And so -- they either can't afford making campaign contributions or they just are revolted by the whole process of how government contracts are won.
HOLMANAnd that, in itself, hurts taxpayers, because then some of the more legitimate, some of the fairer businesses who would actually deliver, you know, as requested on a government contract, won't join in and they will just step out of the process and let it be turned over to those who want to make campaign contributions.
NNAMDIWell, Craig Nelson (sic), this pattern that has been uncovered here, in this investigation by Patrick and American University, might draw close scrutiny in other areas of the country. What kind of laws prohibit this kind of behavior elsewhere and how have they withstood legal challenges?
HOLMANI am very much hoping that this study draws greater attention to the Pay-To-Play problem that we see, not only in D.C. but also elsewhere around the country. There are a number of Pay-To-Play laws, usually passed on the heels of some sort of scandal, like we're now seeing in D.C. There are 15 states and several hundred localities that have various versions of Pay-To-Play laws that limit campaign contributions or ban campaign contributions from government contractors.
HOLMANThere's a couple that have strong laws, and that's New Jersey, Illinois and Connecticut and all three of those followed closely on the heels of Pay-To-Play scandals, which is why they've ended up developing and passing very strong Pay-To-Play laws. The option is available for the District of Columbia. As a matter of fact, you know, I work with Attorney General Irv Nathan in developing what would be the strongest Pay-To-Play law in the country, for the District of Columbia, if someone would just move it on the D.C. Council. But at this point, it's just sitting idle.
NNAMDIGotta take a short break, when we come back, we'll continue this conversation on the possible culture of Pay-To-Play in the D.C. Council. Still taking your calls at 800-433-8850, we'll talk about how some Council members respond to this. You can also send email to firstname.lastname@example.org. Have you done business with the city? Tell us what your experience was like, 800-433-8850, I'm Kojo Nnamdi.
NNAMDIWelcome back to our conversation about the possibility, probability or likelihood of pay-to-play on the D.C. Council. We're talking with Patrick Maddison -- Patrick Madden. He's a reporter for WAMU 88.5 News. Craig Holman is government affairs lobbyist for Public Citizen, where he focuses on campaign finance and government ethics. Patrick, chairman Phil Mendelson of the Council suggested that while the optics may be unfortunate, "the inappropriateness has been overblown I the public's mind."
NNAMDIBut it's not as if there's no reason for the public to be skeptical. Can you put this issue in some broader context for us? How, for example, does the still-looming specter of businessman Jeffrey Thompson influence what's happening here?
MADDENWell, that's what's so amazing all of this. The -- in all the places that Craig just mentioned, where they've had pay-to-play laws go into effect, it's usually after a big scandal. In the District we've had our big pay-to-play scandal. We have Jeffrey Thompson, who is one of the biggest, if not the biggest, contractor who has admitted to helping legally fund multiple mayoral and council campaigns. And it's very hard to make - and as Thompson -- sorry. As Thompson himself told prosecutors why he was doing this, is because he wanted to improve the business climate for his Medicaid company.
MADDENAnd so, I mean, we have our scandal here. And it's just the -- there hasn't been the will to enact either Nathan's reform or some of the other council members who've also pushed pay-to-play laws.
NNAMDIAnd when he says, "Trying to create a better business climate," Craig Nelson -- Craig Holman, some people would interpret that to mean trying to make sure I get a contract.
HOLMANThat's a subtle way of saying it. You know, if any of these players were to say I made a campaign contribution in order to win a government contract, then they would fall afoul of the bribery laws. So none of them will say that. And they will talk in terms of, for instance, the interviews that were done with city officials, looking at Patrick's database. They'd say, wow, I'm surprised that there was such a close relationship between the campaign contribution and I helping award a contract.
HOLMANBut there really -- it doesn't prove pay-to-play corruption. You know, when we're talking about the District of Columbia we're not talking about appearances. D.C. is stuck smack dab in the middle of a real pay-to-play scandal. Several people have been convicted so far, probably more are going to be convicted and going to prison. So when we're talking about the District of Columbia politics, we're not talking appearances of pay-to-play. We're talking the reality of pay-to-play.
NNAMDIHere is Peter, in Washington, D.C., who wants to talk about the mechanics of this. Peter, you're on the air. Go ahead, please.
PETERHi, Kojo. I really appreciate the coverage that WAMU has been giving to, you know, this type of scandal. I don't think that media play -- or pays enough attention to, you know, this, you know, the type of transactional nature of campaign donations and, you know, municipal contracts and access to politicians. I think in the District, in addition to, you know, we -- obviously we can't have the media -- or we can't force the media to pay more attention to this.
PETERBut I think the city can take certain steps in making information about city contracts and campaign donations more accessible, just through, you know, their online databases and, you know, what the public can access and ultimately what the media can access. And, you know, perhaps they can pay a little bit more attention to, you know, how some of these relationships are developing and, you know, carrying on.
NNAMDISo you feel that more transparency is what can help to solve the problem here, but not necessarily a change in the structure and policy?
PETERWell, yeah, I think that, you know, optics play a big role in the way that politicians and…
NNAMDIUh-oh, your phone seems to be doing other things.
PETERSorry. Yeah, my phone was going off there. No optic play a big role in how politicians and their donors behave. So, you know, if, for instance, this information is readily accessible and people are able to make, you know, the correlation between -- or make the connection between, you know, campaign donations and, you know, the awarding of municipal contracts, you know, I think we can count on a certain degree of self-correction here. But only if, you know, the media, you know, pays attention to this and devotes, you know, the resources necessary to bring a lot of this to the public's attention.
NNAMDIHere's Patrick Madden.
MADDENWell, I think the caller makes a great point. That part of -- one of the main reasons we were actually able to do this, this project, which took many months, but we were able to do it because of both there is transparency in the data that that the city has out there in terms of campaign donations. And these contracts that were going to the Council. Now, it's not perfect. There were limitations and other issues we had to deal with.
MADDENBut I don't think one could do this type of project 5, 10 years ago without, you know, having both this sort of data journalism tools out there and the fact that the city -- let's give the District credit here. They do -- they are doing a good job of putting this stuff out there for journalists and people to just take this data and start putting it into a database, starting to look at the connections and putting together, scrutinizing what's going on.
NNAMDIYes, the data is available, but, as our caller says, you have to have the resources and the time to be able to look at it and try to make those connections. You needed a lot of help doing this this way.
MADDENRight. We partnered with American University's Investigative Reporting Workshop. And they were crucial. I had three amazing grad students that helped me spend weeks, months, sort of sitting in front of a computer going through Excel tables as we tried to do all this work. And there were, you know, other critical tools that we had to use to make this data workable. But, yeah, it does take time. And, again, I give credit to WAMU for giving me the time to do it.
HOLMANIf I could add a little, Kojo.
HOLMANI mean, I want to emphasize what a great database this is that Patrick and WAMU has put together. You know, throughout the country we know pay-to-play corruption is prevalent because we've seen the convictions and prison terms of Governor Ryan Blagojevich, Rowland and others. So we always knew it was prevalent, but no one's actually sat down and taken the time of correlating government contracts being issued and campaign contributions being received and when they were received.
HOLMANThis was a lot of work. And this is an excellent, excellent database. I'd also like to add that, you know, even though transparency helps, we don't need to just stop at transparency. We know how to hit the problem right on the head. And we can address pay-to-play corruption by just, you know, outright banning campaign contributions from those who want to seek government contracts.
NNAMDIWe'll get to that…
HOLMAN(unintelligible) the problem.
NNAMDIWe'll get to that in a second, but I do have news update. The Capital Weather Gang is reporting that a tornado warning has been issued for Arlington, Va., Alexandria, portions of Southeast and Central D.C. until at least 1:00 p.m. It's a warning. It's more serious than a watch. So you should take precautions and remain vigilant outside. Allow me to repeat myself.
NNAMDIThe Capital Weather Gang is reporting a tornado warning for Arlington, Va. It includes Arlington, Alexandria, and portions of Southeast and Central D.C. until 1:00 p.m. Now, back to the discussion at hand about the possible culture of pay-to-play on the D.C. Council. Patrick Madden, reaction from the various council members you approached about your findings varied widely. Tell us first about the two members currently running for mayor and how they responded -- Muriel Bowser and David Catania.
MADDENWell, I mean, to be honest, there wasn't much response from the candidates running for mayor. We asked the Bowser campaign several times about this issue, but really didn't get a response on these questions that we posed. And, you know, for the Catania campaign, they weren't as involved in some -- in the data -- we didn't have as much pointing or questions posed to Catania, but he also -- as we know, this issue of his employment with M.C. Dean has come up on the campaign trail. But that's -- that is a different issue than what we looked at here.
NNAMDIWe should mention the actions or lack thereof of Councilmember Grosso whenever these contracts come up.
MADDENRight. So Councilmember Grosso's fascinating. He -- since he's been on the Council, when these contracts…
NNAMDIThat would be at-large Councilmember David Grosso.
MADDENYes. When these contracts come to him for approval he votes present every time. And it's -- he's been doing it for several years now. And it's because, in his opinion, you know, this is a problem. He -- it causes the appearance of conflicts of interest when you're having to vote on contracts that are from companies that are giving you campaign donations.
NNAMDIHow about the responses of Councilmember Mary Cheh?
MADDENWell, Mary Cheh was interesting because she…
NNAMDIWard 3 council member.
MADDENWard 3 Councilmember Mary Cheh has been a supporter of trying to limit money from contractors to folks running for office in the city. But as we showed her, you know, when we crunched the numbers we were able to find an example of when a contractor made donations to her campaign the same week that their contract went to the Council for approval. And, you know, she told us she was shocked. You know, she had no idea. And she told us that, obviously -- that she said that this -- there was no influence here, but she also, you know, knew that it looked bad.
NNAMDIAnd, Craig, is there a sense that when a council member, like Mary Cheh or Chair Phil Mendelson tells you they didn't know about these contributions that came in around these votes, that they're keeping their campaign separate from District business? Or that they're -- simply want plausible deniability?
HOLMANYeah, it isn't very realistic to assume that council members don't know where their campaign money is coming from and who is a government contractor on a contract that they voted on. That's just not very realistic. Now, I'm not saying people like Mary Cheh or others, you know, are being overly influenced by the campaign contributions. In some cases, particularly Mary Cheh or Tommy Wells, they've supported good pay-to-play legislation. So they recognize there's a problem.
HOLMANBut realistically, they also know any government contractor that's making a campaign contribution to their office. And, you know, it just doesn't get them out of the problem of this pay-to-play corruption. It's hard to turn your back on someone who just handed you a wad of cash and pretend that, you know, maybe you shouldn't do something reciprocal, nice toward that person in return.
NNAMDIWell, let me go with Council Chairman Phil Mendelson's response. "Okay. The optics are bad, but there's no evidence of any wrong doing here. You may be exaggerating the problem. There may be no problem here because there's no clear evidence of wrong doing." How would you respond to that, Craig Holman?
HOLMANLet me repeat, the District of Columbia is smack dab in the middle of a very real pay-to-play corruption scandal. So the idea that there's just a potential appearance problem, just does not -- it does not carry water here for the District of Columbia. We are stuck in a pay-to-play corruption culture in the District of Columbia. It's not just an appearance.
NNAMDIPatrick, from the perspective of contractors, what sense did you get for the pressure they feel and whether they do feel pressure to contribute to campaigns and their motivations for doing so? We talked earlier about Joe Lorenzo (sp?), but how about others?
MADDENMany contractors I spoke with believe that there is not a problem, that they're making donations, you know, because they support the folks running for office. They believe in the policies that that person is running for and that the campaign contributions are not tied to their firm's business. And they also would point out that, you know, it's really hard to control all of the employees in your company, you know, from making contributions.
MADDENBut I did speak with other contractors who wouldn't go on the record, basically because they were worried about losing future work with the city, but they would say, you know what, this is a problem. We feel like we have to give money or else, you know, we could be at risk of losing work. So when there's fundraiser we will go there and we will make donations.
NNAMDICraig, what responsibility do these contractors have, either to the candidates or to the public, to be more conscientious? Can we hold contractors accountable?
HOLMANWe can definitely hold contractors accountable. First of all, I want to emphasize, you know, when you take a look at those who make campaign contributions in the American public, it's a fraction of 1 percent of Americans makes campaign contributions. When you take a look at what's going on in D.C., which Patrick Madden's study has uncovered, there are $5 million dollars in campaign contributions in recent years from 300 firms.
HOLMANI mean these businesses are either showing an exceptional notion of civic duty or they understand they've got to pay-to-play to win these contracts. So companies should start realizing and I -- they already do realize what they're doing by making these campaign contributions. And D.C. should move ahead with a good pay-to-play law and start banning these types of corrupting contributions.
NNAMDIA reminder of the news bulletin we just shared with you. Again, the Capital Weather Gang is reporting a serious tornado warning for Arlington. It includes Arlington, Alexandria and portions of Southeast and Central D.C. until 1:00 p.m. A reminder that a warning is more serious than a tornado watch, so you should take precautions and remain vigilant outside between now and 1:00 p.m. when that tornado has been issued for.
NNAMDIBefore we go, Craig, as we look ahead, not just to Election Day in D.C., but to midterms across the nation and a presidential election in 2016. What do you think this issue can show us about our electoral process more broadly?
HOLMANWell, there's a great deal of problem by having a political system that's based upon private campaign contributions. I mean, we could resolve -- we can directly resolve the pay-to-play problem that's so prevalent in the District of Columbia by banning contributions from government contractors. But if we wanted to deal with the broader problem of corrupting money in politics, you know, going towards a public financing system is really the best solution. However, for D.C., you know, at this point there's a very real specific problem going and good pay-to-play legislation would address that problem.
NNAMDIAnd before we go, Patrick, I think you want to address this question from Gerri, in Washington, D.C. Gerri, you are on the air. Go ahead, please. Hi, Gerri, are you there?
GERRIYeah, can you hear me?
NNAMDIYes, we can, Gerri.
GERRIGood. Yes. Thank you so much for this great program. It's so important and valuable at this time of year. And thank you, Patrick and A.U. grad students and WAMU and Public Citizen. This is awesome. This is really awesome and it gets me going as an activist. Where can I see this information? Do you -- will you have it online?
MADDENYes. If you go to our home page, WAMU.org, the project is -- should be right -- it should be front and center.
NNAMDIThat's our homepage, WAMU.org. You can also find a link at our website, kojoshow.org. Thank you very much for your call. Patrick, any action we're likely to see from the Council on this anytime soon?
MADDENWell, that was the one point I wanted to make. Probably not, just because when we counted up all the contributions, it's clear that this is a significant source of fundraising for council members once they're in office.
NNAMDISo that if the Council were to pass a law saying that contractors or people seeking to do business with the city cannot make campaign contributions to members of the Council, how would that affect the fundraising of incumbent council members?
MADDENIt would make it a lot harder for them.
NNAMDIIt would put a big dent in their fundraising.
NNAMDIWell, we'll have to see how they're dealing with that. Patrick Madden is a reporter for WAMU 88.5 news. Craig Holman is government affairs lobbyist for Public Citizen, where he focuses on campaign finance and government ethics. Craig, thank you for joining us.
NNAMDIPatrick, thank you for your work.
MADDENThank you, Kojo.
NNAMDIWe're going to take a short break, but a brief reminder here that there is a tornado warning for Arlington that has been expanded to Arlington County, Prince George's County, eastern Fairfax County and the Central District of Columbia, including Southeast Washington. So please beware of that. It lasts until 1:00 o'clock. When we come back, the lasting effects of food on the brain from childhood to old age. I'm Kojo Nnamdi.
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