Not-so-healthy 'Healthy Holly' lessons for Baltimore, Detroit

Originally published in The Hill

Carol Park, James Hohman May 27, 2019

Maryland and Michigan are very different states, but Baltimore and Detroit have a lot in common: high crime rates, high poverty rates, bad governance and rampant corruption. They’re not alone, but states can encourage local governments to fix these problems that have become far too commonplace.


Recently, Baltimore Mayor Catherine Pugh came under investigation for allegedly using her office to enrich herself. She is accused of leveraging a board position she held to deliver contracts to vendors, with payments laundered through sales of her children’s book, “Healthy Holly.”


It’s not just Pugh. In recent years, high-profile public corruption cases have been brought against Sheila Dixon, Baltimore’s first sitting mayor to be indicted, and state Sen. Nathaniel Oaks, a Democrat, who resigned after pleading guilty to corruption charges.


Detroit has been racked with similar corruption problems involving city officials, school officials and others. Even employees of the city’s library went to prison for bid-rigging.


Recently, an official in the city’s demolition program, which receives federal tax dollars to tear down vacant homes, was charged for delivering bid information to a company in exchange for bribes.


Last year, Detroit Councilman Gabe Leland was indicted on bribery charges. Multiple Detroit school principals have been sentenced for delivering contracts to companies in exchange for cash and gifts.


Constant scandals ought to be a wake-up call for Detroit. For a city struggling with high rates of crime and poverty, another corrupt leader is the last thing that residents need. When they lose faith in their leaders, they can lose hope for the city.


For both Baltimore and Detroit, mismanagement is a core problem behind government corruption, which is why honest officials ought to try to fix their management systems.


Accounting and auditing processes are meant to ensure that public money goes to its specified purpose. Two different auditors review transactions to ensure that administrators don’t abuse financial systems. And bid specifications should be set by officials who know what the government needs.


But these basics break down when officials are corrupt. In other words, they can’t steal thousands of dollars unless they first mismanage millions.


Yet it is tough for policymakers to prevent corruption. Bribery already is illegal and carries harsh punishments. The FBI takes it upon itself to identify and charge officials for public corruption.


Perhaps state policy can help. Michigan funnels a lot of money to Detroit, as Maryland does Baltimore. None of it, or any other state payment to cities, should go to officials who abuse the public trust for personal gain. Local governments should face direct fiscal consequences from the state when city officials are convicted of corruption. This might not root out all corruption, but such policies can create a strong fiscal incentive to ensure that money is spent well.


However, city residents may decry punishment for municipal governments that are struggling financially. Taxpayers are harmed by their officials’ malfeasance, and taking away resources can hurt them even more. Such consequences may not be fair.


That’s why there ought to be a way to avoid penalties. Policies could be designed so as not to penalize cities when the corruption is reported by the city’s own employees. The people most likely to blow the whistle on malfeasance are employees of an administration who have insider knowledge about how city government is supposed to work.


In the case of Baltimore, it took way too long for Mayor Pugh’s “regrettable mistake” to come to people’s attention. Detroit government and employees should learn from this. Courageous insiders can step up to expose apparent wrongdoing.


City governments need to take corruption problems seriously. Residents of Detroit, Baltimore, and other cities deserve to have governments that work for them, instead of working to enrich city leaders.


Carol Park is a senior policy analyst at the Maryland Public Policy Institute. Follow on Twitter @MDPolicy.

James Hohman is the director of fiscal policy at the Mackinac Center for Public Policy in Midland, Mich. Follow on Twitter @MackinacCenter.