For Immediate Release
Federal Highway Administration Is Undermining Pay-to-Play Reforms in Illinois
Public Citizen Asks Transportation Secretary LaHood to Intervene
Transportation Ray LaHood to end the Federal Highway Administration's
(FHWA) practice of withholding highway funds from states that attempt
to curb corruption by enacting "pay-to-play" reforms. Most recently,
the FHWA threatened to withhold federal highway funds from Illinois
because of the state's effort to clean up its contracting process.
Given the recent scandals, the state's new restrictions on government
contractors contributing to political campaigns merit praise, not
"Pay-to-play" is the all-too-common practice in which
businesses make campaign contributions to public officials in the hopes
of winning lucrative government contracts. Illinois is the most recent
state caught up in sensational pay-to-play scandals, in which Gov. Rod
Blagojevich allegedly sold government contracts (and nearly a Senate
seat) in exchange for campaign contributions. The Illinois Legislature
responded by joining eight other states, dozens of local jurisdictions
and the Securities and Exchange Commission in restricting campaign
contributions from government contractors.
But not if the Federal Highway Administration has its way.
On two occasions - once in New Jersey in 2004 and now
in Illinois - the agency has withheld billions of dollars in
desperately needed highway construction funds because of state
pay-to-play laws. FHWA officials under the Bush administration deemed
pay-to-play laws not "cost effective" and found that they fail to
conform to federal contracting standards.
"Today's federal contracting standards are among the
poorest in the nation - riddled with pay-to-play corruption," said
Craig Holman, government affairs lobbyist for Public Citizen, which sent a letter today to LaHood about the issue. "States should be applauded, not punished, for attempting to clean up their contracting process."
The FHWA under the Bush administration claimed that
pay-to-play laws restrict the pool of bidders for government contracts.
FHWA Division Administrator Norman Stoner on Dec. 2, 2008, wrote to the
Illinois Department of Transportation that "(f)ederal regulations
expressly prohibit many kinds of requirements that undermine the
competitive contracting requirements."
"It is incumbent upon the incoming Transportation
Secretary to recognize that awarding government contracts on the basis
of campaign contributions rather than merit is not ‘cost effective,' "
said David Arkush, director of Public Citizen's Congress Watch
division. "We saw in New Jersey that contracts awarded to big campaign
contributors turned into costly boondoggles that were poorly managed
and poorly administered."
The infamous Parson's debacle several years ago brought
pay-to-play in New Jersey to the front page. A poorly administered $400
million government contract awarded to Parsons Infrastructure
Technology Group, a major campaign contributor to state officials of
the then-Republican administration, amounted to nothing less than an
indictment against New Jersey's government contracting process. In a
scathing report, the State Commission of Investigation charged that the
primary duty of government to safeguard citizen interests in government
contracting had been "set aside in favor of a deeply flawed initiative
that cost too much and produced too little in the way of satisfactory
results." New Jersey has since adopted one of the most sweeping
pay-to-play laws in the country but was forced by FHWA to exempt
highway construction contracts.
"Pay-to-play restrictions are a narrow remedy focusing
on a specific problem and are designed to ensure that government
contracts are awarded on merit rather than favoritism," added Holman.
"States have the right to ensure that their contracting procedures
conform to the highest ethical standards and offer the best value for
taxpayers. This is a lesson the federal government should learn."
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