Corruption’s Second Slap

Former Bell city employees at a bail reduction hearing in September 2010, from left are Robert Rizzo, former city manager, Angela Spaccia, former assistant city manager, Victor Bello, former council member and Oscar Hernandez, former mayor. / REUTERS

If having corrupt city officials isn’t enough, there’s a double whammy waiting for municipalities trying to root out corruption. It comes in the form of high legal bills.

The Los Angeles Times reports that stolen money isn’t only the only woe that municipalities with corrupt officials face.  It costs money to fight corruption – a lot of it, which leaves many cities reeling with new costs as they try to turn over a new leaf.

Take Bell, California, a celebrated case where former city administrators and other officials faced charges of allegedly stealing millions of dollars by giving themselves exorbitant salaries and benefits. The cost to clean up the mess?  An additional $1 million a year in legal bills faced by the cash-strapped town.

And, the city attorney predicts that these high bills could continue for another two to five years.  This is money, say Bell officials, that could have helped pay for a much-needed upgrade to the city’s  poorly-functioning sewage system.  That will have to wait.

A chart  accompanying the LA Times story lays out the legal costs in stark detail, city by city.  In Lynwood, California, legal bills have risen to an average of $1.5 million a year following corruption charges against various city officials, including the former mayor.

However painful, it may be money well spent.  Corruption is one form of ripping off average citizens. It takes guts, transparency and cash to put an end to it.

Sweep to Corruption can leave cities with enormous legal bills

Two powerful women leaders of global standing meet and what do they talk about?  Rooting out corruption.

Secretary of State Hillary Clinton met with Brazil’s president  Dilma Rousseff in the capital of Brasilia and gave a shout out for open governments and transparency as they best way to fight corruption.   The statement came before representatives of 55 nations gathered at the first high-level meeting of the Open Government Partnership, started last year by Rousseff and President Barack Obama.

The Associated Press quoted Clinton as saying “The cure against corruption is openness. We believe that countries with open governments, open economies and open societies will increasingly flourish, they will be more prosperous and they will strengthen their democracies.”

Rousseff, who had never held public office before being elected president, has become popular for her anti-corruption efforts.   For this, she was praised by Clinton, who said that Rousseff was setting a “global standard” for openness and transparency.

Sweep to Clinton: Transparency combats corruption

Another tale of how the mighty have fallen, in this case in Louisiana, where corruption and bribery is so prevalent it often fails to shock.

This one, however, is a shocker. An investigative report from The Times-Picayune, says that  Robert Isakson, a former FBI agent and an anti-corruption crusader,  is now under investigation by the public corruption squad he once headed.

Iskason had the reputation of a straight-arrow. After leaving the bureau thirty years ago,  he became a government contractor,   and one dedicated to staying on the right side of the law and exposing those who did not.  Among his targets where war-profiteers in Iraq and bribe-seekers in post-Hurricane Mitch Honduras.

Now, according to the newspaper, the FBI is looking at payments made by Iskason’s construction companies to the former Plaquemines Parish sheriff and his driver. The payments came just before  Iskason’s companies got $3 million in contracts from the sheriff’s office.

And what does the sheriff, Jiff Hingle  have to say about all this?  Hard to tell. He resigned last year after pleading guilty in an unrelated bribery scheme and is awaiting sentencing.

Just another day in Louisiana.

Sweep to Corruption investigation of disaster-recovery firm  takes aim at former FBI supervisor

Leslie Wayne

Leslie Wayne

Leslie Wayne, former senior editor at 100Reporters, is an award-winning business reporter, formerly at The New York Times. Ms. Wayne joined The Times in 1981 and has covered Wall Street, banking industry regulatory reform, municipal finance scandals and, most recently, the aerospace and military industries. Ms. Wayne has an M.B.A. in finance from Columbia Business School and was also a Knight-Bagehot Fellow in Business and Economic Journalism.