Corruption - who pays??

        The Charbonneau commission recently revealed the degree to which the Québec construction industry is infiltrated by organized crime (mafia).

- Cartels to fix prices and determine whose "turn" it is to get a city contract apparently are common in some large municipalities like Montréal. 

- Kick backs to corrupt civic officials inflate the cost of municipal contracts to taxpayers (who already complain about being overtaxed). Thus, exorbitant - and unnecessary - cost overruns are overlooked by those payed to monitor civic expenditures (in return for a chunk of the overrun or lavish gifts or cheap house renovations, etc). 

- Commentators estimate that taxpayers are getting dinged to the tune of 30% of the real cost of municipal contracts. 

          Outrageous! This is the stuff revolutions are made of..

highway closed by debris falling from overpass

            If it only ended there it would be bad enough - but it doesn't just end at the public being cheated. Property is being damaged or destroyed, people have actually died. Saturday, September 30, 2006 near Montréal, Québec, a section of overpass falls onto the highway below, crushing two vehicles. Toll: 5 dead, 6 seriously injured. The resulting inquiry produced a litany of faulty design features, missed inspections, sloppy work and maintenance.

http://en.wikipedia.org/wiki/De_la_Concorde_overpass_collapse

            And if a mafia polluted construction industry in cahoots with corrupt municipal officials were not bad enough we also have to contend with the logical inanity and moral depravity of neo-conservative inspired cuts to regulatory agencies.

". Accused of consistently putting off repairs to pass balanced budgets, the Quebec government has since increased spending on highways and projects and has increased infrastructure spending for future budgets."

          Right! The public pays less taxes for less services to obtain those sacrosanct balanced budgets and people have to die for it - right? The irony, of course, is that some of the good bourgeoisie dying probably voted for the neo-con budget cutters whose policies killed them. Instant Karma..

         On a deeper level what, if anything, does the Charbonneau Commission teach us? The message is actually a pretty mixed one, from my reading. The positive side is that we live in a society in which - at least in principle and, from time to time in reality - public officials are held accountable for their management of the commonwealth or common good. Apparently the process is cyclic. Corruption builds up over time. The public becomes scandalized due to the action of a few muckraker journalists and other do gooders (footnote 1). A big stink follows - like the Charbonneau Commission and its potential sequels. The old bums - the masters of the Old Political System - are thrown out. They are replaced by younger - or in times of rapid transition - young idealists. The system is reformed and runs cleanly for a few decades. Then, the rot of cronyism inevitably sets in. Corruption spreads and in about 40 years, you are back where you began again. This cyclic nature of corruption / collective cleansing might provide a minimalist functional definition of democracy: democracy is a means of keeping the political, economic and social systems on a relatively even keel by periodically purging them of corrupting influences. Like a good purge or sauna every couple of weeks..

          I suspect that another reading might be that democracy has to be "returned" to the people (if ever it was taken away in the first place..) This is a problem raised by French sociologist Jean Claude Guillebaud in his work. At the beginning of the Revolutionary Era - the American and French Revolutions, latter part of the 18th century - things seemed pretty straight forward. The Three Revolutionary Principles of Liberty, Equality and Fraternity appeared non-contradictory. But, over time, the very success of the revolutionary bourgeoisie revealed contradictions between the three revolutionary principles. Freedom, unfettered, allowed some individuals to accumulate "excessive" amounts of wealth which in turn, gave them more power over others with less wealth. Thus freedom was found to be, partly, opposed to equality. Fraternity has also proven elusive when inequalities of wealth pass certain, hard to define, limits.

           It is likely that the coming ecological / demographic / economic / social crises will force us to re-evaluate the Three Revolutionary Principles and their value in modern technical societies. We will be forced to assess the possibility of achieving some form of them in the post cheap energy era we are now entering. We are already seeing some of these re-evaluations taking place in North America over the question of security. Since the 9-11 terrorist attacks, Americans have come to prioritize "security" over "freedom": "if you are not doing anything wrong, you have nothing to fear" is an argument used to rationalize increased surveillance by the state or private corporations payed by the state to enact such surveillance. This is one possible choice..

            An epoch like the one we are entering may, if we play our hands well, actually serve to re-invigorate the revolutionary principles. This would happen if, for example, reduced per capital energy consumption led to the decentralization of economic activity coupled with concurrent democratization of ownership of the means of production (worker coops, worker / consumer coops, creative schemes of social enterprise..)

           Whatever the long term outcome of the Charbonneau Commission it has served a necessary reminder - to be administered periodically! In matters of corruption, it is always the public who pays in the long run.

internal blog links: keywords: Charbonneau (7 entries)

footnotes:

1- muckraker: a militant, investigative journalist fighting for social justice or other Common Good causes

http://en.wikipedia.org/wiki/Muckraker

Montréal rock 'n roll

               In Québec the expression "rock 'n roll" signifies not just the musical style but also has judgemental values close to "badly raised", "delinquent", "of bad reputation"..
  

               For the past 18 months, the Charbonneau Commission has been investigating the linkages between organized crime and the awarding of municipal contracts to the Québec construction industry. The existence of construction company cartels with links to the Mafia and to the funding drives of municipal and provincial political parties has been revealed. Cartel members agree upon the price of municipal contracts and who is next on the "list" to get a contract. Prices are inflated and unnecessary cost overruns are incurred with the aid of colluding officials and bureaucrats. For example, the contract's "fair market" price will be inflated by 30%. Inflated costs will be ignored by city employees whose job is to scrutinize contracts - in return for a "cut" of several percent of the total worth of the contract, of course. In general, several layers of corruption may be involved, each peeling off a few percent of the contract's value. The contractors and the mafia roll in the big bucks. Minor players in city hall and consulting firms live a life of perks. 

              Question: if you have an extra 10 grand or so payed under the table per annum, what exactly are you going to do with it? It is, after all, "hot" money. From the responses I've heard from witnesses at the Charbonneau Commission, there is a strong pressure to burn hot money, presumably so it won't show up on ledgers anywhere. So it gets burned on high living for corrupt officials. In the case of ex-mayor Gilles Vaillancourt of Laval, who was a local godfather type figure - "the King of Laval", millions of dollars were allegedly spirited away to overseas tax havens.

King of Laval used mules to smuggle $ to Swiss banks

              Meanwhile the public overpays a neat 30% on city (and provincial) contracts. And then, we are told by the politicians, we need to cut government, education, social services, pensions, rehabilitation programs.. And of course gotta crack down hard on phony refugee claims, welfare bums and recidivist unemployment assurance claimants, all those who try to "game the system". Indeed.. And so Pincocchio's nose grows.. 

                  There is, of course, a price to payed for this silliness, a potentially very high price in social disruption. In the article cited above, a reader poll revealed some exceedingly disquieting statistics:

Do you think the police will ever get to the bottom of corruption in Quebec politics?

9% Yes 130 votes

84% No 1255 votes

6% I'm not sure 93 votes

                  This is scary! With my - apparently - Pollyannaish view of life, I voted unhesitatingly "yes" on the poll question. To me, there is a cyclic element in the life of corruption. The beast grows strong until its depradations become intolerable. Then some knights in shining armor go and kill it and establish a New World Order. Till the beast ressucitates.. In the meantime, one enjoys a period of transparent and progressive government. That's how it's supposed to work, anyway..

                 I was actually looking forward to a period of clean government, following this big house cleaning. With a bit of luck, I envisioned a forward looking, rejuvenated Québec that could actually become a model for other jurisdictions in North America - and elsewhere - to emulate in these early days of the new century..

                 I also took a bit of pride in being Québécois for another reason. I live in a society which has some expectations of governmental transparency, intellectual honesty and fair play. If we did not have this shared - mostly uncounscious - backdrop of assumed moral values, an exercise like the Charbonneau Commission would simply be unthinkable. If we didn't have a Charbonneau Commission, then we would really have a lot to worry about.. :-0

                 The undercurrent of cynicism revealed in the above poll is, to me, very disquieting. While the respondants of the poll do not necessarily reflect the views of the general public, 90% of the respondants believe that our political system is so corrupt it cannot be reformed. Is that not a formula for fascism? Powerless people will seek a superhero, a messiah, who will sweep away the evil Old World Order and institute a New Age of Peace and Plenty. The 20th century, we should recall was awash in blood shed by the neo-messianic movements of deperate peoples whether Marx's utopian Classless Society or the Nazis' (equally utopian!) "thousand year Reich" with its apocalyptic (post-)Christian overtones:

tausendjähriges reich 1 - thousand year Reich

                  Anyway, back to cheerier topics. "Montréal rock 'n roll". In the last few months, several mayors and lesser luminaries have been forced to resign including Montréal's ex-mayor, Gérald Tremblay. Tremblay was replaced by interim mayor Michael Appelbaum who now, himself, is under criminal investigation for fraud, breach of trust, corruption and God knows what else. Fourteen counts, at my last counting. What major American city can outfunk good ol' Montréal rock 'n roll?

Montréals' harried ex-mayor being led to court by provincial police.

                 We'll even give Toronta the Good a run for their money with their (allegedly) crack-smokin' mayor Rob Ford.. Yah, suck it up Toronta..

http://www.cbc.ca/news/canada/montreal/story/2013/06/17/montreal-michael-applebaum-taken-into-custody.html?cmp=rss

                   At last notice, the Province of Québec was still debating whether the city of Montréal should be placed under trusteeship. Interesting times!


 

Turning over rocks: the things you find..

           When I was a child, there was a patch of undeveloped swampy land behind our house, fed by a spring. There was tall grass, so high I remember it being over my head - fantastic place to hide! There were big grass snakes slithering around, hunting. And there was a shallow bog which held water all year round, except when it froze solid in winter. In the higher, drier spots of the bog there were discarded bits of lumber and some big rocks. When you turned these over you would find an amazing zoo of light shunning creatures: ant colonies, spiders, centipedes, earwigs, worms, woodlice.. I even saw my first slime mold ameba.. Sadistically, I would occasionally lure another kid to see one of my prized "collections" of creepy-crawlers. Sometimes I wouldn't have time to finish turning over a rotten board or a flat rock before I saw their backside cutting a wake through the tall grass to get the hell out there as fast as possible..

           When governments lose contact with their true function: to provide services essential for the maintenance of a civlilized society, they become like that bog of stagnant water. Strange lifeforms which shun the light of day proliferate and take over. When the bog becomes too stagnant and stinks too much people finally decide to drain it and clean it up. Investigators, whistle blowers and muck-raking journalists turn over rocks and expose what has been hidden to the light of day. This is what transparency looks like in action..

           Québec province's Charbonneau Commission into organized crime influence in the construction industry has claimed its first victims.

            Montréal mayor Gérald Temblay decided to step down as the heat went up and accusations of corrupt practices in the metropole's city hall came to light. As Don Macpherson noted in a recent column, the Charbonneau Commission also has a mandate to investigate corrupt political linkages between the construction industry and the financing of political parties, both municipal and provincial. These links may prove the greatest embarrassment of all. Mayor Temblay denied any knowlege of inflated contract prices and an organized system of kickbacks to collaborating city officials in Montréal. But resign he did and not without signficant political fallout. The Mayor's ruling municipal party found itself so weakened and morally compromised that it was forced to cancel tax hikes that been announced a mere two days earlier. The municipal tax hike was pared back from 3.3% to 2.2%, reflecting the annual inflation rate. It was simply too embarrassing to demand super-inflationary tax hikes while city hall is under suspicion of accepting bribes from mafia-ridden construction companies to inflate city contracts. Contracts may have been, in some cases, inflated as much as 30 to 40% over their real value. Corrupted city officials are alleged to have received skim-offs of 2 to 3% of the final contract value to let the inflated estimates pass without question.

              There has already been blow back from the Charbonneau Commission at the provincial level. Ex-premier Jean Charest (Libéral) was, more or less, forced to call an early, summer election rather than face the storm of corruption charges that the Commission would unleash. He lost that election..

http://www.montrealgazette.com/news/Macpherson+Charbonneau+commission+least+some+Quebec/7512778/story.html

             Nor were Mayor Tremblay and Premier Charest the only early victims. The city of Laval's "king", Gilles Vaillancourt, was forced to fall on his sword after a 23 year reign. The heads have only started to roll, one suspects..

              Investigators are looking into allegations that Mayor Vaillancourt funneled millions of dollars of dirty money into overseas tax havens. In addition, two provincial officials have stepped forward claiming that he offered them illegal political contributions.

http://www.cbc.ca/news/canada/montreal/story/2012/11/06/laval-mayor-gilles-vaillancourt-steps-down.html

             A smorgasbord of articles on the Charbonneau Commission by Macleans Magazine:

http://www2.macleans.ca/tag/charbonneau-commission/ 

internal blog link: http://transparencycanada.blogspot.ca/2012/11/the-right-hand-knows-not-what-left-hand.html

While the inquiry is usually described as being into corruption into the construction industry, its mandate also includes possible connections to political financing.

Read more: http://www.montrealgazette.com/news/Macpherson+Charbonneau+commission+least+some+Quebec+politicians+nervous/7512778/story.html#ixzz2Co9uQ55x

While the inquiry is usually described as being into corruption into the construction industry, its mandate also includes possible connections to political financing.

Read more: http://www.montrealgazette.com/news/Macpherson+Charbonneau+commission+least+some+Quebec+politicians+nervous/7512778/story.html#ixzz2Co9uQ55x

http://en.wikipedia.org/wiki/Charbonneau_Commission

The right hand knows not what the left hand does..

           According to conventional neoconservative, Free Market ideology, reducing the size of government and eliminating regulatory mechanisms leads to increased efficiency (government is defined to be inefficient as an axiom of the belief system whether or not, in any given instance, it actually is).

           Like many "common sense" propositions, "cutting fat to improve efficiency" is, at best, only partly true, of limited (though real) applicability. Like all good, but limited, ideas, carrying it to illogical limits leads to destructive, counterproductive blowback (unintended consequences). 

           A good example of the such blowback was revealed in the Charbonneau Commission's investigation into corruption in the construction industry in the Province of Québec.

Wiki: Charbonneau Commission

            Budget cuts can lead to increased expenses in the long run, if they are not judiciously implemented and monitored to optimize the benefit to cost ratio of services provided to the public sector (that is, if cuts are implemented in a hamfisted, ideologically driven fashion). 

            One of the witnesses being grilled before the Charbonneau Commission into construction industry corruption in the city of Montréal observed that staff reductions in the Montréal Public Works Dept meant that oversight of public work contracts was reduced. The reduced oversight had the perverse, counterproductive effect of making it easier to inflate cost estimates and pay off corrupted officials. For example, cost overruns on projects would be inflated or simply invented with a kickback payed to a corrupted civil engineer so he would approve the additional billing. In addition, with oversight delegated to private sector consulting firms, the city lost the inhouse competency to carry out its own monitoring. This lead to increased costs for oversight and / or to reduced capacity. So the net effect of ideologically inspired budget cutting is to save a few bucks with the right hand while the left hand picks the right hand's pocket. Hidden costs - economists call them "externalities"..

internal blog link: http://transparencycanada.blogspot.ca/2012/10/charbonneau-commission-when.html

Charbonneau Commission: when transparency dies

            Writing this blog has been instructive. The ambient cynicism / political passivity has probably insulated me from the important role transparency plays in healthy political, social and economic systems. I am surprised to discover the degree to which democratic societies are hostage to the word. Who controls the word and how it is spun controls (in the short run, at least) the nature of the political game and the power relations among the various players.

            I have come to look for examples of what happens when transparency breaks down, when structures and political actors become opaque, when information does not flow freely, when news is distorted or "spun" to attribute a desired meaning or signification to an event..

             The province of Québec is a "small" society. Demographically and, especially, ethnolinguistically, it is a small island of francophonie in English speaking North America. This status, this mentality, has its advantages and its disadvantages. The relatively lowered mobility of our elites (the language issue) means that our big shots - nos gros légumes - know each other. They inhabit a small world, evolved from the ancestral farming village where you knew your neighbors and were probably related to them. "You scratch my back and I'll scratch yours" was a survival strategy before the invention of the modern State and insurance policies. Unfortuantely this philosophy, in modern societies, leads all too often to political corruption and the exploitation of unfair advantages: those with money purchase politicians and judges. Québec, as a small society, must therefore constantly be vigilant to eradicate corruption. The seeds of the disease must be extirpated before they have time to spread and infect the entire culture.

http://www.montrealgazette.com/news/Charbonneau+Commission+Lino+Zambito+points+finger/7331677/story.html

                The Charbonneau Commission is investigating corruption in the provincial construction industry. Evidence is coming forth in Montréal that a cartel of ten favored contractors received the lion's share of contracts with the provincial or municipal governments.This favoritism was bought with kickbacks to politicians and "taxes" payed to the Mob (about 3% of project cost in the city of Montréal). Cartel members, in turn, inflated their costs in order to pay for this privilege. And of course, in the final analysis, it is the poor taxpayer who foots the bill. We pay about 30% more for provincial tenders than in the neighboring province of Ontario, for example. How much of that difference is due to political corruption in the construction industry? Perhaps the Charbonneau Commission will shed some light into dark corners. (I suspect a horror movie is coming..)

                 This is what the breakdown of transparency engenders in modern, nominally democratic, societies: public theft, gangsterism, public apathy and cynicism toward the political process. Our declining infrastructure - some shoddily constructed in the first place - has reached the point of posing a physical danger to the public.

http://www.cbc.ca/news/canada/story/2006/10/01/overpass-collapse.html