A few billion here, a few billion there, Hill-topers say, and pretty soon we’re talking about real money. That’s a weight off my back?I certainly don’t want them fretting about responsible spending. No doubt this year’s $4 million earmarked in the transportation bill for bike paths is a non-negotiable.
For watchdog afficionados, Washington offers even more than the federal government’s insuppressible pork barrel spending. You get the D.C. government, whose well-intended, but wayward, spending initiatives are getting more attention.
A recent Washington Post investigation found that just 70 of 200 publicly-funded development projects were completed. It’s a dismal record, especially given the $100 million community development corporations have received over the last decade.
Why CDCs?nonprofits funded by the public that are supposed to invest in job-rich ventures in depressed neighborhoods?receive money and fail isn’t all that difficult to understand: The fact is that there’s an incentive to do so. Each of the four major CDCs has been headed by a director with strong political connections that have bought the CDC considerable autonomy. The city foots the bill, while CDC executives, free from consistent scrutiny, draw considerably compensation with perks (think luxury cars), use public funds for for-profit subsidiaries whose successful ventures augment the executives’ pay, and direct loans meant for capital-short start ups to friends of the boss. It’s a set-up that encourages the fleecing of the public.
Now, no one will say CDCs haven’t put up some projects. An executive for the H Street Executive Corporation who has recently been challenged for his use of federal funds to cover administrative costs at the CDC’s private, for-profit subsidiary can also claim credit for a 284-room apartment complex and 43 single-family homes. Still, is that $10 million worth of progress? Plus, no good work justifies some apparently glaring abuses of the public purse. How H Street’s general counsel got a $25,000 loan to set up a law firm is unclear. That money is meant for low-income start-ups who can’t brandish a general counsel’s resume to get a loan. So much for conflict-of-interest regulations. How would we feel if credit union employees just loaned our deposits to themselves?
Consider one more CDC called the People’s Involvement Corporation, even though the people in the LeDroit Park area?a neighborhood around Howard University east of Georgetown?argue that it is not for the people nor does not it invite their involvement. It does seem to be a pretty crooked corporation, though.
PIC had very close ties to former D.C. Councilmember and chair of the Economic Development Committee, Charlene Jarvis. It seems as if PIC’s political ties secured it more public money, even as it failed repeatedly to do its job and follow the law. PIC has promised for years to renovate dilapidated schools and received over $4 million in city loans, grants and tax credits. Perhaps you’ve gotten the point, but I’ll say it anyway: PIC hasn’t touched those schools.
It also hasn’t touched enough tax forms in recent years. PIC was delinquent in over $100,000 worth of tax payments and deep in debt before Jarvis yanked her support in 1999. Perhaps she foresaw that PIC’s failure to fulfill its promises would make her vulnerable in her 2000 City Council race. It did, and she lost, to Adrian Fenty.
When it comes to CDCs, that was a rare case of accountability, even if it wasn’t the CDC that got voted out of office. But perhaps some of their leaders should be.
