Illinois, at least, pursues ethics violations

2009-04-24 / Business

Story and Photo by John Temple Ligon temple@thecolumbiastar.com

In the first week of December 2008, federal prosecutors said Illinois Governor Rod R. Blagojevich "brazenly put up for sale his appointment of Barack Obama's successor in the U.S. Senate," according to reports in The New York Times.

The U.S. attorney for the Northern District of Illinois, Patrick J. Fitzgerald, announced the arrest of Blagojevich and his chief of staff, John Harris.

The Times further reported, "The governor is accused of racing to solicit millions of dollars in donations from people with state business before an ethics law bars such behavior in January (2009), and threatening to rescind state money this fall from businesses, including a Chicago hospital for children, whose executives refused to give him money."

In South Carolina, the laws have been on the books since the post- Watergate era of political campaign reform. For example, South Carolina's Section 8- 13- 1342, Restrictions on contributions by contractor to candidate who participated in awarding of contract: No person who has been awarded a contract with the State, a county, a municipality, or a political subdivision thereof, other than contracts awarded through competitive bidding practices, may make a contribution after the awarding of the contract or invest in a financial venture in which a public official has an interest if that official was in a position to act on the contractor's award. No public official or public employee may solicit campaign contributions or investments in exchange for the prior award of a contract or the promise of a contract with the State, a county, a municipality, or a political subdivision thereof.

According to the local chapter of the American Institute of Architects, its members cannot compete on price. So the AIA's rules of ethics essentially bar an architect's campaign contributions to a politician where the architect can foresee a design commission opportunity to take. Of course, according to Section 8- 13- 1342, the architect cannot contribute after the awarding of the design commission.

In a brief check of market conscious combined architectural/engineering fees, total package, for a standard Hilton hotel between 230 and 300 rooms, the comment, "Maybe $250,000, but no more than $300,000," came up from hotel developers. In its final form, the Hilton hotel built as the headquarters hotel for Columbia's convention center on Senate Street cost just under $400,000 for the full design and construction documentation and construction contract management fee.

Stevens & Wilkinson of South Carolina signed a memorandum of understanding with the City of Columbia, signed by City Manger Austin in the spring of 2003, that allowed for about $2.3 million to cover the complete A/E services for a 300- room Hilton at the corner of Senate and Park.

Whatever extra services that might have been considered under $2.3 million but not under $400,000 cannot be known. Maybe none.

The A/E contract signed by the city and by S&W, then, does not appear price competitive. And, again according to the AIA, price competition is not how architects are allowed to develop business.

First, the preferred firm is announced, then the fee is discussed. If the fee comes in too high, the client/customer can move on to the next firm in preference. There was no firm under consideration as the next firm in prefer- ence. The $2.3 million price held.

The memorandum of understanding was signed in the spring 2003, and S&W donated $1,000 to the campaign fund of city council member E.W. Cromartie on December 22 of the same year, several months after the signing of the contract.

Two years later, on December 30, 2005, S&W contributed $500 to Mayor Coble's campaign fund. S&W also contributed $2,000 on August 24, 2004, to Mayor Coble's political action committee.

Again, according to Section 8- 13- 1342, No person who has been awarded a contract with... a municipality, or a subdivision thereof, other than contracts awarded through competitive bidding practices, may make a contribution after the awarding of the contract..."

The State of Illinois through the U.S. attorney for the Northern District of Illinois appears to understand the law and when the law has been broken. The federal government, as in South Carolina's Lost Trust scandal decades ago, comes into the picture when the state fails to act.

In this case, apparently, members of city council may not be adhering to the laws of the State of South Carolina. It might be reasonable to ask the South Carolina attorney general to help here as he did in the current matter of the governor's control over the stimulus money offered by Congress.

Failing action by the attorney general, possibly the U.S. attorney of the District of South Carolina, as in Illinois, might take an interest.

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