Crony capitalism in Florida—and beyond

Florida’s Chief Financial Officer Jeff Atwater recently resigned. The stepping down of the state’s CFO would not normally be big news. What percentage of Floridians have ever heard of Jeff Atwater or know what the state’s CFO does anyway? As it turns out, the story of Atwater’s work and his parting thoughts, reported in The Miami Herald (July 2), is more interesting that it sounds.

Atwater’s job was to watch over the $83 billion the state spends each year. His challenge was not just finding out where it all goes, that’s the easy part compared with the rest. The tougher challenge was making sure the process by which the money was assigned was honest, fair and open. What Atwater had to say on his way out the door makes it clear this was “Mission: Impossible.” The implications of that are important for the citizens of Florida and holds lessons for the other 49 states and the federal government.

I will start with one basic fact. By now in this state, privatization has gone wild. Governing Florida basically has been turned over to business. The clearest proof that this is fact and not fake news is that this year the state will contract out to business more than $60 billion of the $83 billion it will spend. That means that private companies do almost three-fourths (72 percent) of the state’s work.

It’s a neat scheme to turn over a huge chunk of what the public pays the state in taxes to a relatively small number of private contractors who profit richly and operate under a very lax set of state controls. The result is crony capitalism. It’s a formula for fraud, waste, abuse and corruption—in other words, the identical set of ills privatizers and politicians use to malign government, take over its functions, and profit from public money.

Atwater tried to curtail some of the worst abuses of this intrinsically incorrigible status quo by introducing a dose of transparency. But as a former state legislator, who knew first-hand how easy it was for legislators to insert into bills special clauses to favor clients, he must have known he was tilting at windmills.

The huge role private contractors play in doing the work of this state and others—and increasingly that of the federal government—has been sold as the way to bring government up to the supposedly high level of efficiency of business. Instead, the state essentially lets its contractors get away with murder, paying more for less, thereby putting the lie to the efficiency argument.

According to the Herald, the state:

• doesn’t hold vendors accountable for services they agreed to provide;
• allows contractors to charge for things not included in the bids;
• fails to recover damages when the vendor won’t complete a task correctly or on time;
• renews contracts when a vendor fails.

But none of this happens because of the alleged ineffectiveness of government. Instead, it reflects the efficient functioning of a corrupt system. As Atwater explained, when there is a failure of the state to hold a contractor’s feet to the fire: “You don’t have to go far to track that back to a lobbyist who had a client.”

The Herald described Atwater as the state’s “financial watchdog.” But there were so many restrictions on what Atwater could do and so many ways around him that as a watchdog he was more Pomeranian than Pit Bull. No wonder that, as he leaves government, Atwater sounds like a frustrated reformer.

The sort of things Atwater faced are pervasive in Florida and have perverse effects. The legislature this year will force public school districts to turn scarce money to charter schools, which are run privately. Bet you can trace that back to one or more lobbyists. Efficiency? This year the public schools in Miami-Dade outperformed charter schools.

This corrupt, inefficient, crony capitalism model is exactly what President Donald Trump wants to use if he ever gets around to that huge infrastructure project he promised during the campaign. That’s in line with Trump’s and the Republicans’ ideological zeal to redistribute income upward, for example by using dollars that pay for vital medical care for poor people to give a huge tax break to millionaires and billionaires.

If it ever goes off the ground, Trump’s infrastructure plan would convert money paid by the public through taxes to do things like build highways into profits for contractors who will overcharge for building them and then charge the public a fee for using them. It’s the archetype GOP scheme: the public gets the shaft on both ends and it’s all gravy for the profiteers.

That this way of governing has become so predominant, from the state house to the White House, seems baffling in a country which is supposed to be a democracy. Why don’t we just throw the rascals out? Volumes have been written about this question and many more will be written. Perhaps the outrages of the Trump era will make more Americans realize how far this country has strayed from democracy — and rebel.

It may be beginning to happen. The ideological excesses of the ruling far-right could mobilize all the rest of us against them. It’s a good sign when, on Fourth of July weekend, which is devoted to celebrating democracy and independence and eating hot dogs and drinking beer, demonstrators pour into the streets to demand Trump’s impeachment.