13 March 2009

Why Politicians Shouldn't Direct Federal Funding

Los Angeles Rep., Maxine Waters, is under investigation for ties to a bank to which she has lobbying ties. According to the LA Times:

A month before Congress enacted the bailout program, Waters helped set up a meeting between the chief executive of the bank, representatives of other financial institutions and Treasury officials. "When a member of the financial services committee calls, you pay special attention," said Jeb Mason, who was a high-ranking Treasury official last fall.

Ms. Water's husband was on the board of the bank until last year, and remains a stock holder (reported holdings as of 2007 were $500,000).

Waters was a senior member of the congressional committee dealing with the financial crisis when OneUnited Bank -- one of the nation's largest minority-owned institutions -- received $12 million in bailout funds.

This type of corruption is a perfect illustration for the long-standing argument on this blog: earmarks or any other Congressional authority that allows Congress to specifically direct federal funds to individuals, special projects, particular contractors, etc. will inevitably lead to corruption. At the very least: contracts should undergo a competitive and transparent bidding process, Congressional members must be required to disclose any financial or lobbying ties, and local and state governments should have some control over dissemination of funds.

In 2007, that most liberal of publications, The Nation, fully agreed that earmarks lead to corruption. Now? - nary a peep. Most of the media has been able to realize that at the least, President Obama isn't bringing pledged change to the system. Change can always come later, right? The champion of this issue, Sen. McCain, understands that we are still in a 'business as usual' mode in Washington, and that is unlikely to change.

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