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PAR Says Disclosure First Step, Must Ban Contracts

The state needs to enact tough ethics reform to help assure the nation that billions can be spent restoring Louisiana without fear of graft or corruption. PAR has long recommended that public officials and their family members should be prohibited from receiving public contracts, whether competitively bid or not. Current law provides some limits, but they do not go nearly far enough. Unfortunately, the Governor’s call for the special session failed to include a ban on contracts, although it does permit the legislature to require income disclosure. A comprehensive disclosure bill would provide some critical transparency in the recovery process.

Several bills were filed this session to prohibit public officials from receiving recovery contracts. However, they were deemed to fall outside the scope of this session. With contractors standing to reap millions through many contracts that were not subject to the public bid law, the stakes are very high. Because recovery efforts will last for many years and require numerous contracts, a ban can and should be pursued in the next special session.

News reports reveal that public officials and their relatives are receiving a share of the lucrative recovery contracts. One legislator’s parent secured three no-bid FEMA contracts worth nearly $108 million. An investigation into competitors’ complaints on the deal has led to charges related to a lack of proper licensing. In another example, a special FBI task force investigating hurricane-related contracting fraud arrested a local official for allegedly extorting a $100,000 kickback from a subcontractor. These may be isolated incidents, but a ban on contracts is the only way to avoid more scandal.

Even though a prohibition is out of reach this session, requiring income disclosure is a move in the right direction. Although disclosure is not as effective as an outright ban, it does give citizens the opportunity to hold their elected and appointed officials accountable. Several disclosure bills are making their way through the legislature, but none is comprehensive. Most bills apply to state and local elected and state appointed officials and their spouses with a 10% interest in businesses. Additional elements that should be added include:

  • expanding disclosure to include all immediate family members;
  • requiring local appointed officials and their family members to disclose their recovery contracts;
  • lowering the ownership interest in business entities to 5%;
  • requiring the reporting of all income received from recovery contracts.

Legislators opposing efforts to strengthen disclosure proposals complain that they are too onerous and do little to help in the state’s recovery efforts. Opponents ignore the fact that Louisiana must battle both the effects of the hurricanes and the state’s reputation for mismanagement and even corruption. The burden placed on the state by allegations of corruption in recovery contracting far outweighs any inconvenience posed by a strong disclosure law. Transparency, accountability and real ethics reform that includes a ban on recovery contracts are crucial to proving that the state has left the past behind.


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