Many American cities have corruption problems—from Chicago and New York to Scranton and Harrisburg. In these cities, politicians and bureaucrats abuse their discretionary powers over licensing, permitting, zoning, contracting, and other activities. They shake down individuals and businesses to gain bribes, campaign aid, and other personal benefits in return for providing special approvals, exemptions, and handouts.
Big government subsidy and regulatory schemes fuel corruption, as we see, for example, with housing tax credits, alcohol licensing, and marijuana licensing. It also appears that political structures make some cities more scandal-prone than others. Chicago’s system of “alderman privilege,” for example, has been a driver of corruption for decades.
New York City has long suffered from corruption in building permitting, inspections, gun permitting, and many other things. Recently, the city has been rocked by scandal at the New York City Housing Authority (NYCHA). Last year, prosecutors charged 70 current and former NYCHA employees with bribery and extortion. It was the “Largest Number of Federal Bribery Charges on a Single Day in Department of Justice History.”
A new article in The City discusses the aftermath of the shocking scandal. A year later, the city is continuing to contract with the same corrupt companies that have been bribing NYCHA officials for years.
One year after a sweeping corruption takedown at the New York City Housing Authority, law enforcement’s scorecard reads like this: 64 convictions out of the 70 housing authority employees arrested on charges of taking cash bribes to hand out contracts to vendors performing public housing repairs.
… Since the big sweep on Feb. 6, 2024, billed as the biggest one-day takedown in Department of Justice history, NYCHA has awarded hundreds of contracts worth a total of $7.8 million to eight companies whose operators have publicly confessed to participating in the decade-long bribery conspiracy.
All of these corrupt contractors have admitted under oath that they regularly handed over cash bribes from $500 to $2,000 in the basements and stairwells of NYCHA developments to dozens of NYCHA staffers, sometimes for years. None of the vendors were charged with a crime. All were granted immunity from prosecution in exchange for their testimony against the NYCHA employees they paid off.
… The eight bribe-paying vendors that The City discovered are still getting NYCHA work have, over the years, racked up $70 million in taxpayer-funded contracts for everything from installing vinyl tile to performing minor repairs to painting apartments, an analysis of contract records found.
… NYCHA staffers came to regularly demand cash to either award a no-bid contract or sign off on individual jobs under a blanket contract. All told, they pocketed more than $2 million in bribes over the last 10 years, prosecutors alleged.
NYCHA head Lisa Bova-Hiatt said, “These actions are counter to everything we stand for as public servants and will not be tolerated in any form.” But the agency has tolerated these contracting rip-offs for at least a decade. And it has tolerated the reality that a large share of the repairs that NYCHA paid for may not even have been made.
The well-funded NYCHA has tolerated much more. CNN noted, “The city’s housing authority—plagued for decades by lead paint hazards, rat infestations, inadequate heating, and broken elevators—receives more than $1.5 billion in federal funding each year.”
As for NYC more generally, it has tolerated wasteful and corrupt government for decades. For example, here is a report on widespread permitting corruption in the city from 1960.
Why do the sophisticated residents of the nation’s largest city tolerate such crappy government? The city is jammed full of lawyers, accountants, and finance experts. It should have the best public management in the nation, not some of the worst.