Friends of George

The NY Times has an editorial in today's paper about the big bucks being earned by friends of New York Governor George Pataki.

The bad news piles up steadily these days at Gov. George Pataki's office door. A few months ago, it was his friend, former Senator Alfonse D'Amato, earning $500,000 for one phone call to lobby the Metropolitan Transportation Authority. Then it was the growing cloud over a $30,000 option on a stretch of the Erie Canal. And last week, Comptroller Alan Hevesi pointed out that a former Pataki colleague, Anastasia Song, had earned $582,000 in 14 months as acting financial officer for the Long Island Power Authority. Mr. Hevesi noted that she should have been paid about $150,000 for her work.

The one thing these tales have in common is that all the agencies involved are state authorities: private-public hybrids that operate as a phantom wing of the governor's executive branch. They engage in the big business of government ? huge contracts and big bond transactions worth millions and millions of dollars. But their doings are mostly invisible as far as the public is concerned. Note to governor: this is not national security. The public deserves to know a whole lot more about the way these things operate.

The big business of government is a fixed-quanitity system. A contract given to one company is one not given to another company. Granted, this is also true of the free market, but markets expand over time so that desired goods and services become more abundant and choices grow more numerous. Government on the other hand operates in a paradigm in which the presence of a winner means the inevitable presence of a coexisting loser. As a result, a large incentive for bribery and corruption is a common characteristic of governments.

Last week, Governor Pataki finally made a start in the right direction, calling for an inquiry into the $30,000 canal option. Now he needs to step back and take a hard look at the entire authority system.

Excellent advice.

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