Saturday, July 25, 2009

Is New Jersey the most corrupt state?

Since the FBI takedown of public officials, the national press and indeed the world press has fallen all over the story. The press reports are typically confused and confusing, with accounts talking about "the case" or even two linked "schemes." The NY Times report is a case in point. Gail Collins' column today takes some cheap, mildly amusing shots, much too easy for a writer of her talents..

In fact, there is no "scheme," no link between the various indicted politicians, and nothing at all linking the pols withe the rabbis. The massive one-day arrest was pure theater by the FBI and the US Attorney, not a law enforcement imperative. It worked-- the case made the papers even in Australia. Politicians from Gov. Corzine on down joined the band wagon, denouncing the accused and the level of political debauchery in general.

This case also presents no real evidence of pervasive corruption in the Garden State. First of all, most of the pols are pretty small time. The biggest fish is Hoboken Mayor Peter Cammarano. But Hoboken is a city of 38,577, really just a small town, given some prominence by its proximity to Manhattan. Would anyone care if the mayor of a town of 38,000 in Iowa or Connecticut was arrested?

The story has legs because it fits the Sopranos-inspired narrative of New Jersey as especially and hopelessly corrupt. Maybe it is, but these cases-- linked only by the "cooperating witness," Solomon Dwek (rhymes with "dreck")-- don't show it. Dwek posed as a crooked real estate developer eager to grease palms to get his projects approved. But the people he bribed for the most part had no individual authority to grant or even speed approvals. They were mostly legislators with indirect influence at most.

Worse, there is nothing in the reports saying he had any projects to approve. Even if the evidence of bribery holds up, all it shows is some would-be developer seeking vague favors for some hypothetical projects. This is hardly a fundamental subversion of government.

Maybe the evidence will show a propensity for corruption on the part of those indicted. But how many officials turned Dwek away? We'd need to know that before registering any conclusion about the level of corruption in New Jersey. I'd be much more impressed if there was an allegation (let alone evidence) of one scheme in which a politician actually did something in exchange for a bribe. Did a real estate project get approved that should not have been approved? Did anyone even put a project on the fast track for approval?

Nothing like that is charged. Until it is, we'll have to wait for evidence that New Jersey is as corrupt as we'd all like to believe.

Thursday, July 23, 2009

FBI, Arrests, and Money Laudering

I am listening to the U.S. Attorney from New Jersey press conference on the political corruption and "money laundering" arrest of 30-plus individuals including the mayor of Hoboken and the Jersey City City Council president. It smells a bit, and not for the reasons intended.

First, there seems to be no real link between the money laundering rabbi and the allegedly corrupt politicians, except that one cooperating witness seems to be involved with all of them. If that is the case, why does the U.S. Attorney and the FBI take them down (as the call it) at the same time. Is it just to generate headlines? If there is any law enforcement rationale, it's hard to follow what it is.

As to money laundering, this is a dubious crime in general. But as I understand it, money laundering generally involves someone who has a lot of cash (often from illegal activities, but not necessarily) exchanging that cash for less suspicious assets, whether real estate, securities, or bank accounts. But in this case, the cooperating witness would bring a check to the rabbis and get cash back. That sound like cashing a check; money laundering in reverse. Why is the FBI worrying about this at all?