June 10, 2009
With Carl Robinson’s resounding defeat of Northeast city Rep. Melina Castro in Saturday’s runoff election, the city elections are finally over.
Friday’s arrest of Castro’s personal advisor, former El Paso County judge, county attorney and state representative Luther Jones and District Clerk Gilbert Sanchez proves the FBI and U.S.’s public corruption investigation isn’t.
Not long ago, I learned that Woody Hunt, the head of Hunt Building Corp. and a former member of the UT/Austin Board of Regents, has spoken in private settings from time to time about the long term impact that public and private-sector corruption has had on
El Paso.
The thesis of his talks is that corruption has contributed to and may even be responsible for the high level of poverty here and for the shortage of highly competitive businesses in El Paso.
The fact that Hunt had been speaking in business and political circles about the subject that has been haunting El Paso for two years was as surprising to me as his willingness to be interviewed about it.
“I come from a theory of economic development that says look at our income compared to the state,” Hunt said. “I see (an income) disparity of 35 percent and come to the conclusion that we have a competitiveness issue here. You start looking at the pieces, and see that for whatever reason, we have a heavy dependence on government jobs and projects.”
Is there a correlation between corruption, a community’s poverty and a lack of strong, competitive businesses?
Just Google “corruption poverty competition” and you will get 6.7 million hits on the Web. You will find United Nation’s documents and worldwide indexes that statistically base the level of corruption in certain countries on their poverty and weak business environment.
One example from a 2003 study called “Corruption and Poverty: A Review of Recent Literature,” states, “Increased corruption reduces economic investment, distorts markets, hinders competition, creates inefficiencies by increasing he costs of doing business and increases income inequalities.
“By undermining these key economic factors, poverty is exacerbated.”
El Paso is not some African nation, but it is one of this country’s poorest cities – a situation that was far from true in the 1950s and ‘60s. Many businesses here are providers of goods and services to local school districts and the city and the county governments and have become dependent on public contracts for survival.
“Then the service provider begins to try to manage the process in a way that is not competitive and is not transparent and tries to manage the outcome through campaign contributions or financial transfers.” Hunt said. “That leads to a loss of competitiveness in our community. If you want to develop strong companies locally that can be strong in the state, regionally and nationally, you need to grow them to compete
“That’s the kind of environment you need to be in, and government needs to be the one setting the tone at the top.”
Companies that compete locally on the basis of quality and cost instead of whom they know or paid off will compete outside of El Paso and generate both jobs and money that will stay at home.
“Government has to be the leader,” Hunt said. That’s where you have to separate the political processes, that is, getting elected from governing.
“Once elected, you have to separate yourself from your supporters and govern. The last thing that should get decided on any contract is the service provider, but the service provider has been coming first and having too much communication with the government.”
If that separation doesn’t happen, if politicians stay closely tied to their supporters and campaign contributors, then those ties can become the real basis for decisions and contracts, he said.
“The real cost is in the people who don’t show up to compete because they don’t believe price and quality can win, and you end up with … contracts that are not competitive,” Hunt said. “That can be very wasteful and in efficient because you didn’t have a process that was truly competitive.”
What, you should wonder, would the city’s business sector say about Hunt’s ideas?
I called the president of the Greater El Paso Chamber of Commerce, Richard Dayoub, fully expecting him to say he would to say corruption in this community has been isolated to a few politicians and businesses and that businesses here are as competitive as any city’s.
Instead, Dayoub said he is fully aware of Hunt’s views and that he “would have to agree.”
He didn’t agree just a little, he agreed completely and said other business people in El Paso do as well.
For what they have said publicly, Hunt and Dayoub will no doubt be the subjects of disparaging comments from their peers in business, perhaps their friends and, for certain, people who are less than friends.
People will say Hunt is coming across as pious, and in a culture that despises piety, that is no compliment. People will also say you cannot regulate behavior with an ethics code; if they’re going to cheat, neither words on paper nor a pledge will stop them.
Maybe so.
But in most of the instances of public and private corruption that we in El Paso have learned about in the past two years, what would have happened if there had been one person in the room who had said, “This is not right, and I won’t be part of it”?
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A version of this article appeared in the May issue of El Paso Magazine. To reach David Crowder, write to dcrowder@epmediagroup.com or call (915) 351-0605, ext. 30, or 630-6622.