Oligarchies work really well if you are one of the oligarchs. The Indianapolis Star recently re-engaged in something that used to be called “journalism,” and reported that the State of Indiana had intentionally misused federal funds during the Daniels Administration.
Federal auditors say Indiana intentionally misused federal funds when one of its contractors, operating with little state oversight, funneled nearly a half million dollars to a start-up business run by the nonprofit’s chairman.
Elevate Ventures, which was the subject of an Indianapolis Star investigation last year, was hired by the state to manage millions of dollars in state and federal investment funds. The federal audit concluded that the nonprofit should not have awarded $499,986 in federal cash to a start-up business called Smarter Remarketer managed by the firm’s chairman, Howard Bates.
The article was thorough, and drew a pretty damaging picture of the games being played with our tax dollars. State officials, of course, denied any intentional wrongdoing and attributed the “problem” to inadequate oversight.
Spoiler alert: I will now go into “broken record” mode. For the past quarter-century, citizens have been told that government can’t do anything by itself, and that privatizing–“contracting out”–is the way to deliver government services. Sometimes contracting makes good sense. Often, it doesn’t. See here and here.
When contracting is appropriate, government remains responsible for oversight and management. Even if the scam detailed by the Star wasn’t a case of cronyism (and if you believe that, I have a great bridge to sell you…), it points to one of the dangers of contracting: government officials who lack either the will or the expertise to manage those contracts adequately.
Of course, the article suggests that the folks responsible for overseeing Elevate Ventures weren’t inept. They were cozy.