Corruption in cities prompts more action. New York case shows need for code of ethics

Closing arguments in the New York City corruption trial are scheduled for today, but the impact of the scandal continues to force city officials to look at new ways of deterring graft. The federal court trial of Bronx Democratic leader Stanley Friedman and three other defendants will likely go to jury in New Haven, Conn., at the end of the week. The four men are charged with using the New York City Parking Violations Bureau (PVB) for ``corrupt profit'' through bribery and fraud. The government has charged that certain firms were favored in contract letting, to the benefit of certain city officials and businessmen.

New York City is not the only area where charges of corruption have shaken government and business alike. In Washington, Ivanhoe Donaldson, a top aide to Mayor Marion Barry, pleaded guilty last year to systematically stealing nearly $190,000 from the district. In Chicago, a Federal Bureau of Investigation probe of that city's government led to uncovering New York's scandal. And in Oklahoma, an FBI sting operation found that county commissioners were receiving kickbacks from private businesses.

The question of how to battle corruption has taken on new urgency in recent years, say experts, with the runaway costs of even local political campaigns and an increase in ``contracting out'' city business to private concerns.

``Privatization is really the core of this problem, and of course cities have not been prepared for the large amount of contracting out that has been going on,'' says US Attorney Joseph E. diGenova in Washington, whose office prosecuted Mr. Donaldson. His office is working with the National Municipal League and public-policy scholars to devise a model contract with very stringent conflict-of-interest provisions.

John Parr, executive director of the National Municipal League, says that contracting out is the ``wave of the future,'' as the public continues to demand a more stream-lined government, and more services for less money. But he says cities don't know how to protect themselves from abuses.

``We are in a situation where we are asking local elected and appointed officials to make value judgements without standards and guidelines,'' says Mr. Parr. He sees a lot of cities turning to accounting firms, seminars, and a ``fairly effective grapevine'' to learn to cope with the problems. He says other states, such as Rhode Island and Kentucky, also have high-level studies of government and ethics.

One of the highest costs of municipal corruption is the erosion of public trust. In a poll last spring in New York City, 61 percent of those polled said they thought corruption was widespread.

Corruption has an ``insidious, corrosive effect'' upon public confidence,'' says Mr. diGenova. It will affect the willingness of people to pay their taxes, and ultimately it will affect their willingness to vote, he says.

New York City and state have responded to the crisis with some changes in the way government does business, as well as the creation of a commission on integrity and ethics in government, led by Columbia University President Michael Sovern.

Mayor Edward I. Koch, who had long boasted of a nearly corruption-free city government, continues to be ``disappointed'' that people in government allegedly misused their government connections, according to Leland T. Jones, his assistant press secretary. But Mr. Jones also adds that initial reports of widespread corruption have not been borne out.

Since the scandal broke, the city has tightened up financial disclosure among city employees, endorsed proposed campaign-financing reform, and established a contract-review committee that adds more steps for no-bid contracts.

It has also cancelled a number of private contracts, with the intent of moving back to more in-house services. In the current case, several private collection agencies hired to go after long-uncollected parking fines were major players in the PVB scandal, admitting that they paid kickbacks to officials.

The Sovern Commission has come out with three reports so far on campaign financing, conflict-of-interest laws, and encouraging whistle-blowing. A report on the city's procurement and contracting procedures is due out soon, says Frank P. Graf, Chamberlain professor of legislation at Columbia and staff research director for the commission. He says there has been some concern by the commission that there has been little action on the proposals forwarded so far.

``The commission in its reports has used a strong rhetoric of indignation,'' says Professor Graf. ``This is intentional. These scandals are a mirroring of our society. It does indeed undermine confidence, undermine the way we operate, undermine mutual trust. It will take years to repair.''