***Cross-posted on Jamie’s Beacon Hill Blog ***
Transparency. Accountability. Reform. These have become the buzzwords of the current Legislative session, repeated over and over in every debate to the point where I worry, occasionally, that they begin to lose their meaning.
And yet every time the Senate turns its attention to a new issue, the need for more transparency in government actions, and more accountability from decisionmakers, becomes all the more obvious, and all the more urgent.
The importance of transparency and accountability came up over and over again in the debate over ethics reform and pension reform. We also saw, with the indictment of former Speaker Sal DiMasi, the way greater transparency could have prevented some of the (alleged) crimes that were committed.
Recently, I’ve worked with a number of colleagues, including Senator Mark Montigny (who has been a leader on this issue for years) and Representatives Carl Sciortino and Steve D’Amico, to try to bring more transparency to our tax credit system, and to make information about which companies are receiving these tax credits, and what economic benefit the state is receiving in return, public knowledge.
And today, the need to demand transparency in government came up yet again, as the Senate considered a bill that would pledge a portion of new sales tax revenues to turnpike bondholders and reinstate the state’s credit behind interest rate swap agreements that the firm the United Bank of Switzerland (UBS) wants to terminate. The hope – though there’s no guarantee – is that passing this bill would prevent taxpayers and tollpayers from getting stuck with $274 million in new costs tied to the Big Dig.
This issue – the “swaptions” deal – is incredibly complicated, with many moving parts. It’s been discussed frequently on BlueMassGroup and elsewhere, and I’d refer you to a few excellent posts (here and here are two good examples) for a summary of what this swaptions deal is all about, and why the Commonwealth is currently in such big trouble over it.
I claim no expertise when it comes to complex financial transactions like this one – but I do know a risky deal and irresponsible actions when I see them. And in this situation, I see them. It’s clear to me that people who were entrusted with the care of millions and millions of public dollars, people who really should have known better, entered into an extraordinarily risky deal, a deal made with a callous disregard for the financial health of the Commonwealth, and the burden now being born by taxpayers and tollpayers.
And yet we still don’t know how this happened. We don’t know who made the deal, why these transactions were agreed to, and whether any criminal activity took place. The Commonwealth could be on the hook for hundreds of millions of dollars, and yet even these basic questions remain unanswered.
Senator Mark Montigny, who has been an unrelenting champion for transparency on this issue, proposed an amendment (which I supported) to the current legislation that would:
1. Require the head of the Turnpike Authority and Secretary of A&F to affirm in writing that there exists no feasible alternative to pledging the commonwealth’s full faith and credit.
2. Call for a detailed report from the commonwealth and quasi-public agencies, signed under oath, on each entity’s borrowing practices including: who was involved in past deals, how agreements were reached, and the rationale and impact of each signing.
3. Require all quasi-public agencies to seek and receive approval from the governor and A&F before entering into any future derivative financial transaction.
4. Instruct the Inspector General to investigate these murky Turnpike swap agreements (including the UBS agreement at hand).
Given all of the uncertainties surrounding the swaptions deal, this amendment is the least we can do to insert a measure of transparency into the process.
The fact is, we are currently in a lose-lose situation. If the Senate didn’t pass some version of this bill, the Commonwealth would likely have to pay hundreds of millions of dollars at a time when we certainly cannot afford it. And yet, as Senator Montigny noted in a letter he sent to colleagues today:
“With each guaranty extension, the legislature becomes more complicit in exposing taxpayers and toll-payers to financial risk while allowing the Turnpike to thwart transparency efforts and evade a permanent solution.”
We may not be able to come up with a good solution to this swaption situation. Certainly, I haven’t seen any on the table. We may well have to do the best we can with a limited set of not-so-great options.
But we CAN push for more accountability and more transparency with regards to past actions, and going forward – not to mention an adequate dedicated revenue source for our transportation system – so that the Commonwealth is never put in this situation again. That’s why I supported Senator Montigny’s amendment, and I look forward to seeing the results of the Inspector General’s investigation.
You state above:
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p>Can you explain how, if the charges against DiMasi are true, the new ethics reform laws, if in place at the time, would have “prevented some of the crimes”?
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p>I and some others here are curious as to which particular changes and/or editions in the new ethics reform would have prevented which specific crimes Speaker DiMasi is currently charged with?
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p>Thank you for your attention to this question.
In a classic case of “do as I say, not as I do” why can’t the legislature change the rules so that they are subject to the Open Meeting Law, as they make every other governmental body in Massachusetts?
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p>Instead of deals being done in the Speaker’s office, they could be negotiated around tables where the press and public are invited. That might keep Cognos deals from happening.
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p>While you are at it, strengthen our open meeting laws which are very lax, full of holes and without any serious penalties.
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p>If I become Mayor, that is what I will do for Boston City Government.
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p>Thank you for championing Transparency at the State House! Do a roll call vote of legislators and ask who is for it and who is against it, so that we will know.
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p>Do an investigation, issue subpoenas and get the answers. Either the legislature or the AG or both must have the authority. It doesn’t appear we want to know the answers.
We need the answers to those questions, Jamie – there has to be someone with the authority to compel the answers. If not, perhaps it’s time to make some
sausagelegislation and give someone that power…Any “reform” of these quasi-public agencies will likely be circumvented by the agencies because they are insulated from public accountability. No amount of good-governance measures will ever solve the problem. They’re there, and you’re not; they’ll always have the advantage.
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p>Get rid of them. Have the state government assume all their responsibilities, liabilities, and assets. That way, if there’s mismanagement, voters can seek revenge at the polls. Now, what’s the alternative? Avoid the Pike? Not take the T? Fly out of Manchester?
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p>These agencies are fiefdoms unto themselves, most with some autonomous level of income generation. This is a wickedly bad feature and has turned the MTA, MBTA, Massport, etc., into corrupt organizations run primarily for the benefit of their union employees and retirees. At the tollpayers’/taxpayers’/riders’ expense.
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p>I would much rather have them run by the state (assuming privatization is an impossibility.)
Would you support eliminating the Prevailing wage law which according to the Beacon Hill Institute costs us 17.7% of every dollar spent on construction projects over the Federal Prevailing wage? You can find more information here. Or are you too beholden to your Union campaign donors, and the Unions who paid for thousands of pieces of direct mail attacking your opponent in your last campaign. Freeing up more money for transportation projects starts with the repeal of our wasteful prevailing wage laws.
If you want to talk about this, write up a post.
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p>Study from the Economic Policy Institute. See the link for actual facts vs Eabo and the Beacon Hill Institute.
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p>http://www.epi.org/publication…
Massachusetts Prevailing Wage Law
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p>The Massachusetts prevailing wage laws require that employees on public works projects, except those who perform strictly supervisory functions, be paid a minimum hourly rate set by the Department of Labor and Workforce Development, Division of Occupational Safety (DOS). The prevailing wage rate applies to all public construction contracts, regardless of the estimated price of the project.
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p>The Attorney General’s Office enforces these laws. DOS issues the rates for each project and determines which rates apply to which classifications. Prevailing wage rates are set by DOS based upon the rates established in local collective bargaining contracts. DOS also determines whether the prevailing wage applies to a given public works project.
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p>Apprentices can be used if the contractor is participating in an apprenticeship program which is approved by the Division of Apprenticeship Training, and the apprentices are registered with the Division. The maximum ratio of apprentices to journeymen is supplied by the Department of Labor and Workforce Development when the prevailing wage rates are issues.
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p>An employer may deduct any contribution made by the employer on an employee’s behalf to a bona fide pension, health and welfare or supplemental unemployment fund. An employer may contribute to such plans and deduct for the contribution even if the employee does not wish to participate.
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p>All contractors and sub-contractors are required to file certified payroll records directly with the awarding authority on a weekly basis. These records must contain accurate information detailing each employee’s name, address, occupational classification, hours worked and wages paid. The records must be certified and signed by the contractor or agent under the pains and penalties of perjury. All contractors and sub-contractors must submit the records directly to the awarding authority every week.
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p>The Massachusetts law requires that contractors post prevailing wage rates in a conspicuous place on all public construction sites. Prevailing wage rates are set for each individual project, and may vary. To obtain a copy of the rates for a particular job, contact the awarding authority and ask for the prevailing wage rate schedule.
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p>http://builtbest.org/frequentl…
..and did it pass???
There are no “Democrat Senators” in the state Senate. How many “Democratic Senators” is a different question.
Thanks for keeping us updated. Once again you show the courage to take on the difficult issues.
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p>Swap options work kind of like this:
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p>We will pay you cash now, for you to roll the dice to decide how much you owe in the future.
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p>Too many politicians are too tempted to take the cash now and allow someone else to deal with the fall out in the future.
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p>Why? We have only to look at ourselves. There aren’t enough voices speaking up and demanding a responsible level of revenue to pay our bills and provide the necessary infrastructure, educational and environmental requirements to support thriving communities and economic growth. The trend to adopt short term solutions and ignore long term consequences is costing us money and our economic future.
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p>Senator Eldridge is willing to talk to us like grown ups. Will the voters appreciate it?