A Bad Deal

In 2008, then Chicago mayor – Richard Daley, with the city council’s approval, sold the city’s parking meters and all the revenue produced by them to an outfit called, Chicago Parking Meters LLC for $1.15 billion.  LLC got the ownership rights for 75 years.  Yes, that is not a misprint – 75 YEARS.   LLC got a good deal – a really good deal.

These pages have referred to this deal on several occasions as a “bad deal.”  Yesterday the new mayor, Rahm Emanuel, went public and called the 75 year sale, a “bad deal.”

Now let’s say Daley was the CEO of a public company, one with traded public securities.  What would happen?  Well, without engaging in much external research, we can list some possible outcomes and consequences:

·         He’d be fired, terminated, let go

·         He would lose compensation, benefits and pensions rights, or at least a portion thereof

·         He’d lose investment value in his stock holdings or stock options because the market would lower the price of the company’s stock to reflect the financial impact of the “bad deal”

·         He would be sued – the company would be sued – the directors and officers would be sued

·         Possible government action – department of justice and/or SEC investigations would unfold and further legal – civil and perhaps, criminal, indictments could follow

·         Reputations would be damaged, in some cases, permanently and fines and even possible jail sentences could occur

So, what happened to retired mayor Daley?  Nothing.  Nada.  None of the above.  Not a smidgen of financial or legal or governmental deterioration or impact.  As a matter of fact, exactly the opposite.  Daley is collecting a big pension, over $200,000.00 per year; is enjoying fancy status as “of counsel” to a large law firm and is now on the board of directors of the Coca-Cola company.

But, what about the “bad deal?”  Who pays for the “bad deal?”  Doesn’t someone have to lose something or account for something or somehow be held accountable for Daley’s “bad deal?”

Yes.  The Chicago taxpayers are completely, fully and with no recourse to anyone else, responsible for Daley’s “bad deal.” 

So, as Paul Harvey used to say, “Now you know the rest of the story.”

When TheFundamentals says we need good and regular government financial reporting signed under penalty of law by the key elected and hired government officials and employees, we are not simply being pejorative toward politicians and bureaucrats.    When TheFundamentals calls for outlawing public employee unions, we are not simply stating a convenient position based on some anti union bias or prejudice.  We are demanding that the same level of accountability which applies to anyone in the private sector be applied to those in the public sector.  All deals must be ‘arms length” transactions with personal, legal and civil consequences to the parties.  We are demanding that arrangements, in which any government official benefits and the costs go to someone else, cease, immediately.

Why did we bring the unaccountability of deals made with public employee unions into this posting?  When Emanuel called the parking meter fiasco, a “bad deal” he could just as easily have been referring to the contract with the Chicago teachers union which he and his minions negotiated and which he agreed to.  It, too, is a “bad deal.”  There is no money to pay the terms that Emanuel agreed to.  Yet Emanuel struts around as if he is doing some great thing – for the “kids” is his new spin.  Who will have to pay?

The same group that pays for Daley’s bad deal.  In order for a republic to work, the people must rule.  If that ruling concept is to be delivered via a “representative democratic system” then the representatives must be held personally and legally accountable for their actions to the people and, in the absolute, to the legality and financial soundness of their actions.  Today, all we have is “spin” and a growing list of “bad deals.”