Barack Obama, elected president last month promising to curb the influence of corporate lobbyists and special interests and to change the way Washington works, continues to fill his administration with politicians steeped in the world of special favors and corporate welfare.
By naming New Mexico Gov. Bill Richardson as Secretary of Commerce this week, Obama signaled that his Commerce Department will be an ally for any big businesses willing to go along with the administration’s aims.
As governor, Richardson’s hallmark was forming “public-private partnerships.” He built such partnerships in the arenas of real estate, energy, biotech, and health insurance. What is a public-private partnership?
Basically, it’s an arrangement in which big businesses get taxpayer money or other government favors in exchange for pursuing whatever activity politicians ask them to pursue. Campaign contributions from the business to the politician are usually involved.
If you’re looking for how Richardson wielded the government purse to benefit private enterprise, start by checking out his campaign finance reports. His second-largest corporate source of money in his 2008 presidential bid was a developer called Forest City Enterprises.
The name jumps out because “Forest City” hardly sounds New Mexican. Indeed, the company is based in Cleveland, but Richardson has earned their love.
In Richardson’s second term, he supported and signed the “Tax Increment for Development Act,” perhaps the most important in a string of subsidies for Forest City’s massive Albuquerque-area development called Mesa del Sol. Tax-increment financing is an arrangement whereby Forest City wins the right to pocket future tax payments after Mesa del Sol increases the value of the land.
Forest City Executive Vice President James Ratner was candid in a 2007 interview with Governing magazine about one factor in the company’s success: using big government and politicians’ ambitions for profit. The path to profit, he explained, is through “a partnership … with government that gives them what they want, and gives the company what it wants.”
What did Governor Bill Richardson want? To some extent, he wanted edifices, monuments—physical “accomplishments” of his administration. Mesa del Sol, with its solar farms, thousands of homes, and sparkling community centers, provided that.
Richardson also wanted campaign contributions. The Associated Press reported in 2006 that the company gave $220,000 in contributions to New Mexico politicians, including a ride in the corporate jet for Governor Richardson.
All the top individual contributors to Richardson’s 2006 reelection were developers, and Richardson has done plenty for them in return. But Richardson’s “public-private partnerships” weren’t limited to fueling the real estate bubble. He directed tax dollars toward building a commercial spaceport, funding hopeless renewable energy projects, and helping biotech companies.
Politicians present such partnerships as harnessing the power and efficiency of the market and directing it at the public-good aims of government. But they are a huge opportunity for corruption and insider dealing.
For example, in New Mexico, horse-race tracks and slot machines are public-private partnerships. The state drastically limits them—keeping out competition—and drastically taxes them. The most recent winner of a state license is a partnership called Horse Racing at Raton, where a man named Mark Correra is a 30 percent stakeholder, according to Albuquerque Journal writer Thomas J. Cole.
As Cole wrote: “Correra … is the son of Anthony Correra, a major contributor to Richardson’s first gubernatorial campaign in 2002 who was later picked to help in the governor’s transition into office.
“Anthony Correra also has served as a director for … a nonprofit created by Richardson in 2003…. Two months ago, Anthony Correra was a co-host for a Richardson fundraiser in Albuquerque for Barack Obama.”
When Richardson was pushing for “universal health insurance” in 2007, his backers included Blue Cross Blue Shield of New Mexico, and Presbyterian Healthcare Services, whose CEO James Hinton praised Richardson’s focus on “the need for a partnership between the public sector and the private sector.”
In this case, it meant mandates and subsidies that drive dollars to healthcare corporations. Hinton and his wife both gave the maximum to Richardson’s presidential bid, among their nearly $30,000 in reported campaign contributions. (They also gave $1,000 to Richardson’s 2006 Governor campaign.) Richardson’s largest corporate source of donations for his presidential bid was insurer Torchmark Corporation.
These are just three examples of Richardson’s “public-private partnerships” as governor of New Mexico. There are many others. His record raises the question of what Richardson will do as Obama’s Commerce Secretary. Whatever it is, it probably won’t look much like curbing the power of big business in Washington.
Examiner columnist Timothy P. Carney is editor of the Evans-Novak Political Report. His Examiner column appears on Fridays.
