There are much more lucrative ways for politicians to benefit from political office than just using campaign funds for personal expenses. In fact, that is just chicken feed.
The real money comes from being cut in on business deals while putting up little or no money.
Ever wonder how politicians somehow get rich while in office, even though their pay is fairly meager? Business deals.
The Northside Sun reported in detail on how this works 25 years ago, when we did an expose on Bennie Thompson, who was a Hinds County supervisor at the time.
A big real estate developer created a start-up corporation to buy $5 million in apartment buildings. Thompson’s influence was important because the county had control over various zoning matters related to the apartments.
The principals of the new corporation, of which Thompson was one, all put up a few thousand dollars in startup capital. The new corporation then borrowed the millions necessary to buy the apartments.
So how was a startup company able to borrow all the money necessary to buy the apartments? Simple. The developer signed a personal guaranty ensuring the loan would be repaid in event of a default.
In accounting terms, a personal guaranty is a “contingent liability.” That means it’s not worth anything unless a default occurs. As long as the new corporation pays off its loans with rent money, the personal guaranty is valueless, so it is not reported as a campaign contribution or any other form of benefit to the candidate.
An aggressive attorney general or district attorney could have argued that such an arrangement violated our state ethics laws, but this rarely happens and the penalties are a slap on the wrist.
As it turned out, the note on the apartment buildings was paid down and Mr. Thompson went on to become the wealthiest congressman in the Mississippi delegation.
I don’t mean to pick on Rep. Thompson. Financially benefiting from public office is the rule, not the exception. This type of scenario is repeated countless times from politicians of all ilk.
It would make more sense for us to just pay all our political leaders a flat million dollars a year. Then, at least, they would have a better chance of working for the taxpayers rather than their manipulators.
Under our current system, a politician will squander tens of millions in governmental efficiency just to earn a few thousand dollars in payoffs. It’s a poor arrangement.
For example, in the case of former prison head Chris Epps, $300 million in taxpayer dollars were wasted just so Epps could receive a couple of million or so in bribes.
If we had just paid Epps a million dollars a year, maybe we could have saved the $300 million. But then maybe not.
Fast forward 25 years to the battle over who controls the Jackson airport. I fear this comes down to “my cronies are better than your cronies.”
Just to the east of the airport is a new 2.5 mile East Metro Parkway. It has the potential of being the next Highland Colony Parkway. Millions upon millions in dollars will accrue to the savvy real estate developers who succeed in this development. All in all, there are some 3,000 acres of prime metro land controlled by the airport authority. It’s just waiting to be developed.
Rankin county state Sen. Josh Harkins is a Flowood real estate developer. I have talked to him at length about his plans. He strikes me as earnest about the reasons for his new airport legislation. He is an intelligent, sensible young man with a bright future ahead of him.
Mississippi Gov. Phil Bryant is from Rankin County. In three years, his term as governor will come to an end. We’re not sure what he plans to do at that point, but we can’t help but wonder if he’s considering Rankin County real estate development.
Or maybe there is some other reason the new airport legislation finds it necessary to give one man, the governor, the power to appoint a majority of the new airport board.
We get the idea that the airport is a regional asset and the airport authority should have representation from Hinds, Rankin and Madison counties.
Fine. Then let those counties appoint members to a newly reconstituted board, as well as the city of Jackson. Give the governor one slot. Maybe the lieutenant governor one, too.
But given the unusual circumstances, it is inappropriate to allow one person, even the governor, the power to effectively control the airport authority. That’s not regionalism. That’s a takeover.
I’m not trying to defend the existing airport authority, although I do think they’ve done a commendable job in the selection of its new executive director.
The existing airport authority is composed of too many lay people with little experience in management or air transportation. The legal fees are excessive. The recent closed-door approval of a gargantuan real estate project on Lakeland Drive was a red flag.
But let’s not replace one set of cronies for another. The current board is entirely appointed by the mayor and approved by the city council. That gives the mayor way too much power. Let’s not make the same mistake with the new board. Instead, let’s have separation of appointment power that will provide reasonable checks and balances.
Power is power. We will never prevent politicians from benefiting from the power of their office. But as citizen-taxpayers, we should be prudent in making such abuse as unlikely as humanly possible.
(Wyatt Emmerich is publisher of The Northside Sun in Jackson.)