"Former Buildings Chief Accused of Trading Favors for $150,000 in Bribes" is the headline over a front-page news article in the New York Times reporting that "The department, though often bedeviled by scandal, is among the most important city agencies. It regulates the construction and real estate industries, issuing permits, licensing contractors and policing construction safety and the city's building code, and thus can have a significant impact on development."
The regulation fuels the corruption, and vice versa. That is true whether the corruption is illegal bribes or entirely legal methods such as hiring a former city employee or friend of a current city employee as a lobbyist or "expediter," or giving campaign contributions to the politician who is the boss of the city employee. I was going to write a new piece making this point, but it's such a long-running issue that I had one from February 2015, "Bribery at the Buildings Dept.—Again" on the shelf already ready to go. Re-upping that piece from the archives here:
The New York Times reports:
More than a dozen New York City buildings inspectors and clerks have been charged with exploiting their positions as gateways to the city's booming real estate industry to obtain hundreds of thousands of dollars in bribes, law enforcement officials announced on Tuesday.
This seems to be a recurring problem, and is a wonderful (or horrible, depending on how you look at it) example of the rule that it is the regulation that creates the opportunity for the corruption. One reason to be for smaller government is that it would be more honest, because there would be fewer opportunities for shakedowns.
Some background on past problems:
In October 2009, "six building inspectors were accused of taking bribes to grant building permits, expedite inspections and overlook building violations," the Times reported then. " In 2002, 19 of the city's 24 plumbing inspectors — including the chief inspector and the top supervisors in the Bronx, Brooklyn, Manhattan and Queens — were charged with extorting hundreds of thousands of dollars to approve projects throughout the city."
"In 1996, 42 elevator inspectors were suspended, and 18 eventually pleaded guilty to federal charges, including extortion," the Times reported in another story, which went even further back:
As far back as 1871, The New York Times published a story headlined "Disgraceful Corruption in the Department of Buildings." The story described a meeting of 25 architects, "uptown builders" and house owners who released an 11-point petition charging the department with "tyranny" for habitually taking bribes. One check for $1,400, according to the article, was sent directly to James McGregory, the superintendent, to speed construction of a five-story structure.
Five years later, complaining of precarious apartments, "worthless" fire escapes, and the recent collapse of a condemned wall through the roof of St. Andrew's Church, another Times reporter suggested that the department be abolished altogether. It was, he wrote, a "mere refuge for rapacious politicians" that "is continually imperiling not only the property, but the lives, of the tens of thousands it is paid to protect."
The headline that time? "The Building Department: Its Rottenness Exposed."
It seems to me that the city should have taken the Times' advice back in 1876 when the paper suggested that the department be abolished. The corruption is, along with the regulation, a contributing factor in New York City's sky-high housing costs. Mayor de Blasio seems to want to deal with those costs by subsidizing or forcing developers to build "affordable" housing, but an alternative approach would be to eliminate the bureaucracy that makes the housing so expensive to construct. The city would save money not only on the buildings department, but in the department of investigation, the district attorneys' offices, the corrections department, and all the other agencies that spend time and money dealing with the corruption in the buildings department.
