Poor ethics hurts area’s opportunity to lure business June 22, 2005
By Maurice Eisenstein
Post-Tribune guest columnist
Indiana University Northwest’s Local Government Academy director, Ed Charbonneau, has a daunting task: injecting ethical behavior into local politics. I admire his efforts, but I am concerned that it is going to be a monumental task to overcome the momentum of a political culture for which ethical behavior is considered an oxymoron.
Public ethics has to do with acknowledging one’s duty and performing accordingly. A public official has a fiduciary responsibility for the citizens and their property.
In Northwest Indiana, political behavior is either illegal, and can be so proven, or is permissible. There is no middle ground constituting ethical behavior, which is that vast arena between illegality and the duties of a public official. NWI public officials’ actions, during a time when illegal activity is under close scrutiny by the FBI and the U.S. attorney, clearly show this unethical culture.
A recent Post-Tribune story about the Gary/Chicago International Airport demonstrated unethical behavior by the board and leadership — director Paul Karas and his second in command. The board hired Karas to run the airport as his full-time job. He receives orders from the board and directs other employees at the airport, which is the common-law definition of an employee, according to the Internal Revenue Service. Why, then, is he being paid $145,000 a year as a consultant?
One possibility is the tax advantage to a consultant. Every lunch, every trip to the office, the use of a cell phone for business, among other things, are deductible as a consultant. That is, Karas gets to deduct these things from his consultant pay before he has to pay income taxes or Social Security taxes.
How many of you would like to deduct the cost of traveling to and from work and the cost of buying lunch before taxes are deducted from your paycheck? Get the picture?
This is not to benefit Gary’s citizens, but to fleece the citizens of taxes owed. This is unethical. When public officials serve as employees, then ethically, they must be paid as employees.
In Hammond, a medical insurance contract is awarded by Mayor Tom McDermott Jr. to a company partially owned by his father. Because of incompetence, the grant later was canceled.
This level of unethical conflict of interest would result in most mayors in America leaving town with their tails between their legs. But the mayor strong-arms Woodmar Country Club in the interests of another company that is paying his dad a commission — a textbook case of conflict of interest.
Then, using $100,000 of city funds, the mayor endows a professorship named after Dad. Neither the mayor nor Dad put in one penny of their own money. Naming it after the city of Hammond would have been ethical, since the money belongs to all the people. But, the mayor and his dad used public money for their family’s gain. That is unethical.
Unfortunately, in a lowering of its own standards, the university also cooperated in this unethical behavior by accepting public money to promote a private individual.
Until people like Charbonneau can make progress changing the millennium-old cultural trend in NWI, it will not make any difference what new plans are put in place for economic development. The knowledge-based, information-age businesses so desperately needed in NWI will not be moving here when they have other locations to choose from, where public ethics is valued.
Maurice Eisenstein is a professor at Purdue University Calumet. Contact him at [email protected]. His opinions do not represent Purdue University.
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