The Corrupting Influence of Federal Dollars

Bob Barr

4/3/2013 12:01:00 AM - Bob Barr

A few years ago, Dr. Beverly L. Hall was the well-respected Superintendent of the Atlanta Public School system. In fact, in 2009 she was recognized as “Superintendent of the Year” by the American Association of School Administrators, and was subsequently invited to the White House by the U.S. Secretary of Education. Hall’s job was not an easy one, as she was responsible for overseeing the educational development of more than 50,000 school children in a largely underprivileged school district.

In a spectacular fall from grace, last week Hall was indicted on a wide range of corruption charges -- including making false statements, conspiracy, theft, racketeering, and influencing witnesses. The charges stem from her role in one of the largest cheating scandals in the history of public schooling in Georgia, if not the entire country.

Some may find it hard to fathom how a highly regarded public education official -- made famous because of her district’s test scores that often outshone nearby, more affluent districts -- could suffer such a tragic fall from grace.

Those who understand the lure of federal dollars and the corrupting influence they can exert on recipients, however, should not be so surprised. Hall’s sad tale is but the latest example of what happens all-too-often when state and local government officials become obsessed with chasing federal dollars.

Simply put, when federal money becomes a primary goal for local and state officials, and obtaining those rewards are tied to the recipients meeting certain quantifiable targets, such as student test scores or percentages of minority participation in businesses, the pressure to meet those numbers by whatever means possible -- including lying and cooking the books -- can become enormous. In the case of Hall and her co-conspirators, it became irresistible.

The so-called "No Child Left Behind Act," President George W. Bush’s signature piece of legislation during his first term in office, served as just such a corrupting vehicle. The law tied massive federal dollars earmarked for local school districts, to schools meeting particular test scores. Hall and those under her in the Atlanta Public School system responded by engaging in a pervasive conspiracy to alter tests and test scores so as to meet those federal criteria. The financial rewards to the school system, and to many of the individuals themselves (who received significant bonuses based on the false test results), were simply too enticing to ignore.

The federal government, of course, has long leveraged its financial power as a way to direct the actions of state agencies that become addicted to the cash fix. One well-known example was the National Minimum Drinking Age Act of 1984, which threatened to cut 10 percent of federal highway funds in states that failed to increase the minimum drinking age to 21. The states, eager not to lose federal highway funds, quickly kowtowed to Uncle Sam, notwithstanding the fact that the power to set a minimum age for alcohol consumption was not considered a federal responsibility.

Similarly, states face challenges today in deciding whether to accept their position in the president’s Affordable Healthcare Act, which would require them to vastly expand Medicaid coverage in return for some federal dollars. In a rare break with customary acquiescence by state government, Texas Governor Rick Perry and 18 other Republican governors are refusing to bite this baited hooked, even though it could wind up costing their states billions of dollars in federal funding.

“Texas will not be held hostage to the Obama administration’s attempt to force us into this fool’s errand,” Perry told reporters this week at a press conference about his decision to refuse Obamacare’s new Medicaid requirements. Perry also said that other governors who fell into the Obama administration’s fiscal honeypot would “come to rue the day” as healthcare costs rise, pushing states further into debt.

Perry understands what many other state officials fail to realize: federal dollars are an addictive drug that comes always with strings attached. Accepting federal funding undermines state sovereignty as states become beholden to federal requirements in order to keep the money flowing. It grabs hold of government institutions just as it does with individuals like Beverly Hall.

Human nature -- and the inherent nature of bureaucracies to perpetuate themselves with funding -- unfortunately means this problem will remain with us so long as Washington money continues to serve as the tail wagging the government dog.