Back in January when Governor Perdue made a healthcare lobbyist head of the Department of Health and Human Services it looked like she’d slipped and put the fox in charge of the henhouse. But the Governor shrugged it off, saying that whoever Lanier Cansler had lobbied for in the past, ‘He’s now owned 100% by the people of North Carolina.’
The Governor inferring her new Secretary could be ‘owned’ by one group then another was a less than ringing endorsement – but, anyway, Cansler swore off lobbying and took office. But he didn’t exactly sever his ties with his old lobbying firm.
Instead of selling his interest in the firm for cash Cansler took a ‘promissory note’ from the company – which creates a problem for both the Governor and Cansler. Because the company has to pay the note and one way it can make the money to do it is by lobbying Lanier’s Department. (In addition, Secretary Cansler’s wife is also a lobbyist.)
Next, during the budget debate, a strange thing happened.
Cansler persuaded the Legislature to let him spend $250 million without the usual process of seeking bids on the contracts – in other words Cansler’s Department’s is going to grant state contracts to venders it hand picks, rather than letting multiple venders bid. Lanier dressed the proposal up in some pretty fine political wrapping, saying letting him pick the venders quickly would save the state money.
So over the next six months Lanier and his Department are going to give out $250 million in contracts without bids (with Britt Cobb, the Governor’s Secretary of Administration, looking over their shoulder) – and naturally, the question is will some of the contracts go to Lanier’s old firm’s clients?
Cansler already seems to be trying to defuse that powder keg. For instance, he sent a memo to his subordinates telling them they need to ‘insulate him from ‘procurement decisions’ that affect his former lobbying clients.
That’s a fine sentiment but when you get right down to it that dog won’t hunt.
Imagine you’re the Assistant-Secretary of-Something-Or-The-Other in Lanier’s Department. You’re about to award a $50 million no bid contract and your bosses’ old buddies are beating down your door to get it. Wouldn’t it be natural for you to wonder if it would make your boss unhappy if, in effect, you told his former client to take a hike? It would be a rare bureaucrat who didn’t at least wonder if he might not be biting off more than he could chew.
Another kind of politics could steal into this equation, too. In his book, The Fourth Witch, former House Speaker Richard Morgan tells a story about a legislator, a lawyer, who represented video poker clients. He dutifully recused himself from every vote on video poker but, then, behind the scenes worked diligently to help his clients.
Cansler ‘insulating’ himself may be a good faith attempt at a solution or it may turn out to be a solution as full of holes as Swiss cheese.
But there is another solution that’s iron-clad. If the Governor is really sincere about eliminating this conflict of interest she should just say none of Cansler’s ex-clients (or his wife’s firms’ clients or his former firms’ clients) can receive a no-bid contract from the state.
In other words, if Cansler’s former clients want a state contract they’ll have to compete for it against other companies and have the low-bid.