Ohio fights influence peddling

To put Pennsylvania’s problems with lobbyists in perspective, it’s interesting to consider the problems that Ohio faces because of what some say is influence peddling. Ohio is in the throes of three investigations of possible corruption by state officials. Some of the charges brought against state officials include accusations of "fixing" of state contracts.

A former lobbyist in Ohio is leading the charge against what he believes is a rigged bidding system in Ohio state government. Paul Tipps, former chairman of the Ohio Democratic party, became so disgusted with what he calls his state's "pay-to-play" politics that he recently resigned from the lobbyist firm that he started.

Tipps, 69, in 1983 co-founded Columbus-based State Street Consultants. The company now is the largest government affairs firm in Ohio. Several months ago Tipps resigned from State Street and founded the Braddock Organization, "an independent committee that's looking into the relationship between non-bid contracts and campaign contributions," Tipps says.

Currently there are three major investigations of influence peddling in Ohio. The U.S. Justice Department's Public Integrity department is investigating state officials, as are grand juries for two U.S. District Attorneys. Tipps believes the problems in Ohio are not simply a Republican issue. "This is not a Republican thing, this is a majority thing. Whenever a majority is in total control, this is what happens. It's the system that's bad; the people rationalize it as good politics, which isn't always good public policy," he says.

Tipps is intimately familiar with state politics, having served as state Democratic Chairman from 1975-1983 and as Montgomery County Democratic committee chairman from 1970-1977. He says the state's system of awarding bids for work is inherently political because of legal contributions and illegal contributions.

"Under state law, contractors are limited to contributing no more than $1,000 in the two years prior to receiving a non-bid contract," Tipps says, adding that non-bid contracts lead to companies illegally funneling more money to political action committees. "It's rife to be influenced by political contributions. Two billion dollars in school [construction] contracts have been awarded this way in the past five years."

Tipps says that over the course of his career he has seen state politics influenced by more and more money. "When I got into the business, [contracts] were up for bid, and were until 1990. Now they tell you you've got to contribute. Now they make a decision based on how much money you've given," he says.

Ohio Department of Transportation mostly uses a competitive bidding process to award contracts, says Brian Moore, letting manager for ODOT. “It’s almost always the low bid [that is selected], unless there are mistakes on the bid. A contractor must be pre-qualified, and be able to show that they are qualified to do 50 percent of the work required in the project,” Moore says.

Some of the department’s projects are emergency projects, in which bids are limited, according to Moore. Type A emergency contracts are awarded by district managers for jobs such as landslides. Type B emergency contracts are bid on only by contractors that specialize in a certain type of work, says Moore, noting that districts are required to try to equally divvy out Type A emergency projects to contracts throughout the district. Usually, the state awards only about 20 Type A jobs each year, but heavy rain resulting in flooding and landslides throughout the state resulted in 300 such projects being awarded by ODOT in the past three years, Moore says. Type A projects may account for up to $100 million of this year’s ODOT construction projects.

Some industry insiders say Tipps is off the mark with his notions of how the industry works. Clark Street, president of Ohio Contractors Association and a former assistant director of ODOT, said the state’s bidding process for construction projects is fair and open. “But there’s a difference between highway and building projects. With highway contracts, the lowest bidder gets the job. For building projects, consultants such as engineers and architects have their bids graded on the company’s expertise, and on the price of the bid,” Street says.

What Tipps calls "non-bid" contracts are contracts that are awarded to a company without a bid based on a set of specs that include price. More than $1 billion in such contracts have been awarded to contractors, consultants and other firms by the state of Ohio in the past year, Tipps says. "The corruption here is campaign contributions for non-bid contracts. It's not money under the table," he says.

Donn Ellerbrock, vice president of government affairs for Associated General Contractors of Ohio, says that “pay-to-play” is not the way things work in Ohio. “The political season started early here. A lot of it is rhetoric the Democrats are putting out,” he says. Ellerbrock, who is a full-time lobbyist for AGC of Ohio, says lobbyists can help out with issues that affect contractors across the industry. “For example, I helped rewrite the state’s lien law. I also worked on creating the provisions governing Construction Managers doing public work,” he says.

Such examples are part of the problem with state government, says Leah Rush, director of state projects for the Washington, D.C-based Center for Public Integrity. “Lobbyists are hired guns--hired to influence the legislative process,” she says.

Tipps disagrees with the characterization. He says lobbyists are a legitimate way for people to have their concerns heard by their legislators.

"When you talk about lobbyists, you're talking about people representing a lot of different groups. And yes, certain people have more access to legislators than other people. That's the representative form of government we have," Tipps says.