The Pennsylvania Turnpike Commission is again mired in controversy. Former U.S. Rep. John Peterson's recent accusation that it's a "cauldron of corruption" follows the governor's firing of its former chairman over corruption allegations, as well as a former staffer's guilty plea to charges that he took money for ghost contracts. Meanwhile, separate investigations by the FBI and the state Attorney General's Office are examining cost overruns and links between contracts and political donations.
Pennsylvania needs to rein in the Turnpike Commission. But proposals like last year's failed attempt to lease the turnpike to a state-backed private monopoly would only make matters worse. It would be wrong to conclude from the recent scandals that "quasi-publics" like the commission should be privatized, or run more like private corporations. In fact, we already allow these agencies to act too much like private firms.
Tens of thousands of similar authorities operate around the nation, governed by appointed boards that are not beholden to legislatures. They are called "quasi-public agencies" or "public corporations" because they are financed mainly by their own collection of tolls and fees from the public, as well as by investment income and other nontax revenues. We entrust them with a long leash and light oversight.
Most of the time, these agencies remain out of the news, quietly managing public functions such as toll roads, sewer systems, school construction, and public transit. Their inner workings come to light almost exclusively amid accusations of corruption or mismanagement.
The purpose of their appointed boards and separate financing is to insulate them from politics and budgetary uncertainty. Insulation from legislative politics can help foster professional independence. Likewise, keeping balance sheets "off budget" can provide more stable funding for critical infrastructure and reassure bond investors that they will be repaid.
Unfortunately, though, this lack of traditional public accountability can also provide fertile ground for inside dealing by board members. And financial mismanagement can undermine the agencies' ability to deliver basic services.
Quasi-publics' problems typically arise from too little public accountability, not too much. Rather than being allowed to engage in risky financial schemes or hide behind claims of proprietary privilege, they need to be held to stricter standards of public transparency, as well as accounting practices like those used elsewhere in government.
The turnpike commission isn't the only quasi-public agency in which mismanagement and corruption have festered under exemptions from rules on budget transparency, open records, and conflicts of interest. And the resulting financial mischief isn't limited to kickbacks and campaign contributions.
Boston's "Big Dig" became famous for cost overruns and dangerous construction shortcuts, largely because of a lack of strong public oversight of Bechtel, the general contractor. SEPTA and Pittsburgh's port authority, like at least 27 other transit agencies around the country, saw risky financial deals go bad after they sold train cars and other assets to Wall Street investors who pocketed tax breaks and leased them back to the agencies. These are deals that never would have withstood public scrutiny.
It's not enough to expect quasi-public agencies to raise their own standards. Last year, the Turnpike Commission began disclosing some summary information about its contract bids. Its new online system makes it easier for contractors to enter bids, but it fails to allow public scrutiny of competing bids or past contracts. Despite the commission's claims to the contrary, almost none of its contracts are posted upon execution. The Web site also purports to bolster the transparency of surplus property sales, but it provides no information about past sales.
The state's new Right to Know Law requires the commission to comply with citizens' requests for specific public records. That is a step toward improved transparency, but outside researchers must know what to look for and be able to pay substantial copying fees.
Because of the vital public functions they oversee and their extraordinary lack of direct public oversight, independent agencies such as the commission should be held to stronger rather than weaker standards of transparency. Details of their spending, debt, and salaries should be archived and posted online in easily searchable databases. Contracts, possible conflicts of interest, and relevant campaign contributions should be fully disclosed and easy to access. These are best practices in the public sector, and quasi-publics should not be exempt from them.
There's no reason the Pennsylvania Turnpike can't become a source of civic pride. But it won't unless we hold it to high standards of public accountability.