Алистер Смит - The Dictator's Handbook - Why Bad Behavior is Almost Always Good Politics

In this book, we’re going to provide a way to make sense of the miserable behavior that characterizes many—maybe most—leaders, whether in government or business. Our aim is to explain both good and bad conduct without resorting to ad hominem claims. At its heart, this will entail untangling the reasoning and reasons behind how we are governed and how we organize.

The picture we paint will not be pretty. It will not strengthen hope for humankind’s benevolence and altruism. But we believe it will be the truth and it will point the way to a brighter future. After all, even if politics is nothing more than a game that leaders play, if only we learn the rules, it becomes a game we can win.

To improve the world, however, all of us must first suspend faith in conventional wisdom. Let logic and evidence be the guide and our eyes will be opened to the reasons why politics works the way it does. Knowing how and why things are as they are is a first, crucial step toward learning how to make them better.

Bell’s Bottomless Blues

In politics, as in life, we all have desires and contend with obstacles that keep us from getting what we want. A government’s rules and laws, for example, limit what we can do. Those in power differ from the rest of us: they can design rules to their advantage and make it easier for them to get what they want. Understanding what people want and how they get it can go a long way to clarifying why those in power often do bad things. In fact, bad behavior is more often than not good politics. This dictum holds up whether one governs a tiny town, a mom-and-pop business, a megacorporation, or a global empire.

Let’s start with a tale of a small town’s team of seemingly greedy, grasping, avaricious louts so that we can appreciate how the world looks from a leader’s perspective. And yet it’s vital that we remember that this is a story about politics, not personality. Whether we’re discussing a cabal of corrupt reprobates or not, what really matters is that these are people who value power and recognize how to get it and keep it. Soon enough we will come to appreciate that this small tale of miserable conduct recurs at every level of politics and corporate governance, and that there is nothing out of the ordinary in the extraordinary story of Bell, California.

Robert Rizzo is a former city manager of the small town of Bell (population about 36,600). Bell, a suburb of Los Angeles, is a poor, mostly Hispanic and Latino town. Per capita income may be as low as $10,000 or as high as $25,000—estimates vary—but either way it is way below both the California and national average. More than a quarter of the town’s hard-working people live below the poverty line. Life is not easy in Bell.

Still, it is a community that takes pride in its accomplishments, its families, and its prospects. Despite its many challenges, Bell consistently outperforms other California communities in keeping violent crime and property crime below average. A cursory glance at Bell’s official website suggests a thriving, happy community brimming over with summer classes, library events, water play, and fun-filled family trips. And Bell seems to be a concerned community too. The town offers, for instance, Housing and Urban Development (HUD) grants to pay for repairs to single-family homes provided certain basic residency and income requirements are met.1

Robert Rizzo, in his job for seventeen years, must surely look back on his time as city manager with pride. In 2010, Bell’s then-mayor, Oscar Hernandez (later jailed on corruption charges), said the town had been on the verge of bankruptcy in 1993 when Rizzo (also ultimately charged with corruption) was hired. For fifteen consecutive years of Rizzo’s leadership, up until he stepped down in 2010, the city’s budget had been balanced. Hernandez credits Rizzo with making the town solvent and helping to keep it that way.2 That, of course, is no mean feat. Surely he and the town leaders with whom he worked were deserving of praise and tangible rewards for their good service to the people of Bell.

Behind the idyllic façade, however, lies a story that embodies how politics really works. You see, Robert Rizzo, hired at $72,000 a year in 1993, and in his job for seventeen years before being forced to step down in the summer of 2010, at the end of his tenure was earning a staggering $787,000 per year.

Let’s put that in perspective. If his salary had just kept up with inflation, he would have made $108,000 in 2010. He made seven times more! During long years of low inflation, his salary went up at an annual, compounded rate of more than 15 percent, almost exactly the return promised by Bernie Madoff, the master Ponzi schemer, to his hapless investors.

How does Rizzo’s city manager’s pay compare to other responsible government jobs? The president of the United States is paid $400,000.3 The governor of California’s salary is just over $200,000. The mayor of Los Angeles, just a hop, skip, and a jump from Bell, is paid only a bit over $200,000. To be sure, Robert Rizzo was not even close to the highest paid public employee in California. That distinction, as in most states, went to the coach of a university football team—UC Berkeley’s coach earned about $1,850,000 in 2010, but then he probably brought in a lot more revenue than Mr. Rizzo.4 Robert Rizzo was indeed credited with doing a good job for Bell, but was it really that good? It seems that he was the highest paid city manager in the entire United States (or at least until we discover another Bell).

The natural thought is that somehow Robert Rizzo must have been stealing money, dipping into the proverbial cookie jar, taking funds that were not rightfully and legally his or, at least, doing something or other that was immoral and illegal. The California attorney general (and Democratic candidate for governor) at the time of the Bell scandal in the summer of 2010, Jerry Brown, promised an investigation to find out if any laws had been violated. The implicit message in his action was clear enough: No one would pay a small town city manager nearly $800,000 a year. The truth, however, is quite a bit more complicated.

The actual story is one of clever (and reprehensible) political maneuvering implicitly sanctioned by Bell’s voters and the city council members who represent them, supplemented only by a touch of larceny.

Cities comparable to Bell pay their council members an average of $4,800 a year. But four of Bell’s five council members received close to $100,000 a year through the simple mechanism of being paid not only their (minimal) base council salaries but also nearly $8,000 per month to sit on city agency boards. Only poor councilman Lorenzo Velez failed to reap such rewards. Velez apparently received only $8,076 a year as a council member, approximately equal to what his fellow council members were getting each month . How can we possibly explain these disparities, let alone the outrageous salaries and pensions provided not only to Mr. Rizzo, but also to the assistant city manager and Bell’s chief of police (all subsequently jailed on corruption charges)?

The answers lie in a clever manipulation of election timing. The city’s leaders ensured that they depended on very few voters to hold power and to set their compensation. To see how a poor community could so handsomely reward its town leaders we must start with the 2005 special election to convert Bell from a “general city” to a “charter city.” What, you may well ask between yawns, is the difference between a general city and a charter city? The answer is day and night: decisions are made in the open daylight in general cities and often in secret, behind closed doors in charter cities. While a general city’s governing system is dictated by state or federal law, a charter city’s governance is defined by—well, as you would expect—its own charter.