New Mexico’s current Governor, Gov. Michelle Lujan Grisham (D), is being audited by the New Mexico State Senate for questions in how she uses the discretionary funds that come as a perk to her office. While Gov. Grisham is not the first to abuse discretionary funds, nor will she be the last, abuse of discretionary funds in New Mexico is not the topic of this article. Although, if I were a New Mexican Senator, I would hound the living life out of why the Governor thinks she can use those funds for her dry cleaning and then complain that from a budget of $7 Billion, “context is important.”
Context is not the issue in the use of discretionary funds, paid through forced taxation and other government means, to rob the citizen and businesses of their money. Context, according to Webster is, “the circumstances that form the setting for an event, statement, or idea, and in terms of which it can be fully understood and assessed.” Let us use Gov. Grisham’s spokesman Tripp Stelnicki’s own words for expounding upon the problem. Please remember, Gov. Grisham is only being used as an example as she is currently in the news for dipping her hands into discretionary funds. Many politicians need their discretionary funds scrutinized, audited, and accounted for by the politician to the public for wasting the public’s money.
Discretionary funds are an amount of money available to spend on things that are not considered necessary but may be useful. How these funds are spent, how the funds are accounted, regulated, and controlled will vary from state to state, county to county, and city to city across America. How discretionary funds are controlled and regulated across all democratically elected societies worldwide is extremely varied and complex. The sole standard of discretionary funds is that they are a set amount of money budgeted, and the spending is considered “necessary” or “useful.” Just do not forget, these funds come from the taxpaying public and should be publicly discussed, and accountability is required!
New Mexico Governor (D) Bill Richardson’s annual spending of discretionary funds climbed to $139,000 in 2008 while playing host to Hollywood types foreign dignitaries and community groups the Governor wanted to woo. The ethical lapses of discretionary spending were but one reason why Governor Susana Martinez (R) was elected as the people hoped for a change and better accountability for their tax dollars. Sadly, Gov. Martinez was not the fiscal hawk needed. New Mexico State continues to struggle because of the politicians’ ethical and moral positions in the house, senate, and Governor’s mansion. Not to mention the fiscal illiteracy found in the same politicians.
What are the dangers of discretionary funds?
Fraud appears to be the most obvious danger in discretionary funds. A non-profit group in Flatbush helped rip off the discretionary funds’ scab and the scams that funnel millions of taxpayer dollars into politicians’ hands in a cycle of abuse of both non-profit organization’s discretionary funds. Apparently, “a lack of control and oversight of the millions of dollars New York City appropriates annually to non-profit groups through council member earmarks, often referred to as pork-barrel spending.”
Public corruption also rears its ugly head where discretionary funds and people with hands out conduct business. “Former City Representative Desiree Peterkin Bell, who ordered the $3 million deal in 2014, is charged by state prosecutors with theft and misuse of public money stemming from her oversight of the Mayor’s Fund, a non-profit used to promote Philadelphia and advance the mayor’s policy goals. A state grand jury charged Bell in October 2019 with six felony counts related to public corruption for alleged theft and misuse of Mayor’s Fund dollars. Bell has denied all charges.” Never forget, the politician controlling discretionary funds decides what is “useful” but not necessarily “needful” when spending discretionary funds.
Phantom Funding also appears as a hole through which discretionary funds come and discretionary funds go. Consider New York City and the report from 2008 where “… the City Council had allocated funds to non-existent organizations, Council Speaker Christine Quinn declared that the council has “reformed” its decades-long practice of hoarding extra funding for pet projects.” For New York City, the scandal for discretionary funds and phantom funds went as high as $20 Million annually. Leading to a question for NM Gov. Grisham’s spokesman Tripp Stelnicki, “whose context should we keep in mind when discretionary funds are abused the politicians or the taxpayers stuck footing the bill?”
Want some interesting insights on discretionary fund abuse; Courtney Gross raised some excellent points and identifies how the process works, just in New York City. However, I have no doubt the same pattern is followed in abusing discretionary funds across America, maybe not in the exact dollar amounts, but definitely, a pattern followed. Worse, Courtney Gross asked the questions all politicians who have discretionary funds available need to answer.
Discretionary funds are dangerous, as the Pope has discovered in 2020, where Mr. Tirabassi and Monsignor Perlasca, among a host of others known only by initials, set up schemes to raid the Vatican coffers of at least €454 Million in financial assets. The investigation is ongoing in Italy and has taken a dramatic toll on the Catholic Church’s finances and reputation. The scheme included blackmail, bribery, and a host of other financial crimes. While those accused remain innocent until proven guilty, the fact that the Holy See is not impervious to discretionary fund abuse is a warning to everyone that discretionary funds are dangerous!
A simple search of discretionary fund abuses brings up discretionary trading and a host of articles citing and supporting the claims that anything with the term discretionary in the title is an opportunity ripe for abuse by nefarious actors who want their cut. Hence the problem, too many accounts in public funds include discretionary in their titles. Like the famed hydra of old, if discretionary funds are removed, a new head will appear to abuse and steal the public’s money to the benefit of a few politicians, non-profit groups, and in the case in Rome, “consulting fees.” The following suggestions support a “Liberty FIRST Culture:”
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- All discretionary funds are ended forthwith, and if an account is needed, all receipts are open for public discussion, and details are paramount. Those spending the money need to provide the public the reason for the funds being spent.
- No unfunded liabilities are allowed, ever!
- Make it public with quarterly audits done by more than a single auditor and double-checked using a third and independent auditing system. Fail an audit once, and the politicians are immediately removed, and a criminal investigation opens into financial crimes.
- Reduce the size of government! I cannot stress this point enough; size breeds problems, and theft is committed in the chaos!
- Personal accountability for how and why public funds are spent is missing in how politicians are currently conducting business. Begin to build into local and state laws methods and means for holding those abusing their position with the public’s money ways to hold them personally accountable legally. Hence, if a politician misspends money, they are personally responsible for repaying those funds. Suppose the Commanding Officer of a ship can be held accountable for marine life death due to shipboard operations. In that case, every single politician can be held responsible for the whales of public spending malfeasance they originate.
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Remember, these suggestions are only a beginning to the solution, not the end resolution. In conducting audits, previous politicians will be discovered for the schemes they perpetrated, and they will need to be held accountable. Some schemes have lived for so long; the scheme is now an organizational design problem, costing money and other resources requiring locally adaptable solutions to correct. Regardless, cleaning up the government’s size and the funds spent will be a significant undertaking requiring the best innovative minds. Pitch IN! We need all hands on deck to fix these problems and pay off the fiscal malfeasance!
© 2021 M. Dave Salisbury
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