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Transparency and Government Contracts

What Do They Have to Hide?

by RALPH NADER

Several weeks ago, I joined with Grover Norquist, President, Americans for Tax Reform in urging state governors to emulate and go beyond the advances in bringing more openness to governmental expenditures put forth by Indiana Governor Mitch Daniels.

Early in 2005, Governor Daniels issued an executive order which enables Hoosiers to find on the Internet the total number of state contracts entered into each year, the total amount of dollars awarded under state contracts each year, and the number and percentage of Indiana businesses and out-of-state businesses to whom state contracts are awarded each year. In addition the entire text of most contracts covered by the executive order is available online.

Mr. Norquist and I disagree on many other issues, but we strongly share the belief that taxpayers should be able to easily access clear and concise information on how their tax dollars are being spent by governments at all levels.

At the federal level, the Federal Funding Accountability and Transparency Act will create a free, publicly searchable website for all federal contracts and grants. Senator Tom Coburn (R., Okla.) and Senator Barack Obama (D. IL) introduced this bill requiring the dollar amounts and recipients of all grants and earmarked contracts be placed in a publicly accessible database.

This important step toward transparency was signed into law by President Bush on September 26, 2006, the law states that the Office of Management and Budget (OMB) has to ensure the existence of a searchable website is available no later than January 1, 2008. Lawmakers from both sides of the aisle came together and joined forces to move in the right direction. But this is only a first step, since the actual contract language will not be made available.

When he was Director of the OMB in the federal government, Mitch Daniels expressed his support for putting all federal contracts and grants online above a minimum amount and invited public comment. Included in his proposal were defense contracts, prudently redacted, which, of course, means a large area of governmental spending historically off limits to public scrutiny.

Recently Iowa’s Republican Senator Chuck Grassley enthusiastically supported the idea of amending the Federal Funding Accountability and Transparency Act, to include the full text of contracts. Senator Grassley, a champion of the taxpayer and government whistleblowers knows that greater transparency will benefit taxpayers.

There is momentum to require the full text of government contracts be put online. But, don’t underestimate the power of lethargy. I first wrote to President Bill Clinton and asked him to issue an Executive Order setting procedures for every agency of the federal government to place its contracts online back in January of 2000. On February 8, 2000, President Clinton wrote back saying he had forwarded this request to the OMB’s Office of Information and Regulatory Affairs for review. On September 10, 2001, I wrote to Mitchell E. Daniels, Jr., then the Director of the Office of Management and Budget, urging him to give taxpayers access to the full text of government contracts. On June 6, 2003, as a result of Mr. Daniels drive on this issue, a Federal Register Notice was issued asking for public comments on a pilot project to put contracts online. His successors at the OMB have not followed up.

We are moving in the right direction with the Federal Funding Accountability and Transparency Act, but as we all know the "devil is in the details." Requiring federal agencies and departments to post online the full text of all federal contracts would be a wonderful next step. The computer age should make it possible to efficiently allow for certain redactions related to legitimate concerns about business confidentiality and national security in contracts before they are posted online in a publicly-available database.

A large coalition from across the political spectrum has been pushing for increased transparency in government, which is good for a more competitive procurement process, the taxpayer and our democracy.

Contracting out what the state and federal government do and contracting to obtain what governments need is a large part of our economy. The former includes letting corporations perform government functions and the latter includes buying supplies like fuel, paper, food, medicines and vehicles. Taken together, they amount to spending trillions of dollars over the past decade – our tax dollars.

Putting the full text of these contracts online will: could give taxpayers both savings and better value; let the media focus more incisively on this vast area of government disbursements to inform the wider public; encourage constructive comments and alarms from the citizenry; and stimulate legal and economic research by scholars interested in structural topics related to government procurement, transfers, subsidies and giveaways.

Congress should amend the Federal Funding Accountability and Transparency Act.

And, Governors should work expeditiously to make the full text of all state contracts, ranging from procurement of goods and services to grants, leaseholds and labor contracts, available to the public on the Internet in a clear and searchable format.

Transparency is one of the core principles of representative democracy. Another way of putting it is that "information is the currency of democracy."

RALPH NADER is the author of The Seventeen Traditions