Private Money In City Government: A Good Idea or Bad?

Privatizing government services is generally considered a Republican idea, but what happens when a Democratic mayor funds many of his social service initiatives through private donations?

Chirstopher Osher of the Denver Post explains in "Mayor dreams big; donors come true."

Denver Mayor John Hickenlooper has raised at least $104 million from private donors to pay for a variety of city programs, including help for the homeless, a guarantee of college scholarships for the poor and plans for planting up to 1 million trees.

Since taking office in 2003, the mayor repeatedly has tapped private sources to pay for some of his top initiatives.

"People don't like throwing money at problems, especially tax money," Hickenlooper said. "Philanthropic sources are careful, but they have a higher tolerance for innovation."

As the money has poured in, though, some are beginning to question what the rules are when private money moves into the public sphere.

Those who raise concerns applaud the mayor for his fundraising prowess and good intentions but question whether there is sufficient transparency to gauge whether conflicts of interest are developing from donors.

They also caution that the fundraising could end up inflating city budgets in the end as some of the privately funded programs eventually require taxpayer support.

The biggest concerns seems to revolve around accountability and special favors:

Early in his tenure, Hickenlooper even established the Office of Strategic Partnerships, lodged in the Department of Human Services, to coordinate the fundraising and the efforts of nonprofit foundations.

But the fundraiser in chief raised concerns among some City Council members that he may have overreached when he secured $150,000 from an as- yet-undisclosed private foundation to pay some of the costs of a gang task force wanted by District Attorney Mitch Morrissey.

Councilwoman Carol Boigon said she won't back private funding of the gang task force because she fears it could create a situation where a defendant feared his prosecution was because an enemy donated money.

"When we are in the position of being able to take away someone's money, property, freedom and good name, I think it's very important that we be very, very clear and beyond any remote question that this is truly a public process and not privately funded," Boigon said.

Councilwoman Jeanne Faatz has said it's crucial that the mayor divulge the source of the gang funds to ensure no conflict of interest develops. She wants even the identity of the person who supplied the money to the foundation disclosed.

The mayor said he will reveal the foundation when it actually forwards the money to the city, but he said he doesn't know who gave the money to the foundation and wants to keep it that way.

"We didn't want the district attorney or the chief of police to know what individual had given money so there could never be any accusation that this person was avoiding prosecution or this person was getting this or that," the mayor said. "That's why we wanted the money to be anonymous."

Hickenlooper also wants to allow donors to contribute anonymously to his scholarship foundation program, which has raised $70 million so far, $50 million of which came from oilman Tim Marquez and his wife, Bernadette.

Faatz has questioned whether privately funded initiatives could end up with a hidden tax bite in the future. She voted against the mayor's homelessness initiative in part because she feared adequate resources hadn't been identified to pay for programs in the future.

"You can build a bureaucracy and end up not having buy-in to put that in the general fund," Faatz said, while stressing that she thinks Hickenlooper's ability to tap private donors is one of his top strengths.

Faatz also has been a stickler for full disclosure of donors, including in the scholarship program.

"There could still be expectations on the donor, and it could create cozy relationships," Faatz said. "It seems to me to be more upfront that if a public official is asking something of someone else, that that is transparent."

What do you think? Is this all a very progressive and well-intentioned effort, or are the likely consequences for public access and accountability too severe to allow continuation?