Kelo and Corruption

The blogosphere, particularly the right side, has waved around a story reported by the Newark Star-Ledger, as proving that Kelo was wrongly decided. For a liberal (but incorrect) perspective, see Kevin Drum here. For a right wing perspective, see The Queen of All Evil, here.

The story can be condensed quickly. Good Citizen Segal spends ten years and $1.5 Million acquiring a six acre parcel in Passaic, New Jersey. He wants to build a ninety townhouse development project on the property.

Corrupt Assemblyman Cryan, who is head of the township's Democratic Party, had been the beneficiary of a fundraiser hosted by the Evil Cousins Maulti. Three days later, the five-member township committee of Passaic voted unanimously to authorize the municipality to seize Good Citizen Segal's land through eminent domain and name its own developer.

Good Citizen Segal sued the township, and on Sept. 7 a Superior Court judge in Union County issued a temporary restraining order prohibiting the township from hiring its own developer. Six days later, the township committee unanimously voted to start negotiating -- but not sign a contract -- with the company owned by the Evil Cousins Malti. Corrupt Assemblyman Cryan is alleged to be in control of the township committee.

There are two possibilities here, neither of which undermine Kelo.

Perhaps everything that I just said about the affair is true. That is, Segal is a good citizen, Cryan is a corrupt assemblyman, and the Maltis are evil, and the story illustrates the use of governmental power to cheat a citizen, take his property, and give it to developers who paid off the political decisionmakers. I don't know whether any of these assumptions are, in fact, true. That is, I don't know whether Segal is a good citizen, Cryan is a corrupt assemblyman, the Maltis are evil, or that any of the other statements are true. But, for the sake of argument (or, as lawyers would say, "assuming arguendo that these statements are true"), so what?

All that this would mean is that if there is govenmental power, it can be used corruptly. One cannot argue against either the concept of government or certain governmental practices simply by pointing to specific cases of abuse unless those cases are a natural, unavoidable outgrown of the governmental practice at issue. That is, one must show that government, at its core, or some specific governmental process is inherently corrupt.

Government contracts might (and sometimes are) awarded to people who have bribed the contract officer. (Bribery of contracting and purchasing officers happens in the private sector as well.) The proper responses to such cases are (i) awarding contracts only as a result of a process of open, competitive bidding, and (ii) maintaining sufficient prosecutorial and investigative resources to police anti-corruption laws. No one would argue that because there are instances of corruption, there should be no government contracts. Thus, the anti-Kelo forces could only find succor in the Star-Ledger story if it showed some systemic flaw in Kelo. Not only is this not the case, but the Star-Ledger story shows that the exercise of Kelo-type condemnation powers does not inevitably lead to unfettered corruption and abuse: The matter is currently the subject of a judicial review.

There is a second possibility.

As related by the anti-Kelo commentators, there is something of an air of a "just-so story" about this matter. However, in the story itself, it is reported that Mr. Segal "met with Cryan . . . and other local officials 'scores of times' over the past five years to discuss the project." In other words, it appears that Mr. Segal wanted to have the aid and assistance of the local government to develop the property, but the parties simply couldn't come to terms. It is unclear whether this failure to come to terms was due to differences in price, the nature of the development, or otherwise. That being the case, it would seem that the township committee not only was within its rights to shop around the deal, but it would have derelict in its obligations to the township if it had not done so.

Due process does not require that Mr. Segal be allowed to do anything he wants with the property. There are all sorts of governmental restrictions (e.g., zoning code, building code, etc.) that are widely accepted. In the event of a taking of Mr. Segal's property, due process requires that he be given fair recompense for his property. Kelo does not change this. Kelo merely re-affirms what had really been existing law, namely that the scope of what constitutes an allowable governmental interest that will justify a taking is, of necessity, very broad. There is nothing in the Passaic story that would indicate that the Supreme Court's conclusion in Kelo was in any way incorrect. At worse, it offers an illustration of garden variety corruption, not some new variant that demonstrates an inherent flaw in the decision.