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"Why should people get to see plans? This isn't a public project."
Bruce Ratner in Crain's Nov. 8, 2009

Wired Deals

The following long commentary was posted by reader "MDDW" to an Atlantic Yards Report article on February 21st ("Down the EIS rabbit hole: how growing subway ridership was finessed in the AY environmental review"). We thought it was a worthwile read, and we post it here unedited:

Regarding the tension between reality and legality- Yes, judges often wind up in an Alice in Wonderland world of unreality by not second-guessing the analysis of a public agencies: But that doesn’t mean that a judge “has to agree” that the unreality of an agency's analysis “was reasonable.”

After work, judges, just like the rest of us, go home and watch enjoyable fiction like “Law and Order” or “Michael Clayton.” But the fiction we enjoy in popular culture is regularly more real than the fiction in some judges’ opinions. In popular culture we see stories about deals that have been “fixed” and machinations of improper political influence. OK, crime investigations don’t get wrapped up in trials that seem to go by in an hour, but every public official is familiar with the phrases, “the fix is in,” “the deal is wired,” “he’s got juice” and their familiarity isn’t based primarily on works of media fiction.

We know, because of what they write, that the justices in the Supreme Court’s Kelo opinion are also perfectly aware that when public officials handle matters there might be "impermissible favoritism,” transfers that are "suspicious" and “procedures employed” that are abused or "prone to abuse" and "purported benefits" that are only "trivial or implausible." The justices mention that they know that "benefitting" a developer could be, but should not be "the primary motivation or effect of” a “development plan.”

Though they may not want to, there is no doubt that our New York justices know that they can second-guess analysis of a public agency. They don’t want to because it is an uncomfortable thing to do. Essentially they are required to make an ad hominem finding about how the public officials have conducted themselves; the courts will have to say that what they see is “unreasonable,” “in bad faith” or “arbitrary and capricious.” Either that or they need to change their presumptions- which in cases of developer-initiated, developer-driven condemnations like Atlantic Yards they probably should.

The public officials who know that a deal like this one was wired should not be surprised to be called off base. An important thing to understand is that not all deals are “wired.” Most deals handled by public officials are not. It may be strange to think that all deals, whether they are wired or not, may be subject to the same standard of judicial review, but if our judges choose not to deal with reality that may indeed be the case.

When a deal is wired, process breaks down and rationalization sets in. Public servants don’t stand up for proper process because they might lose their job or not get promoted as fast. They may believe in taking orders. But they don’t want to acknowledge that there is real harm in this. If a deal is small, a public official may disregard the skip in process as too small to pay attention to. If a deal is big, like Atlantic Yards, then the breakdown in process will lead to cumulatively bad results. Through rationalization, these bad results are probably not even acknowledged by the very public servants who have ushered through a wired deal.

Inside ESDC I am sure that Atlantic Yards seems much like the elephant did to the blind men. An expert on the arcana of our condemnation statutes is not an expert on urban design, social fabric or density. Not wanting to acknowledge that they are contributing to a bad result they readily conclude that the glinting towers of Gehry represent an exciting future for Brooklyn. So also, the numbers-cruncher. In all those numbers is there a real and human experience of the megadevelopment? And the people working on the “R-TIFC-PILOT” (pronounced “Artifice-PILOT”) arena bonds?- how far do they consider beyond that the governor says he wants this and there is a Wall Street pay-day here to make? Of course these are hard working individuals but working hard to make plausible the political optimism of an environmental impact statement for a preordained project and developer is not the same as working hard to achieve the best for the public. And then who with a regular job could have enough expertise to fully appreciate the folly of Atlantic Yards?- Even if your job was working on Atlantic Yards.

Even if you are a public servant who has doubts about the deal being pushed through so fast for political reasons, you are more likely to speak your rationalizations around the water cooler than to express doubts- You have a job to keep and need your working relationships- So the collective wisdom of crowds never has a chance to develop. That wisdom is especially not likely to develop if the governor doesn’t circulated [sic] the stacks of negative public comment about the project.

Last in line to say whether the fantasy-land mis-processing of a wired project should be rejected as an unreasonable version of reality is the reviewing judge. The judge can side with reality and reject the work of the public officials. Again, it is uncomfortable to do so- Honestly speaking the public officials who did the work will acknowledge that wired deals are a very real thing- but that doesn’t mean a judge is going to want to render a real opinion that acknowledges this failure of process.

It is rarely much of a secret that a deal is wired. The facts have a way of speaking for themselves and presenting a certain flavor. It doesn’t need to be as obvious as many hundreds of millions of public-dollar-benefit being awarded without competitive bid. The judge is likely to pick up on that flavor. So in deciding whether to do the uncomfortable thing and declare public officials to be off base, the judge must also think realistically about the implications of deciding against a wired deal. One might think of this as the-bid-for-reality’s-recognition confronting another brand of realism.

No, it is not necessary that they actually wind up there, but yes, judges often wind up in an Alice in Wonderland world of unreality by not second-guessing the analysis of a public agencies when they should do so.

Posted: 3.06.08
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