Stealing From the D.C. Government Is Still Distressingly Common

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Any large organization is prone to theft, and the larger the sums of money, the greater the temptations to theft.  (I'm told by people who ought to know that if the scale of embezzlement in the retail banking sector were generally known, people would be shocked -- the banks keep it quiet so consumers won't freak out.)


Nonetheless, DC seems especially remarkable.  Shortly after I got here, a midlevel bureaucrat in DC's tax office was arrested for masterminding a ring that stole $50 million from the city over the course of 17 years.  Several even higher-ranking officials have been arrested for smaller chiseling, and a city council member just resigned over a corruption investigation.

Today brings news of another scam: something north of 100 district employees, current and former, seem to have somehow collected unemployment checks while still working for the city. 

But this actually represents progress, of a sort: this isn't corruption, or an organized conspiracy. It's apparently just garden-variety chiseling, of the sort that happens everywhere.  It's entirely possible that they got caught simply because they worked for the city, which had relatively accessible records of when they'd actually worked:

The alleged fraud is not complicated, nor is it uncommon in unemployment insurance programs: Workers apply for checks and receive them legitimately for a time but fail to inform authorities when they go back to work.

"Some are people who come in and out of government and never stopped [receiving unemployment checks]. Some may have worked in parts of an agency where for the summer months you don't work," Mallory said. "There are no clear patterns that we can discern. It's just a matter of certifying you aren't receiving income when you are receiving income."

Of course, what allows this sort of petty malfeasance, as well as the more odious crimes, is that DC has a large bureaucracy, but very weak controls.  A series of reform mayors has made inroads in this direction, and this latest crackdown is a good sign--but obviously, when City Council members may be among the beneficiaries, it's hard to move as fast as one would like.

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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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