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Comptroller: TN Ranking Among Most Corrupt States Not Necessarily a Bad Thing

Wilson says more public-money malfeasance gets reported here, but that doesn’t mean more is going on

A recent study showing that Tennessee is the third most corrupt state in the nation behind Mississippi and Louisiana isn’t particularly bothersome to the state’s Comptroller of the Treasury, Justin Wilson.

In fact, it is a sign the state is doing things right when it comes to rooting out and remedying corruption among public officials in state and local government, he told a meeting of the Joint Fiscal Review Committee on Tuesday. Comptroller Wilson made his comments after delivering an overview of his agency’s inner workings as reported in its quarterly report.

The study that was indirectly referenced during the Fiscal Review Committee hearing was published in the May/June 2014 issue of Public Administration Review. Prepared by researchers from Indiana University and City University of Hong Kong, the study defined corruption as “misuse of public office for private gain” and used federal corruption-law convictions as a primary element to determine overall corruption rankings.

The study garnered some media attention across the state, with reports about it appearing in the Commercial Appeal, Knoxville News-Sentinel and a column in The Tennessean.

“This is based on reported corruption, not actual corruption, and it really says that we’re more effective in rooting out and reporting corruption,” Wilson said during the July 8 hearing, in response to a question about the ranking from State Sen. Douglas Henry, a long-serving Nashville Democrat who is retiring this year. Wilson mistakenly referred to the Daily Caller as the organization that produced the study, when responding to Henry.

Wilson said he was unsure about how the researchers reached their results. “I’ve looked at the article, and it did not state the basis of which this finding was made,” he said.

There is a potential for fraud in any government, Wilson said. “But also the likelihood of a person committing fraud decreases dramatically if that person believes there is a reasonable chance of being caught or exposed,” he added.

Wilson went on to laud the work the state’s 300 auditors do in trying to proactively sniff out corruption, and partly attributed successes in Tennessee to requirements that state and local agencies adhere to two sets of generally accepted accounting principles to prepare their financial statements, rather than just one as in most states.

Additionally, Tennessee officials are “aggressive” about encouraging reporting of waste, fraud and abuse, which contributes to the amount of public corruption convictions in the states, Wilson said.

However, a recent article published in Salon noted that Nashville was also ranked as one of the nation’s “most corrupt capitals” in a 2012 Harvard study, and Tennessee was ranked the most corrupt state in the country by the Daily Beast in 2010.

In a 2012 survey of public accountability, Tennessee got a ‘C’ on its “Corruption Risk Report Card” from the Center for Public Integrity, which gave the state high scores for its auditing process, but low grades for transparency and ethics enforcement.  No state got an ‘A’ in that report, and the Volunteer State was ranked in the Top 10 for having a “low risk” of corruption. Tennessee also got an ‘A’ for state auditing practices and policies, which was the highest grade the state earned in the 14 categories analyzed by the study’s authors. The lowest marks came in the categories for ethics enforcement and redistricting transparency, which received, respectively, ‘D-minus’ and ‘F’ grades.

Following Wilson’s reassurances, members of the Fiscal Review Committee lauded Wilson for the work his office is doing to root out waste and fraud.

“That makes me feel a whole lot better now that that makes sense to me, because I was concerned about that same accusation against our state,” said State Sen. Bill Ketron, the Senate Republican Caucus Chairman. “But if we do a better job of reporting it, because other states – look at Chicago, come on.”

Wilson replied that “the instances and the cases of fraud” that he’s heard of from other states “are far greater” than in Tennessee, though he admitted that information was anecdotal.

Senate Finance Committee Chairman Randy McNally, a Republican from Oak Ridge, agreed with the comptroller’s assertion that Tennessee takes corruption seriously. In a lot of places, bribing public officials is simply regarded as “a cost of doing business,” but in Tennessee it appears there’s more corruption because it’s reported more, said McNally.

“It’s because we don’t look the other way, and we take strong action against people who embezzle or commit fraud against the public,” McNally said.

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