Costing and curing corruption in public transit agencies. A preliminary assessment of New York and Los Angeles

Date01 October 2006
DOIhttps://doi.org/10.1108/13590790610707564
Pages442-455
Published date01 October 2006
AuthorCameron Gordon
Costing and curing corruption in
public transit agencies
A preliminary assessment of New York and
Los Angeles
Cameron Gordon
Division of Business, Law and Information Sciences, University of Canberra,
Canberra, Australia
Abstract
Purpose – What is the cost of corruption and associated financial malfeasance in public transit?
The purpose of this paper is to consider this question, focusing on two American agencies: the
Metropolitan Transit Authorities (MTA) in both New York and Los Angeles.
Design/methodology/approach This paper reviews the literature on corruption,
mismanagement and malfeasance in the public sector generally and the factors which are believed
to lead to these phenomena; and preliminarily assesses the relative presence and cost of such
malpractices in their MTAs, and their causative factors in public transit agencies generally.
Findings – Preliminary analysis of reports of corruption and malfeasance in the two MTAs yields
cost estimates of over $US200 million in the Los Angeles County Metropolitan Transportation
Authority and over $US1 billion in the New York State Metropolitan Transportation Authority across
roughly five-year periods (periods of analysis not being exactly the same for the two agencies).
Research limitations/implications – The data examined were not comprehensive and costings
not final. Thus, the estimates can be considered to be lower than the actual incidence and costs.
Originality/value – By preliminarily quantifying the cost of maladministration in the largest transit
agency in the USA and then one of the newest, this paper provides an assessment important in and of
itself and also provides an initial methodology which can be used for more precise costing and analysis
of such issues in the future. Possible causes of such problems include lack of accountability: the two
MTAs are independent authorities with little legislative or executive oversight; and also the fact of
these being public monopolies.
Keywords Corruption, Publicadministration, Transportation,United States of America
Paper type Research paper
Introduction
What is the costof corruptionand associated financial malfeasancein public transit? This
is the general question to be considered with a focus on two American agencies: the
Metropolitan Transit Authorities (MTA) in both New York and Los Angeles. The New
York MTA is thelargest transit agency in the USA,while the Los Angeles MTA is one of
the newest,with one of the larger new capitalprograms. Both havesuffered from scandals
ranging from major cost-overruns, shoddy construction, accounting and budgeting
irregularities, and outright indictments and criminal charges. At least some of these
problems may stem from lack of accountability: the two MTAs are independent
authorities with little legislative or executive oversight. There is also the issue of these
being public monopolies.
This paper reviews the literature on corruption, mismanagement and malfeasance
in the public sector generally and the factors which are believed to lead to these
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1359-0790.htm
JFC
13,4
442
Journal of Financial Crime
Vol. 13 No. 4, 2006
pp. 442-455
qEmerald Group Publishing Limited
1359-0790
DOI 10.1108/13590790610707564

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