City Ends Contract – Revenge Says Nonprofit

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December 30, 2010; Source: New York Times (The Bay Citizen) | In San Francisco, a nonprofit environmental advocacy organization called Arc Ecology claims that the city of San Francisco ended its contract with the agency as an act of revenge.

Arc Ecology actively opposed the Hunter's Point Naval Shipyard redevelopment plan, especially components that included construction on state-owned parkland. The San Francisco government made its displeasure clear and denied Arc Ecology an environmental information services contract that the organization had held for almost a decade.

An investigation by the Bay Citizen suggests that this wasn't an accident, but the administration of Mayor Gavin Newsom was actively involved in terminating the Arc's contract. The redevelopment agency's four members, all appointed by Newsom, voted unanimously to give the Arc's contract to a national environmental planning and public relations firm headquartered in San Francisco called CirclePoint, an action contrary to the recommendation of the agency's executive director and staff, all of whom are employed by the State of California.

According to the Bay Citizen, four out of five external reviewers of the competing proposals for the contract rated Arc Ecology higher than CirclePoint. The Arc has filed a federal lawsuit against the city's redevelopment agency alleging that its free speech rights have been violated and its advocacy on the Hunter's Point project should have had no effect on its eligibility for the contract.

According to the article, "the case could help determine the extent to which city officials can require contractors to fall in line with city policies." The city's response is to call the Arc's position "sour grapes." The president of the redevelopment agency made his position clear: "As a consultant, I have my feelings and sometimes I don't agree with all my customers, but I don't bite the hand that feeds me. It's not good policy."

This is a controversy worth monitoring. Should nonprofits swallow their values, principles, and technical analysis in order to adhere to the political stances of the government agencies that hold their contracts? Can and should government contract money buy acquiescence and silence? Alternatively, should government agencies have to contract with groups that, despite their technical qualifications, hold positions at odds with other governmental policies and agendas?—Rick Cohen

  • Saul Bloom

    Mr. Cohen’s review of the NYT/ Bay Citizen article on Arc Ecology’s lawsuit with the San Francisco Redevelopment Agency is perhaps the best of these second generation reports. While there are technical errors with regard to the difference between the Agency and its Commissioners, it was a very good effort.

    The last two paragraphs appropriately and accurately summarize this issue and by doing so reveal one the most disturbing and important components of this controversy. At it’s most distilled, the question raised is: what responsibility does government have to honesty.

    Mr. Swig says here as he has elsewhere: “As a consultant, I have my feelings and sometimes I don’t agree with all my customers, but I don’t bite the hand that feeds me. It’s not good policy.” Mr. Cohen asks: Alternatively, should government agencies have to contract with groups that, despite their technical qualifications, hold positions at odds with other governmental policies and agendas?

    The danger in Mr. Swig’s comment is his clear confusion between government and business. While I would agree that in many instances government should be run more like a business, government cannot be business and business cannot be government. The purposes of these two pursuits are so totally different as to be exclusive. While a business can develop products that are good for all, its purpose is to return value and profit to its shareholders, investors, owners and leaders.

    Government’s role is very different. We the people are its shareholders and value and profit must be returned to all despite or in spite of station or portfolio. In Mr. Swig’s universe of business it is reasonable to expect a consultant to remain silent and even lie on behalf of a customer. In a democratic government this attitude sunders the relationship between the people and their representatives and agencies. If we cannot trust government not to lie than we cannot trust government. If a commissioner can expect a consultant to lie or be silent than one can neither trust the commissioner nor government.

    People working in government and legislation often compare it to making sausage. This is apt but not usually in the way they mean it. The reason it is apt here is because it illustrates the difference between the two roles. While it may be someone

  • rick cohen

    Thanks very much for the comment and the correction. Limited to less than 400 words in newswires, my phrasing regarding Arc Ecology having “opposed” the Hunters Point plan was not quite precise. I’m glad you clarified. The answer you give to my question, however, goes both ways Government should be honest with itself and its stakeholders (all of us) to accept honest, straightforward feedback and analysis, even if it doesn’t lead to the conclusions that some in government might have wanted. However, the issue also goes to the nonprofits too. Will nonprofits stand up for, will they stand behind their forthright findings, or will they take dives because of the money involved. I am reminded of the number of groups, strong advocates, that took money from Ameriquest, but were then confronted with Ameriquest’s predatory home financing behaviors. Many many of these strong advocates turned noticeably cotton-mouthed about Ameriquest’s documented predatory actions, because their grant moneys were involved. How many nonprofits dutifully testify in favor of some banks’ mergers and acquisitions, despite sometimes less than stellar CRA performance, because of the grant money involved. We have an obligation of holding government accountable and being truth-tellers to government, regardless of the contract funds involved, but nonprofits have to be truth-tellers to themselves as well. Thank you so much for your very useful comments.