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Comment by ChuckFrank | Hacker News Reader

What a fiasco. This story just keeps getting bigger and bigger. So many lessons to be learned about a flawed bidding and construction process. And from what I see, it's immune to politics. No party can take the higher ground. Public sector graft and private sector lying, cheating and thieving, both need to be stopped and big, small government, or running government like a business doesn't seem to help. Instead, working towards an ethical and just society with clear and equitable consequences for all does seem to help. So in this case, follow the money, retrieve all that was gotten through ill gotten gains, and hand out jail sentences. As for the rest of us, we still have a bridge to deal with.

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This is exactly the right attitude in my opinion. Wherever there is money to be made, be it public or private sector, thieves will show up with big smiles and sharp suits on. Consequences are the only thing they understand, and prison sentences are the only true consequences for white collar crime (fines just become a cost of doing business, the only thing you can't get back is time).

Unless the fines are 2-3 times the amount stolen. That would cut into the legitimate portion of their income and likely be a strong deterrent.

You have a very small chance of being caught if you ride the subway without a ticket. If you are caught some countries will work out what to fine you by multiplying the chance of being caught by the price of the ticket you didn't buy. So if they check your ticket once every 100 times you catch a train the fine for not having a ticket will be more than 100 times the cost of the ticket. That way not buying a ticket works out more expensive than buying one.

If you actually want to deter this kind of crime you need to fine the people who are caught the amount of money they stole multiplied by the number of people who don't get caught. So you should probably be thinking 20 or 30 times the amount stolen.

Of course such large fines might take entire industries down with them so you're unlikely to ever see corporate crime punished as excessively as it should be.

The train example is very informative because if you don't price the fine high enough you encourage people not to buy tickets. There actually was a mob-run "insurance" plan for train riders in India. The fine was about 20x the ticket price, but you would only be asked to show your ticket about every 100-200 rides. So you could buy half priced tickets from the mob and then they would reimburse you for any fines you paid while riding with their ticket.

The problem is that you have to know how often they get caught in order to decide the amount. For example, if they only get caught 1/4 of the time, the fine needs to be greater than four times the amount stolen to make a difference (force the expected value of the behavior below zero). In practice, it would probably need to be quite a bit higher than that since people who do this sort of thing are likely risk-takers/gamblers.

So there are then two things you have to guess at. First, how often they get caught (which is difficult, but not impossible to estimate) and second, how far below zero the expected financial payoff must be to change the behavior.

You also have to figure out what happens when they don't have the money (or the money is well-hidden). Do they just go into some kind of negotiated payment schedule like people who lose lawsuits? That might have no impact at all since their illegal earnings are likely to be hidden from authorities anyway (or can be if needed).

This is why I favor prison, because a prison sentence is much harder to "cheat" or nullify. No one lives forever, so prison is like taking a small chunk of a precious commodity away from someone. Additionally, if you are a big earner, prison is actually worse for you in some ways because you generally lose your income while incarcerated. This means that even very rich people or people who hide their wealth from the authorities can be punished effectively with prison time.

On principle, I'm opposed to prison being used for anything but violent offenders where there are no other choices to safely contain them - prison includes a very real possibility of rape, assault, and so on.

The administrative penalties could simply be scaled to be much scarier without needing to go that far.

Personal financial liability (piercing the corporate veil) with limited negotiation of terms (and since personal credit is usually factored into business credit, that bankruptcy will greatly impact your ability to do business), administrative dissolution of business, very very large fines, and so on.

I completely agree with you that rape and assault in prisons is a terrible problem. I still think prison is a better solution, but I definitely agree that throwing anyone in the prisons we have currently (at least in the US) is probably immoral.

I am trying to understand how this fiasco is any different from Boston's big dig? Are we just posturing because it was a Chinese company? Neither was bid/priced right and both have/had safety problems.

Welcome to the world of government contracts, big projects tend to be vastly different than what is proposed or agreed too.

Hence I am confused as to why the controversy this time.

Are you implying that there wasn't controversy over the Big Dig? I remember plenty.

I read the article as having a strongly anti Chinese bias. So I think Shivetya's point was a fair one which is "Should this be a story on government mishandling of big projects" as the lead and move away from the Chinese bashing? Or is there a legitimate angle for the overall story about the fact the cheapest bid also happened to be a Chinese company.

The communication problems detailed in the article, coupled with the pre-construction work that was completed in China and then shipped across the Pacific, makes a difference when it comes to the management of the project.

That's not to say that these are unique problems because the contracting firm was Chinese, rather than, say, French. However, in this case it is relevant to the overall narrative that the challenges exist, because they make it that much harder to proactively address quality deficiencies.

So your argument is, because government projects are usually problematic, we should not be calling attention to new problematic projects? Doesn't that seem a little... fatalistic?

I am not aware of many if any actually big government projects that are not problematic. However I do think the story was full of underhanded/indirect Chinese bashing, if not just plain foreigner bashing; like the quote "unaccustomed to the rigor of American construction rules". I guess they are just too stupid to do business in the real world, and this in the state that wants to waste billions on a train to nowhere.

Frankly I am amazed at how much oversight there isn't on billion dollar plus projects. You would think there should be more than one agency, in particular neutral non government agencies that should be required to sign off on projects that crest a certain dollar amount.

This is not to say that big government projects are all bad, they do lay ground work for many private companies to build on. Look as Space X, it would not be where it is today if not for NASA but it is a better choice for many things that NASA because of its big government mentality are not good at anymore. We only have to look at the recent boondoggle that was the ACA's main website to understand that oversight by non politically aligned, no government groups, is warranted.

TL;DR.

Yes, a lot of China bashing going on, to redirect the ire from its rightful spot, inept government with no real oversight. There needs to be "civilian" oversight on large government projects, appointed by industry experts.

Sounds like exactly what I would have recommended when the sub-prime market caused Wall Street's collapse ... people should have gone to jail but instead received performance bonuses. Executives who directed the bridge construction seem to have landed cushy non-government jobs instead, but the level of corruption and blame-shifting amazes me in both cases.

In both cases the behavior was enabled and encouraged by the government regulators. Should they also go to prison?

Yes

It is really time that a new form of government is developed. It simply does not work this way and, in many ways, at the very least, the current form of democracy is insufficient and incapable of providing proper accountability.

There really needs to be some sort of tie to performance. It obviously cannot be the same kind of tie to civilian/private performance, especially since even that system in this country is grotesquely inadequate. Your motivations should be that your retirement and success is directly pinned to some metric and system of government competition and accountability.

I think the first step would be to separate and limit raising revenues, i.e., taxes, from spending revenues. The legislative function in the whole vertical structure of the government needs to be separated into a fourth branch. It is bone-headedly ridiculous that those who decide on what to spend money, also decide how much to spend, and where that money will come from.

There are so many humongous flaws in our governmental structure that violate so many basic auditing, risk, and accounting principles; it's absolutely ridiculous.

This is far deeper than just the acquisition or bidding process. This goes down deep into the core fundamental premises of our governmental and even social structure. It is a deep flaw that was revolutionary in the agricultural era it was devised in, but simply is far beyond inadequate for today's world.

I don't really see any evidence of corruption here. Just accepting a low bid from a contractor that scored poorly on the technical evaluation. Sometimes that pays off, in this case it clearly didn't.

The refusal and coverup/whitewashing of the quality problems is a criminal act. Corruption isn't just taking bags of money -- it's ignoring things that affect public safety to defend you career as well.

"Caltrans permitted an unknown number of cracked or suspect welds in the suspension span. After two senior engineers challenged quality assurance practices, Caltrans reassigned one and let the other’s contract lapse."

"Tony Anziano, chief executive for toll-bridge work, made at least 64 visits to Shanghai, stayed in one of the city’s most luxurious hotels and spent more than $300,000 on travel during construction."

>"Caltrans permitted an unknown number of cracked or suspect welds in the suspension span.

That obviously is not good and is a sign of a badly run programme, but it is also true that structures are built with a certain level of defects all the time. It sounds like in this case they may have made judgements about that which were questionable but accepting work (including structural) which has some flaws is not abnormal, the question is whether the judgement as to the materiality of the flaws was made for sound engineering reasons or not.

>After two senior engineers challenged quality assurance practices, Caltrans reassigned one and let the other’s contract lapse."

Yes, that does sound quite bad. It's by far the most damning thing, I can't determine from here whether they used good engineering judgement, but dismissing whistleblowers is bad news. It's not corruption though.

>"Tony Anziano, chief executive for toll-bridge work, made at least 64 visits to Shanghai, stayed in one of the city’s most luxurious hotels and spent more than $300,000 on travel during construction."

Totally normal. Anyone writing "one of the city's most luxurious hotels" doesn't understand business travel in Asia where there may not be much between the tiers of "luxury" and "doesn't meet basic standards". Most of that money went on air travel, and I wouldn't want to travel back and forth to China 64 times in a short period. That's not a bribe, it's a punishment.

Admittedly, with this much travel they're going to eat into the savings from using a cheap contractor, not to mention the cost of accommodating their China team which was there full time.

This doesn't sound like corruption, it sounds like they foolishly picked a low bidder that couldn't hack it, tempers within the organisation started to flare when they realised how fucked they were and this guy flew back and forth way more times than was planned in a frantic attempt to fix the cluster-fuck before it all blew up in their faces.

I agree that the statements I highlighted aren't really "evidence" of corruption, just facts indicative of possible corruption.

Corruption doesn't necessarily have to be the acceptance of a bribe, though. The dismissal or re-assignment of whistle-blowers that are pointing out potential dangers in the project IS corruption; it's the dishonest use of authority for personal benefit, or to avoid personal responsibility for wrong-doing or negligence.

You're probably right, about the travel. 64 trips back and forth does sound like a punishment, and at ~5k per trip, it doesn't really sound that extravagant. Certainly not enough to think they were lavish bribe-trips.

Your last paragraph actually is a pretty good synopsis. This whole thing was probably a scramble to keep ahead of a badly managed project.

first, let's jail the guys on wall street who probably bet that the bridge would end up fucked up.

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