Here is a South Dakota example of a no-bid contract:
Supporters of a controversial measure on Tuesday's ballot have released about two dozen state contracts they say are evidence of a need for comprehensive reform.
South Dakota's tourism department awarded about $25 million in no-bid contracts to Sioux Falls advertising agency Lawrence and Schiller in recent years, while members of the firm were contributing to state politicians and a former state Office of Tourism director became employed there. But officials with the state and Lawrence and Schiller scoffed at the idea that the firm's political contributions are related to the awarding of contracts.
South Dakotans for Open and Clean Government, the group promoting Initiated Measure 10, accumulated the contracts and released them publicly as part of their campaign to show voters what they hope to abolish.
"It's an overarching example of why transparency is needed in contracting and why there needs to be restrictions on pay-to-play contracting," said Lee Breard, a member of South Dakotans for Open and Clean Government.
That was the play, and now comes the pay:
Officials with Lawrence and Schiller donated more than $16,500 to political candidates from 2002 to 2006, records show. Most of that money went to Gov. Mike Rounds, and Breard notes that many donations weren't made until after Lawrence and Schiller started working for tourism in 2003.
Breard said it's a conflict of interest for people to donate to political candidates when they have a government contract.
Lawrence said he and others are proud to be active in the political process, but they have nothing to do with business.
"We make political contributions. You're dang right we do," he said.
Yes, they want to keep that status quo, which includes this:
Billie Jo Waara was the director of the state's Office of Tourism through January of this year. Several weeks after leaving her post, she joined Lawrence and Schiller.
Measure 10 includes a "cooling off" period in which some state officials would be prohibited from working with any company that has a state contract for at least one year. In Waara's case, however, Measure 10 would not have prohibited her from joining Lawrence and Schiller because she was not a legislative staff member.
But Breard said it's still a potential conflict.
"She's the one who was involved in getting half those no-bid contracts," he said.
Waara said she's "offended" by the implication that the job was a reward. She said she moved back to Sioux Falls after her husband had a job opportunity that allowed them to stay in South Dakota.
A team of state officials of which she was a part approved the contracts, she added. She also said she never signed the contracts.
"It is certainly something I categorically deny was the result of some behind-the-scenes maneuvering," she said.
If there was favoritism, would she admit it? And how are we going to know when so much is done in the dark? Breard summed it up this way:
Breard said the purpose of Measure 10 isn't to root out corruption, but to stop corrupt practices before they happen. "South Dakota has a great standard of ethics," he said. "It doesn't mean corruption can't slip into here."
Same is true of internal control procedures in business. They are most effective as a deterrent to wrongdoing.