What is transparency and AIG?

In the aftermath of Watergate in the 1970s, a number of laws were enacted giving the public greater access to governmental information, increasing the accountability of businesses, civil servants and politicians for their actions, and making decisions more open. These included the Freedom of Information Act (FOIA), the Sunshine in Government Act (1976), and the Presidential Records Act (1978) giving the press and the public access to many government documents on request, to most meetings, and to many presidential materials.

Today these pieces of legislation might be described as creating transparency. The President, state’s attorneys general (Connecticut/New York), the appointee to oversee the bank bailout (Neil M. Barofsky), Republicans and Democrats, and journalists call for greater transparency, particularly when it comes to banks and AIG. But what do they mean?

Transparency is a relatively common word in the parlance of nongovernmental organizations and supranational organizations (e.g., European Union, Organization for Economic and Co-operative Development, and the International Monetary Fund). It is a word used to convey an open process, a way of conducting business that is subject to public scrutiny to reduce the possibility of corruption.

Its institutionalization may have caught on by an accident of translation assuming that the German, French, and English meaning of Transparenz, transparence, and transparency are similar. But it also became prominent when during the early 1990s, Peter Eigen, a manager at the World Bank, became increasingly distressed by the Bank’s failure to address corruption in its loan-giving to nations. Mr. Eigen with a small group of individuals created Transparency International. The organization would examine the effects and consequences of corruption for citizens, report on it across nations, and advocate policy changes in global institutions to address corrupt practices. Today, the organization has affiliates throughout the world, publishes a Corruption Index, and has developed a National Integrity System promoting open structures in the media, business, government, and throughout all of society.

Transparency International’s mission may not mean much to the average American. Corruption is an issue, but not one at the top of the agenda. Instead transparency may mean a piece of film that you write on to project on a screen. Or it could mean accountability. Often politicians use accountability and transparency in the same sentence, not really distinguishing between the two. Legislation such as the Federal Funding Accountability and Transparency Act of 2006 and the Legislative Transparency and Accountability section of the Honest Leadership and Open Government Act of 2007 use the word transparency side by side with accountability. The Internal Revenue Service (IRS) enacted a new reporting form for nonprofits to increase accountability and transparency.

But more and more it is coming to mean ready public access to government, nonprofit, and business information. With the newness of the idea of transparency, the confusion over its many meanings, and the tug for privacy and secrecy, politicians, banks, and AIG ignored creating transparency. Congress, the Treasury Secretary, and bank officials and most recently AIG learned the lesson of transparency when Congress failed to put in legal requirements, the Treasury Secretary failed to provide oversight for reporting the use of bailout funds and employee bonuses, and bank and AIG officials were not forthcoming with that information. A chance to increase the trust of the public was lost. Transparency is different from simple accountability because it creates trust directly. AIG’s web site has its executive compensation committee, its annual report, but it fails in describing its most important relationship, its relationship to the public.

Maybe AIG is too big to fail as the press is stating, but certainly not invincible from shaming. But perhaps there is another problem that needs to be addressed. If AIG and some of the banks are too big to fail, when is the Federal Trade Commission or the United States Attorney General going to investigate these businesses in terms of anti-trust laws?

Planning a City: Dubai

I just got back from the ultimate planned city and country, Dubai, United Arab Emirates. The state received its independence in 1968 and began serious building in the mid '70s when it built a world trade center in the desert. Rotaries were built to nowhere planning for future growth.) Of course, we have a few planned communities and certainly in India and China new communities are springing up.

What would you do if you could build up from nothing?

Two conflicting views make planning cities difficult. One view is that a city is best that is diverse in people, in business, and in residences. In the world according to Jane Jacobs and others, we are safer when the factory, the deli, the park and our homes and apartments are in the same general location. We watch for each other. The other view of non-planners is that we don't want to live where we work.

Dubai has chosen the latter view but with a lot of planning. There are all sorts of special areas, for sports, for hotels, and for specific industries. I travelled through an area that was all automotive related with car parts stores, tires piled high, and places to buy rebuilt engines and auto parts.

I specifically visited Dubai Healthcare City, a planned area in which the state of art ideas, construction, and equipment will be used to make world-class healthcare available in the Mid-east. What's more it will be provided by a diverse array of professionals from all over the world. It is impressive. Yes, there will be a few shops for eating, obtaining prescriptions in the first phase, but it will largely be a place to go for excellent healthcare. Later there will be some housing and a mosque will follow. The state expects this "free zone" to devise the highest standards. To do so, Dubai Healthcare City created its own Center for Healthcare Planning and Quality (CPQ) to regulate the facilities and professions. One hospital is already in operation through Welcare, a South African company. And Boston University has enrolled its first class of dentists who will be getting advanced degrees and certificates in specialty areas. Harvard is working with DHC to build a teaching and research hospital.

During my time there, I met Indians, Pakistanis, Egyptians, Brits, South Africans, Filipinos, Iraqis, Palestinians, and UAE citizens all working to create the highest international standard of healthcare borrowing from the regulatory environment of the US, the Commonwealth Countries, and a few others. Twenty one countries have good enough programs in medicine, nursing and allied health to have professionals work in Dubai Healthcare City. Even then, some programs in these countries may not meet the standards being created. Nurses must, for example, have at least two years recent experience before they will be accepted for a job in healthcare city.

The other amazing part is that two languages are being used, Arabic and English and so employees must be fluent in one or the other, and most often both. In a predominately Muslim country, health professionals will likely be Catholic (from the Philippines), Hindu and Muslim (from India), and Christian (from the US and Commonwealth countries, and Muslim from states throughout the Mideast and Africa.

Still, there is a downside. Planning is always illusive. Separating out various industries from living areas means that cars and traffic are a major problem. Today, Dubai is building a monorail. The first test runs were being conducted as I visited.
And no bookstore area exists! I never did find a bookstore and I wanted desperately to get a book about their architecture, all of it built in the last 40 years. Even the hotels did not have kiosks with romance novels. Where were the bookstores?