Hanlon’s Razor is dead...

...and the government killed it.

Hanlon’s Razor is an adage that states “never attribute to malice that which is adequately explained by stupidity,” and I’ve long been a believer in it.  I’m starting to question why though.  Do I believe it because deep down I think most people are good?  This would make sense since the general “goodness” of people would mean that when things go wrong it’s unintentional.  Sure, there are bad people, and so corruption exists but if it looks like it could be a mistake it probably is.  I am, however, beginning to doubt my faith in the “goodness” of my fellow citizens.  Perhaps not all of them but certain groups.  Unsurprisingly, the group I’m most concerned with is the government. 

Government…what?...mistakes? blunders? unforced errors?...come in many forms but what we usually see are the financial ones.  Some are obviously corruption.  The rapid disintegration of NY City Mayor Eric Adams’ administration is a perfect example.  Adams became the first sitting mayor of NY to be charged with a federal crime when he was indicted for bribery and fraud last week.  While everyone is innocent until proven guilty, it does not look good.  The 57-page indictment includes “photos of these luxury hotel rooms he stayed in…snippets of conversations…text messages,” as well as “details of a staffer excusing herself during an FBI interview to go delete encrypted apps that she was texting him on.”

And then there’s this (you can come to your own conclusions):

Ok, so corruption exists. This shouldn’t come as news to anyone.  We in Canada have our own examples, and we don’t even have to look at historical governments to see us as the current Liberal government has generously provided us with many examples of corruption, including:

• China Election Interference: Reports emerged about the Chinese government's attempts to influence Canadian federal elections in 2019 and 2021, with allegations of funding candidates, primarily from the Liberal Party.

• Mary Ng Scandal: Trade Minister Mary Ng was criticized for not recusing herself from a contracting process where federal funds were awarded to her close friend, Amanda Alvaro, for communications support during the early days of the COVID-19 pandemic.

• WE Charity Scandal: This involved the Trudeau government's decision to award a large contract to WE Charity for a student grant program, despite conflicts of interest as members of Trudeau's family had been paid for speaking engagements with WE in the past.

• SNC-Lavalin Affair: Prime Minister Justin Trudeau and his office improperly pressured former Attorney General Jody Wilson-Raybould to help engineering firm SNC-Lavalin avoid criminal prosecution.

• SNC-Lavalin election donation – Evidence arises that SNC-Lavalin made illegal donations to the Liberal Party for a period of 5 years ending in 2009. The Liberals knew this in 2016 but withheld it from the public for 3 years. 

• Aga Khan's Vacation: Justin Trudeau was found in violation of the Conflict-of-Interest Act for accepting a vacation on the private island of the Aga Khan, who has business interests in Canada.

• Green Slush Fund: Allegations of misallocation of funds from what has been termed the "Green Slush Fund" or Green Fund, with claims of money being funneled to Liberal insiders or entities linked to Liberal politicians.

• Ethical Violations and Corruption Allegations: Various posts and reports highlight ongoing concerns over ethical violations, with mentions of large sums misallocated or misused, like the $300 million to Liberal insiders, or environment-related funds improperly used.

Surely, it’s not all corruption though, right?

Obviously not, I’m not about to sit here and say government bureaucrats are all infallible geniuses.  I worked in a large bureaucracy for 20 years and there were plenty of incompetent idiots, many at high levels, and that’s in a in the private sector where screw ups can actually get you fired.  What’s the penalty when you screw up as a government employee? Paid vacation while you recover from the emotional trauma of having our boss say “tsk, tsk” to you?  No, screw ups in government are probably the norm not the exception. And yet…

What’s the best way to get away with it?

“Laws are spider webs through which the big flies pass and the little ones get caught.”

-- Honore de Balzac

A pretty turn of phrase but, as the Mayor Adams situation shows, not always true.  What’s the best way to get away with it (whatever “it” may be)?  Someone once said, “two can keep a secret as long as one of them is dead.”  This is good advice, but unless you want to leave a trail of bodies (like the Clintons – just kidding, don’t’ kill me!), it’s better just to make it look like incompetence.  This is where Hanlon’s Razor has died for me.  I’m starting to believe that all these cost overruns and “accounting errors” are not signs of incompetence, but evidence of corruption.  How can you tell genuine incompetence from incompetence meant to mask the trail?  Before we answer that let me give you an example of what I’ve concluded can only be corruption.

ArriveCan

I’ve written about this before but for the sake of the newcomers and those who might have missed it, ArriveCAN is a digital application created by the Canadian government to facilitate the submission of mandatory travel and health information for individuals entering Canada during the COVID-19 pandemic. The initial budget for the it was approximately $80,000 however, the final cost ballooned to around $54 million.  Where did this money go?  While many point to factors such as ongoing updates, maintenance, system integrations, user support, cybersecurity enhancements, etc., Canada's auditor general, Karen Hogan, essentially shrugged her shoulders saying that the final cost of the ArriveCan app is 'impossible to determine' due to poor record-keeping.  So it’s all incompetence after all?  Hold on a minute.  Would this fly in the private sector?  Don’t all large bureaucracies have similar procedures and tools for procurement?  The short answers are “no” and “yes.”

Here's how it works in the private sector.  Every large organization has budgets which are assigned to each Division.  The divisions then allocate budgets to each subordinate department.  When projects are launched some of this money is “cut out” for the project and project spending is reviewed during steering committee meetings.  All project spending rolls up into a department and all department money rolls up to the division.  All budgets are reviewed monthly (at a minimum) and every manager is responsible for tracking and reporting spending within their departments.  Spending is rigidly controlled using software that authorizes different people to spend different amounts of money (usually depending on their level in management) any exceptions must be approved by a more senior person.  Everything is tracked and any cost overruns or discrepancies must be explained.  As the government of Canada uses SAP Ariba I would expect it to function in a similar fashion. This is the key.  We are expected to believe that a project authorized to spend $86,000 ended up spending $54 million over a two-year period and not only was no one aware of it, the money was going out the door without anyone signing electronic documents. 

Here's a one-word alternate explanation: kickbacks.

I can’t prove this but nothing else makes sense.  It also aligns with some of the scandals mentioned above such as the Mary Ng Scandal and the ethical and corruptions allegations above which showed the $300 million in contracts going to Liberal insiders.  We don’t think Mary received some nice “presents” for helping her friend?  I’m not making any accusations of course.  Just asking questions.  God forbid I’m accused of libel!  Let’s just say it’s a “you scratch my back, and I’ll scratch yours” kind of world and I don’t think Mary has had an itchy back in years.

Without an independent inquiry (sorry for laughing) all we have is circumstantial evidence but whoa do we ever have a lot:

• How did Nancy Pelosi get so rich on a bureaucrat’s salary?  She made $223,500 per year and has an estimated net worth of between $114 million and $240 million.  Most of her net worth is attributed to her husband Paul who just happened to have the foresight to dump “more than $500K worth of Visa stock just weeks before the DOJ's antitrust lawsuit.”  What a brilliant trader!

• Her husband also sold “up to $5 million in shares of a chipmaker prior to the lower chamber getting ready to vote on a bill focused on the domestic chip manufacturing industry.”  I wish I had his “insight.”

• Just so we don’t give Republicans a pass, Jared Kushner, the son-in-law of former President Trump, “oversaw Middle East policy in the Trump White House, and…secured a $2 billion investment from Saudi Arabia six months after leaving public service.”  Probably a coincidence.

If cost “over runs” are corruption what’s the scale?

Granted none of the above are connected to incompetence…unless making corruption obvious is a form of incompetence.  But then you’d need to be punished for there to be a downside, wouldn’t you?  If project cost overruns really are corruption, how much are we looking at?  Here’s a few infamous examples for both Canada and the US:

Canada

• Muskrat Falls Hydroelectric Project (Newfoundland and Labrador)

  • Initial Budget: $6.2 billion

  • Final Cost: Estimated $13.1 billion

  • Overspending: Over $6 billion

• Phoenix Pay System (Canada)

  • Initial Budget: $309 million

  • Final Cost: Estimated $2.4 billion and counting

  • Overspending: Over $2 billion

• Ontario Eglinton Crosstown LRT

  • Initial Budget: $5.3 billion

  • Final Cost: $12.58 billion (still not fully completed)

  • Overspending: Over $7 billion

Total overspending, $15 billion.  That’s just three projects.

US

• F-35 Joint Strike Fighter Program

  • Initial Budget: $233 billion

  • Final Cost: Estimated at over $1.7 trillion (over its lifecycle)

  • Overspending: Over $1.4 trillion

• California High-Speed Rail

  • Initial Budget: $33 billion

  • Final Cost: Estimated $128 billion (ongoing)

  • Overspending: Over $95 billion

• Boston’s Big Dig (Central Artery/Tunnel Project)

  • Initial Budget: $2.6 billion

  • Final Cost: $24.3 billion

  • Overspending: Nearly $22 billion

Total overspending, $1.5 trillion.  TRILLION!!!

The F-35 Joint Strike Fighter Program is a reminder of how defense projects are a “great” place for overspending.  I won’t get into it but if you haven’t heard of the “Fat Leonard” scandal, it’s an interesting look into how corruption can impact defense contracts.

Conclusion

There’s not much that can be done when incompetence (if that’s what it is) is met with a collective shrug by the public.  When an auditor general, whose role is ensuring accountability within the federal government, returns a report that basically says, “What are you gonna do”¹ you have to ask, what are we actually going to do?

The answer appears to be “nothing.”  Every once-in-a while a politician will lose his or her job while bureaucrats continue to blunder around until retirement and a juicy pension.  Government incompetence and/or corruption is here to stay.  It is, as the software people say, “a feature, not a bug.”  I’ll make my peace with it (well, a bitchy sort of peace anyway) but in the meantime I’d suggest we replace Hanlon’s Razor with O’Reilly’s Corollary to Hanlon’s Razor: never attribute to malice that which is adequately explained by stupidity…unless it’s the government.

1. I’m actually being unfair.  A number of recommendations were made, and some have been accepted but this is “closing the barn door after the horses have escaped.”  No one was fired or reprimanded for this little oopsie, but the government did acknowledge that the failures were "unacceptable."  Well, as long as you admit your mistakes and promise to do better I don’t see why you can’t work from home 2 days a week so you have time to enjoy that mysterious new boat and cottage.