Checkered past: why Washington's 13-year taxi scandal won't end

Washington Monthly, Dec, 1992 by Christoper Georges

Since 1979, a generation of scandals has come and gone: Wedtech, HUD, Solomon Brothers; government investigators cracked down on Wall Street insider trading and uncovered widespread fraud at the Defense department. They even got John Gotti. Nineteen-seventy-nine also happens to be the year the D.C. government decided to crack open the corruption in the city's taxicab industry. The result? After 13 years of investigation, the D.C. government has managed to convict one official: Richard Little, in 1987. Never heard of him? You're not alone. Little was but a low level cab inspector involved in taking payoffs to approve unsafe cabs. Thirteen years -- more time than it took the Columbian government to put away cocaine kingpin Pablo Escobar--and about all the D.C. government can point to for its efforts is Richard Little.

Could it be that the cab industry is clean? Not a chance. Cab company owners and taxi drivers openly admit that fraud is widespread. "Anyone who thinks this business isn't corrupt is naive," says one cabby, who, echoing the sentiments of many other drivers, explains that illegitimate cabbies routinely overcharge passengers, bribe their way through safety inspections, swap cabs, and drive without insurance. The fraud and abuse goes well beyond the petty: The media in recent years has not only reported allegations of corruption among city officials, but one TV investigative team even aired video of what could be nothing other than illegal payoffs changing hands to secure certification for unsafe cabs. Other widely reported allegations include the selling of permits to drivers who failed the hack exam or who owe thousands of dollars for outstanding violations. Nearly $4 million in fines remain uncollected, and according to members of the D.C Taxicab Commission, the 13-person body appointed by the mayor to oversee the cab industry, there may now be as many as 4,000 illegally operating cabs in the District (compared to approximately 6,500 legal ones). As many as 1,000 of these may have obtained licenses by bribing city workers. One commission member claims to have witnessed--in the parking lot of the cab administration building--the illegal selling of an exam given to all prospective cabbies. So out of control is the industry that one brazen cabby who owed more than $20,000 in fines recently showed up at a taxicab commission meeting to issue a complaint. "It's not a question of whether fraud exists," explained one member of the commission, "but how much and where."

Of course, Washington isn't the only city with a cab industry plagued by corruption; but the problems here are widely acknowledged to be among the worst in the nation. "We consider the D.C. system about the best example of how not to run a cab industry," says Alfred Laglasse, executive vice president of the International Taxicab and Livery Association.

And still, the government investigates and investigates. Could these problems be such stumpers that, despite staring at them for 13 years, the D.C. council, police, and taxi commission have been unable to get to their core? Or even to bring someone to trial? Unlike most cases of corruption, where the tough part is discovering that a problem exists, the problem here is known and well documented. But virtually nothing concrete has ever been done to fix it. Why?

The answer, of course, is of importance to anyone who, even occasionally, hails a cab. It's not just that passengers are overcharged, or might find themselves heading toward Glen Echo when they asked for Glenn Dale. Of greater concern is the issue of safety: You don't have to be Mr. Goodwrench to figure out that there are hundreds of cabs cruising the District that couldn't possibly pass a safety inspection; and that's no surprise considering that D.C.'s cabs were found to be, on average, the oldest of any in 10 of the nation's largest cities. Yet many of the city's cab drivers display valid registrations and the cabs they drive are often tagged as being in excellent operating condition. What's their secret? Money, for the most part. Fifty bucks is about what it takes these days to get any scrap heap a safety sticker; and no matter how many driving violations you have, as little as $5,000 will set you up with an illegal permit.

Of course, the police might pick up an illegal cabby now and again, but that's missing the point. The root of the problem lies in the way the D.C. government regulates--or has failed to regulate--the cab industry. While there is no single reason the D.C. council and the cab commission--the two branches charged with overseeing the industry--have allowed fraud and abuse to run wild, peel back the layers of excuses and alibis and you'll find that the regulators and legislators have been virtually captured by the industry they are charged with controlling.

That, of course, is hardly a problem unique to D.C. government; it is played out on a grander scale at the federal level. Some 15 years ago, a congressional investigation on federal regulation concluded that the central characteristic of nine regulatory agencies studied was their devotion to "the special interests of the regulated industry." Today, little has changed. One need only look as far as the S&L scandal or to the Nuclear Regulatory Commission's dictates which consistently toe the nuclear power industry's line. Whether it's the D.C. cab commission or the Food and Drug Administration, government regulators can be the most effective safety net protecting the public's interests against the special interests. Unfortunately, as the case of the cab industry illustrates, it often tends to work the other way around.