Rhode Island’s history of lawmakers and state contractors getting too cozy? Blame geography and population.

“Rhode Island is a very small state,” said Rep. Michael Marcello (D-Dist. 41). “There has always been a close relationship between contractors and the state government. Not because they are necessarily nefarious – just because there’s not a lot of people who are bidding on these things.”

Even if the two sides are on friendly terms, Marcello wants to make sure the relationship doesn’t come at a price. Marcello has sponsored a bill that prohibits state contractors from donating money to the campaigns of officials controlling the contract.  If approved, the legislation would mean any company that receives more than $5,000 in state contracts annually could not donate to a campaign for a candidate who leads a state entity responsible for that contract.

The bill mirrors regulations already in place in other states, and was introduced at the request of Rhode Island Attorney General Peter Kilmartin, who worked with Marcello to craft the language. Marcello said the bill will mostly affect the executive branch, which awards most of the state’s larger contracts.

Marcello (pictured, right) said he’s never personally witnessed what would qualify as a pay-for-play incident in state government, though he didn’t rule out the possibility. But, perhaps as troubling, he said companies looking to do business with the state might feel obligated to donate.

“I think there’s a perception that if you want to be taken seriously, or want to be considered as someone who is able to get these bids, you have to be someone who is connected politically,” Marcello said. “This bill is designed to make [bidding] more transparent, number one – and number two, just to kind of remove any doubt about it.”

One lobbyist has already voiced his opposition privately to Marcello, telling the representative that his bill was an infringement on free speech. So far, Marcello said courts have been lenient in allowing campaign finance restrictions as they relate to government contracts, though he said the free speech issue is a “legitimate constitutional question.”

“But I also think there’s an overriding concern here,” Marcello said. “I’m a lawyer, so I don’t ever like to say you’re sacrificing free speech rights. But I think there are times when there’s a necessary restriction that’s in the public interest.”

When state budgets are balanced, with tax revenues covering state expenses, departments are sometimes left to spend money as they see fit.

That’s not the case right now.

When the bottom line turns from black to red, states turn a discerning eye to their different departments and agencies to see on what they’re spending money.

These days, no state has a worse debt crisis than California. In 2009, with the state facing a projected $42 billion budget deficit, Gov. Arnold Schwarzenegger issued an executive order that all state departments cease any procurement spending that was not an “emergency.”

Around the same time, a new legislative committee met for the first time, calling itself the Assembly Committee on Accountability and Administrative Review. The committee, formed by Democratic Assemblyman and self-described “cheap progressive” Hector De La Torre, sought to expose and eliminate wasteful spending in state government.

Within a year, legislators had found what they were looking for.

It seems Schwarzenegger’s executive order was, to some state agencies, merely a suggestion.

A suggestion they felt free to ignore.

In February 2010, the committee released a report that documented $75 million in purchases that came after Schwarzenegger’s order to stop spending. About $45 million of the money was spent on new vehicles, according to the Sacramento Bee. The most extravagant automobile spending was in the California Department of Transportation, which reported vehicle purchases totaling $10.4 million.  When CalTrans needs new cars and trucks, sometimes it could be an emergency. But, according to an editorial in the Sacramento Bee, that was hardly the case in this instance. Many of the state’s newly-purchased trucks sat, untouched, “for months and even years.”

The committee’s report was damning for California’s procurement process. Schwarzenegger was forced to reiterate his order, demanding that no procurement spending take place that wasn’t  “vital and mission critical.”

The legislators followed their report, which also documented large expenses on furniture, with a combative committee hearing.  During the hearing, Assemblyman Nathan Fletcher discovered that, as it set up a new office for the Air Resources Board, the state was spending up to $7,000 per cubicle.  Fletcher, a Republican representing the San Diego area, grilled state officials, pointing to the state’s drastic financial situation.

“I’m trying,” Fletcher said, “to understand, how, when I have — when we’re cutting critical services, when we’ve got 44 kids in a class, when we are decimating public safety, all these types of things — I’ve got to go back to my constituents and explain how it made sense to spend $7,000 per employee, so they have a place to sit and work.”

As it was with vehicles, the state’s Department of Transportation was the biggest spender: CalTrans used $1.7 million to buy new furniture.

Even as it criticized expenses, the accountability committee was operating in something of a vacuum.

The spending database the legislators were working from had not existed in previous years. Consequently, committee members didn’t have data to use to make year-to-year comparisons.

As an example of the kinds of spending allowed before this level of oversight, the Department of General Services reported that in 2009 state agencies purchased 3,558 vehicles.

By 2010, with heightened scrutiny of every dollar the state spent, that number had fallen to 1,273.