Antisthenes (c. 445 - c. 365 BC) Greek Cynic philosopher
Fragment 103, in Diogenes Laertius, Lives of Eminent Philosophers, Book 6, sec. 11 [tr. @sentantiq]
(Source)
Alt. trans.:
"He used to say too, 'That cities were ruined when they were unable to distinguish worthless citizens from virtuous ones.'" [tr. Yonge (1853)]
"He said that cities are doomed when they cannot distinguish good men from bad." [tr. Mensch (2018), Book 6, sec. 5]