Wednesday, December 29, 2004

Top Aide to Perry Worked for Cintra

Perry Aide Worked for Firm

Ex-consultant wasn't paid, didn't sway decision, governor's office says

The Dallas Morning News
Copyright 2004

AUSTIN – A top aide to Gov. Rick Perry worked for a Spanish company until three months before the company was picked for a $7.2 billion state road project.

As a government affairs consultant for Cintra, Dan Shelley was to be paid if the road deal went through, a spokesman for the governor said. But Mr. Shelley agreed to give up all rights to that money – an amount the governor's office could not detail – when he joined Mr. Perry's staff as legislative director.

The spokesman, Robert Black, said Mr. Shelley was never paid any money by Cintra. After joining the governor's office, he said, Mr. Shelley had no contact about the project with Cintra or the Texas Transportation Commission, the Perry-appointed board that picked the company.

"The governor's office had no influence at all over who won the contract for the Trans-Texas Corridor," Mr. Black said.

Mr. Perry has made the Trans-Texas Corridor, a network of tollways and rail lines across the state projected to cost $175 billion, the centerpiece of his transportation policy. An opponent of the plan said Mr. Shelley's previous employment for Cintra added to questions about the project.

"From the very beginning, this was going to be a railroaded project," said Corridor Watch founder David Stall. His group opposes the governor's proposal and wants to ensure that the development process is open to public input. "The governor had an agenda. It's all predetermined."

A spokeswoman for Cintra, which is based in Madrid, Spain, confirmed Mr. Shelley had worked for the company but declined to comment, referring further questions to the governor's office. Mr. Shelley's office also referred calls to Mr. Perry's press office.

Mr. Shelley, a lobbyist at the time, began consulting for the company in December 2003, roughly three months after Cintra was named to a list of three possible Trans-Texas Corridor contractors, the governor's office said. When Mr. Shelley joined the governor's staff nine months later, his lobbying firm – which includes his daughter and son-in-law – did not take over the Cintra contract or the promised pay, Mr. Black said.

Influence denied

State records show Mr. Shelley – a lawyer and former state legislator who serves as Mr. Perry's liaison to lawmakers – and his firm were not registered with the state as lobbyists for Cintra, as required for individuals who have contact with state officials that's intended to influence government decisions.

"Dan Shelley gave advice to Cintra" about doing business in Texas, Mr. Black said. "He didn't lobby, nor did he try to influence anyone else's decisions, other than Cintra's."

Texas Transportation Commission Chairman Ric Williamson said Mr. Shelley approached Texas Department of Transportation officials about a year ago, seeking a meeting about his work for Cintra and possibly other Spanish companies. The visit was brief, and it was the only known business contact between Mr. Shelley and the transportation department, Mr. Williamson said.

"The visit he made to TxDOT was not in the nature of a specific project," Mr. Williamson said. "It was along the lines of, 'These guys may want to do business in Texas. Can you spend some time with them?' "

Several months later, the state hosted a tour in Dallas and other Texas cities, explaining potential projects to about 20 representatives of Spanish companies. They included several from Cintra's then-parent company, Ferrovial Agroman.

"There should be an appearance question from your point of view. But from my point of view, there is none," Mr. Williamson said. "I can guarantee you Dan Shelley didn't lobby me for anything to do with Cintra."

State transporation officials said Mr. Shelley's association with Cintra could not have played a role in the company's selection for the most expensive privately funded public works project in history.

The bidding process

The identities of each bidder were kept separate from the details of their proposals, with the companies generally known as bidders A, B and C as their plans were evaluated and scored.

But Mr. Williamson said one company's bid stood out because of its unique method of having the contractor pay billions up front for the project, which are then repaid out of future toll and rail proceeds. That funding mechanism matched Cintra's well-known, innovative efforts elsewhere, possibly leading informed guessers to conclude that Cintra wrote that bid, Mr. Williamson said.

Cintra plans to fund the project with a combination of its own revenue and some from investors who will be paid back over time with toll money. The company, which has been in business since 1968, expects to pay for about 20 percent to 30 percent from its own funds, and to get a return on that investment starting in about a decade, company officials said.

Phillip Russell, director of TxDOT'S Texas Turnpike Authority division, has said that none of the companies knew how much weight the state would place on different parts of the bid, including the financing and road-planning aspects.

Initially, the state told bidders that the details on how to build the road would count more than the financing details, but it never released the exact ratio for the decision. The state awarded the contract this month and revealed a ratio with almost equal weight on the two – 41 percent for road planning and 40 percent for financial – a formula that favored Cintra's approach.

"The weighting being kept secret is a problem," said Mr. Stall of Corridor Watch. "If you shift the weight [of one criterion], you can also shift who the winner is."

Mr. Russell, who was in charge of the weighting process, could not be reached for comment Tuesday. A transportation department spokeswoman said that the exact grading formula was set before Cintra and other bidders submitted detailed proposals in August, but nearly a year after the companies submitted their first general plans.

"They were set down in stone prior to us receiving detailed proposals in August," said department spokeswoman Gaby Garcia.

Mr. Perry first proposed the Trans-Texas Corridor concept almost three years ago, and it has morphed into a potential $175 billion plan to build a grid of new toll road, railroad and utility corridors across Texas.

Each corridor could stretch 1,200 feet in width and feature toll roads, truck lanes, passenger and freight rail lines, and utility lines. The initial proposal from Cintra will pay primarily for 300 miles of toll roads from North Texas to San Antonio by 2013, and another 300-mile segment could come later. Aside from a freight-rail line relocation around Austin, no substantial railroad projects are planned before 2025.

Project opponents, many in towns served by major interstates, fear that it would divert traffic from their cities and hurt them economically.

The state is negotiating contract terms with Cintra and could sign a deal by February. It also is negotiating a $3.5 million contract with Cintra to complete a development and construction plan in about a year. After that, road planning and construction could begin.



Dan Shelley
Born: Jan. 3, 1949, in Stamford, Conn.

Education: bachelor's, Texas Tech University; master's, Louisiana Tech University; law degree, South Texas College of Law

Political career: Texas House, 1987-93; Texas Senate, 1993-95; legislative director for Gov. George W. Bush, 1995-96; lobbyist for companies such as Lockheed and Affiliated Computer Services and various gambling interests, 1996-present; legislative director for Gov. Rick Perry, 2004-present

Other career highlights: U.S. Air Force, 1972-77; Texas Air National Guard, 1981-82; businessman and lawyer

Family: wife, Bernadette; five children

SOURCES: Texas State Directory; Houston Chronicle; Dallas Morning News research

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