Thursday, August 06, 2009

Ray Hutchison, husband of Sen. Kay Bailey Hutchison plays a vital role in "Good Ol' Boys' Club."

Ray Hutchison Promotes NTTA's "Good Ol' Boys' Club"

(But Rick Perry still beats Kay Bailey Hutchison hands down in cronyism and corruption : [LINK HERE])


by Tom McGregor
Copyright 2009

Dallas County Commissioner John Wiley Price had castigated the North Texas Tollway Authority (NTTA) last Tuesday over allegations that this agency pursues "racist" policies by awarding over 95% of its contracts to white-owned-and-operated contractors. The Dallas Blog exclusively asked for his opinion on this disparity and he responded that the NTTA runs a "Good Ol' Boys' Club."

Apparently, Ray Hutchison, husband of Sen. Kay Bailey Hutchison (R.-Tx.), plays a vital role for this "Good Ol' Boys' Club."

"On March 27, 2007, the Commissioners' Court of Collin County, Texas, met in regular session," according to official-on-the-record documents. The Court addressed numerous issues, including the construction of a toll road that would run through Denton and Collin counties.

Item No.3 (pg. 3) stated: "Private Activity Bonds for the SH 121 project, Commissioners' Court. Ray Hutchison and Ben Brooks, bond counsel with Vinson & Elkins, LLP, stood to offer insights on the situation with TxDOT (Texas Department of Transportation) and the process of receiving privatization applications to make a section of Hwy 121 going through both Collin and Denton Counties a toll road. TxDOT had asked Vinson & Elkins to contact Collin County. A discussion followed on the pros and cons, what is involved in bond rating, NTTA (North Texas Tollway Authority) non-involvement rate of profit, and financial oversite."

Mr. Hutchison works full-time for Vinson & Elkins earning a substantial salary there. TxDOT and NTTA coordinate to build toll roads in the North Texas region. Yet, the NTTA recently earned notoriety for flagrantly hiring very few minority contractors.

The Fort Worth Star-Telegram reports that, "the report on the authority's contracting prepared by Mason Tilman Associates found significant disparities in the dollars awarded to contractors owned by women, African-Americans and Hispanics, particularly for contracts less than $500,000. It covered contracts awarded for architecture, construction, engineering and other professional services.

© 2009 DallasBlog:

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"Texas needs to take a serious look at its gas tax, which hasn't changed in nearly 20 years."

I-69: Congress, transportation officials apparently agree we need highway, but neither state nor nation will fund it


The Lufkin Daily News
Copyright 2009

Sen. Kay Bailey Hutchison last week said she had secured $500,000 to pay for more federal employees who could speed the environmental review process for a long-proposed Interstate 69 corridor that likely would pass through Angelina and Nacogdoches counties.

"For more than 15 years, the I-69 Corridor has been under development and has been consistently recognized by Congress as a national transportation priority," Hutchison's office wrote in a press release about the half-million dollars, which had not yet been approved by the full Senate. "Yet, the project's progress has been delayed considerably by the inability to get timely environmental reviews and clearances as required by federal law."
We beg to differ. The project has been delayed, more than anything, because neither the federal government nor the state of Texas has put its money where its mouth is and pay for the interstate.

The Texas Department of Transportation, it appears, would love to build I-69 but barely has the money, due to dwindling gas tax income, to fix the highways we already have, much less construct a multi-billion-dollar corridor from the Mexican border to Texarkana. As one TxDOT official said in an I-69 meeting Wednesday in Livingston, the interstate has been "cussed and discussed for a very long time."
Texas has backed away from Gov. Rick Perry's Trans-Texas Corridor concept, although the TxDOT officials at Wednesday's meeting said a shift in federal transportation thinking toward similar multimodal projects — namely, high-speed rail for passengers and freight — mean those ideas could be back on the table. So could two alternative funding methods: tolls (or "user fees," as they may be called from this point) and TIFs, which direct property tax increases to the road system. We suspect that neither of those funding ideas will fly in East Texas, especially among the property owners who felt so burned by the TTC-69 plans.

We agree with the gentleman from Humble who said at Wednesday's I-69 meeting that, before it accomplish anything, TxDOT needs to overcome the adversarial relationship it has with the state Legislature. And this may not the best time to be raising taxes, but we think Texas needs to take a serious look at its gas tax, which hasn't changed in nearly 20 years.

Sen. Hutchison, we appreciate the money you've set aside for I-69 before you take off to challenge Perry for his job. It's just that we know I-69 isn't going to happen until our state and federal transportation people get their ducks in a row. And most of those ducklings have wandered far away from the interstate.

© 2009 Lufkin Daily News:

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Wednesday, August 05, 2009

CAMPO's latest scam: 290 East tollway would cost 66 cents per mile with free frontage roads jammed by stoplights.

Money crunch shrinks U.S. 290 East tollway

Tolls to be a stout 33 cents a mile or more for the 1.5-mile toll road.


By Ben Wear
Austin American-Statesman
Copyright 2009

The U.S. 290 East tollway will be much shorter than previously proposed — at least for the first few years. And it will be expensive to drive.

Officials with the Central Texas Regional Mobility Authority said Tuesday that instead of building the full 6.2 miles from U.S. 183 to near Manor, as planned, the agency will complete only a first phase of flyover bridges at U.S. 183 and about a mile and a half of toll lanes.

Even that stretch will be less elaborate than planned, with two lanes per side in places rather than three lanes each way as previously announced.

And, to save $24 million, the agency will postpone building one of two parallel bridges over two cross streets; on a half-mile section, eastbound and westbound lanes will converge, separated only by a concrete median.

People using the toll road would avoid stoplights at Tuscany Way and Springdale Road, but at considerable cost. Mobility authority executive director Mike Heiligenstein said the initial toll (for those with toll tags) likely will be 50 cents near Springdale Road and, for those who take the flyovers to and from U.S. 183, another 50 cents. That would cost 33 cents a mile for those going straight on U.S. 290.

Those who take a flyover, and thus run up the full $1 toll, would pay about 66 cents a mile. There would still be free frontage roads of two lanes in each direction, but travelers on them would encounter several traffic lights people taking the short toll road would avoid.

That combined $1 toll would exceed even the 40 cents a mile that people pay to drive the agency's 183-A tollway in Cedar Park — $1.80 for 4.5 miles.
Both appear to be well above a 20 cents a mile ceiling that Heiligenstein said the Capital Area Metropolitan Planning Organization board required of the agency's future projects. That ceiling was in 2007 dollars, he said, and the short section of U.S. 290 East tollway likely will not open until 2012. Even applying a 3 percent annual inflation factor, however, the ceiling in 2012 would be less than 24 cents a mile.

The charge on the Texas Department of Transportation's four Austin-area toll roads generally is about 12 cents a mile. Older toll roads elsewhere in the country, particularly those where all the initial debt has been paid off, often have much lower toll rates. Traveling the entire 236 miles of the Kansas turnpike, for instance, costs $9.25 for a two-axle vehicle, or about 4 cents a mile.

Why the shorter, $265 million initial version? Money, both the lack of it on hand and the difficulty of borrowing it. The full 6.2 miles would cost an estimated $620 million.

As recently as 2007, TxDOT had said it would supply $191 million for the U.S. 290 East tollway project, Heiligenstein said, much of it to buy right of way alongside the existing four-lane road to accommodate a combined 12 toll and frontage lanes. He said none of that money is expected now.

In addition, the agency and governments across the country have found it harder to borrow large sums for public works projects. And finally, traffic volumes have flattened in recent years on U.S. 290 as development in Manor and Elgin stagnated, which would dampen projected toll revenue on the road.

Heiligenstein said he hopes construction will begin on the remainder of the tollway, and a westbound bridge added, in late 2010, just six months after groundbreaking on the first mile and a half. But he said that timing estimate, which assumes that the agency in those few months could buy all the right of way it needs and borrow several hundred million dollars for more construction, might be optimistic.

"I probably will be corrected at some point in the future on that," he said. "But I want it (the construction) to look like it is seamless. If things fall just right, it will almost appear that it is just one project."

The agency expects to borrow enough in this initial phase, both from bond markets and a federal transportation loan program, to have an extra $91 million that it could spend buying right of way for the remaining several miles. Heiligenstein said that construction on the flyover portion of the project, which is funded primarily with $90 million from the federal stimulus program, should begin in October.

The construction of the toll lanes from U.S. 183 to east of Springdale Road would start in summer 2010, he said. The flyovers and 1.5-mile toll road should open by fall 2012, he said., 445-3698

© 2009 Austin American-Statesman:

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Tuesday, August 04, 2009

"Once again, the taxpayers become the piggy bank to bail out corporations for their own fiscal mismanagement."

Pillaging taxpayers' pockets

Pirates of Pensions


Terri Hall
Copyright 2009

Another toll road goes south...
Indiana toll road value plunges from $3.8 BILLION to $445 MILLION

Indiana taxpayers were sold a bill of goods. Despite the public outcry, Governor Mitch Daniels sold the Indiana Toll Road to two foreign entities, Cintra of Spain and Macquarie of Australia, for $3.8 billion in 2006. Now the value of the toll road has plunged to a paltry $445 million.

How do these companies avoid foreclosing on their "asset"? Aggressively higher toll rates, which, in turn, risks pricing yet more motorists off the road. It's the same song the North Texas Tollway Authority (NTTA) is singing. The NTTA just hiked its toll rates 32% to cover its debt service payments due to its failure to meet traffic projections.

This push for toll roads that puts taxpayers on the hook for massive multi-generational debt, particularly the sale our public infrastructure to private corporations so that politicians can go on a spending spree today, is a recipe for economic disaster. Cintra and Macquarie thought they bought a cash cow and now they're scrambling to cover their enormous debt load.

The Indiana Business Journal article dated August 1 says, "With so much invested, the companies have an incentive to milk the lease, taking advantage of language in the agreement that could permit annual toll increases of 5 percent or higher. That's exactly what House Speaker Pat Bauer, D-South Bend, an outspoken critic of the Indiana Toll Road lease, feared from the start. 'It was never meant to be a profit center or to make money,' he said of the highway, which opened in the mid-1950s. 'It was meant to be low tolls for maintenance and, eventually, a free road.'"

Given the abject failure of elected officials to protect the public interest and keep these hogs at the public trough at bay, now taxpayers are faced with the loss of control over their public infrastructure and relentless toll hikes by irresponsible, short-sighted private corporations.

The more things change the more they stay the same...these foreign entities failed to plan for economic downturns thinking the world of cheap and easy credit would last forever. And once again, the taxpayers become the piggy bank to bail out corporations for their own fiscal mismanagement.

A book entitled Outsourcing Sovereignty: Why Privatization of Government Functions Threatens Democracy and What We Can Do About It by Paul Verkuil, a free market proponent and professor, warns about outsourcing public duties to the private sector.

He says: "Not every public solution is wrong and not every private solution is better."

Privatization of government functions obviously breeds greed and reckless fiscal policy that feeds the perception that the taxpayers are the source of easy money. Financial experts John Goldberg and Jim Chanos were early critics of the so-called "Macquarie model" of financing, and warned that these deals were a house of cards that would come crashing down. And here we are.

In Goldberg's paper, "The Fatal Flaw in the Financing of Private Road Infrastructure in Australia," he predicted investors would experience heavy losses due to excessive valuations of toll roads that are monetized and spun off into funds sold to pension funds and other investors.

He also cautioned that government guarantees are buried in the voluminous and confidential financial section of public private partnership (PPP) contracts. The taxpayers and even most public officials are kept in the dark about the details and possible public liabilities. It's not hard for the government to get "out-lawyered" by these sharks.

With politicians like Mitch Daniels and Rick Perry, who can blame these companies for sticking their hands into the public treasury? All it takes is a willing vessel in public office and they're set for life. We must toss out such bought and sold politicians who fail to protect the public interest and sell-out the taxpayers for quick cash for the state, or even worse, for campaign cash.

© 2009

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Monday, August 03, 2009

"The myth that corporatization is 'better, faster, and cheaper' is falling apart."

Purloining the People's Property

Wal Street


by Ralph Nader
Copyright 2009

Every week, Marcia Carroll collects examples of privatization (that is, corporatization of the peoples’ assets). Looking at her website,, will either make you laugh helplessly or make your blood boil.

The “off the wall” giveaways at bargain-basement prices of what you and other Americans own eclipses imagination. The latest escapes from responsible government are called “public-private partnerships” and are designed to enable the likes of Morgan Stanley and Goldman Sachs to take over highways, meter-collecting, and public buildings in deals that are loaded with complex tax advantages for the investors.

Here are two of her latest entries. Arizona lawmakers and Governor Jan Brewer are moving to fill a $3.4 billion budget shortfall by selling state-owned buildings. These include not only prisons, but also the House and Senate buildings. That’s the state legislature, fellow Americans! Metaphor becomes reality!

The proposed sale has bipartisan support and will require a leaseback by the buying corporation to the lawmakers with the right to repurchase the premises within twenty years.

The Arizona Republic reports that the deal, which includes 32 state properties, would bring in $735 million in upfront money and entail state lease payments totaling $60-70 million a year.

“We need the money,” State Minority Whip Linda Lopez, a Tuscon Democrat said, adding, “You’ve got to find it somewhere.” Well, why not rent out the backs of the state legislators to their favorite corporate funders? At least the public would get full disclosure of ownership.

“I look at it as taking out a mortgage,” practical Arizona House Majority Leader John McCormish, a Republican, told the Wall Street Journal.

The second item comes from the Denver Post, which reports that the foreign consortium, auto-estradas de Portugal (Brisa), operating the toll road Northwest Parkway under a 99-year lease, objected to improvements on a nearby public road. Under the complex leasing contract, the company could cite the improvements as an “adverse action” reducing toll revenue and the number of vehicles using the parkway. This action would presumably entitle this foreign company to compensation from Colorado taxpayers.

Last year, Pennsylvania Governor Ed Rendell tried to push through the legislature a complex, 75-year lease of the storied Pennsylvania Turnpike in exchange for $12.8 billion up front. All kinds of tax breaks and trap-door evasions filled the 686 page lease. The Governor was prepared, for example, to agree to pay the consortium of foreign investors if new safety measures or emergency vehicles entered the toll road and affected the flow of traffic. Fortunately, the legislature rebelled and blocked the deal.

The Indiana Toll Road was turned over to private companies in 2006. The 75-year lease was for $3.8 billion, which is a little more than the cost to repair the Woodrow Wilson bridge over the Potomac River between Virginia and Washington, DC.

Tolls on the Indiana Toll Road have already doubled and are expected to double again within ten years, according to the Dallas Morning News.

Last year, Mayor Richard Daley of Chicago privatized the city’s parking meters. Chicago’s inspector general concluded that the meters were worth nearly twice as much to the city as the $1.15 billion that the city received under an agreement rushed through the City Council with no civic input. A fourfold increase in meter rates this year has driven many motorists to residential neighborhoods in search of free parking spaces.

Indiana, a leader in outsourcing governmental functions to private corporations, gave the servicing of the state’s welfare program to IBM. According to the Indianapolis Star, error rates since corporatization have risen 17.5 percent last November and 21.4 percent in December.

The myth that corporatization is “better, faster, and cheaper” is falling apart. This year, the IRS announced that it will end the use of private tax collectors after consumer groups argued that taxpayers were subjected to immediate payment demands by private collectors while IRS employees would offer citizens an array of options to help pay their tax debt.

Then there are the corporatized water systems where the companies deliver poorer service at higher cost.

Since the 19th century, privatizing public functions has opened the doors to kickbacks, price fixing, and collusive bidding.

New depths of corruption were reached in Pennsylvania recently when two state judges pleaded guilty to taking bribes in return for sending youths to privately-owned jails.

After reading report after report about the vast, relentless waste, fraud, and abuse arising out of corporate contractors to the Pentagon in Iraq, why should readers be surprised at this domestic scene whereby taxpayers pay through the nose for corporations to govern them?

So, you’re not surprised. But are you indignant? Are you ready to make sure the politicians hear from you in no uncertain terms, hear from you to stop this recklessness and restore public control of the public infrastructure under accountable government?

If the state politicos try to pull a fast one, demand public hearings with thorough reviews of the proposed contracts or leasebacks. Better yet, in states like Arizona or Colorado, require any such proposals go through the open, state-wide referendum voting process.

Corporatizations such as the above just pass on to our children the burdens that our generation should have assumed itself to run government within its means funded by fair taxation.

Ralph Nader is a consumer advocate, lawyer, and author. His most recent book is The Seventeen Traditions.

© 2009

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