Saturday, August 29, 2009

"The toll-road fee game is over. Next please."

End of the road for greatest fee grab in Australian infrastructure history

Maquarie stock drops


The Age (Australia)
Copyright 2009

DRIVING through Sydney's Cross City Tunnel is a majestic experience - and one that is certainly unimpeded by the profusion of other motor vehicles. Outside peak hour, a trip through the CCT can verge on the hallucinogenic. It is as if you are the last motorist in the world, racing along a gleaming, neon-lit tunnel like a kid in a video-game parlour - until the unnerving apparition of another motorist jolts the senses.

This is one fine feat of engineering. It cuts the trip time from east to west by 90 per cent. As a business proposition though, it went bust long ago. Motorists in the east and the west tend to drive to the city rather than through it, save perhaps the odd tradie from the west or an eastern suburbsite en route to the fish markets on a Sunday morning, or someone going to visit a long-lost auntie in hospital.

The consortium that slapped this deal together was banking on daily traffic of 90,000 by the end of the ramp-up period in 2006, whereas the actual traffic numbers barely surpassed one-third of that.

British mob Hyder Consulting was the expert that did the forecasts. And it is Hyder once again that is under scrutiny as forecaster for ConnectEast Management. ConnectEast built the EastLink Mitcham to Frankston toll road in Melbourne, whose forecasts have also proven fanciful and whose financial future hangs in the balance. And the Lane Cove Tunnel too, for that matter, whose equity has vanished and whose traffic volume projections were also inflated.

This is not a story about Hyder, though. It is but one consultant in the greatest fee grab in the history of Australian infrastructure. It has become increasingly clear that the traffic projections for most toll roads have been built around the financial model, not vice versa as it should be. And that financial model was structured in such a way as to ''upfront'' or bring forward the project cashflows so the bankers and all their hangers-on could pocket billions of dollars in fees before even a cent was earned in tolls.

BrisConnections, which is building Brisbane's $4.8 billion Airport Link project, is bound to be in the same class. Already arguably the most farcical public float ever, BrisConn's forecasters Arup appear to have ignored reports from Queensland Transport in coming up with its traffic numbers. Arup was paid $4 million for its service to the syndicate. It is not speaking.

To this day, the project operators and the Queensland, NSW and Victorian state governments continue to hide financial information. Not one has even produced an oil price assumption for public purview. And these are supposed to be public concessions, struck in the public interest.

The spotlight was on ConnectEast this week. Since its $1.2 billion float in 2004, ConnectEast has been back to the market no less than six times. The latest ask is aimed at paying down debt.

Even after paying down $560 million, it still has another $810 million due in 2012. Meanwhile, actual traffic on the EastLink road is running more than 35 per cent below the estimates touted in the prospectus. Yet the operator's woes now extend to lawsuits, possible breaches of banking covenants and material disclosure foibles.

On top, the construction giant - Leighton's Thiess John Holland - has a claim against the operator for misleading and deceptive statements relating to the traffic projections. There is also a potential disclosure breach in this. Thiess itself bought 226 million units last March under a deferred equity deal and has already taken a $130 million bath.

On the calculations of Sydney University academic Dr John Goldberg - who got on to the dubious toll-road model early in the piece - the EastLink peak-hour forecasts are almost twice the level the road can bear.

For the year 2011, for example, the Mitcham-Frankston section is projected to generate 47,503 trips both ways during the morning peak period of two hours. This means that if one assumes an even split for traffic proceeding north to Melbourne with that proceeding south to Frankston, there would be 23,752 trips each way. This equates to 3959 vehicles per lane per hour. This is called the lane loading.

But as Goldberg points out, the Austroads (1988) Roadway Capacity Manual suggests a loading of 2000 vehicles per lane per hour corresponds to a level of service F, which corresponds to flow breakdown.

''Of course, the reason for this conduct is to be able to generate the maximum possible financial outcome from tolls so that investors can be promised a certain rate of return which the project cannot possibly generate. Hence the need for capital raising,'' says Goldberg.

The big player in Australian toll roads, Transurban, remains in losses after eight years despite its portfolio of mature assets, and the grandaddy of the sector, MIG, is mooted to hither forth soon with some sort of internalisation proposal. No wonder the toll-road fee game is over. Next please.

© 2009 The Age:

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Thursday, August 27, 2009

"Both investors and other firms on Wall Street need to know what's going on, or the financial markets will never be considered fair again."

How Goldman Sachs' problems are hurting you


August 27, 2009

John Crudele
The New York Post
Copyright 2009

AMERICANS should boycott the stock market.

No, I'm not kidding. And this isn't going to be one of those funny columns.

In fact, I'm deadly serious that investors shouldn't risk any more of their money until there are promises of a thorough investigation of Goldman Sachs.

Over the past few years I've looked into the much-too-cozy relationship between Goldman and Washington.

I've suspected that this Wall Street firm has been acting, in essence, as an arm of the government. And I am also pretty sure that if Goldman and Washington have something secret going on, the investment firm isn't doing it for altruistic reasons. There's money to be made.

In 2007 I reported in this column that Treasury Secretary Hank Paulson let the cat out of the bag when he confessed on a cable TV show that it was "my job to talk regularly to market participants . . ."

Paulson had been the chairman of Goldman right before taking the job as head of Treasury.

So, if he felt it was his "job" to talk with people on Wall Street then who else would he speak with if not his old friends at Goldman?

The head of the US Treasury would, of course, know lots of secrets. In the olden days, this would be called "inside information."

And despite Paulson's contention it would be entirely inappropriate for him to discuss sensitive matters with people who could profit from the information. It is, in fact, illegal. And the penalty could be jail time.

What has been of particular interest to me is whether Paulson contacted his friends at Goldman after a lunch with Federal Reserve Chairman Ben Bernanke on Thurs., Aug. 16, 2007.

That day Wall Street seemed to get wind of the idea that the Fed was planning to do something big, and stock prices rallied strongly at the very end of that trading session.

The very next morning Bernanke cut interest rates, the first of many such moves.

This was the start of the Goldman suspicions.

Lately, a media posse has been in hot pursuit of the firm. Finally!

A comprehensive, though somewhat antiquated, article ran in Rolling Stone magazine last month that laid out Goldman's manipulation of various markets.

Then The New York Times got hold of Paulson's phone records for Sept. 2008, which detailed loads of calls between him and Goldman right before the government's decision to bail out AIG, a huge insurance company.

AIG had taken large trading risks including many with Goldman on the other side of the transaction.

The Treasury said there was nothing wrong with the phone calls.

Next the Wall Street Journal reported two things.

First, the paper said that Goldman has a habit of tipping off its big clients like hedge funds to market-moving calls that its analysts were about to make public.

The Securities and Exchange Commission and the Financial Regulatory Authority are looking into that. And regulators in Massachusetts are supposedly now investigating that.

And, in an interview with the Journal, Tim Geithner claimed the government never did anything to benefit Goldman.

But then he also admitted that Washington had been "forced to do extraordinary things and, frankly, offensive things to help save the economy."

Nobody bothered to ask about those "offensive" things and whether they had anything to do with Goldman.

The most intriguing recent mention of Goldman occurred back in July when a former employee of that company named Sergey Aleynikov was arrested for stealing proprietary computer codes.

The Justice Department snapped right to it, saying in court: "The bank (Goldman) has raised the possibility that there is a dan ger that somebody who knew how to use this pro gram could use it to manipulate the market in unfair ways."

Is that what Goldman was doing with the program? Was it manipulating the market in unfair ways? Why else would it have had such abilities?

Goldman briefly converted itself into a commercial bank last year so it could get taxpayer bailout money.

Yet even as it had our money in its pocket, Goldman continued high-risk trading that earned it a huge profit.

Even Goldman customers, I'm told, are annoyed about so-called "high velocity trading," in which Goldman's computers allow the firm to jump in front of trades coming from inside its own system.


Both investors and other firms on Wall Street need to know what's going on, or the financial markets will never be considered fair again.

Some ambitious politician like Andrew Cuomo, New York State's Attorney General, might be up to giving Goldman a full investigation.

But this is really a job that Washington should do.

Either the Congressional Oversight Committee or the Justice Department should start doing their job. And if any investigator gets grief from the Treasury, then we will automatically know that there has been wrongdoing.

Meanwhile, investors should know they could be walking into the third act of a major drama.

And with the stock market in a mini-bubble since March, even without justification in economic fundamentals, be prepared if the curtain suddenly drops.

© 2009 New York Post:

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'Cash for Clunkers' program used as reason to push "vehicle miles tax" by Texas Transportation Commission

TxDOT Looking at "Per Mile' Gas Tax

'Cash for Clunkers' is helping drive up gas mileage, drive down gas tax revenue to state


By Jim Forsyth
KQXT-FM (San Antonio)
Copyright 2009

Cash for Clunkers was a big success, but the program is speeding up a proposal by TxDOT to look into a so called 'vehicle miles tax,' 1200 WOAI news reports.

The Cash for Clunkers program was just the latest in a series of initiatives to get Texans into more fuel efficient vehicles.

But the more fuel efficient cars get and the fewer miles Texans drive, that means the less money TxDOT receives in gasoline tax revenue, which is used largely to build and repair highways.

And Ted Houghton, who is a member of the Texas Transportation Commission, says lawmakers have repeatedly declined to raise the gas tax to make up that difference.

"The legislature is not going to do what they should be doing and need to be doing, the federal government's not going to do it, so what are you going to have left?" Houghton asked.

TxDOT today will open discussion on what is called a VMT, or Vehicle Miles Tax. It is a way to collect gasoline taxes not based on the amount of gasoline you buy, but on the amount of miles you drive.

"Whatever the gamut of ideas out there, somebody, and I think it's our responsibility, to put them on the table for decision making," said TTC chair Deidre Delisi.

The idea of a VMT has been floated for years, and the State of Oregon has tested the idea of using GPS devices to track the number of miles a car drives during a month, and then bill the motorist based on a 'toll' system.

What is not clear is how the tax would be collected, how much the tax would be, or whether drivers would be able to use tricks to 'game' the system.

Houghton says any proposals discussed by the TTC will simply by presented to the Legislature in the 2011 session for further consideration.

© 2009 KQXT-FM:

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"It's going to be outrageous." Dallas toll roads put the squeeze on small businesses

Small business worries about toll hike impact

NTTA vampire squid


Copyright 2009

DALLAS — Behind the counter at Sal's Pizza Restaurant, Chris Jakova takes care of his customers. But he's worried that his neighbor — The Dallas North Tollway — will soon be taking a slice of his profits.

Tolls are going up an average of 32 percent, with the biggest increast at the Wycliff Main Plaza, next door to the restaurant.

Right now, it costs 70 cents (with a TollTag; $1 without) to pass through the portal at the tollway's southern terminus. But starting next Tuesday, the TollTag levy at that location rises to $1.26 ($1.89 without).

"It's going to be outrageous," Jakova said, making a trip to the restaurant's other location — right off the tollway in Plano — much more expensive.

Right now, a round-trip to the Legacy Drive exit costs $4.20 with a TollTag, $6.00 without. The price is going up to $5.92 with a TollTag; $8.88 without.

"We have five people going back and forth from here to Plano, three to four times — sometimes five times a day just to get between locations — so it's going to make a big impact on us," Jakova said.

According to the North Texas Tollway Authority, the new charges are based on the distance traveled from plaza to plaza. The Jakovas are now thinking twice about getting on the tollway.

"We are going to have to take less trips to the store, take different routes," he said. "Obviously, we are going to have to adapt."

Some drivers will actually save a few cents with he new pricing scheme. On the President George Bush Turnpike, the fee at the Belt Line Road toll plaza in Irving will be reduced by a quarter.

Motorists who don't have a TollTag pay 50 percent more than the base toll rate.

The NTTA board of directors voted last month to increase the toll rates on September 1 "to maintain a financially viable system."


© 2009 WFAA-TV:

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Latest sub-regional planning commission would provide a check on runaway Alamo Regional Mobility Authority

Cities partner to address 281/1604 project together


By Christine Stanley - Contributing Writer/North Central News
San Antonio Express-News
Copyright 2009

Hill Country Village is joining forces with Hollywood Park to form a sub-regional planning commission that would tackle the U.S. 281/Loop 1604 interchange revamp — and any other state or federal project that may affect the two cities.

Hollywood Park City Councilman Bob Sartor got the green light from his colleagues to start work on the commission last month. Hill Country Village council members approved the move Aug. 20.

State and federal law allows for at least two governing agencies — at the city or county level, or both — to form a sub-regional planning commission to promote the coordinated development of a particular region.

Such a commission can do that in a number of ways, including recommendations to higher governmental authorities on how to proceed with a particular project.

In this case, the sub-regional planning commission would focus on Alamo Regional Mobility Authority's proposed $140 million plan for the 281/1604 interchange.

ARMA plans to build four elevated “direct connectors” between the two highways that would connect travelers on 281 north to the east and west sides of 1604, and two more connectors would take travelers from both sides of the loop to 281 south.

Construction could begin as early as next year.

ARMA is reaching out to Hollywood Park, Hill Country Village and surrounding cities through its own citizen advisory groups and public meetings, but Sartor reminded Hollywood Park residents last month that the agency has no legal obligation to meet with any community.

By law, ARMA would have to meet with the sub-regional planning commission and take any of its recommendations into consideration before making a final decision on the connector project.

Hollywood Park council members have expressed concern about negative impacts to their constituents during and after construction.

Hill Country Village Mayor Kirk Francis said he is worried about ARMA's true intentions. He reminded his colleagues that ARMA was originally created by the state Legislature as a tolling authority.

“So I'm kind of curious why ARMA is hosting all these meetings that have to do with what's supposed to be a TxDOT project,” Francis said Aug. 20.

ARMA has stressed on its Web site and in recent public meetings that the 281/1604 interchange will not be tolled.

Francis said the two cities will work out bylaws for the sub-regional planning commission during the next few weeks. It appears the commission will include Francis and Hollywood Park Mayor Richard McIlveen, a council member from each city and a resident designee appointed by each mayor.

“Right now, (ARMA) can tell us after the fact, they can invite us to meetings — that's their form of communication,” Francis said.

He said the panel would also bring both cities closer in addressing health and safety issues of mutual interest.

Hill Country Village council members also approved a contract with Acadian Ambulance Service Aug. 20.

Francis was the tiebreaker in a vote to sever ties with San Antonio EMS last month. He broke a tie between council members Gabriel Durand-Hollis and Margaret Mayberry, who were in favor of sticking with San Antonio EMS, and Register and Elizabeth Worley, who wanted to switch to Acadian.

The ambulance provider would incorporate Hill Country Village into its coverage area for free, saving the city about $35,000 each year.

© 2009 San Antonio Express-News:

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"Gilbert as Governor would allow the Legislature to act to reform TxDOT without fear of reprisal from the Governor's Office."

Democrat Hank Gilbert announces for Governor's race

Hank Gilbert, Tyler-area rancher and TURF Board Member.


David Smith
Dallas County Republican Examiner
Copyright 2009

I have to admit that this is the first time that I have met a person, worked with them (albeit indirectly) and then they announced they were seeking elected office. Hank Gilbert, a Tyler-area rancher, has announced that he is seeking the office of Governor for the State of Texas in 2010. Now, he will be running as a Democrat, but hear me out first.

Mr. Gilbert has worked with Texans Uniting for Reform and Freedom and served on their Board of Directors alongside Founder and President Terri Hall. Those who know the transportation issue know Mrs. Hall's name is synonymous with doing away with CDA's, PPP's, turning free access highways into toll roads and pretty much the entire anti-TxDOT movement. And Mr. Gilbert has been right there, resplendent in his 10-gallon hat and Texas flag-themed button up shirt.

Quite frankly, Republicans have been the goats on the issue of transportation in Texas, and Democrats have been the rare heroes. Rep's David McQuade Leibowitz and Ruth Jones McClendon are two Democrats who have particularly impressed me in the Legislature. Leibowitz introduced legislation calling for a 14-member Transportation Commission which, although a bit too large, would finally allow for Texans to elect the leaders of the transportation agency in Texas. And McClendon has been an enthusiastic advocate of transportation issues and was on the Sunset Commission last summer when I testified before the Commission on TxDOT.

I wish that we had more Republicans who were bold enough to oppose their Governor on transportation like Democrats have done. Maybe the key there is to put a Democrat in the Governor's Mansion?

Gilbert said that he heard Tom Schieffer, former Texas Rangers Baseball Club General Manager, speak at a Democrat Convention recently and left desiring more. Hence his entering the Governor's race.

Gov. Rick Perry has worn out his welcome and needs to be, um, "retired." U.S. Sen. Kay Bailey Hutchison has obviously earned herself the new title of "Most Recognized Texas Republican." But given her present standing in the Governor's race, I seriously doubt she is the most popular Republican in the State any longer. So she promises to put up very little fight in the Governor's race.

That leaves Deborah Medina, who, as one friend of mine puts it, "Has to prove she can win 6% of the vote!" Which, actually, means another term as Governor for Perry, which is completely unacceptable.

Gilbert has little name recognition when compared to the State's two senior Republicans and a professional sports team's former GM. And being a champion of transportation issues isn't exactly like leading the national pro-choice movement, but we don't need such a person as Governor. Those issues are largely either decided or the Governor has little control over them. And Gilbert promises to bridge the gap between conservatives and liberals by running as a moderate. And as a Democratic candidate he would emerge largely unscathed from the primary season with Republicans totally beaten down by the "Kay vs Rick" "Thrilla in Vanilla" that the Republican Primary is sure to be.

At this point, I question if the best strategy to unseat Perry and kick Hutchison to the curb might not be to vote a moderate Democrat into the Governor's Mansion. For if it gave us the necessary reforms to the transportation industry and agency that we need, that alone would make the choice worth it! And it would get rid of the two senior bungling, bobble heads in the Republican Party, allowing us to regroup for 2014 with a qualified candidate. They all appear willing to sit this one out on the sidelines, unwilling to challenge the incumbents and risk a career-ending defeat.

Gilbert as Governor would allow the Legislature to act to reform TxDOT without fear of reprisal from the Governor's Office. And that alone would be worth a one-term Democrat! Most of the usual issues are irrelevant in the Governor's race. So I welcome Hank's entry into what is becoming an interesting election indeed! Now all we need is for Roger Staubach to heed my call to enter the race and we'd have ourselves a right nice Texas hoe-down.

I have already emailed Terri Hall at TURF, also the San Antonio Transportation Policy Examiner, seeking a referral to Mr. Gilbert for a sit-down discussion for a series of articles. Hopefully that can happen soon. So come back often to meet the newest candidate for Governor!

© 2009 Dallas County Republican Examiner:

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Wednesday, August 26, 2009

"Sooner or later, every one of CAMPO's promises turns out to be calculated lies."

CAMPO considers spending 290 toll road funds 'outside' corridor



Tony Tucci
The Oak Hill Gazette
Copyright 2009

OAK HILL - When the Capital Area Metropolitan Planning Organization (CAMPO) board voted to toll U.S. 290 West through Oak Hill (when the expansion project through the 'Y' is completed), it was with the addition of several amendments by Travis County Precinct 2 Commissioner Sarah Eckhardt. One of those amendments — that revenue beyond the cost of construction, maintenance, operation and debt service should be spent in the "transportation corridor" — was changed at that meeting from 400 yards from the midline of the tolled facility to 1 mile.

Now CAMPO is considering throwing out that amendment entirely in order to fund State Highway 45 Southwest (SH 45 SW). The CAMPO State Highway 45 Southwest Committee, headed by Travis County Judge Sam Biscoe, recommended: "Change or delete Toll Road Policy #4 (October 8, 2007) to eliminate the provision that excess revenue generated in one toll road corridor be kept and used within that same corridor. This would allow the creation of a system of toll roads which in turn would allow more favorable financing conditions if SH 45 SW were developed as a tolled facility."

Vincent May of Fix290 said in a list serve post: "CAMPO is discussing dropping the Eckhardt and Wynn amendments so that Oak Hill money can be spent outside of the 'Y' corridor." May told the Gazette, "CAMPO is a creation of the Legislature and inherits similar powers. It can make or change its own rules. Citizens have no democratic franchise within CAMPO."

Eckhardt appears to be taking a wait and see attitude. She told the Gazette, "I am not a member of the subcommittee exploring funding options for 45 SW. I understand that a "tolled only" option has been discussed by the subcommittee. I do not know whether the committee will recommend such an option to the CAMPO Policy Board. If it is the recommendation of the subcommittee, such an option may implicate the Wynn and Eckhardt amendments."

But Jeff Mills, Mayor of Sunset Valley, is decidedly unhappy with the possible change. He told the Gazette, "I have heard that sometime in the future CAMPO may be reconsidering the Eckhardt 'System' amendment. I do not know any further details on timing, but am not in favor of reconsidering it."

Mills added: "One of the main problems with building SH 45 SW without free lanes is that the board has been given information from CTRMA [Central Texas Regional Mobility Authority] that projects that approximately 50% of the vehicles that would travel on SH 45 SW if it is built with free lanes would still travel on it if there are no free lanes. I have serious doubts concerning the accuracy of these projections. I know of no toll road in the U.S. where 50% of the cars go on a toll road when there is a free alternative like Brodie Lane — or Manchaca Road for that matter — so close. Typically, it is 15%-20% tops. I am presently trying to track down the factual information/ assumptions behind these estimates."

Mills said while there is currently no development along the SH 45 SW planned roadway, development will soon follow — a fear of environmentalists fighting the planned road. While Brodie Lane residents want SH 45 SW to relieve growing congestion along their road, Mills believes a 'toll road only' option – with no free lanes – could be problematic. He said, "If 80-85% of the new traffic chooses the free alternative — Brodie — over the toll road, we may actually see an increase in Brodie Lane traffic congestion when SH 45 SW is actually being sold as a way to decrease congestion on Brodie. I want to make sure that we have the most accurate possible information on this because it would be a travesty to build something as a means of congestion relief only to have it cause an increase in congestion."

In order to toll SH 45 SW, CAMPO would have to break another agreement it made, this one in July of 2004. The recommendation is to "change or delete CAMPO Resolution #8 (July 12, 2004) to eliminate the provision requiring non-tolled capacity within the SH 45 SW Corridor..."

Said May, "Sooner or later, every one of CAMPO's promises turns out to be calculated lies."

© 2009 Oak Hill Gazette:

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Hank Gilbert to run against Bush crony Tom Schieffer in 2010 Democratic Primary

Gilbert announces Dem bid for governor

Hank Gilbert


Houston Chronicle
Copyright 2009

AUSTIN – The top vote-getting Democrat from the 2006 elections — agriculture commissioner nominee Hank Gilbert — said today he plans to join the fight for his party's gubernatorial nomination.

Gilbert, 49, a Tyler-area rancher, received 42 percent of the vote in his race against Republican Todd Staples for agriculture commissioner.

In the current governor's race, Gilbert said he can bridge the gap between Democrats and moderate Republicans who are “disgusted” with incumbent Rick Perry's service. Gilbert said he does not believe U.S. Sen. Kay Bailey Hutchison can defeat Perry in the GOP primary.

Gilbert's entry into the race became another potential stumbling block for Fort Worth businessman Tom Schieffer, who received endorsements Wednesday from some of the top state House Democratic leaders.

They included Reps. Garnet Coleman and Jessica Farrar of Houston, Jim Dunnam of Waco and Pete Gallego of Alpine. The group said Schieffer will be able to govern the state by bringing Democrats and Republicans together.

Democrat running for Texas Governor Tom Schieffer pictured in Crawford with George W. BushGeorge "Dubya" Bush and Tom Scheiffer together in Crawford
Schieffer has been struggling to win over hard-core Democrats because he was business partners with former President George W. Bush and served him as ambassador to Japan and Australia, where he had to defend the administration policy of indefinite detention of terror suspects at Guantanamo Bay.

Former party railroad commission nominee Mark Thompson also is in the race, and humorist Kinky Friedman is expected to join the fray.

Schieffer said he had hoped that Gilbert would run for agriculture commissioner again on a ticket with him.

“Ten days ago, Hank Gilbert talked to me about being part of the team and running the ag race. His exact words to me were: ‘You need to cover me in the urban areas and I'll cover your back in the rural areas,'” Schieffer said.

Gilbert said he had told Schieffer that at a Democratic summit in Tyler, but he said he changed his mind and decided to run for governor after listening to Schieffer speak.

“The man is very intelligent,” Gilbert said. “But he just didn't inspire me. I was looking for that spark.”

© 2009 Houston Chronicle:

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Monday, August 24, 2009

"UBS fraud threatens to involve former Senator Phil Gramm, the Texas Republican who is vice chairman of UBS’ investment banking business."

UBS Money Laundering: what did a prominent American politician know?


Investment International
Copyright 2009

Yet another wealthy private customer of the Swiss-based banking conglomerate UBS has admitted to criminal fraud.

It is a case that threatens to involve former Senator Phil Gramm, the Texas Republican who is vice chairman of UBS’ investment banking business. Given the widespread involvement of UBS in what the American Justice Department alleges were systematic efforts to violate U.S. tax laws, the question has been posed: did Gramm as a top executive have no idea what was going on?

For Gramm this has to be a moment that tests his ideological commitment to the radical deregulation of banking that he championed during his 24 years in Congress. He joined UBS soon after the bank acquired Enron, a company that subsequently went bankrupt. The bank’s involvement with tens of thousands of secret accounts tied to allegations of tax evasion raises more significant issues. Specifically, there is possible criminal fraud through practices that Gramm as a senator helped keep obscure.

In his last years in the Senate, Gramm succeeded in blocking legislation that, in the words of The New York Times, would have made it easier “to crack down on offshore tax havens” and “would have expanded rules that require banks to find out more about individuals and foreign jurisdictions they are dealing with.” The Times noted, “The legislation won bipartisan support but was blocked by Senator Gramm of Texas, a foe of government regulation.”

Gramm subsequently took up a senior position at UBS, stating: “It will provide me with an opportunity to practice what I’ve always preached..… I have a strange combination of experiences that a lot of people don’t have .… knowledge of economics, a knowledge of government policy.” Given that knowledge, it is reasonable to ask just how Gramm could have been unaware of the extensive efforts of his new employer, UBS, to thwart the American tax authorities. In court cases involving UBS over the past year, witnesses have provided extensive details of the bank’s alleged practices in assisting tax avoidance.

© 2009 Investment International:

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"Austin has changed markedly under Perry – from advancing the core philosophies of the conservative movement to cronyism and back-door dealings."

Hutchison a badly needed breath of fresh air

Rick Perry


Tim Francis
The Dallas Morning News
Copyright 2009

Last week, Kay Bailey Hutchison formally announced her run for governor of Texas. She traveled the state hitting 19 cities in five days and was met with great enthusiasm for her message and candidacy.

Kay's message is one of positive reform that cleans up the politics-as-usual mentality in Austin. And she offers voters a conservative vision for addressing the critical issues facing our state: taxes, education, jobs, transportation and health care.

If voters asked themselves after 10 years of Rick Perry where are we, the answer would be sky-rocketing property taxes, a state debt that has doubled, private property rights under attack, a record tax increase on business, the highest unemployment rate in the region, and one of the highest dropout rates in the country.

Austin has changed markedly under Perry – from advancing the core philosophies of the conservative movement to cronyism and back-door dealings. These are precisely the problems the Republican Party has faced at the national level and caused the demise of our numbers in Congress and cost us the White House. We can do better, and with Kay Bailey Hutchison, we will.

Her record is one of success. She'd insist on accountability from state government – in other words, results not politics. She led the charge against the state income tax while state treasurer. In the U.S. Senate she fought and won a repeal of the marriage tax penalty. She has successfully fought for Texas to keep more of the transportation dollars we send to Washington. She fought and kept the deduction for sales tax on our income taxes. And she is working to protect our nation's border.

Kay believes we must advance the ball on our conservative principles while taking care to attract and recruit new conservatives into our party. Whether fighting for our Second Amendment rights by leading the fight to overturn the D.C. gun ban, promoting a culture of life by fighting against federal tax dollars for abortions or vowing to kill the nationalized health care scheme currently being promoted by President Barack Obama, Kay's conservative record is rock solid.

She wants to tackle the problems that plague us now and will cripple us in the future. She wants to work with parents and teachers to tackle our skyrocketing dropout rate. Kay will reach out and build consensus from the local communities on building an infrastructure system, which works and is not based on land grabs, toll roads and political back scratching.

Kay knows that we must reform the way Austin conducts itself on behalf of the taxpayer. No more executive orders on behalf of lobbyist friends that place mandates on parents regarding their children's health care. No more board appointments based on campaign contributions. No more cronyism. Texans deserve better.

This campaign is about the future of not only the state but the Republican Party of Texas. As a longtime Republican activist, I know the crucial need of returning our mission to the conservative ideas our party stands for: small government, low taxes and protection of private-property rights.

We are on the verge of losing our majority in the state Legislature. Kay will build the party with Ronald Reagan's philosophy.

Kay Bailey Hutchison knows that Texas can do better and that we should not settle for four more years of politics and power-mongering. Her love of this state and the humility she brings to this race is a breath of fresh air, which is badly needed in Austin, where the air has become stagnant with arrogance and the decision-making inert with indifference to the taxpayers of this state. Let's change that in March 2010.

James B. Francis Jr. is a longtime Republican activist, Dallas businessman and former chairman of the Texas Department of Public Safety.

© 2009 The Dallas Morning News:

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A Big Blip: “The Spanish now own the bank and our toll roads.”

Texas Credit Unions on Hold Following Bank Failure


By Jim Rubenstein
Credit Union Times
Copyright 2009

South Texas credit unions were acting cautiously Monday in connection with safety/soundness advertising following the weekend collapse of the $13 billion Guaranty Bank of Austin, the nation’s second largest banking failure in 2009.

“The bank’s troubles have been well known here for a long time and they really are not a factor in this market since most of their operations were elsewhere,” commented Tony Budet, president/CEO of the $1 billion University FCU of Austin. He said his CU has kept up its trusted adviser branding campaign all year and sees no need to alter strategy now.

Similarly, Tommy Seargeant, president/CEO of the $373 million Greater Texas FCU, said it would continue its safety/soundness campaigns in ads and newsletters but at the same time he deplores foreign interests taking over U.S. banks. “We should be able to handle our own,” he said.

A Spanish bank, BBVA Compass Bank, was the winning FDIC bidder Friday to take over Guaranty, which has been under regulatory scrutiny for more than a year because of its large mortgage loan losses in California.

“The Spanish now own the bank and our toll roads,” said Seargeant referring to Madrid-based Cintra SA providing highway funding in Austin and throughout Texas. While Budet of University characterized the Guaranty fallout on the local financial scene as a “blip” because of its California presence, Seargeant countered that “it is a big blip.”

© 2009 The Credit Union Times:

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Sunday, August 23, 2009

Toll road authority with no toll roads to get more 'aggressive'

Agency ‘aggressive’ on environmental review for U.S. 281


By Josh Baugh -
San Antonio Express-News
Copyright 2009

By 2012, the Alamo Regional Mobility Authority is hoping to have wrapped up the most extensive environmental review ever conducted on U.S. 281, the prerequisite to any long-term relief on the region's most gridlocked stretch of highway.

The results of the federal “environmental impact statement,” or EIS, will dictate if and possibly how the U.S. 281 corridor from Loop 1604 to the Comal County line will be improved. No capacity can be added to U.S. 281 without first completing the EIS. It's typically a five-year process, but the RMA hopes to complete it in three years.

“That is the best-case scenario in any circumstance,” said Terry Brechtel, executive director of the RMA. “We have decided to be aggressive and do some things to try to get this through. A lot of people and a lot of resources are trying to get it done.”
Improving U.S. 281 has been a controversial issue here for years because of the potential for toll roads, and it likely will continue to be as the RMA moves forward on its EIS.

Toll critic Terri Hall, the agency's most outspoken opponent, has suggested that the cumbersome environmental review isn't necessary — at least not anymore. Hall was part of a 2008 lawsuit that demanded that an EIS be conducted before any improvements were made to U.S. 281.
Her aim is to take toll roads out of the mix.

The EIS will evaluate, among other things, potential environmental, social and economic impacts that the highway's expansion could have on the corridor. The study is supposed to take in a lot of public input.

It's the type of study that toll opponents and environmental activists sought in a 2008 lawsuit they filed against the Federal Highway Administration, the RMA and the Texas Department of Transportation. Aquifer Guardians in Urban Areas and Texans Uniting for Reform and Freedom sought an injunction blocking tolled highway expansion until an EIS was prepared in compliance with the National Environmental Policy Act, or NEPA.

The groups wanted an EIS conducted jointly on U.S. 281 and Loop 1604. But the RMA is conducting an EIS separately for each highway. AGUA President Enrique Valdivia said that in itself taints the EIS process because it signifies the RMA putting its mark on the process before any outcome is reached.

Clearance yanked

In 2007, the Federal Highway Administration had given environmental clearance to the project based on a lower-level study — an environmental assessment — but the federal agency pulled the OK in 2008 after TxDOT announced that it had discovered irregularities in how its San Antonio district had procured scientific services.

The highway administration then sent a letter to the RMA requiring that an EIS be prepared for any future federal transportation project in the U.S. 281 corridor.

Environmentalists and toll opponents point to their lawsuit as a victory in stopping the project.

But Hall — TURF's founder and director, and a plaintiff in the 2008 lawsuit — says the cumbersome EIS process could be avoided if plans to toll the highway were jettisoned.

RMA officials say it's clear that there's no way around conducting an EIS before adding capacity to U.S. 281. The Federal Highway Administration has said as much in a letter requiring that the study be done before any federal money is spent on U.S. 281. But Hall contends that the yanked environmental clearance only applies to the plan to build toll roads. Based on Hall's reading of the National Environmental Policy Act, a non-tolled plan could undergo an “environmental assessment,” or EA, which is a lower-level study.
“We would argue that if you look at NEPA, you could actually do an expedited EA, meaning even faster than a normal EA, which is pretty quick compared to an EIS. And one of the things it says there in NEPA is that you don't have to have public hearings, even. That's a very long process.”

Hall advocates for TxDOT's “original plan,” which called for two additional main lanes, bringing the total on U.S. 281 to six, along with four lanes of frontage roads. All the lanes were to be built as non-tolled.

But Leroy Alloway, the RMA's director of community relations, says the footprint has never changed from the “original plan.”

“If you look at the plan she's talking about, which is overpasses and frontage roads, and you look at the 2005 plan, they're identical,” he said. “You look at the 2007 plan, it's still the same footprint. You're still building the exact same thing. The only difference was the expressway lanes would have been tolled. The frontage roads would have stayed as frontage roads. ... That footprint didn't change.”

That's why the EIS should move forward, he said.

Solution sought

Now nobody knows what will be built. That's where the public comes in.

On Thursday, the RMA will hold the first of several public meetings to gather input on how to deal with gridlock in the U.S. 281 corridor. In technical terms, the RMA will determine “need and purpose” that will help guide the outcome of the study — what the “preferred alternative” could be.

Maybe it's the “original plan,” or the six tolled lanes that currently appear in the Metropolitan Planning Organization's fiscally restrained Transportation Improvement Plan. Maybe it's passenger rail, bus rapid transit or high-occupancy-vehicle lanes.

Throughout the process, a residents advisory group — which includes seats for AGUA and both of Hall's groups, TURF and the San Antonio Toll Party — will meet and offer input for the EIS.

For Hall, though, it's all for naught.

“At the end of the day, we want to get the overpass and original expansion plan for U.S. 281 funded and fixed and move forward with an expedited EA, and this whole EIS thing will be moot,” she said. That is, without toll roads on the drawing board.
But RMA officials say the U.S. 281 corridor is now a “blank slate” and that the EIS will determine the best way to address congestion there. There are a couple caveats: The preferred plan doesn't have to be the most environmentally friendly, and funding sources have to be identified.

The RMA's Brechtel says tolls are on the table and will remain so until another funding source becomes available. There's not enough money from the state or federal governments to build the estimated $450 million project.

Hall said TURF would push in the 2011 Legislature for an indexed gas tax increase that would cover the cost of constructing freeways.

There are other options, Brechtel says, adding that San Antonio and Bexar County could decide to create a public improvement district or use property taxes to fund the project. More stimulus money could become available. Or a local-option sales tax — shot down in the Legislature this year — could take the place of tolls.

“Federal law says to keep a project going through an environmental study process, you have to have a reasonable revenue source, and today that reasonable revenue source is tolls,” Brechtel said. “I've been explaining that to folks on the MPO so they understand how this works.”
Brechtel wouldn't speculate on the possibility of shifting trends at the MPO, the local agency that oversees more than $200 million of federal transportation dollars. Its new chairman, County Commissioner Tommy Adkisson, is a toll opponent and ally of Terri Hall.

Hall said she thinks the MPO could vote to rescind its approval of tolls, effectively deflating the RMA. If Brechtel's concerned about that, she wouldn't say.

A toll-road vote isn't on Monday's MPO agenda, she said, so she's not worried about it “this month.”

© 2009 San Antonio Express-News:

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