Thursday, October 22, 2009

"This is where a government entity can take a piece of property and hand it over to a private developer for development, to enhance tax revenues."

Press Conference

Rick Perry defends the use of eminent domain for privatized toll roads.

Related Link: Perry Dodges TTC Question


Question: "Would Proposition 11 prevent future Trans-Texas corridors from seizing private land?"

Perry: "This is where a government entity can take a piece of property and hand it over to a private developer for development, to enhance tax revenues. When we're building highways in the state of Texas, that still stays the sovriegn land of the state of Texas. So when the next road that's built in the state of Texas and there's eminent domain [unclear word] that goes into place..."

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE


"This kind of political strong-arming is reprehensible."

TABC chief, a Perry appointee, solicits donations for governor


The Dallas Morning News
Copyright 2009

AUSTIN – Gov. Rick Perry's appointee as chairman of the Texas Alcoholic Beverage Commission is soliciting contributions for the governor's re-election campaign from the owners of bars and restaurants he regulates.
In an e-mail to hundreds of restaurants that serve alcohol, José Cuevas seeks donations of $1,000 to $5,000 for a Perry fundraiser next month at an Austin steakhouse.

Cuevas, a Midland restaurateur, was appointed by Perry to the commission in 2004 and was named chairman last year. The agency regulates all phases of the alcoholic beverage business in Texas, including the restaurants whose owners he asked to give money. Cuevas was not identified as chairman of the commission, but he acknowledged that those receiving the e-mail would have known who he was. Both he and the governor's campaign defended the solicitation as coming from a fellow restaurant owner, not as someone who regulates restaurants.

"In this case, you have a letter from someone who is a longtime restaurant owner who is soliciting money from people in the same business," said Perry spokesman Mark Miner.
The solicitation violates no laws, as it came from Cuevas personally and not under the official auspices of the Alcoholic Beverage Commission. Members of state boards and commissions receive ethics training, but Miner declined to say whether the Republican governor has a policy on political activity by his appointees.
'Conflict of interest'

Craig McDonald of Texans for Public Justice, which tracks campaign contributions, said the notion that Cuevas was acting solely as a businessman isn't good enough.

"The people receiving this letter, the restaurant and bar owners, can live or die by his actions," McDonald said. "The recipient thinks, 'Do I have to give or do I not have to give?' This is totally a conflict of interest."

The fundraising e-mail went to more than 200 people in the restaurant business, including owners, suppliers and attorneys. It included a reply form for donors to e-mail the Perry campaign with their pledge.

The solicitation, signed by Cuevas and three other Perry supporters, touts the governor's stewardship of the state as "good for business, plain and simple."

In a veiled reference to Perry's challenger, Kay Bailey Hutchison, the fundraising appeal denounces "Washington politicians" and repeats a campaign theme that Perry is responsible for job creation and economic development.

"The only thought I gave is that these are the guys who are usually politically involved in restaurant issues," Cuevas said. "They understand politics and are always involved."
The fundraising appeal raised eyebrows among several lobbyists and restaurant owners, who said they could not recall a similar solicitation.

"It's certainly a little odd. It'd be like the racing commissioner sending out a fundraising letter to all the tracks," said one Austin lobbyist, a Republican who spoke on condition of anonymity because of concern his clients might be punished.
Said a Democratic lobbyist, who also asked not to be identified: "It's the only letter I've ever seen from a regulator to a group of people [he regulates] asking for this kind of support."

Seeing act of loyalty

Ralph Sheffield, a restaurant owner from Temple who is a Republican member of the Texas House, said Cuevas probably signed the fundraising e-mail out of loyalty to Perry.

"He wears a couple of hats," Sheffield said. "Probably José is wearing the restaurant hat, not the regulator hat, when he signed that letter."

Miner said that although Perry has no problem with Cuevas' solicitation – "None at all" – he would not say whether the governor has a general policy on state regulators soliciting those they regulate.

"I'm not going to comment on hypotheticals," Miner said.
The Texas Restaurant Association has supported Perry in the past, although the trade group has not chosen sides between Perry and Hutchison, who will face each other in the March Republican primary.

Campaign records show that Perry has received more than $400,000 from restaurant interests since he became governor in 2000. In addition, he has raised nearly $800,000 from beer and liquor interests regulated by the TABC.

As a candidate seeking statewide office for the first time in 1990, Perry called for an investigation of his Democratic opponent, Agriculture Commissioner Jim Hightower, because a grain and seed regulator under Hightower was soliciting campaign contributions from those he regulated.

Perry's campaign manager denounced "the shakedown of people regulated by the Texas Department of Agriculture" and said that "this kind of political strong-arming is reprehensible."

© 2009 Dallas Morning News:

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE


“This proposition is Rick Perry's get-out-of-jail- free card for the election year. He wants a political win and wants us to accept crumbs to get it.”

Perry lauds eminent-domain proposition in San Antonio stop

Related article: No Guarantees Proposition 11 Will Prevent Kelo-style Takings


By Gilbert Garcia
San Antonio Express-News
Copyrigh 2009

Proposition 11 has sparked a fundamental, statewide debate. It's between those who hate eminent domain and those who hate it even more.

These two factions are divided on the proposed constitutional amendment — which comes before Texas voters on Nov. 3 — that would restrict the ability of state and local governments to seize private property and hand it to developers purely for the enhancement of tax revenues.

Gov. Rick Perry is largely distrusted by both groups because he actively supported the controversial Trans-Texas Corridor project and vetoed a 2007 eminent-domain reform bill favored by property-rights activists.

But Perry, who's expected to face a tough challenge from Sen. Kay Bailey Hutchison in next March's GOP gubernatorial primary, put his fence-mending skills on display Thursday afternoon at a 15-minute press conference in front of the San Antonio Board of Realtors.

Touting Texas as a state “built by people who understand the importance of private property rights,” Perry lauded Proposition 11 as part of a “firewall” necessary to protect property owners from unwarranted seizure by developers.

He was joined Thursday by State Rep. Frank Corte, R-San Antonio, one of the legislature's most persistent advocates for eminent-domain reform. He authored the proposition.“Right now, we have no protection in the [state] constitution,” Corte said. “This will send a strong message to the legislature to do more next time.”

Eminent domain became a national hot-button issue in 2005 when the U.S. Supreme Court ruled that the city of New London, Conn., could take property away from homeowners for a private development because it could increase tax revenues. The decision, which expanded the legal interpretation of “public use,” incited a backlash from those who worried that eminent domain could be used to trample the rights of landowners.

In response to that decision, the Texas Legislature passed a bill in 2005 that limited the state's eminent-domain powers to public projects — such as construction of roads and public buildings. Proposition 11 essentially would write the provisions of that law into the state's constitution, while also insisting that property seized because of urban blight must be taken one parcel at a time.

Corte argues that Proposition 11 is not redundant because it cements the 2005 law. “Legislation can be overturned, but it's much harder to do that with a constitutional amendment.”

Governments traditionally have used eminent domain to take private property for public projects, with officials providing displaced landowners with fair-market value for their homes.

Gene Hall, spokesman for the Texas Farm Bureau, describes Proposition 11 as a modest but important step to protect property owners.

“What we're asking for is a more level playing field,” Hall said. “Proposition 11 deals with one narrow part of our eminent-domain problem. That's reason enough to do it. But it won't take care of our entire problem.”

While the Texas Municipal League and Texas Association of Counties have been wary of eminent-domain reform legislation in the past, neither group has taken an official stand on Proposition 11.

Terri Hall, founder of Texans Uniting for Reform and Freedom, strongly opposes Proposition 11. She argues that the proposition's language — which limits eminent domain to actions “for the ownership, use, and enjoyment of the property” by state and local governments, and bans seizures for “certain economic development” — simply creates more confusion, and the possibility of more wiggle room for developers.

“You can do this incrementally and never get a real fix — or kill everything until you get the bill you want,” she said. “This proposition is Rick Perry's get-out-of-jail-free card for the election year. He wants a political win and wants us to accept crumbs to get it.”

On Thursday, Perry dismissed such criticisms by saying, “There are always people on the periphery who think that something doesn't go far enough.”

© 2009 San Antonio Express-News:

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE


MIG: "Debt of A$30 billion across a portfolio including highly leveraged and poorly performing road assets concentrated in Europe and North America."

Macquarie Infrastructure Stake Sold


Wall Street Journal
Copyright 2009

SYDNEY -- The second-largest investor in Macquarie Infrastructure Group has sold its stake, traders said Friday, ahead of the global toll-road operator's expected move to sever its relationship with investment banking parent Macquarie Group Ltd.

According to a number of traders who didn't want to be named, the 244.7 million securities in MIG representing 10.8% of its issued capital were sold by Canada's Ontario Teachers' Pension Plan Board.

Canada's largest private pension fund with over C$87 billion (US$90.48 billion) in assets at December 2008, held an 11.7% stake in MIG at June 30, behind only Macquarie's 17.3% stake on the register.

The stake is being offered to institutional investors at a price of 1.40 Australian dollars (US$1.29) a security through an institutional bookbuild handled by J.P. Morgan, according to the traders.

A spokeswoman for MIG had no comment on the transaction, while spokesmen for JPMorgan and OTPP weren't available for comment.

The likely sale by OTPP comes as MIG mulls a split of its toll roads into two separate listed entities with different leverage and growth profiles and also considers severing its management agreement with Macquarie in an effort to make the group more palatable to investors and boost security holder value.

The proposed split, which many market watchers expect to be revealed at MIG's annual meeting Oct. 30, follows a review that has stretched over a number of months as the group grappled with debt of around A$30 billion across a portfolio including some highly leveraged and poorly performing road assets concentrated in Europe and North America.

© 2009 Wall Street Journal:

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE


Tuesday, October 20, 2009

"It'll happen again...over and over until we learn from experience."

The Warning

The hidden history of the nation's worst financial crisis since the Great Depression.

Watch the full program online:


Copyright 2009

"We didn't truly know the dangers of the market, because it was a dark market," says Brooksley Born, the head of an obscure federal regulatory agency -- the Commodity Futures Trading Commission [CFTC] -- who not only warned of the potential for economic meltdown in the late 1990s, but also tried to convince the country's key economic powerbrokers to take actions that could have helped avert the crisis. "They were totally opposed to it," Born says. "That puzzled me. What was it that was in this market that had to be hidden?"

In The Warning, veteran FRONTLINE producer Michael Kirk unearths the hidden history of the nation's worst financial crisis since the Great Depression. At the center of it all he finds Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.

"I didn't know Brooksley Born," says former SEC Chairman Arthur Levitt, a member of President Clinton's powerful Working Group on Financial Markets. "I was told that she was irascible, difficult, stubborn, unreasonable." Levitt explains how the other principals of the Working Group -- former Fed Chairman Alan Greenspan and former Treasury Secretary Robert Rubin -- convinced him that Born's attempt to regulate the risky derivatives market could lead to financial turmoil, a conclusion he now believes was "clearly a mistake."

Born's battle behind closed doors was epic, Kirk finds. The members of the President's Working Group vehemently opposed regulation -- especially when proposed by a Washington outsider like Born.

"I walk into Brooksley's office one day; the blood has drained from her face," says Michael Greenberger, a former top official at the CFTC who worked closely with Born. "She's hanging up the telephone; she says to me: 'That was [former Assistant Treasury Secretary] Larry Summers. He says, "You're going to cause the worst financial crisis since the end of World War II."... [He says he has] 13 bankers in his office who informed him of this. Stop, right away. No more.'"

Greenspan, Rubin and Summers ultimately prevailed on Congress to stop Born and limit future regulation of derivatives. "Born faced a formidable struggle pushing for regulation at a time when the stock market was booming," Kirk says. "Alan Greenspan was the maestro, and both parties in Washington were united in a belief that the markets would take care of themselves."

Now, with many of the same men who shut down Born in key positions in the Obama administration, The Warning reveals the complicated politics that led to this crisis and what it may say about current attempts to prevent the next one.

"It'll happen again if we don't take the appropriate steps," Born warns. "There will be significant financial downturns and disasters attributed to this regulatory gap over and over until we learn from experience."


To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE


"If the measure passes strongly it will signal a continued public demand for protection of private property."

Proposition 11 Merits Solid Support

Texas' constitutional amendment will provide another important step towards protecting private property rights

October 20, 2009
Copyright 2009

Proposition 11 strikes back against the Supreme Court's 2005 Kelo v. City of New London ruling that private property can be taken by the government for the private benefit of another for economic development purposes or increasing tax revenue.

If passed, Proposition 11 would specifically prohibit the use of eminent domain power, "for the primary purpose of economic development or enhancement of tax revenue."

This was a very serious threat in the original Trans Texas Corridor plan. When that plan became law in 2003 it included the power to take land for ancillary facilities for the express purpose of generating revenue. Since then the legislature removed that sweeping authority. Proposition 11 would ensure that such power is never restored.

Incremental protection.

Additionally, Proposition 11 would restrict the expansion of eminent domain authority to more public or private entities; and, would limit excessive use of eminent domain to eliminate urban blight.

Constitutional Amendments vs. Statute.

Constitutional amendment are (and should be) drawn in broad strokes. Details should be left to legislation and case law.

Are more protections needed?


Even if Proposition 11 passes, additional protections will be required to fully protect our private property rights. In 2007 the legislature overwhelmingly passed law (HB-2006) that would have provided much needed protection. Unfortunately, our Governor objected to granting those protections and vetoed that law.

What message will you send the Legislature?

The votes cast FOR or AGAINST Proposition 11 will serve as an indicator of public interest in protecting private property rights.

If the measure passes strongly it will signal a continued public demand for protection of private property. If the measure fails, it will signal a loss of public concern over private property rights.

Those of us who still want to see strong protections (like HB-2006) adopted into statute need Proposition 11 to pass by a large margin.

© 2009

To search TTC News Archives click HERE

To view the Trans-Texas Corridor Blog click HERE