Georgia cancels private toll project amidst mounting opposition

Link to article here.

Georgia Backs Off on Tolling
Unpopular HOT lane project forces Georgia officials to pull the plug on efforts to impose tolls on existing freeway lanes.
December 29, 2011

I-85 congestionStung by the unprecedented unpopularity of the Interstate 85 high occupancy toll lanes (HOT lanes) in Gwinett County, Georgia officials announced earlier this month that they canceled a high-priority tolling project. The Georgia Department of Transportation (GDOT) had initially planned on replacing freeway lanes throughout the Atlanta metropolitan area with a $16 billion network of toll gates, but that plan came to a halt as the first phase of the overall strategy fizzled.

"The state of Georgia is canceling the Public Private Partnership (P3) procurement of the West by Northwest Corridor contract to add managed lanes to portions of Interstate Highways 75 and 575 in Cobb and Cherokee counties," Georgia Department of Transportation (GDOT) Transportation P3 Committee Chairman Brandon Beach said in a December 14 statement.

The Federal Highway Administration had already offered a loan of $275 million in federal dollars raised from the gas tax to underwrite the $1 billion cost of adding tolls. Though Governor Nathan Deal (R) backed the Northwest Corridor and I-85 tolling projects, they were developed by his predecessor. A survey conducted by pollsters at InsiderAdvantage last month found only 4 percent believed the new I-85 HOT lanes were effective (the margin of error for the poll was 5 percent). Many drivers were angered as they found themselves trapped in gridlock in the general purpose lanes on I-85 while the HOT lane, which was previously free to use for anyone driving with a passenger, remained comparatively unused.

Opponents of GDOT's tolling ambitions believe Deal is responsible for preventing the duplication of a project that has no statistically significant support among his constituents. Critics insist the same problems that plagued I-85 would carry over to the I-75 project.

"My take on this is that GDOT has acknowledged that the changes would make matters worse in the general purpose lanes, as well as the goal of the lane was not to ease traffic for all drivers but those willing to pay in times of need," Howard Rodgers wrote on the Stolen Lanes website.

The group's analysis of traffic data show that the HOT lanes made traffic significantly worse in the general purpose freeway lanes, forcing thousands of motorists to adjust their travel schedules to cope with the added congestion. Link to article here.

Georgia shocks investor groups with late stage cancellation of procurement for toll lanes concession on GA/I-75&575

Toll Road News
December 15, 2011
Georgia generated shock waves in infrastructure investment circles with an announcement  last night that it was canceling the managed or toll lanes procurement for GA/I-75 and I-575 to the northwest of Atlanta. The project had seemed to be well past the point of no return.

Three finalists for the toll concessions or PPP agreement were well into writing their detailed proposals, the RFP having been issued in September. Environmental permitting (FEIS) was being finalized.

The financing plan was clear, and a large TIFIA loan for nearly a third of the cost of the project had been granted by the USDOT. Rather than have the state DOT or the feds make the TIFIA announcement Governor Nathan Deal broke the news himself at a special full court news conference.  He was a new Governor - sworn in January - but he seemed to be embracing the project and the PPP process.

The news of the killing of the project was given to the three short-listed builder/investor groups at a meeting with Georgia DOT (GDOT) Wednesday night. They were taken completely by surprise. They thought they were at a routine working meeting to discuss the FEIS and to clarify any issues that were arising in their preparation of proposals or bids.

The meeting broke up quickly after the lead GDOT official said the P3 procurement was canceled.

The governing body for transportation policy, the State Transportation Board (STB) had decided on cancellation and would pursue (unspecified) alternative ways of implementing the upgrade of the highway. He couldn't elaborate or discuss the reasons.

Terse statement

A terse statement issued late Thursday in the name of the State Transportation Board and Georgia DOT read:

"Statement Regarding Cancellation of West by Northwest P3 Procurement

"By Transportation P3 Committee Chairman Brandon Beach:

"The State of Georgia is cancelling (their spelling) the Public Private Partnership (P3) procurement of the West by Northwest Corridor contract to add managed lanes to portions of Interstate Highways 75 and 575 in Cobb and Cherokee counties.

"The Transportation Board is examining other available options for the delivery of this project."

It's pretty clear the cancellation was mostly the Governor's doing. A spokesman in his office emailed in answer to a TOLLROADSnews question whether the Governor asked the state transportation Board to cancel the project: "That was a DOT board decision. The governor had publicly expressed concerns about the structure of the P3 agreement. Now, we need to move forward and look at other ways to relieve congestion in that corridor."

Deal's "concerns" were casually mentioned in a  couple of interviews but didn't seem big enough to stop the project at this late stage.

In September he reportedly asked whether the toll lanes P3 would prevent adding free capacity as the RFP was about to be issued. He was apparently satisfied and it was issued.

Then Nov 18 the Governor told a radio interviewer he was "a long way from being convinced" the project was worth a $300m state contribution that had been bandied about. (Whether the bidding groups would offer the state a fee or ask for a subsidy couldn't be known until the bids were in - editor.)

And the Governor said to the radio interviewer there weren't major time savings for motorists in the general purpose lanes from the I-75 project. (Toll lanes projects are primarily about speeding motorists who pay the toll - editor.)

Deal said the state was "a long way from actually finalizing the project: and he hadn't signed off on it. However he said it was "too late" to halt the procurement process.


The Governor apparently also soured on toll express lanes with the startup days of the I-85 toll Express Lanes October 1.

Toll rates were set too high for the first few days and the express lanes were very empty. The Governor intervened asking the State Road and Toll Authority (SRTA) to lower toll rates. They were doing that of their own accord, it turned out.

A better balance has been achieved on the I-85 in the weeks since and usage has grown toward capacity while being managed for reasonable free flow. But the negative first impression persists.

Being a single managed lane alongside at least five unmanaged lanes, and lacking direct connector ramps, the I-85 HOT lane is limited in the benefits it can confer even with the best management.

I-75/575 much different

The I-75/575 project was much more ambitious and promised much greater benefits. It was mostly two lanes reversible and largely separated from the unmanaged traffic. 29.7 miles, 47km long it extended from just inside the I-285 belt route northwest splitting into a 'Y' the right arm of which is I-575. It would be 16.8 miles on I-75 and 11.3 miles on I-575 and a shorter segment of ramps on I-285.

The FEIS document suggests large travel times savings for the toll managed lanes (see tables nearby) and hence good potential for toll revenues and management of traffic - a much different project than the limited I-85 Express Lanes (a simple conversion of single HOV lanes.)

Other available options?

It is unclear what "other available options" there are.

There was talk that Gena Evans of SRTA had been saying the state toller could do more express lanes, but she wasn't involved in the decision to can the I-75/575 P3. We're told SRTA officials were just as surprised by the STB/GDOT announcement as everyone else.

There's no tax money for adding general purpose lanes, either at the state or federal level. Gov Deal and the state assembly are both unlikely to propose raising gas taxes. Also in the environmental permitting process (toll) managed lanes were found to be superior to adding unmanaged free lanes. The state can't very well restart a five year permitting process on the basis that the inferior alternative of the previous EIS has somehow become the preferred one.

Followers of these projects we contacted were unanimous that the cancellation of the I-75/575 P3 was a terrible mistake and that there are no viable alternatives or other options.

Sheer capriciousness

They also say the sheer capriciousness will kill the opportunity for Georgia to get serious investor proposals for many years to come.

The state has spent over $50m on the project in planning and procurement and the three teams asked to submit P3 proposals have each spent several million each. All that is wasted.

Worse Georgia now has the reputation for flakiness and unreliability, a highly risky place to try to do business in infrastructure.

Bob Poole of Reason and longtime proponent of toll lanes says it's "a very big setback" for Georgia and "very unfortunate for congestion relief in Atlanta."

"They had three world-class well qualified teams that were willing to do a lot of work to come up with financeable proposals. It’s hard to see that happening easily again after this. This stamps Georgia as a place with high political risk."

Brian Chase a P3 consultant in Washington DC said: "This is the third time GDOT has fallen down on implementing their P3 program. I think they have now destroyed what little credibility they had left with potential private investors."

Rick Geddes, a Cornell University transportation policy told us the Georgia decision was regrettable because it imposed serious costs on bidders who see no return on their time and money, adding: "It increases uncertainty surrounding future private investment in U.S. infrastructure at a time when America needs every dime of investment it can get."

Why not a freeze for an expert review panel?

Another said that if the Governor was concerned about the project then the sensible thing to do was to follow New Jersey Gov Chris Christie's approach to the Hudson River rail tunnel ARC and call a three or six month 'freeze' on the procurement while he got an expert report on options. Then depending on the report of his experts he could cancel or carry on with the project.

"To just can the project at this late stage in a procurement without any expert advice and without any notion of what the alternatives are is pathetic in its incompetence," another told us. "Who wants to waste time with a flaky government like that."

It is the second GA/I-75 P3 to collapse. A 2005 project adding truck lanes as well as toll lanes was ridiculously over-ambitious and expensive at $3b to $4b and couldn't attract viable proposals. By contrast this latest proposal was costed at around $1b and considered viable by the three bidders.

BACKGROUND: GDOT issued an RFQ for the project in February 2010 for the toll concession on nearly 30 miles of managed lanes along I-75 and I-575 in Cobb and Cherokee counties, but the project also called for a pre-development agreement for an additional 27 mile of toll-managed lanes along I-285 West and I-20 West.

Three teams were shortlisted in June 2010:

-  Georgia Mobility Partners: Cintra (equity), Meridiam Infrastructure (equity), Soares da Costa, Ferrovial, Prince Contracting and AECOM

- Northwest Atlanta Development Group: ACS Infrastructure Development (equity), Dragados USA, CW Matthews Contracting and Atkins

- Northwest Development Partners: Vinci (equity), OHL (equity), Archer Western Contractors, Hubbard Construction Company, OHL USA and Parsons Transportation Group

RFPs were issued in September for submission by January.

Odd setup of GDOT

Georgia DOT is an odd departure from the normal American division between executive and legislative arms of government.  GDOT is officially "governed" by the 13-member State Transportation Board (STB) which according to law "exercises general control and supervision of the department." One member from each of 13 congressional districts is elected by the majority General Assembly caucus for a 5 year term at the STB.

The leading executive of GDOT, titled Commissioner is Keith Golden, a low profile engineer, not a policy type. The Commissioner of GDOT serves at the pleasure not of the Governor but of the politically appointed State Transportation Board (STB.)


Link to article here.

DOT pulls plug on $1 billion I-75/I-575 project

By Ariel Hart
The Atlanta Journal-Constitution

11:43 a.m. Thursday, December 15, 2011
In a dramatic blow to the state's transportation plan for metro Atlanta, the Georgia Department of Transportation on Wednesday pulled the plug on its most significant project, a historic $1 billion effort to add optional toll lanes alongside I-75 and I-575 in Cobb and Cherokee counties with private investment.

Board member Brandon Beach said the department would look at other methods for building the project besides private funding. But a spokesman for Gov. Nathan Deal would not confirm that the project as currently drawn should ever be built, saying only that “congestion in the corridor" remained a top priority.

"We just have to be sure to do it in a way that protects taxpayers," said the spokesman, Brian Robinson. More than 200,000 people a day drive that corridor, which is one of the region's most congested. Even with private funding, a public subsidy of up to $300 million would have been required.

The abrupt decision raised questions about the viability of DOT's program to draw private financing into public toll roads, a key initiative in the state since 2003, and to spread optional toll lanes along every major highway in the metro area.

The network of toll lanes became DOT's only plan for major congestion relief along metro Atlanta's interstates after officials realized it was unlikely there would ever be enough money to sufficiently widen the highways traditionally. "We don't have a massive freeway expansion program," Todd Long, the state's transportation planning director, said of the network, before the announcement. "This is it."

Beach insisted the I-75 project was still in the works and the program would go forward.

"We think it’s a good project," said Beach, who chairs the DOT committee that oversees toll roads, "but we think there are some questions that have been brought up and we need to re-examine and refocus." He stressed, for example, that the department would continue to seek private investment in the passenger terminal it is developing downtown as a real estate project. In addition, the DOT is continuing work on an optional toll lane along I-75 in Henry and Clayton counties with state money.

The state has been trying to build some variant of the I-75/I-575 project since at least 2005, and has spent more than $54 million on it so far. The latest version of the project was already out to bid, with three teams of international road builders likely spending millions of dollars to put together proposals, due Feb. 17. It was to be the state’s maiden venture into private financing for public toll roads.

The project would have built two reversible toll lanes alongside I-75 from I-285 to I-575, and one reversible toll lane each along I-75 up to Hickory Grove Road and along I-575 up to Sixes Road. The toll price was to rise and fall with congestion in the main lanes in order to keep the toll lane free-flowing. Unlike the HOT lane on I-85, it was to be financed and built by private companies trying to make a profit. They would lease the road and be repaid by toll revenues.

"Holy smokes," said Bob Poole, a founder of the Reason Foundation credited with inventing the idea of optional toll lanes. "That’s a big setback and very unfortunate for congestion relief in Atlanta."

It represents at least the second time Georgia has canceled and restarted the project, after a variant to add eight lanes was found to be too expensive.

"I’m mystified by why they would do that at this point," Poole said, noting that it would cement Georgia's "checkered history" into an unfortunate reputation.

"They obviously had three world-class qualified teams that were willing to do a lot of work to come up with financeable proposals. ... It’s hard to see that happening easily again," Poole said. "This kind of an action will create an impression that Georgia’s a place with political risk."

Problems in Georgia's public-private road program have arisen with projects such as this one and one on Ga. 400 when a plan developed after months or years of intense work at DOT arrived on the desk of a governor, who took a different view.

"It’s been five, six, seven years that Georgia’s been every year, here’s Georgia, a big newcomer state that might be a big market," Poole said. "It never seems to materialize."

Deal had raised concerns about the I-75/I-575 project following reporting by The Atlanta Journal-Constitution. Primary control of the project rests with DOT, but Deal heads the state agencies that control part of its financing. Both DOT and the governor agreed it was DOT's decision.

In September, Deal delayed putting the project out to bid by a couple of days over questions about whether the contract would prevent government from building roads in the corridor. But he approved it in the end, and it went out to bid.

Then last month, the AJC reported that traffic predictions showed the project was expected to make commutes slightly worse for some drivers, and would not provide major congestion relief for most in the main lanes -- although it would dramatically help those who chose to pay the toll.

DOT responded that the goal of the project was not to ease traffic for all drivers, but to provide an option for all drivers in times of need. Should they choose the toll lane, a state study showed, their commutes would be more than twice as fast.

Beach said that in addition to the news stories, there were concerns about the $300 million public subsidy that could be required for the project -- which the bidders said should be higher, perhaps $450 million. The project may qualify for federal loans.

"There gets a point where if you’re going to do that much public participation, you may want to look at doing the project yourself," Beach said. But where that cash would come from was not clear. "That’s what we’re going to look at in the next few months," Beach said, though he said he did not currently have any ideas.

The whole project is estimated to cost about $1 billion. Toll revenues could pay part of the cost of building it, but not all.  That cost would far exceed DOT's entire statewide annual road-widening budget.  If the state did attempt to front the investment to be repaid by tolls, there's no telling how much traffic and toll revenue would materialize, Poole noted. That financial risk "would be entirely on the state’s back," he said.

Residents of the area were absorbing the news.

"I would hope that the project is not completely dead because I think the project does have merit," said Cobb County homeowner activist Ron Sifen.

Others were glad to see it go, saying there hadn't been enough publicity about the project, although DOT has held public meetings.

"That was a lot of the problem with the toll lanes in Gwinnett," said Brett Bittner, vice president of the Cobb Taxpayers Association. "The people who would be affected by it in this area haven't been given the full explanation of what would happen. Overall the idea is a good one, but the implementation has been poor."

The three bidding teams did not respond to requests for comment.

Staff writer Janel Davis contributed to this article.

Story so far

2003: State law first allows private investment in public toll roads. The legislation is rewritten, then later replaced.

2005: The Georgia Department of Transportation signs its first partnership to develop toll lanes along I-75 and I-575. The original plan is to add eight lanes, but the estimates skyrocket from about $2 billion to $4 billion.

2009: DOT abandons partnership on the project, scales it back.

September 2011: The latest I-75/I-575 project -- with 29 miles of reversible toll lanes on I-75 and I-575 -- goes out to bid. The $1 billion project is the largest transportation contract in state history. Tolls and private investors would pay the majority of the cost, but the project also is expected to require a public subsidy of up to $300 million.

Oct. 1, 2011: An HOV lane on 16 miles of I-85 in Gwinnett and DeKalb counties becomes a toll lane, leading to an outcry from drivers facing longer wait times in the regular lanes.

Dec. 14, 2011: The state DOT pulls the plug on the current project but says it will look at other ways to build it.

Denton officials pushed into tolling and privatizing I-35

Link to article here.

This is how the bureaucrats win the day time and again...they control the information the elected officials have. They constantly claim "we're out of money" so that they can continue to push toll taxes upon Texans. We don't elect the bureaucrats, yet they wield the power to increase taxes and control access to our own public roads. Read the article below carefully, they're revealing that taxpayer money will build this project yet those same taxpayers will not be allowed to drive on it without paying a toll to a private entity who will control the toll rates and our public infrastructure for the next half century!

Members focus on finding funding
Committee trying to get more financial partners on board for I-35E project

01:29 AM CST on Sunday, December 11, 2011

By Bj Lewis / Staff Writer
Denton Record Chronicle

LEWISVILLE — The 1420 Committee met again Friday afternoon to continue discussion on the massive project that will expand the often-congested Interstate 35E.

During the meeting, members of the committee said progress was being made as they look to secure more financial partners for the project.

The meeting at Lewisville City Hall was delayed about 15 minutes as some committee members were held up in traffic on I-35E.

Michael Morris, committee chairman and director of transportation for the North Central Texas Council of Governments, took the opportunity to stress that accidents like the one that delayed his fellow committee members were one of the driving forces behind their work.

The committee is a requirement of Senate Bill 1420, which authorizes the use of public-private partnerships to fund the expansion of the highway.

Once assembled, the committee moved swiftly through the agenda items, which included discussion on policy when the I-35E expansion project receives funding in the future. The committee laid out guidelines for the Regional Transportation Council to give the state on how to use the funds.

The guidelines are being locked into place now. Once the project moves forward, the 1420 Committee will be dissolved. All future work will be done within the parameters the committee is currently establishing.

John Polster, transportation consultant for Denton County and a 1420 Committee member, said the guidelines inform the RTC that a balance between toll and non-toll lanes is sought for any new construction.

Committee members also raised the subject of alternatives to the toll lanes, but the conversation was short, since there are no other options right now.

“The next alternative we will look at is based on what additional partnership developments we have,” Polster said.

Members talked about new financial partnerships, including contributions from the city of Denton and from Dallas County. Alberta Blair, director of public works for Dallas County and a 1420 Committee member, said county officials had submitted a letter to Bill Meadows with the Texas Transportation Commission pledging to be a financial partner in the I-35E project.

Denton Mayor Pro Tem Pete Kamp, another committee member, said the city of Denton had found some funds to contribute to the project as well.

Polster said later that officials with the Texas Department of Transportation have told the committee they need time to get their proposal together, and the RTC is looking at ways to add to the funding as well.

The committee’s final meeting of the year will be at 10 a.m. Dec. 19 in Carrollton. The location is still being determined.

At that meeting, committee members are expected to approve the guideline principles for the Regional Transportation Council and to start the process of hiring an engineering firm. The process begins by sending a request for qualifications to each firm. After the RFQs are returned, firms would report to the committee on how much the job would cost. The process of hiring an engineering firm is expected to last into next year.

NYT: Perry survived TTC, but his plan failed

Link to article here.

This article seems to glorify some of the worst players in the battle to defeat the Trans Texas Corridor and almost makes Perry appear a sympathetic figure -- as if Texans just misunderstood his kind intentions. But let's be clear...Rick Perry still brags about the Trans Texas Corridor vision on his presidential campaign web site and only when he was facing litigation and re-election did he back-off (and not even then, since his minions made clear only the TTC name was dead, not the project nor the foreign ownership of our public infrastructure!). Well, the project is now officially repealed from state statute despite Perry clinging to his dead horse, but remnants remain alive through public private partnerships. He'll build a much smaller version and piece by piece without the toxic name attached.

December 9, 2011

Perry Survived Even as His Big Plan for Texas Failed


New York Times

AUSTIN, Tex. — In the bachelor-style apartment of his legislative years, where Rick Perry liked “to kick back and watch football with a cold one,” the future Texas governor forged a lasting bond with a hard-charging roommate who preferred smoking a pipe, studying flip charts and strategizing.

Over time, that friend, Ric Williamson, an oilman known as Nitro, would become “the intellectual guru of Team Perry,” as one colleague put it, and steward of the governor’s boldest initiative and biggest failure, the $175 billion Trans-Texas Corridor.

Unveiled by Mr. Perry in early 2002, the public-private transit project was intended as a centerpiece of his governorship, “a plan as big as Texas and as ambitious as our people,” he said, to create 4,000 miles of road, rail and utility corridors each as wide as four football fields.

But neither Mr. Perry nor Mr. Williamson anticipated just how politically toxic the mammoth toll road plan would become or envisioned tractors advancing on the Capitol with signs like “Rick & Ric, Our Land is Not Your Land.”

When Mr. Williamson died suddenly in late 2007, their venture all but died with him. Shortly before announcing his candidacy for the Republican presidential nomination this summer, Mr. Perry quietly signed a bill erasing all mention of the Trans-Texas Corridor from Texas statute.
“He had to bury his own baby,” said Paul Burka, senior executive editor of The Texas Monthly.

For many here, the epic battle over the corridor epitomizes how Mr. Perry operates — from his self-image as a business visionary and his hands-off management style to his interdependent relationship with an insular cadre of old friends and what critics call the pay-to-play culture of his administration.

It also shows his ability to weather controversy. Whether by political calculation or deference, Mr. Perry’s designation of Mr. Williamson as the point man for this project helped him avoid repercussions at the polls. “He’s a Teflon governor, I guess,” said Dick Kallerman, a Texas environmentalist.

By the end, opposition to the project had united environmentalists and ranchers, big cities and small towns, Democrats and even Mr. Perry’s own Republican Party.

For conservatives, the plan, which would have required vast land seizures, represented a political misfire akin to his executive order mandating the HPV vaccine for girls. They saw both as government overreach — trampling parental rights with the vaccine and property rights with the corridor.

“Perry speaks about getting government out of our lives but that’s not what he has practiced,” said Ken Emanuelson, a Tea Party organizer in Dallas. “We usually say it as a metaphor that the state of Texas is for sale, but with respect to the Trans-Texas Corridor the ground was literally for sale.”

Transportation industry executives say Texas was singularly aggressive in pursuit of private financing of public projects. At meetings where firms were courted, state officials draped a big banner, “Texas: Open for Business,” and some were urged to support the governor with more than just business proposals.

“You’d get hit up by the state at the same time as they were trying to bid out public assets,” said a consultant who represents a European company and spoke on condition of anonymity to protect his client.

The consultant said Mr. Perry’s representatives solicited a $100,000 contribution to a group called Texans for Safe Reliable Transportation, saying, “It will be good for the governor and good for you.”

“My client was aghast,” he said.

Ray Sullivan, a campaign spokesman for Mr. Perry who was involved with the corridor advocacy group, said, “I don’t believe those conversations ever took place.”

Mr. Sullivan acknowledged that the group, headed by a former senior adviser to Governor Perry named Bill Noble, courted “those interested in infrastructure development.” But, he said, “Neither myself nor anyone who made those pitches were involved in procurement.”

The transportation group, established to promote “market-based transportation solutions,” reported $345,590 in membership dues in 2006, its first year. Mr. Noble said that members paid $2,500 to $25,000, and that Cintra, the Spanish firm that won the initial corridor contract, was “at a higher level of membership but not our largest contributor.”

“The characterization that there was some sort of quid pro quo or pay-to-play is not accurate,” he said.

A Grand Vision

When Mr. Perry inherited the governorship from President-elect George W. Bush in late 2000, many considered him an accidental governor. Some believed that the Trans-Texas Corridor was born of his desire to lay claim to an issue, as his predecessor had done with education.

Even before becoming governor, Mr. Perry had discussed the state’s aging roads as a hindrance to economic development with Mr. Williamson and State Representative Mike Krusee. They debated how to finance new highways without raising the gas tax.

“Williamson lived in the world of ideas and he wasn’t happy unless dreaming up new ones,” said Mr. Krusee, now a lobbyist. “Perry wasn’t like that. But Perry was a better implementer. So Williamson became like the intellectual guru of Team Perry.”

In 2001, Mr. Perry appointed Mr. Williamson to the Transportation Commission, later naming him chairman. The two friends were also financially entwined. Mr. Perry owned, and still owns, a working interest in Mr. Williamson’s MKS Natural Gas Company (which his widow, Mary Ann, also a governor’s appointee as Lottery Commission chairwoman, now runs).

The following year, Mr. Perry introduced the outsize corridor idea during his first run for governor; it presaged his predilection as a presidential candidate for tossing out radical proposals, like making Congress part-time.

Few Texans took the Trans-Texas Corridor seriously. But Mr. Williamson, and the Transportation Department, ran with it, developing a detailed plan to get private companies to finance and build a spider web of transportation corridors in exchange for long-term operating leases and future toll revenues.

In 2003, after Republicans gained control of the Texas House for the first time since Reconstruction, Mr. Krusee became chairman of the Transportation Committee and set about designing the complex legislation.

Mr. Williamson suggested an omnibus transportation bill to avoid having each of the many statutory changes required “die the death of a thousand cuts,” said John Langmore, a lawyer hired to draft the bill.

“Every move was his,” Mr. Langmore said. “Perry just turned Ric Williamson loose and gave the nod.”

The 2003 legislative session during which Mr. Krusee introduced the corridor blueprint was tumultuous because of a Republican-drawn Congressional redistricting plan that prompted scores of Democratic legislators to decamp temporarily to Oklahoma.

Eventually, the bill passed — unanimously. But it was 350 pages long, few legislators had read it thoroughly, and many said later they felt deceived by its scope.

“We were bamboozled,” said State Representative Garnet F. Coleman, a Democrat. “Members always support transportation. What they didn’t realize was that this was a total redo of the system and mostly about privatization. It was a money-making operation for Perry’s friends in perpetuity.”


In mid-2002, in their farmhouse in Fayette County, Linda and David Stall, small-town Republicans, were probably among the first Texans to read the original corridor plan, “Crossroads of the Americas.”

Among other things, what truly horrified them was the realization that the corridors were going to rip through the heart of rural Texas and require 146 acres of right of way for every mile of road — or 584,000 acres total.

“I flipped,” Mrs. Stall said. “I looked out my window and saw people going about their lives who had no idea what Rick Perry had in store for them.”

She and her husband created a Web site, Corridor Watch. They bird-dogged public hearings and visited Chambers of Commerce and Lions and Rotary Clubs, putting 200,000 miles on their truck.

One of their most effective propaganda tools came from the state Transportation Department — an illustration of a quarter-mile-wide corridor with 10 highway lanes adjacent to six rail lines and dedicated utility zones.

“That rendering freaked everybody out,” Mr. Krusee said.

Mr. Langmore said, “All of us were like, ‘What on earth are they doing showing that?’ Can you imagine a farmer sitting on his ranch thinking of a 1,200-foot-wide corridor hacked through the middle of it?”

Scott Ging sat on his century-old family ranch in Williamson County and thought about just that. He imagined the corridor splitting his land, with no crossings “and for no good reason.”

“Traffic is not that bad in Texas; if we have to wait 10 or 15 seconds to get on the highway, that’s a traffic jam,” Mr. Ging said. “The idea that they would take our land and give it to somebody else to make a profit on it — I don’t know how Perry thought that would ever fly.”

While anti-toll road groups sprang up and environmentalists forged alliances of convenience with landowners, the governor and his advisers consistently misread and underestimated the opposition.

Mr. Kallerman, of the Sierra Club, said that Mr. Williamson had summoned environmentalists to convince them that the project, with its trains, was environmentally friendly.

“We just kind of sat there stunned,” Mr. Kallerman said. “I mean, it was going to eat up huge amounts of the best growing land in Texas, go right through habitats and over aquifers, encourage more rubber-tire travel, foster urban sprawl and make our air quality even worse. We shook our heads and said, ‘This is total madness.’ ”

By June 2004, Mr. Perry’s own Republican Party had called for the repeal of the Trans-Texas Corridor. In early December that year, the Texas Farm Bureau, his longtime ally, voted to oppose it at its convention while Mr. Perry, anticipating a different outcome, waited in the wings to speak.

A Project Is Stopped

Still, Mr. Perry was ebullient in mid-December when Texas accepted a proposal from a consortium led by the Spanish firm Cintra to start work on the project. He proclaimed it “one of the most significant days in the history of transportation” and said future generations would appreciate “what a visionary group of people were leading this state.”

Then Time magazine ran an article under the headline: “The Next Wave in Superhighways or A Big Fat Texas Boondoggle?”

And local newspapers soon revealed that Mr. Perry’s legislative director, Dan Shelley, had worked for Cintra until three months before the firm was selected. (Mr. Shelley, as a lobbyist, also worked for the company after leaving the governor’s office.)

Mr. Williamson said at the time that Cintra got no special preference. Clearly, though, the universe was a close-knit one.

Rossanna Salazar, a spokeswoman for Mr. Perry as agriculture commissioner, became Cintra’s spokeswoman in Texas; Mr. Langmore, a Democrat who drafted the corridor legislation, helped Cintra prepare its bid proposal.

The contract gave $3.5 million to Cintra and a local partner, Zachry Construction Company, to create a master development plan. They would also get first negotiating rights on up to $400 million in toll road work once the master plan was approved.

In 2005, the Texas Legislature, which meets every two years, reconvened and members tried but failed to scale back the project. It was, however, the beginning of the unraveling.

The next year, when Mr. Perry found himself in essentially a four-way battle for re-election, Carole Keeton Strayhorn, the Republican comptroller who ran against him as an independent (and as “one tough grandma”), repeatedly railed against “the largest land grab in Texas history.” It had an impact; Mr. Perry won but with only 39 percent of the vote.

During the 2007 legislative session, rallies brought protesting farmers to the Capitol and raucous environmental impact hearings drew hundreds. The filmmaker William H. Molina tracked the opposition for his documentary “Truth Be Tolled,” and Johnny Tex and the Texicans recorded the rollicking “Trans-Texas Corridor Blues,” crooning about “the greedy politicians” who want to “line their pockets.”

Mr. Perry, like other politicians in Texas and elsewhere, has long received campaign contributions from transportation-related businesses. Cintra, as a foreign firm, cannot make direct contributions; Zachry donated $125,000 from 2003 to 2008 when bids were sought on corridor projects, according to Texans for Public Justice, a watchdog group.

Other contractors involved in the consortium contributed, too, and Mr. Perry netted $354,450 all told, the group said.

In the State Capitol, legislators began pushing back, voting overwhelmingly for a moratorium on public-private toll road projects.

Excoriating the Legislature, Mr. Perry vetoed the moratorium, and a weaker version was then passed, exempting projects already under way. Those included a 41-mile stretch of State Highway 130 southeast of Austin that Cintra and Zachry had won the right to build and collect tolls on for 50 years (a continuing $1.35 billion project large in its own right but dwarfed by Mr. Perry’s original plan).

But the deep unpopularity of the project had become clear to all.

“The Trans-Texas Corridor became almost like a Rorschach test for statewide politics,” said Chris Steinbach, chief of staff for Representative Lois W. Kolkhorst, a Republican and a leading opponent. “People saw in it what they wanted — property rights violations, cronyism. Opponents of Nafta viewed it as an artery into the interior of Mexico. There was also a nationalist view about a foreign company being allowed to control our land.”

On Dec. 30, 2007, Mr. Williamson, having already suffered two heart attacks,, suffered a fatal one at 55. Mr. Perry had relied on him to wage the battle, not only because he trusted him but because Mr. Williamson guarded the governor against political splatter.

“Now, nobody else was going to go out and spread the gospel and face the hostility, so it kind of ended,” Mr. Burka said.

In 2009, the Transportation Department director acknowledged that the project once declared unstoppable had been stopped. Texas formally notified the federal highway department, and on that day, Mr. Perry tersely offered his own remarks on his grand plan’s demise during a visit to Brownsville.

“If anybody has any new ways to build roads, any ways to fund them, we’d love to hear them,” he said, with a tight laugh. “I think we know there is not an asphalt fairy that will come in the middle of the night and” — he paused, signaling Poof! — “roads will appear.”

Emily Ramshaw contributed reporting from Austin, and Jim Rutenberg from New York.

Toll opposition grows in Virginia

Link to article here.

Portsmouth leaders, residents rally against toll project
The Virginian Pilot
December 8, 2011

PORTSMOUTH - Now that state officials have finalized a deal to build another Midtown Tunnel, the reality of tolls has sparked a protest from Portsmouth residents and second-guessing among some city officials.

Portsmouth Mayor Kenny Wright told a crowd outside City Hall on Wednesday that his city would lead a charge to beat back the size of the tolls. He said every other South Hampton Roads community should join the effort because of the adverse impact that tolls will have on the region economically.

"This thing is far from over," Wright said.

The project, which includes other road improvements, also was the subject of scrutiny at events in Norfolk. Mayor Paul Fraim told a gathering of downtown business leaders that while he supports it, he questioned some of the costs feeding its toll levels - the profit for the private companies and paying for overdue maintenance on both the Midtown and Downtown tunnels.

Tolls initially would be $1.59 for off-peak hours and $1.84 during peak hours for cars, and $4.77 for off-peak hours and $7.36 during peak hours for trucks using the Downtown and Midtown tunnels. Tolls on an extension of the Martin Luther King Freeway to Interstate 264 would be $1, or 50 cents for cars that used either of the tunnels.

Tolling is expected to begin in the fall through the E-ZPass electronic system, eliminating the need for toll booths.
Virginia Department of Transportation Commissioner Greg Whirley said he's surprised by the backlash. State officials were told by local leaders that a $1.50 toll would be tolerable, he said, so the state negotiated with the private companies and pitched in $362 million to bring the tolls down from an original $3 proposal.

"We tried to find a balance and hit that target number," Whirley said. "It was hard getting to that number, because the overall numbers are just so large."

The $2.1 billion project includes a second Midtown tube, improvements to the Downtown and Midtown tunnels, extending the Martin Luther King Freeway plus operating and maintenance for 58 years.

Whirley said bringing down the toll by a penny would cost the state $10 million to $13 million.

The Martin Luther King Jr. Leadership Steering Committee, an influential group of local black leaders, organized the Portsmouth rally as a signed contract appeared imminent. The Rev. Melvin O. Marriner, president of the committee, told a crowd of about 100 people that the tolls will place too large a burden on the city's working class, students, the elderly and businesses.

"I believe it is never too late, even with a signed contract, to negotiate how the tolls will be implemented," he said.

Five City Council members, among other local elected officials, stood with the speakers, but not all were united in their message. Councilman Bill Moody Jr. handed out written statements criticizing Wright for coming out against the project so strongly now rather than months ago.

"Instead of being a leader on the subject of tolls Mayor Wright has been silent on the sidelines," Moody wrote.

Wright said he had written to VDOT officials in January and was monitoring the project, but state officials were not releasing enough details to protest it. Councilman Steve Heretick backed him, saying Wright had been working through the city attorney and city manager for months to find out how the deal was being structured.

"He's been completely shut out of those conversations, but not for any lack of trying on his part," Heretick said by email.

Whirley said he had met with Hampton Roads officials, including Wright, during the project's planning stages and that VDOT had shared everything that was not proprietary or confidential.

VDOT also has been holding public meetings detailing the project and its tolls throughout Portsmouth and Norfolk for much of the past year.

The city managers from Portsmouth and Norfolk also were part of a 15-member review panel that was formed in 2009 by the state's secretary of transportation that evaluated and endorsed the project proposal.

China seeks to takeover U.S. roads, infrastructure

Link to article here.

China keen to invest in US infrastructure: Commerce Minister Chen Deming

Economic Times
December 4, 2011

BEIJING: Seeking to defuse fears that it might use its massive USD 3.2 trillion in foreign reserves as a "political weapon", China today said it is willing to turn some of its holdings of US debt into investment in America to improve its infrastructure.

"China is willing to turn some of our holdings of your debt into investment in the United States, hoping to create jobs for the United States," Chinese Commerce Minister Chen Deming said.

Such investments would tie China more closely to Western economies and might help defuse their fears China might use its USD 3.2 trillion in foreign reserves as a "political weapon."

China has about USD 1.15 trillion of Treasury and other US government debt.

Beijing now wants to invest its over USD 3.2 trillion of US debt into renovating America's ageing infrastructure.

However, it has also asked Washington to relax restrictions on exports of dual use technologies to increase US exports to the country.

Chen said his country wants closer cooperation with the US in infrastructure, clean energy and technology.

"We hope to achieve cooperation in the area of infrastructure," Chen told members of the American Chamber of Commerce in China observing that much American famed infrastructure like railways and port needed renovation.

Chen said China wants to see Chinese and US companies cooperate more closely on clean energy, environmental and energy-saving technology, information technology, biotechnology, pharmaceuticals and medical devices. _______________________________________________________________________________
Link to article here.

Foreigners want America’s public assets
Dec 5, 2011 10:33 EST

It seems like foreign governments and corporations are craving U.S. public assets like toll roads, electrical grids and railways. In the case of our largest creditor, the Chinese government, they don’t want any more U.S. Treasuries, but they do want to own the hard assets that comprise our nation’s infrastructure.

Reuters Beijing bureau reported:

China may channel part of its huge pool of foreign exchange reserves into investment in U.S. infrastructure, including rail and transportation networks, Commerce Minister Chen Deming said on Friday.

“China is unwilling to take on too much U.S. government debt. We are willing to turn that money into investment,” he told U.S. Ambassador to China Gary Locke and U.S. businessmen.

Chen did not elaborate on how China might channel some of the country’s war chest of $3.2 trillion foreign currency reserves to invest in U.S. infrastructure, such as rail and transportation systems.

What the Reuters reporter didn’t mention was that the Obama administration has been urging such investment on the part of the Chinese since their state visit last January, if not before. From the Wall Street Journal:

Key Chinese companies are considering stepped-up investment in the U.S., particularly in infrastructure, and the White House is encouraging them to move ahead.

The prospects for fresh Chinese investment were discussed at a meeting last week between Chinese business leaders and the American and Chinese presidents during a state visit to Washington.

At the meeting, President Barack Obama and the head of China’s Investment Corp. [CIC], the country’s $300 billion sovereign-wealth fund, talked about the Chinese investing in infrastructure projects in the U.S.

“The United States is open for investment and would welcome it,” Mr. Obama told the group, which included four Chinese CEOs, 14 American CEOs and Chinese President Hu Jintao.


Last fall, a CIC official said the fund would be interested in financing U.S. infrastructure projects as a passive investor, not as a majority owner.

“We are advocating that the U.S. government start a program to invest a massive amount of equity, in the form of public and private-equity partnership, in U.S. infrastructure,” Zhou Yuan, head of asset allocation at CIC, said at a conference in New York in October.

It’s a good stance for our President to encourage foreign investment. But is it such a great idea for foreign firms to own our most vital infrastructure? In 2006 an enormous controversy rocked Washington when a private firm from Dubai was negotiating a deal simply to operate 22 U.S. ports. A bipartisan opposition centering on national security eventually emerged and killed the arrangement.

If the Chinese government wants to invest in U.S. infrastructure, the best place for them to do so is the municipal or corporate bond market where they can buy bonds in water and sewer systems, among other infrastructure assets. Direct ownership, even through public/private partnerships, shouldn’t be allowed. Again, national security concerns must be paramount when it comes to our infrastructure.

China has a massive trade surplus with the U.S., and many corporations and investors around the world want to own our public assets. Because there is so much interest, we can choose how we structure their participation in our system. Generally, it should be as limited as possible, and certainly foreigners should never be allowed to participate in any form of national infrastructure bank scheme. If they want to invest here, they must bear the risk of that choice.

Cisneros firm to invest in more toll roads

AE Capital Advisers is the U.S. subsidiary of an Australian company that teamed-up with CityView (which employs former HUD Secretary Henry Cisneros), who's announced it will continue investing in toll roads. Note the first such deal for CityView includes profit guarantees, which puts TAXPAYERS, not the foreign investors on the hook for the losses.

CityView diversifies to ensure growth
Cisneros' firm targets rental units, toll roads.
By Jennifer Hiller, This email address is being protected from spambots. You need JavaScript enabled to view it.
Updated 10:46 p.m., Friday, November 25, 2011

For more than a decade, Henry Cisneros' CityView, a growing investment and development firm, quietly has invested $800 million in urban residential and mixed-use properties for institutional clients.

Now Los Angeles-based CityView is diversifying, looking to invest more in multifamily rental and in infrastructure projects such as toll roads and bridges.

In the wake of the housing and stocks crash of a few years ago, more people are switching from buying to renting, few new real estate projects are moving forward and the need to replace aging roadways, pipelines and the like continues to grow.

So this year, CityView teamed with AE Capital Advisers, the U.S. subsidiary of an Australian company, to invest in infrastructure projects. An Austin-area toll road that will open in the spring is one of the first projects it helped finance.

“There was so much press about the need for infrastructure,” said Cisneros, former San Antonio mayor and the secretary of Housing and Urban Development under President Bill Clinton. “This gives CityView its infrastructure component.”

The Central Texas Mobility Authority sold $95 million on the traditional municipal bond market, but it wasn't enough to pay for the entire cost of the five-mile northern extension of the 183A Toll Road, which runs through Austin, Cedar Park and Leander. AE Capital Advisers and CityView provided another $45 million in subordinate financing. The Central Texas Mobility Authority retains government ownership of the road, but there are protective covenants to ensure AE Capital and CityView are paid over time.

Read the rest of the story here.

TxDOT bait & switch: Yanks free lanes from toll plan

Link to article here.

When will lawmakers learn they can't trust TxDOT nor take it at its word. They're snake oil salesmen and will do a bait and switch EVERY time. They'll tell lawmakers one thing to get the project in the bill and to win enough votes for passage, and then when legislators have gone home, they'll renege as they've done here. The Texas Legislature had the chance to gut and reform TxDOT for two sessions, but they blew it and caved to Rick Perry's cronyism. Lawmakers, many of them bought-off by the road lobby themselves, left Perry's pet agency alone despite mounds of scathing reports and audits revealing how dysfunctional it is.

Officials want more free lanes on I-35E

Groups talk about drawbacks of scaling back expansion project

07:34 AM CST on Wednesday, November 23, 2011

By Bj Lewis / Staff Writer

LEWISVILLE — As talk of the expansion of Interstate 35E continues, area elected officials want to be certain project planners are adding free lanes alongside any projected toll lanes.

Representatives from the committee charged with deciding how the massive expansion project will be funded and delivered met Tuesday in Lewisville. Committee members further expanded on a handful of building options and heard feedback from county and state officials who are unwavering on their desire for free lanes.

“I hope they are able to obtain additional financing to provide what was promised during public meetings by TxDOT,” Denton County Commissioner Hugh Coleman said. “I will be watching the proceedings carefully to ensure we don’t get sold down the river.

“I’m still very concerned the committee is proceeding with its plan to only provide managed lanes without providing any additional free lanes,” he added.

The 1420 Committee is a requirement of Senate Bill 1420, which authorizes the use of public-private partnerships to fund the expansion of a 28-mile stretch of I-35E, from Denton to Dallas.
The current highway has four to six regular lanes and four lanes of frontage roads.

The project would expand the highway to eight regular lanes, four tolled HOV lanes and four to six frontage lanes, depending on the need. The project’s current estimated cost is $3.3 billion in construction, $1.2 billion to purchase right of way and $800 million for operations.

Early Tuesday morning in Commissioners Court, Coleman broached the idea of commissioners’ rescinding the resolution supporting the expansion project and the commitment of county dollars — the only tangible money in the project right now, based on what he perceived to be a bait and switch by the Texas Department of Transportation.

While support for the idea went nowhere, it at least spurred discussion on Coleman’s big concern on the project — free general-purpose lanes.

At the last 1420 Committee meeting on Nov. 10, TxDOT officials made it known they lacked the funding to complete the scope of the expansion project as presented to the public. To that end, they proposed a handful of scenarios that included building a managed toll lane.

Coleman wants a free lane for each toll lane and — after a round of spirited discussion among county commissioners — they seemed to be on the same page with Coleman going into the meeting Tuesday afternoon.

Attending the meeting in addition to County Judge Mary Horn, Commissioner Andy Eads and Commissioner Bobbie Mitchell were state Rep. Myra Crownover, R-Denton, Rep. Tan Parker, R-Flower Mound, a representative from the office of Sen. Jane Nelson, R-Flower Mound, Corinth Mayor Paul Ruggiere and Denton Mayor Mark Burroughs.

TxDOT officials presented updates on their expansion ideas that included the toll lanes in various forms and changes to the width of bridges, sidewalks and frontage roads, with the assurance that they were not committed to any particular plan.

When the forum opened for comment, much of the discussion was on the need for free lanes.

Burroughs stressed the need to get the expansion done right, whatever path was taken to deliver it. He also said that because of Denton’s growth, it would be a mistake to not address the need for a connection to U.S. Highway 380, even if it meant acquiring the right of way now and then pushing forward when the money was there in the future.

Crownover told the committee the big picture was that I-35E was not just a road for Denton County, but a major artery for the United States.

“This is a one-time shot,” she said. “We cannot cut this short; we cannot get it wrong.”

Crownover expressed concern over the pace of the project and its effect on the University of North Texas.

“There is no easy answer here, but this is something we have to get right,” she said.

Ruggiere, Corinth’s mayor, noted a few concerns for the public, suggesting that the committee make it clear to the public that any money generated by a toll lane in the I-35E corridor would stay in the corridor. He also said that if TxDOT is changing how it will approach the project, more public meetings would be held to let residents know about the change and to see if the support is still there.

Nelson’s representative read a letter from the longtime senator in which she stated her stance against anything less than what was initially proposed by TxDOT.

Horn read from a letter she drafted and signed along with Eads to send to the Texas Transportation Commission asking for financial help and stressing the importance of the project and the ability to get things done by working together.

She stressed to those at the meeting that the project scope she has in mind has not changed from when she was proposing the project in public meetings months ago. She said it would have to be done in stages and that there was no clear idea of how much money would be needed for the project.

“[But] my scope of work hasn’t changed — I am not backing off for an instant,” she said.

Michael Morris, chairman of the 1420 Committee and director of transportation for the North Central Texas Council of Governments, said the committee would look at how to meet the desire for free general-purpose lanes financially.

He said that while the committee does not want to move too fast, “at the same time, people are dying on I-35. This committee needs to strike the correct balance on how we get back to the commission and bring some relief to the corridor.”

The committee’s next meeting is set for 9 a.m. Nov. 30 in the boardroom of the Denton County Transportation Authority, 1660 S. I-35E, Suite 250, in Lewisville.

Horseshoe project goes to bid using controversial contracts

Link to article here.

Design build contracts are code for taxpayer rip-off. They are not competitively bid contracts and have a track record of costing taxpayers more by outsourcing design and engineering work to high-priced consultants -- work tat can and should be done in-house at TxDOT at a lower cost to the public.

Infra Insight Blog

Posted at 4:33 PM on November 15, 2011 by Linda Cunningham

Texas Transportation Commission Authorizes RFQ for Horseshoe Project

At its October 27 meeting, the Texas Transportation Commission approved the issuance of a request for qualifications for the Horseshoe Project in Dallas County.  The project will be the first under new design-build legislation passed by the Texas legislature during the 2011 session.  Subchapter F, Chapter 223, of the Transportation Code prescribes the process by which the Texas Department of Transportation (TxDOT) may enter into a design-build contract with a private entity that provides for the design, construction, expansion, extension, related capital maintenance, rehabilitation, alteration, or repair of a highway project. Transportation Code §223.242 authorizes TxDOT to enter into, in each fiscal year, up to three design-build contracts for highway projects with estimated construction costs of $50 million or more.

The Horseshoe Project is part of the larger Project Pegasus, a $2.1 billion (construction only) project in downtown Dallas on two major interstates, I-35E and I-30.   All four legs of Project Pegasus are on the list of 2011 Top 100 Most Congested Roadways in the State of Texas.  The Horseshoe Project will replace two key bridges and connecting roadways crossing the Trinity River at I-30 and I-35E, as well as upgrading outdated roadway geometry.  The estimated construction cost of the Horseshoe Project is $800 million.

The Horseshoe Project is one of several major new design-build projects in the United States, including the Gerald Desmond Bridge replacement project in Long Beach, Calif., VTA’s BART Berryessa extension project in the Silicon Valley, and New York's Tappan Zee Bridge replacement project, which is one of 14 projects chosen by the Obama administration for expedited federal review and approval.

Perry's stubborn insistence on Trans Texas Corridor costly

Link to article here.

Perry's leadership style is sometimes costly

The failure of the Texas governor's vast transit project, a 4,000-mile-long network for cars and trains, can be attributed in part to his inattention to detail and his insularity with a small number of advisors, observers say, problems that also have hindered his presidential campaign.

By Paul West, Washington Bureau

Los Angeles Times

November 21, 2011

Reporting from Austin, Texas

Rick Perry launched his Texas gubernatorial campaign in 2002 with an idea that he hoped would become his legacy: a 4,000-mile-long, 21st century transit network on which motorists would drive 90 mph on toll roads 10 lanes wide, high-speed trains would hum alongside, and there would be room for electric power lines, broadband fiber and pipes to pump oil, natural gas and water to a rapidly growing state.

Perry called it the Trans-Texas Corridor, and advertised his blueprint as "bold" and "visionary" — a "plan as big as Texas and as ambitious as our people."

And it would all be done without raising taxes, thanks to partnerships with the private sector. The entire venture, priced at more than $200 billion in today's dollars, would leave the old interstate highways in the dust and provide, in Perry's view, a model for the nation.

Rick Perry: A Nov. 21 article in Section A about Texas Gov. Rick Perry's failed plan in 2002 to create a massive transit system said the Texas Farm Bureau had "endorsed his previous campaigns." While the bureau had endorsed Perry in most of his races, it backed his opponent in the 1998 election for lieutenant governor. —

Then "they rolled the thing out and it just blew up," said Bill Allaway of the Texas Taxpayers and Research Assn., a pro-business think tank in Austin. "The Trans-Texas Corridor turned out to be a political disaster for him."

What happened to the most controversial initiative of his 11 years as governor provides a window into a style of management that doomed not only the transit corridor but has contributed to the severe turbulence that has wracked his presidential candidacy. It is the sometimes lethal combination of inattention to detail and an insularity that blunts opposing views until it's too late.

Unlike many governors, Perry has generally declined to involve himself in the day-to-day particulars of managing government, say those who have worked for or watched him over the years.

At the same time, he has surrounded himself with a small number of advisors who have remained by his side for many years, from before his election as lieutenant governor in the 1990s to his current foray as a Republican presidential candidate.

Few in his kitchen cabinet were closer to Perry than Ric Williamson, who roomed with him when they were both state representatives in the 1980s. Shortly after Perry became governor — rising from his lieutenant governor post after George W. Bush was elected president — he installed Williamson on the state Transportation Commission.

The transit corridor appealed to Perry and Williamson because it would address many of the state's biggest challenges: relieving urban traffic congestion, keeping hazardous cargo out of populated areas, speeding freight north from the Mexican border and improving air quality, while creating, by their estimate, more than 2 million jobs.

And yet, the futuristic plan was really a throwback: the old idea of state government as a driver of economic growth.

"You'd be very hard-pressed to get Rick Perry to say that Washington will have a good effect on people's lives," said Chris Lippincott, a former official with the Texas Department of Transportation. "But his career is full of examples that government can have a positive effect on people."

In sketching out their grand concept, Perry and Williamson bypassed former colleagues in the state Legislature who dealt with transportation on a daily basis, an omission that loomed large as details of the plan became known and it became obvious that the governor and his advisors had failed to think through the politics of their idea.

The vastness of the corridors — nearly a quarter-mile wide — meant that Perry's plan could eat up more than 500,000 acres of private property. The biggest land grab in state history, opponents said.

Conservative property rights advocates were outraged. Rural landowners, who had supported Perry, a fellow rancher, ever since his 1990 election as state agriculture commissioner, exploded. The state's largest farm organization, the Texas Farm Bureau, which had endorsed his previous campaigns, lobbied to block the plan. Even the state Republican Party, driven by conservative anger over the looming "confiscation of private land," went on record in favor of killing it.

Perry failed, as well, to anticipate the opposition of vested interests — like those tied to existing toll road authorities in Dallas and Houston — who feared they would be left out once the project took off.

Those worries appeared to be justified when the Perry administration, in late 2004, gave a Spanish construction firm, Cintra, the lead role in building the system. The governor called it "one of the most significant days in the history of transportation." But the decision merely intensified the opposition. It fed nativist fears, which had been stirred by descriptions of the plan as a "NAFTA superhighway," a reference to the North American Free Trade Agreement.

The governor's project, to some, conjured up dark visions of Mexican trucks, loaded with foreign freight, barreling unchecked into Texas as part of a vague conspiracy to undermine U.S. sovereignty.

In late 2004, Perry began scaling back his grand vision. He quietly dropped the idea of building rail lines and highways side by side, shrinking the amount of private land that would be required. The governor "did a very effective job over time in backing away in steps from that idea, while keeping the concept alive," said Allaway, who calls it one of the hallmarks of Perry's style. "He makes a decision and he will back it until he can't any longer."

Mike Krusee, a former Republican state lawmaker, drew a comparison with Perry's ill-fated executive order in 2007 that required girls in Texas to be vaccinated against the sexually transmitted human papillomavirus. The mandate, which has backfired on Perry in the presidential race, was blocked by the Legislature after blindsided opponents rebelled.

"Again, he talks to people who are close to him — whether it's his wife or others — he had a vision and put it out and then got push-back from the Legislature," said Krusee, now a lobbyist in Austin.

Ray Sullivan, a Perry campaign spokesman and onetime chief of staff to the governor, acknowledged that in presenting the transit project, "we could have used more coalition-building and communications with citizens, elected officials, legislators and stakeholders prior to that major policy announcement being launched."

He added that while it is "wonderful to live in a conservative state" like Texas, "it's important to remember as well that conservatives can be as resistant to change as anybody else." The governor, who according to the aide has never spoken at length about what went wrong, declined an interview request, as did several others who were top advisors at the time.

By 2007, it was clear that the Republican-dominated Legislature, which initially authorized the ambitious project, wanted nothing more to do with it. Lawmakers overwhelmingly voted to curb new public-private toll road deals.

Williamson, the man who conceived the plan and spearheaded the drive to build it, told Reason magazine in fall 2007 that the "retrenchment" would be temporary. Three months later, not long after being described by Texas Monthly as the "most hated person in Texas," Williamson was dead of a heart attack.

A year after that, following a series of noisy public hearings around the state, his brainchild was gone too.

"The name Trans-Texas Corridor is over with," said Perry in January 2009, as state transportation officials announced they were dropping the plan.

Sullivan points out that Texas is still building toll roads through public-private partnerships. "So even if one argued that the original plan was unsuccessful, the thrust and goals of the public policy have been achieved in a different way," he said.

Still, even the wariest opponents say the governor's dream is dead. Conservatives cheered last spring when the Legislature unanimously approved a measure expunging all references to the Trans-Texas Corridor from state statutes. On June 17, Perry signed it into law, effective immediately.

Goldman Sachs sued over exposing investors to global debt crisis

Link to article here.

Goldman Sachs and JP Morgan are two of the key players in global toll road and infrastructure deals, especially those called public private partnerships or P3s (called Comprehensive Development Agreements, or CDAs, in Texas). What are Goldman Sachs and JP Morgan NOT telling their investors about their exposure to risk on ill-conceived toll projects that we see failing across the country? JP Morgan has also been sued and forced to pay a $51 million fine imposed by the SEC for bid-rigging, including for defrauding Texas taxpayers on an Austin toll road deal. These corrupt firms CANNOT be trusted to protect either the public interest or private investors' interests.

JPMorgan, Goldman Sachs Sued for Alleged MF Global Misstatements

November 20, 2011, 8:37 PM EST

By Joel Rosenblatt

(Bloomberg) -- JPMorgan Chase & Co. and Goldman Sachs Group Inc. units were sued by two pension funds over claims they made misleading statements about the exposure of MF Global Holdings Ltd. securities to European sovereign debt.
As a result of the misstatements, MF Global’s stock traded at “artificially inflated prices,” the funds said in the complaint filed yesterday in federal court in Manhattan. “While the extent of MF Global’s exposure to European sovereign debt was concealed, the defendants were able to raise some $900 million in the offerings.”

MF Global Holdings, which was run by former Goldman Sachs Group Inc. co-chief executive officer Jon Corzine, filed for bankruptcy Oct. 31 after making bets on sovereign debt and getting margin calls. The New York-based company listed debt of $39.7 billion and assets of $41 billion in Chapter 11 papers. The broker-dealer is being liquidated separately.

Other companies named as defendants in the complaint were Bank of America Corp.’s Merrill Lynch unit, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., RBS Securities Inc. and Jefferies & Co. Corzine and MF Global officers were also named as defendants.

The complaint was filed by IBEW Local 90 Pension Fund and the Plumbers & Pipefitters’ Local #562 Pension Fund. The funds seek to represent other shareholders in a class-action, or group suit.
David Wells, a spokesman for New York-based Goldman Sachs, declined to comment. Shirley Norton, a spokeswoman for Charlotte, North Carolina-based Bank of America, and Joseph Evangelisti, a spokesman for New York-based JPMorgan, didn’t immediately return calls after regular business hours seeking comment on the lawsuit.

Separate Liquidation

The broker-dealer unit of MF Global Holdings is being liquidated separately. The trustee liquidating MF Global Inc. said yesterday distributions of collateral in customers’ accounts are “dependent upon assets available and there is no assurance of a 100 percent return.”

The trustee, James Giddens, got court permission Nov. 17 to transfer $520 million in assets to about 23,300 accounts. While planning a third transfer to include a “few hundred” accounts that haven’t had distributions so far, Giddens said the assets available for segregated commodities accounts are “substantially less” than his estimate of claims that will be allowed.

Shortfall, Remedy

“Efforts are ongoing to analyze the cause of the shortfall and to seek to remedy it in coordination with multiple regulators and law enforcement officials,” he said in a statement yesterday.

The broker-dealer’s bankrupt parent moved hundreds of millions of dollars from its futures client accounts to other accounts before its bankruptcy filing, according to a person familiar with the audit of the company, who declined to be identified because the discussions are private.

MF Global Holdings was required to segregate funds posted as collateral by futures clients. The company filed the eighth- largest U.S. bankruptcy after making a $6.3 billion bet on Eurobonds and getting margin calls.

Giddens, whose first transfer of assets was almost $1.6 billion, said the third payment might be a bulk transfer to bring the value of collateral to 60 percent of the net equity in the accounts of all claimants, including those who have received nothing yet. A bulk transfer depends on finding futures brokers to receive the assets, he said.

Multiple Probes

The Commodity Futures Trading Commission, Securities and Exchange Commission and Federal Bureau of Investigation are investigating cash movements at the firm before the bankruptcy filing. The CFTC has been probing about $600 million in futures client funds that disappeared as the firm prepared for bankruptcy. Regulators said they haven’t located the money.

In a separate matter, a federal judge yesterday said he will approve a $90 million settlement of investor claims stemming from a 2008 wheat-trading loss incurred at MF Global’s commodity brokerage.

U.S. District Judge Victor Marrero in Manhattan also said he would approve attorney fees of $16.2 million. A class of investors, led by four public pension funds, claimed losses of $1.1 billion on MF Global shares after the firm disclosed that a broker in its Memphis, Tennessee, office lost $141 million in a few hours in unauthorized trades.

Defendants in that case include MF Global; Man Group, its former owner; underwriters of MF Global’s initial public offering in July 2007; and some former and current officers and directors. The suit claimed MF Global deceived investors by misrepresenting its risk management measures.

Settlement Share

MF Global’s $2.5 million contribution to the settlement will be fully reimbursed, the company said in a court filing earlier this month.

The case is IBEW Local 90 Pension Fund v. Corzine, 11-8401, U.S. District Court, Southern District of New York. The bankruptcy case is MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

The brokerage case is Securities Investor Protection Corp. v. MF Global Inc., 11-cv-7750, and the wheat-trading case is Rubin v. MF Global, 08-cv-02233, U.S. District Court, Southern District of New York (Manhattan).

--With assistance from Linda Sandler and Bob Van Voris in New York. Editors: Michael Hytha, David E. Rovella

Ohio mulling sale of turnpike

Link to article here.

State ponders turnpike's fate

Legislators disagree on lease option, where proceeds will go

7:52 AM, Nov. 12, 2011  |  The News
By Mark Tower

Purchase Image

Traffic passes through Ohio Turnpike tollbooths Wednesday in Fremont. / Jonathon Bird/News-Messenger

FREMONT -- On a recent visit to Fremont, Ohio Department of Transportation Director Jerry Wray laid out what he and other state officials are doing to determine the future of the Ohio Turnpike.

"The issue is the turnpike and, first of all, why would we want to do something with the turnpike," Wray said. "Secondly, if we are going to, what would that be; and how would that happen. And if we generated revenue from that, what would we do with that revenue."

Each of those questions is controversial. Some state lawmakers question the need for any change at all, while others have strong opinions about who should benefit from any lease proceeds.

The 241-mile-long toll road, which runs east-to-west through Northern Ohio from Indiana to Pennsylvania, is administered and maintained under the direction of the nine-member Ohio Turnpike Commission.

Gov. John Kasich and other state officials have proposed options for the road's future, including leasing its operation to a private company or turning management over to the Ohio Department of Transportation.

Studying options

State transportation officials met Wednesday with five consulting companies, a group that had been whittled down from 14. All five are bidding on a study meant to determine the feasibility and economics of the options on the table.

Wray said the state transportation system, including the turnpike, faces falling revenue and rising costs.

"We have a real revenue crunch," he said. "As we look around and say 'What assets do we have that we could perhaps leverage to bridge the gap until there is more funding for transportation infrastructure?' And one of the things we are looking at is the Ohio Turnpike."

State Rep. Matt Lundy, D-Elyria, is an outspoken critic of a turnpike lease. He compared the promises of added revenue to the pitch of a Wild West patent medicine salesman.

"He says he is going to cure all your ills, and then he leaves," Lundy said. "They want Ohioans to believe that all their infrastructure ills and woes will be solved simply by leasing the Ohio Turnpike. I think that is an exaggerated representation of what is and isn't possible."

State Rep. Rex Damschroder, R-Fremont, has some issues with the direction the state is taking on the turnpike, but said there is excess spending under the current system.

"I don't think doing nothing is the best solution," Damschroder said. "I'm sure there is an asset there that is underutilized."

Lundy argued state leaders should not spend any money on a study, saying state residents are largely opposed to a lease.

"My position is, why spend money on consultants when Ohioans don't want this to take place in the first place," he said.

In a Quinnipiac poll in September, 56 percent of Ohio voters said a turnpike lease was a bad idea. About 32 percent considered it a good idea. In Northwest Ohio, 65 percent of those polled opposed a lease.

Wray said the study will be completed by independent consultants, so the process will be fair.

"It is going to be a transparent process," he said.

ODOT spokesman Steve Faulkner said if the study determines privatization is the best option, the goal would be to have a proposal in front of the Ohio General Assembly before the end of 2012.

What's next?

The next step, Wray said, is figuring out what to do with the road.

On one side are those who completely oppose privatization, like Lundy. He said a private company would likely downgrade services and increase tolls, resulting in trucks diverting and damaging nearby roads.

"Once motive becomes profit, then it's all about the dollar, not about the quality and the service," Lundy said. "The greatest fear is this is going to result in trucks using other routes and tearing them up; that it would lead to even more infrastructure damage."

According to a study published in February by the Northeast Ohio Areawide Coordinating Agency, a lease of the turnpike would increase tolls and truck traffic on other routes.

Data collected by the agency suggests a 25 percent increase in tolls would result in 2 percent fewer trucks on the turnpike. A 50 percent increase, according to the study, would result in 13 percent fewer trucks. More than half the truck traffic is expected to leave the highway if tolls are doubled.

When the turnpike was proposed, Damschroder said, Ohioans were promised the road would be toll-free in 1992 after the construction debt was paid. He proposes that promise should finally be fulfilled.

"The legislature voted in 1992 to keep the tolls and ignore the original contract with Ohio voters," Damschroder said. "The rest of Ohio pays nothing for their four-lane highways. That's all it is, is an extra tax."

His idea is to give state residents a free pass to travel the turnpike, which he believes would only slightly decrease state revenue or receipts from a potential lease.

Wray said he recognized most individual trips on the turnpike are made by local commuters, but said that group of drivers makes up a minority of the commission's revenue. That is just one of the pieces, he said, that the study will detail and analyze.

"We have not decided to do anything with the turnpike," Wray said. "What we have decided to do is to analyze the options that we have with the turnpike. We're interested in doing an analysis to determine how we can leverage this asset."

Lease proceeds

The final controversial decision is what to do with any funds gained, if the leasing option is approved.

Kasich recently promised the majority of proceeds from a deal would benefit infrastructure projects in northern Ohio. He defined the region as anything north of U.S. 30, which runs across the state from Van Wert, at the Indiana border, to East Liverpool, which borders West Virginia and Pennsylvania.

During his visit to Fremont, Wray also pledged proceeds would go to communities through which the turnpike passes.

"The majority of the money will go to northern Ohio," he said.

Damschroder said he doesn't understand why any of the money would go to projects south of U.S. 30.

"That would make as much sense as putting toll booths up in southern Ohio and have the money pay for projects up here," he said.

Lundy agreed any proceeds should stay in northern Ohio.

"One hundred percent should stay in northern Ohio," he said. "Especially in the communities close to the turnpike. They are the communities that will see their roads and highways suffer."

Wray suggested a program be set up in which local townships, villages and cities along the turnpike could apply for some of the funds to repair bridges or build noise barriers.

"Where you have been negatively impacted by the presence of the turnpike, we'll fix your problem," he said.

Local bridges

ODOT officials say the 11 damaged bridges spanning the turnpike in Sandusky County will be fixed, regardless of how the toll road is managed.

Local legislators were able to include language in the state's transportation budget bill, signed by Kasich in March, requiring the Ohio Turnpike Commission to pay for the bridge repairs.

The repairs began on Riley Township Road 226 in August and all the roads are expected to be repaired by the end of 2014.

Denton officials balk at carrying load for I-35

Link to article here.

I-35E project funding in doubt

State funds aren’t available; county rethinking its path

01:20 AM CST on Saturday, November 12, 2011

By Bj Lewis / Staff Writer

Denton County officials find themselves at odds with Texas Department of Transportation on how to fund the expansion of Interstate 35E between Carrollton and Denton.

In Thursday’s inaugural meeting of the 1420 Committee, officials dove into some of the logistical and financial difficulties ahead as they work to get the expansion project moving forward, and county officials are not happy with the current scenario.

That committee is a requirement of the Senate Bill 1420, which authorizes the use of public-private partnerships to fund the expansion of I-35E.

The current highway consists of four to six regular lanes and four lanes of frontage roads.

The new project would expand the highway to eight regular lanes, four tolled HOV lanes and four to six frontage lanes, depending on the need. The current estimated cost is $3.3 billion in construction, $1.2 billion to purchase right of way and $800 million for operations.
But state funding is not available now, so if the project moves forward, Denton County will have to pay.

That has transportation officials rethinking how to proceed.

During the presentation, TxDOT offered several scenarios to move forward with what they could fund on the project from Denton County’s available $600 million. All of them involved managed toll lanes, but not adding any free general-purpose lanes, which drew the ire of County Commissioner Hugh Coleman.

“I was surprised that Michael Morris and the [North Central Texas Council of Governments] were proposing to take our $600 million and only build a sole toll lane,” Coleman said. “It was my belief when this was presented to various cities, if I-35E was to have managed lanes, it would also result in having general-purpose lanes at the same time.”

Coleman said it was disingenuous to make that representation and get support for the legislation to get tolling on I-35E and then say they can’t do it.

“This is the first time I have heard there is not enough money to get done what they proposed,” he said. “Frankly, I think we need to reset the situation and reassess how we will get this done moving forward.”

Coleman also questions why at this point only Denton County funds are being bandied about for the expansion project.

Andy Eads complimented the workgroup from TxDOT for the work over the last few months to better define the cost estimates, where to start and what the time frame should be.

“What we want at the county is for the state to contribute to this project, I think, that is my No. 1 message,” Eads said. “Denton County should not be the largest stakeholder in building this large project.”

Eads said that some of the project proposals made at the meeting were unacceptable and that it would take more participants at the table willing to write checks to get it done.

Denton County transportation consultant John Polster noted that both TxDOT and the Metropolitan Planning Organization had money to put into Lyndon B. Johnson Freeway, the North Tarrant Express and the DFW Connector and that TxDOT had $350 million to put into Grand Parkway in Houston during the time they were telling the county they had no funds at all for I-35E.

“There a real possibility if we can’t get TxDOT and the MPO to participate, Denton County may decide that no build is better than wasting our $600 million,” Polster said.

The committee’s next meetings will be at 1:30 p.m. Nov. 22 and 10:30 a.m. Nov. 30 at the headquarters of the Denton County Transportation Authority, 1660 S. I-35E, Suite 250, in Lewisville.

Perry's toll tax legacy turns five

Link to article here.

Here's the text of an email I sent to Reporter Ben Wear in response to this article claiming the dust-up over toll roads has faded....

Toll roads are no more popular today than when Sal Costello started the Austin Toll Party.

Case in point....

Defeat of Prop 4.

Other Indicators -
• Open Letter signed by over 100 grassroots groups, mostly tea parties across the state hand delivered to the Governor, Lt. Gov., Speaker and every legislator during the session. This level of opposition is UNPRECEDENTED, eclipsing even the backlash in 2007. (The file with 2,000 signatures that also signed onto this letter is too big to include here.)
• DFW is raging over the Cintra takeover up there, and the proposed tolls on every new lane of pavement
• Houston is hopping mad over the $10 HOT lanes
• San Antonio is as stirred up as ever

Though Sal Costello's online petition isn't dumping massive emails into elected officials' in-boxes (or yours) anymore, it doesn't mean the anti-toll angst has faded. It means the grassroots have adapted to spam filters and switched to new methods to protest the toll roads. Since the economic downturn (starting in 2008), driving overall continues to go down, not up. It shows the average motorist can't afford the sustained increase in gas prices much less tolls on top on it. People are being forced to change their habits and drive less to make ends meet.

Also, please don't confuse the cues from the politicians with the sentiment among taxpayers. Just because the politicos have allowed this nonsense to continue doesn't mean the PEOPLE of Texas are suddenly fine with selling off our roads to foreign companies nor are they okay with this new tax on driving! Few can afford the extra $2,000-$3,000 a year in new taxes to get to work (though maybe some will pony-up for the occasional football game as you did, but infrequent use isn't enough to pay for the roads). So few, the users aren't covering the debt. The fact you site that SH 130 has had a 70% increase in traffic since it opened (deeming it a success) while failing to mention that taxpayers have had to pony-up 70% MORE in subsidies to bailout the loser toll roads in Austin to the tune of $100 million, or ,to quote you, that the system will be 'in the red for a generation,' or that SH 45 SE though 100% paid for was opened as a toll road to cover the losses elsewhere, or that a distressed plane landed on SH 130 it was so empty shows either 'selective' memory or some other agenda at work.

SH 130 is the poster child of failed toll road policy in Texas. It promised to relieve congestion on I-35 and hasn't delivered.  Your own articles repeatedly note that even with drops in the truck toll rates, it hasn't made truckers switch from free I-35 to the SH 130 tollway. They're so desperate to increase traffic on SH 130, there's talk of tolling existing I-35 and making it SH 130, and making existing SH 130 the new I-35. Overall, drivers are protesting with their cars...they're not using the toll roads as much as projected, certainly not in the volume needed to pay for the debt. They're not solvent and now ALL Texans taxpayers, whether we use the toll roads are not, are paying dearly to prop-up this grand toll road experiment.

The wheels are coming off these failed policies and I hope you'll inform the public of the truth.

Terri Hall
Texans Uniting for Reform and Freedom

Tollways turn 5, to little notice

Ben Wear, Getting There

Sunday, Nov. 6, 2011
Austin American Statesman

The anniversary passed quietly a week ago if anything that happens on Halloween can truly be considered quiet with no official notice.

Five years ago, Austin's toll road era began.

That opening, and the several year gestation that led to it, was anything but quiet. Austin media was all over the toll road system that day, watching TxDOT workers pull aside sawhorses and the first cars pull onto the tollways.

There had been querulous public meetings for several years, with people arguing about where to put toll roads (should Texas 130 go east or west of Walter Long Lake?), about whether to convert what were going to be free expressways into toll roads (the William Cannon Drive overpass on MoPac Boulevard, U.S. 183 north of Oak Knoll Drive, Texas 71 east of Interstate 35), and about whether building a toll road on top of a free road and adding free frontage roads was double taxation (U.S. 183 east of Interstate 35, the Y at Oak Hill).

Then there was angst over the possible conversion of free roads to toll roads (legal briefly, then scuttled before any conversions occurred), the Trans-Texas Corridor plan of toll roads all over the state (also in state law, also scuttled, eventually) and long-term leases to let private companies, particularly foreign companies, build toll roads on the state highway system.

I wrote so many toll road stories in those years that even I got sick of them. I checked the American-Statesman archives, searching for stories that had both "Ben Wear" and "toll" in them. From 2004 through 2007, I averaged 96 stories a year on the topic, or one about every four days. Including weekends.
In 2010, that combo showed up 24 times. So far this year, the number is 35. This will be No. 36.

So, the topic has cooled.

Central Texas has five toll roads open now, a total of about 77 miles, and including the extension of Texas 130 to Seguin, an additional 50 miles is under construction. The Texas Department of Transportation operates four of the tollways, and the Central Texas Regional Mobility Authority runs the other one. There are now 950,000 cars and trucks on Texas roads with TxTags, the electronic tolling devices issued by TxDOT that attach to windshields and enable overhead toll readers to automatically charge the car's owner. Most of these are in the Austin area, given that the majority of TxDOT tollways are here. (There are also TxDOT toll roads in Laredo and Tyler, and a short one near Houston that opened a month ago.)

I rarely get emails from readers anymore about toll roads, and those I do get are usually from people who have had trouble with a toll bill. Sal Costello, a graphic designer who started an anti-toll group called the Austin Toll Party and pushed for the recall of Austin City Council members who supported toll roads, moved away from Texas several years ago. Political attacks on Gov. Rick Perry over his pro-tollway policies (and his brainchild, the Trans-Texas Corridor) pretty much bounced off him.

And the Legislature, which in 2007 had indignantly smote down those long-term leases, has since softened and this spring authorized TxDOT and regional mobility authorities to initiate many more of them.

The Austin-area tollways have seen heavier usage as the years have gone by, even if only one is profitable so far (the mobility authority's 183-A in Cedar Park). Texas 130 on the metro area's eastern fringe, for instance, has seen a 70 percent increase in traffic since 2008.

Still, predictions that the toll roads would be financially ruinous for drivers have not come to pass. The reality: People who can afford to use the tollways for everyday commutes, do so. Those who can't afford it use the free roads they were using before.

As for the rest of us, some never go on a toll road. Others, like me, drive on one now and then when paying to save a few minutes makes sense.

Last week, in my part-time life as a football official, I had a 6 p.m. ninth-grade game in Manor. I bushwhacked my way from downtown east on Martin Luther King Jr. Boulevard, hitting more traffic than I expected along the way. By the time I got to FM 973, which leads to Manor and is just short of Texas 130, it was already 5:40 p.m. So I made the choice to skip that slower, free road and drive 75 mph on Texas 130 for a few miles. My toll tag was dunned $1.35 for the trip.

As it happened, they started the game eight minutes early. As I was entering the stadium gate, the referee blew the whistle for the opening kickoff. After a sprint, I was in position for the first play from scrimmage.

Without Texas 130, I probably would have missed at least half of the first quarter. Money well-spent.

Public funds tight, states seek road privatization as bailout

Link to article here.

Apparently the establishment hasn't learned from our mistakes. These privatized toll roads are heavily subsidized with taxpayer money (socialize the losses and privatize profits -- a big RIP-OFF) and are failing across the nation (San Diego's South Bay Expressway & Indiana Toll Road flirting with bankruptcy despite doubling toll rates). The grand privatization experiment is failing and no one in government is listening. Well, here's a little reality check. Americans' disposable income is GONE. There aren't enough people who can afford to pay 25-100 times more per mile to drive our highways. So privatized toll roads are NOT going to fill the supposed 'funding gap.'

With U.S. infrastructure aging, public funds scant, more projects going private

By Cezary Podkul,  Saturday, October 22, 2011


When the city of Chesapeake, Va., considered closing a crumbling, 80-year-old bridge over the Elizabeth River in 2008, local officials knew that neither the state nor the federal government would pay for a replacement. Just tearing down the old one would cost millions of dollars. So they sold it.

“We paid them $10,” said Bob Hellman, one of the investors, but “what we gave them wasn’t just $10.”

Hellman’s investors group, American Bridge Partners, agreed to remove the old bridge — and to build a brand-new one, solely with private money. Tolls of about $2 a trip, up from the old 75-cent fee, will pay back the company’s $130 million investment in the new South Norfolk Jordan Bridge, due to open in the spring.

“This is a Christmas gift for the city,” said Chesapeake Mayor Alan Krasnoff.

It’s a gift cities and states are asking for more than ever. The goal is not to raise cash by selling public infrastructure but to tap into the private sector for money to build new bridges, roads or tunnels — possibly faster and cheaper than the government otherwise could.

There are at least 70 privately funded and managed infrastructure projects across the United States in various stages of development, according to a list compiled by the law firm Allen & Overy. These are part of a vast network of roads, bridges and tunnels — to say nothing of the subways, ports, airports and water systems — crying out for attention. Consider this: Over the past 60 years, the United States has built a 46,876-mile federal highway system that is now in dire need of repair. As a result, states have had to pour more of their transportation dollars into fixing aging highways and even in good times have little or nothing left over for new construction.

The Great Recession made that harder. In many cases, financially strapped states and cities have little choice but to turn to the private sector, even if it means giving up revenue and selling off an asset normally seen as belonging to the public.
In Chesapeake, “they were looking at our bridge versus no bridge,” said Hellman, who previously invested in pipelines, coal, landfills and even cemeteries. “That’s ultimately what you’re looking at in many of these circumstances.”

Funding ‘crisis’

“States are facing a transportation funding crisis,” said Jaime Rall, transportation policy specialist at the National Conference of State Legislatures (NCSL). But she does not pin the blame for the crisis on the recession alone. She also points to the “political reluctance to raise the gas tax,” she said.

The gasoline tax, which feeds into the National Highway Trust Fund for highway projects, has stood at 18.4 cents a gallon since 1993. Adjusted for inflation, it would need to be 29 cents a gallon just to buy what it did then, according to the Bureau of Labor Statistics. But Congress and the White House oppose any increase.

As a result, federal transportation finances are in even worse shape than many states’. The highway trust fund ran out of cash and had to be rescued in 2008, 2009 and 2010 at a total cost to taxpayers of $34.5 billion. It is expected run out of cash again next year.

“There is no public money,” said D.J. Gribbin, a former chief counsel to the Federal Highway Administration who works at Macquarie Capital, a large Australian investment bank.

While public coffers have been running dry, a cottage industry has been built around the concept of investing private money in infrastructure. It has grown exponentially over the past decade thanks largely to the world’s largest pensions, which have come to view infrastructure as a separate investment category, much like a stock or a bond.

Precise estimates are hard to pin down, but in the past five years, the 30 biggest investors in infrastructure have channeled as much as $180 billion into these types of investments, according to Infrastructure Investor magazine. These investors include Macquarie, as well as some of the largest pension plans in Europe, Australia and Canada.

More capital is on the way. There are 100 private funds seeking to raise $95 billion for infrastructure investments globally, according to a tally by San Francisco-based fund adviser Probitas Partners, though not all of them will succeed. Of that, about $11.5 billion would be targeted for the United States, with fund sizes ranging from $100 million to $3 billion.

“In 2003, nobody in the U.S. talked about infrastructure,” said Kelly DePonte, a partner at Probitas. “We really have seen a sea change in interest.”

The main draw for investors, DePonte said, is the steady, predictable income that infrastructure assets can provide. People need to get to work, use electricity and flush toilets, so a toll road, an electric utility or a water utility tends to deliver cash no matter what happens in the stock market on any given day. Recent research by Macquarie shows infrastructure has outperformed the global stock market by an average of about 0.5 percent per month in the past 10 years.

“Traffic on the road is highly insensitive to stock market levels,” said Chris Camarsh, head of investment process at Australian fund manager CP2. That makes infrastructure a good way to save for one’s nest egg, since “there is good predictability that the cash will be there when you’re older,” he said.

Camarsh, for example, holds shares in Transurban, an Australian toll road developer that owns an 85-year contract to build and operate an expansion of the Capital Beltway in Fairfax.

“It’s my retirement,” he said.

That has helped lure Canada’s $52 billion Ontario Municipal Employees Retirement System, which provides retirement benefits to more than 400,000 members. It has devoted about $8.25 billion, or 16 percent, of its portfolio to infrastructure because it “matches the long-term returns that we need for the pension plan,” said Michael Nobrega, chief executive of OMERS. The pension fund bid — unsuccessfully — for the Chicago Skyway and the Pennsylvania Turnpike.

Nobrega is putting together the $20 billion Global Strategic Investment Alliance with other large pensions around the world, including up to $5 billion from U.S. pension funds, to jointly buy some of the largest assets in the world.

“Any pension that does not have allocation to large-scale infrastructure assets . . . I think is missing a real opportunity,” he said.

In the United States, he sees a $1 trillion shortfall for infrastructure investment.

“But,” Nobrega said, “I think the government framework has to be there to encourage us to be there.”

‘Open for business’

States are increasingly rolling out the red carpet to attract big investors to their infrastructure projects. Thirty-one states and Puerto Rico have laws on their books authorizing private investment in infrastructure, according to the NCSL’s Rall.

But the laws vary so much from state to state that investors often refer to the United States as a patchwork of 50 separate countries. Nevada, for example, has approved private investment in one toll road, while Puerto Rico’s 2009 law created a menu of opportunities across water, energy, transportation and education sectors, as well as a separate office to administer them.

So far, Virginia has had the most success attracting private capital to its projects. The state was among the first to pass legislation enabling private investment for transportation in 1995. It has since built three projects with the help of private capital. Five more are under construction, and another four are in various stages of development.

One deal sealed in July is a $1.9 billion tunnel project directly north of Chesapeake’s new Jordan Bridge. It is what people in the business call “a public-private partnership.” A private consortium led by Macquarie will invest $1.2 billion, one quarter in direct equity, more than a third covered by commercial loans or bonds, and a third to be provided through a direct Transportation Department loan that has yet to be approved.

As in the privately financed Jordan Bridge, tolls from the Midtown Tunnel expansion will go to covering the finance costs and providing a return to the investors.

“You have to look at this from a business perspective,” said Tony Kinn, who heads up a new division for privately financed projects at the Virginia Department of Transportation. “If we could afford to do all these projects ourselves, we would do them.”

The state is also a partner in the Midtown Tunnel expansion. It will contribute a $395 million subsidy to the project. It gets two things: a new tunnel without laying out the extra $1.2 billion and a lower toll than the private investors would have demanded otherwise. But it gets no revenue unless certain revenue-sharing provisions kick in later in the 58-year contract. Under the deal, Virginia capped tolls initially at $1.84 and will let them rise at roughly the rate of inflation.

“We have to leverage the available state funds,” Kinn said.

That does not mean every new highway project in the state will be a toll road or involve private capital, said Dusty Holcombe, Kinn’s deputy. Where all-public financing makes sense, the state will do that.

But, where appropriate, the state will be “proactive, aggressive and active” in getting the private sector involved in building new infrastructure, Kinn said. “Virginia is open for business.”

Unexpected market

Initially, private investment in U.S. infrastructure took the form of buying or leasing rather than building projects.

Six years ago, Chicago got $1.8 billion for leasing its Skyway toll bridge. A year later, Indiana raised $3.8 billion by leasing a toll road.

“Following a couple of the catalyst transactions — the Skyway, the Indiana Toll Road — there was clearly an expectation in the private sector that the public sector couldn’t resist doing these transactions,” said Tom Lanctot, head of infrastructure investment banking at William Blair in Chicago.

Only a handful of the private funds were geared toward new-construction projects, said Ryan Orr, a professor at Stanford University who studies investment in infrastructure.

Large pensions and sovereign wealth are more inclined to buy existing assets rather than taking on the many risks of building new ones, Orr said. New-construction projects also take a long time to develop.

Sovereign wealth funds also like to bid for existing big-ticket assets. In 2009, when Chicago leased its parking meters for $1.15 billion, the Abu Dhabi Investment Authority, the investment arm of the oil-rich Abu Dhabi government, took a minority stake.

The sale or leasing of big visible infrastructure — especially to foreigners — has provoked resistance from the public.

“Do you really want to be selling off your assets?” Rolling Stone writer Matt Taibbi asked a New York audience in March. He had elicited laughs while recounting an anecdote about officials from a Middle Eastern sovereign wealth fund trying to decide whether to bid for the Pennsylvania Turnpike. “I think its absolutely nuts,” Taibbi said.

Orr dismisses such sentiments.

“We live in a globalized economy,” he said, and as a result Middle Eastern investors make all kinds of investments in American assets, such as U.S. Treasury bonds. “Why is a toll road any different? Has there ever been a case where we’ve ever had a problem with an Arab sheik interfering with the operation of one of our assets?”

Public officials have also questioned the financial wisdom of selling off the crown jewels of public infrastructure and of giving up, sometimes for decades, key revenue streams such as parking fees.

Proposals to lease toll roads in Pennsylvania and Florida died after public debate. A plan to lease Chicago’s Midway Airport fell apart, and proposed parking leases in Los Angeles, Pittsburgh, Harrisburg, Pa., and Hartford and New Haven, Conn., were tabled or shot down by local politicians.

Some municipalities and states — such as Ohio, which is mulling whether to lease its turnpike — have come back to the private market with deals on existing infrastructure. But plans for new-construction projects are moving along, mostly at the state level.

Not ‘black and white’

Even when governments embrace deals, the math does not always add up for private investors. The classic example: a short California toll road called the South Bay Expressway.

The road made history in 2003 when it became the first privately backed toll road to secure a loan from a Transportation Department program designed to provide financing for innovation. The $140 million loan helped kick-start construction on the 9.2-mile road, which links the southern San Diego suburbs to an industrial area near the Mexican border.

But when the $658 million project opened to traffic in November 2007, things did not go as planned. The subprime-mortgage crisis roiled Southern California. Expected housing developments were canceled, and recession-battered motorists turned to neighboring freeways. Traffic was about half of what investors had expected, said Greg Hulsizer, the toll road’s chief executive.

To make things worse, the company got tied up in costly litigation with its contractors. By March 2010, with the economy still weak and the litigation draining its coffers, the South Bay Expressway filed for bankruptcy.

When the South Bay Expressway emerged from bankruptcy, the Transportation Department wrote down its loan to about $95 million, costing taxpayers $55 million. But it also received a one-third ownership stake in the road company, Hulsizer said.

To some analysts, it showed why taxpayer funds should not go to such projects.

“The public ends up taking the bath,” said Phineas Baxandall, policy analyst at the U.S. Public Interest Research Group.

To others, the Transportation Department made out well. Dale Bonner, who served as California’s highest transportation official during the bankruptcy process, said the whole episode was “a sign of the strength” of the private investment model. The initial investors were wiped out while the lenders, including the government, were compensated.

“I didn’t have one troubled night of sleep about having to explain to the legislature or the taxpayers that we are going to have to come up with extra money to bail anybody out of the project,” Bonner said.

Now the South Bay Expressway is going to be sold — to government. The San Diego Association of Governments recently decided it was worth it to just buy the expressway and lower the tolls, which have pushed droves of motorists onto a parallel, congested freeway. The association approved a $345 million buyout offer in late July, cheap compared with the initial development cost or what it would have cost to widen the neighboring freeway.

“These lanes are available now and at half the price, so it’s a smart play,” said Jerome Stocks, chairman of the governments association.

Once the local governments take over the expressway, Stocks hopes to cut tolls by half from the current $4 per trip.

“We don’t need to make a profit. We’re not in business to make a profit,” he said. “So our cost of doing business is quite a bit lower than the private sector.”

And what about the Transportation Department? It chose not to sell out to the local governments, opting to remain invested in the deal, according to a spokesman. The department also expects “to fully recover its investment in the toll road” and will continue to make similar loans in the future, the department spokesman said.

Stocks isn’t so sure.

“There is a very good possibility that they will be made whole completely,” he said. “There is also a very good possibility that they won’t.” Like the whole issue of private investing in infrastructure, he added, “it’s not black and white.”

New designation on I-10 hijacks freeway, steers cars to foreign tollway

Link to article here.

New designation on I-10 hijacks freeway, steers traffic to foreign-owned tollway

By Terri Hall, San Antonio Transportation Policy Examiner

At its last meeting, the Texas Transportation Commission quietly passed a Minute Order authorizing the Texas Department of Transportation (TxDOT) to implement a dual designation of I-10 in Seguin to I-410 in San Antonio and eventually to I-35 (53 miles total) as State Highway 130. The Minute Order is a pay-off to Spain-based Cintra whose tollway, which begins at I-10 in Seguin and connects up with the publicly-operated segments of SH 130 tollway that ends at I-35 in Georgetown, will greatly profit from the visibility as it seeks to entice drivers to its two segments of the tollway (segments 5 & 6).

Motorists who unwittingly think they’re going to continue on a freeway from the I-10/SH 130 leg will get a rude awakening when they’re stuck out in Seguin with no way north unless they proceed on Cintra’s privately operated toll road. The public private partnership (P3) contract awarded to Cintra and San Antonio-based Zachry in March of 2007 also gives the private corporations the ability to penalize TxDOT for the expansion of free routes surrounding its tollway through a non-compete clause (see Exhibit 17). Since TxDOT has a share in the toll revenues on SH 130,  if it sends more traffic to Cintra’s toll road, which the dual designation with free portions of interstates 10 and 410 are clearly designed to do, it will benefit from the move.

So now our highway department is making decisions, not based on safety or congestion relief, but based solely on increasing revenues to its own coffers and those of a private corporation at taxpayer expense. Highways are a monopoly by their very nature, privately-owned tollways even more so given the non-compete clauses. So TxDOT’s move, announced on a day when it knew all the attention would be on the announcement of its new Executive Director, Phil Wilson, slipped in this controversial, profit-driven, monopolistic designation under the radar.

Well, now it’s officially ‘on the radar.’

SH 130 so empty a plane used it for emergency landing!
SH 130 is the only portion of Trans Texas Corridor TTC-35 that will ever be built. So this tollway has been under a shroud of controversy from day one. TxDOT’s portion of SH 130 (roughly 49 miles called known as segments 1-4) is also presently a net loser for the state. It has required $100 million taxpayer bailout to date, nearly 70% more than originally planned. That’s right, TxDOT PLANNED for a net loss on this road for the entire life of the debt, and they’ve been dipping into gas taxes to subsidize it since its opening. It’s so empty, a distressed plane landed on it during RUSH HOUR. It’s become the poster child of Rick Perry’s failed toll road policy in Texas.

Cintra is manipulating the main north-south route through our state, I-35, for its own personal profiteering -- and our highway department that has a fiduciary duty to the public is complicit in it, especially since TxDOT is in a sea of red ink on its portion of SH 130.

Just when you think things couldn’t get more outrageous... TxDOT’s I-35 Advisory Committee that issued a report to be unveiled at tomorrow’s monthly Commission meeting, proposes converting existing I-35 into the SH 130 tollway and designating existing SH 130 as the new I-35. Such a move would require a change to both federal and state law, but that’s never stopped TxDOT’s raw ambition for sucking as money out of Texas motorists as possible. This is why an UN-elected board of appointees ought NEVER to have the ability to impose taxes. It’s this taxation without representation that precipitated the American Revolution and now the subsequent toll tax revolt in Texas.

Most state lawmakers that have caught wind of this Minute Order and dual designation of I-10 as SH 130 are shocked but not surprised. One quipped, “Will this nonsense at TxDOT ever end? I’ll answer my own question. Not until Rick Perry is no longer the Governor.” Until then, expect an endless, unaccountable runaway toll tax gravy train to continue at Perry’s highway department.

Rolling Stone eviscerates Perry for selling off TX to highest bidder

Link to article here.

WARNING: This article contains foul language and some vulgarity. Content inappropriate for children. However, it is well-researched and factual account of Rick Perry's crony capitalism and penchant for selling off Texas to the highest bidder, especially to campaign donors.

Rick Perry: The Best Little Whore In Texas

The Texas governor has one driving passion: selling off government to the highest bidder

by: Matt Taibbi

Early morning in a nearly filled corporate ballroom at the Cobb Energy Centre, a second-tier event stadium on the outskirts of Atlanta. It's late September, and a local conservative think tank is hosting a get-together with Rick Perry, whose front-runner comet at the time is still just slightly visible in the bottom of the sky. I've put away five cups of coffee trying to stay awake through a series of monotonous speeches about Georgia highway and port reform, waiting for my chance to lay eyes on the Next Big Thing in person.

By the time Perry shows up, I'm jazzed and ready for history. You always want to remember the first time you see the possible next president in person. But as every young person knows, the first time is not always a pleasant experience. Perry lumbers onstage looking exceedingly well-groomed, but also ashen and exhausted, like a funeral director with a hangover.

In a voice so subdued and halting that I think he must be sick, he launches into his speech, which consists of the following elements: a halfhearted football joke about Texas A&M that would have embarrassed a true fan like George W. Bush, worn bromides about liberals creating a nanny state, a few lines about jobs in Texas, and a promise to repeal "as much of Obamacare as I can" on his first day in the White House.

"I will try," he says, "to make Washington, D.C., as inconsequential in your life as I can."

Then he waves and walks offstage. The whole thing has taken barely 10 minutes.

I can't believe it, and neither can the assembled crowd of Georgia conservatives, who hesitate before breaking into polite applause. I feel like a high school cheerleader who just had her leg jizzed on in the back of a convertible. That's it? It's over? That was Rick Perry's stump speech?

"Low energy, low substance," sighs Justin Ryan, one of the conference attendees. "That's sort of the candidate in general."

But this is America, remember, where one should never underestimate shallow. And Rick Perry brings shallow to a new level. He is very gifted in that regard. He could be the Adolf Hitler of shallow.
Perry's campaign is still struggling to recover from the kind of spectacular, submarine-at-crush-depth collapse seldom seen before in the history of presidential politics. The governor went from presumptive front-runner to stammering talk-show punch line seemingly in the speed of a single tweet, rightly blasted for being too incompetent even to hold his own in televised debates with a half-bright pizza salesman like Herman Cain and a goggle-eyed megachurch Joan of Arc like Michele Bachmann. But such superficial criticisms of his weirdly erratic campaign demeanor don't even begin to get at the root of why we should all be terrified of Perry and what he represents. After all, you have to go pretty far to stand out as a whore and a sellout when you come from a state that has produced such luminaries in the history of political corruption as LBJ, Karl Rove and George W. Bush. But Rick Perry has managed to set a scary new low in the annals of opportunism, turning Texas into a swamp of political incest and backroom dealing on a scale not often seen this side of the Congo or Sierra Leone.

In an era when there's exponentially more money in politics than we've ever seen before, Perry is the candidate who is exponentially more willing than we've ever seen before to whore himself out for that money. On the human level he is a nonpersonality, an almost perfect cipher – a man whose only discernible passion is his extreme willingness to be whatever someone will pay him to be, or vote for him to be. Even scarier, the religious community around which he has chosen to pull his human chameleon act features some of the most extreme end-is-nigh nutcases in America, the last people you want influencing the man with the nuclear football. Perry is a human price tag – Being There meets Left Behind. And sometimes there's nothing more dangerous than nothing at all.

Perry shot into the race for the Republican presidential nomination like a rocket, which is to say, he jumped late into a historically underwhelming contest of bumblers, second-raters, extremists and religious loonies, and became the top dog by default simply by virtue of not looking obviously demented at first blush to the national media. At the time, the GOP's Tea Party base was splitting right down the middle, divided between the intellectual libertarians headed by fellow Texan and original Tea Partier Ron Paul, and the "values"-oriented sect steered by the Bible-thumping likes of Michele Bachmann and Rick Santorum. Despite Barack Obama's plummeting approval ratings, Republicans seemed to have little chance of success in 2012 unless someone emerged from the pack with the goods to pull off a seemingly impossible demographic trifecta: capturing enough of these two increasingly insurrectionary camps within the Tea Party to win the primary, while still retaining enough moderate cred to steal the middle from Obama in the general election.

Into this morass stepped Perry, a tall, perma-tanned, Bible-clutching Southerner with front-runner hair and the build of a retired underwear model, boasting 10 years of executive experience and a furious anti-government bestseller (Fed Up!) still sizzling on the nation's bookshelves. This was the magic-bullet candidate, with the End Times connections and born-again beatitude to out-Jesus Michele Bachmann, the CV full of arch-libertarian, anti-Fed ramblings pretentious enough to have been written by Ron Paul, and the eelish good looks to outshine robotic front-runner Mitt Romney. Perry just looked like the inevitable nominee, and it wasn't long before he was sitting atop the polls.

But as a presidential candidate, Perry has mainly distinguished himself with a kind of bipolar wildness in the debates: sullen and reserved one moment, strident and inarticulate the next. He sweats profusely. He can't stand still. When he does manage to get off a zinger, he cracks a smug grin, looking like he's just sewn up the blue ribbon in a frat-house dong-measuring contest. Parts of his record drive the Tea Party nuts, like his decision to pay for the kids of illegal immigrants to attend state colleges just like other students, or his executive order requiring all sixth-grade girls in Texas to be vaccinated against HPV, the human papillomavirus that causes cervical cancer in women.

Liliana Ros, a party committeewoman in Florida, shook Perry's hand during a commercial break at the Orlando debate and promptly finked on him to reporters, offering a pervy description that was missing only the open raincoat and the raging boner. "He grabbed my hand and held on to it," Ros said. "His hand was so cold, like ice. And he was sweating. He didn't seem well, like he was in pain or he was sick or something. I don't know what it was, but something was definitely wrong."

As soon as Perry became that most fragile of early-campaign life-forms, the "presumptive front-runner," opponents and reporters began scrambling to find the skeletons in his closet. The journalism world is abuzz with salacious whispers about his private life, while liberals have focused on his ties to the New Apostolic Reformation, an apocalyptic sect of loopy Christian fundamentalists who think Jesus is coming back soon to blow up the planet. But voters who want to know who Rick Perry really is would do well to remember the advice of noted political analyst Hannibal Lecter, who instructed Jodie Foster about the serial killer she was tracking in The Silence of the Lambs. What does he do, Lecter asked, this man you seek? He kills women? No, that is incidental. Don't look at what the man does, look at what he is.

It's the same with Rick Perry.

Yes, Perry has deployed some of the campaign's most extreme anti-government rhetoric, denouncing Social Security as an "illegal Ponzi scheme," calling for the repeal of the federal income tax, even seeming to threaten Ben Bernanke with mob violence if he came to Texas. And yes, he hangs out with some of the weirdest religious nuts in America, keeping as allies a Texas evangelical who believes the Democrats are literally controlled by a Satanic demon called Jezebel, and another who believes that a recent Perry-led religious rally helped break an ancient curse laid down on Texas soil by Native American cannibals. And sure, yes, he promises to be a more-than-unusually obnoxious belligerent in the culture wars, having appointed three consecutive creationists to head the Texas State Board of Education, signed a law mandating that every woman who wants to get an abortion must first be forced Clockwork Orange-style to stare at a sonogram of the fetus, and executed more prisoners than any governor in modern times.

Yes, he has done all of those things, and more. But it's all incidental. When you ask what Perry's true nature is – the first and principal thing that defines him – there's just one answer: favors.

Favors are the one consistent thread running through Perry's political career. Throughout his time as governor, whenever his ideology or his religion comes into conflict with the need to give a handout to a major campaign donor, ideology and religion lose every single time.

Though 94 percent of schools in Texas teach a sex-ed curriculum based on abstinence-only – an approach that led one watchdog group to conclude that "shaming and fear-based instruction are the standard means of teaching students about sexuality" in Texas – Perry nonetheless signed an executive order mandating that those same girls subjected to those abstinence-only classes receive an STD vaccine. You can't talk about STDs to sixth-grade girls, but if it's worth $120 a shot to a pharmaceutical company like Merck, you can jam the birds-and-the-bees lesson right into their arms.

Those in Texas who have followed Perry most closely over the years have all come to the same conclusion about him. "He's a cash-and-carry governor," says Craig McDonald, director of Texans for Public Justice, a group that monitors campaign contributions in the state. "He has an extremely strong stomach for holding his nose and doing really dirty favors."

"He'll be whatever you want him to be," says one longtime political opponent. "He's all about greed."

"There's no line he won't cross," says another.

"This guy doesn't believe in one damn thing," says a third.

As for how this classic, big-government, machine politician – a man who made massive government stimulus routine at a time when Barack Obama was still shooting baskets in the Senate gymnasium – could run as a small-market conservative and Tea Party champion, many in Texas express bewilderment.

"If you tell a lie often enough, people believe it," says Debra Medina, a Tea Party Republican who ran against Perry in the gubernatorial primary last year. "That's Rick Perry."

It's just after midday, a Monday afternoon, and I'm barreling down a stretch of State Highway 176 in the deadest, hottest part of the Texas desert, a few miles shy of the New Mexico border and about an hour west of the rusted oil wells and Friday night lights of Odessa-Permian. Just before I get to New Mexico, I slow down, hang a right and roll down a dirt road, out of America and into a different country. Rick Perry Country. This is a land neither capitalist nor socialist, but somehow boasting the worst aspects of both systems.

The specific spot I'm looking for is a giant hole in the ground – one of the nation's largest repositories of nuclear waste. The facility is run by a company called Waste Control Specialists, the creature of a shadowy billionaire named Harold Simmons, who was one of the single largest financial backers of the Swift-boat campaign against John Kerry, donating more than $3 million.

Chew on that for a moment: The Kerry smear campaign was powered in large part by radioactive waste – or, more specifically, by the fat government contracts to store such waste that were swallowed up by Simmons, a supposedly "anti-government" extremist who, naturally, is one of Rick Perry's biggest supporters.

The Perry-Simmons nuclear landfill is surrounded by giant piles of red clay rising up out of the desert, flanked by huge manmade chasms designed to hold sand-covered drums of sizzling waste. A person entering its gates feels an irresistible urge to wear lead underpants. It's a terrifying sight, but it's even more disturbing as a symbol of Rick Perry's style of government. In Perry's Texas, state regulation doesn't work because regulatory seats can be bought, and the free market doesn't work because connections and influence matter more than competition and performance. The landfill run by Perry's pals at Waste Control Specialists represents an extreme example of both dysfunctional ends of the governor's approach to government, a taxpayer-financed hole in the ground that is as extremely unsafe as it is woefully uneconomic. "The WCS plant," says Lon Burnam, a Texas state representative, "is the ultimate example of Perry's crony capitalism."

Perry's great triumph as governor has been the construction of an elaborate political machine, one that operates according to its own separate dynamic, using donations, appointments and favors as currency. In fact, Texas is run much like a Soviet protectorate, with a party boss (Perry) and a Politburo of superconnected advisers to the governor who shuffle back and forth between the public and private spheres (Perry's chief of staff, Mike "The Knife" Toomey, for instance, jumped from the governor's office to a job lobbying for Merck prior to the HPV vaccination order), all backed by a somewhat larger Central Committee of big financial donors who are the real "representative" power in the state, much more than the actual state legislature.

Who's on that Central Committee? It's not that hard to figure out. Texas has no limit on individual donations to political candidates, which means the governor's best friends don't have to hide behind soft money and other back-door channels. In Texas, you can pay your tribute right out in the open.

"The total of hard-money donations to Perry's three gubernatorial campaigns is $102 million," says McDonald, who tracks the state's pay-for-play system on behalf of Texans for Public Justice. "Half of that, $51 million plus, came from just 204 donors."

Simmons, the billionaire owner of WCS, is near the top of that list of Perry's 204 super-insiders, having personally donated more than $1 million to Perry's three gubernatorial campaigns. If you add in his donations to the Republican Governors Association, which Perry was elected to lead last year, then Simmons and his company have donated $3 million to Perry-friendly causes in the past 10 years. That makes Simmons the second-biggest donor in Perry's camp, behind the homebuilding magnate Bob Perry (no relation), who has handed over an astonishing $13.7 million to Perry and the governors association.

The system of uncapped donations means that Perry's superinsiders effectively operate as mobsters who hold a chit on the state's government. "These are obscenely huge amounts," says McDonald. "You can give a politician $100 or $1,000 because you like his ideology. But when you start giving him $250,000 or $500,000, you gotta think you are getting something in return."

So what did Harold Simmons get for his money? A lot.

For starters, a group of Perry appointees on the Texas Commission on Environmental Quality gave Simmons a license to build his hazardous nuke dump, even after the TCEQ's own team of scientists agreed that the project was too risky, given how dangerously close it lies to the Ogalalla aquifer, which provides drinking water for seven states.

When I visit the site in September, it has just rained in the area for the first time in a year – really – and there is water all over the place. Rod Baltzer, the president of WCS, insists that the wastewater is being contained and disposed of in a safe, orderly fashion. But it's hard not to look beyond the dump to nearby Eunice, New Mexico, visible just a few miles away, and wonder about the wisdom of taking a private company's word that there is no contaminated water running underground to the nearby town. Especially since another of Simmons' companies, NL Industries, has already been caught leaking radioactive waste into an aquifer in Ohio. In a supremely ironic demonstration of how the modern system of payola capitalism works, Simmons is now being paid millions by taxpayers, via the federal Energy Department, to clean up his own mess, moving radioactive waste from his dump in Ohio to the one in Texas.

All of this is key to understanding Perry, because the WCS landfill so perfectly fits the business model of his key donors. The company leases the land for the dump, meaning that WCS keeps the lion's share of the profits, while the liability mostly stays with the state. There's no real regulation to speak of, and many of the state's decisions appear to have been greased by massive campaign contributions or other favors: The executive director of the state's environmental commission, for instance, received a job as a lobbyist for WCS not long after helping the firm get its license.

What's more, the company even got the government to pay for the landfill, lobbying the town of Andrews to float a $75 million bond issue to finance the construction of two new dump sites on the property. And in a final insult, WCS managed to negotiate a loophole exempting it from having to pay school taxes in Andrews. Instead, it offers a few small scholarships a year.

"When I was a kid, our high school was the first one in Texas to have carpets," says Melodye Pryor, a local resident and longtime opponent of the dump. "Now, our schools are falling apart."

Andrews is little more than a few crisscrossed roads in the middle of the desert, wrapped around a couple of gas stations and Mexican restaurants and populated by tough blue-collar workers hunkered down in modest little sun-cooked houses. If you can grasp this little working-class neck of Texas lending a Dallas billionaire $75 million so that he can keep 90 percent of the revenue from a dangerous nuclear-waste dump that runs without any real regulatory oversight, all while paying no school taxes, then you've begun to understand what Rick Perry's America might look like.

"It's the worst possible hybridization," says Medina, the Tea Party candidate who ran against Perry. "A private entity keeps the receipts. The state and the taxpayer own all the liability."

The descriptions of Perry's early political career all sound like the early chapters of true-crime books about serial killers, where nobody notices anything special about the protagonist until the bodies start piling up along the local riverbank. In Perry's case, those bodies didn't start showing up until 2000, when Bush became president and Perry assumed his seat as governor, turning the state government into a factory of obscene backroom deals. At first, like many of today's would-be Tea Party leaders, Perry started off trying to milk big government rather than dismantle it. In the late Eighties, when Michele Bachmann was training for her future as an anti-tax crusader by working for the IRS, Perry – who like Bush had a military pilot's background, but unlike Bush flew in the real Air Force for five years – was serving in the Texas state legislature, representing Haskell County, a dry little pocket of nowhere just north of Abilene and west of Dallas.

While Bush made a great political career pretending to be a hick Texas rancher, Perry started out as the real thing, a cotton farmer and cattle rancher who spent his early adulthood looking for a way out of life on his dad's farm. "He was ranching with his family," says Fred McClure, a former aide to Sen. John Tower who met Perry in 1978. Perry had come to Washington to observe the American Agricultural Movement, a grassroots campaign launched by farmers to get the federal government to raise farm subsidies. Though the movement was the ideological opposite of the Tea Party, begging for government handouts, Perry knew a political opportunity when he saw it. "This was an early indicator of his ability to evaluate politically what was going on," says McClure, who remains friends with Perry today. "The grassroots nature of the American Agricultural Movement was not unlike the grassroots nature of the Tea Party. He developed the skill set to read the political tea leaves." It was after watching the angry farmers descend on Washington that Perry decided to run for the state legislature. "I think part of it was that he was bored farming in Haskell," McClure says.

Perry's early political career was marked most particularly by a seeming lack of ambition to accomplish anything specific. After being elected to the Texas House in 1984, he told a newspaper in Abilene, "I had not one piece of legislation I planned to carry." When the state land commissioner asked him to sponsor a bill, Perry told the commissioner not to bother explaining it. "I wouldn't understand it anyway," Perry said.

Back then, the future global-warming denier was a Democrat, and even supported Al Gore for the presidency in 1988. But with Texas moving to the right, Perry switched parties the following year – not for ideological reasons, it appears, but because he could sense the wind shifting. "Perry is a really, really good politician," one Republican strategist later explained. "He understood where the state of Texas was going." The move also enabled Perry to defeat Jim Hightower, a popular Democrat, as agricultural commissioner, a powerful post in America's second-biggest farm state. During his two terms in the office, Perry demonstrated little ideological bent, even expressing support for Hillary Clinton's health care plan in the early Nineties. In 1998, Perry was elected lieutenant governor alongside George W. Bush, serving with the kind of distinction that made his boss look like Winston Churchill. Perry reportedly zoned out during a series of breakfast meetings that Bush held with top Texas politicians. "Sometimes, to pass the time, he would file his nails," The New Republic reported.

Bush and Perry reportedly had a chilly relationship, thanks in part to Bush's refusal to let Perry test the limits of political nepotism. In 1995, Perry wanted to nominate his brother-in-law, Joseph Thigpen, to the 11th Court of Appeals. Bush blocked the move, and legend has it that Perry blamed Karl Rove for the incident and never forgave either of them. This might help explain in part why Perry was so eager to start packing the state offices with cronies the moment Bush left for Washington.

Perry's prowess in building his political machine at the expense of taxpayers can be tied directly to his administration's almost mathematical precision in making government handouts match the campaign contribution. "There are a couple of things you need to do if you want to raise obscene amounts of money," says Andrew Wheat, research director at Texans for Public Justice. "One, you need to send the message that you're carefully counting who's giving how much, to create a competitive atmosphere. And two, you want to send not-so-subtle signals that there's going to be a return on the investment. And this governor has been a master of sending those signals."

How masterful has he been? According to Texans for Public Justice, Perry appointed 921 of his donors and their spouses to government posts over the past decade. All told, those appointees gave a staggering $17 million to his campaigns – 21 percent of the entire amount he raised during that time. To give an indication of just how completely for-sale public appointments became during his administration, Perry collected $6.1 million from the 155 people he appointed to be regents of state universities in Texas.

You can get a fairly decent summary of Perry's track record as governor just by going down the list of political favors that were granted to the 204 "Central Committee" members who collectively contributed half of his campaign money. Start at the top: Perry's biggest single donor, the homebuilder Bob Perry, was rewarded with his very own regulatory agency.

Back in the Nineties, Bob Perry made a fortune building cheap homes, and he had enormous success in circumventing regulation, taking advantage of arbitration clauses that prevented homeowners from suing in the event of leaks or faulty construction or other problems. But after he lost a high-profile arbitration case, he and other builders decided to go straight to the top. In 2003, his company's general counsel, John Krugh, served on a task force established to craft new legislation. The result was a bill creating the Texas Residential Construction Commission, which Gov. Perry signed into law that year. Not long after getting a $100,000 check from Bob Perry, the governor appointed Krugh to serve on the new nine-member commission.

The commission, which initially included four builders and not a single consumer advocate, was a masterpiece of deregulation – actually a kind of deregulation from within, in which builders created and ran a toothless regulatory agency to non-police themselves. The body forced homeowners to pay, at minimum, hundreds of dollars for an inspection fee before making any complaint against a builder. And though the commission frequently ruled in favor of ripped-off homeowners, it had no enforcement power at all – meaning homeowners rarely got their homes fixed.

Perry's entire career as governor is marked by a history of similar handouts to his top donors. In 2005, he signed an executive order to speed approval for 17 new coal-fired power plants that would drive the state's carbon footprint past that of Florida, California and New York combined. Eleven of the plants were slated to be built by TXU, a million-dollar donor. Then there was the chicken-farming king Lonnie Pilgrim, who once handed out $10,000 checks on the floor of the Texas legislature in advance of a bill; he gave more than $600,000 to the governor and his causes, and Perry repaid the favor by petitioning the EPA for a waiver of federal ethanol mandates, which had jacked up the price of corn feed for Pilgrim's business.

Perhaps the single most interesting favor that Perry doled out is one that directly violated his supposedly "conservative" Tea Party principles. One of his first big moves as governor was to back the Trans-Texas Corridor, a $175 billion project to privatize the state's highways. This was to be the mother of all public-works projects, a 4,000-mile highway network, at some points four football fields wide, that would also include commuter rails, freight rails and telecom pipelines. The TTC, in essence, was the ultimate Tea Party nightmare, a massive public boondoggle that would have created a huge network of new tolls and required a nearly unprecedented use of eminent domain to help the state seize nearly 500,000 acres of land from ranchers and farmers.

Though most of the project was shot down by the state legislature, Perry did manage to push through several parts of it, most notably a few stretches of new highway construction around Houston and Dallas. Some of the beneficiaries of those projects were American firms that had donated lots of money to Perry and the governors association, like Williams Brothers Construction ($621,000), Parsons Corporation ($410,000) and JP Morgan Chase ($191,000). But another beneficiary was a Spanish firm called Cintra, part of a consortium that won the development rights for the original TTC project.

Cintra's involvement was an obvious case of revolving-door politics. A Cintra consultant named Dan Shelley left private practice in 2004 and joined the Perry Politburo that same year, working as the governor's legislative liaison during the time Cintra was in line to win the multibillion-dollar project. A year later, Shelley went back to private practice, earning more than $50,000 in consulting fees from Cintra once he left "public" office.

Cintra ultimately received about $5 billion in contracts from the state to develop three major highway projects, one of which, a toll road in central Texas, is one of the few surviving remnants of the hated TTC. On another Cintra highway, the North Tarrant Express near Fort Worth, the state ponied up $570 million to subsidize the project and permitted Cintra to recoup its investment by building toll lanes for drivers who want to bypass the free lanes. That means future generations of Texans who are in a hurry to get somewhere will have the pleasure of being able to jump on a toll lane they already paid taxes to help build. It turns out you can mess with Texas after all.

That's if the road ever gets finished. Cintra received a similar contract to run a toll road in Indiana, but it soon ran into financial problems and had to jack up tolls to pay for the $3.8 billion project. In Texas, Cintra will have some latitude to raise rates on its roads, and if you don't like it, well, fuck you. "What are we going to do – go complain to a board in Spain?" says Terri Hall, founder of an advocacy group called Texans Uniting for Reform and Freedom that fought the highway deal.

In addition to the highway contract with Cintra, Perry this year signed a bill written in part by a lobbyist for a British firm called Balfour Beatty, paving the way for the state to sell virtually everything that isn't nailed down to anyone – foreigners included. The bill, Hall says, allows "all public buildings, nursing homes, hospitals, schools, ports, mass transit projects, telecommunications, etc. to be sold off to corporations." Even more incredibly, the bill authorizes companies to borrow money from the state, which will also help secure their debt. In other words, Perry passed a bill under which a foreign company could theoretically borrow money from Texas taxpayers to buy the taxpayer's own state property back from him, at a discount!

But the most treasonous Perry deal of all came when he tried to do a macabre favor for his political hero, former senator Phil Gramm. Gramm gave hundreds of thousands of dollars to Perry's campaign, essentially emptying the remnants of his own campaign war chest into Perry's when he left public office and went to work for the Swiss bank UBS. In 2002, Gramm came to Perry's administration with a proposal that would allow the bank to take out life insurance policies on retired Texas teachers. Under the deal, UBS would collect on the policies of the teachers when they died, and reward the state with a small cut for arranging the wagers. Teachers who balked at letting UBS profit from their death were reportedly to be paid $100 to sign on the dotted line. The state insurance commissioner, a Perry appointee, approved a special waiver to allow the deal to go through, but the project collapsed after a media backlash.

To recap: Rick Perry sold the right to tax Texas highway drivers to Spanish billionaires, let a British firm write a law authorizing the sale of virtually all Texas state property to foreign corporations, and tried to literally sell the lives of retired Texas schoolteachers to a Swiss bank. Yet he's somehow built a reputation in the national media as a fist-shaking America-first nativist, with a Tea Partier's passion for small government. How Perry has managed to sell this fictional version of himself is a testament to the extraordinary power of marketing over reality in our modern political system. In fact, his entire career is a profound testament to our nagging collective inability, or perhaps unwillingness, to distinguish between what a politician says and what he actually does.

"People are like, 'He wears a red shirt, he must think like I do,'" says Medina, Perry's Tea Party opponent. "It's 'you're Christian, I'm Christian, we must believe the same.'"

For a long time, perry masterfully exploited this basic weakness of the American voter. As he prepared his run for the White House, he took loud and drastic steps to plant flags in both of the main camps of the Republican Party base, making sure there was an extensive record of Tea Party-friendly remarks attached to his name, as well as lots of file footage of him cozying up to prominent evangelicals. He accomplished the former task mainly through his book, Fed Up!, an impressively shameless volume of avalanching self-congratulatory horseshit that lays the indignant Tea Partyisms on so thick, one imagines Perry wearing a tricorner hat as he dictates to his ghost writer. "We are tired of being told how much salt we can put on our food, what windows we can buy for our house, what kind of cars we can drive," Perry writes. "We are fed up with bailout after bailout and stimulus after stimulus... the government picking winners and losers based on circumstance and luck."

Nowhere in the book, of course, does it mention that Perry, who famously refused Obama's stimulus money and blasted the administration for reckless borrowing and creating "zero jobs," greenlighted two gigantic stimulus programs of his own. Both the $200 million Emerging Technology Fund and the $363 million Texas Enterprise Fund were little more than crude vehicles for repaying campaign donors with state aid. The state has also given millions in handouts through the Texas Film Commission, paying for TV commercials for Fortune 500 firms like Walmart.

Perry, who consistently criticizes Obama for borrowing to pay for his stimulus, even paid for the Texas Enterprise Fund in part by borrowing $161 million from the state's unemployment insurance fund – meaning he took money from the paychecks of blue-collar workers and turned it into millions in welfare grants for companies like Lockheed Martin, Texas Instruments and Hewlett-Packard. Ironically, Texas is now running out of money to pay for unemployment claims – including those laid off by companies receiving grants from the Texas Enterprise Fund.

But despite the fact that Perry does a lot of exactly what he decries in his book, there are still plenty of Tea Partiers who profess fierce loyalty to him. The odd thing is that while being uncompromising and morally absolutist is normally one of the key features of the entire Tea Party movement, some of the same true believers who were willing to risk a national default rather than borrow one single dollar over the debt limit suddenly become long-view-taking pragmatists when it comes to Perry. "Ideology is wonderful in principle," says Toby Marie Walker, a Tea Party leader in Waco, sounding more like Barack Obama than John Birch. "But it's not practical in politics."

Walker says she gives Perry credit for changing course when there was a public outcry over some of his less-than-classically-conservative policies – including his use of eminent domain (he later signed a bill restricting it) and his HPV vaccine order (which he has since renounced as a "mistake"). Admitting your mistakes, says Walker, is "valuable to have in a leader."

When I point out that Perry essentially repeated the same "mistake" this year, signing a bill mandating shots of a meningitis vaccine (made by Novartis, a $700,000 donor) for every college freshman in the state, Walker suddenly changes tack and defends the move as good policy. "You can opt out of a shot – you cannot opt out of meningitis," says Walker, joking that I'm giving the governor a hard time for forcing people to avoid cancer. When I ask how that is any different from Obama forcing people to buy health insurance, she again points to the "optional" nature of Perry's executive orders. "I can't opt out of Barack Obama's health care plan," she says.

In point of fact, students can "opt out" of Perry's vaccines only if they obtain a conscientious-objection form from the Texas Department of State Health Services, and renew it every two years – which, if nothing else, is an entertainingly surrealist take on the Tea Party doctrine of limited government.

In any case, my discussion with Walker is predictably pointless. When I ask about Perry selling stretches of already-paid-for highway to foreigners, Walker replies, "We need another road." When I ask about Perry trying to force Texans to pay tolls to an unaccountable Spanish corporation, the answer is, "I don't have a problem paying for upkeep."

When you start hearing Tea Partiers say they don't mind paying taxes, you know the matter has exited the realm of the logical. Medina, who took an impressive 18 percent of the vote in her primary race against Perry, says some Republican voters are so focused on beating Barack Obama that they can't see the truth about a big-government machine politician like Perry.

"You have to want to know," she says. "And it's easier not to."

As befits any Texas politician, Perry has always been at least superficially religious, growing up in the same Methodist tradition as George W. Bush. But like his relatively late conversion to extreme anti-tax/Tea Party rhetoric, Perry's decision to throw in with the truly loony sect of evangelicals only came very recently, after a prayer meeting with two crazy-ass pastors, Tom Schlueter of Arlington and Bob Long of San Marcos, in his office in 2009. According to The Texas Observer, Schlueter had received a "prophetic message" the day before this visit from a local Christian soothsayer named Chuck Pierce, instructing him to "pray by lifting the hand of the one I show you that is in the place of civil rule." Meaning Perry, apparently.

The governor bought the act, paving the way for his impressive slate of primary-season pandering to evangelicals this year. The big ploy was an early-August stadium God-tacular called "The Response," in which Perry invited Christian leaders – featuring a heavy concentration of Rapture merchants and End Timers – to pack into Reliant Stadium in Houston to read the Good Book and "respond" to wayward America's departure from proper Christian values. Perry surely scored points with evangelicals everywhere by brazenly using state resources to promote the event, which his office unironically described as "a nondenominational, apolitical Christian prayer meeting." And his performance in front of the crowd of 30,000 evangelicals was strong stuff. He smiled through his perfect tan and repeatedly clasped his hands together for rhetorical emphasis as he read from the Book of Joel: "Return to me with all your heart, with fasting, weeping and mourning!"

The choice of reading was no accident, as the Book of Joel is very popular with the two preachers who shared the stage with Perry that night, Alice Patterson and C.J. Jackson, both bigwigs in the extremist movement known as the New Apostolic Reformation. In fact, followers of NAR sometimes refer to themselves as "Joel's Army." They believe Joel describes how God is coming back to set up a "kingdom on Earth" with a church that will be "organized more as a military force with an army, navy and air force," to dispense justice and set shit straight with all of us nonbelievers before the second coming of Jesus.

NAR literature dwells endlessly on the need to conquer the so-called "seven mountains" of earthly culture, including the media, Hollywood and Congress, so all the Democrats and relativist comics and other satanic forces can be purged on time before the Great End. These people are completely nuts, and quite obviously expect Perry to start filling the cattle cars for them as soon as he gets elected.

Watching Perry addressing the crowd, several questions naturally came to mind. One was, "Does he really believe this stuff?" But another one was, "Would it matter if he did?" After all, there are times in life when insanity is indistinguishable from cynicism. A man who will take money to greenlight a dangerous nuclear-waste dump that might blow up 30 years from now is not much different from the guy who doesn't balance his checkbook because he thinks Armageddon is coming before the end of the quarter. In both cases, the long view doesn't matter.

That is why Rick Perry is so dangerous. He represents the ultimate merger of nihilistic short-term corporate calculation and rightist apocalyptic extremism. He is a politician willing to do absolutely anything for a buck today, playing to a demographic of millions willing to walk off a cliff en masse tomorrow. In a Rick Perry White House, there will not be much planning for a rainy-day future.

Perry's run for the White House as a small-government Tea Party conservative is one of the all-time great marketing scams, a breathtaking high-wire act by a man who if nothing else certainly has the gigantic balls required for the most powerful job in the world. But it's an act that should have ended after just a few steps down the rope, when he slipped up in the Orlando debate and told the truth.

Among other attacks that night, Perry was taking criticism for his decision back in 2007 to order all sixth-grade girls in Texas to be inoculated against HPV – specifically, with three shots of Gardasil vaccine, a Merck product that sells for a tidy $120 a shot. Michele Bachmann, who not only hates the move as an intrusive use of state power but probably also because it interferes with God's ability to administer punitive cancers to dabblers in extramarital sex, blasted Perry for delivering such a blatant favor to his corporate buddies at Merck. "We cannot forget that in the midst of this executive order, there is a big drug company that made millions of dollars because of this mandate," she said, pointing out that Perry's former chief of staff was the chief lobbyist for Merck.

Perry's response was telling. "It was a $5,000 contribution that I had received from them," he said. "I raised about $30 million. And if you're saying that I can be bought for $5,000, I'm offended."

The Orlando crowd applauded nervously, not quite grasping what Perry had just said. Had the debate taken place in Austin, however, the crowd would have erupted in knowing laughter. Rick Perry, as any Texan knows, does not roll over for 5,000 measly dollars. He charges a hell of a lot more than that. The price tag varies, of course, depending on the favor. Based on the donations Perry has collected, it costs an average of $39,354 to buy a seat on the board of a state university. Landing a state road project runs about half a million, while creating an entire government commission specifically designed to protect your business interests will run you more than $13 million.

We thought Bush was the worst thing Texas ever gave to America. But if Rick Perry wins the White House, it won't be long before we're all remembering crazy-ass W. and his loony Iraq crusade with something like fondness. Bush, for all his flaws, actually believed in something, and was filled with humanity – negative humanity, mostly, but it was there all the same. Good ol' George, the ex-drunk who loved football, couldn't speak English, choked on his pretzels and sincerely wanted to save Iraq from itself!

There were lines even George Bush wouldn't cross, but we don't know any that exist for Rick Perry. Imagine what he could charge for abolishing the EPA, or selling Mount Rushmore to the Sultan of Brunei. And while he may have slipped in the polls, he's far from done. In this country, you never count out the lowest common denominator, especially when it knows how to raise money.

This story is from the November 10, 2011 issue of Rolling Stone.

Mica blasts nation toll road bank, but okay with state banks

Link to article here.

We agree that there should be NO federal infrastructure bank, however we vehemently oppose any STATE infrastructure banks (which Mica promotes). Both amount to loans of taxpayer money to private corporations granted government-sanctioned monopolies.

US House Committee Blasts National Toll Road Bank Proposal
Presidential toll road bank hits roadblock in US House committee of jurisdiction.

Rep. John MicaA top congressional leader on Wednesday made clear his opposition to President Obama's idea of spending $10 billion to create a national infrastructure bank (view details). The bank, part of the White House jobs bill, would offer public subsidy for the financing of "public private partnerships" -- which most often would take the form of a toll road. The chairman of the US House Transportation Committee said at a hearing the president's plan would not advance.

"A national infrastructure bank is dead on arrival in the House of Representatives," Chairman John Mica (R-Florida) said. "If you want a recipe to put off job creation, adopt that national infrastructure bank proposal."

Opponents called the proposal a "distraction" from the issue of a long-term highway program reauthorization bill which would include funding for state-level toll road banks. Already, thirty-two states have their own infrastructure banks which have financed $6.3 billion in loan agreements along the same lines as the proposed federal bank.

"Many people are skeptical that bureaucrats in Washington would have any idea which transportation projects are most deserving of receiving a federal loan," Highways and Transit subcommittee Chairman John J. Duncan, Jr (R-Tennessee) said. "This skepticism is why Congress has already established the state infrastructure bank program in SAFETEA-LU."

In addition, the US Department of Transportation already provides federal credit for transportation projects under the Transportation Infrastructure Finance and Innovation Act (TIFIA), which has offered $8.4 billion in project finance. Dozens of other financing mechanisms are offered by the Federal Highway Administration.

"Why build one when you could build two for twice the price?" Representative Howard Coble (R-North Carolina) said sarcastically.

Democrats offered the only backing for the bank idea.

"Before Wall Street destroyed the economy, I had said, 'Well, I really don't see the need for an infrastructure bank -- most of the states have good credit and they can go out and borrow on their own at very good rates," said subcommittee Ranking Member Peter DeFazio (D-Oregon). "But that isn't the case any more. The states need guarantees, they need help, many are against their borrowing limits, and most of the banks generously bailed out by Congress -- not by me, I didn't vote for it -- aren't lending. Credit and bond markets are tight."

DeFazio only supports the use of the bank only for water, sewer and energy projects. He does not support tolls on existing interstates.

Note to Kasich: Don't privatize Ohio turnpike

Link to article here.

Privatizing the Ohio Turnpike: Learn from Indiana

By Matt Lundy

Avon Lake Patch

September 23, 2011

Recently I wrote about how Lake Erie is one of our greatest resources in Ohio. Other states would love to have a fresh water supply like Lake Erie. I also believe that another one of our great resources is The Ohio Turnpike.

Many of us have utilized and have invested in the turnpike over the years. I often travel the road over to I-71 for my weekly trips to and from Columbus. The toll road is kept in good shape and plowed very well in the winter making it a safe driving experience.

I hate to report that Governor Kasich is still moving forward with plans to sell or lease the turnpike. I strongly oppose this plan and offered several amendments to the budget bill to stop any such action from taking place. Unfortunately, my amendments to stop the sale or lease were voted down in committee and on the floor of the legislature along party lines. The governor is moving forward by hiring a consultant to determine a price for the state to seek in the deal.

Indiana, where the state privatized its turnpike, has seen tolls double. Also, the foreign company that paid more than $3 billion for the 157-mile toll road is now struggling to pay its loans. We can learn a lot from Indiana. I am also very concerned that as tolls increase, heavy trucks will use I-90 and surrounding roads causing more problems and repairs paid for by you and other taxpayers.

Finally, any money made by Ohio on the deal is one-time money and a shortsighted move without any regard for our economic future. This is an uphill fight to stop, but I will continue to do all that I can to keep and protect our Ohio Turnpike.

I want to thank the many residents who attended our last “Lundy Listens” town hall in North Ridgeville. I hope you will make plans to join me for my next town hall on Oct. 20 at 7 p.m. at the Sheffield Village Municipal Complex. I work for you and want to hear your concerns on state issues. You can always reach me at This email address is being protected from spambots. You need JavaScript enabled to view it. or 614-644-5076.

I look forward to serving you.  

About this column: Matt Lundy (D-57) represents Avon Lake and sections of Lorain County in the Ohio House of Representatives. Elected in 2006, the Avon Lake native recently earned his bid at re-election. Lundy’s column, Eye on Columbus, will appear monthly.

Houghton will continue Williamson era at TxDOT

Link to article here.

Perry's new Chair will continue dysfunction at highway department
By Terri Hall
October 11, 2011

It was no surprise that Deirdre Delisi stepped down as Chairwoman of the Texas Transportation Commission to focus on Texas Governor Rick Perry’s presidential campaign. He apparently needs it. However, Perry’s choice to tap Commissioner Ted Houghton to take the helm in Delisi’s place is shocking, yet also not surprising.

Rather than turn a new page and aid the process of getting the Texas Department of Transportation (TxDOT) back on the right footing after heavy criticism of its handling of finances, the Trans Texas Corridor, and the Department’s push for private toll roads,  Perry chose an in-your-face Chairman with a history of picking fights with the public (watch this video of him calling concerned citizens ‘bigots’), legislators, and local toll authorities.

TxDOT came under Sunset Review at the peak of the public outcry over the Trans Texas Corridor. At the time the review began, Ric Williamson, very close friend of Perry’s since the time they had served in the legislature together when Perry was a Democrat, was the Chair of the Transportation Commission. He ushered in the era of selling off Texas public roads to private toll operators, actually gallivanting across Europe announcing to key global players that Texas was for sale.

Williamson was Perry’s chief henchman in getting Perry’s legacy building project implemented -- the Trans Texas Corridor (TTC), a 1,200 foot wide, 4,000 mile multi-modal network of toll roads, toll rail, telecommunications lines, pipelines, and utilities, snatching up 580,000 acres of private Texas farm and ranch land that would all fall under the control of a foreign company for a half century. The development rights for TTC-35 were awarded to Madrid-based Cintra and San Antonio based Zachry in March of 2005.

A Texas-sized backlash ensued causing the legislature to slap a moratorium on private toll contracts (called Comprehensive Development Agreements/CDAs or public private partnerships/P3s) in May of 2007, but not before Williamson signed off on handing Cintra-Zachry two segments of SH 130 for the first such contract in the state of Texas, delivered in the midst of the monolithic battle going on in the legislature that year. Williamson was in his element when controversy and opposition whirled around him, the more the better.

But even for him, the controversy and stress took its ‘toll,’ Williamson died of a heart attack in December 2007 just as TxDOT was getting ready to launch the second corridor, TTC-69. TxDOT received an unprecedented 28,000 comments against TTC-69. Not long afterwards, the Department revealed it had made a $1.1 billion ‘accounting error’ causing a slew of projects to be put on hold drawing ire from legislators who TxDOT initially blamed for the cancellations, only to find out it was the agency’s fault and they purposely hid the facts from the legislature for three months.

One Senator, Tommy Williams (strangely now the Senate Transportation Committee Chairman and TxDOT’s biggest defender of late), basically quipped at a hearing in February of 2008 that if TxDOT’s lips were moving they were lying. Senator Judith Zaffirini said at the same hearing “This is an agency in turmoil and chaos.”

Also during this time, TURF sued TxDOT over the US 281 toll project. It was found that TxDOT had rigged the environmental study and conspired to break federal law, resulting in one employee being fired and another being “reassigned.” Both the public’s trust and the legislature’s were irreparably breached.

Status quo will continue dysfunction

This was the backdrop to TxDOT’s Sunset Review process. The Sunset Advisory Commission, tasked with rooting out waste and mismanagement in state agencies, issued two scathing reports recommending the legislature not only abolish the current Transportation Commission (5 appointees of the Governor), but also to place TxDOT under a legislative conservatorship.

Then came a bruising 628-page management audit by Grant Thornton, then the “Restructuring Council.” All recommended sweeping changes to the agency, particularly the leadership (leading to the resignations of the Executive Director and other top posts), and a fundamental shift in the culture of TxDOT.

The Grant Thornton Audit said: “TxDOT has significant leadership issues that impair staff and management effectiveness and morale...Conversations with TxDOTʼs senior leaders reveal a deep-seated belief that TxDOT is doing all the right things and that criticisms leveled against the organization will decline when TxDOT is better able to demonstrate to people how right the organization is.”

The Sunset Advisory Commission report from 2009 states: “Many expressed concerns that TxDOT was 'out of control,' advancing its own agenda against objections of both the Legislature and the public. Sunset staff found that this atmosphere of distrust permeated most of TxDOT’s actions and determined that it could not be an effective state transportation agency if trust and confidence were not restored. Significant changes are needed to begin this restoration; tweaking the status quo is simply not enough.”

Yet Perry defied all the recommendations of the Sunset Advisory Commission, the Management Audit, and the Restructure Council and picked a lobbyist and former Perry staffer, Phil Wilson, as the new Executive Director and the commissioner that’s the most like Ric Williamson, Ted Houghton, to be the new Chair of the Commission. At the press conference to announce that Perry had pulled the plug on TTC-35 facing the threat of litigation from two cities in its path, Houghton wisecracked that he was "the most arrogant commissioner of the most arrogant state agency in the history of the state of Texas."

News coverage of Houghton’s appointment affirms that he sees his primary mission as handing Texas public roads over to private toll operators in sweetheart P3 contracts, despite the years of public opposition, including from within the Republican Party platform and tea parties alike. Status quo for sure, a thumb in the public’s eye most certainly, and it affirms Perry’s determination to continue the Williamson era of division, controversy, and strife in the midst of his struggling presidential campaign with charges of crony capitalism flying. Makes one shake one’s head in stunned amazement.

Houghton named new Texas Transportation Commission Chair

Remember, Ted Houghton is the Transportation Commissioner who called Hank Gilbert, Board Member of TURF, and TURF supporters 'bigots' for opposing the sale of Texas roads to foreign entities. He also announced at the press conference stating the Trans Texas Corridor TTC-35 project was being pulled that: "I'm Ted Houghton, the most arrogant commissioner of the most arrogant state agency in the history of the state of Texas." Watch it here. This is who Governor Rick Perry chose as the new Chairman of the Transportation Commission!

Texas Department of Transportation - Press Release

Statement by Texas Transportation Commission Chair Ted Houghton

AUSTIN, Texas, Oct. 7, 2011 /PRNewswire via COMTEX/ -- "I'd like to thank Governor Perry for his trust in me to continue TxDOT down a path of responsiveness, change and modernization. I look forward to leading the department as it becomes a better TxDOT, living up to the expectations of the Governor, the Legislature and our stakeholders.

"Texas is a national leader in infrastructure and transportation system development, and I intend to reaffirm our place among the best, strongest and most innovative states as TxDOT delivers the projects the Legislature, our local partners and Texas motorists expect."

Houghton was first appointed to the Texas Transportation Commission in 2003 by Governor Rick Perry, and was reappointed in 2009. A native of El Paso, Houghton is self-employed in the financial services industry. He is the first resident of El Paso to serve on the Commission.

Houghton previously served on the School Land Board, the El Paso Water Utilities Public Service Board, El Paso's Rapid Transit Board, the board of directors of the El Paso Electric Company and as president of the Sun Bowl Association. He was also a member of the 1984 Los Angeles Olympic Committee.

Ted is married to Hettie Cardon Houghton and they have five children -- Jennifer Houghton Lindsay, Cinco, John, Michael and Chris Houghton.

The Texas Department of Transportation The Texas Department of Transportation is responsible for maintaining 80,000 miles of road and for supporting aviation, rail and public transportation across the state. TxDOT and its approximately 12,000 employees strive to empower local leaders to solve local transportation problems, and to use new financial tools, including tolling and public-private partnerships, to reduce congestion and pave the way for future economic growth while enhancing safety, improving air quality and preserving the value of the state's transportation assets.


Link to article here.

Houghton appointed new Transportation Commission Chairman
by Gordon Dickson
Fort Worth Star Telegram
October 7, 2011
El Paso businessman named chairman of Texas Transportation Commission
Gov. Rick Perry has appointed El Paso businessman Ted Houghton chairman of the Texas Transportation Commission. The five-member body oversees the Texas Department of Transportation.

Houghton has served on the commission since 2003 and is a staunch advocate of hiring private developers to build and manage highways and toll roads. He believes that it helps transfer the financial risks of transportation projects away from taxpayers and makes up for a chronic lack of gas-tax-supported funds for road work.

"Texas is a national leader in infrastructure and transportation system development, and I intend to reaffirm our place among the best, strongest and most innovative states as TxDOT delivers the projects the Legislature, our local partners and Texas motorists expect," Houghton said in a statement.

Houghton replaces Deirdre Delisi of Austin, who resigned as chairwoman Thursday to dedicate more time to advising Perry's presidential campaign.

Houghton runs a financial services company and is the first El Pasoan to serve on the five-member commission.

He has previous experience on the School Land Board, El Paso Water Utilities Public Service Board, El Paso Rapid Transit Board, El Paso Electric Co. board and as president of the Sun Bowl Association.

Houghton was also on the 1984 Los Angeles Olympic Committee.

Link to article here.

Houghton new Chair of Transportation Commission
by Michael Lindenberger
Dallas Morning News
Friday, October 7, 2011

Update : TxDOT just sent a statement from Houghton, who says: "I'd like to thank Governor Perry for his trust in me to continue TxDOT down a path of responsiveness, change and modernization. I look forward to leading the department as it becomes a better TxDOT, living up to the expectations of the Governor, the Legislature and our stakeholders.

"Texas is a national leader in infrastructure and transportation system development, and I intend to reaffirm our place among the best, strongest and most innovative states as TxDOT delivers the projects the Legislature, our local partners and Texas motorists expect."

The new chairman of the Texas Transportation Commission is Ted Houghton of El Paso, according to a press release issued moments ago by Gov. Rick Perry.
Houghton has been on the commission since the chairmanship of Ric Williamson and, since 2008, Deirdre Delisi. (Update: He was appointed in 2003.)

Delisi resigned yesterday.

Unlike Delisi, a former Perry chief of staff who now works for his presidential campaign, and the outspoken Williamson, who was one of Perry's best friends and a former Austin roommate, Houghton lacks the strong personal connection to the governor of his two predecessors.

But Houghton brings a passionate -- and articulate -- defense of the pro-business and pro-privatization approach Perry has long championed. Houghton has been one of the fiercest advocates for an untrammeled pursuit by TxDOT of partnerships with private firms to finance and operate Texas toll roads.

He has, however, matched that ferocity with a willingness to reach out to competitors and adversaries, including the North Texas Tollway Authority.

It was Houghton who took the lead in mending fences with then-chairman Paul Wageman of the NTTA and worked with Victor Vandergriff and others on the NTTA board to craft the deal that became the unprecedented loan guarantees that have made NTTA's financing of the SH 161 and Chisholm Trail Parkway possible.

Highlights from our coverage of Houghton on the blog:

* Houghton insists that TxDOT be given equity in future toll projects in which it helps NTTA finance the road.
* Wilson named executive director of TxDOT. Houghton led the search.
* TxDOT offers line of credit to NTTA

The press release announcing Houghton's appointment:

Gov. Perry Names Houghton Chair of Texas Transportation Commission

AUSTIN - Gov. Rick Perry has named Ted Houghton of El Paso chair of the Texas Transportation Commission for a term to expire at the pleasure of the governor. The commission oversees the Texas Department of Transportation.

Houghton is owner of Houghton Financial Partners. He is a member of the Paso del Norte Group, former vice chair of the El Paso Civic Center Board and a past member of the School Land Board, El Paso Water Utilities Public Service Board, and El Paso Electric Company Board of Directors. He is also past president of the Sun Bowl Association, and a member of the 1984 Los Angeles Olympic Committee.

Houghton received a bachelor's degree from the University of Texas at El Paso.

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