Investors seek farm land grabs, water rights

Link to article here.

The footprint for the Trans Texas Corridor (TTC) land grab of over 580,000 acres of private Texas farm and ranch land may be taking shape through various means. This article explains how the TTC is very much alive and well, not only in Texas, but also in Canada and Mexico and everywhere in between. The article below speaks of investors seeking to buy-up U.S. farm land and seek farmers' water rights. Beware!

Hancock ag investors eyeing more farm deals

Reuters | 17 March 2010

by Carey Gillam

Investors are growing more bullish on U.S. farmland as softness in some sectors spurs increased competition for buying quality acres, a top U.S. agricultural investing group said on Wednesday.

New hedge fund players were among a range of large and small investment groups participating in farmland dealings, Jeff Conrad, president of Hancock Agricultural Investment Group, told the Reuters Food and Agriculture Summit in Chicago.

“There is more competition,” said Conrad, who oversees Hancock’s $1.2 billion of agricultural investments in the United States, Australia and Canada. “We are definitely seeing more deal flow.”

Notably, capital flow is increasing from overseas, in particular from Europe, Asia and the Middle East, Conrad said.

The market action is accelerating to the level where Conrad sees portfolio trading opportunities and potential development of a real estate investment trust.

The interest in buying farmland comes amid a decline in commodity prices tied in part to a global glut of key crops like corn and soybeans and diminished corn-based ethanol demand.

Conrad said the Hancock group’s return was down last year to 7.6 percent from 18 percent in 2008 as commodity prices fell and land values flattened. He is cautiously projecting continued single digit returns again for 2010.

Still, the group’s client base, which is made up of pension funds, large taxable investors and funds of funds, continues to grow, Conrad said.

“Our investors are very long-term oriented,” Conrad said. “Typical farmland provides very attractive current income that is what institutional investors are looking for.”

OPPORTUNITIES IN SOFT SECTORS

Conrad said his investment group was finding some opportunities where previous investors had bought land intending to convert it to commercial property but were stymied as credit dried up and the economy swooned.

The group is also finding good values in farmland in Idaho were the dairy industry is struggling, and remains very active in the U.S. Midwest, the heart of corn and soybean production.

As well, the group is looking to deepen its presence in the California vineyard sector, another area that has been struggling through the recession due to falling demand for wine.

“There has been a glut of wine for the last few years so that is a sector we like,” Conrad said.

The Hancock group is a unit of the Hancock Natural Resource Group, an indirect wholly-owned subsidiary of Manulife Financial Corporation (MFC.TO) (MFC.N). In addition to the row crops and wine, Hancock is heavily invested in specialty crops such as almonds, walnuts, cranberries, apples, pistachios and macadamia nuts.

Cranberries and pistachios provided double-digit returns in 2009 while apples and almonds did poorly, according to Conrad. Cranberries appear to be softening, however, with more supply building up inventories amid limited exports.

One key area for investing now is a rush to lease or buy water rights, Conrad said. Water is a key resource for agricultural production and scarcity concerns coupled with a growing world population makes water control critical.

“That pattern is just going to become more and more common,” he said.

The United States and its technologically advanced farming systems do not offer the same high rates of potential return as some investors are seeking in Brazil and other countries, Conrad said.

But the more mature market does offer solid long-term opportunities and Hancock has no plans to extend its investments outside the United States, Australia and Canada.

“Our plan is to build out the countries we’re in right now,” he said.

(Reporting by Carey Gillam; Editing by Tim Dobbyn)

Trans Texas Corridor still alive

Trans Texas Corridor routes moving at freight train speed
By Terri Hall
Mar 20, 2010
Houston Examiner

After Rick Perry's highway department announced the Trans Texas Corridor (TTC) route known as TTC-35 was "dead" in 2009, we find out post-election in 2010 that it, along with free trade, is very much alive and well. Canadian officials have shown renewed interest in a multi-modal trade corridor along I-35. Winnipeg recently announced its intention to build an inland port similar to those in San Antonio and Dallas. One such inland port in Kansas City has ceded sovereign United States territory to Canada and Mexico with the flags of all three countries flying over it. Officials in Winnipeg said it also intends to run a logistics and trade corridor to include rail and high speed highways all the way to Mexico as an Asia-Pacific gateway connecting to Toronto and Montreal.

It should surprise no one that former San Antonio Mayor Phil Hardberger and tolling authority (Alamo RMA) Chairman Bill Thornton took a trip to Toronto in 2006, partially at taxpayer expense, to promote Trans Texas Corridor-style trade connections and to be certain it includes the Port of San Antonio.

Norris Pettis, Canadian Consul General in Dallas, notes in the latest San Antonio Business Journal that "of all the urban centers I deal with, San Antonio is right up there in preaching free trade." The article also said Canadian officials observe an anti-trade sentiment in the U.S. as a whole, but see an open door in Texas, which they say doesn't share "protectionist policies."

Read the rest of the story here.

London tube line’s public private partnership in the hole

Link to article here.

This is another example of how a so-called "public private partnership" (PPP) actually means PUBLIC money for PRIVATE profits rather than the "partnership" taxpayers were promised, one where the private entities put up the money and take all the risk. A legal ruling deemed that the private contractor, Ferrovial (parent company to Cintra, the Spain-based company involved in several PPPs in Texas), does not have to upgrade the system, taxpayers do. Even worse, this also demonstrates that once the government gives away control of our infrastructure to private corporations, it has little recourse to protect the public interest. The private entities write these iron clad contracts to protect their interests, leaving taxpayers holding the bag. We have yet to see one PPP deal that worked out well for the taxpayers in any country. PPPs are just one more scam to give private corporations free access to taxpayers' wallets using government-sanctioned monopolies in the name of "free market."

Boris Johnson told he must plug £460m tube funding gap
Arbiter of public-private partnership rules that London Underground contractor Tube Lines should not have to make up shortfall in budget
By Dan Milmo
guardian.co.uk
Wednesday 10, March 2010

Boris Johnson must make cuts to London's public transport network or postpone improvements to one of the capital's busiest underground lines after he was told to plug a £460m funding gap in a controversial public-private partnership.

The London mayor said taxpayers were being asked to "write a blank cheque" to fund Tube Lines, the last surviving PPP contractor responsible for maintenance and upgrades on three tube routes: the Jubilee, Northern and Piccadilly lines.

In a final ruling today, the arbiter of the PPP contracts, Chris Bolt, said Tube Lines's work programme over the next seven and a half years should cost £4.46bn. The publicly owned London Underground, which still runs the tube network on a day-to-day basis, must fund the work and has budgeted only £4bn for it – leaving a shortfall of £460m on its already stretched balance sheet.

Johnson, who ultimately controls LU and its parent Transport for London, said he would consider taking legal action against Bolt, who rejected demands that Tube Lines fund the difference by raising debt privately. Instead, Bolt said TfL should either cut back on an upgrade to the Piccadilly line – the only tube link to Heathrow airport – or find cost cuts elsewhere in its £9bn annual budget.

"Londoners will also be outraged that the tube upgrades promised to them are now threatened," said Johnson. The mayor claimed that Tube Lines's co-owners, Ferrovial, the Spanish owner of Heathrow airport, and Bechtel, the US project management specialist, would be paid £400m in management secondment fees by 2017.

"In other countries this would be called looting, here it is called the PPP," he said.

But Bolt rejected the management fees argument, saying that Ferrovial and Bechtel managers were helping to keep down overall costs and, without them, the maintenance and upgrade work could cost more than £4.46bn.

Andrew Cleaves, Tube Lines's acting chief executive, said delaying an upgrade to the Piccadilly line was one option for closing the funding gap. Bolt has already asked the Department for Transport whether funding set aside for purchasing new Piccadilly line trains, believed to be about £500m, could be used to plug the gap.

"There are many different variations around timing that we can work through with London Underground, including the timing of the fleet and the upgrade. That's the sort of thing I want to sit down with London Underground about and discuss," said Cleaves.

The Piccadilly upgrade is due to deliver faster and more frequent trains on the route by 2014 and failure to deliver it on time raises the threat of overcrowding on an already busy line.

The Tube Lines boss also denied that the ruling would threaten the company's viability. Tube Lines had originally argued that the work should cost £5.75bn and faced an even greater funding shortfall than LU, which prompted Tube Lines directors to discuss whether the company is a going concern at a recent board meeting.

Johnson's funding options are becoming increasingly limited after the DfT said it would not reopen a 2007 funding settlement that awarded TfL £40bn until 2017. Lord Adonis, the transport secretary, is adamant that TfL cannot increase its borrowing to fund the £460m gap.

Trans Texas Corridor TTC-35 resurrected post-election

Link to article here.

The good news is, the section of I-35 where there is a 391 local government commission (TURF co-sponsored events to help spread this method to fight the Trans Texas Corridor for TTC-69), I-35 will be expanded and kept toll-free.

However, right after the election, Perry's TxDOT announced its intention to extend the SH 130 toll road north of the 391 commission's jurisdiction. SH 130 from Georgetown around Austin extending south to San Antonio has been referred to as the first leg of the Trans Texas Corridor TTC-35. So as we predicted, if Rick Perry were re-elected, he would continue his plans to push the TTC piece by piece all the way up to Red River. This new TTC segment from Waco to Hillsboro, filling the gaps of "free" lane I-35 expansion, is also likely to become some form of foreign-owned toll road.

Relieving traffic on Interstate 35 through Waco remains priority for state officials
By Michael W. Shapiro, Waco Tribune-Herald staff writer
Wednesday March 10, 2010

Plans to relieve traffic on Interstate 35 with the Trans-Texas Corridor were put to bed last year in the face of a chorus of public criticism that centered around the use of eminent domain to make way for the ill-fated project.

But if the population in Texas continues to grow, state officials think congestion will only get worse on I-35 if nothing is done.

The Texas Department of Transportation is studying a series of potential traffic solutions.
Drivers navigate through traffic on Interstate 35.
Drivers navigate through traffic on Interstate 35.
Jerry Larson/Waco Tribune-Herald
TxDOT held a meeting Tuesday in Waco to discuss the situation with local officials representing the Central Texas stretch of the highway.

The department will present ideas next month to four advisory committees trying to come up with plans to ease I-35 traffic.

Finding solutions

State transportation staffers said they will present traffic data on several proposed solutions in April.

Ideas under consideration include:

*  Extending State Highway 130, a toll road that runs parallel to I-35 in the Greater Austin area.

Transportation officials said they would look at the traffic relief that would result from extending the road to Temple, and possibly through the Waco area to Hillsboro.

The committee recommended that the extension run on the east side of I-35 within five miles of the highway.

* Building the so-called Texas T-Bone — a high-speed passenger rail system that would connect Dallas-Fort Worth, San Antonio and Houston.

The proposal envisions using the Killeen-Temple area as a central hub.

The plan has been promoted heavily by Temple Mayor Bill Jones, who sits on the local I-35 committee and delivered a presentation at the meeting.

TxDOT is trying to implement a bottom-up approach — taking recommendations at the local level, then consolidating those ideas into a plan.

It was clear at the session that officials still were working out the kinks.

A few area residents showed up at the three-hour meeting but left early without a chance to address committee members or state officials.

Officials continue to search for ways to relieve current and future traffic congestion on I-35. Ideas proposed during a Tuesday meeting called by the Texas Department of Transportation include expanding toll roads and a high-speed rail system.

Members agreed later to change the rules to ensure that the public will be able to comment at future meetings.

There’s a “need to give everybody an opportunity to speak, to the point where we have to bend over backwards to display that there’s trust and transparency,” said Russell Devorsky, who represents the Waco Metropolitan Planning Organization on the committee.

A lack of transparency led to suspicions about the Trans-Texas Corridor, he said.

Other members complained they hadn’t received detailed traffic statistics for I-35 or guidelines showing the financial limitations for traffic-relief projects.

State officials said they wanted to start with how to tackle congestion, and detailed traffic modeling of several local projects were in the works.

The local committee consists of three members representing Bell County (all attended the Tuesday meeting in Waco); two members representing McLennan County (one of whom attended); members from Hill County and the Hillsboro Chamber of Commerce (both in attendance); as well as two members each from Dallas, Ellis and Tarrant counties; and one each from Falls, Hood, Johnson, Kaufman, Limestone, Navarro and Parker counties.

The Texas Farm Bureau also has a member on the local committee.

Big Bend, target for trade corridor, may become “international” park

Link to article here.

Big Bend is the target for one of Rick Perry's planned Trans Texas Corridor routes, called La Entrada de Pacifico. So it shouldn't surprise us that the idea of turning one of Texas' natural treasures over to international control is being floated anew. Connect the dots...

Should Big Bend Become an 'International Park?'
US Interior Secretary proposed the idea today, proposal dates back to the 1930s
By Jim Forsyth
Friday, March 12, 2010
WOAI Newsradio, San Antonio

US Interior Secretary Ken Salazar today suggested combining the Big Bend National Park in west Texas with  the Monumento Natural del Rio Bravo across the river in Mexico, to form the Big Bend/Rio Bravo International Park, 1200 WOAI news reports.

"The United States and Mexico are neighbors sharing a beautiful treasure," Salazar said today during a tour of the Big Bend.  "Our two nations could and should engage in an even higher level of cooperation to conserve this remarkable area and its wildlife, while providing more opportunity for visitors to enjoy it."

Actually, the idea of combining the two parks is not new...it was discussed by Presidents Franklin Roosevelt and Manuel Avila Camacho back in the 1930s.

Salazar said he has had talks with Mexican Interior Secretary Juan Rafael Elvira Quesada about the idea.

Salazar was the guest of Congressman Ciro Rodriguez, who's district includes the Big Bend.

"I'm proud to represent this area and look forward to having a dialogue with the Secretary about how best to preserve and enhance the park using stimulus funding and other resources," Rodriguez said.

Salazar said combined, the Big Bend and Rio Bravo constitute one of the largest and most important conservation areas in North America, and a combined park would help officials on both sides of the Rio Grande better address issues from water and air quality to management of wildfires.

Rio Bravo del Norte is the name for the Rio Grande used in Mexico.

Perry’s slush fund: public money for private profits

Link to article here.

This article exposes one of Rick Perry's worst policies aside from his toll road and Trans Texas Corridor boondoggles: the Texas Enterprise Fund, dubbed a "slush fund." Perry is bought and paid for by special interests. Private industries should NOT be receiving "economic incentives" paid for by Texas taxpayers, just like Perry's buddies at Cintra (Spain-based company that's the primary beneficiary of Perry's penchant for selling-off Texas roads to the highest bidder, that in turn charges us 75 cents PER MILE to drive) shouldn't be granted a government-sanctioned monopolies over our public infrastructure.

Slush Fun
At least one Texan has benefited from Rick Perry's Enterprise Fund.
by Dave Mann
Published on: Thursday, March 11, 2010
Texas Observer

 
For the past six years, Texas Gov. Rick Perry has lorded over a controversial stash of taxpayer money known as the Texas Enterprise Fund, dispensing huge sums—$345 million and counting—to large corporations, ostensibly to spur job growth. Critics call it the governor’s slush fund. “He takes from us so that he can play with his corporate slush fund and award his friends’ businesses,” said Debra Medina, one of Perry’s two challengers for the GOP gubernatorial nomination, at a recent candidate’s debate.

Perry defends the fund as a much-needed economic-incentive program. He credits the disbursements with creating 55,000 jobs in Texas and helping keep the state’s economy out of recession. Whether the program has boosted the state’s economy depends on your point of view. But at least one Texan has greatly benefited from Enterprise Fund outlays—Rick Perry.
Many companies that have received money from the fund have, in turn, aided the governor. An Observer investigation has found that 20 of the 55 Enterprise Fund companies have either given money directly to Perry’s campaign (through their political action committees or executives) or donated to the Republican Governors Association, a Washington, D.C.-based group that Perry presided over in 2008.

The 20 companies have received a combined $174.2 million from the Enterprise Fund. During the same time period, those 20 corporations have donated $2.2 million to Perry and the governors association. Several companies made donations around the time they received grants from the Enterprise Fund. It’s even possible that taxpayer money from the fund came full circle into Perry’s own campaign.

Perhaps no company better illustrates the flow of money than Hewlett-Packard Co. In October 2006, the California-based technology giant received $3 million from the Enterprise Fund to open four data centers in Texas that were supposed to create 420 jobs. The project didn’t exactly go well—the centers never opened, and Hewlett-Packard later had to repay its grant. Nary a Texan got a new job. But before the deal fell apart, Perry and his political allies took in their share of money.

Hewlett-Packard’s political action committee contributed $20,000 to the governor’s campaign. It was one of 18 Enterprise Fund companies whose PACs or chief executives donated to Perry’s campaign, according to an analysis by the watchdog group Texans for Public Justice. The PACs and chief executives forked over a combined $355,000 to Perry’s campaign. (One of the largest donors was Joe Sanderson, the head of Sanderson Farms Inc., a Mississippi-based chicken producer that received $500,000 from the Enterprise Fund in April 2006. Three months later, Joe Sanderson gave $25,000 to Perry’s campaign. He has since given $75,000 more.)

The serious money went to the Republican Governors Association. Organized in 2002, the association raises tens of millions every election cycle to support GOP candidates for governor all across the country. In 2008, Perry served as its chairman, and as its finance chair for the last two years.

Hewlett-Packard has given the governors association $518,767 in corporate money since 2003. Eleven other Enterprise Fund recipients have sent corporate checks to the association during the past seven years, according to an Observer analysis of the group’s campaign filings with the Internal Revenue Service. Many of them gave money repeatedly. The 12 companies contributed nearly $1.8 million in corporate money to the association. Eleven of the 13 are large, national corporations that could have donated to the association for reasons unrelated to Perry or the Enterprise Fund.

Hewlett-Packard was the most generous, but wasn’t alone. FMR LLC, owner of Boston-based Fidelity Investments gave big money ($343,450), as did Lockheed Martin Corp.($211,595), Home Depot Inc. ($189,081), defense contractor Raytheon Co. ($167,175), and the chicken producers at Sanderson Farms ($102,145).

It’s difficult to know what the Republican Governors Association did with the millions it received from Texas Enterprise Fund companies. Some of that cash may have circled back to Rick Perry.

In the fall of 2006—10 days before he would be re-elected—Perry received two checks totaling $1 million from the governors association.

The contributions raise some legal questions. That’s because much of the association’s financing comes from corporate sources, according to an Observer analysis of the group’s IRS filings. Craig Holman, a campaign finance expert with Public Citizen in Washington, says it’s well known that the Republican Governors Association accepts and spends corporate money. In some states, that’s legal. But Texas law forbids candidates from receiving or spending corporate money on political campaigns.

Texas’ century-old corporate prohibition was the central issue in the campaign finance scandal that led to the indictment of then-House Majority Leader Tom DeLay in 2005. The DeLay affair involved GOP organizations funneling illegal corporate money to Texas candidates. Similarly, if the governors association gave corporate money to Perry’s campaign in 2006, that would violate Texas law.

However, the association also received several million dollars from non-corporate donors, people like Bob Perry (no relation to the governor). The Houston home builder and prolific GOP donor gave more than $2 million in 2006 alone—enough to account for the contributions to Gov. Perry. In fact, Bob Perry donated $500,000 the day before the governors association sent a $500,000 check to Gov. Perry. It’s perfectly legal for the association to send this non-corporate money to Rick Perry’s campaign.

The flow of money also raises the possibility that some taxpayer dollars traveled the following circuit: from the Texas Enterprise Fund, to various large companies, to the Republican Governors Association, which then donated to Perry’s campaign.

By Oct. 26, 2006, the day the governors association sent Perry’s campaign the first of two $500,000 checks, the group had received nearly $216,000 in corporate contributions from five Enterprise Fund companies during the 2005-06 election cycle. The companies were Tyson Foods Inc. ($20,000), Home Depot ($25,000), Raytheon ($65,000), the U.S. unit of German telecommunications company T-Mobile International AG ($20,000), and Hewlett-Packard ($86,000). IRS records show these corporate donations being paid to the same governors association accounts that later dispensed money to Gov. Perry.

By Oct. 26, 2006, those five companies had been paid $17.5 million by the Texas Enterprise Fund.

Perry may have benefited in other ways. Raising money for someone else can sometimes be more beneficial in politics than receiving it. In that sense, Perry’s fundraising for the governors association may have raised the governor’s political profile.

IRS filings show that some of the top contributors to Perry’s campaigns over the years also donated to the association. Bob Perry, the governor’s top money man, heads the list. He’s given the association nearly $6 million since 2006. San Antonio’s James Leininger and Dallas businessman Harold Simmons have donated $100,000 each in recent years. Several Perry-friendly Austin lobbyists have contributed. So did the Association of Electric Companies of Texas, an Austin-based trade group that sent $25,000 to the governors association.

Then there’s Michele Mosbacher of Houston, who contributed $25,000 to the association on April 18, 2008, according to IRS records. That was three months after Gov. Perry appointed her to a position on the University of Houston Board of Regents.

These contributions may partly explain how Perry ascended to the chairmanship of the association in 2008—a high-profile position among national Republicans—bypassing the group’s then-vice chairman. After serving one year as chairman, Perry is now, as he runs for re-election, the association’s finance chair.

Donations from Texas Enterprise Fund companies also may have aided the governor’s rise in the association. Some companies donated to the association not long after, or not long before, they received money from the Enterprise Fund. The most blatant example is the bank Comerica Inc. In September 2007, Comerica received $3.5 million from the Enterprise Fund to create 200 jobs in the Dallas area. On Feb. 8, 2008, Comerica gave $25,000 to the Republican Governors Association—to date the only contribution the company has ever made to the group that several months earlier had named Perry as its chairman.

Gurwitz: Conservatives want more than Perry's photo-ops

Web Posted: 03/06/2010
Conservative Texans want more than photo-ops
By Jonathan Gurwitz
San Antonio Express-News

When the 2009 regular session of the Texas Legislature concluded, Gov. Rick Perry came to San Antonio to affix his signature to a major property rights measure. In front of the Alamo, Perry appeared to sign legislation putting a constitutional amendment on the November 2009 ballot that sharply restricted the circumstances under which state and local government could exercise eminent domain.
The ceremony presented a great photo-op: a conservative governor affirming an essential right, drawing a line in the sand on eminent domain in the shadow of the Cradle of Texas Liberty. The ceremony was also deceptive.

What Perry purported to sign was a joint resolution passed by a two-thirds majority in both houses of the Texas Legislature. Such measures circumvent the governor's office and automatically appear on the ballot in the next general election. Voters approved it in November with 81 percent support.

The decision of conservative Texas lawmakers to bypass the governor on eminent domain reform in 2009 was deliberate. Two years earlier, Perry had vetoed an even stronger affirmation of property rights drawn up in response to the U.S. Supreme Court's Kelo decision.

The ostensible explanation for Perry's 2007 veto was that a key provision would have vastly inflated costs for new road construction. Beneath this explanation lay additional bothersome issues that put him at odds with conservative Texans.

The 2007 eminent domain reform effort conflicted with Perry's plans — since abandoned — for the Trans Texas Corridor, a 4,000-mile multi-modal transportation network that would have necessitated the state's seizure of as much as 600,000 acres of private property. The project generated even greater controversy because of its heavy reliance on toll roads; because a former Perry staffer worked as a consultant for the Spanish company, Cintra, that won the rights to develop the corridor; and because Perry fought a ruling by Texas Attorney General Greg Abbott that compelled the Texas Department of Transportation to lift a veil of secrecy on the contract's details.


Read the rest of the story here.

Goldman Sachs fueled financial crisis in Greece, Europe

Link to article here.

Goldman Sachs has been playing both sides (consulting and giving financial advice to both the government and the private entities with whom the government is making deals) for quite some time now, especially with regards to public private partnership infrastructure deals. They've been operating with impunity despite the colossal conflicts of interest. Now it's toxic wheeling and dealing has led to the financial collapse of Europe. The U.S. government beware - time to boot Goldman from the halls of Washington and Austin!

February 14, 2010
Wall St. Helped to Mask Debt Fueling Europe’s Crisis
By LOUISE STORY, LANDON THOMAS Jr. and NELSON D. SCHWARTZ
New York Times

Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts.

As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.


Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November — three months before Athens became the epicenter of global financial anxiety — a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting.

The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards.

It had worked before. In 2001, just after Greece was admitted to Europe’s monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means.

Athens did not pursue the latest Goldman proposal, but with Greece groaning under the weight of its debts and with its richer neighbors vowing to come to its aid, the deals over the last decade are raising questions about Wall Street’s role in the world’s latest financial drama.

As in the American subprime crisis and the implosion of the American International Group, financial derivatives played a role in the run-up of Greek debt. Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere.

In dozens of deals across the Continent, banks provided cash upfront in return for government payments in the future, with those liabilities then left off the books. Greece, for example, traded away the rights to airport fees and lottery proceeds in years to come.

Critics say that such deals, because they are not recorded as loans, mislead investors and regulators about the depth of a country’s liabilities.

Some of the Greek deals were named after figures in Greek mythology. One of them, for instance, was called Aeolos, after the god of the winds.

The crisis in Greece poses the most significant challenge yet to Europe’s common currency, the euro, and the Continent’s goal of economic unity. The country is, in the argot of banking, too big to be allowed to fail. Greece owes the world $300 billion, and major banks are on the hook for much of that debt. A default would reverberate around the globe.

A spokeswoman for the Greek finance ministry said the government had met with many banks in recent months and had not committed to any bank’s offers. All debt financings “are conducted in an effort of transparency,” she said. Goldman and JPMorgan declined to comment.

While Wall Street’s handiwork in Europe has received little attention on this side of the Atlantic, it has been sharply criticized in Greece and in magazines like Der Spiegel in Germany.

“Politicians want to pass the ball forward, and if a banker can show them a way to pass a problem to the future, they will fall for it,” said Gikas A. Hardouvelis, an economist and former government official who helped write a recent report on Greece’s accounting policies.

Wall Street did not create Europe’s debt problem. But bankers enabled Greece and others to borrow beyond their means, in deals that were perfectly legal. Few rules govern how nations can borrow the money they need for expenses like the military and health care. The market for sovereign debt — the Wall Street term for loans to governments — is as unfettered as it is vast.

“If a government wants to cheat, it can cheat,” said Garry Schinasi, a veteran of the International Monetary Fund’s capital markets surveillance unit, which monitors vulnerability in global capital markets.

Banks eagerly exploited what was, for them, a highly lucrative symbiosis with free-spending governments. While Greece did not take advantage of Goldman’s proposal in November 2009, it had paid the bank about $300 million in fees for arranging the 2001 transaction, according to several bankers familiar with the deal.

Such derivatives, which are not openly documented or disclosed, add to the uncertainty over how deep the troubles go in Greece and which other governments might have used similar off-balance sheet accounting.

The tide of fear is now washing over other economically troubled countries on the periphery of Europe, making it more expensive for Italy, Spain and Portugal to borrow.

For all the benefits of uniting Europe with one currency, the birth of the euro came with an original sin: countries like Italy and Greece entered the monetary union with bigger deficits than the ones permitted under the treaty that created the currency. Rather than raise taxes or reduce spending, however, these governments artificially reduced their deficits with derivatives.

Derivatives do not have to be sinister. The 2001 transaction involved a type of derivative known as a swap. One such instrument, called an interest-rate swap, can help companies and countries cope with swings in their borrowing costs by exchanging fixed-rate payments for floating-rate ones, or vice versa. Another kind, a currency swap, can minimize the impact of volatile foreign exchange rates.

But with the help of JPMorgan, Italy was able to do more than that. Despite persistently high deficits, a 1996 derivative helped bring Italy’s budget into line by swapping currency with JPMorgan at a favorable exchange rate, effectively putting more money in the government’s hands. In return, Italy committed to future payments that were not booked as liabilities.

“Derivatives are a very useful instrument,” said Gustavo Piga, an economics professor who wrote a report for the Council on Foreign Relations on the Italian transaction. “They just become bad if they’re used to window-dress accounts.”

In Greece, the financial wizardry went even further. In what amounted to a garage sale on a national scale, Greek officials essentially mortgaged the country’s airports and highways to raise much-needed money.

Aeolos, a legal entity created in 2001, helped Greece reduce the debt on its balance sheet that year. As part of the deal, Greece got cash upfront in return for pledging future landing fees at the country’s airports. A similar deal in 2000 called Ariadne devoured the revenue that the government collected from its national lottery. Greece, however, classified those transactions as sales, not loans, despite doubts by many critics.

These kinds of deals have been controversial within government circles for years. As far back as 2000, European finance ministers fiercely debated whether derivative deals used for creative accounting should be disclosed.

The answer was no. But in 2002, accounting disclosure was required for many entities like Aeolos and Ariadne that did not appear on nations’ balance sheets, prompting governments to restate such deals as loans rather than sales.

Still, as recently as 2008, Eurostat, the European Union’s statistics agency, reported that “in a number of instances, the observed securitization operations seem to have been purportedly designed to achieve a given accounting result, irrespective of the economic merit of the operation.”

While such accounting gimmicks may be beneficial in the short run, over time they can prove disastrous.

George Alogoskoufis, who became Greece’s finance minister in a political party shift after the Goldman deal, criticized the transaction in the Parliament in 2005. The deal, Mr. Alogoskoufis argued, would saddle the government with big payments to Goldman until 2019.

Mr. Alogoskoufis, who stepped down a year ago, said in an e-mail message last week that Goldman later agreed to reconfigure the deal “to restore its good will with the republic.” He said the new design was better for Greece than the old one.

In 2005, Goldman sold the interest rate swap to the National Bank of Greece, the country’s largest bank, according to two people briefed on the transaction.

In 2008, Goldman helped the bank put the swap into a legal entity called Titlos. But the bank retained the bonds that Titlos issued, according to Dealogic, a financial research firm, for use as collateral to borrow even more from the European Central Bank.

Edward Manchester, a senior vice president at the Moody’s credit rating agency, said the deal would ultimately be a money-loser for Greece because of its long-term payment obligations.

Referring to the Titlos swap with the government of Greece, he said: “This swap is always going to be unprofitable for the Greek government.”

Lawmakers push for repeal of NAFTA

Link to article here.

Remember that NAFTA is the reason for all the trade corridors planned to pave over Texas called: NAFTA superhighways, the Trans Texas Corridor (TTC), Corridors of the Future, High Priority Corridors, or the renamed TTC called "Innovative Connectivity Plan."

U.S. lawmakers launch push to repeal NAFTA

By Doug Palmer, Reuters
Thu Mar 4, 4:35 PM EST

A small group of U.S. lawmakers unveiled legislation on Thursday to withdraw from the North American Free Trade Agreement in the latest sign of congressional disillusionment with free-trade deals.

The bill spearheaded by Rep. Gene Taylor, a Mississippi Democrat, would require President Barack Obama to give Mexico and Canada six months notice that the United States will no longer be part of the 16-year-old trade pact.

"At a time when 10 to 12 percent of the American people are unemployed, I think Congress has an obligation to put people back to work," Taylor said.

He argued NAFTA has cost the United States millions of manufacturing jobs and hurt national security by encouraging companies to move production to Mexico.

The high unemployment rate makes it the "perfect" time to push for repeal even though past efforts have failed, he said.

"You'll see the American people rally behind this, in my humble opinion," said Rep. Walter Jones, a North Carolina Republican who is one of about 28 co-sponsors of the bill.

Business groups like the National Association of Manufacturers and the U.S. Chamber of Commerce strongly support NAFTA, which they say has spurred U.S. economic growth by tearing down trade barriers between the three countries.

The repeal proposal comes as Obama says he wants to resolve problems blocking congressional approval of long-delayed trade deals with South Korea, Panama and Colombia.

The strongest opposition to those agreements comes from Obama's fellow Democrats.

The United States also will begin talks later this month with Australia, New Zealand, Singapore, Chile, Peru, Vietnam and Brunei on an Asia-Pacific regional free-trade agreement.

Obama criticized NAFTA during the 2008 presidential election campaign but has not followed through on threats to withdraw from the agreement if Canada and Mexico did not agree to revamp the pact's labor and environmental provisions.

But many Democrats are pushing for that and other changes to existing trade deals before considering any new deals such as the deals with South Korea, Colombia and Panama.

The House of Representatives is expected to vote later this year on whether the United States should remain a member of the World Trade Organization.

U.S. law allows House and Senate members to request a vote on that issue every five years. In 2005, 86 of the House's 435 members voted to withdraw from the world trade body.

(Reporting by Doug Palmer; Editing by Stacey Joyce)

Elections come & go, but resistance to toll taxes continues


If there's one thing we've learned in the 5 years we've been fighting to keep our freeways toll-free, it's that elections don't matter near as much as the people themselves staying engaged in the ongoing battles against our own government. We've passed the era where citizens could get by with complacency, we're in a new ballgame now. After years of neglect and trusting our elected representatives to do the right thing when no one's looking, it's obvious to even the casual observer that those days are long gone, and we now face the Goliath of entrenched special interests and lobbyists who really run the show. As one of our supporters likes to put it, we need a permanent, grassroots lobbying class for "we the people."

One thing about elections remains the same...the same recycled candidates show-up in office year after year. Though on rare occasions the good guys and bad guys trade places, by and large, for a litany of reasons I won't go into here, it's those who have been corrupted and who have no qualms about ignoring and exploiting the taxpayers that remain the powerbrokers. The kingmakers simply won't tolerate the incorruptible being in charge. So we've learned to work hard for the good guys, but to expect the bad guys to still be there when the dust settles.

Issue-based activism works

The grassroots have shown that we can mount an offensive and successfully defeat toll-related issues one at a time, year after year, by constant vigilance. The bad guys only have to win once to get their pay-dirt, but the taxpayers have to win time after time, year after year to defeat the litany of bad legislation and policies that hit the pipeline at breathtaking speed.

The aversion to paying 75 cents a mile to a foreign company to simply drive on a public road hasn't faded, nor will it. The waste, fraud, and abuse of taxpayer money by an out-of-control transportation department can and must be fixed. With the taxpayers on high alert, we can return to a sensible, sustainable, and affordable transportation policy in Texas, one without the highest tax on the table...tolls.
One of the biggest challenges in unseating incumbents isn't so much the name recognition and hefty campaign coffers (though these things can be enormous obstacles) as it is the growing number of political favors and payback the politician doles out the longer he's in office. It makes for highly motivated voters beholden to incumbents who eagerly head to the polls to re-elect the guy who is the gift that keeps on giving to one's industry or pet program.

Corporate welfare

I sat down and read an issue of the Business Journal this week. A sizable chunk of the stories involved businesses who owe their success to taxpayer handouts. One business that experienced explosive growth (5,900 percent) exclusively provides services for the federal government. One article brazenly offered tips on how to secure contracts from local bond elections (and avoid pesky obstacles like competition) by positioning oneself early for favorable treatment by being a team player and helping the bond election pass.

For all the mudslinging about social welfare programs, corporate welfare costs the taxpayers dearly. The self dealings that often involve the revolving door between private sector and public sector positions, jumping between the two in order to secure government funding or land a government contract by being well-connected, often exploits taxpayers with backroom deals made in secret with lobbyists. Instead of standing in line at a welfare office, they have slick web sites that tell them of all the upcoming bond elections, how much taxpayer money is on the table, and what contracts are up for grabs. This ain't capitalism, rather, it nicely explains the origin of the phrase: "hogs at the trough."

The sooner we, the taxpayers, identify the enemy, the sooner we defeat the cronyism that grips the "system." With our freedom to travel at risk and the threat of a complete financial meltdown of the infrastructure bubble (that will be too big to let fail) our politicians are creating with massive, multi-leveraged toll road debt, we cannot and will NOT relent until freedom is secured.

NTTA bailout saddles taxpayers with toxic debt

Last week, both the Texas Transportation Commission (TTC) and the North Texas Tollway Authority (NTTA) approved a deal to use ALL Texas taxpayers (our state gas taxes) as collateral for toll roads in North Texas. Highway 161, a road to primarily benefit the Dallas Cowboys (Hwy 161 is the main pathway to its new stadium), got the green light first, and we're on the hook for virtually unlimited interest on the debt for 36 years if the toll road traffic doesn't show up.

The NTTA wouldn't need the State to guarantee its debt if it didn't already know that the projected traffic to pay for it is on shaky ground. Investors won't bite unless a return on their investment is a sure thing. They made it a sure thing by using the State's highway fund as a backstop for the NTTA's toxic debt (read more history here).

For years Rick Perry's excuse for levying toll taxes on urban Texans has been, "Why should West Texas pay for the congestion in Houston or Dallas?" Yet here we are, ALL paying for congestion in North Texas! The move is also unconstitutional (exploiting what TxDOT thinks can be construed as a "loophole"). The highway fund cannot be used to guarantee loans. To skirt the law, TxDOT added a provision it thinks it can use to make the unconstitutional deal legal by charging the NTTA interest on any money lent to it from the highway fund.

Exploitation or illegal?

Sound familiar? TxDOT exploited a "loophole" that was supposed to prohibit tolling existing roads for US 281, US 290, among others (watch it here). TxDOT also exploited the prohibition against selling our highways to foreign corporations through private toll contracts called CDAs by using another financing mechanism meant for local governments (called pass through financing) to accomplish the same thing.

In another example, TxDOT exploited a law that allows it to advertise toll roads in order to wage a PR campaign to persuade/lobby the public to accept more toll roads versus following the legislative intent of the law, which was to advertise the use of toll roads already open to traffic (like "get your Toll Tag here"). Perry vetoed a law passed by the legislature last year that would have prevented such chicanery from continuing.

Lastly, TxDOT attempted "creative accounting" tricks with Proposition 12 bonds in order to multi-leverage debt (use borrowed money as a down payment to get more borrowed money and so on) after the Texas legislature soundly defeated such legislation in the special session in July of 2009. Lawmakers clearly did NOT want TxDOT to become a bank or engage in the same risky financial schemes that caused the mortgage meltdown and global financial crisis that required a massive taxpayer bailout.

So how many times will this rogue agency get away with flouting the law? Would you and I get a free pass for such violations (especially considering TxDOT is doing it with other people's money forcibly confiscated through taxation)? Of course not! Add to that its rigged, fraudulent environmental studies to gain clearance for controversial toll projects and its $1 billion dollar "accounting error," and it adds up to intolerable acts that cry out for accountability.

Scheme to buyback FREEway to toll it

Hwy 161 is already three-quarters built with taxpayer money and could open as a free road, yet in this NTTA bailout, the agency will borrow over $1 billion in part to buy back the free portion of the road so it can turn around and toll it. This scam shoots a hole through another Perry talking point that claims we're out of money to build these roads with traditional funds, "so we MUST toll it." In fact in 2007, a TxDOT report to Congress lobbied to buy back existing interstates so it can slap tolls on freeways already built and paid for, and it caused a statewide backlash, a federal amendment by Kay Bailey Hutchison to ban the practice, and a TURF lawsuit to stop such lobbying against the taxpayer.

See the pattern here? TxDOT continues its deplorable behavior unchecked while taxpayer money is exploited, wasted, and recycled (how many times do we have to pay for the same road?). At the end of the day, lawmakers huff and puff, but they never blow the house down (and clean house)!

It's abundantly clear no one is looking out for us, so we must do it ourselves. We cannot give up the fight for accountability nor can we afford for this Governor and legislature to look the other way and continue to condone such disastrous fiscal policy certain to bring economic ruin for generations.

Call your state lawmakers at (512) 463-4630 or to contact his/her district office go here.

Perry’s Commission approves NTTA BAILOUT

Link to article here.

Tollway authority approves State Highway 161 project

Friday, February 26, 2010

By MICHAEL A. LINDENBERGER / The Dallas Morning News
This email address is being protected from spambots. You need JavaScript enabled to view it.

The North Texas Tollway Authority voted today to borrow nearly $1.2 billion and formally accept State Highway 161 into its growing network of toll roads.

The decision means construction on the final leg of the 11.5 mile road between Irving and Grand Prairie can begin as soon as next month, and be open to full traffic by late 2012.

Also Online
Transportation blog: Pros and cons of NTTA's construction of SH 161

The decision adds to NTTA's already staggering $7 billion debt, and puts future drivers in the role of guarantors for the new loans, since toll rates will go up if traffic on highway is significantly below expectations.

Texas taxpayers could be on the hook, too. That's because the Texas Department of Transportation guaranteed the debt for SH 161, promising to make annual debt payments for decades, in the unlikely event that traffic is so low the road can't support itself even after rates are increased.

The NTTA board's vote to proceed with the project was 8 to 1, with Bill Moore, an appointee from Collin County, opposed.

Under NTTA's rules, it would have taken only two "no" votes to scuttle the project.

Even some of those voting for the deal expressed concerns.

Board Chairman Paul Wageman of Plano said the North Texas region has too many toll roads as it is. Vice Chairman Victor Vandergriff of Arlington said taking on the project means the agency could be "sidelined for a number of years," unable to proceed with other major new ventures.

The decision was closely watched across the region and in Austin, as well as by scores of local and state officials packed into NTTA's Plano headquarters.
The road is expected to generate big profits for NTTA after 2040. But Wageman -- who peppered advisers and staff alike with questions as if he were a lawyer cross-examining witnesses -- asked how reliable the revenue estimates could possibly be that many decades out.

"Are they not just estimates? Guesses?" he asked. "We don't know what the world will look like in 30, 40 years."

Dan Heimowitz of RBC Capital Markets, NTTA's chief financial adviser, agreed. He noted, however, that NTTA's current roads have, over time, exceeded projections, not fallen short.

___________________________________________________________________

Background on NTTA deal here. More background on the NTTA bailout in the article below. Link to article here. Also see Terri Hall's article entitled "Toll roads run amok."

Road Conditions


by Abby Rapoport
February 25, 2010
Texas Tribune


Sensible people in the Metroplex may have given up long ago on Southwest Parkway and State Highway 161, two huge road projects that were first proposed back in the 1960s. Now they're toll roads — one incomplete, one not yet started — and the money to build them may finally be available.

There is, of course, a catch.

On Wednesday, Texas Department of Transportation commissioners approved a "credit wrap" that will help the North Texas Tollway Authority afford the loans it needs to complete SH 161 and to build Southwest Parkway. That was expected, but they also added a provision that forces NTTA to pay interest if it can't meet their revenue commitments. As part of the deal, NTTA gets to use TxDOT's credit rating to lower its own borrowing costs. Since the state isn't allowed to guarantee loans from its highway fund — known as Fund 6 — and isn't allowed to lend money that will be used directly to pay off someone else's loans, the agency is exploiting a loophole.

The local authority will vote on whether to accept TxDOT’s conditions on Friday, and that late addition could prove contentious. NTTA building toll roads while drawing on TxDOT’s credit rating to incur enormous debts is a far cry from Texas’ traditional pay-as-you-go approach to highway construction. With traditional sources of funding falling short, the story of Southwest Parkway and SH 161 illustrates the lengths the state must go to meet its transportation needs.

The ramp-up period

Almost everyone in North Texas seems to agree on the necessity of the two projects. SH 161, first initiated in 1969, runs north-south from SH 183 to I-20 on the Dallas-Tarrant county line, forming a link in Dallas’ growing “loop.” Southwest Parkway (also known as Chisholm Trail Parkway), which first appeared on the drawing board in 1962, connects southwest Fort Worth to downtown. Three of SH 161's four phases are complete; construction has yet to begin on Southwest Parkway.

The funding imbalances for the projects were projected to be in the billions, and given the state’s lack of available funds for transportation, both would clearly require using tolls to offset debt. As SH 161 began to garner support and funding, those concerned about the parkway proposed a new idea: Combine the projects so that excess revenues from one could support the other.

“[Southwest Parkway] was getting pushed aside in favor of what might be a more reliable revenue sources,” says state Sen. Wendy Davis, D-Fort Worth. That has changed: Southwest Parkway is now projected to be more profitable than its sister road, but the revenue-sharing mechanism is still in place and should lower risks for lenders and make construction loans easier to come by.

“We expect that both roads have potential to be very lucrative projects once they get through the ramp-up period,” says NTTA spokeswoman Sherita Coffelt. “We don’t anticipate either road underperforming, but in the case that one did, the other one would be able to support it.”

NTTA has taken out a variety of loans to complete its various projects, a burden that makes it less appealing to lenders and pushes up the costs associated with its debt. Thanks to the recent TxDOT vote, NTTA can now use TxDOT’s credit rating. While the state Constitution prevents Fund 6 from being used as collateral for this type of loan, the state can make construction and maintenance loans to NTTA that happen to mirror the amounts of the authority's bond payments.

“We cannot loan them money for debt service,” explains TxDOT deputy director James Bass. “We’re looking at what eligible expenses we are able to make a loan available to them for.”

He estimates the funding gap now, if the deal is approved by NTTA on Friday, at about $30 or $40 million. That's pennies in the world of road building. The maneuver could save the authority hundreds of millions in interest and essentially makes it possible to build two roads that might not otherwise get built. “So it’s real, it’s big,” says TxDOT Commissioner Bill Meadows, who represents the Fort Worth area on the board.

Will the safety net be needed?

It also creates a new way to pay for roads that may not be as fiscally conservative as people might like. “Given the amount of debt the [Transportation] Department has already incurred and the uncertainty of future revenue to replenish Fund 6, what protections, if any, are there for Fund 6?” wrote House Transportation Chair Joe Pickett, D-El Paso, in a letter to the agency. (Pickett did not return several requests for an interview.)

To answer his question, the agency included a number of protections. Before anyone could touch Fund 6, NTTA would have to raise tolls on both projects, and even if anyone dipped into the fund, it could not take out more than the difference between expected and actual toll earnings. “We’re not making a pledge that we’re going to make sure [that] in any and all circumstances bondholders get paid,“ Bass explains.

It also includes a stabilization fund with enough money to match the next year’s projected revenues. That way, should the highways underperform one year, the fiscal trouble is at least 12 months away. “The intent is that it will always provide one year’s cushion … before there’s a call placed upon Fund 6,” Bass told the board.

Staffers at both agencies assured the commissioners the safety net won't be needed. Coffelt says the revenue estimates are very conservative, and that the roads would have to be 20 percent below these low expectations in order to even consider going into Fund 6. “We think there’s a very slim to none chance of that happening,” she says. Bass echoed those sentiments to the TxDOT commissioners.

Such reassurances ease Davis' concerns, as her constituents would benefit from the roads. “If I felt like Fund 6 were ever going to be drawn upon by virtue of these projects it would concern me, but I think enough analysis has been done,” she says. “I don’t foresee any circumstance that Fund 6 will ever spend a dime towards these projects.”

Coffelt says the credit wrap isn’t just good — it offers innovative methods to overcome funding challenges. “That’s never been done before,” she says. “Taking advantage of TxDOT’s good credit rating and our cash flow abilities is what’s allowing us to get these projects across the goal line. “

The idea of using state credit to finance local projects isn’t entirely new, says Bill Allaway of the Texas Taxpayers and Research Association. When school districts use bonds, the state often backs the bonds with the Permanent School Fund to secure a lower rate. “The difference is the Permanent School Fund’s actually got a pile of cash in it. It’s an endowment,” he says. “Whereas the highway fund is not an endowment but an operating fund.”

The Highway Fund, a.k.a. Fund 6, generally struggles to meet its own obligations — particularly as the Legislature has dipped into it for health and human services programs, education programs and other spending that has little to do with highways. With the fund already struggling, Meadows sympathizes with concerns that the credit wrap maneuver will become a regular tool in transportation.

Not everyone is worried. “I think this will be a model for projects all over our great state,” state Rep. Rob Orr, R-Burleson, told the TxDOT board as he exhorted them to approve the agreement to build in his district. Yet TxDOT Commissioner Ned Holmes of Houston insisted that the board amend the agreement to charge interest should NTTA not meet its revenue-sharing agreements after year 10 of the project. “We’re in the business of setting precedents,” he said. “I think it’s a very dangerous precedent to set, not to have cost to a deferral.”

Meadows argued against the amendment, which ultimately passed, but he acknowledged the significance of the effort. “This whole thing about the precedent-establishing nature of this action — I think that’s a good public policy question,” he says. But nonetheless, he’s “ready to build the roads” and isn’t interested in waiting longer.

No one’s saying the situation is perfect, but impatience and desperation are setting in. “I’m supporting it because at this point, it’s the only solution that we have,” Davis says.

But while legislators hold out for better leadership on transportation, some see this effort as a sign of things to come. “Projects in the future are going to be more and more complicated to fund,” says Michael Moore, director of transportation for the North Central Texas Council of Governments. “Is this a systemic problem? … The answer is yes.”

NTTA’s board gets its say on Friday. Coffelt says the board may be hesitant, given Holmes’ amendment. The various partners who have negotiated the effort — the Regional Transportation Council, the counties, not the mention TxDOT — are holding their collective breath.

© 2010 The Texas Tribune

Tax indexed to fuel efficiency to replace gas tax?

Link to article here.

Is this a better gas tax idea?
Fri, Feb 19, 2010 | By Rodger Jones
Dallas Morning News

State lawmakers have been scrambling for ways to protect the buying power of the fuel tax even as cars get more efficient and require less gas. The concept under discussion in Austin has been to index the tax so it would automatically rise with inflation or the cost of construction.But that's looking to be old school even before Austin gets seriously close to acting.

In Virginia, lawmakers are already looking at a newer idea of indexing the gas to the average fuel efficiency of the cars on the road. That's yet another way to make sure that car owners produce a steady amount of revenue and keep up their per-mile tax support for roadways.

Two transportation guys around here have tossed out this idea too -- my colleague Michael Lindenberger wrote about it recently, and Michael Morris, transportation director for the North Central Texas Council of Governments, has made public presentations.

Both Michaels seem to be claiming authorship of the idea -- our Michael says he thought about it before he heard about it -- and it's hard to know which one to believe. I do know that both have the attention of transportation officials.

-- Our Michael says he was buttonholed the other day by Texas Transportation Commissioner Bill Meadows, who had read the blog item and said the idea is worth pursing.

-- Morris laid out details of the concept this month to a joint meeting of the Legislature's Senate and House transportation committees. Senate Transportation Chairman John Carona asked for details. You could hear the wheels turning.

I have to say Morris has a better pitch. Lindenberger has a treatise. Morris has charts, numbers, a powerpoint and everything. He's also got a great intro line for elected officials who are sensitive to the "tax friendly" label.

Morris told lawmakers: "If I said there is a strategy to raise taxes that does not cost the consumer any more money, you would say I'm crazy."


He had their attention. You can see his presentation by clicking up the Feb. hearing on the Legislature's archives. Dial into 3 hours, 29 minutes and listen. You can also follow his chart while listening (click to pg 10).

I'm not sure I follow how you can cut people's taxes and make more money, but lots is possible in Austin. One of the Michaels will have to convince me how a fuel efficiency index does magic that an inflation index can't.

Even so, this campaign year is a tricky time to talk about any kind of new tax. Kay Bailey Hutchison has jumped on Rick Perry because TxDOT is studying the concept of so-called VMT (vehicle miles traveled) tax. That method also could make sure you pay a steady per-mile cost of using roadways, regardless of fuel efficiency. It could be a lot more complicated, potentially with transponders that could have to produce information at car-registration time or perhaps at the gas pump.

But any of the new ways of raising more highway revenue is politically dangerous in an election year. Just look at the answers legislative candidates gave on this newspaper's voters guide when asked about highway funding.

Whoever goes down to Austin next year will need to confront a long-term funding shortfall estimated at more than $300 billion over 25 years. The status quo isn't cutting it.

What transportation crisis? Voters would cut road funding first

Link to article here.

First, not one of the major newspaper outlets who commissioned the poll will release it: the questions, how many Republicans versus Democrats were polled, or the methodology used.

While we have many road projects that lack funding right now, when given a choice between all the potential cuts to implement to balance the State' budget next year, voters chose cuts to road funding over other priorities. We've contended for along time that a host of taxes already collected aren't getting to transportation, and those must be redirected to roads before ANY increase in gas tax is considered.

But are they listening? No, Hillco lobbying firm is re-doubling its efforts to ram a local option gas tax through without first fixing the diversion problems or reforming TxDOT. Also, they try to make toll roads look like the option of choice to fund roads, but this analyst rightly proclaims that when only 20% say they want toll roads, that means 80% don't want them! Our take is that people view that option as the one they can avoid paying. However, under Rick Perry's policies, no road in urban areas (and some suburban and rural areas) will be left untouched by tolls. Even Senator John Carona admitted in a hearing February 1 that it's disingenuous to say people have a choice whether to pay toll taxes or not when tolls will be everywhere.

Poll: Texas voters would cut highway funding first  

02/15/2010

Associated Press

Forty-one percent of Texas voters chose highway funding in a poll asking what they would cut to deal with a projected state budget shortfall as high as $16 billion next year.

About one in five surveyed in the poll said they would raise taxes or fees, and fewer said they would cut spending on education or health care for the poor.

The Feb. 2-10 telephone survey of 1,508 registered voters has a margin of error of plus or minus 2.5 percentage points.

Blum & Weprin Associates Inc. conducted the poll for the Austin-American Statesman, The Dallas Morning News, the Fort Worth Star-Telegram, the Houston Chronicle and the San Antonio Express-News.


 

Asked where to get money for roads, voters were even more ambivalent. Given five widely debated options, toll roads ranked the highest. Twenty-one percent of respondents chose that option.

"It tells me that 20 percent like toll roads, but 80 percent don't like them," said Dale Craymer, president of the Texas Taxpayer and Research Association, a nonpartisan research group.

The results come amid the high-profile Republican gubernatorial primary between Gov. Rick Perry and Sen. Kay Bailey Hutchison. Debra Medina is also in the race.

Perry has made transportation a high priority in his campaign leading to the March 2 vote, while Hutchison has been critical of toll roads, including a Perry-backed plan called the Trans-Texas Corridor.

Craymer said the poll shows that in times of budgetary duress, concrete-and-steel projects that are costly and take years to complete are the first to go in the minds of voters.

"It's not so much an indicator that people are willing to tolerate the traffic as much as it is recognition about the cost of fixing it," Craymer said. "You can throw billions at the problem and not make a dent."

While 38 percent of Texas voters said illegal immigrants should be deported, a combined majority picked two options that would allow them to stay. A path to citizenship was favored by 29 percent of voters, and 23 percent said they support giving immigrants work visas.

"There is a plurality for deporting them and the path to citizenship is not wildly popular in the state except among a few groups — minorities and the young," said the pollster, Mickey Blum.

The economy and jobs was a prevalent worry for many of those interviewed, especially coupled with the looming state deficit.

Most said they believed offering incentives for businesses to move to Texas was the best way to create jobs. Only 16 percent said the state should spend money on public projects as a way to put Texans back to work.

Officials raise concerns about 161/Southwest Pkwy deal

Link to article here.

Area officials raise concerns about Southwest Parkway/Texas 161 deal

Posted Friday, Feb. 12, 2010

By GORDON DICKSON

This email address is being protected from spambots. You need JavaScript enabled to view it.

ARLINGTON -- Negotiations to turn over construction of Southwest Parkway and Texas 161 to the North Texas Tollway Authority are on course to meet a Feb. 28 deadline, but some Dallas-Fort Worth officials say they are uncomfortable with what they say is a financial shell game that's taking place to seal the deal.

A $300 million funding gap remains, and to help fix that problem, $91 million in Regional Transportation Council funds meant for other Metroplex road projects would be diverted to the Southwest Parkway/Texas 161 deal.

But some area elected leaders, particularly those from the Dallas area, say they're worried that the deal is potentially a roadblock to the region's ability to perform other work for years to come.

Dallas County Commissioner Maurine Dickey said those concerns are being glossed over in a furious attempt to get the deal completed by the deadline.

"I feel we're being held hostage," Dickey told members of the Regional Transportation Council, Dallas-Fort Worth's official planning body, during a monthly meeting Thursday in Arlington. "I've never been on a board where I've been so absolutely pressed to make a decision on an issue without being able to discuss it."

Despite those concerns, the 43-member RTC agreed on a voice vote Thursday to allow funds to be used as a bargaining chip.

Progress

Southwest Parkway, a proposed 28-mile toll road from downtown Fort Worth to Cleburne, and Texas 161, which is under construction in Grand Prairie and Irving, are being developed as toll roads because for decades the state has been short of the cash needed to build them as freeways.

In Cleburne, the Southwest Parkway project is known as the Chisholm Trail.

Texas 161 runs parallel to Texas 360 in Arlington and is considered a main route to Cowboys Stadium.

The Texas Transportation Commission agreed last month to use the state's gas taxes as collateral for debt issued to build the roads, though a rival agency, the North Texas Tollway Authority, would control the project. The two roads will share toll revenue -- as if they were a single project -- until both are fully paid for.

That agreement all but assured that Southwest Parkway, which has been on the planning books for four decades, would be under construction by year's end and open by 2013.

All that remains is negotiating the final details of the deal.

Tricky proposition

But that's proving to be a tricky proposition because, even with the state co-signing debt for the road, there is still a $300 million gap between the cost of building the roads and the amount of revenue the roads can raise.

One of the key negotiators is Michael Morris, transportation director for the North Central Texas Council of Governments.

Morris' latest proposal involves taking $91 million in funds that the RTC expects to receive beginning in 2014 and using tollway authority debt to convert the funds to cash so it can be used immediately for construction.

That would mean $91 million less for the RTC to spend on other Dallas-area projects in 2014. Morris said, however, that funds from state-issued Proposition 14 bonds could make up the difference. The Legislature has authorized the sale of Proposition 14 bonds to build roads today and repay the debt with future gas tax revenues.

The deal would also include language requiring the tollway authority to raise tolls on Southwest Parkway if necessary to satisfy debts, which means motorists could be asked to pay more for using the road if the project hits any fiscal snags down the road.

Several RTC members said it's important to take the painful step of including their $91 million to ensure that the tollway authority -- and not the state Transportation Department -- takes the project.

If the tollway authority determined that the project wasn't feasible, the alternatives would be to have the state build the project as a state-run toll road or to find a private partner to enter into a comprehensive development agreement -- or CDA. Otherwise, construction could be postponed again.

But state lawmakers have repeatedly said they want the Transportation Department out of the toll business.

Tarrant County Judge Glen Whitley worries that if the tollway authority deal falls apart, Southwest Parkway would not get built.

"You're running the risk of being at the mercy of the Legislature," he said, "and whatever their feelings are about CDAs and toll roads."

Nichols: Redirect state vehicle sales tax back to funding roads

Link to article here.

Now on this idea, we can agree with Senator Robert Nichols. End ALL diversions NOW!

This TxDOT idea might make too much sense to happen
Ben Wear, Austin American Statesman
Sunday, Feb. 14, 2010

Scan the Texas State Directory and you won't see very many engineers among the 181 members of the Legislature. There are five, to be exact.


State Sen. Robert Nichols, 65, a Republican now in his fourth year representing Jacksonville , is on that short list. And that helps explain why his legislative style sometimes comes off as quirky in the insular world of the Capitol. Nichols seems to have this crazy idea that if there's a problem and you find a rational solution to it, well, then maybe that ought to become the law.

Take the looming fiscal train wreck for transportation.

The Texas Department of Transportation last year set a record when it awarded $9.4 billion in contracts, and it has about $4.5 million available annually this year and next, still a healthy amount historically. But then comes trouble, with the department pretty much borrowed out (facing close to a billion dollars in annual debt payments) and the federal stimulus largesse gone.

The rhetorical response to that from most legislators (and gubernatorial candidates, both incumbent and challengers) has been along these lines: Don't raise the gas tax, don't build too many toll roads and don't let the private sector get involved much (Gov. Rick Perry's views on those last two are a conspicuous exception). Instead, most Texas politicians say, let's cut waste at TxDOT (always a handy and safely vague suggestion) and end the "diversion" of gas taxes and vehicle registration fees from transportation to the state's general spending.

Problem is, no one can really put a dollar figure on that presumed TxDOT waste. And even throwing into the transportation kitty the remaining $1.2 billion of diversions every two years would make only a tiny dent in what's needed to stem urban traffic congestion, maintain existing roads and fulfill ambitious high-speed and urban rail plans.

Enter Nichols.

At a recent joint hearing of the House and Senate transportation committees, Nichols had a suggestion. The state's 6.25 percent sales tax on vehicle sales generates almost $3 billion a year , money that now goes to general state spending. You could call it a diversion as well. Why don't we put that money into transportation, Nichols asked.

"I'd be willing to run with it, if you think it's a good idea," Nichols said.

Metaphorically speaking, you could hear the crickets chirping at that point.

The problem is that the rest of state government has its own money problems, too. That $6 billion every two years would blow a big hole in the overall budget, one that might have to be filled with higher taxes or fees. Yet, can anyone really argue that selling a F-150 pickup has anything to do with education, or prisons, or social services?

But what does Nichols know? He's only an engineer.

Supporter of pro-toll Sheila McNeil tries to buy votes

Link to article here. McNeil "Those people can afford the tolls" McNeil, who's trying to oust Good Guy Tommy Adkisson from office (more how McNeil stole the MPO chairmanship from Adkisson here), has a supporter offering to "buy" votes to reward people for voting for McNeil. It's highly illegal, but do you think anyone will pay the price?

McNeil voters were to be rewarded
By Gilbert Garcia
Express-News

A Sheila McNeil supporter who runs a youth football program sent a text message last week urging parents to vote for the Commissioners Court hopeful in exchange for a $125 credit on their children's football enrollment fees, according to multiple sources.

Fred Davis, 35, founder of Youth Advancement Initiative, a nonprofit organization with five youth football leagues and a cheerleading program, sent the offer Friday, according to three former East Side City Council members: Mario Salas, John Sanders and McNeil, the hopeful whom Davis sought to help.

In the text message, Davis told parents with children enrolled in his program that if they went to the Claude Black Center over the weekend and cast their vote for McNeil, one of two hopefuls challenging incumbent Commissioner Tommy Adkisson in the Democratic primary, he would reward them with a $125 enrollment credit. It's unclear how he would've determined whether the parents voted for McNeil.

Early Saturday, Davis sent a follow-up text message rescinding his offer, according to sources. But by then, the initial text had generated a buzz on the East Side.

Davis declined to comment.

Read the rest of the story here.

TURF releases Voter Guide on transportation issues today


IMMEDIATE RELEASE

TURF releases primary election Voter Guide


(Tuesday, February 16, 2010) Texans Uniting for Reform and Freedom released its primary election Voter Guide today. The Guide reflects the candidatesʼ positions on transportation issues like the best way to fund roads as well as positions on toll roads, public private partnerships (where private corporations gain control of public infrastructure, called CDAs in Texas), and the Trans Texas Corridor. Candidates are still returning surveys, so TURF expects to update its guide prior to election day, March 2. Itʼs also posted on its web site under “Important Info.”

Is the Trans Texas Corridor still alive?

Confusion persists about whether or not the Trans Texas Corridor is truly “dead” as Rick Perryʼs transportation department announced last year. On February 1, 2010, in a Joint Senate and House Transportation Committee hearing, Senator John Carona directly asked TxDOT Executive Director Amadeo Saenz if TxDOT decided tomorrow that it wants to build the Trans Texas Corridor after all, does it still have the statutory authority to do so? Saenz answered: "Yes." Watch it here.

 


At a Transportation Commission work session on August 26, 2009 (scroll down to the end of the transcript), Commissioner Ned Holmes essentially asked that the master development plan CDA for TTC-69 be expedited. For TTC-35, they're planning to advance a "no build" alternative at this time. Such a move is UNPRECEDENTED. If a project is killed, all they have to do is send a letter to the Federal Highway Administration to notify them they're withdrawing the project. End of story.

Instead, they're seeking a Record of Decision on the "no action" alternative. Once they get a Record of Decision from the Federal Highway Administration, the law allows them to change their preferred "alternative" at any time. So if Perry is re-elected, he could easily change back to a "build" alternative and they're in business. In addition, Ports to Plains and La Entrada de Pacifico are two TTC corridors moving forward unabated.

Tolling existing freeways legal or not?

Thereʼs also questions about whether or not it is legal to convert free highway lanes into toll lanes in the state of Texas, despite Governor Rick Perryʼs claim that it is illegal during the January 29 Republican gubernatorial debate. In an article in the Dallas Morning News February 1, TxDOT spokesman Chris Lippincott stated:

"ʼThe department has made it clear that we have no interest in tolling existing lanes,ʼ Texas Department of Transportation spokesman Chris Lippincott said this afternoon, when told of the Obama budget provision. ʻWhether we are prohibited from doing so in federal law is irrelevant,ʼ he said.

The article goes on to say...

“And it wouldn't be easy, even if the state's Transportation Commission didn't have a policy in place that effectively abides by the moratorium. To turn a freeway (or even a single lane of existing roadway) into a toll road, TEXDOT would need a waiver from the Federal Highway Administration. These are granted only rarely. Then, state law requires approval from the county commissioners and then from a county's voters.”

Terri Hall, Founder of Texas TURF counters, “Not only is TxDOT planning to toll existing lanes, they're lying about it. The feds are not only aware of the plans for US 281 in San Antonio in particular, it had already granted clearance until we sued to stop them. So rare or not, the feds granted it.”

Perry's greatest fib of the January 29 debate was his insistence that the Texas legislature passed a bill in 2005 prohibiting the conversion of free lanes to toll lanes. However, the bill, HB 2702, tells precisely how TxDOT can LEGALLY convert existing highway lanes into toll lanes through 6 exceptions, one that allows a conversion of free lanes by simply downgrading the free lanes to access roads adjacent to the tollway.

Though the language doesnʼt specifically use the term “access roads” to refer to the relocating of free lanes adjacent to the tollway, TxDOT has consistently interpreted the law to mean it has the authority to downgrade freeway lanes to access roads without triggering a public vote based on HB 2702. See the two-part discussion of this law before the Sunset Commission in 2008 here and here. Part-two shows TxDOT Executive Director Amadeo Saenz stating TxDOTʼs interpretation of HB 2702 allows highway lanes to be downgraded to access roads.

The bill also contains a gaping grandfather clause that exempts virtually all the toll projects currently on the table (because they were designated as toll roads in MPO plans prior to September of 2005), so no public vote would be triggered for the dozens of grandfathered toll projects.

“Perry's elitist ʻyou can eat cakeʼ attitude is this: if you can't afford the toll lanes, you can sit in congestion on the stop-light ridden access roads. He thinks replacing free highway lanes with access roads is acceptable and his highway department is doing it all over Texas,” says Hall.

The citizensʼ fight to stop the conversion of existing FREEway lanes into toll lanes on US 281 and Loop 1604 in San Antonio, 290 West in Austin, and Hwy 59 in East Texas (part of Trans Texas Corridor TTC-69 thatʼs still alive and well), has languished precisely because of the loopholes in HB 2702.

TURF worked 24/7 in the last session to fix these loopholes. Rep. David Leibowitz of San Antonio introduced a bill to do so and got it attached to the TxDOT sunset bill (but it was stripped in the Senate).

“Texans deserve protection from the DOUBLE TAXATION of converting freeways into tollways. Perry was dead wrong to imply Texans are protected in state law. Theyʼre not, especially for the exempted Trans Texas Corridors, like TTC-69, that will ʻupgradeʼ existing freeways (like Hwy 59) into tollways at the hands of foreign companies,” Hall emphasized.

See detailed proof of the freeway to tollway conversion plans for US 281 on this web site: http://www.281overpassesnow.com.

Portion of HB 2702 that addresses converting existing highways into toll roads –

SECTION 2.36. Chapter 228, Transportation Code, is amended by adding Subchapter E to read as follows: SUBCHAPTER E. LIMITATION ON TOLL FACILITY DETERMINATION; CONVERSION OF NONTOLLED STATE HIGHWAY Sec. 228.201. LIMITATION ON TOLL FACILITY DESIGNATION. Except as provided by Section 228.2015, the department may not operate a nontolled state highway or a segment of a nontolled state highway as a toll project, and may not transfer a highway or segment to another entity for operation as a toll project, unless: (1) the commission by order designated the highway or segment as a toll project before the contract to construct the highway or segment was awarded; (2) the highway or segment was open to traffic as a turnpike project on or before September 1, 2005; (3) the project was designated as a toll project in a plan or program of a metropolitan planning organization on or before September 1, 2005; (4) the highway or segment is reconstructed so that the number of nontolled lanes on the highway or segment is greater than or equal to the number in existence before the reconstruction; (5) a facility is constructed adjacent to the highway or segment so that the number of nontolled lanes on the converted highway or segment and the adjacent facility together is greater than or equal to the number in existence on the converted highway or segment before the conversion; or (6) the commission converts the highway or segment to a toll facility by: (A) making the determination required by Section 228.202; (B) conducting the hearing required by Section 228.203; and (C) obtaining county and voter approval as required by Sections 228.207 and 228.208.

Sec. 228.2015. LIMITATION TRANSITION. (a) Notwithstanding Section 228.201, the department may operate a nontolled state highway or a segment of a nontolled state highway as a toll project if: (1) a construction contract was awarded for the highway or segment before September 1, 2005; (2) the highway or segment had not at any time before September 1, 2005, been open to traffic; and (3) the commission designated the highway or segment as a toll project before the earlier of: (A) the date the highway or segment is opened to traffic; or (B) September 1, 2005. (b) This section expires September 1, 2006.

SECTION 2.37. Section 362.0041, Transportation Code, is transferred to Subchapter E, Chapter 228, Transportation Code, redesignated as Sections 228.202-228.208, and amended to read as follows: Sec. 228.202 [362.0041 ]. COMMISSION DETERMINATION [CONVERSION OF PROJECTS ]. The [(a) Except as provided in Subsections (d) and (g), the ] commission may by order convert a nontolled state highway or a segment of a nontolled state highway [the free state highway system ] to a toll project [facility ] if it determines that the conversion will improve overall mobility in the region or is the most feasible and economic means to accomplish necessary expansion, improvements, or extensions to that segment of the state highway system.

Sec. 228.203. PUBLIC HEARING. [(b) ] Prior to converting a state highway or a segment of a[the ] state highway [ system ] under this subchapter [section ], the commission shall conduct a public hearing for the purpose of receiving comments from interested

persons concerning the proposed conversion [transfer ]. Notice of the hearing shall be published in the Texas Register, one or more newspapers of general circulation, and a newspaper, if any, published in the county or counties in which the involved highway is located. Sec. 228.204. RULES. [(c) ] The commission shall adopt rules implementing this subchapter [section ], including criteria and guidelines for the approval of a conversion of a highway. Sec. 228.205. QUEEN ISABELLA CAUSEWAY. [(d) ] The commission may not convert the Queen Isabella Causeway in Cameron County to a toll project [facility ].

Sec. 228.206. TOLL REVENUE. [(e) Subchapter G, Chapter 361, applies to a highway converted to a toll facility under this section. [(f) ] Toll revenue collected under this section: (1) shall be deposited in the state highway fund;

(2) may be used by the department to finance the improvement, extension, expansion, or operation of the converted segment of highway and may not be collected except for those purposes; and (3) is exempt from the application of Section 403.095, Government Code.

Sec. 228.207. COUNTY AND VOTER APPROVAL. [(g) ] The commission may only convert a state highway or a segment of a[the ] state highway [ system ] under this subchapter [section ] if the conversion is approved by : (1) the commissioners court of each county within which the highway or segment is located ; and (2) the qualified voters who vote in an election under Section 228.208 and who reside in the limits of: (A) a county if any part of the highway or segment to be converted is located in an unincorporated area of the county; or (B) a municipality in which the highway or segment to be converted is wholly located .

Sec. 228.208. ELECTION TO APPROVE CONVERSION. (a) If notified by the department of the proposed conversion of a highway or segment under this subchapter, and after approval of the conversion by the appropriate commissioners courts as required by Section 228.207(1), the commissioners court of each county described by Section 228.207(2)(A) or the governing body of a municipality described by Section 228.207(2)(B), as applicable, shall call an election for the approval or disapproval of the conversion. (b) If a county or municipality orders an election, the county or municipality shall publish notice of the election in a newspaper of general circulation published in the county or municipality at least once each week for three consecutive weeks, with the first publication occurring at least 21 days before the date of the election. (c) An order or resolution ordering an election and the election notice required by Subsection (b) must show, in addition to the requirements of the Election Code, the location of each polling place and the hours that the polls will be open. (d) The proposition submitted in the election must distinctly state the highway or segment proposed to be converted and the limits of that highway or segment. (e) At an election ordered under this section, the ballots shall be printed to permit voting for or against the proposition: “The conversion of (highway) from (beginning location) to (ending location) to a toll project.” (f) A proposed conversion is approved only if it is approved by a majority of the votes cast. (g) A notice of the election and a certified copy of the order canvassing the election results shall be sent to the commission.

-30-

Shami in debate: "Forget about toll roads"


Link to article here.

White, Shami spar on death penalty, gas tax in Texas Democratic governor debate

11:37 PM CST on Monday, February 8, 2010

By ROBERT T. GARRETT / The Dallas Morning News
This email address is being protected from spambots. You need JavaScript enabled to view it. FORT WORTH – The two main Democratic candidates for governor clashed on the death penalty, increasing the gasoline tax and halting Barnett Shale energy production Monday night in their only statewide televised debate.

Former Houston Mayor Bill White, who covets a November showdown with GOP incumbent Rick Perry, staked out more conservative positions on taxes, crime and the environment than his opponent, Houston businessman Farouk Shami.

Shami, a political newcomer, concentrated on surviving the March 2 primary. Sounding populist themes, he wooed key Democratic constituencies and cast himself as the change agent in the race.

"They want somebody with a clean record," Shami said of disgruntled voters.

The hourlong debate was calm, with few direct exchanges and plenty of agreement between the two candidates. But it laid bare a number of disagreements between the two that hadn't been seen before in a campaign that has seen most of the energy on the GOP side.

White opposed placing a moratorium on executions and on natural-gas drilling in urban North Texas' shale belt, while Shami said justice and public health require both.

 

Shami said he supports capital punishment, "if we are 110 percent certain" of guilt. But he said recent exonerations, many based on DNA testing, require a pause so that cases can be reviewed.

"We have killed lots of innocent people in the state of Texas," Shami said – a claim that hasn't been definitively proven.

White, though, said a moratorium on executions would be too broad. "That would disrespect the juries and the victims," he said.

White acknowledged the system has problems, but said it generally works pretty well. He said he rejects "one-size-fits-all" solutions in this and other parts of government.

White also managed to get in a dig at Perry on the question, criticizing the governor for reshuffling a state forensic science panel that was scheduled to hear experts on flawed arson science used to convict and execute Cameron Todd Willingham for the fire that killed his three daughters.

White is considered the front-runner in the race, and many Democrats hope he can avoid a runoff and prepare for a battle against Perry or perhaps U.S. Sen. Kay Bailey Hutchison while the two go to a protracted runoff. But Shami is spending millions of his own dollars on the race, and with five little-known candidates on the Democratic ballot and low turnout expected, it's unclear whether White can top 50 percent to avoid an extra round of his own.

Barnett Shale

On the Barnett Shale, which has sparked concern in recent weeks over emissions of benzene, a cancer-causing gas, Shami called for a halt to production.

"Human life is more precious than digging for gas or oil," he said afterward.

Shami, criticizing air quality in Houston during White's tenure as mayor, brought up the Barnett Shale, using the one question he was allowed to ask White.

It effectively highlighted how White won't join him in endorsing a moratorium on the gas drilling, though it's unclear how widespread voter concern over the issue is statewide.

White stood his ground, saying it would be "unfair to shut down operations of all operators based on what some operators do."

On transportation, White said he would be reluctant to raise the state's 20-cent-a-gallon gasoline tax, while Shami endorsed an 8-cent increase.

"Yes, I believe in raising the gas a little bit," Shami said, promising one big benefit to commuters: "Forget about toll roads."

White said he first wants to quit siphoning off gasoline tax money for nonhighway programs.

He criticized Perry's appointees to the Texas Transportation Commission for wanting to issue more bonds, eating into road maintenance money.

Economic issues

Shami, who has courted Hispanic voters, criticized existing border policies as inhumane.

"Without Mexicans, you know, it'd be like a day without sunshine in our state," Shami said.

He promised to create 100,000 new jobs within two years as governor, or he'd personally donate $10 million of his money to the state.

"As a governor, everybody will have a job," Shami said. Training fire on White, he added: "We lost 43,000 jobs in Houston since he took over."

White, though, suggested that Shami had overpromised.

"I do not think the governor of Texas has control over the global economy," White said. "I do think that the governor of Texas can do what we can to prepare our workforce to take advantage of the future."

Several people in the 40-person studio audience joined a panel of journalists in asking the candidates questions, including Elgie Clayton of Emory, who asked about Texas' deregulation of electricity in many sections of the state.

That allowed Shami to discuss his vision of eliminating electric bills, by having homeowners install solar panels and sell their unused power to the electricity grid.

White stressed weatherization programs he championed in Houston, and decades of experience in energy that include a high federal post and running businesses.

The debate was sponsored by the same coalition of groups that organized the first of the GOP debates: KERA, in partnership with KTVT-TV (Channel 11) and KTXA-TV (Channel 21), the Fort Worth Star-Telegram, KUVN-TV (Channel 23), the Texas Association of Broadcasters, Texas State Networks and the Freedom of Information Foundation of Texas.

__________________________________________________________

Link to article here.

White, Shami try to win votes in only scheduled debate
 By Corrie MacLaggan and Jason Embry
AMERICAN-STATESMAN STAFF

Published: 11:17 p.m. Monday, Feb. 8, 2010

Democratic gubernatorial candidate Bill White largely bypassed opponent Farouk Shami in a televised debate Monday night, instead attacking Gov. Rick Perry and seeking to appeal beyond his party to independents and Republicans.

Shami, meanwhile, criticized White and distanced himself from "career politicians" while making some big promises to Texans: If he's elected, they won't have an electric bill in 10 years, and if he doesn't succeed in creating 100,000 jobs in two years, he'll give the state $10 million.

"I will be the one to make the American dream a reality to all our citizens," said Shami, 67, who was born in what was then Palestine and arrived in the United States in 1965. Shami pointed to his participation in the debate as "proof that the American dream is still alive" and likened his candidacy to that of President Barack Obama — whom he referred to as "President Barack Hussein Obama."

"The state is ready for a brown governor called Farouk Shami," he said.

The event was the first — and only scheduled — Democratic gubernatorial debate, giving many Texas viewers their first good look at White, a former Houston mayor, and Shami, founder of a Houston-based hair care products company. Though White was a popular mayor, he is not widely known outside of that city, and Shami has never before run for political office. Shami, who is spending millions of his own money on his campaign, has been advertising on TV for months; White recently started airing his TV ads.

White, 55, is the clear choice of Texas' Democratic establishment, and he seemed to succeed in avoiding major blunders to derail his front-runner status. The former U.S. deputy secretary of energy and former chairman of the Texas Democratic Party said he wants to ensure that legislative sessions "are not hijacked by wedge issues" and said Perry "has brought the partisan politics of Washington to the statehouse."

White sought to paint himself as a pragmatist who would put consensus over ideology, and in that process he made an appeal to the political center. He said there should never be injustice in the criminal justice system, but he said he supports the death penalty. He did not name any abortion restrictions that he would overturn. He did not embrace a higher gas tax, and he broadly said education and job training would be his top priorities.

At the same time, he did what he needed to do to keep Democratic voters happy, saying he opposes school vouchers and legislation requiring voters to present more identification at the polls.

He stressed that he had sought consensus as mayor of Houston, which appeared to be his way of telling Republican voters that GOP lawmakers would have plenty of seats at the table in his administration.

"I don't think leadership means getting diverted into the so-called hot button issues that divide Texans," White said.

Shami attacked White's work as mayor and characterized himself as better prepared to create jobs.

"You talk about it — I do something about it," Shami said to White. Shami also said, "People want a change — a major change."

Shami cited job creation as the solution to a number of the state's problems, but he did little to spell out how government could create those jobs. Shami also avoided giving direct answers to some questions, including on whether he would mandate the E-Verify system to check whether employees are eligible to work in the United States.

White said that the system is useful but that he wouldn't create mandates on private employers.

Shami was specific on other issues, saying he supports a moratorium on the death penalty, opposes school vouchers and thinks abortion should be legal for the first two to three months of a woman's pregnancy.

White gently pointed out some "good faith" differences between himself and Shami, saying that when it comes to finding money to pay for new roads, he wouldn't start with raising the gas tax, though Shami has said he would raise the tax.

Shami got a question about gay marriage and said he "would not take freedom from any individual." But though most questions were asked of both candidates, White got a pass on that one.

Both White and Shami called education a priority, with Shami saying he wants to increase teacher salaries and White saying that Texas children deserve a good education "regardless of whether there's a refinery next door or a mansion" or a modest house.

The debate was held at the CBS 11/TXA 21 studios with a studio audience of about 40 people, some of whom asked questions of the candidates. Other candidates in the Democratic gubernatorial primary — Alma Aguado, Felix Alvarado, William Dear, Clement Glenn and Star Locke — were not invited because they did not meet debate organizers' criteria.

The winner of the primary will face the winner of the Republican primary — involving Gov. Rick Perry, businesswoman Debra Medina and U.S. Sen. Kay Bailey Hutchison — in November.

At the end of the event, White asked the audience to compare Monday's debate — which he characterized as civil — with the two previous GOP debates, which he characterized as people shouting over each other.

CEO of road contractor, PBS&J, steps down in pay to play scandal

Link to article here.

PBS&J gets lots of contracts in Texas despite the perpetual scandals revealed about the company. Between embezzlement, overbilling, the company paying employees back for political contributions, and now it's pay to play bribes, PBS&J is clearly a criminal outfit beyond redemption. The San Antonio MPO awarded them a contract even after we alerted them to the first round of corruption with this company. Now we find out the corruption has been at the top all along. Where's the outrage in Texas? Why don't they ban all contracts going to this criminal company? Why can't these guys make an honest living? No wonder the public remains skeptical when it comes transportation contracting...

Tue, Feb. 02, 2010
CEO of PBS&J to step down amid scandal
BY DAN CHRISTENSEN
BrowardBulldog.org
Miami Herald

The boss of one of Florida's biggest government contractors has announced he's stepping down. The news comes weeks after embarrassing disclosures about his personal involvement in a corporate pay to play scandal, and disclosures about possible corrupt payoffs overseas by company officials.``After a decade of my executive leadership through the best of times and through difficult times it is now time to plan an orderly transition to a new CEO,'' PBS&J chief executive John Zumwalt, 58, said in a prepared statement last week. Zumwalt will continue as chairman of PBS&J's board of directors.

A company source told Broward Bulldog that Zumwalt was forced out by a group of unhappy employee-shareholders. PBS&J spokeswoman Kathe Riley Jackson deniedit.

PBS&J is a major competitor for government contracts in Broward, where over the years it has made tens of thousands of dollars in campaign contributions to Republicans and Democrats.

At the same time, PBS&J has received public sector business worth tens of millions of dollars. The company currently leads the design engineering team for the county's $810 million airport runway expansion project. At the Broward School Board, PBS&J has helped manage school construction projects.

Until last summer, Zumwalt was also president of PBS&J International -- the subsidiary that's the focus of an internal investigation into possible violations of the Foreign Corrupt Practices Act.

The act prohibits corrupt payments to foreign officials to obtain or keep business. Zumwalt was replaced as president by Walid Hatoum.

``Initial results of the investigation suggest that FCPA violations may have occurred. However, the investigation does not suggest that any violation extends beyond the international operations or that members of our executive management were involved in the illegal conduct,'' the company said in its annual report filed with the SEC on Jan. 13.

PBS&J, which shifted its headquarters from South Florida to Tampa in 2007, has provided no details about what spurred the internal probe, nor has it named the country or countries where payoffs are suspected.

Dan Christensen, a former Miami Herald reporter and columnist for The Daily Business Review, is founding editor of BrowardBulldog.org, a nonprofit online-only newspaper.

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