Skip to comments.Corrupt Bargain in Houston Light Rail Contracts (FR Original Find)
Posted on 04/23/2004 10:47:01 AM PDT by GOPcapitalist
FROM TODAY'S HOUSTON CHRONICLE
April 22, 2004, 11:55PM
Metro agrees to contract for next 4 light rail lines
By LUCAS WALL
Metro has taken a significant step toward the construction of Houston's next four light rail lines.
Directors on Thursday authorized signing a five-year contract estimated at $60 million with STV Inc. of New York, the same consortium that shepherded development of the Main Street line, which opened Jan. 1.
Six firms competed for the project, which includes options for two two-year extensions. Dennis Hough, the Metropolitan Transit Authority's director of contracts, said STV and its 16 subcontractors stood out as the most qualified companies to continue oversight of light rail construction in Houston.
NOW TAKE A LOOK AT WHAT REALLY HAPPENED:
TEXAS ETHICS COMMISSION
Please Click On the Report Number to View Reports
STV Incorporated, to Citizens For Public Transportation, $3,000.00 03-JAN-03 http://188.8.131.52/public/216570.pdf
Stv Incorporated, to Citizens For Public Transportation, $25,000.00 26-JUL-03 http://184.108.40.206/public/230485.pdf
NOTE: Citizens for Public Transportation was the pro-Metro Political Action Committee that ran the referendum campaign for the light rail expansion that STV just got.
Stv Incorporated, to Citizens For Public Transportation, $25,000.00 26-JUL-03 http://220.127.116.11/public/230485.pdf
Um ... I rarely drive on highways, but you folks keep on taking all the gas tax money I pay while driving on local streets. I could undoubtedly make do with the old US Highway network if I had too for the travelling I do (I already use it a fair amount).
The choo-choo fanatics instead take money from people who will never use them in order to run nearly empty trains.
The trains we ride around Philadelphia and New York and DC are typcially full. Must be a Texas thing to build them and not use them.
Those costs *should* (but probably aren't) be paid for by the insurance of the idiot motorists who keep hitting it. Its not like the train is jumping off the tracks and suddenly hitting unsuspecting motorists.
Just how stupid are you guys down there anyway? Don't you know not to drive in front of a moving train and expect it to stop?
This seems pretty elementary to me, like not turning right on red without first looking to check if cars are coming on the road you are turning onto.
Yeah, well, the City Planning Director in Houston is from ......<drum roll> New York City. First thing he did when he got here was change all the downtown traffic lights to New York City-style synchronization, so they all turn red at once, and then back to green all at once. Screwed things up royally. And remember the rail line operator's motto: "The public be damned!"
And furthermore, while I'm still on the subject, and since you've vouchsafed to lecture us from your expert database of personal experience riding New York's train system, could you please review for us the significance of those ubiquitous lapel-buttons of yesteryear that read, "I hate the L.I.R.R.!"?
Waiting on expert reply.
Sonora?! Not Mexico? You mean, the damn rail cars are made in Mexico, too?
Last time I drove down a non-toll Interstate was at Christmas time. I don't expect to be doing so again until September, when I head out on vacation. I think I'd rather pay tolls per use instead of $500 per year in gas taxes.
Because if there really was a demand to have these things, private industry would be chomping at the bit to build and run them. But instead they're pushed through by activists who smell nirvana and contractors who smell money.
First off, before American began subdizing highways, rail lines and streetcars and interurban lines were built all over the place only by private industry and linked up all major cities and most minor towns without government assistance. With the advent of the subsidized motor highway, these companies were bankrupted and their capital plant abandoned for scrap. The demand was there before the government changed the rules of the game in favor of cheap auto transportation.
Second, I have yet to hear of a single road financed by private industry on its own. Why aren't they chomping at the bit to build roads? Of course the reason is no road has ever turned a profit. Heck, the busiest highways can't even support themselves when it comes to earning enough through the gas tax from use on them alone to build and maintain them. Most people are not going to be willing to pay the $0.20 per mile in tolls it takes to actually run a highway.
Third, the gas tax only pays for a portion of road expenses in this country. There are many places where sales taxes and other general revenue sources are routed directly to the State DOT. To say nothing of the universal practice of paying for local roads through property tax revenue. I'd be more willing to listen to complaining about "subsidized mass transit" when I also start hearing complaining about "subsidized highways".
It's apparently a los angeles thing as well. People advocate publicly funded rail mass transit citing numerous benefits that never materialize. If people really want these things built and they feel it will be used, then they should pool money and do it through the private sector. The vast majority of people who will pay for this will never, ever use it. That's what's wrong with it.
I'd be more than happy to have my fares doubled to pay full board on using commuter rail.
I strenuously object as well, though, to having to subdize auto commuters through my gas and property tax bills. Are you willing to see the gas tax doubled to remove the subsidization of highway travel?
As to traffic light synchronization, it works great for moving NYC traffic north and south on Manhattan. You can drive from Soho to Harlem and never stop. It sucks for going crosstown, but then, Manhattan is long, not narrow, and far fewer people are going across. Why somebody would think this is a brilliant idea for a round city like Houston is beyond me.
And remember the rail line operator's motto: "The public be damned!"
That was Commodore Vanderbilt, and he was referring to his cross-Hudson ferry operations. Railroad interests cam later.
I've heard that Parsons Transportation Group won a $100 million contract on East Side Access after they gave something like $141,000 to the re-elect Pataki campaign in 1998. Their competitor gave $2000. Everyone is free to draw their own conclusions.
Well, here in SoCal we have FastTrack lanes on several freeways that were, I believe, funded by private companies. They turn a profit.
And the Golden Gate Bridge is a small example of a profitable road.
I sure am glad that us small town bumpkins can count on all you smart urban folks to help us out every now and then.
(Don't fall off your pedestal, you just might crack your noggin.)
Not only a political campaign but to a bond referendum for which they were the contracted beneficiaries. In effect, they bought themselves a contract extension.
Then buy a Prius, Civic, or, even better, the Electaurus.
The trains we ride around Philadelphia and New York and DC are typcially full.
...and smelly, and dirty, and inefficiently operated (case in point: I took the train into town this morning. The time tables say it should've been a 17 minute trip. I got there in 32 minutes, or a TTI of almost 2.0 and it wasn't even rush hour). That's why I prefer to drive the same route in about half the time.
Very true. Also - the outgoing Metro president and the incoming replacement are both from that smelly worthless craphole of a state we know as New Jersey.
Believe me - the exact same thing can be said about 99% of that agency. It doesn' matter if its a bus driver, a train driver, a transit policeman, a phone operator, a media relations official, or even a contracted out a ticket machine repairman - if they work for Metro they tend to come from the lowest rungs of human intellect. The entire agency is a magnet for ineptness and that is largely why their train has become a boondoggle so quickly.
How about all those the lapel-buttons of yesteryear that read, "I'm a fan of Dashing Dan."?
The main advantage they had going into it was possession of a contract from phase I. The contribution to the PAC was twofold - First, ensure yourself future business by expanding a system that you are highly likely to get the nod on.
Second, show the people in power that you'll go up to bat for them if they go up to bat for you at a later date (by that I am referencing the fact that Metro's board chairman Art Schechter, Metrorail's chief orchestrator Ed Wulfe, and dozens of other politically powerful Metro players literally ran the PAC that took those checks)
Have you ever worked on a contract of this type personally?
No, though I have conducted professional transit policy studies and probably know the intricacies of Houston political campaign practices and players better than some 99% of this forum.
It is a normal expectation in doing business like this, that as one of the "winning" contractors for a project, that you might be asked to help "contribute" to any cause that furthers the work to be performed. There is no collusion or nefarious dealings in making this happen.
You evidently don't know Houston Metro then. Collusion and nefarious dealings are what they do best - as in colluding to redirect and reshape the routes of train lines so that they service the property ownings and developments of politically connected individuals within the Metro machine (look up a little project called Gulfgate Mall and then find out what a man named Ed Wulfe has to do with both it and Metro if you doubt me). This one is also something more than a little "thank you" political contribution to a politician. Sure - companies give donations to reelection campaigns and the sort all the time and they often do it in gratitude or return for some break the politician gave them. We all expect that and, though we SHOULD also condemn it even if "they all do it," there is relatively little that will ever be done to stop it.
STV/Metro's PAC/Metro took that to the next level in this case because the contribution wasn't a simple reelection favor with loose connections that may help with some return benefit in the future. The nature of the referendum and the contributions make the connection much stronger than that and are in fact direct. STV gives to a Metro-backed PAC, the PAC pushes through $$$ for Metro in a referendum, Metro gives the $$$ to STV in a contract. The political scientist calls a relationship of this sort an iron triangle and a very strong one at that. Iron triangles are known as one of the greatest ethical lapses of the democratic system as they turn the simple wink and nod relationships we all expect will be there into blatant cronyism.
STV has the right, as well as any of its' competitors, to make donations to support the legal process by which they work.
You are blurring technical legality (and a very loose one at that. The collusion between the PAC and Metro via Wulfe and Schechter, for example, plus Metro's own campaign spending were of very questionable legality in any sense) with having "rights" in the ethical sense. A loophole in a statute, if loosely interpreted to the benefit of that loophole's users, may permit "legal" bribery and cronyism to occur. That doesn't make what happens any less unethical or any less corrupt.
The fact that STV followed the legal guidelines and publicly admitted they were supporting the side they did shows that they followed the law.
Did STV send out a press release "publicly admitting" they were supporting Metro's PAC? Did they send out a notice saying "STV announced today that it would better its financial well being by assisting in the adoption of a referendum bond for which it is a likely candidate to recieve $61 million in contracts." Did they do anything of the sort? Heck no! Or at least not to my knowledge or that of anybody else in Houston. Their $25,000 check simply appeared listed deep within the PAC's disclosure filing through no act of their own and only then several weeks after it had been cut (also per its absence from the ethics commission's online database, it appears that PAC has yet to file the last of its required disclosure reports though this should've been done about 6 months ago). Was this technically legal? Probably, but then again you can just as easily pull up Hildebeast's finance reports and probably find all sorts of dirty cash from terrorist bagmen and Johnny Chung.
Considering STV was already the winning contractor for this portion of the contract for Metro, I do not see any "conspiracies" in the way this worked out.
That's a circular conclusion. By being the winning contractor for phase I they had a substantially above-average chance at getting the phase II contract IF there was to be a phase II. By cutting that check to campaign for phase II they substantially increased the likelihood of there being a phase II.
You are correct in one sense - they may have been able to do this "legally" or at least done it in a manner that was legal enough to get away with it. But crony deals of the STV-Metro sort are not what make for good government and certainly aren't something that conservatives should overlook. The government envisioned by our founders derives from consent and undeniable truths rooted in our bible, our constitution, and our common law. The STV/Metro model you extoll as technically "legal" throws all that out the window and substitutes the "honest" grafts of Plunkitt of Tammany Hall in its place.
...the obvious next question being "Why would any sane person ever want to visit either?"
Wrong, wrong, and wrong. Virtually ALL of the major railroad lines connecting cities in the north and west were built on cushy government perks, land handouts, and subsidies to yankee industrialists between roughly 1850-1890 (I believe the lone exception was a single transcontinental line across the extreme northern part of the country near the canadian border). The southern lines were a bit different, having originally been built to transport cotton to the Mississippi river, so some of them were indeed private (but the war in 1861-65 also destroyed many of those). But as a general rule of thumb, most of the major intercity railroad tracks from pre-interstate days got their starts on government incentives and subsidies. Streetcars, I suppose, vary from city to city and while I do not have data on every city I do know how Houston's streetcar system (which was at one time one of the largest in the nation with about 100 miles of tracks) came to be. It started in the 1870's when a group of businessmen went down to city hall and asked the government to give them free land on city streets for their tracks. City Hall gave them the perks they wanted and from then until 1940 government constistently subsidized and built the Houston streetcar system. When taxicabs came along in the 1910's it cut into the streetcar's business profits. The solution? They lobbied city hall to impose inordinately stringent regulatory licensing procedures on cab operators, and when that didn't work they banned the cabs all together from competing! Houston's streetcars grew up as a city supported, city subsidized, and city protected monopoly.
Second, I have yet to hear of a single road financed by private industry on its own.
There are actually quite a few of them throughout history. Several of the old roads that we know today by the name of "turnpike" were originally trails that private citizens and companies cleared out in previous centuries (they also charged users a fee on several of them). In modern times there have been several private venture tollroads where companies have come in under public-private partnership laws, bought the land, and built the roads on their own. Some of the tollways in CA and the Leesburg Greenway outside of Washington D.C. are prime examples of this.
Why aren't they chomping at the bit to build roads?
Actually several companies have and are doing just that. Virginia has a procedure that allows private companies to buy land and build and maintain roads on them, and some have successfully done so. Unfortunately it is actually the government that impedes this the most - to build a private road you have to go through ridiculously complex bureaucracies before they will give you the land use approval that is necessary to begin construction. To say nothing of the universal practice of paying for local roads through property tax revenue.
Property is worthless without a road to make it accessible. Using a small ammount of property tax revenues to finance and maintain something that benefits the property owner and increases the value of his property is therefore perfectly reasonable.
I'd be more willing to listen to complaining about "subsidized mass transit" when I also start hearing complaining about "subsidized highways".
There's a key distinction to be made. Whereas highways recover the majority of their expenses through user fees and user taxes, public transit doesn't even come close to the 50% mark. Houston's metro is on pace to take in maybe $5 million in ticket sales this year, which is less than ONE QUARTER of what it costs them to simply keep the trains moving. Transportation costs and taxes are a heck of a lot more palatable when the system itself is recovering the majority of its expenses through use (as highways do) as opposed to falling over 75% short (as transit often does) and leaving the rest of us non-users with the tab.
Is it required? No, of course it isn't
Was this technically legal?
Of course it was. There's nothing technical about it. In fact if you have such a problem with it, (and are so connected in Houston) why don't you file a lawsuit and have your day in court? Otherwise, your protestations that a legitimate contractor didn't file a press release announcing their contribution to Metro's PAC are just so much meaningless hot air.
Is it required? No, of course it isn't
That was not the original issue. The issue was whether or not STV had been forthcoming on an ethically conflicted political contribution. The other poster said that they had publicly indicated their support, to which I responded that their "public notification" was nothing more than an involuntary single line entry buried deep in the PAC's ethics commission filing - i.e. they intended that nobody but the most astute political observers would ever know about it.
Of course it was. There's nothing technical about it.In fact if you have such a problem with it, (and are so connected in Houston) why don't you file a lawsuit and have your day in court?
Lawsuits take time and money, and in this case the proper route would be a complaint to the ethics commission, not a lawsuit. It is doubtful at this time that they would take much interest in a moot case over an election that was conducted 6 months ago.
There is a problem with this. Some states, like my state of Pennsylvania and Virginia for example, see far more highway traffic pass through than we actually generate, because of our proximity to the Port of NY/NJ. On the other hand, NJ generates far more traffic that it pays for. Therefore, NJ loses some of the gas tax it pays, and it is routed to PA and VA to pay for roads there. That's the reason there is a federal program with a complex formula for distributing gas tax money.
That being said, I'm certainly in favor of other methods of payment than a gas tax. I personally would like to see a ton-mile fee, where you pay something like $0.02 per ton mile every year when you renew your registration. So if you own a typical car or light truck and drive 20,000 miles, you might pay $00. For vehicles above 4 tons (above the heaviest SUV's), the fee would become exponential, to recognize the extreme damage caused by over the road trucks in comparison to cars. This would recognize both the volume and damage your vehicle does and make you pay directly for it.
Not as much as you are trying to make out. Let's see.
Last time you bought something at the grocery store
More and more meats and perishables are now shipped again across country via rail in intermodal trucks and refrgierator cars. Local distribution on both ends is the domain of the truck. Companies that make cookies, flour, sugar, crackers, snack foods and the like also ship their raw materials to bakeries, mills, and refineries and frequently ship finished goods out by rail too. Its quite rare for a bulk commodity like flour or sugar to be driven very far.
or filled your tank up with gas
Gas is shipped by ship and pipeline around here except for local distirbution. The ethanol being added to it is shipped by rail directly from the plant to the tank farm.
how do you suppose those items showed up in those places in an efficient manner?
Well, as I showed, frequently by rail, with only final distribution by truck.
Don't us an accountant.
My barber lives in the neighborhood. He walks to work from his house nearby. I walk to the barbershop.
Don't need a financial planner. I can handle that myself with my wife's help (she was a financial planner, now retired to be a mom).
I'm the repairman around here.
etc that you use, how do you suppose they were able to get to work or show up at your home on a service call?
The one guy I did use walked on a sidewalk paid for with his property tax money.
How did they get the equipment and tools that they use?
Do you ever mail a letter or a package? How do you think it arrives at the final destination, sometimes clear across the country, for as little as $0.37. You depend on those highways whether you use them or not.
Letters I mail go by air if they are going cross country. Packages are mostly on the railroads in intermodal trucks or boxcars. The USPS mostly does not use over the road trucking except for short distances and of course, local delivery.
Oh, and I walk to the post office to mail my letters. Its on my way to work between my office and the train station.
Only because it is owned by the government and exempted from taxes, and has a monopoly on Marin-San Francisco travel.
While I applaud these efforts, they are piggybacked on previous government boondoggle roads. Therefore, the major land/row costs were frequently already dealt with and thus excluded from the project. They also don't pay taxes (the private financiers do indirectly, but their road doesn't pay property taxes - railroads do), nor do the private companies provide maintenance/police.