Follow the Money - Local Politicians Campaign Contributors
Friday, December 26, 2008
Issue 1 – TxDOT Governance and Oversight
1.1 Abolish the Texas Transportation Commission and replace it with an appointed Commissioner of Transportation. The Commissioner must be experienced and skilled in transportation planning, development, financing, construction, and maintenance, or have appropriate finance or management experience. A person is not eligible to be appointed or serve as the Commissioner if the person has served in Texas Legislature in the previous 10 years.
1.2 Establish a Transportation Legislative Oversight Committee to provide necessary oversight of the Department and the State’s transportation system.
Modification to Recommendation 1.2
Authorize the Transportation Legislative Oversight Committee to contract with an outside management consulting firm independent of TxDOT to restructure; recommend an effective and efficient organization structure, appropriate staffing levels based upon work loads; review TxDOT’s financial condition and business practices; evaluate the effectiveness of the agency’s transportation planning and programming processes; and coordinate with the Legislative Budget Board, State Auditor’s Office, and the agency’s internal efforts to minimize the duplication of efforts, and to plan, contract and build in the most cost effective and timely manner. The implementation of these recommendations will be overseen by the Legislative Oversight Committee, with the goal of reducing staff, streamlining processes, and transitioning the agency into an entity with greater efficiency, transparency, and accountability.
The primary functions of the auditing entity would include, but not be limited to:
♦ Evaluating TxDOT’s financial condition and business practices;
♦ Evaluating TxDOT’s administrative practices and performance, including statewide transportation planning, the agency’s relationship with Metropolitan Planning Organizations (MPOs), how the agency’s district and central offices perform their functions, and the need for standardization of the agency’s operations across the state;
♦ Evaluating the current guidelines of MPOs and all other transportation entities within the state involved with project delivery and/or transportation policy by identifying duplicative practices and providing recommendations for better efficiency and transparency;
♦ Identifying ways to streamline all processes/procedures of policy implementations of the agency, most notably the environmental process;
♦ Examining and evaluating the use and benefits of performance-based maintenance contracting at TxDOT;
♦ Examining and presenting recommendations on how to maximize TxDOT’s use of multi-modal solutions;
♦ Analyzing TxDOT’s compliance with applicable laws and legislative intent;
♦ Examining the efficient use of TxDOT’s available funding, personnel, equipment, and office space;
♦ Recommending appropriate performance measurements for each major function including comparisons to best practices;
♦ Evaluating establishing in statute the state pavement quality goal as having 85 percent of state roads being in good or better condition; and
♦ Considering significantly expanding utilization of the private sector for planning, design, and delivery of projects and a commitment to excellence in project and program management.
Require the Transportation Legislative Oversight Committee to assess TxDOT’s progress in implementing the management consultant and audit recommendations and to report the status of TxDOT’s implementation efforts to the Senate Finance Committee and House Appropriations Committee to be considered when establishing TxDOT’s budget as part of the appropriations process.
Tuesday, October 21, 2008
DFWRCC rarely endorses candidates. However this year all three co-founders of DFWRCC voted to endorse three candidates. These individuals have been selected because of their comprehension of the complexities of public private partnership toll roads and the averse impact these project will have in the near future and for years in the future to the North Texas economy.
JERRY LEE PHILLIPS FOR TARRANT COUNTY COMMISSIONER, PCT. 3
In Tarrant County, civic activist Jerry Lee Phillips is challenging Gary Fickes for County Commissioner. The northern part of Tarrant County suffers from discrimination by TxDOT and transportation planners at the RTC in appropriating their fair share of gas tax dollars and other public transporation financing to keeping pace with the escalation of population in that region. One of the newer members of the Tarrant County Commissioners' Court, Mr. Fickes understands the importance of combatting gridlock, but has not fought vigorously to demand cost effective public solutions to that region's transportation needs. We endorse challenger Jerry Lee Phillips because he grasps the impact of State and Tarrant County officials decisions to abandon traditional infrastructure financing for the more costly tolled alternatives.
The tolled HOV expansion of existing roads in that region will not solve the transportation problems confronting that district. The current plans are merely a bandaide -- and a very costly one to the pocketbooks of citizens who depend on state highways for commuting. Jerry Lee Phillips is one of the more intelligent candidates who has run for the Tarrant County Commissioners Court in decades. He brings business skill, educational training, and a solid grasp of public administration. He is not a "court house insider" and brings a fresh perspective to county administration. He will demand more accountability by the JPS Hospital system. Jerry Lee Phillips says: “It’s time that tough questions be asked in relationship to the stewardship of taxpayer dollars. The Commissioners Court must seize the moment and ask why JPS executives are getting richer while JPS hospital staff are underpaid in relation to their dedication to patient care. Why are JPS executives getting richer while JPS hospital is in desperate need of upgrades and refurbishing?”
Jerry Lee Phillips is running one of the more vigorous challenger campaigns for public office in the DFW metroplex.
He is a sound voice who will represent residents of the district in confronting "the good ole boy engrained and entrenched fraternity" of contractors, road planners and bought and paid for politicans.
RAIN MIMMS FOR STATE SENATE
Attorney Rain Mimms is challenging Senator John Carona for Texas Senate Seat 16. Senator Carona, as chair of the Senate Transportation and Homeland Security Committee, allowed citizens to speak out against the Trans Texas Corridor. Without his support, it would have been much more difficult for Texans to confront the powerful Texas Transportation Commission and TxDOT. However, he did not act to defeat the exemption on the 2-year moratorium on toll roads in the DFW metroplex. Like most incumbents, he caved to Governor Perry when the "going got really tough."
His involvement with home mortgages during the financial crisis creates conflicts of interest.
Rain Mimms brings an intelligent, responsive, educated alternative for State Senate District Voters. With a few exceptions (such as Senator Lois Kolkhorst and Senator Florence Shapiro) Republican incubent Texas Senators from this region refused to represent the people's best interest by rejecting the market value priced public private toll state highway give-away promoted by Rick Perry and his Texas Transportation Commission. Some incumbent Democrats joined with Perry in the great Texas infrastructure give-away and deserve to be booted out of the Senate also. In this region, the race where there is a highly qualified challenger who sincerely represents the welfare of ordinary working men and women in this district and state is Senate District 16.
Senator Carona deserves to be thanked for the postive things he has brought to this State. Rain Mimms deserves the opportunity to serve the people. We urge voters in Senate District 16 to vote for challenger Rain Mimms.
TOM LOVE FOR U.S. HOUSE DISTRICT 24
Tom Love is challenging incumbent Representative Kenny Marchant for U.S. House seat 24. Rep. Marchant, low on the house senority list, is tired and discouraged. He has written few bills and gotten little accomplished. His staff has not been exceptional in serving his constituents. At best, his tenure in the house can only be described as lack-luster. Rep. Marchant's "No" vote on regulating the sub-prime mortage industry contributed to the current financial melt-down. In 2007 he voted against allowing stockholder to vote on executive compensation. He voted "no" on protecting whistleblowers from employer recrimination.
Rep. Marchant has not supported mass transit despite this region's poor air quality and transportation gridlock. In 2006 he voted "no" on adding $214M to $900M AMTRAK to bring it up to previous year's funding.
In 2005 he voted "yes" on implementing CAFTA (Central American Free Trade). He also voted to make the Patriot Act permanent.
On healthcare, Rep. Marchant voted "no" on adding 2 to 4 million children to the SCHIP eligibility and voted "no" on requiring negotation for prescription prices on Medicare Part D.
Tom Love differs with Senator Marchant on all these votes. It is time to give another Texan opportunity to serve in the U.S. Congress.
All three founders of DFWRCC know challenger Tom Love. We know that his campaign rhetoric about representing the ordinary working man and woman is genuine. We know that his support for Universal Health Care predates his declaration for office. He is passionate about combating the trend of moving American manufacturing offshore. He will fight to reverse policies which reward companies for registering their businesses in off-shore tax sheltered corporations.
Tom Love also understand the negative impact of tolling public highways. He will fight to bring adequate funding to the DFW Region so that we can maintain existing federally funded highways and bridges and expand capacity without tolls. We urge voters to give Tom Love opportunity to serve them in the U.S. Congress.
The New York Times - October 17, 2008
[DFWRCC EDITOR NOTE: This story is posted here because Goldman Sachs is a player in the toll road financial market and in financing other public and private infrastructure projects. The Financial Crisis reaches to every segment of our community.]
CLICK HERE TO SEE PHOTO OF TREASURY FACES WHO ARE FORMERLY FROM GOLDMAN SACHS.
Treasury faces,Steve Shafran (formerly of Goldman), Kendrick Wilson III (ditto), Henry Paulson Jr. (you guessed it), Edward Forst (yep) and Neel Kashkari (see a trend?).
THIS summer, when the Treasury secretary, Henry M. Paulson Jr., sought help navigating the Wall Street meltdown, he turned to his old firm, Goldman Sachs, snagging a handful of former bankers and other experts in corporate restructurings.
In September, after the government bailed out the American International Group, the faltering insurance giant, for $85 billion, Mr. Paulson helped select a director from Goldman’s own board to lead A.I.G.
And earlier this month, when Mr. Paulson needed someone to oversee the government’s proposed $700 billion bailout fund, he again recruited someone with a Goldman pedigree, giving the post to a 35-year-old former investment banker who, before coming to the Treasury Department, had little background in housing finance.
Indeed, Goldman’s presence in the department and around the federal response to the financial crisis is so ubiquitous that other bankers and competitors have given the star-studded firm a new nickname: Government Sachs.
The power and influence that Goldman wields at the nexus of politics and finance is no accident. Long regarded as the savviest and most admired firm among the ranks — now decimated — of Wall Street investment banks, it has a history and culture of encouraging its partners to take leadership roles in public service.
It is a widely held view within the bank that no matter how much money you pile up, you are not a true Goldman star until you make your mark in the political sphere. While Goldman sees this as little more than giving back to the financial world, outside executives and analysts wonder about potential conflicts of interest presented by the firm’s unique perch.
They note that decisions that Mr. Paulson and other Goldman alumni make at Treasury directly affect the firm’s own fortunes. They also question why Goldman, which with other firms may have helped fuel the financial crisis through the use of exotic securities, has such a strong hand in trying to resolve the problem.
The very scale of the financial calamity and the historic government response to it have spawned a host of other questions about Goldman’s role.
Analysts wonder why Mr. Paulson hasn’t hired more individuals from other banks to limit the appearance that the Treasury Department has become a de facto Goldman division. Others ask whose interests Mr. Paulson and his coterie of former Goldman executives have in mind: those overseeing tottering financial services firms, or average homeowners squeezed by the crisis?
Still others question whether Goldman alumni leading the federal bailout have the breadth and depth of experience needed to tackle financial problems of such complexity — and whether Mr. Paulson has cast his net widely enough to ensure that innovative responses are pursued.
“He’s brought on people who have the same life experiences and ideologies as he does,” said William K. Black, an associate professor of law and economics at the University of Missouri and counsel to the Federal Home Loan Bank Board during the savings and loan crisis of the 1980s. “These people were trained by Paulson, evaluated by Paulson so their mind-set is not just shaped in generalized group think — it’s specific Paulson group think.”
Not so fast, say Goldman’s supporters. They vehemently dismiss suggestions that Mr. Paulson’s team would elevate Goldman’s interests above those of other banks, homeowners and taxpayers. Such chatter, they say, is a paranoid theory peddled, almost always anonymously, by less successful rivals. Just add black helicopters, they joke.
“There is no conspiracy,” said Donald C. Langevoort, a law professor at Georgetown University. “Clearly if time were not a problem, you would have a committee of independent people vetting all of the potential conflicts, responding to questions whether someone ought to be involved with a particular aspect or project or not because of relationships with a former firm — but those things do take time and can’t be imposed in an emergency situation.”
In fact, Goldman’s admirers say, the firm’s ranks should be praised, not criticized, for taking a leadership role in the crisis.
“There are people at Goldman Sachs making no money, living at hotels, trying to save the financial world,” said Jes Staley, the head of JPMorgan Chase’s asset management division. “To indict Goldman Sachs for the people helping out Washington is wrong.”
Goldman concurs. “We’re proud of our alumni, but frankly, when they work in the public sector, their presence is more of a negative than a positive for us in terms of winning business,” said Lucas Van Praag, a spokesman for Goldman. “There is no mileage for them in giving Goldman Sachs the corporate equivalent of most-favored-nation status.”
MR. PAULSON himself landed atop Treasury because of a Goldman tie. Joshua B. Bolten, a former Goldman executive and President Bush’s chief of staff, helped recruit him to the post in 2006.
Some analysts say that given the pressures Mr. Paulson faced creating a SWAT team to address the financial crisis, it was only natural for him to turn to his former firm for a capable battery.
And if there is one thing Goldman has, it is an imposing army of top-of-their-class, up-before-dawn über-achievers. The most prominent former Goldman banker now working for Mr. Paulson at Treasury is also perhaps the most unlikely.
Neel T. Kashkari arrived in Washington in 2006 after spending two years as a low-level technology investment banker for Goldman in San Francisco, where he advised start-up computer security companies. Before joining Goldman, Mr. Kashkari, who has two engineering degrees in addition to an M.B.A. from the Wharton School of the University of Pennsylvania, worked on satellite projects for TRW, the space company that now belongs to Northrop Grumman.
He was originally appointed to oversee a $700 billion fund that Mr. Paulson orchestrated to buy toxic and complex bank assets, but the role evolved as his boss decided to invest taxpayer money directly in troubled financial institutions.
Mr. Kashkari, who met Mr. Paulson only briefly before going to the Treasury Department, is also in charge of selecting the staff to run the bailout program. One of his early picks was Reuben Jeffrey, a former Goldman executive, to serve as interim chief investment officer.
Mr. Kashkari is considered highly intelligent and talented. He has also been Mr. Paulson’s right-hand man — and constant public shadow — during the financial crisis.
He played a main role in the emergency sale of Bear Stearns to JPMorgan Chase in March, sitting in a Park Avenue conference room as details of the acquisition were hammered out. He often exited the room to funnel information to Mr. Paulson about the progress.
Despite Mr. Kashkari’s talents in deal-making, there are widespread questions about whether he has the experience or expertise to manage such a project.
“Mr. Kashkari may be the most brilliant, talented person in the United States, but the optics of putting a 35-year-old Paulson protégé in charge of what, at least at one point, was supposed to be the most important part of the recovery effort are just very damaging,” said Michael Greenberger, a University of Maryland law professor and a former senior official with the Commodity Futures Trading Commission.
“The American people are fed up with Wall Street, and there are plenty of people around who could have been brought in here to offer broader judgment on these problems,” Mr. Greenberger added. “All wisdom about financial matters does not reside on Wall Street.”
Mr. Kashkari won’t directly manage the bailout fund. More than 200 firms submitted bids to oversee pieces of the program, and Treasury has winnowed the list to fewer than 10 and could announce the results as early as this week. Goldman submitted a bid but offered to provide its services gratis.
While Mr. Kashkari is playing a prominent public role, other Goldman alumni dominate Mr. Paulson’s inner sanctum.
The A-team includes Dan Jester, a former strategic officer for Goldman who has been involved in most of Treasury’s recent initiatives, especially the government takeover of the mortgage giants Fannie Mae and Freddie Mac. Mr. Jester has also been central to the effort to inject capital into banks, a list that includes Goldman.
Another central player is Steve Shafran, who grew close to Mr. Paulson in the 1990s while working in Goldman’s private equity business in Asia. Initially focused on student loan problems, Mr. Shafran quickly became involved in Treasury’s initiative to guarantee money market funds, among other things.
Mr. Shafran, who retired from Goldman in 2000, had settled with his family in Ketchum, Idaho, where he joined the city council. Baird Gourlay, the council president, said he had spoken a couple of times with Mr. Shafran since he returned to Washington last year.
“He was initially working on the student loan part of the problem,” Mr. Gourlay said. “But as things started falling apart, he said Paulson was relying on him more and more.”
The Treasury Department said Mr. Shafran and the other former Goldman executives were unavailable for comment.
Other prominent former Goldman executives now at Treasury include Kendrick R. Wilson III, a seasoned adviser to chief executives of the nation’s biggest banks. Mr. Wilson, an unpaid adviser, mainly spends his time working his ample contact list of bank chiefs to apprise them of possible Treasury plans and gauge reaction.
Another Goldman veteran, Edward C. Forst, served briefly as an adviser to Mr. Paulson on setting up the bailout fund but has since left to return to his post as executive vice president of Harvard. Robert K. Steel, a former vice chairman at Goldman, was tapped to look at ways to shore up Fannie Mae and Freddie Mac. Mr. Steel left Treasury to become chief executive of Wachovia this summer before the government took over the entities.
Treasury officials acknowledge that former Goldman executives have played an enormous role in responding to the current crisis. But they also note that many other top Treasury Department officials with no ties to Goldman are doing significant work, often without notice. This group includes David G. Nason, a senior adviser to Mr. Paulson and a former Securities and Exchange Commission official.
Robert F. Hoyt, general counsel at Treasury, has also worked around the clock in recent weeks to make sure the department’s unprecedented moves pass legal muster. Michele Davis is a Capitol Hill veteran and Treasury policy director. None of them are Goldmanites.
“Secretary Paulson has a deep bench of seasoned financial policy experts with varied experience,” said Jennifer Zuccarelli, a spokeswoman for the Treasury. “Bringing additional expertise to bear at times like these is clearly in the taxpayers’ and the U.S. economy’s best interests.”
While many Wall Streeters have made the trek to Washington, there is no question that the axis of power at the Treasury Department tilts toward Goldman. That has led some to assume that the interests of the bank, and Wall Street more broadly, are the first priority. There is also the question of whether the department’s actions benefit the personal finances of the former Goldman executives and their friends.
“To the extent that they have a portfolio or blind trust that holds Goldman Sachs stock, they have conflicts,” said James K. Galbraith, a professor of government and business relations at the University of Texas. “To the extent that they have ties and alumni loyalty or friendships with people that are still there, they have potential conflicts.”
Mr. Paulson, Mr. Kashkari and Mr. Shafran no longer own any Goldman shares. It is unclear whether Mr. Jester or Mr. Wilson does because, according to the Treasury Department, they were hired as contractors and are not required to disclose their financial holdings.
For every naysayer, meanwhile, there is also a Goldman defender who says the bank’s alumni are doing what they have done since the days when Sidney Weinberg ran the bank in the 1930s and urged his bankers to give generously to charities and volunteer for public service.
“I give Hank credit for attracting so many talented people. None of these guys need to do this,” said Barry Volpert, a managing director at Crestview Partners and a former co-chief operating officer of Goldman’s private equity business. “They’re not getting paid. They’re killing themselves. They haven’t seen their families for months. The idea that there’s some sort of cabal or conflict here is nonsense.”
In fact, say some Goldman executives, the perception of a conflict of interest has actually cost them opportunities in the crisis. For instance, Goldman wasn’t allowed to examine the books of Bear Stearns when regulators were orchestrating an emergency sale of the faltering investment bank.
THIS summer, as he fought for the survival of Lehman Brothers, Richard S. Fuld Jr., its chief executive, made a final plea to regulators to turn his investment bank into a bank holding company, which would allow it to receive constant access to federal funding.
Timothy F. Geithner, the president of the Federal Reserve Bank of New York, told him no, according to a former Lehman executive who requested anonymity because of continuing investigations of the firm’s demise. Its options exhausted, Lehman filed for bankruptcy in mid-September.
One week later, Goldman and Morgan Stanley were designated bank holding companies.
“That was our idea three months ago, and they wouldn’t let us do it,” said a former senior Lehman executive who requested anonymity because he was not authorized to comment publicly. “But when Goldman got in trouble, they did it right away. No one could believe it.”
The New York Fed, which declined to comment, has become, after Treasury, the favorite target for Goldman conspiracy theorists. As the most powerful regional member of the Federal Reserve system, and based in the nation’s financial capital, it has been a driving force in efforts to shore up the flailing financial system.
Mr. Geithner, 47, played a pivotal role in the decision to let Lehman die and to bail out A.I.G. A 20-year public servant, he has never worked in the financial sector. Some analysts say that has left him reliant on Wall Street chiefs to guide his thinking and that Goldman alumni have figured prominently in his ascent.
After working at the New York consulting firm Kissinger Associates, Mr. Geithner landed at the Treasury Department in 1988, eventually catching the eye of Robert E. Rubin, Goldman’s former co-chairman. Mr. Rubin, who became Treasury secretary in 1995, kept Mr. Geithner at his side through several international meltdowns, including the Russian credit crisis in the late 1990s.
Mr. Rubin, now senior counselor at Citigroup, declined to comment.
A few years later, in 2003, Mr. Geithner was named president of the New York Fed. Leading the search committee was Pete G. Peterson, the former head of Lehman Brothers and the senior chairman of the private equity firm Blackstone. Among those on an outside advisory committee were the former Fed chairman Paul A. Volcker; the former A.I.G. chief executive Maurice R. Greenberg; and John C. Whitehead, a former co-chairman of Goldman.
The board of the New York Fed is led by Stephen Friedman, a former chairman of Goldman. He is a “Class C” director, meaning that he was appointed by the board to represent the public.
Mr. Friedman, who wears many hats, including that of chairman of the President’s Foreign Intelligence Advisory Board, did not return calls for comment.
During his tenure, Mr. Geithner has turned to Goldman in filling important positions or to handle special projects. He hired a former Goldman economist, William C. Dudley, to oversee the New York Fed unit that buys and sells government securities. He also tapped E. Gerald Corrigan, a well-regarded Goldman managing director and former New York Fed president, to reconvene a group to analyze risk on Wall Street.
Some people say that all of these Goldman ties to the New York Fed are simply too close for comfort. “It’s grotesque,” said Christopher Whalen, a managing partner at Institutional Risk Analytics and a critic of the Fed. “And it’s done without apology.”
A person familiar with Mr. Geithner’s thinking who was not authorized to speak publicly said that there was “no secret handshake” between the New York Fed and Goldman, describing such speculation as a conspiracy theory.
Furthermore, others say, it makes sense that Goldman would have a presence in organizations like the New York Fed.
“This is a very small, close-knit world. The fact that all of the major financial services firms, investment banking firms are in New York City means that when work is to be done, you’re going to be dealing with one of these guys,” said Mr. Langevoort at Georgetown. “The work of selecting the head of the New York Fed or a blue-ribbon commission — any of that sort of work — is going to involve a standard cast of characters.”
Being inside may not curry special favor anyway, some people note. Even though Mr. Fuld served on the board of the New York Fed, his proximity to federal power didn’t spare Lehman from bankruptcy.
But when bankruptcy loomed for A.I.G. — a collapse regulators feared would take down the entire financial system — federal officials found themselves once again turning to someone who had a Goldman connection. Once the government decided to grant A.I.G., the largest insurance company, an $85 billion lifeline (which has since grown to about $122 billion) to prevent a collapse, regulators, including Mr. Paulson and Mr. Geithner, wanted new executive blood at the top.
They picked Edward M. Liddy, the former C.E.O. of the insurer Allstate. Mr. Liddy had been a Goldman director since 2003 — he resigned after taking the A.I.G. job — and was chairman of the audit committee. (Another former Goldman executive, Suzanne Nora Johnson, was named to the A.I.G. board this summer.)
Like many Wall Street firms, Goldman also had financial ties to A.I.G. It was the insurer’s largest trading partner, with exposure to $20 billion in credit derivatives, and could have faced losses had A.I.G. collapsed. Goldman has said repeatedly that its exposure to A.I.G. was “immaterial” and that the $20 billion was hedged so completely that it would have insulated the firm from significant losses.
As the financial crisis has taken on a more global cast in recent weeks, Mr. Paulson has sat across the table from former Goldman colleagues, including Robert B. Zoellick, now president of the World Bank; Mario Draghi, president of the international group of regulators called the Financial Stability Forum; and Mark J. Carney, the governor of the Bank of Canada.
BUT Mr. Paulson’s home team is still what draws the most scrutiny.
“Paulson put Goldman people into these positions at Treasury because these are the people he knows and there are no constraints on him not to do so,” Mr. Whalen says. “The appearance of conflict of interest is everywhere, and that used to be enough. However, we’ve decided to dispense with the basic principles of checks and balances and our ethical standards in times of crisis.”
Ultimately, analysts say, the actions of Mr. Paulson and his alumni club may come under more study.
“I suspect the conduct of Goldman Sachs and other bankers in the rescue will be a background theme, if not a highlighted theme, as Congress decides how much regulation, how much control and frankly, how punitive to be with respect to the financial services industry,” said Mr. Langevoort at Georgetown. “The settling up is going to come in Congress next spring.”
Read more on the financial crisis in the New York Times
Wednesday, October 15, 2008
[DFWRCC EDITOR'S NOTE: This is a video you should see. Even though this story is about Harris county, the loophole which makes this "legal" is in Texas State Law, therefore it has statewide ramifications. ]
Eyewitness News Report By Wayne Dolcefino - HOUSTON (KTRK)
-- Think Harris County toll road fines are outrageous? Wait till you hear how the county attorney is spending some of your money.
That's $2 million of your money. We thought you should know how the county attorney is spending it. We all know what happens when you don't pay a toll. How fifty cents becomes 34.50?
"I think they're outrageous," said toll road customer Jimmy Deal. "Ridiculous."
Notice on the bill there's a $1 fee that goes directly to the Harris County Attorney from every unpaid toll.
"I agree with you. It's public money," said Harris County attorney Mike Stafford.
"Does it say on there what it goes for?" asked toll road customer T.J. Swift.
State law only says "the fund shall be at the sole discretion of the county attorney and may be used only to defray the salaries and expenses of the attorney's office."
"It doesn't say it's only to be used for toll road efforts," Stafford said.
In fact, when we examined the fund, we couldn't find a single penny used for toll road business.
"What I like about toll road fund is its toll road violator dollars," Stafford said. "It's not tax dollars."
So where is the money going?
"This is pure and simple a county attorney office slush fund," said tax watchdog Bob Lemer.
Coconut shrimp anyone? That's part of the menu for the county attorney's office Christmas party.
Yes. Your toll fines paid for the catering bills from the east side Italian eatery Pizzinis. One party cost $5,625.
That's money from the fines of 5,600 trips through the toll booth.
"That's pretty disappointing and they haven't invited me to the party," said toll road customer JJ Cannon.
In one year, they used more than $17,000 in toll fines on Italian food.
"This is just a totally improper use of taxpayer money," Lemer said.
"It improves morale of the office, makes the office a better place to work at no cost to taxpayers," Stafford said.
"Those are taxpayers sitting in those cars going through those toll road booths," Lemer said.
Oh, we forgot to add the Star Pizza parties.
"So that's where my money is going and I'm not invited. That's a bad deal," Deal said.
Next time you get called for jury duty you'll have to pay $5.50 for parking a day. Too bad you don't have control of that toll road fund.
The county attorney's office has used $196,000 so they can all park for free, even though most county employees have to pay their own way.
Sheriff's deputies pay three bucks to park in another lot every day.
"Anytime I can use the fund instead of tax dollars I'm going do it," Stafford said.
More than two million dollars has gone into the public toll road fund. Nearly $100,000 has gone to provide extra pay to selected employees.
"There were people who were unable to get a raise because of the salary cap and they deserved it," Stafford said.
Oh, by the way, the toll road fund could have been used to pay the salaries of the county lawyers who are working with the toll road. Two lawyers were paid $225,000 a year.
"I think that's an idea worth considering," Stafford said.
Instead of coconut shrimp.
We began examining the toll road fund as we investigated the county attorney's relationship to one of his employees. Tuesday our hidden cameras go into action.
Wednesday, October 8, 2008
Agency’s ’04 Rule Let Banks Pile Up New Debt
By STEPHEN LABATON - The New York Times - October 2, 2008
“We have a good deal of comfort about the capital cushions at these firms at the moment.” — Christopher Cox, chairman of the Securities and Exchange Commission, March 11, 2008.
As rumors swirled that Bear Stearns faced imminent collapse in early March, Christopher Cox was told by his staff that Bear Stearns had $17 billion in cash and other assets — more than enough to weather the storm.
Drained of most of its cash three days later, Bear Stearns was forced into a hastily arranged marriage with JPMorgan Chase — backed by a $29 billion taxpayer dowry.
Within six months, other lions of Wall Street would also either disappear or transform themselves to survive the financial maelstrom — Merrill Lynch sold itself to Bank of America, Lehman Brothers filed for bankruptcy protection, and Goldman Sachs and Morgan Stanley converted to commercial banks.
How could Mr. Cox have been so wrong?
Many events in Washington, on Wall Street and elsewhere around the country have led to what has been called the most serious financial crisis since the 1930s. But decisions made at a brief meeting on April 28, 2004, explain why the problems could spin out of control. The agency’s failure to follow through on those decisions also explains why Washington regulators did not see what was coming.
On that bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.
They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.
The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary.
A lone dissenter — a software consultant and expert on risk management — weighed in from Indiana with a two-page letter to warn the commission that the move was a grave mistake. He never heard back from Washington.
One commissioner, Harvey J. Goldschmid, questioned the staff about the consequences of the proposed exemption. It would only be available for the largest firms, he was reassuringly told — those with assets greater than $5 billion.
“We’ve said these are the big guys,” Mr. Goldschmid said, provoking nervous laughter, “but that means if anything goes wrong, it’s going to be an awfully big mess.”
Mr. Goldschmid, an authority on securities law from Columbia, was a behind-the-scenes adviser in 2002 to Senator Paul S. Sarbanes when he rewrote the nation’s corporate laws after a wave of accounting scandals. “Do we feel secure if there are these drops in capital we really will have investor protection?” Mr. Goldschmid asked. A senior staff member said the commission would hire the best minds, including people with strong quantitative skills to parse the banks’ balance sheets.
Annette L. Nazareth, the head of market regulation, reassured the commission that under the new rules, the companies for the first time could be restricted by the commission from excessively risky activity. She was later appointed a commissioner and served until January 2008.
“I’m very happy to support it,” said Commissioner Roel C. Campos, a former federal prosecutor and owner of a small radio broadcasting company from Houston, who then deadpanned: “And I keep my fingers crossed for the future.”
The proceeding was sparsely attended. None of the major media outlets, including The New York Times, covered it.
After 55 minutes of discussion, which can now be heard on the Web sites of the agency and The Times, the chairman, William H. Donaldson, a veteran Wall Street executive, called for a vote. It was unanimous. The decision, changing what was known as the net capital rule, was completed and published in The Federal Register a few months later.
With that, the five big independent investment firms were unleashed.
In loosening the capital rules, which are supposed to provide a buffer in turbulent times, the agency also decided to rely on the firms’ own computer models for determining the riskiness of investments, essentially outsourcing the job of monitoring risk to the banks themselves.
Over the following months and years, each of the firms would take advantage of the looser rules. At Bear Stearns, the leverage ratio — a measurement of how much the firm was borrowing compared to its total assets — rose sharply, to 33 to 1. In other words, for every dollar in equity, it had $33 of debt. The ratios at the other firms also rose significantly.
The 2004 decision for the first time gave the S.E.C. a window on the banks’ increasingly risky investments in mortgage-related securities.
But the agency never took true advantage of that part of the bargain. The supervisory program under Mr. Cox, who arrived at the agency a year later, was a low priority.
The commission assigned seven people to examine the parent companies — which last year controlled financial empires with combined assets of more than $4 trillion. Since March 2007, the office has not had a director. And as of last month, the office had not completed a single inspection since it was reshuffled by Mr. Cox more than a year and a half ago.
The few problems the examiners preliminarily uncovered about the riskiness of the firms’ investments and their increased reliance on debt — clear signs of trouble — were all but ignored.
The commission’s division of trading and markets “became aware of numerous potential red flags prior to Bear Stearns’s collapse, regarding its concentration of mortgage securities, high leverage, shortcomings of risk management in mortgage-backed securities and lack of compliance with the spirit of certain” capital standards, said an inspector general’s report issued last Friday. But the division “did not take actions to limit these risk factors.”
Drive to Deregulate
The commission’s decision effectively to outsource its oversight to the firms themselves fit squarely in the broader Washington culture of the last eight years under President Bush.
A similar closeness to industry and laissez-faire philosophy has driven a push for deregulation throughout the government, from the Consumer Product Safety Commission and the Environmental Protection Agency to worker safety and transportation agencies.
“It’s a fair criticism of the Bush administration that regulators have relied on many voluntary regulatory programs,” said Roderick M. Hills, a Republican who was chairman of the S.E.C. under President Gerald R. Ford. “The problem with such voluntary programs is that, as we’ve seen throughout history, they often don’t work.”
As was the case with other agencies, the commission’s decision was motivated by industry complaints of excessive regulation at a time of growing competition from overseas. The 2004 decision was aimed at easing regulatory burdens that the European Union was about to impose on the foreign operations of United States investment banks.
The Europeans said they would agree not to regulate the foreign subsidiaries of the investment banks on one condition — that the commission regulate the parent companies, along with the brokerage units that the S.E.C. already oversaw.
A 1999 law, however, had left a gap that did not give the commission explicit oversight of the parent companies. To get around that problem, and in exchange for the relaxed capital rules, the banks volunteered to let the commission examine the books of their parent companies and subsidiaries.
The 2004 decision also reflected a faith that Wall Street’s financial interests coincided with Washington’s regulatory interests.
“We foolishly believed that the firms had a strong culture of self-preservation and responsibility and would have the discipline not to be excessively borrowing,” said Professor James D. Cox, an expert on securities law and accounting at Duke School of Law (and no relationship to Christopher Cox).
“Letting the firms police themselves made sense to me because I didn’t think the S.E.C. had the staff and wherewithal to impose its own standards and I foolishly thought the market would impose its own self-discipline. We’ve all learned a terrible lesson,” he added.
In letters to the commissioners, senior executives at the five investment banks complained about what they called unnecessary regulation and oversight by both American and European authorities. A lone voice of dissent in the 2004 proceeding came from a software consultant from Valparaiso, Ind., who said the computer models run by the firms — which the regulators would be relying on — could not anticipate moments of severe market turbulence.
“With the stroke of a pen, capital requirements are removed!” the consultant, Leonard D. Bole, wrote to the commission on Jan. 22, 2004. “Has the trading environment changed sufficiently since 1997, when the current requirements were enacted, that the commission is confident that current requirements in examples such as these can be disregarded?”
He said that similar computer standards had failed to protect Long-Term Capital Management, the hedge fund that collapsed in 1998, and could not protect companies from the market plunge of October 1987.
Mr. Bole, who earned a master’s degree in business administration at the University of Chicago, helps write computer programs that financial institutions use to meet capital requirements.
He said in a recent interview that he was never called by anyone from the commission.
“I’m a little guy in the land of giants,” he said. “I thought that the reduction in capital was rather dramatic.”
Policing Wall Street
A once-proud agency with a rich history at the intersection of Washington and Wall Street, the Securities and Exchange Commission was created during the Great Depression as part of the broader effort to restore confidence to battered investors. It was led in its formative years by heavyweight New Dealers, including James Landis and William O. Douglas. When President Franklin D. Roosevelt was asked in 1934 why he appointed Joseph P. Kennedy, a spectacularly successful stock speculator, as the agency’s first chairman, Roosevelt replied: “Set a thief to catch a thief.”
The commission’s most public role in policing Wall Street is its enforcement efforts. But critics say that in recent years it has failed to deter market problems.
“It seems to me the enforcement effort in recent years has fallen short of what one Supreme Court justice once called the fear of the shotgun behind the door,” said Arthur Levitt Jr., who was S.E.C. chairman in the Clinton administration. “With this commission, the shotgun too rarely came out from behind the door.”
Christopher Cox had been a close ally of business groups in his 17 years as a House member from one of the most conservative districts in Southern California. Mr. Cox had led the effort to rewrite securities laws to make investor lawsuits harder to file. He also fought against accounting rules that would give less favorable treatment to executive stock options.
Under Mr. Cox, the commission responded to complaints by some businesses by making it more difficult for the enforcement staff to investigate and bring cases against companies. The commission has repeatedly reversed or reduced proposed settlements that companies had tentatively agreed upon. While the number of enforcement cases has risen, the number of cases involving significant players or large amounts of money has declined.
Mr. Cox dismantled a risk management office created by Mr. Donaldson that was assigned to watch for future problems. While other financial regulatory agencies criticized a blueprint by Mr. Paulson, the Treasury secretary, that proposed to reduce their stature — and that of the S.E.C. — Mr. Cox did not challenge the plan, leaving it to three former Democratic and Republican commission chairmen to complain that the blueprint would neuter the agency.
In the process, Mr. Cox has surrounded himself with conservative lawyers, economists and accountants who, before the market turmoil of recent months, had embraced a far more limited vision for the commission than many of his predecessors.
‘Stakes in the Ground’
Last Friday, the commission formally ended the 2004 program, acknowledging that it had failed to anticipate the problems at Bear Stearns and the four other major investment banks.
“The last six months have made it abundantly clear that voluntary regulation does not work,” Mr. Cox said.
The decision to shutter the program came after Mr. Cox was blamed by Senator John McCain, the Republican presidential candidate, for the crisis. Mr. McCain has demanded Mr. Cox’s resignation.
Mr. Cox has said that the 2004 program was flawed from its inception. But former officials as well as the inspector general’s report have suggested that a major reason for its failure was Mr. Cox’s use of it.
“In retrospect, the tragedy is that the 2004 rule making gave us the ability to get information that would have been critical to sensible monitoring, and yet the S.E.C. didn’t oversee well enough,” Mr. Goldschmid said in an interview. He and Mr. Donaldson left the commission in 2005.
Mr. Cox declined requests for an interview. In response to written questions, including whether he or the commission had made any mistakes over the last three years that contributed to the current crisis, he said, “There will be no shortage of retrospective analyses about what happened and what should have happened.” He said that by last March he had concluded that the monitoring program’s “metrics were inadequate.”
He said that because the commission did not have the authority to curtail the heavy borrowing at Bear Stearns and the other firms, he and the commission were powerless to stop it.
“Implementing a purely voluntary program was very difficult because the commission’s regulations shouldn’t be suggestions,” he said. “The fact these companies could withdraw from voluntary supervision at their discretion diminished the mandate of the program and weakened its effectiveness. Experience has shown that the S.E.C. could not bootstrap itself into authority it didn’t have.”
But critics say that the commission could have done more, and that the agency’s effectiveness comes from the tone set at the top by the chairman, or what Mr. Levitt, the longest-serving S.E.C. chairman in history, calls “stakes in the ground.”
“If you go back to the chairmen in recent years, you will see that each spoke about a variety of issues that were important to them,” Mr. Levitt said. “This commission placed very few stakes in the ground.”
Read more in the New York Times
California and other states scrambled on Tuesday to cope with bills coming due as they pressed Washington for assistance because the municipal bond markets remain largely closed to them.
In Washington, White House officials said they were talking with state officials and reviewing the issue of aid. But despite the urgency of the problem, thorny legal issues have emerged.
Though the federal government has taken extraordinary steps to lend money to corporations in the short-term markets, and to provide more money to banks, officials have been stymied over how to assist local governments because of their status as issuers of tax-exempt bonds.
A longstanding provision of the Internal Revenue Code bars the federal government from guaranteeing tax-exempt bonds. Officials are concerned that if the federal government helps states and others without Congressional action it could put their tax exemption at risk.
While officials seek a way around this obstacle, many local governments are running into severe cash squeezes.
California has the largest and most pressing problem. The state has told the Treasury Department it might need an emergency loan of up to $7 billion to pay its day-to-day bills in coming weeks, including those to school districts and municipal governments due on Oct. 29. Massachusetts has also reached out for help.
“It’s critical,” said Jeffrey L. Esser, executive director of the Government Finance Officers Association. “There are no buyers out there for the governments, to meet their short-term financing needs.”
Among the ideas being discussed is finding a way for the federal government to provide some guarantee of municipal bonds without violating the tax code, and in that way building investor confidence in the bonds.
“I think there are partial guarantees or other federal programs that would fall short of the full guarantee that might not violate this code section,” said Richard Chirls, a partner at Orrick Herrington & Sutcliffe, the bond counsel to California.
Another approach may be to include some short-term municipal issues under the Federal Reserve’s newest program to buy commercial paper.
California has an immediate problem because, like many other places, it receives tax revenue in batches during the year. The state is accustomed to borrowing in short-term markets in the fall, to tide itself over through the lean months before the next batch of tax revenue comes in. The credit markets froze just when California would have issued its revenue anticipation notes.
Other governments have run into a cash squeeze because they have issued a type of short-term debt with an interest rate that resets every week. That worked until the credit markets froze, but now the interest rates that governments pay on such debt are tripling or quadrupling.
The trouble in the credit markets has compounded the deteriorating finances of many states and cities, which are finding the revenues they had projected months ago are now falling short, sometimes drastically.
Andrew A. Davis, executive director of the Illinois Student Assistance Commission, said that if the federal government stepped in to help California, other states might expect similar relief instead of tackling tough budget issues themselves. “There’s going to be very little incentive to levy taxes,” Mr. Davis said.
Even if states get short-term access to credit, many will need to take further steps to balance their budgets. Unlike the federal government, they are generally required to balance their budgets each year.
In California, the most populous state and one of those suffering the most from the housing slump, Gov. Arnold Schwarzenegger said he would meet with legislators on Wednesday to propose possible routes out of the state’s crisis.
The California treasurer, Bill Lockyer, said he would discuss the possibility of tapping into the state’s big public pension funds with their managers. Mr. Lockyer said he would see if they could buy some of the state’s short-term notes, or issue a line of credit, if the markets do not improve and the federal government cannot help.
Before the problem became critical this month, California was relying on optimistic revenue forecasts to balance its budget. Now it is coming up short again, possibly by as much as $1 billion.
Massachusetts, which has also told the federal government it might need assistance, withdrew a planned $750 million offer of short-term notes on Tuesday, for the second time in two weeks, saying that the market seemed inhospitable and that it could dip into a state fund for emergencies.
North Carolina said it was fielding calls from other states about how to duplicate an innovative deal it struck to borrow $1.1 billion from the state employees’ credit union. It is using the money to provide student loans. Illinois recently completed a similar deal for about $100 million with a group of eight credit unions, also for student lending.
The New York State Insurance Department put together a $1 billion package to assist Jefferson County, Ala., on Tuesday, to help keep the county from declaring bankruptcy. It has been teetering for several months, after having issued a large number of variable-rate bonds for major improvements in its sewer system.
These unusual measures show just how much pressure some local governments face as their tax revenues dry up and the credit squeeze prevents them from issuing the kind of debt that they have long relied on to handle their operations.
“Talking to our members in the last week or so, it is so bleak,” said Scott Pattison, executive director of the National Association of State Budget Officers, adding that just two weeks ago he never would have dreamed the situation would become so dire.
A handful of well-rated debt offerings did come to market on Tuesday, but for the most part the markets were quiet.
The Long Island Power Authority sold the largest municipal bond issue since the credit squeeze began, aided in part by bond insurance provided by Berkshire Hathaway, the company headed by Warren E. Buffett. Berkshire stepped in to fill a gap in the bond insurance business earlier this year, but has received more attention in recent days by investing in Goldman Sachs, the lead underwriter for the utility’s bond issue, and in General Electric.
The Cold Spring Harbor school district on Long Island also sold a relatively small $7 million issue of tax anticipation notes on Tuesday, but its success seemed to stem from not urgently needing the money. “We’re one of two school districts in the whole state that has a triple-A uninsured bond rating,” said the district’s assistant superintendent for business, William Bernhard.
Absent extraordinary measures by the Federal Reserve, investors were not buying anything except Treasury securities, said Mark V. McCray, managing director and portfolio manager for Pimco.
“There is absolute panic in the markets,” Mr. McCray said. “People are hoarding cash.”
Edmund L. Andrews and Katie Zezima contributed reporting.
Read more in the New York Times
Monday, October 6, 2008
State transportation officials are poised to issue billions of dollars in debt to help speed road construction, a move that will keep Dallas-area projects on schedule for now but will do little to shore up the state's long-term road-funding crisis.
The Texas Department of Transportation will likely begin issuing $1.5 billion in bonds within 60 days, pending the recovery of the nation's upended credit markets, and is taking steps to borrow another $6.4 billion over the next few years.
Historic turmoil in the credit markets is already costing the department hundreds of thousands of dollars in extra interest payments each week on some of its smaller loans, and any efforts to borrow much more will be complicated – and likely delayed – if the markets do not improve.
Credit worries aside, the decision to borrow billions enables TxDOT to end months of hand-wringing over whether it will have the money to complete projects local officials throughout Texas have been depending on. Late last year, the agency announced it was going broke and would have to delay some of those projects.
The new borrowing will allow the state to keep projects on schedule. But the big debt will do nothing to reduce the state's long-term shortage of road funds and could make paying for future projects more difficult as interest costs grow.
"Borrowing money does have the benefit of building projects faster," said Michael Morris, North Central Texas Council of Governments' transportation director. "Borrowing money does nothing for building more projects [in the long term]. Some people will be confused that building projects faster solves the problem, but it doesn't address the total funding need."
Mr. Morris says North Texas' transportation needs are $50 billion ahead of expected tax revenues between now and 2030. Some critics call those numbers too pessimistic, but everyone agrees that the number is big. Conservative estimates have said statewide needs will outpace funding by $50 billion to $60 billion.
Meeting last week in Austin, Texas Transportation Commission members said the bond program won't fix a basically busted system – and could make things worse if the Legislature doesn't eventually provide new tax funds.
"The system for funding TxDOT is fatally flawed," said Ned Holmes of Houston, one of five members of the Texas Transportation Commission that runs the department.
A political problem
Few leaders in Austin disagree with Mr. Holmes.
But while lawmakers, the governor and TxDOT all seem to agree Texas needs more money for roads, consensus on a solution beyond more borrowing has proven devilishly difficult to reach.
One camp argues that, of course TxDOT is going broke, given that state gasoline taxes have remained flat since 1991, at 20 cents per gallon. However, efforts to raise the tax rate have been dead in the water for years.
"As far as the gas tax goes, there is simply no appetite in the Legislature for that. None at all," said Allison Castle, press secretary for Gov. Rick Perry, said. "To make a real difference, you'd have to raise it 50 to 55 cents per gallon. Raising it a nickel or two would be just giving false hope."
But even simply indexing the 20-cent-per-gallon rate to inflation would have a huge impact over time, said Senate Transportation Chairman John Carona, R-Dallas. He said he is going to press for that this session.
"If we had had the courage to do that two years ago, we'd be in a substantially better place already," Mr. Carona said.
For the past five years, the governor has pushed instead to build more toll roads and then to borrow heavily against future revenue.
"Toll roads are fair, as they are essentially user fees, and drivers can decide whether to use them or not," said his spokeswoman.
Opposition to tolls, especially private toll roads, was a powerful force during the 2007 session, and even lawmakers who say some tolls are helpful also argue that Mr. Perry has pushed too hard for tolls.
"We have 15 major highways proposed in Dallas-Fort Worth, and all 15 are planned as toll roads," Mr. Carona said. "In that situation, you can no longer say tolls are an option for motorists. If they are all built, you won't be able to drive anywhere in Dallas without using a toll road."
Mr. Holmes, too, acknowledged the governor and the agency under former chairman Ric Williamson had been too focused on tolls as the solution.
"They came up with a solution that did not require TxDOT to go to the Legislature to ask for new funds," he said. "But tolling was never going to work by itself."
Ready to borrow
For now, the only solution lawmakers and the governor have agreed on is to borrow another $8 billion.
It's not a new direction. From 2002 to 2007, the department first went on a borrowing spree – and then a building spree, much to the delight of traffic-clogged regions like North Texas. In those years, the department spent as much as $5 billion a year in construction contracts.
But by 2007 TxDOT had spent the money and was left with flat revenues, rising costs and hefty interest payments. TxDOT says it has about $2.5 billion in tax money to spend on major road contracts annually, about half what it was spending in recent years. It also warns that soaring maintenance costs could soon eat up as much as $2 billion a year.
"We're fast going to be at a place where we simply have to tell the locals, we're out of the business of building new roads," said Commissioner Ted Houghton of El Paso.
To delay that, TxDOT is ready to borrow again. But those new dollars will only delay, not solve, the department's long-term funding crisis.
More time may be what TxDOT needs most of all, said Mr. Holmes, who reluctantly supported the new borrowing.
"It's going to take some time – this next session, the next one and maybe one more after that – before we reach a real solution," he said.
Read more in the Dallas Morning News
FORT WORTH — The city of Saginaw wanted to widen an east-west thoroughfare from three lanes to six with a divided median.
Even though it combined more than $7 million in federal funds and matching dollars in the 2006 Tarrant County bond program, the city of 19,000, which has a budget of $30 million, is finding it difficult to come up with its share of the money for the project.
Now, Saginaw plans to take the Longhorn Road project back to the county commissioners to request a scaled-back version that would instead widen it to four, undivided lanes.
"The escalating costs, since the concept of the projects were done back in 2005, have made it too expensive right now," said Dolph Johnson, assistant city manager and finance director.
"The city’s share is about $1 million more than what we had expected. It would be difficult for us to come up with the difference."
Rising construction costs, tightening municipal budgets and a national credit crunch are preventing some Tarrant County cities from tapping into $140 million in matching road funds in the bond package that was approved by voters in 2006.
About 90 percent of the transportation projects in the $433 million program have been delayed at least a year. Some have been delayed as long as three years.
And several cities are coming back to the county commissioners, asking to scale back or otherwise alter their project plans to make them affordable.
Commissioner Gary Fickes warns that the problem could get worse as city budgets tighten and construction costs continue to rise.
"Time is killing them," he said during a recent discussion of the project delays. "I think the longer this goes on, the worse it is going to get."
The 2006 bond program set aside money to match cities’ contribution for road projects that would reduce congestion, ease traffic problems and improve air quality. Under the program, cities must cover the costs of inflation.
Since 2005, the cost of concrete has risen about 20 percent; the cost of steel about 83 percent; and the cost of asphalt paving mixtures about 107 percent, according to Labor Department commodity data.
"They submitted the projected costs in 2005, but those estimates were pre-Katrina, Rita and Ike," said Renee Lamb, Tarrant County transportation director. "The rising cost is the reason for some of the delays, according to what cities have told us. Some of the cities are awaiting bond elections this November to come up with their portion of these projects."
She said the financial crisis may make it difficult for cities to borrow money in the near future.
"I’m sure that the financial side is playing a factor in some of these delays, but it is not in anyone’s best interest to delay because construction costs are not going to go down anytime soon," Lamb said.
Tarrant County Administrator G.K. Maenius said some cities have already set aside money for the road projects and others may not issue debt until after the financial crisis passes.
Earlier this year, Tarrant County sold $112 million in bonds as part of the 2006 program, paying 4.36 percent on that debt. The county invested the money in accounts that are earning about 3 percent annually.
Maenius said cities that try to sell bonds, or certificates of obligation, which are typically paid for with property taxes, for capital projects such as road construction may find it difficult.
"It will be a matter of timing, when they go out and try to borrow that money," he said. "A big problem will be that money will only be available to individuals and governments that are credit-worthy. I’m sure the rating agencies are going to be taking a really hard look on any government that they rate."
Read more in the Fort Worth Star Telegram
Sunday, September 28, 2008
Officials said that Congressional staff members would work through the night to finalize the language of the agreement and draft a bill, and that the bill would be brought to the House floor for a vote on Monday.
The bill includes pay limits for some executives whose firms seek help, aides said. And it requires the government to use its new role as owner of distressed mortgage-backed securities to make more aggressive efforts to prevent home foreclosures.
In some cases, the government would receive an equity stake in companies that seek aid, allowing taxpayers to profit should the rescue plan work and the private firms flourish in the months and years ahead.
The White House also agreed to strict oversight of the program by a Congressional panel and conflict-of-interest rules for firms hired by the Treasury to help run the program.
The administration had initially requested virtually unfettered authority to operate the bailout program. But as they moved toward clinching a deal, both sides appeared to have given up a number of contentious proposals, including a change in the bankruptcy laws sought by some Democrats to give judges the authority to modify the terms of first mortgages.
Congressional leaders and Treasury Secretary Henry M. Paulson Jr. emerged from behind closed doors to announce the tentative agreement at 12:30 a.m. Sunday, after two days of marathon meetings.
“We have made great progress toward a deal, which will work and be effective in the marketplace,” Mr. Paulson said at a news conference in Statuary Hall in the Capitol.
In the final hours of negotiations, Democratic lawmakers, including Representative Rahm Emanuel of Illinois and Senator Kent Conrad of North Dakota, carried pages of the bill by hand, back and forth, from Speaker Nancy Pelosi’s office, where the Democrats were encamped, to Mr. Paulson and other Republicans in the offices of Representative John A. Boehner of Ohio, the House minority leader.
At the same time, a series of phone calls was taking place, including conversations between Ms. Pelosi and President Bush; between Mr. Paulson and the two presidential candidates, Senator John McCain and Senator Barack Obama; and between the candidates and top lawmakers.
“All of this was done in a way to insulate Main Street and everyday Americans from the crisis on Wall Street,” Ms. Pelosi said at the news conference. “We have to commit it to paper so we can formally agree, but I want to congratulate all of the negotiators for the great work they have done.”
In a statement, Tony Fratto, the deputy White House press secretary, said: “We’re pleased with the progress tonight and appreciate the bipartisan effort to stabilize our financial markets and protect our economy.”
A senior administration official who participated in the talks said the deal was effectively done. “I know of no unresolved open issues for principals,” the official said.
In announcing a tentative agreement, lawmakers and the administration achieved their goal of sending a reassuring message ahead of Monday’s opening of the Asian financial markets.
Lawmakers, especially in the House, are also eager to adjourn and return home for the fall campaign season.
Among the last sticking points was an unexpected and bitter fight over how to pay for any losses that taxpayers may experience after distressed debt has been purchased and resold.
Democrats had pushed for a fee on securities transactions, essentially a tax on financial firms, saying it was fitting that they contribute to the cost.
In the end, lawmakers and the administration opted to leave the decision to the next president, who must present a proposal to Congress to pay for any losses.
Officials said they had also agreed to include a proposal by House Republicans that gives the Treasury secretary an additional option of issuing government insurance for troubled financial instruments as a way of reducing the amount of taxpayer money spent up front on the rescue effort.
The Treasury would be required to create the insurance program, officials said, but not necessarily to use it. Mr. Paulson had expressed little interest in that plan, and initial cost projections suggested it would be enormously expensive. But final details were not immediately available.
Saturday’s intense negotiating effort followed a tumultuous week, including a contentious meeting at the White House with President Bush and the two presidential candidates.
That meeting had moments of drama, including a blunt warning by President Bush. “If money isn’t loosened up, this sucker could go down,” he said. It ended with angry recriminations after House Republicans scotched a near-agreement from earlier in the day.
Mr. Paulson scrambled to revive the talks, and they resumed almost immediately. Congressional and Treasury staff then worked all of Friday and through the night, ending in the predawn.
Mr. Paulson and Congressional leaders stepped in at 3 p.m. Saturday and were in direct negotiations for most of the rest of the night. And immediately after the news conference, staff members began efforts to finalize the language.
Even then, their work is hardly over.
Congressional leaders who want the bailout to pass with solid bipartisan support had already begun to anxiously court votes, mindful of the difficulty they could face in a high-stakes election year.
Public opinion polls show the bailout plan to be deeply unpopular. Conservative Republicans have denounced the plan as an affront to free market capitalism, while some liberal Democrats criticize it as a giveaway to Wall Street.
Representative Roy Blunt of Missouri, the chief negotiator for House Republicans, who have been among the most reluctant to support the plan, expressed some satisfaction but did not commit his members’ support.
“We need to look and see where we are on paper tomorrow,” Mr. Blunt said. “We have been talking about how we can make these things work in a way that our conference can come together.”
Representative Barney Frank of Massachusetts, the lead negotiator for the House Democrats, said that there was no expectation of making anyone smile.
“This was never going to be a bill that was going to make people happy,” he said. “No solution to a problem can be more elegant than the problem itself. We are dealing with a very difficult problem.”
“Given the dimensions of the problem, I believe we have done a good job,” he added. “It includes genuine compromises.”
Aides described a tense meeting on Saturday afternoon that included Senator Max Baucus, Democrat of Montana, shouting at Mr. Paulson about executive pay caps.
Outside, stunned tourists visiting the Capitol watched as camera operators shoved one another to get footage of lawmakers talking outside of the meeting room.
At one point, when too much information was leaking out, staff members’ BlackBerrys were confiscated and collected in a trash bin.
While Congressional Republicans sent only their chief negotiators, Mr. Blunt and Senator Judd Gregg of New Hampshire, at least nine Democrats with competing priorities piled into the meeting, surprising the Republicans but apparently not unsettling them.
The centerpiece of the rescue effort remains the plan for the government to buy up to $700 billion in troubled assets from financial firms as a way to free their balance sheets of bad debts and to help restore a healthy flow of credit through the economy.
The money will disbursed in parts, with an initial $250 billion to get the rescue effort under way, followed by another $100 billion upon a report by Mr. Bush to Congress.
The president could then request the balance of $350 billion at any time. If Congress disapproved, it would have to act within 15 days to deny the Treasury the money.
Early in the day, the two presidential nominees were active from the sidelines. Mr. McCain telephoned Congressional Republicans to sound them out, and Mr. Obama got regular updates by phone from Mr. Paulson and top lawmakers.
Some lawmakers have made clear that they will not vote for the bailout plan under virtually any terms. “I didn’t want to be in the negotiations because I object to the basic principles of this,” said Senator Richard C. Shelby of Alabama, the senior Republican on the banking committee, who would normally be his party’s point man.
Pressed about his role, Mr. Shelby replied, “My position is ‘No.’ ”
Officials, including Mr. Bush, stepped up efforts to sell the plan to the American public, which, according to opinion polls, is deeply skeptical.
“The rescue effort we’re negotiating is not aimed at Wall Street; it is aimed at your street,” Mr. Bush said in his weekly radio address. “There is now widespread agreement on the major principles. We must free up the flow of credit to consumers and businesses by reducing the risk posed by troubled assets.”
In a brief speech on the Senate floor, Senator Kent Conrad, Democrat of North Dakota, said: “It’s not just going to be Wall Street. The chairman of the Federal Reserve has told us if the credit lockup continues, three million to four million Americans will lose their jobs in the next six months.”
The ultimate cost of the rescue plan to taxpayers is virtually impossible to know. Because the government would be buying assets of value — potentially worth much more than the government will pay for them — there is even a chance the rescue effort would eventually return a profit.
Some Democrats had sought to direct 20 percent of any such profits to help create affordable housing, but Republicans opposed that and demanded that all profits be returned to the Treasury.
Robert Pear contributed reporting
Read more in the New York Times
Sunday, September 21, 2008
By Faith Chatham - DFWRCC - September 21, 2008
I believe that every American, whether they are Republican or Democratic, whether they support Senator McCain or Senator Obama, whether they voted for Senator Clinton or Senator Obama, I believe that Senator Clinton's remarks on the current Financial Crisis should be heard by every American. She represents both the financial titons of Wall Street and all the workers associated with Wall Street and ordinary working citizens. She addresses the "broad picture" as it comes home to roost with every American.
Monday, September 15, 2008
Sunday, August 31, 2008
The Volunteer Center of North Texas is working in collaboration with the American Red Cross, the North Texas Food Bank and The Salvation Army to prepare for a possible mass evacuation as a result of Hurricane Gustav.
As of Saturday, August 30, it has been announced that 4,100 individuals will be evacuated to our area. However, depending on where the hurricane makes landfall, it has been projected that 45,000 people, or more, could evacuate to the DFW Metroplex. Here's how the four organizations will coordinate the response:
• The American Red Cross will manage and oversee shelter operations.
• The Salvation Army will provide meals at all mass shelter locations.
• North Texas Food Bank will provide food for meal preparation.
If you wish to sign up to volunteer as needs arise, please download and fill out an application and email to firstname.lastname@example.org. You will be contacted and scheduled, as needed. For more information, call 1-866-797-8268.
The Volunteer Center is in immediate need of volunteers to help serve meals at shelters that are already open for Hurricane Gustav evacuees. As the evacuation continues, volunteers will be needed for other roles as well. All volunteers must complete a volunteer application form. Volunteers SHOULD NOT go to a shelter expecting to volunteer without prior approval, as every volunteer must pass a criminal background check in order to serve. If you have any questions, please contact the Volunteer Center at 866-797-8268.
The Volunteers of North Texas web site for updates as they become available.
NOTE: The American Red Cross will hold volunteer training this weekend in Dallas and Fort Worth. The trainings will be offered 9:00 am - 5:00 pm at chapter headquarters in both cities. For more information, please visit http://www.redcrossdallas.org/ or call (214.678.4800) OR http://chisholmtrail.redcross.org/ or call (817) 336-8718).
By WFAA - Aug. 31, 2008
FORT WORTH — The City of Fort Worth is preparing to open three more shelters for guests leaving the Gulf Coast as Hurricane Gustav approaches, bringing the total to eight.
Ten buses with evacuees from the New Orleans area were expected to arrive at the Wilkerson-Greines Activity Center, 5201 C.A. Roberson Boulevard, by 7:30 p.m. From there, they will be dispatched to the following shelter sites:
• Worth Heights, 3551 New York Ave.
• Highland Hills, 1600 Glasgow Road
• Greenbriar, 5200 Hemphill St.
• Handley/Meadowbrook, 6201 Beaty St.
• Eugene McCray, 4932 Wilbarger St.
• Martin Luther King Community Center, 5565 Truman Drive
• North Tri-Ethnic Community Center, 2950 Roosevelt Ave.
• Fire Station Community Center, 1501 Lipscomb.
Pets will be housed at the Fort Worth Animal Care and Control Division, 4900 Martin St. Guests can call 817-392-3737 to make sheltering arrangements for their pets. All pets will be microchipped to ensure they are returned to their owners.
Want to help? Contact the Volunteer Center of North Texas at 817-335-9137.
The American Red Cross is welcoming cash donations at this time.
By Faith Chatham - DFWRCC - Aug. 31, 2008
In Arlington Davis Street Church of Christ and the Salvation Army expected the arrival of several hundred evacuees Sunday night. A few had arrived at the Salvation Army shelter in Arlington by mid day Sunday.
Saturday, August 23, 2008
AUSTIN — San Antonio state Rep. Frank Corte must be declared ineligible to run for re-election this fall because the place he claims as a residence is nothing but a vacant lot, the Texas Democratic Party said in a letter Thursday to Republican Party officials.
Chad Dunn, a lawyer for Texas Democrats, provided Bexar GOP Chairman Richard Langlois with public documents showing that Corte lists 4203 Honeycomb St. as his residence. It is a vacant lot in northwest San Antonio.
But Corte said he plans to build a house on that lot, where he once had a residence.
“As long as I intend to return — that's my residence,” Corte said.
Corte applied for a permit to have the house moved in the fall of 2006, according to documents. But Corte listed the vacant lot as his residence when filing for re-election on Dec. 17, 2007, and on a legally required personal financial statement last summer.
“There's no house. There's no shed. There's no cot. There's no way that Mr. Corte's living at the address that he certified as his residency,” Dunn said. “It's as serious as can be when it comes to eligibility of somebody who wants to serve in the Legislature.”
The issue is a nonstory, Corte said, because lawyers have assured him that he can claim that spot as his residence so long as he intends to return. Corte said he currently lives with his family in an apartment complex located about one-quarter mile from the Honeycomb location.
State Rep. Trey Martinez Fischer, D-San Antonio, represents the area where Corte has taken up temporary residence.
Corte wouldn't say when he plans to start building a new home at his Honeycomb address.
“What process I'm in is irrelevant. I intend to return,” he said.
The documents “conclusively establish that Frank Corte, Jr. knowingly and materially misrepresented facts on his ballot application and is not a resident of District 122, Texas House of Representatives and is therefore not entitled to election to that office,” Dunn said in the letter to Republican Party officials.
Langlois did not return a phone call.
The deadline for replacing a candidate on the Nov. 4 election ballot is today, Dunn reminded Langlois in the letter.
Inaction could result in a legal ruling against Corte's candidacy and the inability for Republicans to field a candidate, Dunn said.
Corte has represented the area in the state House since his first election in 1992. It's considered a Republican district.
If Corte is declared ineligible, Democrats could improve their chances to regain control of the state House. They need to pick up five seats in the November election, and Corte's district is not one of the Democrats' targeted districts. Democrat Frances Carnot is running for the seat.
Read more in San Antonio Express News
Friday, August 22, 2008
Thursday, August 21, 2008
Monday, Sept. 8, 2008 -- 6:30 p.m.
W.O. Haggard Jr. Library
2501 Coit Road
Plano, Texas 75075
Tuesday, Sept. 9, 2008 -- 10 a.m.
Transportation Council Room
616 Six Flags Drive
Arlington, Texas 76011
Tuesday, Sept. 9, 2008 -- 6:30 p.m.
Fort Worth Intermodal Transportation Center
1001 Jones Street
Fort Worth, Texas 76102
1. Regional Transportation Project Status Report
2. Transportation Improvement Program Modifications
3. Unified Planning Work Program Modifications
Let us know what you think. Submit comments online.
For additional information about public meetings, visit: www.nctcog.org/trans/outreach/meetings .
Please forward this e-mail to anyone who would be interested in learning more about transportation news.
For special accommodations due to a disability or for language translation, please contact Jahnae Stout at 817-608-2335 or email@example.com at least 72 hours prior to the meeting. Reasonable accommodations will be made.
Wednesday, August 20, 2008
Thursday, August 7, 2008
Yet as TURF warned (and the media has failed to report), the devil is in the details and the request for proposals by TxDOT clearly stated this contract was for the long-term development of the TTC. TxDOT also denies this grants ACS/Zachry the right of first refusal (preferential contracts without competitive bidding) for TTC-69 segments, but again, this statement by ACS tells its investors otherwise.
Read more about the egregious contract and taxpayer rip-off on the first segment of TTC-69 in the Rio Grande Valley here.
ACS to participate in the development of a great transportation infrastructure corridor in Texas
By ACS - June 27, 2008Iridium and the North American Zachry have been chosen by the State of Texas as strategic partners for 50 years to design, plan and develop a great infrastructure corridor of 1,000 kilometres in length.
The estimate project investments, involving the construction of road and railway infrastructures, exceed 30,000 million dollars, 5,000 million during the first seven years.
The I-69/TTC (Trans Texas Corridor) will connect the Mexican border with the Gulf of Mexico coastline, Houston and major industrial and logistics centres in Texas with the north of the country.
This is the second concessions project awarded to ACS in North America in seven days, after last week being awarded the A-30 highway in Canada.
Madrid, June 26, 2008. ACS Infrastructures Development, the North American branch of Iridium, the concession development company of ACS, and the Texan concessionaire Zachry American Infrastructure have become the successful bidders for the design, planning and development, as strategic partners of the Texas Department of Transportation (TxDOT), of the I-69/TTC infrastructure corridor for the next 50 years.
The I-69/TTC will be a great road and railway infrastructure corridor that will cross the State of Texas from north to south. Specifically, it will start in the Rio Grande valley to Houston offering new exits towards the centre of the Union from large industrial and logistics centres in the south of the State, including a branch towards the Gulf of Mexico and the port of Corpus Christie. The estimate investment for the entire project is around 30,000 million dollars, of which 5,000 million shall be invested during the first 7 years.
With the award of this project, ACS and Zachry, the largest construction group in the State of Texas, have become strategic partners of the Texas Department of Transportation and shall propose the development of specific projects and activities for which they will have a preferential negotiation option without public tender. In fact, the consortium is already considering the renewal of a first route whose concession will be negotiated with the Texas Department of Transportation, the US 77, which shall include the construction of a series of highways under concession regime connecting to it and which shall require an investment of 2,500 million dollars.
The I-69/TTC development project includes, in its initial design, the construction of a 1,000 kilometre network of highways and roads as well as railway lines. Based on this, ACS and Zachry will draft a Master Plan with the Texas Department of Transportation to establish the priority activities as well as the form and deadlines for their execution.
The winning consortium for the project, led by Iridium and Zachry, and which has UBS as its financial advisor and SDG as infrastructure planning consultant, also enjoys the involvement of Dragados, the parent company of the ACS construction area, and SICE, company belonging to its Industrial Services area and which has extended experience in the installation of traffic control systems, as well as other engineering and construction companies in the State of Texas.
The I-69/TTC is one of the high priority transportation infrastructure corridors identified by the State of Texas, the first of which has already been set in motion. In total, it entails an infrastructure network of around 3,000 kilometres and investments of 150,000 million euros to improve State communications with Mexico, centre and north of the country and Canada. Eight States of the Union, including Texas, which is the developer, are involved in the project.
Second concession in North America in one week
The awarding of the I-69/TTC represents the consolidation of the presence of the ACS Group in United States, where it already has considerable presence in civil works, and is the second concession won by Iridium in North America in seven days. Last week the ACS concessions developer was awarded by the State of Quebec, together with Acciona, the project to finance, build and operate for 35 years the A-30 highway in Canada, a project with an investment of 1,000 million euros, which shall require the execution of important civil works to connect the south of Montreal with the North American border. The A-30 is also the first concession awarded to Iridium in Canada.
This way, ACS continues its expansion process in North America, a market it has defined as strategic. Through Dragados, the parent company of its construction area, is already present in United States in its civil works activities since 2005, when it became the successful bidder for the first expansion of the New York Subway; a large engineering project connecting the Grand Central Station in Manhattan to Queens under the Hudson River, representing 400 million dollars. Later Dragados assumed new projects in the north east of the country to improve roads, dams and subways, and recently was awarded the construction of a dam in Puerto Rico and the first contract for the expansion of Miami airport. In December 2007, it acquired 100% of Schiavione; a company specialized in construction in the north east of the country.
Iridium, the ACS concessions company, has been for the last ten years the greatest private transportation infrastructure investor in the world, with promoted investments exceeding 22,000 million euros. The infrastructure and public equipment company participates in the management of more than 40 companies of these characteristics, encompassing the entire concessional business value chain.
Read more at TURF
Read ACS statement
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A government big enough to give you everything you want, is strong enough to take everything you have. - Thomas Jefferson