ACTION ALERT: TX Trans. Commission WORKSHOP Online (Wed) afternoon at 1:30

By Martha Estes - Feb. 25, 2009
Texas Transportation Commission Workshop (Wed) afternoon Feb. 25 at 1:30.
Fourth on Agenda:
2b. Discussion of the Department's plans for the use of Texas' portion of the American Recovery and Reinvestment Act for transportation related activities.
On February 17, 2009, President Obama signed legislation enacting the American Recovery and Reinvestment Act which created an economic stimulus package aimed at bolstering the economy through activities that will create new jobs. One element of this package provides investment in transportation infrastructure projects. TxDOT is working with the Texas Division of the Federal Highway Administration and Texas' metropolitan planning organizations, tolling authorities and transit providers to develop a list of potential projects that would qualify for funding from the stimulus package. This discussion item will allow the commission to discuss the activities TxDOT and our partners have taken thus far and the planned approach we will take to select projects from across the state to recommend to the commission for funding from the program.

Live streaming Video of the Workshop discussion

Action Alert: Stimulus money should not be used for toll roads and bridges

By Faith Chatham - DFWRCC - Feb. 25, 2009
Lack of funding was the basis used for planning state and federal roads and bridges as toll roads. The Federal Stimulus funding targets infrastructure. Those projects which are planned are most likely to be funded through Stimulus funds. Texas Legislators, US Senators and Congress persons, the Governor and Lt. Governor and President Obama need to hear from you. Let them understand that STIMULUS MONEY SHOULD NOT BE USED ON TOLL PROJECTS OR PRIVATE PUBLIC PARTNERSHIP HIGHWAY PROJECTS.

If we do not speak out now, we'll pay gas tax, pay tolls and pay back the stimulus money. We'll face TRIPLE TAXATION if we don't demand that project planned as toll projects be revised to non toll roads and bridges.

Please take this opportunity to demand what is best for you, your neighbors, and future generations.

For Whom the Toll Bells - The North Texas Tollway Authority exacts a stiff price for those who drive willy-nilly on its highways

By Jim Schutze - Dallas Observer - January 14, 2009

Certain things you can do that might turn out very badly for you. Borrowing money from the Mafia, for example. Posing naked for a photographer who is a stranger.

The only sure way to avoid getting one of the tollway authority's trick bills for several hundred dollars is to have a lawyer ride with you.-MORREY TAYLOR

But who worries about driving down a toll road? I can tell you who should: You!

Over the last several years I have received numerous phone calls, letters and e-mails from people complaining that they have been hit with huge, totally unexpected bills for unpaid tolls and associated fines.

For a long time, I brushed these aside. I thought, "Well, you know, people should pay their tolls."

But most of the people calling me don't sound like folks who regularly skip on restaurant tabs or jump over turnstiles. I made up my mind a few weeks ago that the next time I got one of these complaints, I would stop whatever I was doing and take a look. I didn't have long to wait. On a Monday morning I found a phone message from Rick Johns, a probation officer in Tarrant County.

Johns had just received a bill from the North Texas Tollway Authority for $337 for four trips on the President George Bush Turnpike, which runs from near the D/FW Airport east to the vicinity of Rowlett on Lake Ray Hubbard.

For the first trip, which he made a year and a half ago, he was charged at a rate of $3 in tolls and $100 in "administrative fees." The second trip, made about a year ago, was billed at $3 in tolls and $75 in fees. Another cruise down the PGBT the following day cost him $2 in tolls and 50 bucks in fees.

The most recent trip, his most expensive, was made last May and billed at $4 in tolls and $100 in fees.

According to Johns, this statement was the first notification of any kind telling him he owed the NTTA money. His claim—that this was a first notice—was backed up by the notice itself, of which he gave me a copy, and by the NTTA's own description of its billing practices when I called them. The NTTA didn't comment on Johns' case specifically.

Before I even venture into the question of the billing practices, let's you and I see if we can figure out how a normal, law-abiding citizen—a parole officer in this case—gets behind the eight-ball to the tune of three C-notes in unpaid toll road fees.

Johns drives to the Dallas side of the metropolitan area for his son's baseball games. He used to drive on the State Highway 121 tollway between Coppell and Lewisville.

There are no tollbooths on 121. Therefore it is not possible to pay your tolls as you go. Cameras along the way take pictures of you as you pass. If you do not have an electronic TollTag on your windshield connected to a credit card, the NTTA bills you by mail for the amount of your tolls.

Johns didn't have a Dallas-area TollTag. Didn't want one. Was happy to pay by mail. Did so. He even thought mistakenly that he was paying a little extra and didn't mind.

"I was under the impression that the toll may have been even 25 cents higher per toll by not stopping and paying, and I didn't have a problem with that."

He says he paid those bills when he got them. Never had a problem. So where did he do wrong? He started driving on another NTTA toll road—the President George Bush Turnpike. There, the rules are different.

As explained to me by NTTA spokeswoman Sherita Coffelt, the difference is that the PGBT does have tollbooths, while the 121 tollway does not. Coffelt said that wherever there are tollbooths, a motorist who does not have a TollTag must stop and pay cash. Where there are no tollbooths, a motorist does not have to stop and pay cash.

When a motorist is not required to stop and pay cash, he will be billed for the amount of his toll only. When he is required to stop and pay cash but does not, he's a toll jumper. He will be billed for the amount of his toll plus a $25 penalty called an "administrative fee."

No signs along the road warn motorists of this difference. Coffelt told me it's the motorist's obligation to know the rules.

Each skipped toll station incurs a new $25 administrative fee. On his jaunt down the PGBT last May, Johns passed by four toll stations, each one of which took a picture of his license plate and billed him for a $1 toll plus a $25 administrative fee. So four times $26 amounted to a bill for $104, a tab he racked up for 33 minutes of driving.

But wait. We're not done with the different rules on how to pay your toll. There is a third rule. On the Dallas North Tollway, you can pay cash, so if you don't have a TollTag you must pay cash, and if you don't pay cash you'll be billed for the tolls plus the $25 fees. But you can't pay cash.

Say what?

The Dallas North Tollway is a road where you can pay cash, so you have to pay cash, but if you enter the Dallas North Tollway at the main plaza at Wycliff close to downtown, you will notice that you can't pay cash. There are no tollbooths at Wycliff.
Coffelt explained to me that the absence of cash-taking booths at the main entrance to the Dallas North Tollway is just kind of an exception. The Dallas North Tollway is definitely a must-pay-cash toll road except when you get on it, when it is a can't-pay-cash toll road. But that doesn't last; later down the road you have to pay cash.

Maybe you better take notes.

If you enter at Wycliff and you don't have a TollTag and you don't pay cash because you can't pay cash, you will be billed only for the amount of your tolls. Maybe.

If you keep driving, and maybe you think this is a road where you don't have to pay cash because that's what it was when you got on, but you pass another toll plaza farther north at say, Keller-Springs Road where you can pay cash, but you decide not to pay cash because you have been lulled into thinking you don't have to pay cash, this is what you must do next:

Pull over to the shoulder immediately.

Exit the vehicle.

Put your head between your legs.

Kiss your ass good-bye.

You have just become a son-of-a-bitch, toll-jumping, miscreant fool, and you are about to feel the full weight of the law on your no-good, crime-prone head.

Well, you might think, maybe I make that mistake one time. They let me know. I take my medicine, pay my toll plus my 25 bucks. Man, I'll sure never make that mistake again!

Not so fast, Kemo Sabe. In Johns' case, for example, he had no idea he was doing anything wrong until he was on the tab for $337. He told me he certainly would have figured out a smarter way to behave had he known what was going on at the get-go.

"I get on George Bush, which I assume is the same deal as 121, and obviously if I had known this—a $25 administrative fee per tollbooth—I mean, good grief, I would have made other arrangements."

I asked Coffelt why people don't get billed or notified right away, the first time they hit the buzzer, so that they won't keep making the same mistake. She said the NTTA wants to spare people the annoyance of being billed every time they have a two-bit toll.

"We're not sending out a 40-cent bill, and then you end up paying 42 cents for postage, because what person would want to write a check for 40 cents. So we save up a couple of transactions."

I said I understood about the normal tolls, but did the agency try to let people know the first time they made a mistake and racked up a $25 administrative fee? She said no. They save up those too.

"We will save it, and you may get two, three transactions with $25 fees on it, so yes, we do save those."

Problem. Johns, indeed, had only four toll road trips on his first bill. But those trips took place over an 18-month period. And because the system hits him with a separate $25 fee every time he ticks past another camera, his total administrative fees for those four trips came to $325. The first trip alone, a year and a half ago, cost him $100 in fees.

They couldn't have given him a heads-up a year and a half ago?

I asked Coffelt how much the agency collects in administrative fees and fines. Apparently that is a really tough question to answer. She said she would have to get back to me.

I did not hear from her before the deadline for this story, but I did the best I could on my own. I looked online at the NTTA's annual financial statements.

According to the NTTA's 2007 financial statement, it collected $4.4 million that year in administrative fees "for collection of tolls from toll violators [the bastards]," representing 2.1 percent of its total income.

Note to reader: I added "the bastards."

What I found more interesting was this: Between 2001 and 2007, the agency's toll revenues grew by 89 percent. In that same period, its revenues for "administrative fees, parking transaction fees, statement fees and miscellaneous charges" grew by 356 percent.

So I guess if you are the bright person at the NTTA in charge of squeezing money out of people with non-toll fees, right about now you've got a big gold star over your name.

While they're at it, the NTTA should set up a special tollbooth just for people who get really behind on their administrative fees. Deadbeats would be required to park their cars and come inside.

There should be some old pinball machines in there and a couple guys in zoot suits smoking cigars, one of them cleaning his fingernails with a switchblade. They might say something like, "Pal, you gotta lotta administrative fees youse owes us. We'd like to settle this peaceful."

They might as well be honest about the type of operation they're running.


Read More in the Dallas Observer

For some Dallas-area legislators, donations fund the good life

By EMILY RAMSHAW and MARCUS FUNK - The Dallas Morning News - Sunday, February 1, 2009

Read more


AUSTIN – Luxury car payments and private airplanes. Five-star hotels and exotic resort stays. Upscale condos, gym memberships and maid service.

They're just some of the ways North Texas lawmakers spend their campaign donations.

Some of this money, which is designed to fund runs for office, comes from individual supporters; the rest comes from special interest groups that have a stake in legislation. But Texas lawmakers are permitted to use the contributions for other expenses associated with holding elected office.

What qualifies is often subject to debate. A Dallas Morning News review of two years' worth of North Texas elected officials' spending habits shows their expenditures run the gamut from bare-bones to lavish, largely depending on how much they raise.

North Texas lawmakers say their spending is justified because of the personal and professional sacrifices they make to hold office. Lawmakers are paid $600 a month, plus a $128 personal allowance every day they're in session,

"It's a very expensive obligation – we have to live in Austin, we have to travel throughout our districts," said Sen. Florence Shapiro, R-Plano, who has used her contributions to fund car lease payments to Mercedes Benz and conference stays at the Ritz Carlton Palm Beach, the Venetian in Las Vegas, a Puerto Rican resort and the Hay-Adams, a luxury hotel in Washington, D.C.

"Otherwise, the only people who could afford to be elected would be the wealthiest of the wealthy."

Critics: slush funds

But watchdogs say the campaign accounts have effectively become lawmaker slush funds, where special interest groups can give unlimited contributions to augment elected officials' lifestyles. In the last two years, 34 percent of North Texas lawmakers' total spending – roughly $3.4 million out of nearly $10 million total – has gone to fund things beyond traditional campaigns, according to The News' analysis.

In a review two years ago that included only Dallas-area lawmakers, The News found that nearly half of their spending went to noncampaign expenditures.

"They're using the lobby's money to enhance their lifestyles, a perk that is technically legal but a clear conflict of interest," said Craig McDonald, executive director of Texans for Public Justice, which tracks the influence of money in state politics. "There ought to be a better wall between campaign contributions and what appear to be personal expenditures."

Combined, 36 North Texas lawmakers have spent nearly $560,000 on travel and entertainment, $470,000 on Austin living expenses and $290,000 on food since 2007. The bulk of their noncampaign spending – just over $2 million – was on charitable donations, gifts and campaign contributions, many of them to one another.

It's common for officials at all levels who don't face serious competition for re-election to donate to colleagues, often to help a fellow party member or to try to secure future support from them.

Of the five highest North Texas spenders, three are senators and two are House members, and all but one is Republican. Only one had a highly competitive race in the last election, which could have required unusually high expenditures.

Of the five lowest-spending North Texas lawmakers, three are Republicans and two are Democrats. All are House members.

Sen. John Carona, R-Dallas, spent more than $1 million in the last two years, more than any other North Texas lawmaker. The Senate transportation chairman's campaign reimbursed his property-management company nearly $62,000 for using the company's corporate jet for travel between Austin and Dallas – and other states where his firm has offices.

"The only expenses that we charge to the campaign are related to my service here in office," Carona said.

Carona's airplane costs were second only to Sen. Craig Estes, R-Wichita Falls, who spent nearly $95,000 on fuel and fees for a prop plane he leases. Estes, whose district includes parts of Denton and Collin counties, said that ground travel from his district to Austin is time-consuming and that the lack of direct flights means flying commercial is as tedious as driving.

"I'm a little envious of my colleagues in Amarillo and El Paso, since Southwest flies there straight from Austin every day," he said

.

Questions have been raised about lawmakers' use of private airplanes in the past. Between 1996 and 2004, the Texas Republican Party repeatedly attacked former Democratic House Speaker Pete Laney for using campaign funds to pay for his own airplane, once filing a Texas Ethics Commission complaint against him. Laney, whose district was in West Texas, was never cited for it.

Hans Klingler, spokesman for the state Republican Party, said if the ethics commission is OK with it, the party is, too.

"We always hope they put taxpayer interests first, and it sounds like both of these people, along with Speaker Laney, did that," said Klingler, who did not work for the party then.

Common practice

Using campaign funds to pay for other expenses is a common practice across the country, though the level varies from state to state, said Nick Nyhart, president of the nonprofit group Public Campaigns, which works to reduce the role of special interest money in politics.

In some states, lawmakers use the funds to sponsor Little League teams and community events. In the most severe cases, Nyhart said, lawmakers have used the campaign accounts to get around gift-giving rules and other ethics laws.

"The money can help purchase you a lifestyle above and beyond what you can afford were you not a lawmaker," Nyhart said.

Rep. Dan Branch, R-Dallas, and Sen. Jane Nelson, R-Lewisville, were two of the most generous donors – contributing $343,000 and $165,000, respectively, to the campaigns of their colleagues and to charitable causes across North Texas.

Branch attributed most of his spending – which totaled nearly $800,000 over the last two years – to having a Democratic challenger for his seat that "we took really seriously." But he argued that because of relatively low pay, it's appropriate for them to use their officeholder accounts for business purposes.

"There are a lot of sacrifices being made to be here," Branch said. "That said, there are laws set out for what's appropriate. Each member needs to be thoughtful about what these appropriate uses are."

For Sen. Chris Harris, R-Fort Worth, these uses include spending more than $15,000 on rental apartments for himself and his staff in Austin, and using campaign funds to cover his renters and auto insurance, his Sirius satellite radio and his maid service. He put a $12,000 down payment on a car at Park Place Lexus, then made more than $8,500 in lease payments.

In addition to car payments and luxury hotel stays totaling more than $13,000, Shapiro spent nearly $10,000 on Austin apartment rent, plus more than $2,000 on DirecTV and home cleaning services. Shapiro says she pays for half of her expenses out of pocket and funds the other half with her campaign account.

"The people who give us money recognize what it's going for and know that we're citizen legislators," she said.

Among other lawmakers' expenditures:

•Rep. Burt Solomons, R-Carrollton, spent more than $20,000 on rent for his Austin apartment, plus more than $4,500 on cable TV and cleaning service.

•Sen. Royce West, D-Dallas, was the top-spending Democrat, using campaign funds to make nearly $16,000 in car payments.

•Rep. Todd Smith, R-Euless, spent nearly $15,000 on Austin living expenses, including rental furniture, TV repairs, insurance, carpet cleaning and a gym membership.

•Sen. Bob Deuell, R-Greenville, spent more than $27,000 on car lease payments, auto insurance and repairs. He also spent nearly $18,000 on hotel stays. He said logistics getting to and from Austin, as well as travel within his own district, make up the bulk of his noncampaign-related expenses.

"If anybody thinks I'm making money out of this, they can call my
accountant," said Deuell, a physician. "I lose a lot of money every year
as a senator, as do a lot of other folks."

The Dallas Morning News surveyed campaign finance records from 36 lawmakers in Dallas, Tarrant, Rockwall, Denton, Collin and Ellis counties to measure campaign-related and noncampaign-related spending over the last two years. The study classified anything related to pursuing or supplying an office as "campaign spending" – everything from campaign mailers to office fax machines. All other expenses were divided into four categories: food, often for meetings; travel and
entertainment, including gasoline charges; gifts and political contributions, including donations to colleagues and local civic groups; and Austin living expenses, including apartment rent and utilities. The six North Texas lawmakers elected for the first time in 2008 had very few noncampaign expenses and were excluded from this survey.

Also Online:


Lawmaker living expenditures (.pdf)
http://www.dallasnews.com/sharedcontent/dws/img/02-09/0201living1.pdf

Lawmaker gifts, donations and dues expenditures (.pdf)
http://www.dallasnews.com/sharedcontent/dws/img/02-09/0201gifts1.pdf

Lawmaker travel and entertainment expenditures (.pdf)
http://www.dallasnews.com/sharedcontent/dws/img/02-09/0201travel1.pdf

Lawmaker food expenditures (.pdf)
http://www.dallasnews.com/sharedcontent/dws/img/02-09/0201food1.pdf

Texas Ethics Commission
http://www.ethics.state.tx.us/

Blog:
http://trailblazersblog.dallasnews.com/

Video: Emissions Created From Hydraulic Fracture of Barnett Shale Gas Well

Part of the reason the EPA is being sued.

Texas Senate Committees

Administration Committee

1. Tommy Williams, R-The Woodlands, chairman (new member)
2. Carlos Uresti, D-San Antonio, vice chairman
3. Steve Ogden, R-Bryan (new)
4. Florence Shapiro, R-Plano
5. Jeff Wentworth, R-San Antonio
6. John Whitmire, D-Houston
7. Judith Zaffirini, D-Laredo

Agriculture and Rural Affairs Committee (new, was a subcommittee)

1. Craig Estes, R-Wichita Falls, chairman
2. Carlos Uresti, vice chairman (new, was member of subcommittee)
3. Glenn Hegar, R-Katy
4. Juan Hinojosa, D-McAllen
5. Mike Jackson, R-La Porte

Business and Commerce Committee

1. Troy Fraser, R-Horseshoe Bay, chairman
2. Chris Harris, R-Arlington, vice chairman
3. Kip Averitt, R-Waco
4. Kevin Eltife, R-Tyler
5. Mike Jackson, R-La Porte (new)
6. Eddie Lucio, D-Brownsville
7. Leticia Van de Putte, D-San Antonio
8. Kirk Watson, D-Austin

Criminal Justice Committee

1. John Whitmire, D-Houston, chairman
2. Kel Seliger, R-Amarillo, vice chairman
3. John Carona, R-Dallas (new)
4. Rodney Ellis, D-Houston
5. Glenn Hegar, R-Katy
6. Juan Hinojosa, D-McAllen
7. Dan Patrick, R-Houston (new)

Economic Development Committee (new, was a subcommittee)

1. Chris Harris, R-Arlington, chairman (new)
2. Kevin Eltife, R-Tyler, vice chair (new)
3. Robert Deuell, R-Greenville (new)
4. Kirk Watson, D-Austin
5. Judith Zaffirini, D-Laredo (new)

Education Committee

1. Florence Shapiro, R-Plano, chair
2. Dan Patrick, R-Houston, vice chairman (new)
3. Kip Averitt, R-Waco
4. Wendy Davis, D-Fort Worth (new)
5. Mario Gallegos, D-Houston (new)
6. Steve Ogden, R-Bryan
7. Leticia Van de Putte, D-San Antonio
8. Royce West, D-Dallas
9. Tommy Williams, R-The Woodlands

Finance Committee

1. Steve Ogden, R-Bryan, chairman
2. Juan Hinojosa, D-McAllen, vice chairman (new)
3. Kip Averitt, R-Waco
4. Robert Deuell, R-Greenville
5. Robert Duncan, R-Lubbock
6. Kevin Eltife, R-Tyler
7. Chris Harris, R-Arlington (new)
8. Eddie Lucio, D-Brownsville
9. Jane Nelson, R-Lewisville
10. Kel Seliger, R-Amarillo (new)
11. Florence Shapiro, R-Plano
12. Royce West, D-Dallas
13. John Whitmire, D-Houston
14. Tommy Williams, R-The Woodlands
15. Judith Zaffirini, D-Laredo

Government Organization Committee

1. Rodney Ellis, D-Houston, chairman
2. Glenn Hegar, R-Katy, vice chairman
3. Joan Huffman, R-Houston (new)
4. Eddie Lucio, D-Brownsville (new)
5. Jane Nelson, R-Lewisville
6. Steve Ogden, R-Bryan (new)
7. John Whitmire, D-Houston

Health and Human Services Committee

1. Jane Nelson, R-Lewisville, chair
2. Robert Deuell, R-Greenville, vice chair
3. Joan Huffman, R-Houston (new)
4. Robert Nichols, R-Jacksonville
5. Dan Patrick, R-Houston
6. Eliot Shapleigh, D-El Paso
7. Carlos Uresti, D-San Antonio
8. Royce West, D-Dallas
9. Judith Zaffirini, D-Laredo

Higher Education Committee (new, was a subcommittee)

1. Judith Zaffirini, D-Laredo, chair
2. Dan Patrick, R-Houston, vice chairman (new, was member of subcommittee)
3. Kip Averitt, R-Waco
4. Robert Duncan, R-Lubbock (new)
5. Royce West, D-Dallas

Intergovernmental Relations Committee

1. Royce West, D-Dallas, chairman
2. Robert Nichols, R-Jacksonville
3. Mario Gallegos, D-Houston
4. Dan Patrick, R-Houston
5. Jeff Wentworth, R-San Antonio

Subcommittee on Flooding and Evacuations

1. Mario Gallegos, D-Houston, chairman
2. Robert Nichols, R-Jacksonville
3. Dan Patrick, R-Houston

International Relations and Trade

1. Eddie Lucio, D-Brownsville, chairman
2. Kel Seliger, R-Amarillo, vice chairman (new)
3. Wendy Davis, D-Fort Worth (new)
4. Craig Estes, R-Wichita Falls
5. Troy Fraser, R-Horseshoe Bay
6. Mario Gallegos, D-Houston
7. Tommy Williams, R-The Woodlands (new)

Jurisprudence Committee

1. Jeff Wentworth, R-San Antonio, chairman
2. Mario Gallegos, D-Houston, vice chairman (new)
3. John Carona, R-Dallas
4. Robert Duncan, R-Lubbock
5. Chris Harris, R-Arlington
6. Juan Hinojosa, D-McAllen
7. Kirk Watson, D-Austin

Natural Resources

1. Kip Averitt, R-Waco, chairman
2. Craig Estes, R-Wichita Falls, vice chairman
3. Robert Deuell, R-Greenville
4. Robert Duncan, R-Lubbock
5. Kevin Eltife, R-Tyler
6. Troy Fraser, R-Horseshoe Bay (new)
7. Glenn Hegar, R-Katy
8. Juan Hinojosa, D-McAllen
9. Mike Jackson, R-LaPorte
10. Kel Seliger, R-Amarillo
11. Carlos Uresti, D-San Antonio

Nominations Committee

1. Mike Jackson, R-La Porte, chairman
2. Kevin Eltife, R-Tyler, vice chairman
3. Glenn Hegar, R-Katy
4. Jane Nelson, R-Lewisville
5. Robert Nichols, R-Jacksonville
6. Eliot Shapleigh, D-El Paso
7. Kirk Watson, D-Austin

State Affairs Committee

1. Robert Duncan, R-Lubbock, chairman
2. Robert Deuell, R-Greenville, vice chairman (new)
3. John Carona, R-Dallas
4. Rodney Ellis, D-Houston
5. Troy Fraser, R-Horseshoe Bay
6. Chris Harris, R-Arlington
7. Mike Jackson, R-La Porte
8. Eddie Lucio, D-Brownsville
9. Leticia Van de Putte, D-San Antonio

Transportation and Homeland Security

1. John Carona, R-Dallas, chairman
2. Kirk Watson, D-Austin, vice chairman
3. Wendy Davis, D-Fort Worth (new)
4. Rodney Ellis, D-Houston
5. Joaan Huffman, R-Houston (new)
6. Robert Nichols, R-Jacksonville
7. Florence Shapiro, R-Plano
8. Eliot Shapleigh, D-El Paso
9. Jeff Wentworth, R-San Antonio

Veterans Affairs and Military Installations

1. Leticia Van de Putte, D-San Antonio, chair
2. Eliot Shapleigh, D-El Paso, vice chair
3. Wendy Davis, D-Fort Worth (new)
4. Craig Estes, R-Wichita Falls
5. Joan Huffman, R-Houston (new)

Subcommittee on Base Realignment and Closure

1. Eliot Shapleigh, D-El Paso, chairman
2. Craig Estes, R-Wichita Falls
3. Joan Huffman, R-Houston (new)

If you live in D/FW and drink water

You might want to ask the Texas Railroad Commission this question:

WHERE DID THE WATER GO?

TTC Dead -- New Plan announced

TxDOT - For Immediate Release - January 6, 2009

TxDOT Announces Updated Vision for Trans-Texas Corridor New document describes changes to original development plans, responds to public concern

AUSTIN - Before approximately 1,200 attendees at the fourth annual Texas Transportation Forum Tuesday, Texas Department of Transportation (TxDOT) Executive Director Amadeo Saenz unveiled Innovative Connectivity in Texas|Vision 2009, outlining updated guidelines for development of the Trans-Texas Corridor (TTC). The document describes the transformation of the original TTC vision, appropriately altered with regard to corridor width, transportation mode, use of existing facilities, timeline for development, and level of involvement of local officials and citizens in planning major corridor facilities in their communities.

"Texans have spoken, and we've been listening," said Saenz. "Citizens across the state have had good ideas about how Texas roads can better serve Texas communities. I believe this transformed vision for the TTC and other major corridor development goes a long way toward addressing the concerns we've heard over the past several years."

TxDOT agrees with many of the recommendations of the I-35 and I-69 Corridor Advisory Committees, citizen advisory groups created to participate in planning transportation projects along the two TTC project corridors already under way. Major corridor projects will now be comprised of several small segments closer to 600 feet wide and will no longer be called the Trans-Texas Corridor. Instead, the department will use the highway numbers originally associated with each segment, such as I-69, SH 130 and Loop 9. In addition, TxDOT will seek guidance from Corridor Segment Advisory Committees, comprised of citizens from affected communities along each corridor segment, to design and build facilities that meet the needs of the region, whether that includes road, freight rail, commuter rail and so on.

"I'm pleased with the level of public involvement called for in this document," added Saenz. "I'm hopeful that, working together, we'll develop a corridor that serves both the economic interests of the state and the needs of each individual community."

The original vision for the TTC, outlined in Crossroads of the Americas: Trans-Texas Corridor Plan, called for a corridor of up to 1,200 feet in width that would allow for several modes of transportation in addition to utility transmission facilities. Since the concept was publicly introduced in 2002, communities along the TTC-35 and I-69/TTC study areas have frequently voiced concerns over the corridor width, and viewed the idea as a one-size-fits-all concept, inappropriate for a
state as diverse as Texas.

The corridors are still in early phases of development. As each corridor continues to undergo federal environmental impact studies, the public will play a significant role in shaping the development and path of the roadway. These environmental impact studies and input received from public participation in Corridor Segment Advisory Committees, Corridor Advisory Committees and town hall meetings will eventually determine the final route alignment to satisfy the state’s
transportation needs.

View the complete document

For more information contact TxDOT Government and Public Affairs Division at (512)463-6086

Sludge Spill Worse Than Initial Reports. MUCH WORSE

The Tennessee clean coal by product sludge pit spill is 3 TIMES worse than the initial reports

DRAFT SUMMARY - Sunset Commission Decisions on the Texas Department of Transportation

Sunset Decision Meeting – December 16, 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.

DFWRCC ENDORSES THREE CANDIDATES IN GENERAL ELECTION

By Faith Chatham - DFWRCC- Oct. 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 Guys From ‘Government Sachs’

By JULIE CRESWELL and BEN WHITE -
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

CHANNEL 13 HOUSTON UNDERCOVER: WHERE DO TOLL FEES GO?

Channel 13 KTRK- TV Houston - Tuesday, October 14, 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.

Major Players in TTC and SH 121 Toll Financing Scenario hit with Financial Crisis

DRWRCC Editor's note: This article is being posted here because Goldman Sacks has a cozy relationship with key players in the Dallas District TxDOT office. Last year a memo surfaced which appeared to have been authored by Goldman Sacks evaluating NTTA's financial ability to build and manage SH!21. Investigations showed that the memo was actually authored by an engineer in the TxDOT Dallas District Office and circulated under the Goldman Sacks name just as the NTCOG RTC's was deciding between Cintra or NTTA for awarding the lucrative toll contract for SH121. Investment banks are heavily involved in financing (and profiting from) Texas road contracts. Washington and Wall Street impact the cost of public services and infrastructure in Texas cities, counties and the state. This behind-the-scenes article sheds light on some of the players and decisions which are impacting the pocketbooks of DFW regional citizens and Texans in every county of this state.

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

With Bonds in Trouble, States Seek Federal Help

By MARY WILLIAMS WALSH and RANDAL C. ARCHIBOLD - The New York Times - October 7, 2008
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