WND Politics | December 29, 2012 | Jerome R. Corsi
NEW YORK – Believe it or not, the Trans-Texas Corridor is back.
Very quietly, Gov. Rick Perry and the Texas Department of Transportation, or TxDOT, signed in October a comprehensive development agreement to construct a toll-road redevelopment of Interstate 35 north of downtown Fort Worth.
TxDOT signed the 50-year deal with NTE Mobility Partners Segments 3 LLC, a U.S.-based wholly-owned subsidiary of Cintra, the Spanish-owned construction company. TxDOT picked Cintra in 2005 to build what some critics called the “NAFTA Super Highway.”
Chris Lippincot, the former TxDOT information officer who is currently acting as the new public relations man for Cintra in the United States, also announced TxDOT signed a contract in September with Cintra to build a privatized State Highway 130 toll road in San Antonio.
Perry may never have abandoned his original idea to build what during the presidential administration of George W. Bush was known as the Trans-Texas Corridor project, a 4,000-mile network of privately built and operated toll roads to crisscross the state, with Spanish development company Cintra scheduled to earn the tolls under 50-year leases.
In 2009, Perry scrapped the TTC plan after a series of combative town hall meetings throughout the state showed TxDOT it faced massive taxpayer resistance.
But now, the plan apparently is being implemented in small chunks, without the fanfare of divulging a statewide blueprint Perry and TxDOT may still have tucked away in their back pockets.
Was TTC ever really dead?
Operating below the radar of public opinion, Texas currently has $20 billion in roadwork underway through public-private partnerships, according to Ted Houghton, TxDOT chairman, the Texas Tribune reported earlier this month.
Despite Perry’s pledge in 2009 to end the Trans-Texas Corridor project with Cintra, TxDOT has kept the public-private partnership toll road concept alive by proposing smaller projects for the approval of the Texas state legislature.
Nicholas Rubio, the president of Cintra’s U.S. arm in Austin, told the Texas Tribune that Cintra currently has contracts for three road projects in Texas, consisting of approximately $5 billion in private investment against about $1 billion in public subsidies.
“You have to recognize, in general, that policymakers in Texas have been ahead of the curve,” Rubio told the Tribune. “The states that have been developing P3s (public-private partnerships) are Texas, Florida, Virginia, and that’s about it.”
In October, Perry and Rafael del Pino, chairman of Ferrovial, Cintra’s parent company in Spain, attended the grand launch of a 41-mile stretch of State Highway 130 P3 project between Austin and Sequin.
Texas owns the land on which the SH 130 P3 project is built, but a private consortium owned and operated by Cintra is scheduled to build the toll road. It’s to be operated under a 50-year lease, with Cintra taking the lion’s share of the tolls collected over the next 50 years to recover construction costs and to make a profit.
To make the SH 130 toll road palatable to Texas drivers, the speed limit will be set to 85 miles per hour, the fastest posted limit in the United States.
A look-back to the Bush era
Quietly but systematically, the Bush administration in conjunction with Perry in Texas advanced the plan to build a huge highway, four football fields wide, through the heart of Texas, parallel to Interstate 35, from the Mexican border at Laredo, Texas, to the Texas border with Oklahoma.
The Trans-Texas Corridor moved ahead to begin construction following the re-election of Perry in November 2006.
Plans to build TTC-35 were fully disclosed on KeepTexasMoving.org, a now defunct official TxDOT website.
On March 11, 2005, a “Comprehensive Development Agreement” was signed by TxDOT to build the “TTC-35 High Priority Corridor” parallel to Interstate 35.
The contracting party was a limited partnership formed between Cintra Concesiones de Infraestructuras de Transporte, S.A., a publically-listed company headquartered in Spain, majority controlled by the Madrid-based Groupo Ferrovial, and a San Antonio-based construction company, Zachry Construction Corporation.
The Cintra deal meant that once the TTC was completed, anyone who wanted to drive on it would have to pay an investment consortium in Spain for the privilege of driving in Texas.
Although somewhat incomprehensible to most U.S. citizens, these public-private partnerships involve selling off key U.S. infrastructure projects to foreign entities.
Granted, the “ownership” rights of projects like TTC-35 would have remained with the state of Texas, yet selling off the leasing rights amounts in the thinking of most U.S. citizens to selling off the highway to foreign interests for the term of the lease.
Under the terms of the TTC agreements with TxDOT, Cintra would have had the rights to operate TTC-35 for 50 years and to collect all tolls on the road in that period of time.
The Comprehensive Development Agreement called for Cintra-Zachry to provide private investment of $6 billion “to fully design, construct and operate a four-lane, 316-mile toll road between Dallas and San Antonio for up to 50 years as the initial segment of TTC-35.
For this, Cintra-Zachry paid the state of Texas $1.2 billion for the long-term right to build and operate the initial segment as a toll facility.
In April 2006, TxDOT released a 4,000-page Environmental Impact Statement, or EIS, for what was described as the “Trans-Texas Corridor-25 Oklahoma to Mexico/Gulf Coast Element.”
The April 2006 EIS made clear that Cintra-Zachry planned to build a 1,200-foot-wide (approximately four football fields wide) complex with 10 lanes of highway – five lanes in each direction, north and south.Three lanes in each direction would be reserved for passenger vehicles and two separate lanes reserved for trucks.
The EIS design included six rail lines running parallel to the highway, with separate rail lines in each direction for high-speed rail, commuter rail and freight rail.
Finally, the design called for a 200-foot wide utility corridor that would include pipelines for oil, natural gas, water, telecommunications and data, as well as electricity towers.
According to the TxDOT Trans-Texas Corridor Plan adopted in June 2002, TxDOT ultimately would build some 4,000 miles of highway-railway-utility super-corridors throughout Texas over the next 50 years, using some 584,000 acres of what is now Texas farm and ranchland, at an estimated cost of $184 billion.
The TTC plan left little doubt TTC toll-road super-corridors were designed to facilitate international trade, primarily speeding trucks and trains carrying “inter-modal” containers from Mexican ports to destinations in the heartland of the U.S.
The full TTC build-out was designed to move goods through Texas rapidly, bypassing the major cities.
On the heels of a successful lawsuit that has stopped construction of a Union County toll road, an environmental group said it will file a new federal lawsuit Tuesday to thwart another planned toll project – the Garden Parkway in Gaston County.
The Southern Environmental Law Center in Chapel Hill alleges that the N.C. Turnpike Authority did a “defective” environmental impact study for the parkway, a planned 21.9-mile toll road that cuts through southern Gaston County.
The law center alleges that the state gamed its federally required study in order to obtain the necessary state and federal permits.
It had previously filed a lawsuit to stop the Monroe Connector/Bypass, which was supposed to begin construction this year.
The federal government requires major highway projects to do what’s known as a “build vs. no build” study, which projects the impacts of building the highway against not building it.
In the case of the Monroe Connector/Bypass, the law center said that the N.C. Turnpike Authority assumed the toll road had already been built, resulting in a “build vs. build” study.
That showed little impact from the toll road’s construction. The law center said that made it easier to receive required permits.
In May, the 4th Circuit Court of Appeals in Richmond ruled in favor of the law center and criticized the state for failing to do the study properly.
That has forced the state to delay the project indefinitely.
“We think (the Garden Parkway study) is worse than Monroe,” said Kym Hunter, an attorney with the law center.
The state had been expecting litigation concerning the Garden Parkway, which is one of the most controversial highway projects in the state.
Greer Beaty, a spokesperson for the N.C. Department of Transportation, said the environmental studies for the parkway are correct. She said she couldn’t comment on the lawsuit until the state has had time to review it.
Supporters of the Garden Parkway say it will provide Gaston County with a much-needed link across the Catawba River, and provide an economic jolt to the county.
Opponents say the nearly $1 billion project won’t improve traffic congestion on Interstate 85 and that it will lead to sprawl and environmental damage.
One report showed that the Garden Parkway would actually cost Gaston County 900 jobs if it were built. The reason, according to the state study, is that the toll road would encourage jobs to move into South Carolina.
After that number was publicized, parkway supporters commissioned a study by UNC Charlotte economics professor John Connaughton, who said the project would bring up to 18,000 jobs to Gaston.
Ex-Louis Berger Group President Charged With False Claims
By David Voreacos | October 20, 2011 | Bloomberg Businessweek
(Updates with attorney’s comments in seventh paragraph.)
Oct. 20 (Bloomberg) — The former president and chief executive officer of Louis Berger Group Inc., a New Jersey engineering consulting firm, was charged with overbilling the U.S. government on overseas reconstruction projects.
Derish Wolff, 76, was accused of conspiring to defraud the U.S. Agency for International Development by inflating overhead and other indirect costs over almost two decades on hundreds of millions of dollars in contracts in Iraq and Afghanistan. He surrendered today to the Federal Bureau of Investigation in Newark, New Jersey.
“During decades at the helm of a company entrusted with the rebuilding of battle-scarred nations Derish Wolff focused on profits over progress,” U.S. Attorney Paul Fishman said in a statement. “Wolff allegedly used his position to lead others in the scheme, setting targets that could be reached only through fraud.”
The indictment follows an agreement by the company on Nov. 5 to pay $69.3 million to resolve criminal and civil probes related to overbilling for reconstruction contracts in Iraq and Afghanistan and other work. Two former executives also pleaded guilty that day in federal court in Newark.
Wolff was charged with conspiring with Salvatore Pepe, the former chief financial officer, and Precy Pellettieri, the former controller, who admitted to conspiring to defraud USAID. The Wolff indictment, unsealed today, doesn’t specify a specific amount of loss by the government.
Wolff, a resident of Miami and Bernardsville, New Jersey, appeared in federal court in Newark, where he was released on $1 million bail. He faces as long as 10 years in prison on the conspiracy charge and five years on each of five counts of filing false claims.
“Mr. Wolff intends to plead not guilty because he is not guilty, and he looks forward to establishing it in court,” his attorney, Herbert Stern, said in a phone interview.
The company, based in Morristown, New Jersey, admitted to filing claims for more than $10 million in inflated overhead rates to USAID. The company agreed to pay an $18.7 million criminal penalty and $50.6 million to resolve civil claims, including allegations it violated the False Claims Act. The U.S. examined billings over a 17-year period.
From at least 1990 through 2009, Wolff intentionally overbilled USAID and ordered subordinates to achieve an overhead target rate “through a variety of fraudulent means,” according to the Fishman statement.
‘Below Wolff’s Target’
At a Louis Berger annual meeting in September 2001, Pepe presented an overhead rate that was “significantly below Wolff’s target,” Fishman said. In response, “Wolff denounced Pepe, called him an ‘assassin’ of the overhead rate,” and told him to target a rate of $1.40 in overhead expenses for every $1 of labor devoted to the USAID contract, according to the Fishman statement.
Wolff was the president and CEO of Louis Berger Group from 1982 until 2002 and chairman of Berger Group Holdings Inc., which owns Louis Berger Group, from 2002 until August 2010, according to the indictment.
“The individuals associated with the government’s allegations are no longer with the company,” Louis Berger Group said in a statement. “The company has enacted substantial remediation to its accounting internal controls, made significant changes in personnel, and upgraded the company’s administrative and accounting expertise while under U.S. government oversight.”
The case is U.S. v. Wolff, U.S. District Court, District of New Jersey (Newark).
–Editors: Fred Strasser, Peter Blumberg
To contact the reporter on this story: David Voreacos in Newark, New Jersey, at email@example.com.
To contact the editor responsible for this story: Michael Hytha at firstname.lastname@example.org.