HELP KILL THE EWC! Action needed now on our bill.

Help protect Maine people and the environment from unnecessary new transportation infrastructure

(like the East-West Corridor)

 

Call your Senators and Representatives and ask them to vote, “ought to pass” on LD 1168 today!

 

Click here for a CONTACT LIST for all Senators and Representatives: https://docs.google.com/spreadsheets/d/1WBJaw1Hvmr0n0DSVVS_CBXA1ug1_lLw0-L26MbrPVdE/pubhtml?usp=gmail

 

Please take notice: LD 1168 has changed from a focus on eminent domain to a focus on improving the P3 law. There are several reasons for this. Primarily, we want to achieve some protection THIS SESSION. Please contact us to discuss.

 

New Talking Points for LD 1168

 

LD 1168 as amended makes some significant improvements to the public-private partnership law for transportation projects (P3) to improve protection of the public interest.  This amended bill was a joint effort between Stop the East-West Corridor, the Department of Transportation, and Sen. Paul Davis.

 

LD 1168 clarifies that P3s must be in accordance with the Sensible Transportation Policy Act (section 73).  The P3 should comply with the STPA because it is the guiding statute dictating appropriate transportation development in Maine, with guidelines for protecting the public interest in significant transportation development. That means more safeguards for water resources, farmland, wildlife, natural resources, rural character, tourism, state and municipal resources, and taxpayer money from unnecessary transportation infrastructure like the East-West Corridor.

 

LD 1168 calls for an annual reporting requirement, which enables some public participation and accountability to lawmakers on authorized P3 projects.  Right now, P3 projects only require legislative authorization at a draft stage, and then never need to be seen again.  Since P3 projects may use up to 50% taxpayer money and other state resources, ongoing legislative and public oversight is critical.

 

LD 1168 clarifies that the department may not confer eminent domain power to a private entity.  According to the Chief Deputy Attorney General, Linda Pistner, this potential abuse of eminent domain power is currently unclear in Maine State law, so we are fixing that.

 

 

To view Maine’s existing P3 law, visit: http://legislature.maine.gov/statutes/23/title23sec4251.html

 

To view Maine’s Sensible Transportation Policy Act (section 73), visit:

http://legislature.maine.gov/legis/statutes/23/title23sec73.html

 

To view an amended version of LD 1168, see the attachment.

 

Click here for a CONTACT LIST for all Senators and Representatives: https://docs.google.com/spreadsheets/d/1WBJaw1Hvmr0n0DSVVS_CBXA1ug1_lLw0-L26MbrPVdE/pubhtml?usp=gmail

 

Thank you for your concern and your support!

 

 

Questions? Contact:

 

Chris Buchanan                                                             Jane Crosen

Statewide Coordinator, STEWC                                 Eastern Outreach, STEWC

Maine Coordinator, Defending Water for Life         jcrosenmaps(at)gmail(dot)com

chris(at)defendingwater(dot)net                                           (207) 326-4850

(207) 495-3648

 

 

For more information about Stop the East-West Corridor and the East-West Corridor proposal in general, please visit: www.stopthecorridor.org

LIKE us on Facebook: Stop the East-West Corridor

Meeting with MDOT & LD 1168

Letter to STEWC email notification list from Chris Buchanan on 4-9-15

Hi everyone,

As many of you know, our bill to close the loophole in the PPP law, LD 506, was unanimously defeated in the Transportation Committee last week, which is a bummer.  But, we’re not done with advocating for better state policy!

We are now asking for your support on LD 1168.  Below and attached are the talking points that we’ve written up for LD 1168 to help people draft testimony.

The public hearing has not been scheduled yet, but this bill will be heard before the Judiciary Committee.

Now is the time to start calling, emailing, and meeting with members of the Judiciary Committee to earn their support.  Note, the Senate Chair of the Judiciary Committee is Senator David Burns, so folks in Washington County, we hope you’ll make an effort to get in touch with your Senator!  Judiciary Committee contacts are attached and at this link.

As before, it will be very powerful to receive testimony from municipalities, so while we have time, please share a copy of the bill with your selectboard or council and ask for their support!

You may also begin preparing and submitting testimony.  Emailing testimony, we’ve learned, will get to committee members but may not be part of their official packet, or a part of testimony listed online.  So, it’s best to show up in person and give them 20 copies, or to mail 20 copies, if you want your testimony as part of the official packet.  Info on submitting testimony is attached and will be sent out again.

MDOT.  I met with Nina Fisher from MDOT yesterday, to discuss LD 1168 and understand why they killed LD 506.  Nina said that the MDOT is going to try to kill LD 1168 because they don’t feel like the PPP has any legs without eminent domain powers.  She provided an example of a possible train spur project to Limestone that would need eminent domain, and would be a private entity.  However, Nina said she was going to talk to the executive office about advocating for a clause in the PPP that would eliminate an east-west highway from being a project that could be used by the PPP.  She said she wasn’t sure the governor was ready to do that, but he may be.  If he is agreeable, MDOT would use LD 1168 as the vehicle for making that change to the PPP law, as opposed to advocating to completely kill the bill.

Regarding LD 506, Nina said that the clause in the PPP law, subsection 4i which states, “I. The proposal and the transportation facility must comply with all requirements of applicable federal, state and local laws and department rules, policies and procedures,” means that both solicited and unsolicited proposals must follow the Sensible Transportation Policy Act, go through the normal public hearing process, etc.  She believes that providing the unsolicited proposals clause provides a way to encourage private entities to approach the MDOT with ideas that may be good ideas.  I told her it didn’t seem necessary to me, and that the MDOT was asking for trouble with this loophole, as we have seen with the EWC, but she insists that the MDOT wants to maintain the clause.  Instead, as described above, she offered to discuss the possibility of prohibiting the EWC in the PPP law.  She agreed that the EWC would not pass muster under MDOT scrutiny, and she did not think, even if the Commissioner at MDOT changed and was a super pro-East West Corridor person who gave the EWC a green light, that the legislature would agree and pass it.  She said she thought that legislators perceived that supporting the EWC was toxic, thanks to all of the work of all of you, the people of Maine.

I say, congratulations to everyone on that major accomplishment, which is also very apparent to me!

For those who want to discuss my meeting with Nina more, please feel free to call.

Again, attachments are: 1) LD 1168 talking points, 2) Judiciary Committee contact info, 3) How to Submit Testimony to the Judiciary Committee

Here are the talking points on LD 1168:

LD 1168, An Act to Prohibit the Delegation 

of Eminent Domain Power to Private Entities,

sponsored by Sen. Paul Davis (R-Piscataquis)

 

Concept:

 

LD 1168 prevents eminent domain from being used by a private entity, or in certain Public-Private Partnerships (PPP) on behalf of a private entity, by amending the Public-Private-Partnership for Transportation Projects Law[1], and the law that restricts eminent domain use[2].

 

Talking points:

 

  • Eminent domain is an important tool for State and Local Government to have in order to promote the health, safety, and welfare of its residents; however, eminent domain is a serious power that overrides individual property rights in favor of community rights.  Therefore, State and Local Government Entities should use eminent domain only as a last resort, for vetted transportation projects that can be demonstrated to be in the public’s best interest.

 

  • The law must be clear and the law must reflect that the public interest is the priority interest of concern to State and Local Government when exercising eminent domain power for transportation projects.  Although private entities may be subcontracted by the State or Local Government Entity to fulfill a contract, no public entity should use its eminent domain power to act on behalf of a private entity’s transportation development interest, or to further the economic interests of another country that could be the primary beneficiary of the transportation infrastructure.
    • The proposed East-West Corridor, for example, would allow local territory to be used as a pass-through connecting New Brunswick and Quebec, with primary economic benefits accruing to Canada and profits accruing to foreign investors.
    • In general, since foreign investment and/or ownership is sometimes part of a private project, state and local eminent domain power should not be used to further these financial interests.  

 

  • Maine’s farmland and fresh water must be protected.  Everyone needs good food and water to live a healthy life.  The growth rate of Maine’s young farmers is much higher than anywhere else in the country, 40% versus 1.5%.[3]  Maine farmers shouldn’t feel threatened by private entities to give up their livelihoods and future food security.  We need to support multi-generational farms and the next generation of farmers as much as possible.  New transportation infrastructure development increases risks to water quality, and is likely to result in fragmentation of farmland and wildlife habitat.

 

  • Additional protection from eminent domain for transportation projects will help maintain regional stability.  When a private entity can access the power of eminent domain for a private transportation project, or unsolicited public-private-partnership for a transportation project, as we have learned through experience with the East-West Corridor proposal, many members of the public experience needless trauma, declined economic activity and real estate sales (also known as condemnation blight), and even flight from the region.

 

  • This bill closes previously unaddressed loopholes and shortcomings in our law that became apparent when the East-West Corridor proposal came to the table.  These are lessons that stretch well beyond the East-West Corridor proposal.

[1] Maine Revised Statutes Title 23, Part 5, Chapter 410, subchapter 5, subsection 4251. Public-private partnerships; transportation projects

[2] Maine Revised Statutes Title 1, Chapter 21, subsection 816. Limitations on Eminent Domain Authority

[3] In Maine, More Hipsters Choosing Life on the Farm, Jennifer Mitchell, MPBN 12-11-14

TESTIMONY GUIDELINES Judiciary 2015 Judiciary Committee contacts 127th 2015 LD 1168 Talking Points

 

Town of Sangerville testimony supporting LD 506

Darlene Simoneau March 26, 2015
Transportation Committee Clerk
100 State House Station,
Augusta, Maine 04333

Dear Senator Collins, Representative McLean and Members of the Transportation Committee,
We are writing in support of LD 506, An Act to Improve Public-Private Transportation Partnerships. As Selectmen from the Town of Sangerville, we are deeply concerned that the Public-Private Partnership Law, as it exists today, allows private entities to initiate proposals for new transportation infrastructure projects within the State of Maine. In Sangerville we have been threatened by the proposed construction of a so called, East/West Corridor, which, if constructed, would cut our Town in two. Faced with the threat of this unwanted project, in the spring of 2013, Sangerville passed a Moratorium against the construction of “Public and Public-Private Transportation and Distribution Corridors.” Later that same year we chose to enact a self-governance ordinance in an attempt to further protect ourselves from this undesired development.
The proposed changes that LD 506 would bring to the existing Public-Private Transportation Partnership Law would prevent private entities from using State resources to drive projects that are not developed through the existing State planning processes. We strongly feel that, the Maine Department of Transportation best represents the interests of the citizens of Maine, and that the responsibility for the development and control of future transportation infrastructure projects should lie with the MDOT, not with private corporate interests. Further, by requiring the Public-Private Transportation Partnership Law to follow the guidelines outlined in the Sensible Transportation Policy Act, the citizens of Maine would be assured that any future PPP project would move forward with transparency, accountability and public oversight. Finally, we are concerned that if PPP projects like the East/West Corridor were built under existing law, the State of Maine would lose control over such projects due to rights of foreign investors to bring suit to protect their rights to future profits. We would, possibly, be handing over valuable assets of the State of Maine and our ability to control them, to foreign investors.
We hope that you will support LD 506 and it’s attending changes to the Public-Private Transportation Partnership Law. Maine citizens deserve public policy and projects that are developed within the framework of our legitimate state government.
Respectfully,

William Rowe Thomas Carone Melissa Randall

EPA Decision: Maine Water Quality Standards Inadequate for Tribal Waters

Link to Original Article and Radio Program

  FEB 5, 2015 | Maine Public Broadcasting Network

Download audio file: 

      1. 02052015spsmix.mp3

AUGUSTA, Maine – In a decision that is being welcomed as “historic” by Maine Indian tribes, the U.S. Environmental Protection Agency has asked the state of Maine to revise some water quality standards for tribal waters.

The decision comes during ongoing litigation brought by the state against the EPA. Maine’s chief of environmental protection says it could have far-reaching consequences for discharge license holders.

In a communique to Maine Department of Environmental Protection Commissioner Patty Aho this week, EPA Regional Administrator Curt Spalding delivered the news:  that federal regulators disapprove of some state water quality standards established by Maine more than a decade ago.

Aho says she was stunned by the announcement that the standards could not be used on tribal waters because they’re not protective enough of human health, and of the tribes’ sustenance fishing practices.

“It is, in some cases, work that we thought had been approved and had been in place for many, many years,” Aho says. “So it is just simply, as I stated, breathtaking in the scope and the sweep.”

Breathtaking in its scope, Aho says, because of its wide implications for sewer districts, paper companies and other discharge licensees.  She says the EPA has not defined what it means by waters in Indian territory.  Nor, she says, has the agency indicated how it wants the state to revise the standards and on what scientific  basis.

“It’s asking us to redo something, but not telling us to what standards,” she says. “They’re not telling us which waters in the state, or what parts of those waters, we are to redo these standards.”

“We’re talking only about the waters within tribal reservations and trust lands,” says Ken Moraff. “We’re not talking about the waters upstream or downstream, although there could possibly be an effect on upstream dischargers.”

Moraff is the director of the Office of Ecosystem Protection for EPA. He says existing permit holders will not be affected by the decision. But when new water quality standards are adopted in the future, any new or re-issued permits would have to meet the new standards, which have yet to be established.

Moraff says the decision is significant from the EPA’s point of view, too. That’s because this is the first time the EPA has determined that state standards are inadequate for uses in tribal waters, including sustenance fishing.

Chief Kirk Francis of the Penobscot Indian Nation couldn’t be happier.

“For the first time ever, what the EPA has said is that tribal subsistence and sustenance-based rights are a determinant factor under the Clean Water Act,” Francis says. “So you have to acknowledge those differences while setting your standards within Indian territory. You have to respect those practices. You have to respect the human health issues and the cultural identity of the tribes within those areas where the standards are being set.”

As part of an ongoing lawsuit brought by the state against the EPA over jurisdiction to set water quality standards, the EPA has concluded that the 1980 Maine Indian Land Claims Settlement Act, which extinguished certain tribal rights, allows the state authority to set water quality standards in tribal waters.

But Matt Manahan, an attorney representing discharge license holders along the Penobscot River, says what the EPA is also doing is setting up a two-tiered system for the tribe.

“What this is saying is, notwithstanding the fact that the Settlement Act treats them just like any other citizens of the state, we’re going to carve them out and say because they would like to have standards that are more stringent than the standards that apply to everyone else in the state, even though the science doesn’t support that, we’re going to basically carve that out and give them special treatment for purposes of water quality standards,” Manahan says.

The EPA has given the state 90 days to establish new standards for tribal waters. Commissioner Aho says she’s working with the Attorney General’s Office to determine a response.

Abigail Field: Privatization Is Driven By Private Greed and Public Cowardice (and Public Greed, Too)

Link to Original Article

Posted on May 12, 2014 by Lambert Strether

Lambert here: Apparently, IBGYBG (“I’ll Be Gone, You’ll Be Gone”) applies in government as well as Finance. How cozy.

By Abigail Caplovitz Field, an attorney and a freelance writer. She writes news for Benzinga.com and others, and posts a new blog every Sunday morning at Reality Check.

“Privatization” and “public-private-partnerships” for infrastructure and other public assets are scams driven by private greed and public cowardice. Americans have been burned by these scams. Last month the Atlantic ran a nice piece on the growing privatization backlash.

Unfortunately, as governments at the city, state and federal level continue to lack the political will to raise taxes or cut spending, as our infrastructure continues to deteriorate, and as political leaders such as President Obama and Congress peddle the idea, the pressure to privatize public goods will continue to rise. Indeed, it’s no longer companies like Deloitte offering to do deals; we’ve reached the point where the Motley Fool is pitching retail investors.

The New Jersey Toll Road Privatization Push

It’s a topic I’ve given a lot of thought to, because in my role as Legislative Advocate for NJPIRG, I played a meaningful role in defeating then-New Jersey Governor, nee Goldman Sachs Jon Corzine’s push to privatize New Jersey’s ‘three big roads’–the Turnpike, the Garden State Parkway, and the Atlantic City Expressway.

The policy arguments we made then (2007)–and which USPIRG and others continue to make today–remain true, and provide a good, accessible framework for judging any privatization deal that may affect you.

As you read the NJ story and our cheat sheet for judging proposed deals, consider what’s at stake– the level of traffic congestion and air pollution, the safety and quality of roads, and even the availability of high-quality affordable mass transit alternatives.

When Governor Corzine came into office, there was a political consensus among a sufficiently large and diverse coalition of interests that the best way to fund New Jersey’s transportation needs was to raise its very low gas tax. But rather than gather and lead this political will to pass the tax hike–something that would have taken courage, but not heroism–Governor Corzine pushed the privatization idea. I don’t know if ducked the tax hike because he was a coward, or greedy, or driven by his deep saturation in Wall Street’s greed ethos.

Regardless, Corzine (and his Democratic legislative allies, most notably State Senator Raymond Lesniak) suggested that New Jersey should fix its chronic budget crisis by leasing the New Jersey Turnpike, Garden State Parkway and Atlantic City Expressway to a private operator for 75 years. The private operator would be guaranteed annual toll hikes, given management of the ‘three big roads‘ and would pay the state some $20 billion.

Six Principles For Judging PPP Deals

I published an Op-Ed in the Trenton Times on May 18, 2007 that explained how to judge a deal that we (I worked closely with USPIRG’s Phineas Baxandall) later fully developed in this white paper:

1. Public Control: public policy, not protecting private profit, had to control key management decisions that would not only affect the leased roads, but also the communities all along the roads. Because of the roads at stake in New Jersey, the issue was really statewide transportation policy.

What were we talking about? As the white paper explains:

“…toll levels, maintenance and safety standards, and congestion on the Turnpike and Parkway have a substantial impact on the number of cars using alternative routes, including local roads and mass transit. …

In the wake of the last Turnpike toll hike, for instance, many communities felt the impact of trucks diverted onto local roads…. Public control of key toll roads is necessary to ensure a coherent statewide transportation planning and policy making.

… Three examples illustrate these potential dangers:

● Non-Compete Clauses—Deals in California, Colorado, and to a lesser extent, Indiana, limited the state’s ability to improve or expand “competing” roads. In New Jersey…virtually all major roads compete for cars with the Turnpike and the Parkway.

● Private Toll Decisions = Broad Private Control of Traffic Management—If the rules for increasing toll rates under Chicago toll road deal had applied to the Holland Tunnel since its inception, that roadway could presently charge a one-way toll of more than $180. As a practical matter, an operator would be unlikely to charge that price because drivers would instead take alternate routes. The point is that the Chicago toll-increase schedule effectively allows the private operator to charge whatever maximizes its profits. The toll operator can also offer discounts to particular types of motorists or encourage traffic between certain exits, as will maximize profits. Together these powers enable the operator to control toll policy, and thus dictate who drives on the toll roads, and when…

[Note: although Senator Lesniak said he would require annual toll hikes but limited them to the rate of inflation, even that doesn’t solve the issue; New Jersey would have given up its ability to set toll rates, and thus all its consequences, for 75 years. It’s not just about how high tolls go; it’s about controlling the policy–congestion pricing, HOV discounts, Lexus Lanes, etc.]

● Creates “Tax” on Normal Policy Making—The Indiana deal also requires the state to pay investors compensation for reduced toll revenue when the state performs construction such as when it might add an exit, build a mass transit line down the median, or bring the road up to state-of-the-art safety standards. This compensation would add significant costs, and potentially the state could not afford to do the work it would otherwise perform. As added complication, the exact level of these future payments might be subject to dispute and lawsuits.

2. Fair Value: deals pay the state far less money than its assets were worth, as the Atlantic article notes. In New Jersey, the best public advocate on this point was Peter Humphreys, then head of securization practice at the then 13th largest American law firm (McDermott, Will & Emery).

He testified before the Assembly Transportation Committee and explained the state could itself securitize the existing annual toll revenue of $700 million for a 15-year period and get an upfront payment of about $8.4 billion. Senator Lesniak’s approach imagined getting $20 billion from a 75 year deal. Thus serial securitizations–without changing the existing toll rates–for the same 75-year time frame would produce a nominal $42 billion.

Sure, that serial securization doesn’t account for the time value of money; but it also doesn’t consider the future toll hikes guaranteed to the private lessee. If the hikes contemplated in the Lesniak deal were enacted and also securitized, the serial figure would be much higher. $20 billion was way too little.

And it’s not just New Jersey; as the white paper recaps:

A financial analysis of the Indiana and Chicago deals by NW Financial, a New Jersey investment bank that represents the Turnpike Authority (among others), found that the private investors in those deals would likely recoup their investment in less than 20 years. That analysis is confirmed in at least Indiana’s case by the company that won the bid. Macquarie sent investors a presentation asserting an “Anticipated 15 year payback to equity.” Given that Indiana’s deal is 75 years long, and Chicago’s is 99 years, the analysis suggests that governments in these states received far less for their assets than they are worth.

3. Deals capped at 30 years. As I noted in the Trenton Times Op-Ed:

Sen. Raymond Lesniak (D-Union) has introduced a bill authorizing a 75-
year deal here, in the ballpark of Chicago’s 99 years and Indiana’s 75.
Some perspective: Henry Ford introduced the Model T 99 years ago, and the George Washington Bridge opened 76 years ago. The first section of the New Jersey Turnpike didn’t open until a mere 56 years ago.

Population also shifts dramatically on these timelines. In 1930, New
Jersey’s population was 4 million; 70 years later, it more than doubled
to 8.4 million.

From these markers, it’s clear that massive, unforeseeable changes will likely take place for transportation technology, networks and
demographics over the 75-year time frame being considered here. In the face of such uncertainty, New Jersey cannot predict its future
transportation needs, nor the revenue potential of its toll roads, well
enough to negotiate a deal that fairly allocates risks, dictates policy
or sets a fair price.

To minimize this problem, New Jersey must not enter a deal longer than 30 years.

4. State-of-the-art maintenance and safety standards. As we put it in the white paper:

The New Jersey Turnpike has been innovative throughout its history. Many of its design and safety choices have been replicated throughout the country and world. It is also recognized as having traffic management and danger warning systems that are among the best in the world. Similarly, the Garden State Parkway is consistently one of America’s safest roads.

…Indiana’s deal, for example, would not guarantee this performance. … the state of Indiana can require the operator to meet generally applicable safety standards, but must pay a hefty premium to implement higher quality…. In addition to the cost of construction or performing the maintenance, Indiana would be required to pay compensation to the private operator for any loss of revenues caused by the construction or imposition of new standards.

No deal for the Turnpike and Parkway should be approved that did not guarantee that state-of-the-art innovations would continue to be introduced.

5. Complete Transparency and Accountability. Again from the white paper:

…That requires full disclosure of the deal’s terms, and any related contracts and subcontracts, at least six months before a deal is done, plus public hearings. This commitment to transparency is doubly important given New Jersey’s past struggles with corruption and pay-to-play contracts. The public must have full confidence in the process for considering a potential deal.

Likewise, New Jerseyans need to be able to hold their representatives accountable for their decision to approve (or not approve) a deal. The Legislature must vote on the final terms of any potential deal. True accountability requires that both the Legislative and Executive Branches answer to New Jerseyans

6. No Budget Gimmicks. This one is self-explanatory, but also crucial, as Legislatures typically blow the wad of cash they get from these deals without fixing anything. The Atlantic piece mentions some of that, as does the white paper.

In response to our campaign based on the principles–we demanded the Governor sign a pledge to honor them–he came out with some nice sounding principles that didn’t go nearly far enough, as I discussed in this Op-Ed in the Newark Star Ledger July 10, 2007.

Ultimately the plan cratered. The Assembly Transportation Committee, led by Assemblyman John Wisniewski (also a Democrat) was a major reason why.

While NJPIRGs position always was: privatization is fine if done right–and the principles defined “right”–realize that Wall Street will never do a deal that lives up to the six principles. It’s just not profitable enough for them, and would put too much risk on them.

Extracting “Latent Income” (NOT!)

I began by claiming cowardice and greed are the reason these deals are done. Of course, that’s not the official line. The NJ framing of the advantage of privatization–which was branded as “monetizing” the turnpike, parkway and expressway–was reported in this April 12, 2007 Philadelphia Inquirer article this way:

““Monetizing” assets means squeezing latent income from them by selling or leasing them.”

As I pointed out in this letter to the editor about that article:

The article stated that “‘monetizing’ assets means squeezing latent income from them by selling or leasing them.” The Inquirer’s readers may imagine that this process harnesses additional value or productivity from the roads themselves. That is not the case.

“Monetization” simply means to borrow against a future source of revenue. Instead of receiving toll money at a later date, the government would receive cash up front today. Thus, monetization only “extracts latent income” the way individuals do when they take out a payday loan or a second mortgage.

To be fair, I should have said “in this case Monetization simply means” as monetizing doesn’t have to involve borrowing. But that doesn’t change my point then or now. The myth of privatization is that private companies can magically make things more valuable than government can, without articulating a coherent, stands up to scrutiny reason why it can.

Given that $20 billion was much less than the 75 year toll revenue was worth, where was the latent value extraction in the Lesniak deal?

Cowardice And Greed

Public policy involves tough choices. Privatization deals offer legislatures and governors an easy sounding way out; let stuff happen long after they’re out of office (and hope that’s when the bad consequences hit), and get in return a big wad of cash to blow now. No need to raise taxes or cut services.

Thus often privatization advocates on the government side are simply cowards–they don’t want to raise taxes, and they don’t want to cut spending.

The greed happens on both sides. On the private side, it’s the extraordinary profit potential. On the public side, greed can also shape decisions whether through quid pro quo type corruption or revolving door corruption.

And of course, greed and cowardice are not mutually exclusive motives.