Danish, Australian and Spanish Companies Pay Pennies on the Dollar for Infrastructure
By Luis R. Miranda
The Real Agenda
April 27, 2007
If you are a commuter who drives in and out of New York City, or maybe on Indiana highways chances are you’ve heard about local banking enterprises advising state and local governments on selling their transportation
system to foreign conglomerates and making a buck in the process. Well, let’s imagine you are a daily commuter who drives through the Holland Tunnel every morning and back out every evening. If Goldman Sachs or Morgan Stanley had their saying, you would be paying somewhere around $185 instead of what you pay now. See, the irresponsibility of local, state and federal governments has driven the country into bankruptcy, with a dollar that plunges deeper and deeper against foreign currencies, states that supposedly do not have money to maintain local roads or highway systems so they have to be sold to Spanish, Danish and Australian companies which pay a miserable price for the country’s infrastructure, but obtain lavish tax exemptions and little oversight.
As I mentioned earlier, these foreign companies cannot do it themselves, so they have the support of some of the biggest and more influential financial companies in the United States. The most prominent, Goldman Sachs. The smart pants bankers work hard to “advice” the governments to privatize their roads for which they receive juicy fees. While that is going on, they also pay lobbyist companies like Hillco Partners through J. McCartt -a former aide to Texas governor Rick Perry- to press local and state governments to sell their highways to companies like Cintra, Transurban and Zachry Construction or lobby the legislators themselves. If this wasn’t enough, the bankers also raise funds among parties who are interested in participating and getting a piece of the pie. These funds, of course, are not taxed thanks to the changes made to the tax code, which now allows bankers like Merryl Lynch and Morgan Stanley to come up with a cash box to invest in road projects, something only governments were able to do not too long ago.
This movement of privatizing everything seen as a burden started more or less during the Reagan years and has found a safe heaven during Bush’s seven years in Washington. It is the same type of behavior that allowed congressman Don Young to build his bridge to nowhere. But before I continue into the highway selling deals, let me put it in prospective. Why are local and state governments lacking the money to maintain the roads? Well, they certainly have money to spend in an illegal war, in law enforcement… the Pentagon even lost 12 billion dollars in a money transfer to Iraq! So how come, if everyone pays taxes, do we not have funds to finance the maintenance of our roads? Well, local and state officials waste the money you and I pay and then claim there aren’t enough funds to sustain the typical repays a road needs. Or better even, the cities and states do have enough money, but officials still promote privatization because they will make a buck or two in the process. This is the case of Texas governor, Rick Perry, who competes neck to neck with Indiana’s governor Mitch Daniels to see who provides more support to the project known as the NAFTA Superhighway, a project which includes the privatization of roads across the country in order to favor the commands of the Security and Prosperity Partnership (SPP) and the extensions of the North American Union (NAU) which president Bush signed into law in 2005. The NAU is an initiative supported by mainly by private groups like the Council on Foreign Relations (CFR) and its similars in Mexico and Canada. Their goal is to merge the North American block into a single political and economical beast through which people would be able to circulate without borders. In other words, the US, Mexico and Canada would lose their sovereignity as independent nations. Among other things, the initiative would require a highway system like the NAFTA Superhighway and policies which were written by non-governmental groups; better known as corporate tycoons.
Throughout the country there are projects to privatize everything. From the New Jersey, Ohio and Pennsylvania Turnpikes, the New York Thruway, highways and bridges in Alabama and Alaska, and of course Texas and Indiana. Let’s look at Indiana. The state received $3.8 billion from CINTRA and Macquaire Infrastructure Group (MIG) to lease the Indiana Toll Road for the next 75 years. The companies not only would be able to manage and raise the tolls at their discretion, but they also are exempt from taxes at the local and state levels. And if this wasn’t enough, calculations tell us that the companies would get a return of $11 billion. In Texas, the state transportation commission permitted a $1.3 billion deal so CINTRA could own and operate a 40 mile toll road out of Austin. In the meantime, Transurban paid around $500 million to lease Virginia’s Pocahontas Parkway for 99 years.
In case you haven’t notice anything wrong with this, because all you care is to have well-kept roads, let me make it clear. All these roads were paid for with your tax money and they have been paid in full already. What these companies are doing is paying the states with change, and obtaining absolute power over the country’s transportation system for two, three or four generations. In addition, they will make you pay many times over for infrastructure you already paid for and on top of that, the privatizations themselves are facilitators to forward the agendas of national and foreign corporations which intend to terminate the country as it exists today. By the way, they are way ahead already.
Phyllis Schlafly, a conservative activist, fought and continues to fight projects like the NAFTA Superhighway. “Why the rush to sell our transportation system? Following the money explains it all. Local and state governments pocket the money and get to spend it here and now, so politicians can cover their runaway budget deficits and enjoy the political rewards of spending for new facilities.”
Daniels just screwed the state of Indiana and the people of the state of Indiana. Private companies have the license to print money here. It’s a scam, basically. And you lose control of your transportation system,” says Representative Peter DeFazio, Democrat of Oregon and Chair of the House’s Subcommittee on Highways, Transit and Pipelines. Although Daniels claimed the privatization of the highways in the state as the “freeing of trapped value from an underperforming asset”, the truth is that he failed to appoint an independent financial analysis for the toll road privatization project. The bill Daniels introduced to allow the privatization of the highways, passed through after a strong debate and a complete disregard for what the population had to say. Those who did have much to say and continue to have a saying in these projects are the bankers. In the case of Goldman Sachs, representatives were shipped to at least 35 states to push for the privatization of highways. These banks, with their hundreds of lawyers and executives, and working along with construction companies attend conferences at places like the Waldorf Astoria in New York, where they talk about the trend of infrastructure privatization in the US. Statesmen and local officials also attend these conferences where they are sold the benefits these projects will bring to their local communities.
How do these bankers get so familiar with government officials or their aides? you probably ask. Well, many of these lobbyists are former government staffers or inversely are now former staffers who represent investment bankers in the privatization deals. One case is that of Jon Corzine, the governor of New Jersey, who was one of Goldman Sachs CEO’s and who in September organized a group of people to analize whether the garden state’s infrastructure should be leased or sold to private companies.
But if you thought privatization is only limited to roadways, you are in for a surprise. Everything from Healthcare to Social Security, from who feeds American troops to the operation of entire city halls, from public works to welfare. So why aren’t American companies taking care of our roads, Healthcare or Social Security? I do not have one answer. I believe it is so because they do not have the favor of the government as the foreign companies do. They have experience and know well how to manage government officials. These foreign companies are such experts, that most of the time they even ask for noncompete clauses, which limit government or smaller companies to fix existent roads or to build new ones. This not only gives companies more power to do whatever they want with the roads, but also eliminates the option commuters have to use alternate roads to visit family, friends or to travel between states.
Current roads will be turned into bottle necks which will force everyone to pay a toll no matter where you are driving to or from. Simply put, the privatization of roads and services previously overseen by the government will make this country and its people tenants not landlords, it will drive us all into a new version of feudalism; corporate feudalism. For those of you who think we already live in such a situation, you are right. We are submitted to feudalism through the production and consumption of mass produced goods. We need a new cellphone every year; it doesn’t matter if it fries our brains. We need to buy the 60′ plasma television, although most of the programming offered right now is not offered in HD. We replace our cars every two years, even though we could drive them many more years. Yes, we are part of a control grid that owns us through our consumerist lives. The difference with the massive privatization of roads and basic services is that we will be chained by our necessities; the water we need to drink, the food we do not grow ourselves, the medical care we need, prescription drugs we need -even though they are poison-, and the defense of the land, to cite a few.
One common characteristic the privatization projects have is that the contracts which the companies negotiate with the governments is kept secret. Governor Perry refused to release the details of his negotiations with CINTRA for the road that runs from Austin to Seguin. On the other hand we do know that Perry’s former legislative director, Dan Shelley, worked as a CINTRA consultant, before he became a staff member of Perry’s. This is how former lawyers, executives and lobbyists make their way from corporations to government and vice versa, while their fat pockets get larger and larger.
How do we correct this problem, the problem of corruption, the sale of our assets to foreigners; how do we defeat the control grid? The only peaceful tool we have in our hands is to VOTE. Just remember that in this country, we do not elect our president. We have the option to elect our delegates, who ultimately will have a say on who governs. Although that is bad news I do have good news too. This country was not made out of dust. In fact, that is why it is called the United States of America. The secret is the states. We must rise and take control of our local, regional and state governments. We must bring the government and the power back to the people. We must stop executives and lawyers from corporations from occupying public office, because their only commitment is with their former bosses, not with you or me. We face a new election in 2008. We need to elect delegates who will commit to the people, not to the corporations. Let’s unseat those who have failed us for the past 30 or more years. Let’s take power back!