San Antonio Toll Party  
 
Take Action
Toll Glossary
Non-toll Alternatives
Most Current Post

 

NJ: Rest stops, toilets closed on freeways, remain open on toll roads

April 27th, 2010 by terrih

Link to article here.

Christie Shuts Toilets on Free New Jersey Roads to Save Money
By Dunstan McNichol
April 22, 2010
Businessweek

April 22 (Bloomberg) — New Jersey Governor Chris Christie wants to shut the last two rest-stop bathrooms on non-toll roads in the most densely populated U.S. state after this year to save $270,000.

“We just don’t have the money for the bathroom facilities,” Christie’s transportation commissioner, James Simpson, told members of the Senate Budget and Appropriations committee today during a hearing on his department’s $1.24 billion budget for the fiscal year that starts July 1.

The bathrooms scheduled to close under Christie’s plan are on Interstate 80 at the Pennsylvania border and Interstate 295 at the Delaware border. Parking areas at the rest areas will remain open for truckers under Christie’s plan, Simpson said. The closings will eliminate 18 maintenance positions, according to the department’s written response to questions from the nonpartisan Office of Legislative Services.

“Lavatory and tourism facilities will now be closed on all of the state’s non-toll roadways,” the response says.

Drivers will still find bathroom facilities on the New Jersey Turnpike and the Garden State Parkway. Those are two of the busiest toll roads in the U.S., according to the New Jersey Turnpike Authority.

Christie, a Republican who took office Jan. 19, last month proposed a $29.3 billion budget that includes $10 billion of spending reductions to help close a $10.7 billion deficit. The legislature, which is controlled by Democrats, is holding hearings on the proposal. A budget must be approved by July 1.

Simpson told lawmakers he is hoping to coax federal officials to give the state an exemption that would allow a private vendor to operate a cafe at the sites where the rest rooms are scheduled to close Jan. 1, enabling the bathrooms to stay open.

–Editors: Stacie Servetah, Ted Bunker

Forbes: Toll roads prohibit China from benefiting from its highway system

April 27th, 2010 by terrih

Link to article here.

The Cost Of Driving In China
Toll roads prohibit the nation from enjoying the economic benefits of its vast highway network.
Paul Midler 04.20.10
Forbes.com

HONG KONG – China will spend $300 billion on high-speed rail lines over the next 20 years. The world has seen nothing like it, and China-watchers have responded by drawing analogies to America’s transcontinental railroad, built in the 19th century, or its interstate highway system, built and expanded throughout the 1950s and 1960s.High-speed rail is not the only thing on the nation’s infrastructure to-do list. China’s General Administration of Civil Aviation has budgeted $62 billion to build 100 new airports by 2020. All of this new infrastructure is being seen as the signs of progress, but what has been missed is how high-speed rail and the new airports are a way for China to get around a major problem it faces–an exorbitant, toll-based road system.

Have a mind to jump in your car and drive from Guangzhou to Beijing? Don’t forget to bring your wallet. The expressways connecting the south to Beijing are expensive, and a trip to the nation’s capital will run you close to $200 each way. Driving on toll roads in China–and almost all of the country’s expressways cost money–runs an average of 0.5 yuan (7 cents) per kilometer, or nearly 12 cents per mile. For many types of cars, the tolls are greater than the cost of the fuel burned.

The jacked-up cost of auto travel in China actually makes high-speed rail seem affordable, but tickets for high-speed trains are still out of reach for most Chinese. The speedy rail line meant to connect Beijing to the southern province of Fujian was closed after only two months in operation due to a lack of commercial interest.

Other problems with China’s high-speed rail include poor planning. The high-speed rail lines connect only two, sometimes three, major cities. The tracks do not cover the country well; they will not necessarily take folks to where they want to go. They are by no means linked into a network, and already people are complaining that the rail stations do not connect properly to mass transit systems. For many who choose to take existing high-speed rail lines, it can take longer to get to the rail station than it does to ride the train from Point A to Point B.

Transportation infrastructure in China is a curious phenomenon. One of the observations made by New Yorker writer Peter Hessler in his travel book Country Driving is that while China’s expressways are clean and well-maintained, they are by and large empty. You can ride down many highways and find your car the only one in sight. What an odd contradiction for an economy said to be the world’s largest auto market!

Like it or not, the long-term potential of major auto companies in China–including Ford, Volkswagen, Honda and Toyota–is going to be affected by how the country deals with the high economic barrier posed by road tolls.

Japan is in the process of doing away with toll roads, which today account for 18% of its highway network (excluding the Tokyo Metropolitan and Hanshin Expressways). Japan’s Democratic Party pledged to give back thousands of kilometers of fee-based expressways as a political gesture, but the net effect will likely be to lift the economy ever so slightly.

China privatized its expressways as a way of quickly establishing an extensive network. While that was great for the short term, the policy decision means that the highway system may never belong to the public, that it will for some time represent corruption of some kind.

For all the latest headlines visit Forbes Asia.


Chinese leaders have no difficulty tearing down entire villages for the sake of a new high-speed rail line, but getting local and other stakeholders to agree on reforming the expressway system will be an enormous challenge in the not-too-distant future.Infrastructure is critically important to an economy; transportation is the cornerstone of commerce. A nation whose citizens move around unencumbered is better able to grow and do more business.China’s auto market is seen as an attractive long-term prospect for investors, but the Chinese continue to view automobiles more as status symbols than as means of conveyance. To get folks rolling down these roads, China will have to consider investing heavily in a different kind of “infrastructure”–the reduction of costs associated with auto travel.

Paul Midler is the author of the book Poorly Made in China: An Insider’s Account of the Tactics Behind China’s Production Game.

For all the latest headlines visit Forbes Asia.

Over 300 properties to be condemned for 290E toll project

April 27th, 2010 by terrih

Link to article here.

For anyone who still thinks toll roads don’t impact private property rights, think again. Here’s proof positive that an unnecessarily wide road expansion comes into play whenever TxDOT plans to toll existing roads. It must leave as many non-toll lanes as exist before the reconstruction. So most toll roads being done in Texas today require much larger footprints than would otherwise be necessary. Also, these toll lanes are largely underutilized (for “managed lane” projects only about 8% of the traffic can afford to pay the extra tax to access the new lanes). So this is a BIG price to pay for a project that won’t even provide congestion relief for the vast majority of commuters.

TXDOT wants 366 properties to widen 290 corridor
Public comment sought
Jay Blazek Crossley, Apr 16, 10.
Houston Tomorrow

The Texas Department of Transportation (TXDOT) has released the Final Environmental Impact Statement (FEIS) for a proposed project to add traffic lanes to the 290 corridor and fix the 610 / 290 / I-10 interchange.

Four of the additional lanes would be part of a new managed lane facility along the existing Hempstead Highway that would have variable toll pricing for private vehicles as well as HOV and METRO use, replacing the existing HOV lanes in the middle of 290.

The project identifies and preserves land for future transit use, but does not include implementation or specifics on technology or potential stops for transit. Construction could begin in 2011 and the total expected cost of the project is $4.65 billion.

The public now has the opportunity to comment on this proposed project.

The FEIS Notice of Availability Press Release states that TXDOT expected for the notice to appear in the Federal Register on April 16, 2010.  The Notice of Availability states “The FEIS wait period ends May 17, 2010.  Comments regarding the FEIS should be submitted to the Director of Project Development at the Texas Department of Transportation’s Houston District Office located at 7600 Washington Avenue, Houston, Texas prior to 5:00 p.m. on May 17, 2010.  The Texas Department of Transportation’s mailing address is P.O. Box 1386, Houston, Texas, 77251-1386.”

TXDOT states that the project will require the use of eminent domain to take 366 properties to acquire right-of-way, including two churches: Celebration Lutheran Church at 15815 House Hahl Road and Christian Family Church at 14406 Hempstead Road (no apparent website). Appendix D of the FEIS identifies churches, community groups, and civic associations in the area that were contacted and provided information to publish to their constituents on the proposed project. Neither of the churches proposed for eminent domain appear on the list.The proposed eminent domain needs will include 360 residences, including both single and multi-family, and 392 businesses, some of which are listed as multiple businesses on one property.

The Indirect and Cumulative Impacts section of the FEIS states that 413 acres of prime farmland would be converted directly for ROW use, although that information does not appear on Form NRCS-CPA-106, Farmland Conversion Impact Rating for Corridor Type Projects. This form is presented as Appendix A, although it appears incomplete. This form is a consequence of the Farmland Protection Policy Act, which seeks to avoid adverse impacts on American farmlands as a consequence of federal programs, including road projects funded by the Federal Highway Administration. The FEIS does not appear to give an estimate of the amount of prime farmland that will be lost as a result of indirect impacts of the road project, however it states that TXDOT expects that 5,000 to 7,500 acres of additional development will occur in the study area as a result of induced demand from increased lane capacity in the corridor.

TXDOT explains that induced development does not occur because increased highway capacity brings new development to the Houston region, but instead that TXDOT’s decision will allocate development to this area of the region as opposed to other areas.  Referring to a study by the Urban Land Institute, the FEIS notes in section 6.1.2 that “Regional development is primarily driven by regional economics and the major effect of highways is the distribution of development within a region. (FHWA 2004a; Cervero 2003; Hartgen 2003a and 2003b).”  TXDOT notes that the study area currently houses 184,000 acres of undeveloped land, approximately 130,000 acres that is used for pasture and farming, 14,000 of which is cultivated farmland.

TXDOT describes the area surrounding 290 as such: “The transportation network is discontinuous with self-contained, isolated developments with very little interconnectivity of the roadway network.” The proposed addition of freeway lanes will not address this issue. TXDOT instead states that the City of Houston Mayor Thoroughfare and Freeway Plan will be used at a later time to add major thoroughfares “to be designed and built as development occurs.” TXDOT continues: “Thoroughfares are built as development happens, leaving gaps between communities. Bikeways and sidewalks are discontinuous, existing only as part of individual residential developments or isolated public projects along bayous or parks.”

TXDOT summarizes the major changes between the Draft Environmental Impact Statement and the FEIS as such:

The Preferred alternative has the same general configuration as the Recommended alternative, with some changes in the number of proposed main lanes on US 290: 12 lanes from West 34th Street to Pinemont Drive (revised from 10 lanes), 12 lanes from FM 529 to Eldridge Parkway (revised from 10 lanes), and 10 lanes from Eldridge Parkway to Telge Road (revised from eight lanes).  Some direct connector and access ramp modifications were also revised.  The other major change in the Preferred alternative is the relocation of the transit reserve from north of the managed lanes along Hempstead Road to between the managed lanes and the UP railroad from IH 610 to BW 8.

The stated purposes of the US 290 Corridor projects are:

Reduce congestion in the US 290 corridor within Harris County,
Improve LOS and mobility on US 290 and Hempstead Road,
Bring the roadway facilities up to current design standards, and
Improve safety in the US 290 Corridor.

Main My290 project website
Full US 290 FEIS Report (link is to a webpage with a series of pdf’s)
Executive Summary
Section 6 – Indirect and Cumulative Impacts
Appendix A – Farmland Conversion Impact Rating for Corridor Type Projects
Section 1 – Need for and Purpose of Proposed Action
Public Comment and Response Report (This document includes written responses to the DEIS, transcripts from public meetings, and an attempt by TXDOT to respond to every issue raised in a manner that groups public comments into a series of questions)

Image credit: deltaMike

PA State Auditor blasts Turnpike Authority for “gambling” with taxpayer money

April 27th, 2010 by terrih

Link to article here.

Remember this is written by a toll road industry advocate, so the tone is pro-toll. It’s enlightening as to the financial chicanery being played with taxpayer money regarding interest rate swapping and other tricks with public debt that are not only risky, they’re downright malfeasance!

State auditor hits Penn Pike for “gambling” with $2.23 billion in interest rate swaps
Toll Road News
Posted on Fri, 2010-04-09

The state auditor-general in Pennsylvania, Jack Wagner has criticized the Turnpike for “gambling” with $2.23 billion variable interest rate debt tied to 26 different interest rate swaps. He said his office calculated the cost to terminate the swaps could be $146m – the equivalent of around three months toll revenues.

Wagner wrote in a letter to Turnpike CEO Joe Brimmeier: “Swaps are tantamount to gambling with taxpayer money and they have no place in the public sector.  With drivers already paying higher tolls mandated under Act 44, the Turnpike Commission must do all that it can to show Pennsylvanians that it is handling money wisely.”

In his letter to Brimmeier, Wagner urged the Turnpike Commission to:

– stop using swaps,

– conduct a financial assessment to determine the financial impact of its swaps, and

– hire financial advisers through a competitive selection process.

He asked Brimmeier to provide more detailed information about the Turnpike Commission’s swaps giving a deadline of April 19.

Wagner is quoted: “The fundamental guiding principle in handling public funds is that they should never be exposed to the risk of financial loss. Swaps have no place in public financing and should be banned immediately.”

Carl de Febo spokesman at the Turnpike said the commission is “reviewing that correspondence, and we have no comment at the moment.”

Wagner is a candidate for the Democrat Party’s nominee in the state governor election this November, since the incumbent governor Ed Rendell is term-limited out.

Populist politics?

Critics of Wagner will say he’s engaging in populist politics and pandering to people’s prejudice against complex financing instruments. Economists argue that all borrowing is risky. It is, they say, a gamble because future revenue streams to pay the interest and repay capital are uncertain, and because prevailing interest rates are unpredictable.

Interest rate swaps can – at a price – reduce the risk of interest rate volatility and such ‘hedging’ will make variable interest borrowing less of a gamble. Properly used they can be an insurance against big increases in interest rates on variable interest debt or on refinancing debt as debt matures.

To prohibit public authorities from hedging, they will say, could increase the “gamble” they take when they borrow – like prohibiting insurance.

But interest rate swaps that shielded borrowers in the boom turned out to be big lossmakers in the great financial crisis from 2008 on. Engineered to protect against rises in interest rates they turned into major lossmakers when interest rates plunged.

Carelessness and fraud

And many theoretically defensible swaps and auction rate securities seem to have been carelessly written, some were fraudulent. In addition many contracts just fell apart when the bond insurers lost their required credit rating. That risk had not been properly explained or considered.

Brian Chase an investment consultant and former Nossaman and Carlyle Group staffer says: “Frequently, we have seen that the public sector does not in fact understand the financial risks it has taken through its use of interest-rate swaps and auction-rate securities.”

Elaine Greenberg, top SEC official in Pennsylvania, has said there is widespread pay-to-play corruption and bid fixes in bond underwriting and derivatives transactions in that state.

Small cliques seem to get the great bulk of the profitable work of underwriting and legal and financial advice.

Size of debt may be biggest issue

But the biggest question of all may lie not in hedging via interest rate swaps but in the absolute size of the Turnpike’s borrowing relative to its income stream and its obligations.

How sound is the basis for the Turnpike’s huge borrowing – $6.11 billion at end December last year? Can the Turnpike realistically deliver on the fixed Act 44 obligations it has assumed to support unpriced and loss-making transportation elsewhere in the state?

Public authorities held to lower standard of liability disclosureGreenberg of the SEC told Business Week recently that public authorities like the Turnpike have not been required to fully disclose the liabilities they are taking on nearly as fully as investor owned companies.

So while they provide sexy subject matter for gubernatorial campaigning the interest rate swaps may turn out to be a trivial side issue compared to the fundamental question of whether the borrowing of these many billions is justified. Some say it isn’t clear that the proceeds of the borrowings been productively invested to generate cash flows five and ten years off to service that huge debt.

TOLLROADSnews 2010-04-09

Tea Parties bring critical mass to fiscal issues

April 19th, 2010 by terrih

TURF speaks to Dallas Tea Party
By Terri Hall
San Antonio Express-News blog
April 19, 2010

Though much maligned in the press, the Tea Party movement has the potential to bring much-needed attention to a host of fiscal issues that, if left unchecked, threaten to bankrupt the country. I was invited to speak at the Dallas Tea Party event at Quick Trip Stadium in Grand Prairie for its April 15th Tax Day anniversary, along with national talk radio host Mike Gallagher and Dallas talk radio hosts Chris Krok and Jeff Bolton. Fourteen-thousand concerned citizens from all walks of life, many political stripes, and of all colors gathered to express their concerns with a host of fiscal issues from government spending to unsustainable debt across a broad range of policies.

TURF Founder, Terri Hall, with national radio talk show host Mike  Gallagher

The new version of toll roads using “innovative financing” relies on heaps of multi-leveraged public debt (the same risky financial schemes that brought us the mortgage crisis and bailout era) and has caused our infrastructure to teeter on the edge of insolvency. Many in the DFW area heard for the first time about this new-fangled version of toll roads (totally different than the traditional turnpikes that have been in North Texas for decades) that co-mingle public and private funds and ultimately sells America’s public infrastructure to the highest bidder on Wall Street in order to generate quick cash for government. Think of it as a government bailout as a result of decades of out of control spending and a lack of properly funding legitimate priorities like public infrastructure.

Hall - Tea  Party.JPG

The crowd response was nothing short of amazing with shouts of “who’s responsible for this?” and “what a rip-off,” along with other sentiments of fiscal disgust. North Texas is under an all-out toll road assault, with virtually every new lane slated to be tolled and close to 600 miles of planned toll lanes. All three of the current public private partnership (PPP) contracts that will sell our roads to foreign companies are in North Texas: the DFW Connector, North Tarrant Express/I-820, and LBJ/I-635. These deals will charge extremely high tolls, 75 cents PER MILE, which is like paying $17 more for every gallon of gas you buy, just to use a single road!

Hall with Dallas radio talk show host Jeff Bolton

PPP contracts essentially give private corporations the power to levy taxes and it’s also opened the door to eminent domain abuse for private gain. PPPs are yet another example of socializing the losses and privatizing the profits that awakened the sleeping giant in the first place. Your average Joe is not gonna tolerate being taken to the cleaners for government irresponsibility nor for private gluttony.

With DFW and Houston comprising the largest population centers, their grassroots involvement on toll tax issues are critical to halting toll road proliferation and returning to sensible, affordable, and sustainable transportation policy in Texas. Clearly our elected officials have ignored the public outcry against tolls in Austin and San Antonio for years. But with the rise of the Tea Parties and the newly awakened electorate they represent, a massive, organized coalition can now be mounted against runaway toll taxation.

Fasten your seat belts, we’re in for a wild ride in the next legislative session!

Read the complete text of TURF’s Dallas Tea Party speech here.

Perry breaks state law, fails to report stimulus money

April 18th, 2010 by terrih

Link to article here.

Perry accepted $2 billion in stimulus money for road projects, 70% of which was slated to go to toll projects in a massive TRIPLE TAX scheme (gas tax, federal taxes to pay for stimulus, then another toll tax to use the road). It’s inexplicable that anyone would call this man a “fiscal conservative.”

Perry ducked state law on disclosing some stimulus money
Spending report was not posted on Web site as required.
By Laylan Copelin
AMERICAN-STATESMAN STAFF
Published: 9:39 p.m. Tuesday, April 13, 2010
Gov. Rick Perry has always publicly stiff-armed federal stimulus dollars, even as he accepted billions to balance the state budget and tens of millions that he could award to constituents.

He even ignored state law and his own executive order that require all state agencies and institutions of higher education to be “accountable and transparent” by posting their stimulus spending reports on their Web sites.

Until Tuesday, that is.

After a reporter’s inquiry, the Governor’s Criminal Justice Division began posting reports, some of them months old, on its Web site. Perry’s spokeswoman, Katherine Cesinger, would not elaborate on why the governor chose not to follow the law that he expected other state officials to follow.

State Rep. Jim Dunnam, D-Waco , who leads the House committee overseeing federal stimulus programs in Texas, said Tuesday that he isn’t surprised by the governor’s actions.

“Unfortunately, it’s a pattern of the governor publicly distancing himself from the federal stimulus while accepting the majority of the money,” Dunnam said. “They took $16 billion, and most Texans think they haven’t taken any of it.”

Last year, Perry accepted about $16 billion in federal stimulus money so lawmakers could avoid deep budget cuts or tax increases. But he refused to accept smaller amounts for unemployment benefits and education programs, saying that money came with “strings attached,” an argument his critics rejected.

Perry’s failure to file reports on the governor’s Web site involves only the money administered directly through his office.

The governor’s office has received about $92.2 million of the $110 million it requested from the federal government for law enforcement purposes. About $81 million has been obligated and $6.8 million disbursed, according to the Comptroller of Public Accounts, which maintains weekly reports of the state’s stimulus activities.

Perry’s office submitted the weekly summaries with totals, but Texans looking for greater detail were directed from the weekly report back to the governor’s Web site to find a report from 2006 — three years before the stimulus program existed.

Citizens looking for spending details would have had to navigate the federal site,

recovery.gov, where all agencies, including the Texas governor, must post reports.

The Legislature demanded more disclosure than posting to the federal site. The appropriations act requires each state agency and higher education institution to post stimulus reports on their state Web sites for easier public access.

In his Aug. 25 executive order, Perry cited those requirements when he directed state officials “to maintain transparency and accountability in all cases.” He also required every agency to designate a representative “to maintain a flow of current information relating to the receipt, deployment, management and use of funds received by the state and any of its political subdivisions or contractors” under the stimulus program.

The governor’s office has been hands-on in administering the money, with senior adviser Mike Morrissey running meetings with agency officials once or twice a week until recently.

The information on state Web sites varies. The Texas Department of Transportation has a “project tracker” that shows each construction project, contractors, amounts being spent and location. It can be viewed at apps.dot.state.tx.us/apps/project_tracker/stimprojects.htm.

Even the tiny Texas Commission on the Arts has a link to all National Endowment for the Arts awards in Texas at www.nea.gov/grants/recent/09grants/states2/arra.php?STATE=TX.

The public can view the efforts by the governor’s office at governor.state.tx.us/cjd.

Goldman Sachs accused of defrauding investors

April 18th, 2010 by terrih

Link to article here.

Goldman Sachs has been a key player in advising governments as well as private investors on infrastructure/toll road deals called public private partnerships. They’re instrumental in many deals in Texas and have swarmed our highway department, infecting them with their fraudulent schemes that exploit taxpayers. Perhaps if justice is truly served in this case, we may rid ourselves of at least one major canker in this fight.

SEC accuses Goldman Sachs of defrauding investors
Posted Friday, Apr. 16, 2010
By MARCY GORDON
AP Business Writer

WASHINGTON — The government on Friday accused Wall Street’s most powerful firm of fraud, saying Goldman Sachs & Co. sold mortgage investments without telling the buyers that the securities were crafted with input from a client who was betting on them to fail.And fail they did. The securities cost investors close to $1 billion while helping Goldman client Paulson & Co., a hedge fund, capitalize on the housing bust. The Goldman executive accused of shepherding the deal allegedly boasted about the “exotic trades” he created “without necessarily understanding all of the implications of those monstrosities!!!”

The civil charges filed by the Securities and Exchange Commission are the government’s most significant legal action related to the mortgage meltdown that ignited the financial crisis and helped plunge the country into recession.

The news sent Goldman Sachs shares and the stock market reeling as the SEC said other financial deals related to the meltdown continue to be investigated. It was a blow to the reputation of a financial giant that had emerged relatively unscathed from the economic crisis.

Goldman Sachs denied the allegations. In a statement, it called the SEC’s charges “completely unfounded in law and fact” and said it will contest them.

The SEC is seeking to recoup the money lost by investors and impose unspecified civil fines against Goldman Sachs and the executive, Fabrice Tourre. The SEC could enter into settlement negotiations over the amount if Goldman changed its stance and decided not to fight the charges in a trial.

The SEC said Paulson paid Goldman roughly $15 million in 2007 to devise an investment tied to mortgage-related securities that the hedge fund viewed as likely to decline in value. Separately, Paulson took out a form of insurance that allowed it to make a huge profit when those securities’ value plunged.

The fraud allegations focus on how Goldman sold the securities. Goldman told investors that a third party, ACA Management LLC, had selected the pools of subprime mortgages it used to create the securities. The securities are known as synthetic collateralized debt obligations.

The SEC alleges that Goldman misled investors by failing to disclose that Paulson & Co. also played a role in selecting the mortgage pools and stood to profit from their decline in value. Two European banks that bought the securities lost nearly $1 billion, the SEC said.

“Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party,” SEC Enforcement Director Robert Khuzami said in a statement.

But Goldman said in a statement that it never mischaracterized Paulson’s strategy in the transaction. It added that it wasn’t obliged to “disclose the identities of a buyer to a seller and vice versa.”

The charges name only Goldman Sachs and Tourre, who was a vice president in his late 20s when the alleged fraud was orchestrated in 2007. Tourre, the SEC said, boasted to a friend that he was able to put such deals together as the mortgage market was unraveling in early 2007.

In an e-mail to the friend, he described himself as “the fabulous Fab standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!”

Tourre, 31, has since been promoted to executive director of Goldman Sachs International in London.

Stanford University spokeswoman Elaine Ray said a student by the name of Fabrice Tourre received a master’s degree in management science and engineering from the school in 2001.

A call to a lawyer for Tourre, Pamela Chepiga at Allen & Overy LLP, wasn’t returned.

Asked why the SEC did not also pursue a case against Paulson, Khuzami said: “It was Goldman that made the representations to investors. Paulson did not.”

Paulson & Co. is run by John Paulson, who reaped billions by betting against subprime mortgage securities. He is not related to former Treasury Secretary Henry Paulson, a former Goldman CEO.

John Paulson was among the first on Wall Street to bet heavily against subprime mortgages. His firm earned more than $15 billion in 2007, and he pocketed $3.7 billion. He has since earned billions more, largely by betting against bank stocks and then buying them back after their shares plunged.

In a statement, Paulson & Co. said: “As the SEC said at its press conference, Paulson is not the subject of this complaint, made no misrepresentations and is not the subject of any charges.”

Goldman, founded more than 140 years ago, built a reputation as a trusted adviser to investment banking clients and for sending top executives into presidential Cabinet posts.

In recent years, it shifted toward taking more risks with its clients’ money and its own. Goldman’s trading allowed the firm to weather the financial crisis better than most other big banks. It earned a record $4.79 billion in the last quarter of 2009.

The complaint filed in federal court in Manhattan “undermines their brand,” said Simon Johnson, a professor at the Massachusetts Institute of Technology and a Goldman critic. “It undermines their political clout. I don’t think anybody really values being connected to Goldman at this point.”

He continued: “There are many people who – until this morning – thought Goldman Sachs was well-run.”

The SEC’s enforcement chief said the agency is investigating a wide range of practices related to the crisis. The prospect of possible legal jeopardy for other major financial players roiled the stock market.

Goldman Sachs shares fell more than 12 percent Goldman and lost $14.2 billion in market capitalization. The Dow Jones industrial average finished down more than 125 points.

The SEC appears to be taking a particularly aggressive approach with Goldman. Typically, cases are resolved by firms agreeing to a settlement before the charges are made public, said John Coffee, a securities law professor at Columbia University.

“The SEC has changed its style,” Coffee said. “They wanted to tell the world what they thought Goldman had done wrong.”

The charges come as lawmakers seek to crack down on Wall Street practices that helped cause the financial crisis. Congress is considering tougher rules for complex investments like those involved in the alleged Goldman fraud.

President Barack Obama vowed Friday to veto a financial overhaul bill that doesn’t regulate mortgage-backed securities and other so-called derivatives. Legislation in Congress would for the first time regulate derivatives, whose value depends on an underlying asset, such as mortgages or stocks. Senate Republicans oppose the bill.

Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, is “pleased that the SEC is departing from the lax enforcement of the Bush administration and is returning to the SEC’s proper role of protecting investors in the marketplace,” spokesman Steven Adamske said.

The biggest loser in the alleged fraud was ABN Amro, a major Dutch bank, and the Royal Bank of Scotland, which acquired major portions of it in 2007. The SEC said the Royal Bank of Scotland paid Goldman $841 million to unwind ABN transactions.

IKB Deutsche Industriebank AG, a German commercial bank, lost nearly all its $150 million investment, the agency said. Most of the money the banks lost went to Paulson in a series of transactions between Goldman and the hedge fund, the SEC said.

IKB was an early casualty of the financial crisis. It issued a profit warning in 2007 saying it had been hurt by U.S. subprime mortgage investments. IKB was sold in 2008 to Dallas-based Lone Star Funds.

Ed Trissel, a spokesman for Lone Star Funds, declined to comment on the case.

The SEC charges come after Goldman Sachs denied last week it that bet against clients by selling them mortgage-backed securities while reducing its own exposure to them.

In an annual letter to shareholders, Goldman said it began reducing its exposure to the U.S. mortgage market in late 2006.

AP Business Writers Alan Zibel in Washington, Stevenson Jacobs in New York and Ashley M. Heher in Chicago contributed to this report.

New diversion of road tax discovered, citizens demand end to diversions

April 18th, 2010 by terrih

Link to article here.

Anti Toll Groups Would Back Gas Tax Increase
but only if ‘diversions’ from gas tax fund are ended
By Jim Forsyth
Friday, April 16, 2010

Leaders of the anti toll road movement in Texas are quietly notifying state lawmakers that they would support an increase in the state gasoline tax as an alternative to toll roads, but they are demanding some concessions in return, 1200 WOAI news reports.

Terri Hall, founder of the anti toll group Texans Uniting for Reform and Freedom, says an increase in the gasoline tax would be preferable to ‘out of control’ creation of toll roads.

The Texas gasoline tax, which is 20 cents a gallon, hasn’t been raised since 1991, and the move to more fuel efficient cars is drastically cutting into the amount of money available for highway construction and maintenance, which has led to talk of toll roads.

“The studies we’ve seen would show that somewhere between eight and ten cents a gallon would meet out road needs, without having to toll our roads,” Hall said.

Tax increases are very controversial in the Texas Legislature, with the Republican leadership and Governor Perry repeatedly indicating that they would oppose tax increases.

Hall says she would back the gas tax increase if lawmakers agree not only to completely end the controversial practice of ‘diverting’ gas tax revenue to pet projects in their districts, and if lawmakers consider using the state automobile sales tax for highway projects.

“We all pay vehicle sales tax when we buy a car, and that money is now going into general revenue, instead of to roads,” Hall said.  “My understanding is that there is $4 billion a year that we could put back into roads, without having to raise any taxes.”

The legislature is expected to be facing a massive deficit, as much as $15 billion, when the next session begins in January, and Hall concedes that with the state scrambling for general fund revenue, taking billions of dollars out of the general fund may not be politically feasible.

SHAKEDOWN: Blagojevich bribed road contractors on Illinois toll project

April 18th, 2010 by terrih

Link to article here.

WARNING: There is some profanity contained in this article. Blagojevich uses some profane words when speaking about his plans to extort money from road contractors in exchange for building a much bigger toll project (went from $1.8 billion to a $5 billion project).

Illinois Tollway in clear in Blagojevich corruption case – no staff or board implicated
Toll Road News
Posted on Wed, 2010-04-14 22:47
The Feds have released details of their corruption case against former Illinois Governor Rod Blagojevich. Called “Government’s evidentiary proffer” the 91-page document filed in US District Court in Chicago by US Attorney Patrick J Fitzgerald today shows that the Governor tried to use the Illinois Tollway to extort money from Tollway contractors. But it makes no suggestion that Tollway officers or board members were involved in the shakedowns, just the Governor himself and his staffers.

The document is remarkable for the detail of hundreds of conversations between the governor and his immediate staff and telephone calls. Clearly the FBI had Blagojevich’s offices wired and other places he met. They tapped into his telephone conversations and those of his immediate staff.  

Most important, key participants in the conspiracies led by Blagojevich are cooperating with the US Attorney in his prosecution, perhaps in return for leniency.

The case begins before Blagojevich won the governorship in an election in late 2002. There are accounts of conversations with associates to plan extortions early in 2002.

From p21 of the US case after he became governor:

“There were occasions after Blagojevich became Governor that Blagojevich, Kelly, Monk, and Rezko (political hacks and flacks) all met to discuss their efforts to make money from state action. For example, the four men met in a conference room at the offices of one of Rezko’s businesses in about mid to late 2003. During the meeting, Rezko led the discussion, standing at an easel or chalkboard and listed at least three or four different ideas or plans to make money being developed by Rezko that involved some kind of state action. At times, Kelly got up during the meeting and clarified or added to things that Rezko was saying. Blagojevich mostly listened during the meeting, but was engaged. As Rezko talked, he indicated how much money Blagojevich, Kelly, Rezko, and Monk could hope to make from the different ideas. The amounts that were associated with the different ideas were typically in the hundreds of thousands of dollars per deal, which would be evenly split four ways.”

Obsessed with moneymaking

As pictured in the US Government case Blagojevich was completely obsessed with using the post of governor to enrich himself and his supporters. Everything he did seems to have been geared to self-enrichment and self-advancement. Every issue and decision was discussed in terms of what opportunity it provided to extort and steal. Many cases of corruption are laid out in detail.

The Tollway appears about halfway through

Several pages (from p52 on) are devoted to “Attempted Extortion Relating to the Tollway Program”.

That started when Tollway board members talked with Blagojevich about potential construction plans. They presented a $1.8 billion option and a more ambitious $5 billion option. Blagojevich told a flack named Monk that the Tollway’s program would be great for engineering firms. If they’d cough up serious money he’d go with the $5b program: “If they don’t step up, fuck ’em. I won’t do the bigger announcement (the $5b) in January.”

The US case page 53 on: “In about mid-September 2008, Blagojevich met with Monk, Robert Blagojevich, and Construction Executive, who was an executive in a cement company, at the FOB (Friends of Blagojevich) offices. As an active member of a concrete industry association group, Construction Executive had been responsible for raising large amounts of contributions for Blagojevich beginning in about 2002. Monk had become the primary contact with Construction Executive in terms of fundraising for Blagojevich in about 2007.

“At the meeting, Blagojevich also talked about both the potential $1.8 billion and $5 billion Tollway road building programs. Blagojevich indicated to Construction Executive that he was going to announce the small plan that Fall. Blagojevich said that he was inclined to also go forward with the larger plan, but that he did not want word to get out about his interest in doing so. Blagojevich explained that he wanted to keep that quiet so that the legislature would continue to feel pressure to pass a capital bill. Blagojevich suggested to Construction Executive that Blagojevich had the power to go forward with either of the two Tollway roadbuilding programs without the approval of the legislature. In response, Construction Executive told Blagojevich that he was in favor of the building programs because the concrete industry really needed the work.”

Get the money in before the law changes

“Shortly thereafter in the meeting, Blagojevich said he wanted to talk about campaign contributions. Blagojevich talked about the change in Illinois law that would restrict the ability of companies that did work with the State of Illinois to contribute money to him, and how that law would take effect by the end of the year. Blagojevich asked for Construction Executive’s help raising money and indicated that Blagojevich wanted to raise the money before the end of the year.

Fobbed off

“Blagojevich asked Construction Executive how much money he could raise. When Construction Executive initially indicated that he did not know, Blagojevich again brought up the Tollway program and discussed additional projects that could be done if the larger program were done. At the end of the meeting, Construction Executive was again asked about how much money he thought he could raise for Blagojevich. Construction Executive indicated that he would have to go back to his people and talk to them about it.

“Both Monk and Construction Executive understood that Blagojevich was making a connection in the meeting between the amount of money that Construction Executive might be able to raise for Blagojevich and his willingness to do the larger Tollway program. As a result of Blagojevich’s statements, Construction Executive felt pressure from Blagojevich to raise money for Blagojevich so that he would allow the larger Tollway program to go forward.

“After Construction Executive left the meeting, Blagojevich directed Monk to ask Construction Executive to raise $500,000 in contributions, which money Monk understood would come both from Construction Executive’s own company as well as from other companies in the road building industry.

Blagojevich: “If they don’t perform (pay up) fuck ’em”

“On October 6, 2008, Blagojevich met with Lobbyist A at the offices of Friends of Blagojevich (“FOB”) offices. During their meeting, Blagojevich mentioned an upcoming announcement he was planning to make regarding a $1.8 billion project with respect to the Tollway. Blagojevich said words to the effect of, ‘I’ve got Lon going to Construction Executive and asking for $500,000’ and ‘I could have made a larger announcement but wanted to see how they perform by the end of the year. If they don’t perform, fuck ‘em.’

$1.8 billion or $5 billion is the issue

“Lobbyist A knew that Construction Executive was involved with a trade association that would benefit from the proposed $1.8 billion project. Lobbyist A understood Blagojevich to mean was that he expected that Construction Executive would raise $500,000 in contributions to FOB and that Blagojevich was willing to commit additional state money to the project beyond the $1.8 billion but was waiting to see how much money interested entities raised for FOB before the end of the year.

“In mid-October 2008, Blagojevich announced a plan for a $1.8 billion Tollway building program. On about October 22, 2008, Blagojevich called Construction Executive. Blagojevich talked about the $1.8 billion program and asked Construction Executive something like ‘How are you coming with the fund raising?'”

But the US Government account has it that Construction Executive was in fact stringing the governor along, not saying yes, not saying no.

Here’s the official account quoting from p55 and p56:

“Construction Executive indicated to Blagojevich that he was working on raising money, but that was not true. Construction Executive did not, in fact, plan on raising any money for Blagojevich, but Construction Executive did not want to say that for fear that Blagojevich would be less inclined to go forward with the larger Tollway project. Construction Executive ultimately did not make or arrange for any contributions to be made to Blagojevich.

“(Flack) Monk also continued to stay in touch with Construction Executive about potential contributions to Blagojevich, and consistently reported on the status of those conversations to Blagojevich and Robert Blagojevich, including on November 24, 2008 (Blagojevich Call #1005).22/”

That’s the extent of the Tollway involvement in the 91 page document from US Attorney Fitzgerald.

The Governor tried to use his power over key Tollway decisions to extort money from companies wanting business with the Tollway. But he failed.

Of Blagojevich, apparently, the Construction Executive rightly said “Fuck ‘im.”

Under his breath anyway.

BACKGROUND: Blagojevich, a Democrat was arrested by US marshals Dec 9 2008 charged with extensive corruption, the most spectacular count being an effort sell to the highest bidder the US Senate seat vacated by Barack Obama after his election as US President.  Blagojevich as governor had the power to appoint a successor to Obama.

An oddly youthful looking man he’s in fact53 (born 1956-12-10) his full name is Milorad Blagojevich, his first name anglicized and simplified to Rod. Born and raised on the northwest side of Chicago to Serb immigrants he worked as shoeshiner, pizza delivery, and in a meat plant. He is said to have washed dishes in a camp on the Trans Alaskan Pipeline.

Wikipedia on his education: “Blagojevich graduated from Chicago’s Foreman High School after transferring from Lane Technical High School. He played basketball in high school and participated in two fights after training as a Golden Gloves boxer.[19] After graduation, he enrolled at the University of Tampa.[20] After two years, he transferred to Northwestern University in suburban Evanston where he graduated with a BA in history in 1979. He later (obtained) his JD from the Pepperdine University School of Law in 1983. He later said of the experience: ‘I went to law school at a place called Pepperdine in Malibu, California, overlooking the Pacific Ocean — a lot of surfing and movie stars and all the rest. I barely knew where that law library was.’ ”

He married Patricia Mell the daunter of Richard Mell a Chicago alderman.  He clerked for another Chicago alderman, then got a job as an assistant prosecutor under famous mayor Richard M Daley, when Daley was State’s Attorney.

His influential father-in-law appears tog have launched him on his political career – first in the state house, then as a US Congressman for the 5th district  (Chicago). He seems to have been a good campaigner but kept out of the spotlight as a state and US representative.

His predecessor as Illinois governor George Ryan, a Republican, also an extortionist and thief, is serving time in a federal jail.

TOLLROADSnews 2010-04-14

Dixon: We need principled road policy

April 13th, 2010 by terrih

Link to article here.

Mr. Dixon has been a stalwart supporter of the cause for many years. He’s sacrificed more hours than we can count in Austin advocating for taxpayers on transportation issues. This article was also published in the Lone Star Report. It hits the nail on the head of how we move forward…

Tired of Gridlock? Try Principled Road Policy
by Don P. Dixon
Dallas Morning News, Guest blogger
Mon, Apr 12, 2010

The main reasons Texans are stuck in traffic is a massive failure in public road policy, lack of reforms and inefficiency at TxDOT. The fact is that public roads are a low priority for the state.

In 30 years the state budget went up 8.66 times – from $10.22 billion in 1980 to $88.57 billion in 2009.

In the same 30 years, road work went up 2.69 times from $1.58 billion to $4.25 billion.

In 1980, Texas spent 15.45 percent of state budget on road work (maintenance and new construction). In 2009 Texas spent 4.8 percent of state budget on road work.

Whether state leaders believe it or not, in 30 years road work priority and efficiency continue to deteriorate. Car and truck drivers have paid billions in gas taxes and registration fees to build and maintain the roads, but almost half is diverted away from public roads. All gas tax and registration fees should go to public roads.

Taxpayer restitution of at least $12 billion needs to be corrected by temporarily transferring auto/truck sales tax (including parts sales) to public roads, almost $4 billion per year.

Before the public is asked to pay more in new taxes, reform of road policy must occur:

1. Stop building roads with debt such as $12 billion state road debt and $12.7 billion plus off-budget toll road debt.

2. The toll road debt and costs to run toll road bureaucracy are unacceptable, unaffordable, and unsustainable.

3. End diversions completely.

4. Increase TxDOT efficiency and stop wasteful spending.

5. TxDOT must halt the siphoning of billions of dollars from public roads to convert public right of ways into toll roads, i.e., stop tolls, stop CDAs (privatizing road ways).

6. End non-traditional financing (innovative financing).

The off-budget tax increases the state leaders have laid on drivers through tolls and privatizing Texas roads are confiscatory taxes. This must be stopped.

The toll tax of 17 cents to 75 cents per mile means the driver pays $4 to $17 per gallon extra for toll roads.

The 87 toll roads TxDOT has on its books will cost Texans, optimistically speaking, a minimum of $177 billion in toll tax over 22 years, which annualized is more than the current TxDOT budget.

No one likes tax increases; however, if additional funds areneeded after reforms, the statewide gas tax per gallon is the most efficient and most fiscally responsible way to fund roads.

With regard to the local option tax, Gov. Pat Neff (father of the public road system) learned it served only to create a patchwork road system. He saw it was a failed system, so he founded the statewide highway system.

A uniform statewide public road system funded at the state level – freely accessible by all citizens, regardless of income, status or location – is the proper and rightful duty of the state.

The once superior ranking of the Texas public road system was lost by compromising sound, principled road policy. Thus we are in road gridlock.

Restoration of an equitable statewide public road system will come about only through our elected leaders, in every branch of government, recognizing the cause and courageously mandating an accountable agency using best practices and a sound fiscal policy in order to regain the taxpayers’ trust.

Don Dixon is a retired engineer who lives in San Antonio.

   
   

FAIR USE NOTICE. This site may contain copyrighted material whose use has not been specifically authorized by the copyright owner. SATollParty.com is making this article available for academic research purposes in our non-commercial, non-profit, effort to advance the understanding of government accountability, civil liberties, citizen rights, social and environmental justice issues. We believe that this constitutes a "fair use" of the copyrighted material as provided for in Title 17 U.S.C. Section 107 of the U.S. Copyright Law. If you wish to use this copyrighted material for purposes of your own that go beyond "fair use," you must obtain permission from the copyright owner. SATollParty.com does not express or imply that SATollParty.com holds any claim of copyright on such material as may appear on this page.