When Matty wins, we all lose.
How political clout beat the public interest
Published: December 15, 2010
To pave the way, Canada offered to cover Michigan's share of the tab — up to $550 million. The money, generated through tolls, would be repaid over time.
Senate Majority Leader Mike Bishop (R-Rochester) initially promised to allow the issue to come to the floor for a vote after authorizing legislation was narrowly approved by the Michigan House on a largely party-line vote.
Bishop then reneged on his promise. His spokesman told Metro Times that the about-face occurred because the Michigan Department of Transportation (MDOT) failed to provide the Legislature with all the pertinent traffic study information.
According to published reports, concerns were expressed by some in the Legislature that MDOT was concealing information that tolls would not be enough to cover construction and operating costs, and that Michigan taxpayers would end up subsidizing the project.
MDOT spokesman Bill Shreck tells Metro Times there was no withholding of information.
State Rep. Rashida Tlaib is a Democrat who represents the southwest Detroit neighborhood where the Ambassador Bridge is located, She says she supports the DRIC, but only if the final plan includes measures designed to help her constituents. She says it wasn't worries about the proposed span's financial viability, but rather Moroun's largesse that persuaded legislators to vote against the DRIC bill.
It is important to note, she says, that approval of the legislation would not have automatically meant that the DRIC would be built. Rather, the measure would only have allowed MDOT to enter into negations to create a public-private partnership.
That partnership, she said during a recent press conference, was itself a compromise. Asked by Metro Times during that event why the project couldn't have been entirely public, both she and Canada's Masse noted that the public-private partnership was proposed in an attempt to help gain support from conservatives.
"The public-private partnership — that's not a Democratic concept," she says. "That's a Republican idea."
Even so, with Republicans in control of the state Senate, the bill sat in committee throughout the summer and fall. Then came Election Day, and a stunning victory for the GOP. Along with gaining a supermajority in the Senate, Republicans took control of both the House and the governor's office from the Democrats.
"Look at what happened here," she says. "You have Mike Bishop promising an up-or-down vote, and then, all of a sudden after the election, you have the leadership saying, 'No, no, we're not going to do it.'"
In December, Democrats in the Senate made one last attempt to get the measure to the floor for a vote, but fell far short.
The consequences for Michigan, Tlaib says, are potentially devastating.
With Michigan bearing the burden of one of the nation's highest unemployment rates, failure to construct the DRIC means there won't be 10,000 new construction jobs on this side of the river pouring concrete piers, erecting girders and stringing suspension cable. Neither will there be the 25,000 new, permanent jobs supporters of the project say it will generate over the next 20 years.
There's another consequence of not building the DRIC, says Canada's Masse:
"It sends a chilling effect to those who might have been willing to invest in our north-south corridor. There's no doubt that when investors look at retooling old plants or building new ones, one of the things they look at are infrastructure capabilities."
Hubbard, of the Detroit Regional Chamber agrees, saying, "It is a real issue. Buffalo already has four bridges" crossing the Niagara River into Canada. "They are pursuing the same kinds of industry we in Michigan are — the auto industry and other logistic-type carriers. And those industries are going to take the options that have the lowest costs and the least amount of waiting time at the border.
"These companies think long-term when deciding to open or close a plant. And it's the future we are concerned about, as far as potential growth. As the economy is going into a recovery, we want to be able to catch that uptick."
Given all that, how could a majority of the Legislature not have jumped at that deal being offered by Canada?
It is possible that concerns about traffic numbers and hidden subsidies laying in wait for the state's taxpayers are heartfelt — although even the Detroit Chamber's Hubbard contends that MDOT provided legislators with credible info. And Tlaib says she wants to give her fellow lawmakers the "benefit of the doubt."
But asked what the overarching lesson of this has been, she replies: "We have steel workers who haven't gotten a paycheck in two years, and to have legislators turn their backs on a project that would have put 10,000 people to work is very disappointing. The lesson I learned as a freshman legislator is to never underestimate the power of special interests."
And when it comes to Matty Moroun and the Detroit International Bridge Company, that power is considerable.
According to a recent analysis of federal and state campaign finance records by the Free Press, Moroun "showered candidates and political action committees with campaign cash — $526,825 to state candidates and PACs and another $489,200 to federal candidates and PACs" in 2009-2010 as the Legislature wrestled with the DRIC issue this year.
"From my perspective, having observed this from some distance, I would say that [Moroun and the bridge company] spent a lot of money with one policy objective — to kill the DRIC — and they got what they wanted," says Rich Robinson, head of the Michigan Campaign Finance Network, a nonprofit watchdog group.
The bridge company wasted little time trying to capitalize on its victory.
"Today's actions in the Senate only reinforce that the DRIC project is dead," Matty's son Matthew Moroun, vice chairman of the bridge company, told the Wall Street Journal after the measure failed to make it the Senate floor for a vote. "It's time ... to stop delaying the Ambassador Bridge's construction of its privately funded second span and work cooperatively to improve the existing international crossing, while creating much-needed jobs and economic growth in our region."
But, like a lot of information that comes out of the bridge company, what Moroun the younger had to say wasn't exactly true.
To be certain, with Michigan legislators having gone home for the year, there will be no more votes on the issue in 2010. But that doesn't mean there won't be a renewed attempt to gain passage when the new Legislature is seated next year.
And, already, attempts are being made to convince Republican Gov.-elect Rick Snyder to throw his support behind the project.
This week Canadian Transport Minister Chuck Stahl met with Snyder in Lansing to "reaffirm the government of Canada's commitment to build the new Windsor-Detroit border crossing," according to a press release from Stahl's office.
"The meeting was very productive. The governor-elect understands the complexity of this project and was very interested in learning more about Canada's offer to increase its financial participation so that there would be no cost or financial risk to Michigan taxpayers."
No doubt bridge company representatives will be doing their best to convince Snyder and legislators otherwise. In fact, the effort is already under way. The Gongwer News Service reported shortly after Election Day that Snyder had met with incoming freshmen legislators at an event held at Karoub Associates, the bridge company's highly effective lobbying firm. Sponsored by the Detroit International Bridge Company, Matty's wife, Nora, was also present.
But as they listen to the company's pitch that traffic projections don't justify constriction of the DRIC, Snyder and the Legislature should keep this in mind: The company was singing a much different tune a few years ago in Buffalo.
The Buffalo shuffle
In the Buffalo-Niagara corridor there are four international crossings between New York and Ontario, two of them operated by public authorities. In 2008, the general manager of one authority, Ron Rienas, who oversees operations at the international Peace Bridge, testified before a U.S. House transportation appropriations subcommittee and followed up a month later with a letter to the committee's chairman.
Among other things, he noted that the four Buffalo-Niagara bridges contain a total of 14 lanes over the Niagara River, with a total of nine lanes open to trucks. That compares to the Ambassador Bridge's four lanes, which are heavily used by trucks, and the Detroit-Windsor Tunnel, which is used primarily by cars.
Despite the Buffalo-Niagara Corridor's greater capacity, Moroun's Detroit International Bridge Co. created a subsidiary that attempted to win approval to construct a new four-lane bridge over the Niagara River.
In a June 2008 letter to the committee, Rienas described an evaluation process he said was similar to that undertaken by the DRIC study group. He also said he felt compelled to "correct" comments to the committee previously made by officials from Moroun's bridge company.
"Since 1999, the Ambassador Bridge [DIBC] has been aggressively seeking to construct an additional crossing over the Niagara River one and a half miles north of the existing Peace Bridge. In spite of the traffic declines [at the Peace Bridge] less than four months ago the Ambassador Bridge submitted an application for a Presidential Permit to U.S. Department of State and filed an Environmental Assessment alone with their application."
Rienas also reiterated the bridge company's rationale for wanting to build the bridge:
"The proposed bridge and plaza system is compatible with the national interest. The project will provide a higher level of service to the business and commerce interests engaging in international trade by eliminating border delays and opening the door to opportunities for intermodal transportation linkages. The Proposed Project will not only provide a safe and efficient corridor for traffic flowing into and out of the U.S., bit will serve as a catalyst for local business development, bringing jobs and prosperity to the city of Buffalo."
And Rienas added that in the bridge company's application for a Presidential Permit and in its environmental assessment for a new crossing in Buffalo, the company said:
"The need for an additional international crossing within the Niagara River Region has been intensely studied for more than a decade by various independent agencies and organizations. All these studies have reached the same conclusion — that additional cross border capacity is needed between Canada and the U.S." (Our emphasis.)
In other words, Rienas tells Metro Times, the same studies the company relied on in an attempt to win approval to construct a bridge in the Buffalo-Niagara Corridor, the company ridicules in Detroit, saying the numbers don't justify constructing the DRIC.
What's the difference? The DRIC would provide competition to the bridge company's Detroit franchise, while the Buffalo span would allow it to expand its operations.
"In summary," Rienas told the committee, the Ambassador Bridge cannot credibly say one thing in Detroit and then say the opposite in Buffalo."
Credibly would appear to be the key word in that sentence.
But incredible as it seems, Moroun and the bridge company have managed to say just that, and held off the rest of the organized business community and much of the political establishment.
What remains to be seen is whether his personal financial interests — and the political clout his vast wealth garners — will continue to win out over the public's best interests.
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