Link to article here.
Perry & his cronies: The Shelley-Cintra-Giuliani connection
By Terri Hall, Examiner.com, September 21, 2011
With the pay-to-play Solyndra scandal rocking the White House, presidential hopeful Rick Perry is embroiled in a mountain of crony capitalism controversy all his own. During the September 12 GOP presidential debate, Michelle Bachmann
exposed the money trail behind Perry’s Executive Order mandating all
6th grade girls in Texas receive the Gardasil HPV vaccine made by the
drug company, Merck, the employer of Perry’s former Chief of Staff, Mike Toomey, at the time. Merck funneled money to Perry, initially $5,000, but eventually adding up to the tidy sum of closer to $400,000, sparking outrage across Texas and now the nation.
Toomey’s just the tip of the ice berg.
A recent bill pushed through the Texas Legislature benefited the
company Waste Control Specialists, owned by #2 donor to Gov. Rick Perry,
Harold Simmons. Just days after the bill was signed into law,
Mr. Simmons wrote a $100,000 check to Americans for Rick Perry, the
super PAC supporting Gov. Perry's candidacy for president notes Debra Medina of We Texans.
Janet Ahmad, President of Homeowners for Better Building, pointed to similar problems in the construction industry. Top Rick Perry donor, Bob Perry,
paid nearly $8 million in campaign contributions and sought and
received his own regulatory agency called the Texas Residential
Construction Commission in 2003. Gov. Perry appointed
industry-connected people to that agency, including Perry Homes VP,
corporate counsel John Krugh. “The resulting agency was so
anti-consumer and so counter-productive that the Texas Legislature later
decided to abolish it,” Ahmad concludes.
Texas for Sale
Then there’s Perry's penchant for selling off Texas infrastructure to
the highest bidder, particularly to the employer of his former staffer Dan Shelley,
a Spanish company, Cintra. Shelley worked as a ‘consultant’ for Cintra
(in 2004), became Perry’s liaison to the legislature during the time
that Cintra was awarded the development rights to the $7 billion dollar
Trans Texas Corridor (in 2005), then went back to work as a lobbyist for
Cintra (in 2006). He and has daughter reportedly earned between $50,000-$100,000 on lobbying for Cintra that year.
Two key bills that just passed the Texas Legislature and signed into
law by Perry further illustrate the crony capitalism and pattern of
governance in the Perry Administration, both of which will benefit
Cintra, in particular.
SB 1420 makes 15 Texas roads eligible
for public private partnerships (P3s) that sell- off Texas sovereign
land/public roads to private entities in 50 year monopolies. P3s involve
public money for private profits (including gas taxes and other public
subsidies), contain non-compete clauses that penalize or prohibit the
expansion of surrounding free routes, and put the power to tax in the
hands of private corporations that result in toll rates as high as 75
cents per mile ($13/day
or like adding $15 to every gallon of gas you buy). It’s selling off
Texas to the highest bidder, which is the MOST expensive, anti-taxpayer
method of funding infrastructure.
Four road projects under SB 1420 have already been awarded to Cintra.
In fact, every single P3 for roads in Texas has gone to Cintra: SH 130
(segments 5 & 6) and I-635 and the North Tarrant Express (comprised
of multiple projects, primarily on I-820) in Dallas/Ft.Worth. All have
been heavily subsidized with gas taxes and other public money (see pages 2 & 3), yet Cintra walks away with a sweetheart deal and guaranteed profits. Despite Cintra’s shaky financial situation (its debt rating just got lowered due to fears of the Cintra-controlled Indiana Toll Road
going into default), Perry’s highway department continues to press
ahead with these extremely controversial and unpopular privatization
Perry’s connection to Cintra explains why he endorsed Rudy Giuliani
in the last presidential election. At the time, Giuliani’s law firm,
Bracewell & Giuliani, was the legal firm representing Cintra in its
bid to takeover SH 121
(which eventually unraveled) in the Dallas area. Giuliani’s investment
firm was purchased by an Australian firm, Macquarie, another global
player in P3s at the same time his law firm was advising Cintra on the
SH 121 deal. While many social conservatives were baffled by Perry’s
backing of Giuliani, it was no surprise to those following the Trans Texas Corridor and Perry’s push to privatize Texas freeways.
Balfour Beatty enters the scene
Perry likes to brag ‘Texas is Open for Business’ and here’s what that
means to property rights and taxpayers. The second key public private
partnership bill, SB 1048, Perry signed into law will mean
Katie-Bar-the-Door on selling off virtually everything not nailed down.
The bill was written by lobbyist Brett Findley on behalf of another infrastructure firm, British company Balfour Beatty,
and it will allow all public buildings, nursing homes, hospitals,
schools, ports, mass transit projects, ports, telecommunications, etc.
to be sold-off to corporations using P3s. Unlike the 50 year cap on road
P3s, SB 1048 gives no limit on the length of time a P3s can last or
whether such broad authority expires.
Two particularly anti-taxpayer provisions in SB 1048 are the fact
taxpayers secure the private entity’s debt (2267.061 (f)) and that it
authorizes public subsidies for private profits by raiding taxpayers’
money through loans from the State Infrastructure Bank.
Michelle Malkin called P3s corporate welfare.
Fannie Mae and Freddie Mac are P3s and required massive taxpayer
bailouts. P3s socialize the losses and privatize the profits. These
contracts also eliminate competitive bidding and grant
government-sanctioned monopolies (with guaranteed profits) to the
Public interest not protected, kept secret
These contracts can be negotiated in SECRET, without financial
disclosures (like financing, the structure of the ‘user fees’ or lease
payments, viability studies, public subsidies, or whether or not it
contains non-compete clauses or other gotcha provisions). There is no
meaningful public access to P3s before they’re signed, and the few
guidelines created simply exist to advise governmental entities outside
the public purview.
Eminent domain for private gain
P3s represent eminent domain for private gain -- the source of much
of the backlash to the Trans Texas Corridor, where P3s were the
financing mechanism that granted these private entities the control of
not just the facility, but the right of way/surrounding property where
private companies make a killing on concessions. A plurality of Texans
don’t like the idea of foreign ownership of our public infrastructure
and they dislike eminent domain for private gain even more.
Of course, it started with the Trans Texas Corridor,
known at the federal level as high priority corridors, corridors of the
future, or the NAFTA superhighways. Just in Texas, it was to be a 4,000
mile multi-modal network of toll roads, rail lines, power transmission
lines, pipelines, telecommunications lines and more. It was going to be
financed, operated, and controlled by a foreign company, Cintra, granted
massive swaths of land 1,200 feet (4 football fields) wide taken
forcibly through eminent domain.
Called the biggest land grab in Texas history, it was going to gobble
up 580,000 acres of private Texas land (the first corridor alone was to
displace 1 million Texans) and hand it over to well-connected global
players using PPPs, who would gain exclusive rights to determine the
route and what hotels, restaurants, and gas stations were along the
corridor in a government-sanctioned monopoly for a half century. It was
the worst case of eminent domain for private gain ever conceived.
Property rights shredded
The Trans Texas Corridor, and P3s in
general, represent an imminent threat to private property rights. While
lawmakers repealed the Trans Texas Corridor from state statute only
months ago due to the public backlash, the corridor lives on through
So Perry basically granted government a blank check to trample on
property rights and the power to pick the winners and losers — who will
lose their land to benefit another, rather than restricting the power of
eminent domain to matters of public necessity. If the government can
steal your land, it’s tantamount to stealing your wealth. Who said
Republicans aren’t socialists? P3s are just the sort of wealth
redistribution they like — giveaways to their cronies and special
interest friends. They’re also a BIG step in enacting the U.N.’s Agenda
21 policies where the stated goals are to abolish private property and
Rick Perry’s crony capitalism wasn’t just a fleeting lapse of judgment
pertaining to the HPV scandal, it’s a consistent pattern of revolving
door, pay-to-play crony capitalism that Americans detest and can ill
Terri Hall, San Antonio Transportation Policy Examiner