Republicans With Influence On Immigration Debate Are Top Recipients Of Private Prison Contributions

By Nicole Flatow/Think Progress

As the immigration reform debate heats up, private prison executives have made it clear that they are monitoring how it will affect their rates of incarceration. During a call with investors last week, Corrections Corporation of America CEO assured investors that there will “always be demand for beds”, reflecting concern that incarceration rates will actually go down. With many elements of reform left on the negotiating table, the Columbia Journalism Review is showing just how much money the two major private prison companies, Corrections Corporation of America and GEO Group, have invested in the outcome:

Some of the politicians who have benefited most from this largesse are influential Senators who are now playing key roles in shaping proposed immigration reform legislation.

Among members of Congress, the top two recipients of contributions from CCA are its home-state senators, Lamar Alexander and Bob Corker of Tennessee. The Republican lawmakers, each of whom has received more than $50,000 from CCA according to data compiled by the Sunlight Foundation, represent important swing votes for advancing a reform bill through the Senate. Another top CCA recipient is Arizona Republican John McCain, who has gotten $32,146 from CCA and is a member of the bipartisan “Gang of Eight” that is working to draft legislation. His fellow Gang of Eight member, Marco Rubio, ranks among the top recipients of contributions from the Florida-based GEO Group,receiving $27,300 in donations over the course of his career.

In recent years, each of these senators has sponsored bills that would have increased the detention and incarceration of immigrants. Legislation put forward by Alexander in 2009, for example, would have provided for “increased alien detention facilities.” And a 2011 bill cosponsored by McCain and Rubio sought to expand Operation Streamline, a federal enforcement program that makes illegal entry a criminal offense in some jurisdictions.

Skyrocketing immigration detention numbers are attributable in part to programs like Operation Streamline and Secure Communities, which link criminal activity to immigration status. But they are also linked to record deportations, as many facing removal subject to mandatory detention while proceedings are pending, leaving judges no discretion to decide whether to release them.

A McCain spokesman told CJR that McCain stands by Operation Streamline, and that he expects it to continue whether or not comprehensive immigration is implemented “because it works.” According to ColorLines, Democratic staffers are concerned that negotiations will lead to an expansion of Operation Streamline and other programs that detain and criminalize immigrants in exchange for support on other core elements of reform.

Immigration detention has more than doubled private prison profits since 1995, and these corporations have not been shy about using their influence to lobby for incarceration-friendly policies, despite claims from both Corrections Corporation of America and GEO Group that they do not take official positiions on issues. Those sentenced for immigration offenses make upone of the fastest-growing segments of the United States’ overflowing federal prison population.

Perry Adviser Steve Forbes Crafted Flat Tax Plan That Would Have Given Himself A $1.9 Billion Tax Cut

By Travis Waldron/Think Progress

After telling former pizza magnate Herman Cain — proponent of the 999 tax plan — that he’d be glad to “bump plans with you, brother,” Texas Gov. Rick Perry (R) is set to release his own flat tax plan tomorrow. While many details of the plan are still unknown, it is expected to take similar form to the flat tax pushed by Steve Forbes, CEO of Forbes Media, when he ran for president in 1996. Forbes officially endorsed Perry today and helped draft Perry’s version of the flat tax.

The flat tax proposal will likely fall short of generating the same amount of government revenue as the current tax structure, as most all flat tax plans do. What it will do, however, is provide a huge windfall to wealthy individuals like Forbes, whose net worth is already about $430 million. In fact, Citizens for Tax Justice analyzed the plan Forbes’ proposed in 1995 and found that it would give him a total tax break worth $1.9 billion over 30 years:

Taking Forbes up on his suggestion, Citizens for Tax Justice, a non-partisan research group, has updated its earlier analysis of Forbes’s personal tax savings from his proposed 17% flat tax. CTJ’s new, more “dynamic” analysis looks not only at Forbes’s current annual savings from his flat tax, but also at his long-term tax savings. Over the long term, CTJ estimates that Forbes’s tax savings from his flat tax would total approximately $1.9 billion.

At the time of CTJ’s analysis, Forbes earned about $1.6 million annually, and his flat tax plan would have cut his annual tax liability by more than half. But the bulk of Forbes’ savings would have come from investments., as the Forbes plan exempted interest, dividends, and capital gains from taxation. Meanwhile, the 17 percent flat tax Forbes proposed would have blown a$200 billion hole in the federal budget, and its benefits wouldn’t have been shared by low- and middle-income Americans — two-thirds of its proposed tax reductions would have gone to those earning more than $200,000 a year. In order to avoid adding to the deficit, the Forbes plan would have had to include a massive tax hike on the poor.

Perry’s plan won’t come out until tomorrow, but if it is similar to the Forbes plan, the implications are clear: it will be yet another Republican plan that requires poor and middle-class Americans to shoulder the cost of a humongous tax cut for the rich.

Cantor could rake in windfall if debt ceiling isn’t raised

By David Edwards

Economists have said that failing to raise the debt ceiling could be catastrophic for the U.S. economy, but at least one lawmaker stands to gain financially if the country defaults on its debts.

House Majority Leader Eric Cantor's (R-VA) latest financial disclosure statement indicates that he owns up to $15,000 of ProShares Trust Ultrashort 20+ Year Treasury EFT, a fund that will likely skyrocket as U.S. debt becomes less desirable.

"If the debt ceiling isn’t raised, investors would start fleeing U.S. Treasuries," Motley Fool's Matt Koppenheffer told Salon. "Yields would rise, prices would fall, and the Proshares ETF should do very well. It would spike."

"Cantor's involvement in the fund and negotiations is not ideal," he added. "I don’t think someone negotiating the debt ceiling should be invested in this kind of an ultra-short... It looks pretty bad."

Cantor pulled out of negotiations to raise the debt limit last week saying, "Now is the time for these talks to go into abeyance."

Since that time, ProShares ETF is up 3.3 percent.

"Cantor's office claims the investment is simply part of a balanced portfolio," noted Washington Monthly's Steve Benen. "It's hardly a stretch, though, to suggest prominent officials should avoid these kinds of conflicts of interest."

Report: Paul Ryan May Personally Benefit From Preserving Billions In Taxpayer Oil Subsidies

By Lee Fang 

Rep. Paul Ryan (R-WI), the architect of the GOP budget plan, has put forth a plan that calls for ending a number of tax subsidies. However, he has hedged multiple times when asked about oil subsidies. When given the opportunity to end billions in taxpayer giveaways to big oil companies, Ryan voted to preserve the generous subsidies.

The Daily Beast’s Daniel Stone is reporting that Ryan’s protection of billions in wasteful oil subsidies may relate to his own personal fortune. Newly released personal finance disclosures reveal that Ryan and his wife “own stakes in four family companies that lease land in Texas and Oklahoma to the very energy companies that benefit from the tax subsidies in Ryan’s budget plan.” Stone reports that those companies are among his most valuable assets:

Ryan’s father-in-law, Daniel Little, who runs the companies, told Newsweek and The Daily Beast that the family companies are currently leasing the land for mining and drilling to energy giants such as Chesapeake Energy, Devon, and XTO Energy, a recently acquired subsidiary of ExxonMobil.

Some of these firms would be eligible for portions of the $45 billion in energy tax breaks and subsidies over 10 years protected in the Wisconsin lawmaker’s proposed budget. “Those [energy developing companies] benefit a lot from these subsidies,” explained Russ Harding, an energy policy analyst with the Mackinac Center for Public Policy, when presented with the situation, without reference to Ryan. “Without those, they’re going to be less profitable.”

According to disclosure reports reviewed by ThinkProgress, other major proponents of extending billions in oil subsidies are also heavily invested in oil and drilling companies. For example, Energy and Commerce Chairman Rep. Fred Upton (R-MI) owns up to $250,000 in ExxonMobil stock, among other fossil fuel investments.

The GOP's CIA Playbook: Destabilize Country to Sweep Back Into Power

By Robert Parry/ Consortium News

Modern Republicans have a simple approach to politics when they are not in the White House: Make America as ungovernable as possible by using almost any means available, from challenging the legitimacy of opponents to spreading lies and disinformation to sabotaging the economy.

Over the past four decades or so, the Republicans have simply not played by the old give-and-take rules of politics. Indeed, if one were to step back and assess this Republican approach, what you would see is something akin to how the CIA has destabilized target countries, especially those that seek to organize themselves in defiance of capitalist orthodoxy.

To stop this spread of “socialism,” nearly anything goes. Take, for example, Chile in the early 1970s when socialist President Salvador Allende won an election and took steps aimed at improving the conditions of the country’s poor.

Under the direction of President Richard Nixon and Secretary of State Henry Kissinger, the CIA was dispatched to engage in psychological warfare against Allende’s government and to make the Chilean economy “scream.”

U.S. intelligence agencies secretly sponsored Chilean news outlets, like the influential newspaper El Mercurio, and supported “populist” uprisings of truckers and housewives. On the economic front, the CIA coordinated efforts to starve the Chilean government of funds and to drive unemployment higher.

Worsening joblessness could then be spun by the CIA-financed news outlets as proof that Allende’s policies didn’t work and that the only choice for Chile was to scrap its social programs. When Allende compromised with the Right, that had the additional benefit of causing friction between him and some of his supporters who wanted even more radical change.

As Chile became increasingly ungovernable, the stage was set for the violent overthrow of Allende, the installation of a rightist dictatorship, and the imposition of “free-market” economics that directed more wealth and power to Chile’s rich and their American corporate backers.

Though the Allende case in Chile is perhaps the best known example of this intelligence strategy (because it was investigated by a Senate committee in the mid-1970s), the CIA has employed this approach frequently around the world. Sometimes the target government is removed without violence, although other times a bloody coup d’etat has been part of the mix.

Home to Roost

So, it is perhaps fitting that a comparable approach to politics would eventually come home to roost in the United States, even to the point that some of the propaganda funding comes from outside sources (think of Rev. Sun Myung Moon’s Washington Times and Australian media mogul Rupert Murdoch’s News Corp.)

Obviously, given the wealth of the American elites, the relative proportion of the propaganda funding is derived more domestically in the United States than it would be in a place like Chile (or some other unfortunate Third World country that has gotten on Washington’s bad side).

But the concept remains the same: Control as much as possible what the population gets to see and hear; create chaos for your opponent’s government, economically and politically; blame if for the mess; and establish in the minds of the voters that their only way out is to submit, that the pain will stop once your side is back in power.

Today’s Republicans have fully embraced this concept of political warfare, whereas the Democrats generally have tried to play by the old rules, acquiescing when Republicans are in office with the goal of “making government work,” even if the Republicans are setting the agenda.

Unlike the Democrats and the Left, the Republicans and the Right have prepared themselves for this battle, almost as if they are following a CIA training manual. They have invested tens of billions of dollars in a propaganda infrastructure that operates 24/7, year-round, to spot and exploit missteps by political enemies.

This vertically integrated media machine allows useful information to move quickly from a right-wing blog to talk radio to Fox News to the Wall Street Journal to conservative magazines and book publishing. Right-wing propagandists are well-trained and well-funded so they can be deployed to all manner of public outlets to hammer home the talking points.

When a Democrat somehow does manage to get into the White House, Republicans in Congress (and even in the Courts) are ready to do their part in the destabilization campaign. Rather than grant traditional “honeymoon” periods of cooperation with the president’s early policies, the battle lines are drawn immediately.

In late 1992, for instance, Bill Clinton complained that his “honeymoon” didn’t even last through the transition, the two-plus months before a new president takes office. He found himself facing especially harsh hazing from the Washington press corps, as the mainstream media – seeking to shed its “liberal” label and goaded by the right-wing media – tried to demonstrate that it would be tougher on a Democrat than any Republican.

The mainstream press hyped minor “scandals” about Clinton’s Whitewater real estate investment and Travel-gate, a flap about some routine firings at the White House travel office. Meanwhile, the Right’s rapidly growing media was spreading false stories implicating Clinton in the death of White House aide Vince Foster and other “mysterious deaths.”

Republicans in Congress did all they could to feed the press hysteria,  holding hearings and demanding that special prosecutors be appointed. When the Clinton administration relented, the choice of prosecutors was handed over to right-wing Republican Appeals Court Judge David Sentelle, who consciously picked political enemies of Clinton to oversee zealous investigations.

Finally Winning

The use of scandal-mongering to destabilize the Clinton administration finally peaked in late 1998 and early 1999 when the Republican-controlled House voted impeachment and Clinton had to endure (but survive) a humiliating trial in the Senate.

The Republican strategy, however, continued into Campaign 2000 with Vice President Al Gore facing attacks on his character and integrity. Gore was falsely painted as a delusional braggart, as both right-wing and mainstream media outlets freely misquoted him and subjected him to ridicule (while simultaneously bowing and scraping before Republican candidate George W. Bush).

When Gore managed to win the national popular vote anyway – and would have carried the key state of Florida if all legally cast ballots were counted – the Republicans and the Right rose up in fury demanding that the Florida count be stopped before Bush’s tiny lead completely disappeared. Starting a minor riot in Miami, the Republicans showed how far they would go to claim the White House again.

Five Republican partisans on the U.S. Supreme Court – wanting to ensure that the new president would keep their side in control of the courts and recognizing that their party was prepared to spread disorder if Gore prevailed – stopped the counting of votes and made Bush the “winner.” [For details, see the book, Neck Deep.]

Despite this partisan ruling, Gore and the Democrats stepped back from the political confrontation. The right-wing press cheered and gloated, while the mainstream news media urged the people to accept Bush as “legitimate” for the good of the country.

For most of Bush’s disastrous presidency, this dynamic remained the same. Though barely able to complete a coherent sentence, Bush was treated with great deference, even when he failed to protect the country from the 9/11 attacks and led the nation into an unprovoked war with Iraq. There were no combative investigations of Bush like those that surrounded Clinton.

Even at the end of Bush’s presidency – when his policies of deregulation, tax cuts for the rich and massive budget deficits combined to create the biggest financial crisis since the Great Depression – the prevailing message from the Establishment was that it was unfair to lay too much blame on Bush.

Shortly after Barack Obama took office in 2009, a Republican/right-wing talking point was to complain when anyone took note of the mess that Bush had left behind: “There you go again, blaming Bush.”

Getting Obama

Immediately, too, the Republicans and the Right set to work demonizing and destroying Obama’s presidency. Instead of allowing the Democrats to enact legislation aimed at addressing the financial and economic crisis, the Senate Republicans launched filibuster after filibuster.

When Obama and the Democrats did push through emergency legislation, such as the $787 billion stimulus package, they had to water it down to reach the 60-vote super-majority. The Republicans and the Right then quickly laid the blame for high unemployment on the “failed” stimulus.

There also were waves of propaganda pounding Obama’s legitimacy. The Right’s news media pressed bogus accusations that Obama had been born in Kenya and thus was not constitutionally eligible to be president.  He was denounced as a socialist, a Muslim, a fascist, an enemy of Israel, and pretty much any other charge that might hit some American hot button.

When Obama welcomed American students back to school in 2009, the Right organized against his simple message – urging young people to work hard – as if it were some form of totalitarian mind control. His attempt to address the growing crisis in American health care was denounced as taking away freedoms and imposing “death panels.”

Soon, billionaires like oil man David Koch and media mogul Murdoch were promoting a “grassroots” rebellion against Obama called the Tea Party. Activists were showing up at presidential speeches with guns and brandishing weapons at rallies near Washington.

The high-decibel disruptions and the “screaming” economy created the impression of political chaos. Largely ignoring the role of the Republicans, the press faulted Obama for failing to live up to his campaign promise to bring greater bipartisanship to Washington.

Hearing the discord framed that way, many average Americans also blamed Obama; many of the President’s supporters grew demoralized; and, as happened with Allende in Chile, some on the Left turned against Obama for not doing more, faster.

By November 2010, the stage was set for a big Republican comeback. The party swept to victory in the House and fell just short in the Senate. But Congress was not the Republicans’ true goal. What they really want is the White House with all its executive powers.

However, following Obama’s success in killing Osama bin Laden on May 2 and with what is widely regarded as a weak Republican presidential field, the Right’s best hope for regaining complete control of the U.S. government in 2012 is to sink the U.S. economy.

Already, the Republican success in limiting the scope of the stimulus package and then labeling it a failure – combined with deep cuts in local, state and federal government spending – have helped push the economy back to the brink where a double-dip recession is now a serious concern.

Despite these worries – and a warning from Moody’s about a possible downgrade on U.S. debt if Congress delays action on raising the debt limit – the Republicans are vowing more brinksmanship over the debt-limit vote. Before acting, they are demanding major reductions in government spending (while refusing to raise taxes on the rich).

A Conundrum

So, Obama and the Democrats face another conundrum. If they slash spending too much, they will further stall the recovery. However, if they refuse to submit to this latest round of Republican blackmail, they risk a debt crisis that could have devastating consequences for the U.S. economy for years – even decades – to come.

Either way, the right-wing media and much of the mainstream press will put the blame on Obama and the Democrats. They will be held accountable for failing to govern.

The Republican propaganda machine will tell the American people that they must throw Obama and the Democrats out of office for stability to return. There will be assurances about how the “magic of the market” will bring back the bright days of prosperity.

Of course, the reality of a new Republican administration, especially with a GOP Congress, would be the return of the old right-wing nostrums: more tax cuts for the rich, less regulation of corporations, more military spending, and more privatization of social programs.

Any budget balancing will come at the expense of labor rights for union employees and shifting the costs for health care onto the backs of the elderly. Yet, all this will be surrounded by intense propaganda explaining the public pain as a hangover from misguided government “social engineering.”

There is, of course, the possibility that the American people will see through today’s Republican CIA-style strategy of “making the economy scream.” Americans might come to recognize the role of the pseudo-populist propagandists on Fox News and talk radio.

Or Republicans might have second thoughts about playing chicken on the debt limit and running the risk of a global depression. Such a gamble could redound against them. And, it’s hard to believe that even their most ardent billionaire-backers would find destruction of their stock portfolios that appealing.

But there can be a momentum to madness. We have seen throughout history that events can get out of hand, that thoroughly propagandized true believers can truly believe. Sometimes, they don’t understand they are simply being manipulated for a lesser goal. Once the chaos starts, it is hard to restore order.

That has been another bloody lesson from the CIA’s operations in countries around the world. These covert actions can have excessive or unintended consequences.

Ousting Allende turned Chile into a fascist dictatorship that sent assassins far and wide, including Washington, D.C. Ousting Mossadegh in Iran led to the tyranny of the Shah and ultimately to an extreme Islamist backlash. Ousting Arbenz in Guatemala led to the butchery of some 200,000 people and the rise of a narco-state. Such examples can go on and on.

However, these CIA-type techniques can be very seductive, both to U.S. presidents looking for a quick fix to some international problem and to a political party trying to gain a decisive edge for winning. These methods can be especially dangerous when the other side doesn’t organize effectively to counter them.

The hard reality in the United States today is that the Republicans and the Right are now fully organized, armed with a potent propaganda machine and possessing an extraordinary political will. They are well-positioned to roll the U.S. economy off the cliff and blame the catastrophe on Obama.

Indeed, that may be their best hope for winning Election 2012.

Gov. Rick Scott May Personally Benefit From New Law That Hands Medicaid Program Over To Private Companies

By Tanya Somanader

Florida Gov. Rick Scott (R) signed “a landmark Medicaid overhaul” yesterday that will put “hundreds of thousands of low-income and elderly Floridians into managed-care plans.” The proposal “gives managed care companies more control over the program that’s paid for with federal and state money,” a shift the state GOP claims will “hold down spiraling costs in the $20 billion program.” However, as TP Health editor Igor Volskypointed out, a five-county pilot program in Florida already revealed that such a plan produces “widespread complaints and little evidence of savings.” Under managed care, states “have to ensure that private payers aren’t looking out for short term profits by denying treatments or reducing reimbursement rates” and — given what occurred during the pilot program — the results “are already less than promising.”

But Scott may have another reason to push a dubious bill into law. As Mother Jones reported, one of the private managed-care companies that stand to gain from the new law is Solantic, “a chain of urgent-care clinics aimed at providing emergency services to walk-in customers. Solantic was founded in 2001 — by none other than Rick Scott:

The Florida governor founded Solantic in 2001, only a few years after he resigned as the CEO of hospital giant Columbia/HCA amid a massive Medicare fraud scandal. In January, according to the Palm Beach Post, he transferred his $62 million stake in Solantic to his wife, Ann Scott, a homemaker involved in various charitable organizations.[...]

“This is a conflict of interest that raises a serious ethical issue,” says Marc Rodwin, a medical ethics professor at Suffolk University Law School in Boston. “The public should be thinking and worrying about this.”

Scott’s office dismissed the conflict of interest concern as “incorrect and baseless.” However, Scott’s history of fraud with entitlement programs (in that case Medicare) should certainly raise a red flag here. And it is not as if Scott is completely clean when it comes to the mix between professional office and personal interest.

Incidentally, Scott also just signed a bill that will require anyone applying for welfare benefits to pay for a drug test to qualify for benefits. They will only recoup that fee if they pass. One company that provides such drug tests? Solantic.

Issa Secured Nearly $1 Million In Earmarks Potentially Benefiting Real Estate That He Owns

By Lee Fang

As Roll Call reported earlier this month, Rep. Darrell Issa (R-CA) has a history of blending his personal business interests with his work as a member of Congress. Companies owned by the Issa family, including a firm called DEI (an acronym for Issa’s initials), set up websites to channel users to Issa’s official congressional campaign website. After Roll Call made an ethical inquiry to Issa, he changed the website.

ThinkProgress has discovered more troubling evidence that Issa may have blended his work as a lawmaker with his own business empire. After founding a successful car alarm company, Issa invested his fortune in a sprawling network of real estate companies with holdings throughout his district. One of Issa’s most valuable properties, a medical office building at 2067 West Vista Way in Vista, California, is called the Vista Medical Center, and was purchased in 2008 for $16.6 million. Described as “a long-term investment,” the property was bought by a company called Viper LLC, a business entity operated by Issa’s family that Issa has up to a $25 million dollar stake in.

Around the same time Issa made the Vista Medical Center purchase, the congressman began requesting millions of dollars worth of earmarks to widen and improve the highway adjacent to the building. In 2008, he requested $2 million to expand West Vista Way, the road in front of his “long-term investment,” but only received $245,000 from the government. The next year, Issa made another earmark request for improving the West Vista Way highway next to his building. He earmarked another$570,000, bringing his total to $815,000, to add parking lots, widen the road, add bus stops, improve the sewer system, and other utility work. A map showing the location of Issa’s property, and the road, is below:

Issa has said that an “earmark is tantamount to a bribe.” While Issa has handed outearmarks to his campaign donors in the past, in this case, he appears to be helping himself.

Although the highway project has not begun yet (because of local budget problems), the federal money is allocated through Issa’s efforts. Already, a firm representing Issa’s real estate company is advertising the Vista Medical Building and its “Excellent Access with Freeway Visibility.” As ethics experts have explained, lawmakers shouldavoid earmarks in the immediate area of their own business interests.

Issa’s highway earmarks not only potentially benefit his multi-million dollar medical office building, they provide better access to his other properties in the area. About 2 miles down West Vista Way from the Vista Medical Center, Issa owns a commercialoffice building worth over $9 million, as well as an adjacent retail office building. The commercial office building leases to a number of different clients, and Issa’s retail building leases to a Hooter’s. All three properties are on the same highway, which Issa plans to retrofit with taxpayer money.

Gov.-Elect Rick Scott Plans Lavish Inauguration Ceremony In The Midst Of Florida’s Economic Crisis

By George Zornick

The economic picture in Florida is not pretty: there were 1.1 million Floridians unemployed last month, and 55 of Florida’s 67 counties reported double-digit unemployment. It has the fifth-highest foreclosure rate in the country, and the state is facing a $3 billion budget shortfall, including a $1.5 billion shortfall for pressing needs like schools and courts. Former health care executive and multi-millionaire Rick Scott (R) won the governorship this fall by claiming to be a “businessman with no ties to special interests” that would revitalize the state and spur job growth. Before he’s even taken office, however, some Floridians are criticizing Scott for planning an extravagant inauguration ceremony in the midst of the state’s economic turmoil. The Governor’s Inaugural Ball will take place in Tallahassee on Jan. 4, and any Floridian that can scrape together $95 can attend. So far, Scott — who won by the narrowest margin in 134 years in a Florida gubernatorial race — has raised $2 million for the ball, primarily from large corporations that conduct business in the state. Recent letters to the editor in Florida newspapers indicate some of Scott’s constituents find the ceremony offensive: The governor-elect has so far raised $2 million for his inauguration bash and would welcome more. Would it not be a grand gesture if Rick Scott would say that he wants a low-key inauguration? He could either return all the money to his donors or take the $2 million and spend it on the people of Florida who really need it. Does he know how many people are in shelters? How many rely on soup kitchens to get at least one meal a day? Does he know that there are thousands out there living in misery that need help? –Michael Voris of Odessa When challenged on the expensive ceremony, Scott responded that “he’s not sure what the right number is” to spend on an inauguration, and that “it’s important to have a celebration.” This is a view that was not held by his predecessor, Gov. Charlie Crist, who canceled his inaugural ceremony in 2006 after similar criticisms over the cost and scale of the party. “I made a mistake, and, yes, it was a doozy,” Crist said at the time. “Upon reflection, it doesn’t feel right to me when there are people having trouble paying their insurance bills and making ends meet.” Elsewhere in the country, New York Gov.-elect Andrew Cuomo is planning “a muted affair” which he says is “in tune with the economic uncertainty wracking New Yorkers.” Texas Gov. Rick Perry (R) is also planning a “less glitzy” inauguration ceremony “in light of the estimated $20 billion budget shortfall Texas is expecting to face.” Surely they won’t have as much fun as Scott, however.

When Matty wins, we all lose

By Curt Guyette

How political clout beat the public interest

When supporters of the proposed Detroit River International Crossing gathered for a press conference in downtown Detroit this past April, a startling array of often discordant voices were singing in sweet-sounding harmony.

There were Democrats and Republicans. There were a number of trade unionists as well as business interests ranging from the local Chamber of Commerce to Ford Motor Co. There was the African-American mayor of Detroit and white political power brokers from the other side of the Eight Mile divide. There were Canadians and Americans. All standing shoulder to shoulder as they joined in unison to praise the proposed bridge they said needs to be built between the Motor City and Windsor.

The current governor, Democrat Jennifer Granholm, and a few conservative members of the Legislature were there. Jim Doer, the Canadian Ambassador to the United States, was there as part as a far-ranging coalition that also includes the Michigan Association of Counties, the Canadian Auto Workers and the Ohio Senate. It was indeed, as one business publication covering the event reported, an "all-star lineup."

But the fact that they had come together spoke volumes, not just about the importance of the issue but also about the power and influence emanating from one octogenarian billionaire — Manuel "Matty" Moroun, whose privately controlled Detroit International Bridge Company owns the Ambassador Bridge.

That bridge provides a crucial link in the chain of international commerce, a key point in the corridor that accounts for 25 percent of all the trade that flows between Canada and the United States. As a conduit for semis carrying freight, it is a near-monopoly that, according to a recent article in the Wall Street Journal,generates $60 million a year in toll revenue.

The bridge, however, is only one piece of Moroun's empire, which includes trucking and insurance businesses, as well as real estate and duty-free shops. So, even without the Ambassador, the Moroun clan wouldn't be reduced to collecting aluminum cans in order to make ends meet.

But it is the bridge that he is most associated with, and competition from the DRIC — which would be publicly owned and privately operated — is portrayed as a cataclysmic threat to all things Moroun. The scope of DRIC's perceived menace to Moroun and his family was made clear at the April press conference when Matty's wife Nora made what the trade publication Toll Roads News described as a surprise appearance at the event.

"You have somebody who operates a crossing that has retained a No. 1 ranking since we owned and operated it. Now the state of Michigan and Canada want to take 70 percent of our business," Nora Moroun is reported to have said. Making the most important border crossing in North America sound like a vulnerable mom-and-pop grocery, she added, "They want to destroy our family business."

Given that perspective — even if exaggerated — it's not surprising that Moroun and his minions would pull out all the stops in an attempt to keep the DRIC project from moving forward.

Those efforts culminated earlier this month, when legislation needed to take the next step in making the DRIC a reality failed to make it out of committee after Republican leadership reneged on a promise to allow an up-or-down vote on the Senate floor.

Which means that Matty Moroun wins. At least temporarily.

He wins because it puts him in a position to convince a new group of legislators and an equally new governor that the DRIC is dead and that, if they want to fend off competition from border crossings located elsewhere, then his new bridge is the only game in down.

And though he is locked in what has been a lengthy battle to build a second bridge, facing significant opposition on the Canadian side and permitting problems on the American side, he still wins, even if that second bridge of his never gets built. Because every day he delays progress on the DRIC, he profits. The longer the hoped-for bridge remains just a hope, the more millions he continues to rake in by maintaining his grip on cross-border traffic and the tolls it generates.

"Delay works in the bridge company's favor," says Sarah Hubbard, senior vice president of government relations at the Detroit Regional Chamber of Commerce. "Delay does not work in the region's favor. Or the state's favor."

The view is much the same from the other side of the river. As Brian Masse, a member of the Canadian Parliament from Windsor and a vocal DRIC supporter, points out: "He wins, and everyone else loses."

But his victory in the long run, no matter how much he wants to convince people otherwise, is anything but inevitable. His camp may claim that the DRIC is dead, but it is not. And its importance — to the city of Detroit, the entire region, and the nation as a whole — is an issue that is far too important to allow him to hold sway and dictate the terms of the debate.

River of trade

There is one thing everyone agrees on: Any sustained disruption to the flow of goods across the Detroit River would be an economic catastrophe. Automobile manufacturing — which relies on just-in-time deliveries to keep assembly lines moving smoothly — would screech to a halt. As the Build DRIC Now Coalition points out, with $43.8 billion in trade moving through the Detroit-Windsor corridor annually, more than "450 major Michigan businesses from Holland to Hazel Park" count "on the free flow of trade with Canada to keep their businesses competitive."

Which is a main reason why, after the 9/11 terrorist attacks, a bi-national effort to create "redundancy" in the corridor began.

This history was outlined in a November letter Canadian MP Masse sent to the Republican leader of Michigan's Senate, Mike Bishop.

"Following the heinous event of September 11, 2001, border procedures, infrastructure vulnerability and security created further complications to efficiently run our aging border infrastructure."

Initially, Moroun's Detroit International Bridge Co. opposed these efforts, claiming traffic volume didn't warrant a second bridge. But, as the effort progressed, the bridge company attempted to get in on the action, proposing a second span be built adjacent to its existing Ambassador Bridge.

But that proposal was eventually rejected the bi-national DRIC study group. It was rejected in large part because having two bridges side by side failed to provide the kind of protection necessary to the flow of trade should disaster — either natural or man-made — strike.

Security expert Stephen Flynn says the decision to seek another crossing some distance from the Ambassador was a wise one.

As president of the Center for National Policy, a Washington, D.C.-based think tank that specializes in infrastructure and homeland security issues, Flynn says that, viewed from the perspective of a terrorist looking to inflict the most economic damage possible, "You would be hard put to find an asset more important than the Ambassador Bridge. No one has turned over a rock in Afghanistan and found a note saying they are going after the Ambassador Bridge, but I would say it is at the top of the list of attractive targets."

And having two bridges right next to each other would make it even more attractive, he says.

It's not just the bridge itself, he explains. An attack that would cause shutdown of roads leading to the bridge, for example, or customs or immigration facilities, would also lead to a significant disruption in the flow of goods.

On the other hand, having separate bridges makes it less likely either would be targeted; taking out just one wouldn't completely shut down international traffic.

And an attempt to attack both bridges would involve much more planning, coordination and surveillance by more people. As the logistics of an attack becomes more complicated, says Flynn, the "footprint becomes larger" and is more likely to be uncovered.

"Building extra capacity further away makes more sense."

Speaking from a national security perspective, Flynn says, "They should have built extra capacity 10 years ago." And the delay in moving ahead "is not a very responsible position to take. The overarching goal should be to advance the security of the country. The stakes here are quite high, not just for the local area, but for the broader national good."

What's especially disturbing, he says, is that as the debate drags on al-Qaeda and its affiliates are becoming increasingly focused on creating economic destruction.

Flynn's observations highlight a devastating hypocrisy on the part of the bridge company.

After the DRIC study group decided against "twinning" the Ambassador Bridge, the company set out on a dual course. On the one hand, it began pursuing construction of a twin span on its own. It also launched an all-out effort to derail construction of a competing publicly owned bridge nearly two miles downriver near Zug Island in the Delray neighborhood.

The result is that, if Matty Moroun were to have his way, there would be two bridges next to each other — creating an extremely high-value "big bang" target instead of the more complicated target of two separate bridges that would serve as a deterrent to terrorism.

The hypocrisy comes from the fact that the fence the bridge company put up in Riverside Park — taking a 150-foot stretch of publicly owned land the company needs in order to build its second bridge — is being justified by the claim that the fence is needed to deter terrorists.

As Metro Times has previously reported, although the signs placed on that fence by the bridge company indicate that trespassing in the area is prohibited by order of the Department of Homeland Security, government officials within the department previously have consistently said they never authorized the company to put up either the fence or the signs.

Although one judge has already ruled that the bridge company is illegally occupying the parkland, the company has appealed that decision and continues to use the national security argument in court as a rationale for fencing off public property it doesn't own.

(In addition to the Riverside Park lawsuit, a Wayne County Circuit Court judge ruled recently that the bridge company illegally utilized a portion of city property — a section of 23rd Street — when constructing a truck plaza adjacent to the bridge. Another judge is considering finding the company in contempt for allegedly failing to abide by an agreement with the state to build an elevated truck ramp that would keep truck traffic off of surface streets in southwest Detroit.)

Another irony in all this is that the patriots on the Republican side of the aisle in the Michigan Legislature — with outgoing Senate Majority Leader Mike Bishop in the lead — were able to derail, at least for the time being, progress on construction of the DRIC bridge downriver.

To accomplish that obstruction, they had to justify refusing an offer of financial help that proponents say would have allowed Detroit and the rest of the state to reap the financial benefits of a new bridge while avoiding any risk to the state's taxpayers.

Canada steps in

In May, despite all the political firepower on display at the press conference the previous month, it became clear that the depth of Michigan's budgetary woes was going to make the DRIC project a tough sell in the Legislature.

The cost of the entire project is pegged at $5.2 billion, but little of that would have fallen on the state's taxpayers, even in a worse-case scenario. The Canadian and U.S. governments would finance much of the project's costs — things such as tollbooths and customs facilities. The state's portion would be primarily limited to its half of the actual bridge construction, projected to be as much as $1.2 billion for the entire span.

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 Timesduring 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.