Hi Norm, All of a sudden, high-speed rail and the Transbay Terminal are sounding do dleazy. Can you tell me what I should be supporting? What the Transportation Working Group of the SF Green Party should be supporting? Thanks, Sue Vaughan --- RicSilver@aol.com wrote:
From: RicSilver@aol.com Date: Mon, 23 Aug 2004 12:08:38 EDT Subject: Say Goodby to High Speed Rail 1-2
To: RicSilver@aol.com
Say Goodby to High Speed Rail
Any Comments? Ideas?
Published Sunday, August 22, 2004, in the Oakland Tribune
High-speed collision with conflicting interests
Plans to link trains to Transbay Terminal run into intransigent developer and rail officials who appear to back him
By Sean Holstege Staff Writer
Plans for a California bullet train network and conveniently linked Bay Area transit are joined at the hip in downtown San Francisco.
Yet top California High Speed Rail Authority officials appear more supportive of a downtown developer than either public transportation project.
A 51-story condominium development at 80 Natoma Street stands in the path of proposed bullet train lines into the new Transbay Terminal's basement. Attempts at diffusing a political collision course there have raised questions about conflicts of interest and new doubts bullet trains will ever reach downtown San Francisco.
In May, Mayor Gavin Newsom invited Rail Authority Chairman Joseph Petrillo to intervene, Petrillo said. But city records show that Petrillo's employer, international law firm Paul, Hastings, Janofsky & Walker, had helped 80 Natoma developer Jack Myers execute financial deals two months earlier.
Myers' firm took title on March 25 for $10, plus other undisclosed "considerations," and then took out a $124 million construction loan, city records show.
An attorney in Petrillo's division of the law firm told Petrillo that he had represented Myers, the rail chairman said in an interview.
Myers built the office complex where Petrillo's firm is headquartered a block away from 80 Natoma. Petrillo convened bullet train contractors at that office for a fund-raiser, also in May.
San Francisco Supervisor Chris Daly said 80 Natoma and the terminal can't co-exist, describing the collision course as "a pretty significant conflict." Last week he voted against a new plan that some in San Francisco believe would allow both projects to proceed.
At stake is a downtown San Francisco terminal that would allow people to transfer between major Bay Area transit systems under one roof while using one fare. From the basement, bullet trains would carry people to downtown Los Angeles in 2-1/2 hours.
The glittering $1 billion terminal could revolutionize the region's disjointed transit network. Sponsors envision one of the world's great rail stations, to rival New York's Grand Central, London's Victoria and Paris' Gare du Nord.
Several state laws and voter-backed measures pay for the terminal and require rail platforms in the basement for Caltrain and bullet train alike.
The Rail Authority's environmental report projects the future Transbay Terminal as the busiest station in the entire 700-mile network.
Without trains, the Transbay Terminal would -- as critics have called it -- become the world's most expensive bus stop. Independent engineers found no option for tracks other than under Myers' property. But while Rail Authority Executive Director Mehdi Morshed was telling people he didn't care if his trains ever reach the terminal, Petrillo's actions seemed to bolster Myers' negotiating position.
The public agency developing the terminal needs Myers to suspend work until it can tunnel under it. Myers refuses, and the agency has begun an eminent domain proceeding to buy the property. "Every dollar going into that high-rise is one-for-one coming out of the public's pocket," said San Francisco transit advocate Michael Kiesling. "I believe Myers is trying to scam public money out of this."
Daly put it more politely, calling Myers effective at "trying to better his negotiating position."
Myers said that's nonsense. "I don't want condemnation, and I'm going to fight it all the way," he said. He sued to overturn the Transbay Terminal's environmental study.
In a May 4 meeting Petrillo tried to resolve the dispute. "Petrillo was acting like Myers' man, barking out stuff. He hasn't been a friend of the Transbay Terminal," said Jerry Cauthen, an engineer on the terminal project.
The Transbay Terminal authority paid two consultants to assess whether tracks could reach the terminal without tunneling under Myers' project. They said no.
"Petrillo was involved on the phone. He was trying to muzzle the consultants," said Tony Bruzzone, AC Transit's point-man on the terminal.
The same two consultants are retained by the Rail Authority and helped prepare its environmental study. Petrillo acknowledged they were placed in the awkward position of serving two masters.
Petrillo said he was merely trying to cut to the chase to see if 80 Natoma and the terminal could co-exist. "They were debating numbers that didn't communicate to me the basics I needed to know: whether there were any fatal flaws," Petrillo explained.
AC Transit fired off a letter to San Francisco officials two weeks later, arguing: "Failure to acquire this parcel will cause the entire Transbay program to collapse."
Published Sunday, August 22, 2004, in the Oakland Tribune
Truth may have come off the tracks
Rail Authority efforts leave some legislators questioning if proposed high-speed rail project is 'a fraud'
By Sean Holstege Staff Writer
Lawmakers say California High Speed Rail Authority work is not just sloppy, but misleading.
Sloppiness was evident: a business plan that never mentioned an Oakland track, a $20 million environmental plan describing a future BART station six months after it opened.
The route into the Bay Area is one of the biggest controversies in the plan for the 700-mile system. The Rail Authority dropped an Altamont Pass route in favor of two South Bay alternatives.
On Feb. 17, Rail Authority Executive Director Mehdi Morshed told the state Senate Transportation Committee that years ago French, German and Japanese rail experts had blessed the plan to run tracks through San Jose rather than over the Altamont Pass.
Morshed couldn't document the claim.
The Train Riders Association of California filed a public records request for all communications with the French, German and Japanese consultants. Morshed provided what he described as a full, unedited set of documents.
"None of the documents we were provided contained any information to support Mr. Morshed's statement," TRAC's Oakland lawyer Stuart Flashman wrote lawmakers.
In a rebuttal letter, Morshed reasserted the documents that led to the Altamont decision "were peer reviewed by German, French and Japanese experts," adding the reviews marked "general agreement."
But a month after Morshed's testimony, Rail Authority Deputy Director Dan Leavitt wrote a Japanese rail expert, asking for "a brief analysis" of the environmental study's conclusion that an Altamont Pass route would be "impractical."
On March 16, Leavitt wrote "the task should take no more than $10,000."
On April 23, the Japanese expert duly complied with a three-page report, finding "it is reasonable to eliminate the (Altamont) option." On May 10, came the bill. "Cost for the review task: $10,000," the Japanese expert wrote.
Morshed said the letters stemmed from a U.S. Environmental Protection Agency request. A Feb. 27 EPA letter copied to Morshed noted concern that the Altamont route "appears to have been prematurely eliminated." Morshed said his Senate appearance was all a misunderstanding.
"The question was 'Why didn't you study it?' and I said we did," Morshed said. He said he only intended to imply that foreign consultants reviewed the whole plan and "did not find fault with our assumptions," including the Altamont.
"How they construe that to be misleading, I don't know," he said.
But lawmakers on the committee had no doubts. "It sounds like Mehdi said he had a study that predated their decision and it informed their decision. Now it looks like they are making it up as they go along," said Sen. Tom McClintock, R-Thousand Oaks, who sat on the committee hearing.
"I am not surprised that phantom studies are being waved before the Legislature," McClintock added. "I think this entire project has been a fraud since the day it was proposed."
"I don't know how you could interpret it any other way," said Brian Perkins, transportation adviser to Sen. Jackie Speier, D-Hillsborough, who also sat on the committee.
More troubling to Perkins, who called Morshed's actions "not intellectually honest," was a document missing in his public records disclosure. Correspondence between Leavitt and the Japanese expert refers to an e-mail dated Feb. 17 -- the same day Morshed testified.
"It's like the missing 17-1/2 minutes," Perkins said, referring to the erased gap in the Oval Office tapes that helped force Richard Nixon from the presidency. "They apparently learned from Mr. Nixon that you burn the evidence."
French consultants, working under a High Speed Rail Authority contract, also had offered an opinion to the authority. They noted an Altamont route "would not be practical," and they peer-reviewed the agency's work in 2000 and found it "sound and reliable."
The Feb. 11 letter was written by engineers at SNCF, parent company to Systra Consulting. Systra is one of three firms picked for the "Project Implementation Team," which stands to make $10 million a year if California's rail bond passes.
Flashman said Morshed's team "got back what they wanted" from a firm with an incentive to deliver.
Veteran San Diego lawmaker James Mills, who quit the California High Speed Rail Authority board, is not surprised.
"One of the reasons I left is I couldn't get the truth out of Mehdi Morshed. Mehdi is one of those people who has a hidden agenda on everything," Mills said, "He would only tell the truth when it was convenient."
Mills described the entire project as "based on a fallacy" of wildly exaggerated ridership projections. It stems, he said, "from hiring a consulting firm (and) letting them know what you want them to say."
Morshed said Mills is "full of (it)," describing him as someone who used his position on the board to help California's intercity Amtrak service and undermine the bullet train.
But some Central Valley politicians involved in the rail issue side with Mills.
"Their story changes depending on their audience," Kings County Supervisor Alene Taylor said. "They have not been honest with the public. It's how they do business."
Published Sunday, August 22, 2004, in the Oakland Tribune
Bullet Train to Nowhere
Critics say politics and back-room deals cast serious doubt on whether a proposed $37 billion high-speed rail system will ever be built
By Sean Holstege Staff Writer
The marbled conference hall buzzed with that potent mix of money, power and anticipation.
It was May 11, 10:40 a.m. Willie Brown was late to his own meeting, well under way in the 24th floor boardroom of an international law firm's downtown San Francisco office.
Around the U-shaped, polished wood table assembled heavyweights in the rail engineering and construction world, including the CEO of Parsons Brinkerhoff, one of the country's biggest transportation firms. They came to the private meeting to throw money and political clout behind a proposed $37 billion bullet train network. Big deals were afoot.
As the dozen or so guests waited, they schmoozed for 40 minutes with three top officials from the California High Speed Rail Authority, the public agency planning the 700-mile rail network, ultimately stretching from San Diego to San Francisco, Oakland and Sacramento.
Without asking for it directly, Rail Authority chiefs told industry leaders -- including those with authority contracts -- that the rail agency needed money and political backing to carry on.
Brown took his place at the head of the table. His resume as powerful San Francisco mayor and Assembly speaker well known to everyone in the room, Brown now markets his influence in the private sector. He looked over the group and explained that he and former state lawmakers Richard Katz and Terry Goggin wanted a fee of $1 million.
In return, they would steer a favorable budget into law by lobbying all the key state politicians. Then they'd launch a campaign to convince California voters to pass a $10 billion rail bond.
The author of California's political reforms and good-government watchdogs said -- absent any overt coercion -- such fund-raisers are legal, but raise doubts about appearance and propriety.
"How can the public be confident that decisions would be based on merit and not undue influence?" asked Andy Draheim of Common Cause, a government watchdog group.
That's exactly how several industry sources took it. In describing the meeting and events surrounding it, they portrayed a below-the-radar state agency run amok with a history of back-room dealing, conflicts of interest and secretive money-gathering. One called the meeting a "classic shakedown" -- and not the first.
Industry sources spoke on condition of anonymity because their employers prohibit media interviews. In the close-knit world of transportation engineering, sources fear their firms would be blackballed or they would earn career-ending reputations by talking openly.
They say the Rail Authority's cavalier tactics raise serious doubts about whether the Golden State can ever build a "bullet train" network, which could relieve Californians of congested in-state air travel.
Three days after the San Francisco gathering, Brown, Goggin and Katz wrote a follow-up memo to invited donors, detailing the first and only meeting of Friends of California High Speed Rail.
'Substantial retainer'
The memo, obtained by ANG Newspapers, confirms a picture that emerges from interviews with more than half of the participants and dozens of transportation sources familiar with high-speed rail.
"Over the next 60 days we propose to concentrate our considerable political resources and campaign experience," the memo states. "This will require a substantial initial consultant retainer for our fees and expenses of $400,000."
Another $600,000 was needed to start the bond campaign, the memo said. Overall, Brown would get half of the $1 million, while Katz and Goggin would split the rest.
Public agencies, including BART and AC Transit, often ask consultants and vendors for big political checks, officials at each agency, and others, say.
"If you say, 'Give me a campaign contribution and I'll give you contracts,' that's a bribe. If you say, 'You won't get a contract unless the bond passes,' that's OK. That's just normal politics -- getting contributions from those that benefit," said Robert Stern, a UCLA professor who helped write California's Political Reform Act.
He found no transgressions in the Brown letter.
Top Rail Authority officials say concerns about influence-peddling are misplaced, because the appointed governing board will be almost entirely replaced before it votes on contracts.
"Any competitive bid at the High Speed Rail Authority will be based on merit, as it always has been," authority board member Rod Diridon said.
"The people who benefit from high-speed rail should organize themselves, because otherwise it may very well remain unaccomplished," Rail Authority Chairman Joseph Petrillo said.
Petrillo, Diridon and Rail Authority Executive Director Mehdi Morshed "were very careful not to cross a line that might exist," said one industry player who attended the May 11 meeting.
Questions of influence
But Common Cause's Draheim said the public should naturally ask "if future decisions on public policy will be unduly influenced by the position these officials put themselves in."
Morshed and Diridon said they felt no such qualms, because, they said, it was Willie Brown's meeting.
Petrillo, whose law firm hosted it, apparently was less comfortable. Not long before Brown arrived Petrillo told the group "I shouldn't be here," and he recused himself. Diridon and Morshed remained.
No contributions were reportedly made, and a follow-up telephone conference call was canceled. No public records for the political group are on file with the Secretary of State's office, and Brown, Goggin and Katz are not registered lobbyists.
Brown and Goggin did not return calls to their law firms made over several weeks.
Sources familiar with their request for money called it premature amid persistent doubts that California's dream of a European-style rail system will bear fruit.
Funding for the Rail Authority was -- and remains -- uncertain. A lengthy environmental study is under review and significant challenges are expected.
The Legislature passed a bill, which Gov. Arnold Schwarzenegger signed, delaying a November bond vote by two years. Later he trimmed the rail agency's budget and his reform advisers recommended scrapping the Rail Authority entirely.
Its plans assume America's first bullet train will carry 68 million passengers a year, enough to cover costs and debt, with spare money to finance an expansion beyond the first San Francisco-to-Los Angeles track.
No bullet train system in the world, nor any large U.S. transit system, is self-sufficient, let alone profitable.
But believers say tactics, not merits, threaten to kill bullet train prospects in California.
"They are going to screw high-speed rail all up if they keep playing around like this. It's already radioactive," one industry leader said. Union Pacific lobbyist Wayne Horiuchi skipped the Willie Brown fund-raiser and others by rail commissioner Rod Diridon.
One, at Diridon's South Bay home, raised re-election campaign money for Gov. Gray Davis one day after Davis signed the $10 billion rail bond bill.
Davis challenger Bill Simon showed up with the media, raising allegations of payback.
Diridon said the fund-raiser had been planned weeks beforehand and the timing was "an unfortunate coincidence."
'Pay-to-play'
"Rod Diridon called me personally and wanted me to contribute to Gray Davis," said Horiuchi, who declined the offer because "we didn't want to get into the political sensitivity of pay-to-play."
Said another rail industry source: "Rod Diridon is a one-trick-pony. All he knows is shaking people down."
"I can't control that (perception),"said Diridon, adding the Rail Authority is "gun-shy of pay-to-play accusations."
But several rail sources said they felt compelled to donate to scholarship dinners at the Mineta Transportation Institute, which pays Diridon $138,834 annually to be executive director. Engineers, consultants and rail firms fear losing favor at the High Speed Rail Authority if they don't support the foundation at the government- funded San Jose State University think tank, some said.
"No one has ever discussed it with me, and if they were honorable and seriously concerned, they should. I'm not going to turn down scholarships because I recently became a member of the High Speed Rail Authority, " Diridon said. "Unnamed sources don't have much credibility with me."
Diridon said he's been at the Mineta Institute since 1992 and has invited the same donors to the scholarship dinner for years. Davis appointed him to the High Speed Rail Authority in 2001.
Diridon said two firms with Rail Authority contracts -- French rail company Systra and political consultants Townsend Raimundo Besler & Usher -- never gave money to the Mineta Institute. Other firms have donated and never received Rail Authority contracts, he said.
But the institute's brochures list Bechtel Corp. and Parsons Brinkerhoff Quade & Douglas as big donors in 2002 and 2003.
Both firms are part of the Rail Authority's Project Implementation Team, which is paid $10 million a year to steer the project from plans to construction. Tax law exempts the foundation from disclosing contributors, but an institute brochure listing sponsors reads like a who's who of high-speed rail wannabes. It includes at least seven attendees of Willie Brown's May 11 meeting and at least two no-shows.
One no-show was LTK Engineering Services, which is represented in Northern California by former Sacramento transit director Tom Matoff. He said Willie Brown's $1 million request -- $100,000 per donor -- was out of his league, but he buys $2,000 tickets every year to the Mineta Institute fund-raiser.
Although he said he's never felt pressured, he added, "We want to be viewed, like everybody else, as a friend of the project."
He said there's no clear connection between contributions and work, but his firm doesn't leave it to chance.
"It's the way it's done, and everybody does it," Matoff said.
Critics of the High Speed Rail Authority's work have long suspected Diridon had an overlapping role between the Mineta Institute and the rail board. Last year the institute sponsored a discussion of the bullet train proposal at the Commonwealth Club of California. Diridon was the featured speaker.
Diridon also introduced himself at the Willie Brown fund-raisers representing the Mineta Institute.
"Over the past two years the lines of distinction between the authority and institute have been blurred," wrote Ken Gosting, executive director of Transportation Involves Everyone, in a letter to Diridon.
Similar questions of overlapping interest and hidden political influence also hover over a community campaign that's sprouted in Merced.
Lee Boese Jr., an orthodontist, chairs the Merced group, whose literature advocates high-speed rail somewhere in Merced County. The area is a key battleground because that's where the route would split into the Bay Area -- one of the plan's hottest controversies.
Boese says bullet trains will boost the Central Valley's tepid economy and help clean its smog-heavy air.
The Merced County High-Speed Rail Committee, has 24 active members from all walks of life, Boese said. A spring fundraiser raised $25,000, and all donations were tax-deductible, Boese and group literature said.
Questionable filing
But the group's filing with the Secretary of State's office describe it as a 501(c)4 nonprofit, a charitable civic organization.
Tax laws allow such groups to conduct "unlimited" political lobbying without disclosing contributors, according to IRS advisories.
The IRS also says that contributions to civic charities are not tax-deductible.
The money, Boese said, pays for the help of Sacramento political consultant Elaine Trevino, who lobbies local governments and organizations.
Trevino is not a registered lobbyist. Neither she nor Boese explained the discrepancy in the organization's filing and its pitch for tax-free contributions. Nor did they explain why the group didn't organize as a simple political organization.
Boese and Trevino attended the Willie Brown meeting, representing themselves as Merced real estate interests. Several members of the group have business interests in the Los Banos area, one of the preferred sites for a station.
"I thought it was totally inappropriate for real estate people to be involved at this stage, when they are deciding the route," one witness said.
Gosting, who wants to see bullet trains zooming down California tracks someday, said that vision is destroyed if the Rail Authority and its allies such as the Merced group continue down the current track.
"You end up with something that benefits land speculators and promotes sprawl, that decreases ag land instead of protects it," he said. "We end up with a debacle. We spend billions and billions of dollars for something that won't work."
ETHICS TROUBLES
Participants at the May 11 bullet train fund-raiser are no strangers to ethics probes.
* Willie Brown had been investigated by the FBI in a 1980s undercover sting while he was Assembly speaker. His name surfaced at the FBI again when he was mayor, after questions of favoritism arose in airport construction contracts. Brown always denied any wrongdoing and has never been indicted or censured, either as a lawyer or a politician.
* Terry Goggin fared worse. The Fair Political Practices Commission fined the then-assemblyman $13,500 in 1984 after he carried a bill to require telephones for the deaf. Only one firm could provide the devices, a firm owned by a close friend of Goggin, according to published press reports.
* Richard Katz, who had a reputation as an effective state lawmaker, was fined $4,000 in 1997 after failing to disclose campaign expenses in a Los Angeles mayoral race. Questions surfaced again during the state energy crisis when he advised Gov. Gray Davis, while taking consulting fees from firms lobbying the governor.
* Michael Bernick was one of the potential donors present and is now with HNTB, an engineering design firm. When he was an elected BART board member, an FBI wiretap caught him soliciting contributions from a firm after ensuring that the firm would get a BART contract. "We've got to keep it real clean," Bernick was taped saying in 1992. "You know, so there is nothing linking the two of us."
Later Bernick told the media, "I'd do it again." He was taped as part of a bribery investigation that forced the resignation of BART board member Margaret Pryor. Current board member Dan Richard served at the time and said Bernick, who was never indicted, simply made a judgment error.
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