Link to article here.

Overseas Investors Buy Aggressively in U.S.
By PETER S. GOODMAN and LOUISE STORY
New York Times
January 20, 2008

Last May, a Saudi Arabian conglomerate bought a Massachusetts plastics maker. In November, a French company established a new factory in Adrian, Mich., adding 189 automotive jobs to an area accustomed to layoffs. In December, a British company bought a New Jersey maker of cough syrup.
For much of the world, the United States is now on sale at discount prices. With credit tight, unemployment growing and worries mounting about a potential recession, American business and government leaders are courting foreign money to keep the economy growing. Foreign investors are buying aggressively, taking advantage of American duress and a weak dollar to snap up what many see as bargains, while making inroads to the world’s largest market.

Last year, foreign investors poured a record $414 billion into securing stakes in American companies, factories and other properties through private deals and purchases of publicly traded stock, according to Thomson Financial, a research firm. That was up 90 percent from the previous year and more than double the average for the last decade. It amounted to more than one-fourth of all announced deals for the year, Thomson said.

During the first two weeks of this year, foreign businesses agreed to invest another $22.6 billion for stakes in American companies — more than half the value of all announced deals. If a recession now unfolds and the dollar drops further, the pace could accelerate, economists say.

The surge of foreign money has injected fresh tension into a running debate about America’s place in the global economy. It has supplied state governors with a new development strategy — attracting foreign money. And it has reinvigorated sometimes jingoistic worries about foreigners securing control of America’s fortunes, a narrative last heard in the 1980s as Americans bought up Hondas and Rockefeller Center landed in Japanese hands.

With a growing share of investment coming from so-called sovereign wealth funds — vast pools of money controlled by governments from China to the Middle East — lawmakers and regulators are calling for greater scrutiny to ensure that foreign countries do not gain influence over the financial system or military-related technology. On the presidential campaign trail, the Democratic candidates have begun to focus on these foreign funds, calling for international rules that would make them more transparent.

Debate is swirling in Washington about the best way to stimulate a flagging economy. Despite divided opinion about the merits, foreign investment may be preventing deeper troubles by infusing hard-luck companies with cash and keeping some in business.

The most conspicuous beneficiaries are Wall Street banks like Merrill Lynch, Citigroup and Morgan Stanley, which have sold stakes to government-controlled funds in Asia and the Middle East to compensate for calamitous losses on mortgage markets. Beneath the headlines, a more profound shift is under way: Foreign entities last year captured stakes in American companies in businesses as diverse as real estate, steel-making, energy and baby food.

The influx is the result of a confluence of factors that have made the United States both reliant on the largesse of foreigners and an alluring place for opportunistic investors. With American banks reeling from the housing downturn and loath to lend, businesses are hungry for cash.

The weak dollar has made American companies and properties cheaper in global terms, particularly for European and Canadian buyers. Even as Americans confront the prospect of a recession, economic growth remains strong worldwide, endowing oil producers like Saudi Arabia and Russia and export powers like China and Germany with abundant cash.

As the German company ThyssenKrupp Stainless broke ground in November on what is to be a $3.7 billion stainless steel plant in Calvert, Ala., its executives spoke effusively about the low cost of production in the United States and the chance to reach many millions of customers — particularly because of the North American Free Trade Agreement, which allows goods to flow into Mexico and Canada free of duty.

“The Nafta stainless steel market has great potential, and we’re committed to significantly expanding our business in this growth region,” said the company’s chairman, Jürgen H. Fechter, according to a statement.

Foreign giants like Toyota Motor and Sony have been sinking capital into American plants. Investment in the American subsidiaries of foreign companies grew to $43.3 billion last year from $39.2 billion the previous year, according to the research and consulting firm OCO Monitor.

“This is a vote of confidence in the American economy, the American marketplace and the American worker,” the deputy Treasury secretary, Robert M. Kimmitt, said. “These investments keep Americans employed and keep balance sheets strong.”

Five million Americans now work for foreign companies set up in the United States, Mr. Kimmitt said, and those jobs pay 30 percent more than similar work at domestic companies. Nearly a third of such jobs are in manufacturing, which explains why Rust Belt states have been wooing foreign investment.

“We’ve lost 400,000 manufacturing jobs,” said Michigan’s governor, Jennifer M. Granholm, a Democrat, who has traveled three times to Europe and twice to Japan in pursuit of investment since taking office in 2003. “I’ve got to get jobs for our people.”

Some labor unions see the acceleration of foreign takeovers as the latest indignity wrought by globalization.

“It’s the culmination of a series of fool’s errands,” said Leo W. Gerard, international president of the United Steelworkers. “We’ve hollowed out our industrial base and run up this massive trade deficit, and now the countries that have built the deficits are coming back to buy up our assets. It’s like spitting in your face.”

Other labor groups take a more pragmatic view.

“We need investment and we need to create good jobs,” said Thea Lee, policy director for the A.F.L.-C.I.O. in Washington. “We’re not in the position to be too choosy about where that investment comes from. But it does bring home the consequences of flawed trade policies over many, many years that we’re in this position of being dependent.”

At the center of concern is the growing influence of sovereign wealth funds, which invested $21.5 billion in American companies last year, according to Thomson. Analysts say they could skew markets by investing to improve the fortunes of their national companies or to pursue political goals.

“This is a phenomenon that could be called the growth of state capitalism as opposed to market capitalism,” said Jeffrey E. Garten, a trade expert at the Yale School of Management. “The United States has not ever been on the receiving end of this before.”

Perhaps emblematic of national ambivalence, in an appearance on CNBC last week, the voluble market analyst Jim Cramer spoke in menacing terms about the growing role of state investment funds from the Middle East and China.

“Do we want the communists to own the banks, or the terrorists?” Mr. Cramer asked. “I’ll take any of it, I guess, because we’re so desperate.”

Proponents of investment from overseas note that finance from sovereign wealth funds is a mere trickle of the overall flow from abroad. Indeed, the bulk comes from Europe, Canada and Japan. Just as Americans have scattered investments around the world in pursuit of profit — with holdings of foreign stock and debt exceeding $6 trillion in 2006, according to the Treasury Department — foreigners are looking to the United States, with their capital generating economic activity, proponents say.

If fear of foreign money now inspires Americans to erect new barriers, that would damage the economy, said Todd M. Malan, president of the Organization for International Investment, a Washington lobbying group financed by foreign companies.

“The policy choices on the negative side would have enormous economic implications that would make the current situation look like a bubble bath,” he said.

Tensions spawned by foreign investment hark back to the 1980s, when Japan snapped up prominent American businesses like Columbia Pictures, and some intoned that the American way of life was under assault. The new wave of foreign money is washing in at an even more important time, analysts say.

The United States has lost more than three million manufacturing jobs since 2001, with foreign trade often taking the blame. Foreign-made goods now account for roughly one-third of all wares consumed in the United States, roughly tripling their share over the last quarter-century. The soaring price of oil and a widening trade deficit underscore how the American economy is increasingly vulnerable to decisions made far away.

In 2005, Congressional opposition scuttled a bid by the state-owned Chinese energy company Cnooc to buy the American oil company Unocal. The following year, furor on Capitol Hill prevented DP World, a company based in the United Arab Emirates, from buying several major American ports.

No such outcry has greeted the purchase of stakes in major Wall Street banks by state investment funds in the United Arab Emirates, Kuwait, China, Singapore and South Korea. This is largely because the banks sold passive slices and ceded no formal control, which would have set off a federal review of the national security implications. But the silence also reflects the imperative that these enormous institutions swiftly secure cash.

“It would be good if these companies didn’t need all this capital and better if the capital was available in the United States,” said Senator Charles E. Schumer, Democrat of New York, who was a vocal opponent of the DP World deal. “But given the situation that these institutions find themselves in and the fact that there’s a pretty strong credit squeeze, there’s only two choices: Have foreign companies invest in these firms or have massive layoffs.”

In years past, particularly when Japanese money washed in, many foreign purchases proved not to be so prudent in the end. This time, with the dollar weak and troubled American companies in a poor bargaining position, the prices really do seem cheap, some economists say.

“They’re buying financial assets at well under book value,” said Gary C. Hufbauer, a trade expert at the Peterson Institute for International Economics.

Trade experts assume tensions will rise as developing countries — which tend to have more state companies — continue to expand their share of investment in the United States.

Canada still spends the most money buying stakes in American companies — more than $65 billion in 2007, according to Thomson. But other countries’ purchases are growing rapidly. South Korea’s investments swelled to more than $10.4 billion last year from just $5.4 million in 2000. Russia went to $572 million from $60 million in that span; India to $3.3 billion from $364 million.

But even if political tension increases, so will the flow of foreign money, some analysts say, for the simple reason that businesses need it.

“The forces sucking in this capital are much bigger than the political forces,” said Mr. Garten, the Yale trade expert. “If there is a big controversy, it will be between Washington on the one hand and corporate America on the other. In that contest, the financiers and the businessmen are going to win, as they always do.”

Link to article here.

Meetings begin in Texas toll road plan
By MICHAEL GRACZYK
Associated Press
Businessweek
January 14, 2008

The biggest construction project ever attempted in Texas comes under public debate beginning Tuesday in the first of a series of town hall meetings about a proposed 4,000-mile network of superhighway toll roads.

The Trans-Texas Corridor, or TTC, as it has become known, was initiated six years ago by Gov. Rick Perry. It has rankled opponents who characterize it as the largest government grab of private property in the state’s history and an unneeded and improper expansion of toll roads.

Texas Department of Transportation officials and Perry have defended the project as necessary to address future traffic concerns in one of the nation’s fastest-growing states. They also say the project is vital because of insufficient road revenues from the state gas tax and the federal government.

“This state has to look outside the box and the traditional ways we’ve been doing things the last 50 years,” Perry spokesman Robert Black said.

The TTC would crisscross the state — for the most part roughly paralleling existing interstate highways — with up to quarter-mile-wide ribbons of separate highways for cars and trucks, rail lines, pipelines and utility lines. The cost of the project has been estimated at approaching $200 billion, and it could take as long as 50 years to complete.

In what the agency says is an unprecedented step, department officials were heading to Texarkana on Tuesday in northeast Texas for the first of 11 meetings over the next four weeks to answer questions about the project.

Backers of the TTC already have been accused of backroom political dealing, mounting a propaganda campaign and caving to foreign ownership.

“We really are getting ripped off,” says Terri Hall, of San Antonio, who heads TURF — Texans Uniting for Reform and Freedom. The group is suing the transportation agency, alleging its promotional campaign violates a ban on state officials using their authority for political purposes.

“Once people really understand all that’s going on, and what’s at stake, it really does have massive, massive implications,” she said.

The first phase of the TTC, envisioned as part of a superhighway stretching from Oklahoma to Mexico, was planned by the Cintra Zachry consortium. It’s composed of Cintra Concesiones de Infraestructuras de Transporte SA of Spain, one of the world’s largest developers of toll roads, and Zachry Construction Co. of San Antonio.

Its legal representative is the firm of Bracewell & Giuliani, the home firm of GOP presidential candidate and former New York City Mayor Rudy Giuliani, who counts Perry among his supporters.

The Spain-based company would get to operate the roads and collect tolls. State officials insist the land and road would continue to be owned by the state like any Texas road. They also say they have an obligation to make the best deal possible for financing regardless of the address of the contractor.

Hall argues elected officials in the counties affected by the project have “sold out to the road lobby” and succumbed to courting.

And Sal Costello, whose Austin-based Texas Toll Party has been opposing the TTC, speculated transportation officials should expect a cool reception at the meetings, which he said he won’t attend.

“These meetings will change nothing,” he said.

Some 580,000 acres will be needed for the project, primarily in rural areas that will take “some of the best farmland in the state,” says Texas Farm Bureau spokesman Gene Hall.

“The fact of the matter is, every highway in the state of Texas was once private property somewhere,” Black said. He noted there was opposition in the 1950s to the vast Texas farm and ranch road system and the interstates of the 1960s.

“A thousand new people are coming to the state every day,” he said. “Our population will double in roughly the next 40 years. Our current transportation infrastructure cannot meet that challenge.”

Other meetings this week were planned in East Texas for Carthage and Lufkin, both areas in the path of the long-anticipated Interstate 69, one of the proposed legs of the TTC. It would run from the Mexico border in far South Texas, skirt the Houston area and into East Texas toward northwestern Louisiana.

Besides I-69, the Trans-Texas Corridor as proposed also would include new superhighways that parallel existing Interstates 35 and 37, major north-south routes through the center of the state, and I-10, the 800-mile main east-west artery from Orange to El Paso.

An environmental study for the I-69 project undergoes a separate scrutiny at public hearings starting next month. The series starting this week is designed to focus more on the overall TTC project.

Link to article here.

Wonder how free trade, college, and jobs relate to toll roads? Our Nation’s so-called “free trade agreements” are the reason why the Trans Texas Corridor is being built and handed over to a foreign company (Cintra) to reap MEGA profits for the next 50 years. China and multi-national corporations want a new trade corridor to ship cheap Chinese goods into the U.S. at Texas taxpayers’ expense. The project requires 580,000 acres of private Texas land to benefit Cintra and China, not Texans. It’s the worst eminent domain abuse EVER to befall our country. So in the name of “free trade,” we’re now sending so many high paying jobs overseas, that the expensive college education you just mortgaged your home to pay for was for nothing. U.S. News and World Report is now suggesting those students take blue collar jobs. This election year we can this to the mantra: it’s the jobs, stupid!

College Not Necessary for Many New Careers
January 2, 2007
by Phyllis Schlafly, Eagle Forum

U.S. News & World Report, which has made a name for itself by ranking and announcing the Best Colleges every year, is now ranking and listing the Best Careers for young people. A comparison of the latest lists shows a shocking disconnect and makes for dispiriting holiday reading.

While the price of a college education has skyrocketed far faster than inflation, many careers for which colleges prepare their graduates are disappearing. U.S. News’ Best Careers guide concludes that “college grads might want to consider blue-collar careers” because B.A. diploma holders “are having trouble finding jobs that require college-graduate skills.”

Incredibly, U.S. News is telling college graduates to look for jobs that do not require a college diploma. Among the 31 best opportunities for 2008 are the careers of firefighter, hairstylist, cosmetologist, locksmith, and security system technician.

Where did the higher-skill jobs go? Both large and small companies are “quietly increasing offshoring efforts.”

Ten years ago we were told we really didn’t need manufacturing because it can be done more cheaply elsewhere, that auto workers and others should move to Information Age jobs. But now the information jobs are moving offshore, too, as well as marketing research and even many varieties of innovation.

The flight overseas includes professional as well as low-wage jobs, with engineering jobs offshored to India and China. Thousands of bright Asian engineers are willing to work for a fraction of American wages, which is why Boeing just signed a 10-year, $1-billion-a-year deal with an Indian government-run company.

Society has been telling high school students that college is the ticket to get a life, and politicians are pandering to parents’ desire for their children to be better educated and so have a higher standard of living. John Edwards wants the taxpayers to guarantee every kid a college education, and Mitt Romney says more education is the means for Americans to compete in a global economy.

But it doesn’t make sense for parents to mortgage their homes, or for students to saddle themselves with long-term debt, in order to pay overpriced college tuition to prepare for jobs that no longer exist. Tuition at public universities has risen an unprecedented 51 percent over the past five years.

President Bush calls the loss of U.S. jobs “the pinch some of you folks are feeling.” I guess his words are designed to show his “compassionate conservatism,” but the reality is far more than a pinch.

U.S. News offers this advice for the nerds who still spend five to six years earning an engineering degree despite increasingly grim prospects of a well-paid engineering career: “Look for government work.” Or maybe you can be an “Offshoring Manager” and be part of the process of shipping your fellow graduates’ jobs overseas.

A Duke University spokesman said that 40 percent of Duke’s engineering graduates cannot get engineering jobs. A Duke University publication suggests that the best prospect for good engineering jobs is for the U.S. government to start another major project like going to the moon.

U.S. News warns us that “government is becoming an employer of choice.” Corporations are getting leaner, but government can continue to pay good salaries, with lots of vacation days, sick leave, health insurance and retirement benefits, because government rakes in more tax revenue in good times and can raise taxes in bad times; and if the Democrats win in 2008, we can expect government to expand even more.

Presidential candidates have gotten the message from grassroots Americans that we want our borders closed to illegal aliens. Headlines now proclaim “Immigration Moves to Front and Center of G.O.P. Race” and “G.O.P. Candidates Hold Fast on Immigration at Debate.”

But G.O.P. candidates haven’t yet gotten the message that jobs are just as big a gut issue as immigration. The Wall Street Journal/NBC News survey conducted December 14-17 reports that, by 58 to 28 percent, Americans believe globalization is bad because it subjects U.S. companies and employees to unfair competition and cheap labor.

Where are the limited-government fiscal-conservatives when we need them to refute the notion that the best an engineering graduate can hope for is a job with the government? Are the fiscal-conservatives too busy chanting the failed mantra of “free trade” even though it has resulted in millions of good American jobs being shipped overseas?

When are we going to call a halt to the way globalism is destroying U.S. jobs by foreign currency manipulation, theft of our intellectual property, shipping us poisonous seafood and toys, and unfair trade agreements that allow foreign subsidies (through the so-called Value Added Tax) to massively discriminate against U.S. producers and workers?

It’s clear the current crop of transportation commissioners is committed to selling out the Texas taxpayers by hawking-up our PUBLIC FREEways to the highest bidder on Wall Street. This is the legacy Ric Williamson and Rick Perry will leave…pushing an agenda the Texas taxpayers have repeatedly rejected and representing private interests over the public good.

The Texas Transportation Institute study showed merely indexing the gas tax to inflation would meet our future transportation needs, de-bunking Commissioner Holmes’ claims of an unacceptably high gas tax increase below. It’s time for all of these bureaucrats to go. Replace the transportation commissioners, who are joined at the hip with the road lobby, with a single ELECTED commissioner! The sooner the better!

Texas transportation commission chairman’s death could upend toll-road debate
Monday, December 31, 2007
By MICHAEL A. LINDENBERGER / The Dallas Morning News
The death of Ric Williamson, the fiery, whip-smart chairman of the state transportation commission, could upend the still-roiling debate over toll roads in Texas in the New Year.

Mr. Williamson died Saturday of a heart attack at age 55, sending shock waves through the nearly 15,000-employee department he led as well as the political and policy circles where his combative style and pro-toll-road agenda had engendered enormous change – and criticism.

Always careful to credit Gov. Rick Perry, a close friend and former roommate, Mr. Williamson emerged as a lightning rod in recent years as he pushed to let private companies build and operate toll roads throughout Texas.

“We are [expletive] running out of money,” he told The News in a wide-ranging interview a week before his death, allowing his usual thoughtful, precise vocabulary to give way to frustration over continued resistance to the governor’s toll road policies. “It absolutely boggles my mind how men and women elected to make courageous decisions in leading this state cannot focus on the simple fact that our congestion is rapidly approaching an intolerable level.”

It was Mr. Williamson’s sometimes-abrasive approach that has those who clashed with him hoping his successor will take a more conciliatory tone and a balanced approach to the state’s problems. One of those critics, Sen. John Carona, D-Dallas, chairman of the Senate Transportation Committee, said he is hoping that Mr. Williamson’s successor will support raising state gas taxes to help reduce the need for tolls.

Even Mr. Williamson’s supporters acknowledge that he often bruised feelings. Still, fellow members of the commission say he was indispensable.

“Ric was focused laser-like on the issues, well read and always researched things thoroughly,” said commissioner Ted Houghton of El Paso.

Mr. Williamson was focused on finding a way to pay for the new roads and added lanes that Texas’ booming metropolitan areas need – even as such traditional revenues as gas taxes failed to keep up with costs. In general, new roads in Texas will have to be toll roads, Mr. Williamson said often in recent months.

Plenty of powerful voices have disagreed, however.

Last session, the Texas Legislature passed a partial moratorium on a centerpiece of Mr. Perry’s strategy, slowing his plans to privatize toll roads. Mr. Williamson spent most of 2007 criticizing the moratorium as an example of fuzzy-headed legislative intrusiveness. But he also led a vigorous effort to work around the new rules, and within months of the session’s close unveiled a list of more than 80 highway projects eligible for toll roads.

Those stormy debates are expected to carry into 2008.

A new panel will study the concept of private toll roads this year and report to the Legislature. In addition, and perhaps far more significantly, an independent sunset review commission will begin the top-to-bottom examination of TxDOT that all state agencies must undergo every 12 years.

No one expects the latter process to be free of conflict.

Mr. Carona said a new chairman will give TxDOT a less abrasive style.

“I think it will moderate the case for toll roads,” Mr. Carona said. “Chairman Williamson was singular in his focus on the usage and expansion of toll roads. And as much as he will be missed, a change in leadership will undoubtedly result in a more multi-pronged approach.”

A spokesman for the governor said Monday that it’s far too early to comment on a replacement for Mr. Williamson, who was a close friend of Mr. Perry’s for more than 20 years. Whoever is selected can begin serving immediately but will have to be confirmed by the state Senate next year.

Sen. Florence Shapiro, R-Plano and a member of the transportation committee, said the sunset review panel’s findings will help set the course for when the debate with the Legislature resumes in 2009.

“That commission is going to start meeting fairly quickly, and there will be some very creative and very innovative ideas that will come to the forefront,” she said.

But the toll road debate won’t be the same without Mr. Williamson, she and others said Monday.

“I think he was a very strong advocate for that [pro-toll-road] position,” Ms. Shapiro said. “We probably won’t have another chairman who will be as strong. But that doesn’t mean that position and those ideas about toll roads and privatization will go away.”

She’s right, Mr. Williamson’s fellow commissioners said Monday.

Mr. Houghton said Mr. Williamson and the governor had been pushing for private toll roads because they are a solution that works.

“All four of us are committed to this approach, and we understand the issues,” Mr. Houghton said. “The issues are this: We are out of money.”

Commissioner Ned Holmes of Houston agreed.

“We have to have a new methodology to fund our highway program,” Mr. Holmes said, speaking in support of private toll roads. “The traditional ways of funding are just not adequate, and they are not likely to be. I don’t believe those changes [embraced by TxDOT in recent years] will fall apart now.”

He said higher gas taxes – the most often touted alternative to tolls – won’t work, because rates would have to soar far beyond any acceptable level to provide the needed revenue. “That’s not going to happen.”

But Mr. Carona and others said more modest increases in the gas tax would greatly reduce, though not eliminate, the need for private toll roads in Texas.

Terri Hall, a grassroots activist who has led a citizens’ group to sue TxDOT over its toll road push, said Mr. Williamson sometimes embraced a with-us or against-us approach when communities resisted his push for toll roads.

“I think you always knew where you stood with Ric Williamson,” said Ms. Hall, whose group is called Texans Uniting for Reform and Freedom. “You knew he was never going to back away from his position, no matter how many citizen concerns he heard. He’d stick to his gun no matter what.”

She said she hopes the sunset review will recommend doing away with the commission and replacing the body with a single elected commissioner.

In the meantime, though, the dynamics of the toll road debate will change without Mr. Williamson. How much they change could depend on how involved Mr. Perry decides to be in pushing the policies he relied on Mr. Williamson to champion.

Mr. Carona said the governor will have to step up his involvement in the discussions if he wants to see his side advocated as strenuously as it has been by Mr. Williamson.

Ms. Hall agreed.

“I truly think there was only one Ric Williamson,” Ms. Hall said. “How significantly his absence will affect the debate really is up to the governor. The governor has really leaned on Ric Williamson to take his hits for him.”

The state transportation commission’s next scheduled meeting is Jan. 31 in Victoria. Though chairman Ric Williamson died Saturday, the four remaining members can continue to act with full authority. Possible scenarios:

• The four members can elect a temporary chairman, who will preside until Gov. Rick Perry appoints a permanent chairman.

• The governor can appoint Mr. Williamson’s successor, who could begin serving immediately but would be subject to a Senate vote in the next legislative session in 2009.

• The new chairman could be one of the four existing members or the fifth to be named by Mr. Perry.

SOURCE: Dallas Morning News research

We started to send out word connecting the dots between Macquarie, Cintra, the law firm Bracewell & Giuliani and Presidential candidate Rudy Giuliani last spring. Finally, the mainstream press is starting to look into Giuliani’s crooked deals that involve the Texas Governor and many of the special interests that dominate Texas. It’s clear Cintra and Macquarie are trying to buy themselves a U.S. President!

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Below is an excerpt from Vanity Fair, December 2007, on the Macquarie, Cintra, Bracewell & Giuliani, and Trans Texas Corridor connection – Link to full article here.

“Finally, last March, Giuliani managed to sell Giuliani Capital Advisors for an undisclosed sum to a fast-growing Australian bank called Macquarie Group. In a New York Times article, an analyst suggested that Macquarie might have paid as much as $76 million for it. Another analyst scoffs at that and says the price was closer to $10 million—essentially what Giuliani had paid for it. A source at Macquarie, while not confirming the lower figure, allows that the higher figure is “wildly” off. (Hess says, “We don’t comment on fees or compensation.”)

Why would an Australian colossus like Macquarie buy a money-losing U.S. investment bank? Perhaps because Macquarie is making inroads—literally—in the U.S., acquiring the leases on state highways and operating them as toll roads, in Indiana and Illinois, with more states to follow. The toll-road business is highly controversial and involves politics right up to the top. It can’t hurt to have helped out a man who might be the next president. (A Macquarie spokesperson says the only reason for the purchase of G.C.A. was “new sectors and new locations for us,” and that Giuliani “was not involved in discussions for acquisition of G.C.A. by Macquarie.”)

Even before the deal, there had been only one degree of separation between Macquarie and Giuliani. Macquarie’s partner in a $3.8 billion Indiana toll road is a Spanish company called Cintra Concesiones de Infraestructuras de Transporte, S.A. Cintra, in turn, is represented by a Texas law firm once known as Bracewell & Patterson, now called Bracewell & Giuliani.

Legal Eagles

For Giuliani, a law firm was the third leg of the stool. Not only did it fit right in with his other businesses; for the former prosecutor, appending his name to a large, established firm was a dream come true. But one in Texas?

The business marriage worked for the reason marriages often do: each partner could help the other. At 64, Bracewell managing director Patrick Oxford had accomplished a lot. A genial Republican with close ties to Senators Kay Bailey Hutchinson and John Cornyn, among other Texas stalwarts, he prides himself on his role in heading up his party’s delegation of lawyers in Broward County, Florida, in the aftermath of the 2000 election. Four years later, he took his strike force to Ohio and helped keep the tipping-point state in the Republican column. Oxford, then, had done about as much as any individual in the United States to determine the outcomes of the last two presidential elections. Yet Bracewell was overshadowed by larger Texas firms such as Vinson & Elkins, alma mater of former U.S. attorney general Alberto Gonzales, and Baker Botts, where former secretary of state James Baker presides. Giuliani would boost Bracewell’s profile, especially if he ran for president—and won.

To all who asked, Giuliani said he hadn’t yet made up his mind about entering the race for 2008. But the alliance with Bracewell in early 2005 was a move made by a man who knew exactly what he needed to shore up his prospects: credibility in the Republican heartland. Also, the money was good. Oxford agreed to give Giuliani Partners $10 million, to be split among its three senior partners: Giuliani, Mike Hess, and Daniel Connolly, according to a story in The American Lawyer. In becoming Bracewell & Giuliani, the Texas firm would also commit $25 million to establish a New York office. As the head of that office, Giuliani would be guaranteed at least $1 million a year, plus 7.5 percent of all fees generated by the office. Yet his commitment to the law firm was less than half-time: Mondays and Fridays.

Politically so far, the move has paid off. By the middle of 2007, Giuliani had raised $4,788,168 in Texas, more than Hillary Clinton ($3,137,134), more even than the two closest Republican candidates combined (Mitt Romney’s $2,254,349 and John McCain’s $2,189,696). But in marrying into Bracewell, Giuliani has acquired a whole family of squirrelly relatives, from the firm’s own lobbyist-lawyers to the clients they represent.

Bracewell & Patterson has long been known for representing school districts. By the time Giuliani became part of it, in early 2005, it had also become the go-to law firm for major polluters: oil and gas as well as coal companies. Among its significant clients are Chevron/Texaco, Pacific Gas & Electric, Dynegy, Southern Company, Valero Energy, and Shell Oil.

Until recently, Citgo oil company was among those significant clients, but no longer. Last March, after a flurry of news stories, Giuliani was embarrassed: Citgo, since 1990, has been run by a state-owned Venezuelan petroleum company, and thus is currently controlled by the country’s president, Hugo Chávez. Giuliani had been knocking the virulently anti-American Chávez in speeches around the country. “We need a president who knows how to get things done, so we don’t have to be sending money to Chávez,” he declared in a speech in May. “Who would listen to Chávez if he didn’t have all this oil money?” In fact, Bracewell & Giuliani had been happy to take Chávez’s money: Bracewell had registered as a lobbyist for Citgo in April 2005, for $5,000 a month, right after Giuliani joined the firm. Bracewell finally ended its relationship with Citgo in June 2007.

Perhaps most unfortunately, Bracewell & Giuliani has supplied the legal and lobbying muscle to get new coal-fired power plants built all over the country. A dramatic example is the coal-fired plant called Desert Rock Energy Project, to be built by Sithe Global Power, a Bracewell client, on Navajo lands in Burnham, New Mexico. “To us, this is environmental injustice and economic exploitation,” declares Dailan Long, a Navajo activist. “We were never informed about this project thoroughly. The terms of the lease agreement have never been released to us.” Bracewell’s lobbyist Frank Maisano, the point man on Desert Rock, scoffs at that. “There have been more than 400 public meetings about the project over a four-year period,” he says. “They don’t have to disclose the terms of the lease. This is an agreement between Sithe Global and the Navajo Nation, and the lease is part of an ongoing process.” Maisano notes that the council of the Navajo Nation voted 66 to 7 for the plant. Long and other activists say the tribe’s elders have been misled about the environmental and financial impact on the community.

Howard Rubinstein, the well-known New York public-relations man who now represents Bracewell & Giuliani, has said that Giuliani “doesn’t lobby in any way” for the firm, and that lobbying makes up only about 2 percent of the firm’s earnings. So none of this really matters, nor do the contributions that the firm’s employees have made to Giuliani the candidate—at least $100,000 to date—or the contributions from the oil and gas companies: $545,058 as of mid-November 2007, way ahead of Mitt Romney ($309,933) and Hillary Clinton ($220,550). And, presumably, if Giuliani wins in November 2008, the firm would be known simply as Bracewell, not as Bracewell & President Giuliani.

The Road Through Texas Is Paved with Gold

Still, Giuliani’s presence at the firm may create some synergistic connections. Consider the Trans Texas Corridor debate.

For several years now, Texas governor Rick Perry has been pushing a plan that appalls many of his constituents—except, apparently, the most powerful ones—to outsource a spider’s web of new and improved state highways to Cintra Concesiones de Infraestructuras de Transporte, S.A. To ease Texans’ fears that the state is putting its future roads in the hands of a foreign-owned company, Cintra is now partnered with a San Antonio construction company called Zachry. The roads envisioned in this $184 billion, 4,000-mile project are no mere superhighways. They’re three football fields wide. They will include not only a rail line but also pipelines that can carry oil, gasoline, or liquefied natural gas. Alongside the roads will be distribution centers. Cintra-Zachry will lease the roads and levy whatever tolls it likes. And it will also control the distribution hubs, and charge what it likes there too. “I don’t want to see transportation become another battle between the haves and have-nots,” says former Texas Democratic congressman Chris Bell. “And it could quickly become that.”

The roads of the Trans Texas Corridor, as currently envisioned, would cut wide swaths through hundreds of farms and ranches. “Eminent domain is a huge issue here,” says Democratic Texas state representative Garnet Coleman. “The biggest opposition has come from farmers and ranchers who are along the proposed roads.” Eventually, the corridor might be extended to Canada. Coleman calls it “a super-nafta corridor.”

The connections may be coincidence, but they’re striking. Cintra is a client in Texas of Bracewell & Giuliani. The company it’s most likely to work with to extend the corridor north is Macquarie, which already operates its Indiana toll road in partnership with Cintra. In early 2007, Macquarie bought a chain of some 40 local Texas and Oklahoma newspapers. Might it have bought those papers to control public opinion in advance of plans to build more controversial toll roads? Might it potentially have in Giuliani not only a legal partner for future toll roads but a political ally?

Bracewell spokesperson Melanie Hillis says that Giuliani has not worked on behalf of Cintra or Macquarie. A Macquarie spokesperson adds that Cintra used Bracewell before it became Bracewell & Giuliani. He says that Macquarie is as likely to compete with Cintra as to cooperate on any future toll roads. He also declares that the purchase of those newspapers was made by the Macquarie Media Group, a separate division with no connection to Macquarie’s toll-road business. “To suggest that the acquisition was made to control public opinion in advance of building toll roads is absurd and incorrect. The business continues to be run by the same management team, with the same editorial staff. No editorial influence has been exercised by the Macquarie Media Group.” Anyway, the spokesperson adds, “I don’t think it is correct to say that the building of more toll roads in the United States is ‘a highly controversial plan.’ ”

That might come as a surprise to the farmers and ranchers who face the prospective loss of their land through eminent domain, and the Texans who feel their taxes entitle them to state-built freeways, not foreign-run toll roads. At the least, they seem less likely to get a sympathetic hearing from a president whose law firm represents Cintra and whose investment bank was sold to an Australian bank that often partners with Cintra and wants to build more U.S. toll roads.

Perhaps Giuliani does have little or nothing to do with his law firm’s principal clients. With at least one smaller client, however, he clearly played a role, and that role appears, to say the least, unpresidential.

In early 2006, Bracewell & Giuliani reviewed a proposed bank purchase. The Spanish bank Santander wanted to buy 20 percent of Sovereign Bancorp of Philadelphia. Bracewell’s review recommended the deal, the New York Stock Exchange and the S.E.C. eventually approved it, and so Santander bought in for $2.4 billion. The story, however, was a bit more complicated than that.

The review, according to one Sovereign insider, was paid for by the Spanish bank and dismissed the concerns of shareholders opposed to the acquisition. As a result, says this source, Bracewell ignored dubious dealings by Santander, such as its donations to Venezuelan president Hugo Chávez’s political campaigns and its connections to Cuba and Iran (Santander was fined by the U.S. in 2004 for doing business with Cuba and has come under scrutiny for trading with an Iranian bank blacklisted by the U.S. for links to terrorism), not to mention the fact that its C.E.O. had been investigated for corruption. “I questioned why Rudy stuck his neck out like that,” the insider says. “Obviously it was for a fee, but with his long-term aspirations there didn’t seem like a lot of upside.” (Bracewell says that the firm was hired by Santander to assess the proposed investment and found that the bank “had fully and completely complied with all laws relevant to the transaction.”)

“Cheer and Loathing in New York,” by Gail Sheehy (June 2000), about the showdown between Rudy and Hillary in that year’s Senate race—before Rudy bowed out

“Giuliani’s Princess Bride,” by Judy Bachrach (September 2007)

“Crazy for Rudy,” by Michael Wolff (June 2007)

Illustration by Risko.

Almost immediately after the buy-in, Sovereign’s chairman, Jay Sidhu, resigned with a $44 million parachute. In November of that year, Giuliani gave a speech, for $100,000, at the Jay S. Sidhu School of Business & Leadership at Wilkes University, in Wilkes-Barre, Pennsylvania.

When the Chicago Tribune asked Bracewell managing partner Daniel Connolly about the timing of these events, Connolly said that Giuliani’s speech had no connection to the Bracewell review, which in any case was completed nine months before the speech. But a Wilkes University spokeswoman told the Tribune that, in fact, the university had identified Giuliani as a potential speaker in April 2006, formally asked him to speak in May, and signed a contract with him on June l3—two weeks after the Santander-Sovereign deal closed. (Giuliani’s speeches were arranged by the Washington Speakers Bureau.)

In the businesses that Giuliani built and bought these last six years, more deals have yet to be examined, more dots connected in the picture of his great financial success. But enough are there already, with lines between them, for a shape to have clearly emerged. It’s a picture of a politician leading a parade, as Mayor Giuliani so often did. Only the marchers behind him aren’t drum majorettes or wartime veterans or firefighters or police. They’re a ragtag band of Texas lawyers and energy lobbyists, penny-stock sharpies and security-industry entrepreneurs, agog with visions of the ultimate pay-to-play presidency.”

With additional reporting by Christopher Bateman.

Michael Shnayerson is a Vanity Fair contributing editor.

Haven’t we seen that private equity deals, like the private equity toll road deals being perpetrated upon Texans (like the SH 130 toll road) are a bad deal all the way around for our Nation? Here’s another reason to oppose them and to be informed about the presidential candidates’ money trails…Giuliani has a few of his own.
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WASHINGTON (CNN) – Congressman Duncan Hunter, R-California, who is running for President, called on Mitt Romney, another GOP candidate, to take a public stance on the proposed partnership between the private equity firm Romney founded and a Chinese-based company.

Before running for Governor of Massachusetts in 2002, Romney was the CEO and founder of Bain Capital Partners, a highly successful venture capital and investment firm based in Boston which currently manages more than $50 billion in assets, according to the company’s website.

Last month, Bain Capital and China’s Huawei Technology purchased 3Com in a deal valued at $2.2 billion. The deal gave the Chinese company a minority stake in 3Com, an internet security company.

Hunter says that 3Com has contracts with the U.S. Dept. of Defense. However, Bain Capital tells CNN 3Com does not contract with the U.S. government directly, and the Chinese company will not have access to sensitive U.S.-origin technology or U.S. government sales as a result of this transaction.
In a letter addressed to Romney, provided to CNN by Hunter’s campaign, Hunter claims the Chinese company has ties to Saddam Hussein and the Taliban and asks Romney to come forward with a “clear statement” in opposition to the deal sealed last October.

The Bain Capital deal in question “can only be characterized as irresponsible,” Hunter said in a written statement.
In September, other Republicans in the House called on the Bush administration to block the merger and proposed a resolution that says the deal “threatens the national security of the United States and should not be approved by the Committee on Foreign Investment in the United States.”

Romney’s campaign provided CNN the following statement in response to the request from Hunter, “Governor Romney is no longer involved in Bain Capital and their investment decisions.”

Link to article here. Read more about how Bracewell & Giuliani is the sole law firm for the Spanish company, Cintra who is building the Trans Texas Corridor. His conflicts of interest are astounding!

Giuliani Will Not Sever Ties to His Firm
By MARC SANTORA
New York Times
DECEMBER 9, 2007
Rudolph W. Giuliani, seeking to stem a spate of bad news in his bid for the Republican nomination, defended himself Sunday morning from a vast array of questions about his personal integrity, his judgment and possible conflicts of interest because of business ties, among other issues.

As the solo guest on “Meet the Press,” Mr. Giuliani was by turns defensive, apologetic and indignant under the questions of Tim Russert, but the interview never grew heated and at points Mr. Giuliani seemed amused.

He said he would not sever his financial ties with Giuliani Partners, the security consulting firm he founded. He also disassociated himself from the opinions of one of his more hawkish foreign policy advisers, tried to explain why he missed meetings of the Iraq Study Group to give lucrative speeches and once again tried to explain his recommendation of Bernard Kerik to head the office of Homeland Security.

His personal life was also touched upon, when Mr. Giuliani, the former mayor of New York who was twice divorced, was questioned about the decision to provide security to his then-girlfriend, now wife, Judith Nathan, at taxpayer expense.

Mr. Giuliani was dismissive when asked about the work his law firm, Bracewell/Giuliani, has done on behalf of Citgo Petroleum Corporation of Houston, the American subsidiary of Venezuela’s state-owned oil company, Petroleos de Venezuela S.A. (PDVSA).

Hugo Chávez, the socialist leader of Venezuela who derides President Bush as a genocidal murderer, controls the state company.

Mr. Giuliani laughed loudly as Mr. Russert posed the question and then went on to claim that the law firm represented Citgo “just in Texas.”

He was also asked about some controversial clients of his security firm, Giuliani Partners, including the government of Qatar.

Members of the royal family in the Gulf Country are suspected of sheltering Khalid Sheik Mohammed, the mastermind of the 9/11 attacks. “The reality is Qatar is an ally of the United States,” he said.

Mr. Russert pressed him on why he simply did not sever his financial ties with Giuliani Partners and make a full list of clients public.

Mr. Giuliani said certain confidentiality agreements made that impossible but he did not explain why he still takes money from the security firm, which he founded, while he runs for president.
He said he was “not going to do more than what is absolutely required.”

The explanation seemed to run counter to his defense of his decision to drop out of the Iraq Study Group.

Mr. Giuliani missed several early meetings, and on those days instead gave speeches for which he was paid millions of dollars.

Mr. Giuliani said that it was not personal gain that compelled him to quit the group, a bipartisan commission that was tasked with assessing the situation in Iraq. Rather, he said, he feared that as he considered running for president, his political ambition could taint the findings of the commission.

Mr. Russert pressed the point, saying that Mr. Giuliani had told no one at the time that he was quitting because of his presidential ambitions. Mr. Giuliani claimed he mentioned his rationale to James Baker, the Republican head of the study group.

Often there are one or two difficult issues a candidate will have to deal with when going on the Sunday morning talk shows. But the tough and serious questions for Mr. Giuliani, who was reluctant to appear on “Meet the Press,” according to people familiar with the booking process, did not seem to stop. Though the interview touched on foreign policy, fuel standards and even remarks by a rival, Mike Huckabee, most of the questions were about Mr. Giuliani’s personal record and decision making.

It was a reminder of just how much the campaign has been struggling of late to drive the news rather than simply respond.

For months, Mr. Giuliani was setting the agenda of the Republican race. Last spring, he focused on 9/11 and pushed the theme as far as he could. Throughout the summer, he used crime and New York as a foil to position himself as tough. And he started the fall talking almost solely about Hillary Clinton and his contention that he was the best candidate to beat her.

Even the question of abortion seemed to work for him, at once allowing him to say that he was going to not shift his pro-life stand despite the pressures of the primary while at the same time repeatedly invoke his desire to appoint “strict-constructionist” judges.

But in the last month, he has yet to find a successful narrative to move beyond the questions that are being raised about him.

On his decision to appoint Mr. Kerik — now under indictment on corruption charges — to lead the New York City Police Department and later to recommend him to for a critical job in keeping America safe from terrorism as head of the Homeland Security Department, Mr. Giuliani said, “The mistake was I should have checked it out much more carefully.”

But he also once again tried to point to successes Mr. Kerik had as his police commissioner.

On the question of police protection for Judith Nathan, Mr. Giuliani said it was a security matter and not his call and that no one really likes to have security anyway.

Mr. Russert focused on the timing of when the security was provided, citing reports that she was given security before December of 2000, suggesting that the security argument was hollow because Mr. Giuliani’s relationship with Ms. Nathan was secret.

Mr. Giuliani said he misunderstood the timing of his affair, noting that they went public in May of 2000.

But the details of discussion seemed of little importance. Words like affair, mistress, secret, and girlfriend are not what a candidate wants to be discussion one month before the first caucus and primary contests.

It is perhaps a bit surprising the Mr. Giuliani waited so long to go on the program, since the scrutiny will likely now be much greater.

However, Mitt Romney, the former Massachusetts governor who is also seeking the Republican nomination, has also been reluctant to subject himself to tough questions. He is scheduled to appear on “Meet the Press” next Sunday.

With Americans facing volatile oil markets, an unstable housing market, and a shaky credit crunch, now they have to contend with the free fall of the U.S. dollar. Jerry Corsi, in his book, The Late Great USA, warns that the Trans Texas Corridor and intercontinental trade corridor crowd pushing the merger of the United States with Canada and Mexico into a North American Union need a currency crisis to make way for a single North American currency called the Amero.

Still think NAFTA, CAFTA, GATT, and all the other free trade agreements are a good idea? Anyone think dependence on foreign oil ought to continue? Are we tired of being puppets for our enemies and the global elites who want to erase our borders, our sovereignty, and threaten our economy and even our security? The only truly anti-globalist Presidential candidates are Dennis Kucinich, Duncan Hunter, and Ron Paul. Ron Paul seems to have the momentum and also the grassroots support to take out the pre-ordained globalist picks for the top job.
Link to article here.
BLACK-GOLD BLUES
Chavez, Ahmadinejad join bin Laden’s jihad on dollar
Leaders urge OPEC members to declare economic war against U.S. ‘imperialism’

By Jerome R. Corsi
© 2007 WorldNetDaily.com

Venezuelan President Hugo Chavez and Iran President Mahmoud Ahmadinejad

Iran and Venezuela have declared war on the U.S dollar following al-Qaida leader Osama bin Laden’s call for a jihad on the American currency. At this past weekend’s OPEC summit in Saudi Arabia, Venezuelan President Hugo Chavez and Iran President Mahmoud Ahmadinejad urged members to move away from the dollar as the currency of choice for foreign-exchange reserves resulting from oil sales.

Calling the dollar a “worthless piece of paper,” Ahmadinejad told the OPEC summit that a “credible hard currency” other than the dollar should be found.

Chavez, in his concluding speech at the summit, called for OPEC to use oil to fight U.S. imperialism, arguing “the empire of the dollar has to end.”

Ahmadinejad’s call for a basket of currencies for trading oil first surfaced over the weekend, after a closed OPEC members-only meeting was inadvertently shown on a TV monitor in the media center.

The call for an oil jihad against the dollar was first issued by bin Laden in his “Letter to the American People,” published by the London Guardian Nov. 24, 2002.

Bin Laden wrote, “You steal our wealth and oil at paltry prices because of your international influence and military threats. This theft is indeed the highest theft ever witnessed in the history of the world.”

He declared, “Whoever has stolen our wealth, then we have the right to destroy their economy.”

At the Riyadh summit, Chavez told the group the price of oil could reach $150, or as high as $200 a barrel, “if the United States is crazy enough to attack Iran.”

Ahmadinejad argued that oil was under-priced at $100 a barrel, contending higher prices on world markets would be fair to oil-producing countries such as Iran.

Saudi Arabia, a strong U.S. ally, was reluctant to take political advantage of OPEC’s oil-producing strength, arguing the cartel has always acted “moderately and wisely.”

According to the Islamic Republic News Agency, or IRNA, Chavez stopped off in Tehran today for direct talks with Ahmadinejad before returning home from the summit.

During the meeting, Chavez reported the two nations have signed 186 agreements, including a proposal to form a joint bank and create a joint fund for industrial projects. Bilateral trade between Iran and Venezuela has reached $4.6 billion annually.

According to IRNA, Chavez said “the value of dollars on global markets is declining, and we will witness the fall of the dollar in the future.”

IRNA also reported Ahmadinejad’s statement that Venezuela and Iran are in full support of each other.

In February 2006, WND reported, Iran was on a course to declare a jihad on the dollar, calling for the creation of an Iranian oil bourse organized to quote oil in euros, instead of dollars.

To date, Iran has yet to follow through with the actual creation of an oil bourse.

In the same month, WND reported Venezuela declared a policy of moving the country’s foreign-exchange holdings out of the dollar and into the euro.

At that time, Chavez called for the creation of a South American central bank designed to hold in euros all the foreign-exchange holdings of the participating countries.

In February, WND reported an announcement by Ehrabhim Sheibany, governor of Iran’s central bank, that about 60 percent of Iran’s oil income is collected in non-dollar currencies, affirming Iran’s decision to end all oil sales in dollars.

According to the Associated Press, the dollar has lost 11 percent of its value against the euro since the start of this year.

In December 2006, WND first reported a warning of the possibility of a dollar collapse.

In January came warnings that the fall of the dollar in world currency markets that began in 2006 would accelerate this year.

WND reported last week that with oil at over $90 a barrel, the U.S. has begun spending $1 billion a day for foreign oil, an outflow of dollars that both deepens the country’s negative balance of international trade and further weakens the dollar on world currency markets.

Link to article here. Note how the Trans Texas Corridor I-69 project has hijacked a long promised INTERSTATE highway project and turned it into Rick Perry’s Trans Texas Corridor that will now gobble up existing state highway 59 and turn it into a DOUBLE TAX scheme to fleece already wounded motorists facing unabated gas price hikes.

Planners narrow proposed I-69 corridor
New road would largely follow the U.S. 59 footprint across the state
By RAD SALLEE
Copyright 2007 Houston Chronicle
Nov. 15, 2007

READ THE REPORT
The draft environmental impact statement can be accessed here.State highway officials have sharply narrowed the possible route of the Interstate 69/Trans-Texas Corridor, saying they plan to keep it close to U.S. 59 and other existing roads.

The news comes after months of criticism that the planned corridor and its sister project, TTC-35 in Central Texas, could divide farms and ranches and suck motorists’ dollars from nearby towns to the projects’ developers.

It also comes after the Texas Legislature restricted the Texas Department of Transportation’s ability to expand the use of tolls and privatization to pay for new roads.

The revised study area is shown in the federally required Draft Environmental Impact Statement on the I-69/TTC project, a hefty document made public earlier this week.

Through most of its 650 miles from Texarkana to the Mexico border, the corridor under study initially ranged from 20 to 80 miles wide. It has been reduced in the DEIS to between a quarter mile and four miles wide.

The proposed route follows U.S. 59 from Texarkana to Victoria, except through Houston, then splits off to Laredo and the Rio Grande Valley on U.S. 77, U.S. 281 and Texas 44.

A bypass — TxDOT uses the term “relief route” — would skirt west of the Houston area.

Because the corridor’s role is to connect urban areas rather than go through their hearts, the identified route generally avoids areas that are built up or expected to grow rapidly.

However, spurs would extend to the Port of Houston from the north and west. Bypasses also are likely around several smaller cities.

Another spur is shown branching off from north of Nacogdoches to the Louisiana state line. Although the Trans-Texas Corridor would stop there, the envisioned Interstate 69 would continue northeast to Detroit and Canada, for a total length of 2,700 miles border to border.

An east-west connection between the Gulf port of Corpus Christi and the inland port of Laredo also is planned, said project spokeswoman Gabriela Garcia of TxDOT.

“One thing we have heard from everybody over several years is to focus on existing corridors and see how we can incorporate them into the project,” Garcia said.

Room for toll lanes

Texas Transportation Commissioner Ted Houghton described U.S. 59 as a four-lane divided highway with “a beautiful nice, wide median” where toll lanes dedicated to trucks or cars could be built. In some places, he said, the footprint might need to be widened.Garcia said the corridor would be “demand-driven” and built in pieces as needed. A TxDOT official also said toll rates and the roadway could vary between segments depending on traffic load and local preferences.

In spring 2008, Houghton said, TxDOT will set up working groups for specific segments of the route “to advise us on what they would like to have.”

A separate group would represent ports and another working group for the overall project.

“Each region has its own significant issues,” Houghton said.

For instance, he said, “Victoria County has said they want dedicated truck lanes and they are going out to buy right of way.”

Residents of the Brazos Valley want an interstate highway to Bryan-College Station, Houghton said. The proposed route west of Houston would pass through Grimes and Walker counties nearby.

For years, towns and cities along U.S. 59 in East and South Texas have sought to have the busy highway upgraded to I-69. After 2002, when Gov. Rick Perry announced his goal of building the Trans-Texas Corridor — a statewide network of roads and rails, pipelines and power lines — the I-69 idea was folded into corridor plans.

But there were changes that troubled longtime supporters: The road would be tolled, probably built and managed privately, and may end up too far from towns for local businesses to attract motorists.

David Stall of Corridor Watch, a citizens group opposed to the corridor concept, said the decision to build close to U.S. 59 or on it is a partial victory.

“I think the state is learning very slowly,” Stall said. “Those are huge shifts in direction.”

Also pleased was Texans for Safe Reliable Transportation, which advocates tolls and other means of stretching tax dollars for needed highways.

“Using existing right-of-ways means highways can potentially be built faster, more cost effectively and with less impact on property owners,” said spokesman Bill Noble in a statement.

Uncontrolled access
It was not clear how the broad corridors that Perry envisioned could be built alongside U.S. 59 in East Texas, where numerous small towns line the highway and there is uncontrolled access from dozens of streets, parking lots and driveways.In those places, said TxDOT deputy executive director Steve Simmons, “We might have to rebuild the facility so that the existing lanes become more like frontage roads.”

Stall said adding lanes to U.S. 59 would be easier in the less populous stretch from the Houston area to Mexico.

“We are talking about something along the model of the interstate system, and the Rio Grande Valley and Polk County have been clamoring for that for years,” he said.

Work on the DEIS began in 2004, and it could take at least as long to complete the second phase of environmental studies to determine a detailed route, Garcia said.

She said the process will begin in January with 10 town hall meetings, dates and places to be announced, followed by 46 public hearings in February throughout the corridor.