Link to article here.

Detours on a Super-Highway
The only thing bigger than the Trans-Texas Corridor may be the rebellion against it
By PETER GORMAN
Ft. Worth Weekly
January 10, 2007

Four thousand miles of smooth blacktop. Six open lanes of road with never a traffic jam. Four lanes for trucks to keep the 18-wheelers from bothering Joe Motorist. High-speed rail to get you from San Antonio to Dallas in just a couple of comfy hours. Oil, gas, and water lines running from Oklahoma to the Mexican border. Handy motels, shops, and gas stations to keep you from having to get off the road until you hit the state line.

That’s the dream of the backers of the Trans-Texas Corridor, the biggest public works project in the history of the state and the most ambitious road project in the USA since Ike decided to connect Maine with California and Wisconsin with Arizona by building the U.S. highway system 50 years ago.

But some people see it more as a nightmare than a dream. They see foreign companies owning the rights to Texas’ infrastructure, whole towns being turned to dust because there won’t be an exit ramp for them, vast stretches of farm and ranching land — close to 1 million acres all told — being gobbled up in a bid to put a feather in Gov. Rick Perry’s cap and eventually in the U.S. Department of Transportation’s cap if the plan is expanded to all 48 contiguous states. They see Texas water being traded for Mexican oil, toll fees as high as 44 cents a mile, “no-compete” clauses leaving Texas’ current free highway system to crumble, and a host of other problems with the gigantasaurus-sized plan.

And the nightmare thinkers are a lot more vocal than those trying to implement the plan — surprising, perhaps, since Perry has hailed it as “the most visionary transportation plan this state has ever seen … . [I]t likely will forever change the way we build roads in Texas.” And the Texas Department of Transportation (TxDOT), has said it will financially benefit the whole state by “injecting billions of dollars in private spending into the state’s economy and creating millions of jobs … .”

If you’re neither part of the grassroots rebellion against it or the state-agency-and-big-contractor cheering section for it, chances are you are still bewildered by the hyperbole on both sides, and the question of what in tarnation this animal called the Trans-Texas Corridor really is. Whatever it turns out to be, the fact is that right now it is a huge pig in a poke for Texans, a massive creature that will transform the state’s landscape, but whose outlines — and price tags and details — are still partly under wraps.

At its simplest, the TTC is not one road but a series of huge transportation corridors connecting the state’s major population hubs. It’s intended to ease traffic congestion along the state’s busiest routes and provide lanes not only for cars, but for high-speed and commuter rail, freight trains and trucks carrying NAFTA goods from Mexico to Oklahoma and eventually all the way to Canada. It will also include a utilities corridor for pipelines and conduits carrying natural gas, oil, water, electricity, and electronic data. In North Texas, the TTC is planned to run between Dallas and Fort Worth, paralleling I-35.

In theory it will boost Texas’ economy by making Texas more attractive to businesses that will see the corridor as a time-saving, and therefore money-saving, way to move their goods. TxDOT said it will also “significantly reduce air pollution” by convincing Texans to travel more by passenger rail rather than cars and by reducing congestion on the rest of the state’s major thoroughfares.

All of that sounds pretty desirable. But when the Texas Legislature passed HB3588, the massive transportation bill authorizing the TTC, in 2003, almost no one understood its final impact — not the politicians voting on it nor the general public.

The executive summary of the bill describes a statewide network of transportation facilities that sounds pretty much like business as usual in the road-building game. But the master plan for the TTC-35, the section of corridor to run parallel to I-35 from Laredo to Oklahoma, released three years after the bill passed, indicates it’s anything but that. The plan, made public only after 175 Freedom of Information Act requests were filed by citizen groups and news media, describes a 1,200-foot-wide corridor to be leased to private companies who will design, build, and maintain their specific sections, setting and collecting all tolls for contract periods ranging from 50 to 75 years. Sections of existing roads that coincide with the corridor — all of I-35 from San Antonio to Laredo, for example — will become part of the toll road. Additionally, motels, gas stations, and stores built within the corridor will be part of the private company’s holdings — and part of their profit package.

But the deal is even sweeter than that. The initial contract signed by the Spanish firm Cintra; their partner on the project, Zachry Construction Corp.; and TxDOT for a 316-mile section of road to be built from San Antonio to Dallas, includes what’s known as a no-compete clause. In this case, it means TxDOT has agreed not to improve any roadways that run parallel to the TTC for the duration of the Cintra lease, unless those improvements had already been approved prior to the signing of the contract.

Perry has still refused to disclose some parts of the contract, on grounds that they contain proprietary information for the Cintra-Zachry partnership. But the sections that have been made public show that Cintra will not be obligated to build more than four car and truck lanes “until and unless it is demonstrated that there is a demand for high-speed rail, commuter rail, freight, and utilities.”

And who gets to decide what tolls to charge on these new roads? Cintra. In the contract, TxDOT agreed that toll prices will be set “at what the market will bear.” A TxDOT news release suggested they would be in the 12- to 24-cent range per mile for autos. Opponents think they’ll more likely be twice that. In other words, the San Antonio-to-Dallas trip could cost a motorist anywhere from $32 to $118 in tolls, plus gas.

Wait, there’s more. Later this month, TxDOT officials will be in Washington, lobbying Congress to exempt from federal taxation any income gained from dividends or partnership distributions by toll road companies.

The tax exemption will be of interest to legislators from many states. The issue of ownership of major portions of the U.S. highway system by private — and often foreign — companies goes far beyond Texas. Cintra, for instance, in partnership with Macquarie (an Australian company), already owns a 75-year lease on 157 miles of the Indiana Toll Road. The state was paid $3.8 billion for the lease, which will allow Cintra-Macquarie to keep all tolls during that time, an estimated total of nearly $12 million.

The ambitiousness and audacity of the Trans-Texas master plan provoked former Texas Comptroller Carole Keeton Strayhorn, during her recent gubernatorial campaign, to call it “the biggest land grab in the history of Texas.”

While support for the TTC has come from a small coterie that includes Perry, TxDOT, some federal officials, and businesses that stand to benefit, opposition is gathering from all over the map. On this issue, the Texas Republican Party has found itself in bed with the Sierra Club and independents like Strayhorn, Democrats like Houston State Rep. Garnet Coleman, the ultra-conservative property-rights group Stewards of the Earth, farmers, ranchers, and a host of groups created with the sole purpose of trying to stop the TTC.

“The initial plan for the TTC calls for the taking, by eminent domain, of 580,000 acres of private Texas property,” said Terri Hall, regional director of the San Antonio Toll Party. “That’s more than 900 square miles. And there are secondary components to the TTC that would bring that number up to 1 million acres. That’s going to cut the state into pieces.”

While TxDOT downplays the issue of having a series of nearly quarter-mile, non-crossable roadways cutting Texas into a bunch of jigsaw puzzle pieces, it’s very serious to the tens of thousands of farmers and ranchers whose property and livelihoods could be steamrolled by the widest roadway in the hemisphere.

Ron Smith, editor of Southwest Farm Press, said the farmers and ranchers who read his magazine and web site are up in arms. “You’ve got farmers with 500 to 800 acres whose farms are going to be cut in half. The same with ranchers. They make a good point when they say that with the TTC having few crossovers it’s not just going to make their lives difficult, it’s going to drive them out of business.”

Farmers are worried not only about losing valuable property but also about having their properties split, with access to the other-side-of-the-road half a major problem. And although final plans for the TTC have not been drawn as yet, Ric Williamson, chairman of the Texas Department of Transportation, has been quoted repeatedly as telling farmers that they can go ahead “and build a tunnel underneath the road if you want one.”

Such flip comments won’t solve the problem. There is no way to know yet how far apart Cintra-Zachry will build the crossovers, which are extremely expensive since they have to cross so many lanes. If farmers have to move tractors for miles and miles along access road to get to a crossing, it will be costly for them as well as for the traffic on the access roads stuck behind their slow-moving equipment. And think about the problems involved for ranchers having to move their cattle from pasture to pasture, when the move involves herding the bovines down access roads for several miles to the nearest crossover.

“It could be worse than you think,” Smith said. “Farmers are telling me the only way they’ll be able to work fields on the other side of the corridor will be to set up a second farm headquarters there. That means tractors and other farm equipment that couldn’t possibly pay for itself on a hundred, two hundred acres of land.”

Anna Mowery, a longtime Republican legislator from Fort Worth, said she worked with the Farm Bureau to try to make certain that TTC overpasses would be frequent enough to allow for reasonable farm connections. “I don’t mind telling you that I think we need to do something, and toll roads seem like a reasonable way to go about improving our transportation needs. And what particularly interested me about the TTC was the inclusion of commuter and high-speed rail,” she said. “But what bothered me about the original plan was that farmers might need second tractors to access land cut by the eminent domain-taken corridor.”

So, Mowery said, “I hung in with the Farm Bureau to ensure that the farmers and ranchers would have reasonable access.”

But farmers and ranchers don’t see any assurances of reasonable access in the plan, despite her efforts. The legislator was surprised to be asked just how far apart crossovers would be on the TTC. She didn’t know. And in fact, no one knows if there will be one overpass every 10 miles or every 40. TxDOT, which spoke very briefly and conditionally to Fort Worth Weekly for this story, is silent on the issue. The truth is, there’s been no agreement. And no one, despite Governor Perry’s claim that no public monies will be used to build the TTC, knows who will pay for whatever overpasses there are. There is some question of whether or not TTC builders would pay for crossovers and road connections at all; one section of the law authorizing the project lists the state as being responsible for those.

“Bottom line,” said Mike Barnett, a spokesman with the Farm Bureau, “is we were told to trust TxDOT and Cintra. And we don’t. We are dead set against the whole TTC. And we’ll fight for our farmers and ranchers as best we can to get them the best deal. But right now we have no idea what that will be.”

Nor is it just farmers and ranchers who will suffer. In some places, particularly in the area from San Antonio to Laredo, for instance, I-35 will be incorporated into the corridor — taking a road already purchased by tax dollars and making it a toll road — and whole towns will be cut in half. TxDOT refers questions to its web page and the ominously named Master Plan, which reassures readers that there will be plenty of access to affected towns. But those reassurances don’t jibe with the Cintra-Zachry contract, which calls for the corridor to connect with all U.S. and state highways, but says nothing about duplicating the number of exits that already exist on I-35, or for the building of frontage roads along the new corridor.

And in the southern part of Texas, where I-35 is little more than a two-lane road through towns, or along which towns have grown up, it’s not difficult to imagine that some of those towns will be wholly swallowed up by a 1,200-foot roadway.

But the interest of the operators of the TTC is to make money. They will have a substantial investment to recoup — all components of the TTC combined will have a price tag as high as $184 billion — and it won’t be in their interest to put in 1,200- to 1,400-foot-long crossovers, at a price of $2.6 million each, very frequently. And besides, the TTC builders won’t want to let people off their road too easily. It’s to their benefit to keep them on the TTC as long as possible, and when they do stop, to have them eating and sleeping and buying things at their businesses, not existing ones.

“I’ve wondered whether those farmers affected by this road would have the right to build motels on their land, or gas stations,” said Mowery. “I haven’t gotten an answer to that yet.”

The limited-access clauses have a lot of people wondering what other time bombs are ticking in the TTC deal and when the public will finally be allowed to see the details.

Maybe you figure that if the tolls are too high on the TTC and the exits won’t let you get where you’re going very well, you’ll just stick to the old roads. Well, good luck. The TTC legislation forbids improvement of any road that runs parallel to the TTC corridors beyond what’s already in the works. That means no beautification, no widening, no new exits or entrances for the life of the contract — 50 years in this case. “Imagine if you live in a little town on a two-lane farm-to-market road that runs parallel to this thing,” suggested former Fort Worth City Council member Clyde Picht. “And then a subdivision gets built, and suddenly you’ve got 3,000 homeowners and cars fighting for space on that two-lane road. Well, you need to widen it to accommodate people. But your hands will be tied.”

Picht said he was surprised to hear about the no-compete clauses. “There should never be no-compete clauses in highway construction. If the toll is too high, let someone else build a road. I hate to see us depart from the traditional system of free roads. And this — well, I’m disgusted with it. After seeing the abuse of eminent domain with the Trinity Uptown project, I think this will be a thousand times worse.”

Hank Gilbert, a farmer, former high school ag teacher, and small businessman who ran unsuccessfully for Texas agriculture commissioner last year, goes further. “They’re going to take a million acres of Texas agricultural and ranch land and pave it over. This is such a huge project it’s almost incomprehensible. And I personally don’t like the idea of taking people’s homes away to build a highway system to facilitate NAFTA to the betterment of companies that sent U.S. jobs down to Mexico to make more money by bringing their goods in tariff-free.”

Gilbert, a Democrat, said it was the TTC — and what he sees as corruption associated with it — that propelled him into running for political office. He’s passionate about how little the general public knows of things like the no-compete clauses. “As best as anyone knows, because so many elements of the contract are not clearly spelled out, no-compete would mean no improvements to any road seen as a viable alternative to getting to a destination that you could reach using the toll road. But we don’t yet know what that proximity is. And in all likelihood, that would be determined by Cintra or whomever leased the road,” he said.

The no-compete clauses have raised the ire of Republicans as well, including State Sen. John Carona of Dallas, the new chairman of the Senate Committee on Transportation and Homeland Security. Carona recently told Texas Monthly that “Within 30 years’ time, under existing comprehensive development agreements [like the one given Cintra], we’ll bring free roads in this state to a condition of ruin.”

Gilbert is also unsure what the public’s financial investment in the TTC will be. “The governor and TxDOT signed off on a contract not made public in many parts, so we don’t have any idea what our fiscal responsibility will be. We do know that initially this will be a roadway with four lanes in each direction, two for passenger cars, two for trucks. There’s no guarantee they’ll have to put rail in, or utilities. The contract says things like ‘if and when they are deemed necessary.’ Well, if and when means when they look like they’ll be profitable. But who knows if that means they or us are responsible for putting them in at that time, because Governor Perry isn’t releasing those parts of the contract.”

Perry’s also not releasing any information on what the tolls will be, though, based on TxDOT estimates, the cost of, say, a daily commute of 50 miles round-trip would be about $12 a day, or $60 a week. And regardless of how much pocketbook pain that causes, it might be the only option available — which is, of course, the purpose of the no-compete clauses.

According to Perry and TxDOT, financial constraints have pushed the state into a corner, requiring that they find new ways to finance road construction to accommodate Texas’ fast growth.

TxDOT chief financial officer James Bass explained that his agency collects about $7 billion annually from federal and state gas taxes, vehicle registrations, and a few other sources. Most of that goes toward maintaining existing roads, agency overhead, and paying for right-of-way and design costs for new roads. By law, 25 percent of state gas tax revenues are diverted to public schools. What’s left is about $700 million a year for actual construction of new roads — not nearly enough to keep up with the needs, Bass said. “And it’s only going to get worse,” he said. “With the needs that have already been identified to expand the system, between now and 2030 there will be an $86 billion shortfall.”

From the road-builders’ — and politicians’ — point of view, the passage of HB3588, by allowing existing roads to be turned into toll roads and new toll roads to be built, provided a way to develop the state’s road system without increasing taxes.

“So what we’re looking at is innovative public-private partnerships to raise those funds,” said TxDOT spokesman Michael Peters. In theory, said Peters, sums like the $1.2 billion paid to Texas by Cintra-Zachry for the right to design, build, and operate the 316 miles of TTC-35 will pay for other badly needed TxDOT projects.

TTC supporters say that’s only the beginning of the project’s financial benefits. An October 2006 study done by the Perryman Group of Waco for TxDOT predicted that, once the corridor is complete, business activity along it would boost the gross state product by almost $666 billion and generate 3.7 million permanent jobs.

The report was everything Governor Perry and TxDOT hoped and paid for. And the alternative to the TTC, according to TxDOT, would be to increase the state gas tax from 20 cents to $1.40 a gallon.

Baloney, say skeptics, who see many ways to make up the shortfall in highway construction money without resorting to the TTC strategies.

The first move, they say, should be to stop looting the state gasoline tax fund. Several papers released by Bexar County Commissioner Lyle Larson, who opposes toll roads, reveal that the highway fund has lost $10 billion in the last 20 years. “More than half of the total money diverted from road construction, $5.4 billion, went to fund the operations of the Department of Public Safety,” he told a San Antonio radio audience in October. Another $115 million went into the state’s general fund, and millions more went for a computer system for the state comptroller’s office, and to the Texas Department of Mental Health and Mental Retardation, arts commissions, and various politicians’ pet projects.

Even despite such diversions of money, another recent report, commissioned by another state agency, suggests that the highway construction fund could cover most of the roadways Texas needs, with a relatively small immediate increase in the state gas tax, and more increases through the years. The report, released in November 2006, was produced for the Governor’s Business Council by the Texas Transportation Institute of Texas A&M. According to the study, $66 billion of the supposed $86 billion shortfall — the money needed for the eight largest urban areas — could be produced by raising the gas tax by 8 cents and tying future increases to changes in highway construction costs. David Ellis, one of the report’s authors, said that the indexing, over the next 25 years, would increase the state gas tax from the current 20 cents to about 92 cents.

Compare that to the costs of privatized toll roads like the TTC. If an average driver uses roughly 1,000 gallons of gas annually, the 8-cent gas tax hike would amount to $80 a year. Even gas-guzzlers would pay no more than double that. But a 50-mile daily commute at 25 cents per mile would come to $62.50 a week — or about $3,000 a year. And even with a 92-cent hike over the next quarter-century, the costs would still be considerably lower than toll roads at their current projected cost.

“But our report doesn’t make the gas tax out to be a silver bullet,” Ellis cautioned. “We’re going to need a whole toolbox to get these things built and maintained. And we don’t exclude tollways from that mix.”

The list of objections to the TTC is long enough to draw all kinds of groups to oppose it. The huge costs, the loss of immense tracts of agricultural land and major problems caused for farmers and ranchers, the costs and controversy associated with making currently free highways into toll roads, the displacement of thousands of people, privatization of state infrastructure, and the governor’s refusal to release key documents about the initial TTC contract — all have combined to produce a groundswell of grassroots opposition.

Environmentalists are also concerned that a fenced-in, or otherwise uncrossable road, as the TTC is assumed to be, may have severe repercussions on the migration of land animals or their feeding habits. Those concerned with terrorist activity wonder about the potential danger of putting utilities together in a single corridor that might make an attractive target. Those who worry about public safety are concerned that a road with few entrances and exits, and with rail and utilities in its center, will present difficulties for emergency vehicle access. People concerned with illegal immigration suggest that a road this large originating in Mexico will only increase the flood of illegal immigrants. Truckers are worried not only about the potentially exorbitant toll costs but about truck safety, since Mexican truckers will be permitted to enter the U.S. without U.S. driving credentials or vehicle safety inspections.

“The only solution is a moratorium on not only the TTC but all toll roads, statewide,” said Rep. Coleman. “I submitted a bill to that effect in the last legislative session, but Mike Krusee, chairman of the House Committee on Transportation and author of HB3588 … wouldn’t let it out of committee. This is about cronyism and creating Lexus lanes and paying pals. To invest [this] kind of money … in a superhighway when we could invest it in high-speed rail is ridiculous.”

And TxDOT knows it, he said. “What ought to tell people something is wrong with the Trans-Texas Corridor is that TxDOT has gone on a marketing campaign to push this down our throats.”

Coleman said he also believes TxDOT is sitting on road construction that’s already been authorized, in order to keep traffic congestion bad in Houston. “I believe they’re doing it so that people will get so fed up with congestion that they’ll welcome toll roads and the TTC,” he said.

This session, he plans to reintroduce both his toll road moratorium bill and a bill to prohibit TxDOT from advertising the TTC. “This whole TTC has to be stopped. And people are beginning to get it, that it must be stopped. I believe we’re making headway on this issue.”

Can a project with this much momentum and political clout behind it be stopped?

“Anything can be stopped.” he said. “It just takes the will of the people.”

Link to article here.

ROAD KILLER
State’s game? Highway extortion
Harris County is getting held up on toll road funding
By STATE SEN. JON LINDSAY
Houston Chronicle
Jan. 6, 2007

Question: When is it more appropriate to call a proposal “highway extortion”rather than “highway robbery”?

Answer: When the Texas Department of Transportation (TxDOT) negotiates with the Harris County Toll Road Authority (HCTRA) and makes demands such as TxDOT is now making on how new toll roads will be built in Harris County.

TxDOT wants the county to pay TxDOT $1.234 billion for the right to use or cross the state’s right of way for the construction of possibly three new tollways. The county will then be responsible for all other right of way and construction costs. When the project is completed and tolls are being collected, 8 percent of the gross tolls will be paid to the state.

This extortion, of course, is not acceptable to the county. The county has offered to pay the state $1.2 billion, payable over 40 years with $350 million of that being paid up front. I believe even this is too generous to the state. Remember: the county has already paid the state $250 million to build part of the Katy Freeway.

When I (as Harris County judge) negotiated with TxDOT in 1983 for the right to build the Hardy Toll Road and West Belt (which became the Sam Houston Toll Road), the state highway commission was great. Again in 1990, the commissioners were supportive in the construction of the south and east belt, along with the county taking over the money-losing toll bridge at the Houston Ship Channel. We were able to complete all of those projects ahead of schedule and below projected budget.

The agencies that rate the county bonds have rewarded Harris County by improving ratings because of the toll road authority’s strong financial position. I don’t believe we can keep our favorable rating if the state prevails in its current demands.

This present state commission for TxDOT has a different attitude than the commission I dealt with in the past. The current TxDOT commissioners want to do in Harris County what they’ve done in central Texas. In the Austin area they took proposals from private groups to build and operate some toll roads. TxDOT accepted the proposal that offered the most money to the state. Great for the state; bad for the users. Although the private group has to pay large amounts to the state, they don’t care because they can pretty much charge what they want to the users.

Instead of building public projects based on the best low bid, the state is adopting a policy of building major projects based on the best high bid. When the state enters into one of these agreements called a “comprehensive development agreement,” or CDA, the state agrees to limit competition. The investor gets a guarantee that other roads will not be built to compete in any way with the CDA toll revenue.

Who knows what effect this will have on future development? This has already happened in Pflugerville, on Texas State Highway 45, where an exit was denied in order to maximize revenue, thus hurting local< business. California did a CDA on a state road in the Los Angeles area and later decided more capacity was needed. However, before they could proceed they had to buy back the CDA from the investors. The buy-back cost the state a lot of money. Apparently, this procedure will be used by TXDOT to build FM 1604 in San Antonio. I believe the state is being unreasonable with Harris County, because it knows it can receive proposals from private entities for as much or more. If that happens, the roads will still be built. The tolls will be a lot higher. Local control will be lost. The private entity will make large profits and those profits will leave the area, probably going overseas to Spain as has happened in the Austin area.

This is not just a Harris County problem. A similar concern is developing in North Texas with the North Texas Toll Authority. The move there by TxDOT could be that the state takes over the toll authority’s toll roads, including the existing ones. TxDOT is asking for legislation that will allow this to happen. San Antonio will soon be facing the same issues.

Texas should continue past policies that encourage the development of its transportation system in the most efficient manner with as much participation with local agencies as possible. There are better options available to the state to improve our mobility problems. A gasoline tax pegged to inflation with bonding ability, along with efficient toll roads with local control, would go a long way; and we would not be sending our money to overseas investors – money that should be invested locally, which is what the Harris County Toll Road Authority does. Selling our state highways to anyone is terrible public policy. It’s up to the Legislature to make some changes in the law.

Lindsay, a Republican, has represented State Senate District 7 in Houston since 1996. Prior to that, he was Harris County judge for 20 years.

Link to World Net Daily article here.

Residents of planned union to be ‘North Americanists’
Arizona State University teaches how continent to be integrated
By Bob Unruh
World Net Daily
January 5, 2007

Arizona State University is teaching that the U.S., Mexico and Canada need to be integrated into a unified superstate, where U.S. citizens of the future will be known as “North Americanists,” according to the taxpayer-funded “Building North America” program.

The program openly advocates for the integration of economic issues across the continent, and in many places goes further – such as the call for a common North American currency.

One teaching module made available online for professors to integrate into their teachings was written by George Haynal, senior fellow at the Norman Patterson School of International Affairs at Carleton University, and implied a joint military is required. Since the security of the continent “is a joint need; it should be supplied as a common enterprise.”

“Given the nature of the threats against our security in the current environment, the first task is to reinvent ‘borders.’ We must exercise the responsibility for protecting our society against external threats where we can do so most effectively, not where infrastructures happens to be in place,” he added. “Multilateral cooperation is going to be essential among governments.”

“It is clear, to me at least, that we must … move beyond NAFTA and do so with a purposeful determination,” he wrote.

Another teaching paper advocates the adoption of a unified North American currency, the “amero,” modeled after the euro currency of the European Union.

The programming the university is providing for help in teaching the new North American focus is just the latest evidence of the mounting campaign for a de facto North American Union. Although most in the establishment press are not covering the controversy, it has earned the opposition of a number of high-level voices including congressmen like Tom Tancredo, Virgil Goode and Ron Paul, and newsmen like CNN’s Lou Dobbs who has described the U.S. government’s actions in this effort as “Orwellian.”

Paul, a maverick Republican from Texas, has denounced such integration plans and warns that most members of Congress aren’t aware of the situation, and that he is opposing any transnational “superhighway” projects such as the “Trans-Texas Corridor” project in his home state.

Rep. Ron Paul, R-Texas

Why? The ultimate goal, he said, is not simply a superhighway, “but an integrated North American Union – complete with a currency, a cross-national bureaucracy and virtually borderless travel within the union. Like the European Union, a North American Union would represent another step toward the abolition of national sovereignty altogether.”

Rep. Goode, R-Va., already has introduced a resolution expressing the sense of Congress that the U.S. should not engage in further NAFTA advances.

But progress already is significant down the road to a joint government, evidenced by confirmation that the U.S. government is planning to provide full Social Security benefits to Mexicans as well as a report by the powerful Council on Foreign Relations, considered by many to be something of a “shadow government,” that calls for the transfer of massive amounts of wealth from the U.S. to Mexico and the setup of a “security perimeter” around North America.

A Canadian website set up by those who fear the loss of their Canadian national sovereignty already has established a timeline for the program.

The Arizona State contribution to the move towards a one-government continent was launched because of “the notion that economic integration in the NAFTA Triad (Canada-U.S.-Mexico) was advancing despite the lack of press and public attention it received …” and a new website would allow “those of us in the Triad” to link up with the growing body of research about “how businesses, governments, and organizations were shaping, and adapting to, the evolution of a shared economic space.”

“We are now bringing together the fruits of this research endeavor in a new, updated and redesigned ‘Building North America’ website…” the group said. “We are betting on the continued existence of scholars and policy practitioners who would benefit from a site which would consolidate the research and data we are all generating, and thereby build community among us.”

A telephone number for the managers of the site was unavailable, and a WND e-mail to the site did not generate a response.

But the goal is clear: “The links, documents, and other materials on this site have been selected, organized, and in some cases designed to advance teaching and research on North American regional integration. … At the same time the site also aims to benefit the broader community of North Americanists, within the academy and beyond, by putting at our collective fingertips – or mouse-reach – the kinds of current and historical material that will benefit research into, and understanding of, North American integration – past, present and future.”

The site cross-references and links to organizations and university centers such as the Center for North American Studies at American University in Washington, D.C., institutional home for Robert Pastor.

American University Professor Robert Pastor

Pastor has been described as a leading intellectual force in the move to create an EU-style North American Community, and recently told WND he believes a new 9/11 crisis could be the catalyst to merge the U.S., Mexico and Canada.

Pastor said that in such a case the Security and Prosperity Partnership of North America, or SPP – launched in 2005 by the heads of the three countries at a summit in Waco, Texas – could be developed into a continental union, complete with a new currency, the amero, that would replace the U.S. dollar.

In May 2005, Pastor was co-chairman the Council on Foreign Relations task force that produced a report entitled “Toward a North American Community,” which he has claimed is the blueprint behind the SSP declared by President Bush, Mexico’s then-President Vicente Fox, and Canada’s then-Prime Minister Paul Martin.

At American University, Pastor directs the Center for North American Studies where he teaches a course entitled “North America: A Union, A Community, or Just Three Nations?” As WND previously has reported, Pastor is on the board of the North American Forum on Integration, the NAFI, a non-profit organization that annually holds a mock trilateral parliament for 100 selected students drawn from 10 universities in the U.S., Canada and Mexico.

Arizona State also lists government agencies in support of the merging of various functions that historically have been handled by each government, such as the Security and Prosperity Partnership of North America, the U.S. Customs and Border Protection, “the U.S. Department of Commerce, and others.

The website’s archive contains “influential papers and articles which have shaped the debate on ‘North America,'” including the 2005 document from the Council on Foreign Relations called “Building a North American Community: Report of the Independent Task Force on the Future of North America.”

Also available is a series of “Teaching Modules,” where Haynal’s instructions are available. “The section leads off with an introductory guide to Building North America Into Your Course, as well as a more structured ‘Matrix’ offering sample units by theme and subfield … Each of these TMs either has, or will have in the near future, an accompanying Teaching Note with more detailed suggestions for incorporation into a variety of courses.”

Among the organizations being promoted are the Council of The Americas, the free market thinktank Fraser Institute, North America Works, North American Integration and Development Center, North America’s Super Corridor Coalition, North American Integration and Development Center at UCLA, the Mexican Embassy, NORAD, North American Development Bank, NAFTA Secretariat, North American Agreement on Environmental Cooperation and North American Agreement on Labor Cooperation,

One of the teaching notes lists Earl Fry’s work titled: “The Role of Subnational Governments in the governance of North America.”

Subtitled “Mapping the New North American Reality,” that paper argues that provinces in Canada and states in the United States and Mexico are quite efficiently setting up their own integrated North America with or without their “federal” governments’ participation.

It even warns against renegade states like South Dakota, which has undermined “treaties and agreements signed by national governments” with its requirements for inspections of Canadian cattle, hogs and wheat.

The North American Union plans were cited by WorldNetDaily editors as the Number One story on the news site’s list of 10 most underreported stories for 2006.

Texas Transportation Commission asks Congress to END ALL LIMITS TO TOLLING!

Read about it here and here

Some of the most disturbing aspects of this report as cited on Toll Road News:

They want to buy interstates from the feds so they can toll you!

“The paper says federal law should remove the ‘pilot program status’ of toll financing exemptions to give states ‘as many opportunities as possible for new funding alternatives.’ It proposes toll revenues be freed of restrictions they be reinvested in the particular road. It also calls for states to be able to buy back interstate segments by reimbursing the federal government its past contributions.”

This once again shows that tolls are not “user fees” as the tollers repeatedly state. They plan to and are actively advocating to take tolls collected for one road and have the ability to spend it on something else. This is government speak for “we want to tax “x” so we can spend it however we choose to with NO accountability to the public!” We’ve contended all along that this isn’t about transportation, relieving congestion, or mobility, it’s about a tax grab and building up a toll road slush fund for bureaucrats to take your money and spend it on any pet project that suits their whims (look no further than past precedent here and here.)

They want to give private companies government perks by making some of their profits income tax exempt!

“They then say they want federal law amended to recognize the role of private equity capital as a source of capital for roads. Also they propose amending the federal tax code to exempt partnership distributions and dividends from income tax. Income and distributions from government owned and not-for-profit toll authorities are already exempt from federal income tax.”

TAKE ACTION NOW!

Email comments here: cmueller@dot.state.tx.us

They’re seeking comment. Please take a moment to contact the DOT (cmueller@dot.state.tx.us) to let them know the public is outraged at ending all limits to tolling, particularly allowing states to “buy back” interstates and then toll the public so State government can empty your wallet and create a toll road slush fund! The Texas Transportation Commission is shameless in its attempt to hijack our public freeway system and turn it into their personal cash cow to enrich a select few corporations and feed BIG GOVERNMENT. This is tantamount to holding commuters and motorists hostage by controlling where and how we drive in a nationwide push to toll everything they can get their hands on!

Link to article here.

Of greatest importance: “The prospect of expanded trade in Mexican states controlled by some of the country’s most dangerous cartel leaders could pose serious national security challenges for the United States, an internal DEA report obtained by the Daily Bulletin explains…

“Even as Congress held numerous immigration field hearings during the summer to determine the extent of security failures at the U.S. border, private corporations, local and federal government officials and international investment corporations were planning for trade expansion.

“Those plans include finishing the Trans-Texas Corridor, which would open the highways to future shipping of cargo from Lázaro Cárdenas, whose biggest investors are Hong Kong-based Hutchison Port Holdings Group and Wal-Mart. Those two firms already have invested more than $300 million to expand the container port.

“For many business and political leaders, the economic growth promised by Gateway to the Pacific and the Trans-Texas Corridor outweighs any perceived danger about national security or increased drug trafficking.”

Crossroads of conflict
World Trade Bridge has changed the U.S.-Mexico border, for good and bad
By Sara A. Carter, Staff Writer
Daily Bulletin.com
12/27/2006

LAREDO, Texas The mammoth globe on the World Trade Bridge spins in the glow of the Texas moon, welcoming hundreds of cargo trucks from Mexico to the United States’ largest inland port.

Nighttime is the slowest time for the bridge.

Beyond Borders: View our special section on immigration

During the day, literally thousands of trucks cross the span into the U.S., headed for destinations scattered throughout the Midwest and East and north into Canada.Traffic between Laredo and Nuevo Laredo, on Mexico’s side of the bridge, is only expected to increase in coming years with Mexico anticipating billions of dollars in new trade, mainly from China, on its way to the United States, according to a U.S. Drug Enforcement Administration executive summary.Increasing trade has, however, been matched by growth in corruption and death in both border cities, though U.S. and Mexican officials are loathe to admit it.

BY THE NUMBERS
$142 billion in drug trade between the U.S. and Mexico, according to the U.S. Drug Enforcement Administration.86,000 Transportation jobs created as a result of the World Trade Bridge.9,300 Commercial trucks pass through the World Trade Bridge daily.

90% of all drugs smuggled into the United States enter through its border with Mexico.

The prospect of expanded trade in Mexican states controlled by some of the country’s most dangerous cartel leaders could pose serious national security challenges for the United States, an internal DEA report obtained by the Daily Bulletin explains.The report, which has never been released, examines how already strained federal law enforcement agencies monitoring border security and narcotics will be challenged by not only Mexican and South and Central American drug trafficking organizations, but also by Asian cartels.With slim resources to monitor cargo and inadequate border security measures in place, it will be next to impossible for U.S. agencies to stem the tide of contraband expected to enter the country from Mexico, the DEA report warns. Agencies will be hard-pressed to monitor the billions of dollars in contraband expected to enter the nation if U.S. officials don’t take heed.

“Contraband can be anything from narcotics, pirated videos, humans or weapons of mass destruction,” said David Monnette, spokesman for the DEA in El Paso, Texas. “These drug-trafficking organizations know that we are spread thin, and many times they use legitimate trade routes to move their contraband into the United States. This report explains the possible dangers of not addressing these issues.”

Trade route
A joint venture of Texas and the Mexican government, La Entrada al Pacífico (Gateway to the Pacific) which also is the title of the DEA report is meant to get more goods from Asia north into the United States.

The plan which involves redirecting more than half of East Coast-bound Asian cargo from the ports of Long Beach and Los Angeles to Mexico will stretch the power of Mexican cartels while aligning them with Asian drug-trafficking organizations, according to the DEA report. That report focuses on the Mexican port of Topolobampo, Sinaloa, on Mexico’s southwestern coast.

But Topolobampo has taken a back seat during the past year to another port, Lázaro Cárdenas, just 72 hours from Laredo.

Lázaro Cárdenas, the deepest container port on the Pacific, is in southern Mexico, in Michoacán. The volume of re-routed trade through it is expected to explode within the next four years.

And that’s troubling to U.S. authorities.

“The (plan) represents an expanding threat to the U.S. for drug, weapon and alien smuggling, as well as related crime, through a 260-mile stretch of Texas into the heartland of the U.S.,” the report states. “(Drug trafficking organizations) will be able to exploit the new corridor through the use of established smuggling networks and associations with Mexican drug trafficking organizations.

“They may evade U.S. law enforcement under the guise of the North American Free Trade Agreement (NAFTA) and use established Asian communities in the U.S. for the distribution of drugs.”

Piggy-backing
Ninety percent of all non-domestic narcotics enter the U.S. through the Mexican border, according to a 2005 U.S. State Department report.

Drugs are a multibillion-dollar industry for cartels in Latin America. The National Drug Intelligence Center conservatively estimates more than $108 billion roughly equal to the combined gross domestic product of Ecuador and Guatemala in drugs comes into the U.S. yearly. The U.S. Drug Enforcement Administration puts the figure at $142 billion in drug trade just between the U.S. and Mexico. Other estimates soar even higher.

“NAFTA has made smuggling drugs across the border easier by several means,” including via cargo trucks, the DEA report notes. “The volume of truck traffic coming across the border necessitates the expediting of inspections to the point that few trucks are thoroughly inspected.”

More than 9,300 commercial trucks, carrying everything from piñatas to electronics, pass through Nuevo Laredo into Laredo each day, according to U.S. Customs and Border Protection officials. As cargo shifts from Los Angeles to Mexico, it is expected to triple the amount of traffic moving from Mexico through the Texas highway system.

At the same time, drug cartels are using the trucks to piggy-back more than $10 million a day in drugs through the Laredo corridor into the United States, according to senior DEA officials interviewed by the Daily Bulletin.

The numbers aren’t surprising, said TJ Bonner, president of the National Border Patrol Council. In July, Bonner testified before Congress that less than 5 percent of the 6 million cargo containers entering the U.S. each year are physically inspected by U.S. Customs and Border Protection agents.

“From the standpoint of homeland security, this plan (Gateway to the Pacific) is a nightmare,” Bonner said. “Any possible benefit of expedited trade is going to be totally eclipsed by the increased amount of contraband … slipping across borders.”

Hidden among the televisions, piñatas and clothing are heroin, cocaine and methamphetamine, law enforcement officials say. Worse are weapons and people, and the possibility of terrorist organizations using gaps in border security to put their agents in the United States. “… All such ventures have one common factor: They have to cross the border from Mexico into the U.S., and they will use one of several corridors available to do so,” the DEA report points out. “La Entrada al Pacífico is one of the corridors.”

The Bridge
With the ports of Long Beach and Los Angeles already stretched to capacity, Lázaro Cárdenas’ ability to handle billions of dollars worth of cargo from Asia is proving a godsend to global corporations and city leaders in the American southwest.

For their part, Port of Los Angeles officials say they don’t expect the Mexican port to siphon off anywhere near the amount of cargo called for in the Gateway to the Pacific Plan, though they admit business is booming.

Theresa Adams Lopez, the L.A. port’s media director, said she disagrees with the assumption that half of the Asian cargo headed to Los Angeles will be diverted to ports in Mexico.

“Our cargo is expected to double and triple in the upcoming years,” she said. “The bulk of it is still going to come in through the Port of L.A. and through our partner, the Port of Long Beach.

“A lot of the problem with new developments like the one in Mexico is the infrastructure rail and roads to get things out. Coming here is literally one stop, and going there would be two stops first from their original destination, and then through Mexico to the United States.

“There is plenty of cargo to go around,” she said. “But the contention that half of our business will go away is not true.”

Regardless, Laredo officials are pinning their hopes on increased port business, and tout the World Trade Bridge and its ability to handle cargo from places like Lázaro Cárdenas as the lifeblood of Webb County, Texas.

Born out of NAFTA, the bridge signaled the beginning of a bright future with Mexico as a significant partner in North American trade.

According to a 2004 U.S. Census Bureau report, the most recent data available, the Port of Laredo handles more than $130 billion worth of goods and merchandise each year. Nearly 86,000 transportation jobs have been created since the World Trade Bridge was built. More than 90 percent of the truck traffic between Laredo and Nuevo Laredo goes over it.

Expansion of Lázaro Cárdenas will allow delivery of cargo to the East Coast via the World Trade Bridge four to five days faster than from California, say proponents of the plan especially officials in Laredo, which benefits every time traffic and trade increase.

“NAFTA started moving Laredo away from being the frontier land to the center of something very significant,” said Roger Creery, executive director of the Laredo Development Foundation. “We’re not the U.S. vs. Mexico vs. Canada anymore. We are the Americas.”

Even as Congress held numerous immigration field hearings during the summer to determine the extent of security failures at the U.S. border, private corporations, local and federal government officials and international investment corporations were planning for trade expansion.

Those plans include finishing the Trans-Texas Corridor, which would open the highways to future shipping of cargo from Lázaro Cárdenas, whose biggest investors are Hong Kong-based Hutchison Port Holdings Group and Wal-Mart. Those two firms already have invested more than $300 million to expand the container port.

For many business and political leaders, the economic growth promised by Gateway to the Pacific and the Trans-Texas Corridor outweighs any perceived danger about national security or increased drug trafficking.

That philosophy seems to be heard even in the words of former Laredo Mayor Elizabeth Flores, who was criticized publicly earlier this year for playing down the escalation of violence in Nuevo Laredo.

“We’ve lived with the cartels all of our lives,” Flores said in an interview a few weeks before she left office. “They are a part of life on the border. Eventually, one will take control, and the killings will slow down.”

The business Lázaro Cárdenas will bring to Laredo and Nuevo Laredo could transform both cities, Flores added.

“It’s about growth, not death,” she said.

With billions of dollars in legal trade at stake, bad publicity simply isn’t something business leaders or politicians are willing to acknowledge, others say.

“See no evil, hear no evil,” said Webb County Sheriff Rick Flores, who testified before Congress numerous times this year about growing violence in Laredo, the county’s largest city, and along the border. “That’s the way they want it, and that’s what they have done.”

Violent Neighbor
Lost in the talk about bigger business and improved trade is the picture of life on the street in Nuevo Laredo.

The drug cartels have compromised truck drivers, U.S. Customs inspectors at ports of entry and business owners on both sides of the river, according to residents and law enforcement officials.

And then there are the killings, which come on a stunningly regular basis.

The sound of gunfire in the distance doesn’t seem to shock residents in the heart of Nuevo Laredo. Many of their homes are fortified with thick cement blocks, iron gates and barbed wire protection from the high-powered weapons used by the cartels.

“The government is owned by the cartels,” said an older woman returning home. “As the trucks make their way to America freely, we are forced to live like animals. While the rich get richer, we are here dying, and nobody really cares.”

Residents in Nuevo Laredo say that the violence has only become worse over the past year. Expansion of trade routes will only heighten the tension and violence among Mexico’s cartels, they contend.

“They want to control the routes into the United States,” said Nacho, a Nuevo Laredo resident whose real name was withheld to protect his identity. “In a way, they already do. And U.S. officials should be worried, because the cartels will do anything for money. They will kill anyone, help anyone, do anything to get what they need to move contraband across the border for the right price.”

The DEA report echoes what Nacho and other residents believe. The possibility of a “direct, nearly inspection-free route to the central U.S. and expanded market for drugs” has or will result in the following, according to the report:

Networks created by Mexican and Asian organized crime organizations to smuggle illegal aliens, counterfeit products and pirated intellectual property into Mexico.

Cargo containers being used to smuggle drugs into the U.S.

Distribution networks being created by Asian gangs in communities.

Creation of legitimate businesses in the U.S. to cover up smuggling, contraband and money laundering.

Expedited truck inspections “to keep substantial backup of trucks from regularly occurring.”

The cartels’ reach extends well beyond the streets and people of Nuevo Laredo and the border, however.

On Dec. 12, newly elected President Felipe Calderón sent more than 6,500 troops to Michoacán, where the Port of Lázaro Cárdenas is located, in an effort to get a handle on the growing violence.

Calderón also transferred 10,000 troops from the army and navy to the federal police force on Dec. 13, the largest move against narcotics traffickers since his predecessor, former President Vicente Fox, sent nearly 1,000 troops to Nuevo Laredo to squelch a drug war that has killed more than 3,000 people across the country during the past two years.

Calderón may have learned how deadly dealing with the cartels can be. First Lady Margarita Zavala, Calderón’s wife, lost her cousin, Luis Felipe Zavala, on Dec. 12 when gunmen open fired on his SUV in Mexico City.

According to DEA intelligence officials, Zavala’s assassination was retaliation for Calderón’s promise to take down Mexico’s drug kingpins. “It was an assassination of opportunity,” said one DEA intelligence official who requested anonymity. “… It was directly related to Calderón’s move into Michoacán.”

However, Mexico’s attorney general, Eduardo Medina Mora, told reporters the incident was a coincidence.

“There is at this time no indication … that would suggest or make us guess that this unfortunate event was related to the Mexican government’s efforts against organized crime,” he told reporters at a press conference a day after the killing.

Since the Sept. 11, 2001, attacks, the Department of Homeland Security has tried to beef up security along the border. Officials say new technologies radiation portal monitors, hand-held radiation detectors and X-ray machines assist front-line agents in detecting dangerous materials that may be in trucks at ports of entry.

U.S. Customs and Border Protection spokesman Pat Jones said striking a balance between increased traffic and inspections is challenging. New programs implemented by the Department of Homeland Security have assisted in better checks at ports of entries along the southwest border, he said.

“It may be possible to improve the flow of legitimate trade and improve security,” Jones said. “Prior to 9/11, the thought was that if you improve security, you’re going to slow down cargo trade. We’ve learned that if you actually could identify and separate the risk-free cargo, the flow of cargo could be expedited.”

But once the illegal cargo finds its way into the U.S., there’s little law enforcement can do.

Laredo police can barely keep up with the violence spilling into their community from their sister city across the border. Sheriff Flores said growing violence and corruption in Mexico is spilling into the U.S. and becoming increasingly difficult to manage.

“The cartels have more power, money and weaponry than we do,” he said. “The cartels know how to get their narcotics across the (World Trade) bridge. They’re not afraid to lose some of their loads; they expect it. The risk is worth it because the possibility of getting caught is minimal, at best.”

You’ve got to read this…

Link to Texas Toll Party blog on how TxDOT doles out millions to losing bidders for highway contracts here.

Link to Texas Observer article here.

The Highwaymen
Even the losers win as Texas rushes to privatize its roads
by Eileen Welsome
Texas Observer
December 15, 2006

Ric Williamson, a former state legislator and longtime pal of Gov. Rick Perry, runs the monthly meetings of the Texas Transportation Commission like a traffic cop. Staff members give brisk status reports before Williamson dismisses them so the next bureaucrat can take the podium. If members of the public embark on a diatribe, Williamson will let them prattle on with an air of friendly indulgence. Then, rounding his shoulders and leaning forward—using body language no doubt perfected when he and Perry were freshmen state representatives harrying their elders—he’ll pleasantly announce that their time is up.

As commission chairman, Williamson sits atop the organizational chart of the Texas Department of Transportation, a huge branch of state government that receives about $6 billion in tax revenue each year, and parcels out road construction jobs worth many billions more.

Appointed by Perry in 2001 and elevated to chairman in 2004, Williamson is now the governor’s man on one of the most ambitious and expensive public works programs in the world: building a network of privately financed and operated toll roads and super-corridors that will literally and figuratively change the state of Texas for generations to come.

Yet even the chairman is perplexed by some details of the new public-private partnerships being forged to build thousands of miles of roads quickly. During a break in a recent commission meeting, Williamson shook his head in befuddlement when asked why the state has begun paying millions of dollars in “stipends” to companies because they weren’t picked to build some of the toll roads.

The notion of paying the losers, Williamson agreed, is “nutty as a fruitcake.” But the department is bound by law to do it, he said, a law Williamson suggested might be a holdover from the era of big government.

Actually, million-dollar parting gifts for the losers is a more recent Texas custom, courtesy of the huge 2003 transportation bill sponsored by Mike Krusee, a Republican state representative from Round Rock and chairman of the House Transportation Committee.

Already, TXDOT has paid roughly $4.3 million to companies whose proposals to spearhead two different road projects were rejected, according to documents obtained by The Texas Observer under the state’s Public Records Act. As much as $10 million more will be doled out in the coming months.

The payments, sometimes called “work-product stipends,” or “consolation stipends,” are needed to encourage competition and innovation, TXDOT officials say. But agency records give no indication that the stipends are actually encouraging more companies to compete for the jobs.

Instead, records show the same small pool of companies, sometimes in different configurations and under different partnership names, vying for the contracts. Sometimes they’re winners. Sometimes they’re losers. Either way, they walk away with a hefty bundle of cash.

The millions in stipend payments are small change compared with the billions that will be spent on toll roads, multimodal corridors, rail lines, bridges, and port expansions in the coming years. Perry’s signature project, the Trans-Texas Corridor—really a series of superhighways crisscrossing the state—could cost more than $36 billion, by one company’s estimate. That’s greater than the entire annual budgets of some countries.

“Texas is on the leading edge in the use of tolling and public-private partnerships to improve the highway system,” says Bob Poole, director of transportation studies for the Los Angeles-based Reason Institute, a public policy think tank with a free-market philosophy.

It’s all part of a global effort by investment banking firms and multinational companies to convert public infrastructure—roads, bridges, tunnels, airports—into private, moneymaking ventures. “Hundreds of billions of dollars are moving around world markets looking for long-term investments,” D.J. Gribbin, a division director of Macquarie Holdings, recently told congressmen on Capitol Hill. Gribbin, whose company is part of the Australian-based Macquarie Bank, likened infrastructure in the United States to the “dead capital” created by Third World squatters who build homes on property they don’t own.

Without clear title, the squatters can’t borrow against their homes or sell them. Thus the investment is “dead capital,” he explained. “Highway infrastructure here in the United States is analogous. Inadequate markets and legal systems in this country have locked up billions of taxpayer dollars in our transportation infrastructure,” said Gribbin, a former chief counsel of the Federal Highway Administration and former national field director for the Christian Coalition.

The effort to privatize infrastructure dovetails nicely with the agenda of public officials who want to build new roads and repair old ones without increasing taxes. “What we’re seeing,” says Pat Choate, an economist, author, and Ross Perot’s vice presidential running mate in 1996, “is an era in which governments will be selling off their infrastructure to keep their no-tax pledges.”

Multinationals from Spain, Sweden, Japan, the Netherlands, and Australia have rushed to Texas to help liberate the state’s dead capital. The problem is that once freed, much of that capital won’t be staying in Texas. For the next 50, 75, or 100 years, it’ll be flowing overseas to its liberators.

Last spring Rep. Krusee, author of the transportation bill that is making Texas’s massive road-building binge possible, spoke at a gathering of transportation officials in Santa Monica, California. Krusee had been taking a beating from bloggers and anti-toll advocates in Texas for his role in creating the private-public partnerships that will cannibalize the state’s roads and gobble up millions of acres of farmland.

After receiving a warm round of applause, Krusee launched into a lengthy discussion of how it all began: “Everyone’s wake-up call is different. For Texas, it was Dell computer locating their expansion in Nashville, Tennessee, because Austin’s roads were inadequate. On that one day we lost 10,000 jobs. We did not have the enormous funds it took to fix it, and the timetable stretched for decades. We knew that in time, we would lose more business, more jobs, throughout our state. So we discovered the magic, and the necessity, of private sector financing and tolls.”

Dell Inc.’s rather mild criticism sent local and state officials rushing about like Henny Penny. Roads, roads, roads, they concluded, would keep good corporate citizens like Dell from leaving. But they needed more money, and that would mean raising the gasoline tax. (Currently, the gas tax is 38.4 cents a gallon, with 18.4 cents going to the feds and 20 cents to the state. A fourth of the state’s share, in turn, goes for education.)

“A political calculation was made that large-scale increases in gas taxes would be politically impossible. So the choice in Texas was taxes versus tolls, and the choice was made to go with tolls,” said transportation guru Poole, who has advised four U.S. administrations on transportation and privatization issues, and currently acts as a consultant to a number of states, including Texas.

That “choice” was made by a powerful clique of state officials and business leaders, not the public. Taxpayers may well have been receptive to a big, messy debate about future transportation needs and the gasoline tax, but they were never asked.

For Republicans, though, the prospect of raising taxes was akin to heresy. So state officials snuck innocuous-sounding constitutional amendments onto the ballot in 2001. Proposition 2 allowed the state to issue bonds for road projects in border colonias. Proposition 15 created the Texas Mobility Fund, a bank of sorts that is funded by a stream of tax revenue and can make grants and loans, and issue bonds to finance the construction, reconstruction, acquisition, operation, and expansion of state highways, turnpikes, toll roads, toll bridges, and other mobility projects.

Voters approved both amendments in a low-turnout election. Effectively, just 2 percent of the state’s population voted for the ballot measures, hardly a mandate. The Trans-Texas Corridor was never mentioned in either proposition, and the word “toll” appeared only in passing. Still, Perry and others now point to them as proof that voters have approved his administration’s behemoth road-building program.

A few months after voters approved the constitutional amendments, Perry rolled out his Trans-Texas Corridor plan. The text of his press release made it clear that extensive discussion had been going on behind the scenes with investment-banking types interested in resuscitating the state’s “dead capital.”

Perry tossed around terms like “toll equity” and “exclusive development agreements,” and introduced a new political animal called a “regional mobility authority.” (Regional mobility authorities are quasi-governmental bodies that act as local toll road authorities. Made up of representatives from one or more counties, they have many of the same powers as TXDOT. They can issue bonds, borrow money, and enter into contracts with private developers. The new layer of bureaucracy, as one lobbyist put it, allows TXDOT to control the purse strings while making it appear as if the locals are in charge.)

Perry’s announcement set the stage for construction of the massive toll projects. But it was Krusee’s 2003 transportation bill, House Bill 3588, that allowed TXDOT to slough off many of the stuffy old rules governing how highway contracts were awarded, and to get down to business with its multinational friends from Spain, Australia, and Sweden.

Krusee’s bill essentially serves as a “charter” for the public-private road-building partnerships and new financing mechanisms now being used, said consultant Poole.

Perry was only too happy to sign the bill into law. Within months, though, several grassroots groups sprang up to fight the toll roads. Unusual alliances formed: urban dwellers and rural farmers; Republicans and Democrats; rich people and working people.

“There needs to be a revolution,” one farmer remarked darkly at a recent meeting of activists. “I was once a staunch Republican, but I’m not anymore.”

Dollie Cole, a wealthy landowner who lives on a ranch near Lockhart and whose late husband was president of General Motors Corp., has refused to let highway officials on her land. She’s vowed to fight the construction of the Trans-Texas Corridor and urged her neighbors to be wary of TXDOT’s promises. “Don’t be fooled,” she said. “You are paying for a road twice and will continue to pay throughout your life and throughout your childrens’ driving life.”

Judging from Krusee’s near-defeat in this year’s House District 52 race, support for toll roads is, well, taking its toll. Democratic challenger Karen Felthauser, a substitute teacher who had no political experience and only a fraction of Krusee’s financial backing, came within approximately 2,000 votes of capturing the district.

Despite the growing opposition, transportation officials haven’t detoured from their plans. “The Transportation Commission is using scare tactics and old-fashioned, mobster-type arm-twisting to further their gains,” says State Rep. Joe Pickett, an El Paso Democrat. Other state legislators and businessmen are also concerned about the toll projects, Pickett said, but they’re afraid to speak up because of the department’s enormous clout. “There isn’t anyone who will talk about it. If they’re in the business sector, they’ll get blacklisted. If it’s a state rep or senator like myself, they’ll get their projects cut.”

Although Pickett’s not against all toll roads, he believes the massive projects, which will be financed in part by bonds, loans, and toll income that has yet to be collected, will leave the state in a perilous financial condition, with a fractured, unequal transportation system.

“TXDOT is looking at the here and now. They’re not looking at the future. They’re just trying to sell everybody a bill of goods. Some people are going to get rich, become millionaires or billionaires, and 10 years from now the state will be messed up pretty bad.”

TXDOT officials have a rosier view, saying the privately financed and operated toll projects will allow roads to be built more quickly and ultimately lead to less congestion, less air pollution, and fewer accidents. They also point out that the concession fees and the revenue they’ll get from private toll operators can be used as seed money to build other badly needed infrastructure. (In reality, though, it seems this revenue will more likely be used for the construction of feeder roads, bridges, and overpasses that will funnel motorists into the for-pay lanes and super-corridors.)

House Bill 3588, like subsequent legislation, has clauses buried within it that should raise enormous public concern. An anticompetitive clause, for example, puts a two-year moratorium on TXDOT’s ability to build or improve roads that would compete with a toll road. TXDOT officials say Interstate 35 is exempt from that clause, as well as some other roads identified in its 20-year plan, but that clause ensures that customers on additional toll roads won’t be siphoned off to a free highway during the critical period in which the toll facility is ramping up.

Another section of the legislation requires TXDOT to construct connections to and from the Trans-Texas Corridor. By doing so, TXDOT will help prop up a private developer’s operation, and quite possibly divert funds from free roads elsewhere that need improvement.

A third provision provides a limited waiver of sovereign immunity, giving greater financial protection to developers by making it easier for them to sue the state and force TXDOT or the commission to comply with its obligations.And a fourth allows the state to enter into contracts on other than a low-bid basis.

Also buried in Krusee’s bill was the legal language that explains why TXDOT is now paying million in stipends to losing bidders. It went unnoticed by the public. But the road-builders cleared their desks, sharpened their pencils, and got to work drafting proposals. They had a win-win situation–even if they lost.

One of the first projects for which stipends were awarded was State Highway 130, a 49-mile toll road that will extend from I-35 north of Georgetown to U.S. 183 southeast of Austin. Although TXDOT officials are still being cagey about the alignment of the Trans-Texas Corridor superhighway that will parallel Interstate 35 and run from the Mexican border to Oklahoma, it’s highly likely that SH 130 will become the first leg of that corridor.

Three firms made the short list to build the project. They included:

*Lone Star Infrastructure, a consortium led by Fluor Corp., a multinational company and longtime government contractor.

*Four Rivers Developers, a joint venture whose largest partner was Granite Construction Inc., a publicly traded company headquartered in Watsonville, California that makes gravel and concrete, and oversees huge construction jobs.

*Texas Corridor Constructors, another joint venture whose primary partner was Zachry Construction, a well-established and privately owned firm in San Antonio that frequently partners with local, national, and multinational companies on large projects.

TXDOT’s experts ultimately decided to go with Lone Star Infrastructure, whose team includes nearly 30 members, including Edelman, the world’s largest privately owned public relations firm. (Former Ronald Reagan advisor Mike Deaver is listed as one of its leaders.) In the old days, the two losers would have gone home empty-handed. Instead, the Granite team and the Zachry-led team each received stipend payments of $1,379,219, according to records obtained from TXDOT.

The next project in which stipends were awarded was the development plan for the TTC-35 project, the mega-corridor that will parallel Interstate 35. The winner in that competition was Cintra-Zachry, a partnership consisting of Zachry Construction and Spain’s Cintra Concesiones de Infraestructuras de Transporte. The two rejected companies each received $750,000.

One was Fluor (which was on the winning end of the SH 130 project). The other was an entity called the Trans Texas Express, whose members included Skanska BOT AB, a global firm based in Sweden that builds hospitals, schools, and transport facilities; Telvent, a Spanish information and technology company; and a number of U.S. firms, including several based in Texas.

Millions of dollars in additional stipends will be paid on other toll projects being developed under so-called “comprehensive development agreements.” Those projects include TTC-69, another super-corridor that will start at the Mexican border, skirt Corpus Christi and Houston, and jog northeast toward Arkansas, as well as several smaller toll road projects in San Antonio and around Dallas-Fort Worth.

Transportation officials said the stipends defray only a portion of the costs that go into preparing the proposals. “We need to be able to reward these firms for submitting,” says Hope Andrade, a San Antonio businesswoman appointed by Perry to the Transportation Commission in December 2003. “These proposals are very expensive. A million is nothing for what they submitted. If they don’t get reimbursed, then we discourage innovation, and we’re trying to encourage innovation.”

But records obtained from the state Comptroller’s Office under the Public Records Act show that some stipend payments are going to companies that are already are doing a landslide business with the state. Since 2002, for example, San Antonio’s Zachry Construction has been paid roughly $1.1 billion by TXDOT for various projects. California-based Granite Construction received payments totaling $335 million. (Roughly $52.5 million of that went to both Granite and its local partner, J.D. Abrams, an Austin-based company that also does hundreds of millions of dollars of business with TXDOT.) And Lone Star Infrastructure has received approximately $825 million.

Andrade and other TXDOT officials emphasize that the department gets to keep the intellectual ideas contained in the losing proposals and use them on other projects. But when pressed, they could cite no new ideas that sprung from the losing SH 130 proposals.

Commissioner John W. Johnson, appointed to the commission in 1999 by then-Gov. George W. Bush, says TXDOT did glean some innovative ideas from the toll lane project on Interstate 635 in Dallas. Originally a tunnel was envisioned, he says, but shifting some of the lanes below ground level will save money.

This summer, as rallies and demonstrations against the Trans-Texas Corridor erupted around the state, Secretary of State Roger Williams, Texas Transportation Commissioner Ted Houghton (another Perry appointee), and numerous TXDOT employees went to Wall Street to pitch their “Texas style” public-private partnerships, or PPPs as they’re known in the alphabet-soup world of road-building.

Phillip Russell, engineer, lawyer, and director of the Texas Turnpike Authority Division, sounded more like a hotdog vendor than a public official involved in overseeing multimillion and even billion-dollar deals as he spoke frequently of revenue opportunities available to private-sector developers. In a forum held for potential developers in New York City, he described a tolled interstate project in Dallas as “a package you all can sink your teeth into.” Of State Highway 121, another Dallas project, he said, “This is your opportunity to sharpen your pencils.” Addressing the TTC-69 corridor, he remarked, “If you haven’t dug into this one, you’ve got 52 hours to submit.”

TXDOT’s pitch for private partners is drawing interest from around the globe. One of the most active firms is Cintra Concesiones de Infraestructuras de Transporte. Its parent is Grupo Ferrovial. Both are publicly traded companies based in Madrid, Spain. Cintra has investments in 17 toll roads in six countries. In a proposal for a Virginia project, Cintra boasted that it had become “a strategic partner of the State of Texas, obtaining a 50-year contract worth up to $36.7 billion to develop the Trans-Texas Corridor.”

Cintra, along with home-grown Zachry Construction, has been given the green light to develop the master plan for the TTC-35. The partnership also has been awarded—without any competitive process—the go-ahead to develop the remaining 40 miles of SH 130, which will run from Austin to Seguin. The partnership is also competing for toll road projects in San Antonio and Dallas, and wants to build a 600-mile freight line that will run from Dallas-Fort Worth to the Mexican border. On the TTC-69 project, Cintra and Zachry have divided into two separate teams and are competing against each other.

Another big player in the global transportation market is Australia’s Macquarie Infrastructure Group, which is part of Macquarie Bank, an investment bank named after a former governor who helped transform Australia from a penal colony to a viable, dynamic country. Macquarie, which manages more than 30 toll roads in nine countries, has made proposals on several projects here in Texas, including one in San Antonio and three in Dallas.

Several years ago, Cintra and Macquarie made headlines when they formed a partnership and paid $3.85 billion for a 75-year lease to operate the 157-mile Indiana Toll Road, and roughly $1.83 billion for a 99-year lease on the Chicago Skyway, an eight-mile stretch of elevated highway on Chicago’s south side.

Bob Poole, the privatization guru, said U.S. infrastructure is more attractive to investors than the infrastructure in other countries because the political climate is more stable, another way of saying that contracts are more likely to be enforced and there’s no risk a project will be nationalized. “It’s like they’re buying a piece of ownership in a 50-year business,” Poole said.

Other global players are lining up for a piece of the action, including Skanska, a Swedish-based company that has projects throughout the world; AECOM, another multinational with 28,000 employees working in five continents; and Spain’s Dragados, which is active in more than 60 countries and bills itself as a world leader in “infrastructure and transport concessions.”

Choate, Ross Perot’s old running mate, points to another factor driving the construction of the super-corridors. The West Coast’s ports, roads, and rail lines have reached gridlock proportions, he contends, and corridors such as the TTC-35 could serve as alternate trade routes for moving foreign goods into U.S. markets. Using deepwater ports in Mexico, for example, container ships could offload goods, which could then be shipped by rail or truck through Mexico, into Texas, and up to other parts of the United States and Canada. “These routes will be cash cows,” said Choate.

Certain aspects of the super-corridors support Choate’s contention. At a recent meeting, for example, a TXDOT official confirmed there will be no frontage roads on the super-corridors other than an occasional access road allowing landowners to reach their severed property. “Because what we really want in building our parallels is we want Interstate 35 to remain the local and regional boulevard of choice for the taxpayers of the state, while the corridor becomes the regional and national transportation corridor of choice,” Transportation Commission Chairman Williamson said.

Some toll roads, as well as the super-corridors, will overlay portions of existing highways or rural farm-to-market roads. Since they’ve already been paid for through the taxes at the pump, critics maintain that Texans are paying twice for the roads, a concern that was echoed by legislative analysts. “Toll roads represent double taxation,” they wrote. “Motorists already pay for highways at the gasoline pump, vehicle registration counter, and at auto supply retailers. They should not have to pay for highways again when they exercise their right to travel on them.”

Far less attention has been paid to other ways the public is underwriting the privately operated toll roads: the large, multinational companies and global investment firms are often using taxpayer-supported bonds, loans, and grants from sources such as Texas’ State Infrastructure Bank, the Federal Highway Administration, and the Federal Department of Transportation. These private firms will be able to deduct millions from their income taxes for interest payments on the huge debts and won’t be paying property taxes because the state will still own the roads. (With large swaths of property removed from the tax rolls, property owners may find themselves making up the difference.) The state will also be helping to subsidize the profits these firms earn by performing a lot of the advance environmental work and providing emergency services and law enforcement personnel once the roads are up and running.

Among the greatest ironies is that the super-highways won’t really do much to reduce congestion, a fact that Chairman Williamson confirmed during a recent commission meeting while trying to allay the fears of businessmen and communities who worry they’ll become ghost towns once the new roads go through. In a question-and-answer session with Amadeo Saenz, TXDOT’s assistant director of engineering operations, he asked, “Is it also my understanding that we have a congestion relief study ongoing to determine what percentage of traffic moves off of Interstate 35 and onto the parallel?”

“Yes sir,” responded Saenz.

“Is it safe to say that no less than 2.5 percent and no more than 10 percent of the traffic is going to fall somewhere in that range?” asked Williamson.

“Yes, sir.”

“So for those who live in, for example, Hillsboro who believe that Interstate 35 is their economic lifeblood and the parallel might have the same impact on their city as Route 66 had on some cities in Oklahoma, we can represent to them that it appears, least-case your traffic shrinks 2.5 percent, worst case it shrinks 10 percent, and in no circumstance should that be enough to markedly impact your local economy?”

“That’s correct,” Saenz responded.

Miles of new toll roads have already opened in North Austin, including the Loop 1 extension, State Highway 45 North, and a portion of SH 130. Not surprisingly, portions of these roads, collectively called the Central Texas Turnpike Project, were built by Zachry, often in partnership with other Texas firms. With their smooth pavement, sturdy overpasses, and large, easy-to-read signs, they look no different their untolled counterparts.

For now, motorists can cruise these roads free. Come Jan. 5, though, the toll booths will be manned, the electronic surveillance will be up and running, and cameras will be recording the license plates of scofflaws still intent on getting a free ride.

For a department that loves numbers and PowerPoint presentations, TXDOT’s being unusually fuzzy when it comes to saying how much, exactly, the tolls will be. “The tolls will be set at whatever price the market can bear,” says Gabriela Garcia, a TXDOT public information officer.

The tolls roads in North Austin were, for the most part, financed and built the old-fashioned way. There were no stipends. No noncompete clauses. No 50-year leases. No legal waivers. No guy from Sweden or Spain breathing down the highway department’s neck, telling the State of Texas where it can and can’t build a competing road. The tab to taxpayers will be hefty, though, roughly $3.6 billion. The good news is, unlike many of toll projects now on the drawing boards, the state will get to keep the revenue the roads will be generating.

Fast-food restaurants, big-box stores, and discount shoe outlets already are appearing along the access roads, part of the “induced development” planners say invariably follows the construction of new roads. More development means more cars. More cars mean more roads. And so the cycle goes.

Near the intersection of Loop 1 and State Highway 45, there are still a few large pieces of wide-open land. Birds dive in and out of the brown fields. A ribbon of reddish cloud is unraveling in the sky, and small crescent moon has appeared. Scattered through the fields are small signs announcing that the property’s available for development. Soon the fields will be gone.

Karol Griffiths, a business and tax consultant, contributed to the research on this story.

This directly affects us here in San Antonio since some of this cargo is set to come through the Port of San Antonio (formerly Kelly AFB) via the Trans Texas Corridor. In the age of terrorism and known drug activity at the border, do we really want the risk of uninspected, merely tracked, cargo coming into San Antonio?

Link to article here.

Chinese have ownership in U.S. cargo monitors
Firm tied to communist regime involved in deal to set up high-tech sensors
By Jerome R. Corsi
December 7, 2006
WorldNetDaily.com

A Chinese company with close ties to the communist government owns 49 percent of the Lockheed Martin subsidiary that is negotiating a contract with the North American SuperCorridor Coalition, Inc. – the Dallas-based trade association – to place cargo monitoring sensors along as superhighway stretching from Mexico to Canada.

China’s Hutchinson Port Holdings entered into a $50 million joint venture in 2005 with Savi Technology, a Lockheed Martin wholly-owned subsidiary, to form a new company called Savi Networks LLC. Savi Technology owns 51 percent and Hutchinson Port Holdings, a wholly-owned subsidiary of the Chinese holding company Hutchinson Whampoa Limited, holds the rest.

Lockheed Martin spokeswoman Leslie Holoweiko confirmed to WND that Savi Networks LLC is the company named in the contract currently being negotiated with NASCO to provide cargo sensors all along the NASCO I-35 super-corridor. If successfully negotiated, the contract would appear to give Hutchinson Holdings operational involvement all along the emerging I-35 NAFTA superhighway. Hutchinson Holdings also operates the port at Lázaro Cárdenas, Mexico.

Hutchinson, Whampoa, Ltd. is the holding company of billionaire Li Ka-shing, a well-known businessman, whose companies make up 15 percent of the market capitalization of the Hong Kong Stock Market. According to the Washington, D.C., government watchdog Judicial Watch, a declassified U.S. government intelligence report that Judicial Watch obtained in a Freedom of Information Act request indicates Li is “directly connected to Beijing and is willing to use his business influence to further the aims of the Chinese Government.”

A Judicial Watch complaint filed in 2002 at the time HWL was purchasing the then-bankrupt Global Crossing, notes Li Ka-Shing’s holdings includes ports, telecom and energy assets around the world. Hutchinson Ports was forced to drop a bid to purchase Global Crossing when the Committee on Foreign Investments in the United States refused to approve the transaction on national security grounds.

Savi Networks LLC operates RFID (Radio Frequency Identification) equipment and software to track and manage containerized ocean-going cargo. According to the company, the goal of Savi Networks LLC is to install “active RFID equipment and software in participating ports around the world to provide users with information on the identity, location and status of their ocean cargo containers as they pass through such ports.”

Conceivably, the Savi-installed RFID software would permit NASCO to track containers from the time they leave ports in China and the Far East to when they enter North America at Mexican ports such as Lázaro Cárdenas.

Data on the cargo could be read then by any sensor-reading station the Savi-NASCO project placed anywhere along what NASCO calls the North American SuperCorridor, generally identified by NASCO as incorporating Interstates 35, 29 and 94.

NASCO and Savi Networks LLC plan to put Savi sensor reading stations all the way north, to destinations in Canada such as Winnipeg.

The Savi technology includes an architecture designed to accommodate Automatic Identification Data Collection (AIDC) technologies, such as is used in barcodes, RFID technologies and Global Positioning Systems (GPS) that can track container ships on the ocean or the containers as they travel on land by truck or train.

The NASCO plan to use cargo tracking technology is consistent with the plans announced by the working groups in the Security and Prosperity Partnership of North America, or SPP, to rely primarily on technology, instead of in-person inspection, to track and monitor containers entering the U.S.

As disclosed in the “2005 Report to Leaders” on the SPP website, FAST lanes and SENTRI software will be used extensively to “streamline the secure movement of low-risk traffic across our shared borders” with Mexico and Canada.

The Security and Prosperity Partnership was declared by President Bush, Mexico’s President Fox and then-Prime Minister Paul Martin of Canada at their summit meeting in Waco, Texas, March 23, 2005.

Global Crossing was noted for turning Democratic National Committee chairman Terry McAuliffe’s $100,000 investment into an $18 million personal fortune. The company’s bold move to control the U.S. international fiber-optics network, however, ending in a corrupt, corporate meltdown that preceded the Enron debacle.

Link to article here.

Proposed Texas Toll Road Could Drive Away Truckers
From Transport Topics
December 4, 2006

A planned multi-billion dollar toll road in Texas that would recoup its costs by charging tolls may prompt truckers to avoid the highway, the Waco (Texas) Tribune-Herald newspaper reported Monday.

The proposed Trans-Texas Corridor was touted by backers as a way to ease congestion along Interstate 35 by taking some of the thousands of trucks that use I-35 each day, the paper said, but it quoted both independent and company drivers who said they would avoid the new road.

Trucks would pay 58.5 cents a mile to drive the 370-mile corridor, with the fees set by its international developer, Cintra-Zachry, the Tribune-Herald reported. Passenger cars would pay 15.2 cents per mile.

That company would spend $8.8 billion to build the road and pay the state $1.9 billion, then have the rights to recoup its expenses and make a profit by charging tolls on the road for 50 years, the paper said.

The Texas Department of Transportation unveiled a plan for the corridor in September. (Click here for previous coverage.) By Transport Topics

Link to article here.

Infrastructure, debt, and the Islamic Bond
Islamic-Bond Market Becomes Global By Attracting Non-Muslim Borrowers
by Karen Lane
Wall Street Journal
11/16/06

WHEN TEXAS-BASED energy firm East Cameron Partners wanted to raise cash this year, it turned not to banks or the domestic bond market, but to the Middle East. The result was the first bond backed by U.S. assets that adheres to Islamic laws against paying or charging interest. “I had never heard of sukuk before,” says Campbell Evans, the Houston company’s general manager, using the Arabic name for Islamic bonds. “I got a book [about it] and it seemed Byzantine. But at the end of the day, it worked for us.”

Islamic financing differs from conventional financing in its strict adherence to Shariah, or Islamic law, which calls for ethical and equitable financing, and bans speculation. Conventional bonds issued by companies or governments pay a fixed annual interest rate for the life of the bond, which can be as many as 10 or even 30 years, after which the principal is repaid. Some bonds are backed by assets such as mortgages or creditcard receivables. If the issuer defaults, the assets are sold to recoup some bondholder losses.

Sukuk are similar to asset-backed bonds, but instead of a fixed annual interest rate, payouts to investors over the life of the bond are derived from leases, profits or sales of tangible assets such as property, equipment or a joint-venture business. These leases, profits or sales can be structured to deliver the equivalent of a fixed annual interest rate, yet they technically aren’t the forbidden “interest” payment.

Western and Asian companies and governments are increasingly using Islamic bonds to tap a well of petrodollars in the Middle East. A rising queue of Persian Gulf-based borrowers are doing the same to raise cash overseas, particularly for large infrastructure projects needed to diversify their sources of economic growth.

As a result, the Islamic finance market is swiftly expanding globally. With both Islamic and conventional banks seeking a piece of the action, it is building bridges between Muslim and non-Muslim nations. According to London’s Islamic Finance Information Service, $16.9 billion in sukuk was issued between January and October this year, 43% more than the total in 2005. Analysts say there is easily $10 billion in the pipeline for the next few months. The market is relatively tiny. In the first half of 2006,new sales of international bonds and short-term notes totaled $1.2 trillion, according to the Bank for International Settlements.

New rating and hedging tools are expected to help the Islamic bond market expand faster. East Cameron Partners, Mr. Evans’s Houston energy firm, raised $166 million in its July issue to consolidate assets and fund development of gas fields. “The sukuk represented over and above what might be available in America in terms of being able to raise the cash at relatively lower coupons,” or payouts to investors, Mr. Evans said. “An Islamic bond would be easily placed with conventional investors, which can widen the investor base, whereas the opposite isn’t true,” said Roula Sleiman, senior associate at Lebanon’s Bemo Securitization SAL, which arranged the deal with Merrill Lynch & Co.

Malaysian borrowers, including state-owned investment company Khazanah Nasional, have marketed Islamic bond deals in the Middle East. So has the Pakistani government, selling $600 million in bonds in 2005. In Japan, Bank of Tokyo-itsubishi UFJ Ltd., the core banking unit of Mitsubishi UFJ Financial Group Inc., is allying with Malaysian bank CIMB Group Bhd. to sell financial services, including potential Japanese corporate sukuk. Islamic communities in the Gulf for centuries have looked close to home to raise capital. Now they are looking farther afield for Shariah-compliant funds to finance projects aimed at transforming the region into a tourism and business hub.

Dubai Ports, Customs and Free Zone in January sold 11% of its $3.5 billion sukuk—the largest ever—to European investors. Around half went into the hands of non-Islamic investors. “In the next two to three years, Bahrain, Kuwait, Qatar, Saudi Arabia, the United Arab Emirates and Oman are looking at more than $50 billion in [infrastructure] financing. I would say 30% of the $50 billion is likely to emerge as sukuk,” said Rafe Haneef, head of Islamic banking at Citigroup Inc. in Kuala Lumpur.

Banks, particularly in the Gulf, are loath to overexpose themselves to the property sector, while developers find that aping the stock markets is more expensive than raising debt. “Infrastructure is a perfect use of sukuk because you are raising funds that are to be used for a specific project. Assets that you create can generate a return” to pay bondholders, says Neale Downes, a partner in Bahrain with law firm Trowers & Hamlins.

Borrowers outside the Middle East have made this discovery, too. Next year, China is expected to issue its first sukuk when Kuwait Finance House targets the Persian Gulf with a $200 million deal for a Chinese government-linked power company. Indonesia is in the midst of revising tax and other regulations to support both sovereign and corporate Islamic-bond issuance. One of the first sukuk to come to market could be a $650 million deal from Jakarta Monorail, aimed at easing the Indonesian capital’s gridlocked transport network.

Some Islamic borrowers are opting to list their deals outside their home jurisdictions. “Listing on a European exchange like the Irish Stock Exchange makes secondary trade easier from a regulatory point of view for European institutions,” says Gerard Scully, head of debt listing at the Dublin exchange, which last month got its first sukuk listing and is pitching for more. The London and Luxembourg exchanges also list sukuk.

There is geopolitical upside to the proliferation, observers say. It “gives people the chance to learn something positive about Islam, and it counters negative issues in other areas,” says Rodney Wilson, professor in the Institute for Middle Eastern and Islamic Studies at the United Kingdom’s Durham University. Cross-border sales of sukuk are prompting greater harmonization in the way the bonds are structured. Malaysia in the past has favored bond structures that don’t comply with the Middle East’s interpretation of Shariah, notably the deferred payment sale principle of bai’ bithaman ajil—whereby a bank buys an asset on behalf of a customer and sells it later at cost plus a profit margin.

In recent years, however, the Malaysian government has offered tax breaks to encourage the use of more globally accepted structures in a bid to become an Islamic financing hub. One is called the lease-based, or ijarah, structure. Say a petrochemical company wants to raise $350 million. It would sell a plant to a special-purpose company set up for the deal and then lease it back for five years. Investors or banks would lend the company the $350 million. Instead of interest payments, the investors would get proceeds from the lease payments. After five years, the special-purpose company returns the plant to the parent company, and the principal $350 million is returned to the investors.

Another globally accepted structure is called musharakah, a joint venture. The venture’s partners buy Islamic bonds and receive payments over the loan period based on the plant’s profit. In September, Malaysian toll-road operator Plus Expressways set a precedent by swapping outstanding 4.7 billion ringgit ($1.3 billion) in bai’ bithaman ajil debt for Persian Gulf-compliant funding to make the company eligible for inclusion in global Shariah stock indexes. “If you can commoditize products, your cost of issuance comes down,” said Mr. Downes of Trowers & Hamlins.

Cross-border investment should get a further lift from the use of credit ratings. The year-old Islamic International Rating Agency has developed Shariah Quality Ratings, designed to help Islamic investors better judge the standard of Shariah endorsements of an instrument or issuer.

Another catalyst for growth should be global standards for Shariah-compliant derivatives— financial products designed by investment banks to hedge the risk of Islamic debt. New York’s International Swaps and Derivatives Association and Bahrain’s International Islamic Financial Market are engaged in talks aimed at agreeing on such basic standards.

Adherence to Shariah prevents Islamic investors from using conventional hedging tools—interest-rate swaps, forwards or options—to offset fluctuations in interest rates and currencies. The few tailor-made hedging tools now in use have concentrated such risk into the hands of a small number of investors. Global standards would help spread it more evenly, bankers say. “For the Islamic market to exist in the proper manner, it must have all the relevant products that befits the financial market.

For every single conventional product, you want to have the equivalent Islamic product,” says Badlisyah Abdul Ghani, head of CIMB’s Islamic division. Bid Lifts Delta Air Lines Bonds US Airways Group’s announced intention to buy Delta Air Lines when it exits bankruptcy court drove up the price of its bonds Wednesday, a sign some creditors gave the plan an enthusiastic thumbs-up. After being rebuffed by Delta executives this summer, US Airways has brought its proposed purchase of the air carrier to the company’s many creditors by offering them $4 billion in cash and 78.5 million US Airways shares, for a total $8 billion based on Tuesday’s closing price of US Airways’ stock.

Those holding the company’s distressed bonds rejoiced in the idea. Delta’s 7.9% bonds due 2009 rose 21 points, or cents on the dollar, to trade at 61.5 cents on the dollar, according to MarketAxess, an online trading platform. The 8.3% notes due 2029 rose 21.56 cents to 61.75 cents on the dollar, MarketAxess showed. Those notes were the most actively traded Wednesday. Shareholders also cheered. US Airways shares rose $8.57, or 17%, to $59.50 as of 4 p.m. in New York Stock Exchange composite trading. “The prospect for everybody would be better because you’d have these companies combining and forming a much stronger entity which would eliminate redundancies,” said Margaret Patel, a portfolio manager at Pioneer High Yield Fund. “The prospect for recovery for bondholders would be improved.”

The elimination of overlaps from the merger, in flights and gates at both airlines for example, would allow for cost cuts that could strengthen both carriers’ operations, market participants said. US Airways said it believes the combination would generate at least $1.65 billion in annual synergies. A potential US Airways and Delta tie-up also lifted the bonds of Northwest Airlines, which like Delta is in bankruptcy protection. Its 10% bonds due 2009 were up 11.5 points to 78.28 cents on the dollar, according to MarketAxess. Treasurys Slip on Factory Data Robust New York-area manufacturing data knocked Treasurys lower Wednesday, and meeting minutes from the Federal Reserve’s latest policy-setting gathering ensured that the market ended in negative territory.

Most of the damage done to the market was done early, and it struck most hard at the short-dated issues on the yield curve. The Fed minutes exacerbated the slide. The lost ground helped push further into negative territory the spread between short- and long-dated Treasury yields, with the difference, -0.20 percentage point, at its widest point in nearly six years. At 4 p.m., the benchmark 10-year note was down 11/32 point, or $3.4375 per $1,000 face value, at 100 2/32. Its yield rose to 4.619% from 4.576% Tuesday, as yields move inversely to prices. The 30-year bond was down 16/32 point at 96 28/32 to yield 4.697%, up from 4.666%.

—Cynthia Koons and Michael S. Derby contributed to this article.

Link to article here.

THE NAU: IT’S THE ELEVENTH HOUR – GET BUSY
By: Devvy Kidd
November 20, 2006
NewsWithViews.com

“The global theory of free trade is siphoning off America’s wealth and bringing her economy to the level of others. The theory is displacing American workers who otherwise would be employed.” Senator George Malone, 1958

First plank of the communist manifesto: abolition of all private property. Eminent domain is sweeping this country like a deadly forest fire and it will continue to escalate as plans for the complete and total destruction of our sovereign nation move ahead. Bush’s proposed North American Union (NAU) and the so-called Security and Prosperity Partnership of North America (SPP) are the final nails in the coffin of America’s sovereignty. The globalists in Congress and the White House over the past several decades have been slowly, step by step deconstructing our sovereign republic in anticipation of eliminating these united States of America and merging them into one region of a world governmental body. Congressman Ron Paul summed it up this way:

“By now many Texans have heard about the proposed “NAFTA Superhighway,” which is also referred to as the trans-Texas corridor. What you may not know is the extent to which plans for such a superhighway are moving forward without congressional oversight or media attention.

“This superhighway would connect Mexico, the United States, and Canada, cutting a wide swath through the middle of Texas and up through Kansas City. Offshoots would connect the main artery to the west coast, Florida, and northeast. Proponents envision a ten-lane colossus the width of several football fields, with freight and rail lines, fiber-optic cable lines, and oil and natural gas pipelines running alongside.

“This will require coordinated federal and state eminent domain actions on an unprecedented scale, as literally millions of people and businesses could be displaced. The loss of whole communities is almost certain, as planners cannot wind the highway around every quaint town, historic building, or senior citizen apartment for thousands of miles.

“The SPP was first launched in 2005 by the heads of state of Canada, Mexico, and the United States at a summit in Waco. The SPP was not created by a treaty between the nations involved, nor was Congress involved in any way. Instead, the SPP is an unholy alliance of foreign consortiums and officials from several governments. One principal player is a Spanish construction company, which plans to build the highway and operate it as a toll road. But don’t be fooled: the superhighway proposal is not the result of free market demand, but rather an extension of government-managed trade schemes like NAFTA that benefit politically-connected interests.

“The real issue is national sovereignty. Once again, decisions that affect millions of Americans are not being made by those Americans themselves, or even by their elected representatives in Congress. Instead, a handful of elites use their government connections to bypass national legislatures and ignore our Constitution – which expressly grants Congress the sole authority to regulate international trade.

“The ultimate goal is not simply a superhighway, but an integrated North American Union – complete with a currency, a cross-national bureaucracy, and virtually borderless travel within the Union. Like the European Union, a North American Union would represent another step toward the abolition of national sovereignty altogether.”

In July 2006, I traveled to Austin, Texas to take a look at this trans-Texas corridor. It is a monstrous construction feat that has been years in the making right under everyone’s nose until Phyllis Schlafly and then Jerome Corsi, began exposing this insidious plan. There is a four minute video cartoon on how Gov. Rick Perry (Texas) has sold out the sovereignty of our republic for big money. While this is a cartoon, it is 100% factual. This is top priority national issue. Watch it. Get it. This NAU is going to get you in one way or another if it isn’t stopped. Thousands of businesses, ranches, farms and homes will be seized under eminent domain (a 4,000 miles long gutting) to complete this sell out of America. Perry allegedly won reelection a couple of weeks ago. That’s what electronic machines are for: making sure those individuals who have proven their loyalty to their global masters remain in office so the agenda goes forward. Texans need to resurrect, “Remember the Alamo” and soon because the eminent domain sledgehammer will crank up next year and then watch the carnage.

While in Austin, I did my usual questioning of everyone from hotel employees to retail clerks and restaurant workers. The response was all the same: this trans-corridor was a God-send because it brought jobs and billions of dollars into the area. Oh, boy, it’s going to cut down on traffic problems! and that’s how it’s been sold as a “Texas Department of Transportation initiative proposed to solve critical transportation problems in the State of Texas.” Horse feathers. Not a single person I questioned had any idea of what it really means for our republic and I doubt much they would care because jobs are the name of the game.

This is how the destroyers have the people by the throat. NAFTA and GATT have destroyed our most important job bases: agriculture, manufacturing and industrial. Out of work Americans were run off their land, out of the factories and into huge, crime infested metropolitan cities totally unprepared causing their infrastructures and legal systems to near breaking point. Now it’s anything to keep your head above water as more as more Americans slide into poverty. The middle class is being killed off and a new peonage system will develop in what used to be America if this NAU succeeds. Lord, our Founding Fathers must wonder why they and all the thousands whose blood ran in rivers to give us a free republic even bothered.

As Ron Paul says above, there will be a new currency because there has to be. While many Americans would rather hide their head in the sand, the financial picture is an ugly one. America’s debt is not sustainable and the worst is coming. A couple of weeks ago I had a very long phone conversation with Dr. Edwin Vieira about this very subject and the timing of this trans-corridor/North American Union, the manipulation of the stock market as the “FED” tries to keep it propped up and a two tiered monetary system. I asked Edwin to write a column on this and hopefully he will soon. Unless and until the American people understand the money mechanics, they won’t be able to comprehend what’s coming that will affect them and their family.

Millions of Americans simply haven’t been able to understand why Bush has refused to close the borders or make any attempt whatsoever to stop the massive invasion of illegals. As soon as the veil was lifted on this North American Union and the Security and Prosperity Partnership of North America, it all made sense even to his most loyal supporters. Bush has never had any intention of upholding the laws of this land because his job is to cement the final pieces of one world government along with bankrupting US with his endless, unconstitutional “wars of liberation.”

Why do you think this voluntary National ID card surfaced and is scheduled for 2008? Because Bush and his global masters intend for the destruction of our republic to be complete by 2010. Do Americans really understand what this means? All the blood that has been shed to keep America a free nation will have been spilled for nothing. It means the death of our nation, our constitution, our Bill of Rights. It means inheriting another 100 million illiterate poor from Mexico, making all of US “global citizens” in this nightmare scheme. Years ago I wrote about grade school children in Red Bluff, California being given textbook lessons on becoming a global citizen. No American history, just pure propaganda. Forward planning and it’s been underway for decades while Americans walk around in their self imposed comas or fighting at retail stores for the latest junk from commie China: a Sony play station. Adults fighting over a toy while Bush burns the U.S. Constitution and Bill of Rights. Think about that and this:

“The open plan to merge the US with Mexico and Canada and create a Pan American Union networked by a NAFTA Super Highway has long been a Globalist brainchild but its very real and prescient implementation on behalf of the Council on Foreign Relations has recently come under bright spotlight. According to author Jerome Corsi, “Across the NAFTA Super-Highways will flow millions more Mexicans, now armed with North American border passes and biometric identification, as defined by the Security and Prosperity Partnership of North America working groups organized within the Department of Commerce.”

The Council on Foreign Relations is an evil operation, a subject I have written about extensively over the past decade plus. These people are our enemy and you should know their faces; see here and this one courtesy of an American who cares; this list was obtained from the Seeley Mudd library at Princeton University. The American Empire: Conquest Through NAFTA is another in depth look at the connection between the destruction of our sovereign country and the CFR.

In August 2006, I traveled to Laredo, Texas to interview a U.S. Border Patrol agent who is retiring. While there I saw the huge construction underway of another section of the trans-Texas corridor.

My new friend drove me all around town and gave me a very good history lesson on illegals smuggling themselves across the border, the hot spots and the drug corridors. As I stood on the bank of the Rio Grande and looked across at Mexico, the international bridge joining the two countries was packed like sardines; a human wave. Day workers, visitors and illegals trying to get through with forged documents. On the USA side of the Rio Grande, the first ten blocks going North looks just like the slums of Mexico and like the LA basin, it will come to your town. One or two businesses are in English, but the rest is all Spanish and having been to Tijuana and the interior of Mexico, I know what I’ve seen and to see it being birthed in America is tragic.

Any Texas State legislator who voted for House Bill 3588 back in 2003 which amended the Texas Transportation code to give the state the broad, new powers needed to build the Trans-Texas Corridor should have been thrown out of office two weeks ago. Now they should the target of all Texas groups fighting to stop this move to destroy our republic the next time they’re up for reelection. It is simply beyond words that elected officials, governors, state legislators and members of Congress are allowing America to be sold off to foreign interests and governments. It is an outrage and it is killing US. Texans need to begin bombarding their state legislators to stop this NAU and the SPP by telling Washington, DC we will not give up our sovereignty. I know this will be difficult since most of them are bought and paid for by big business in this state, but if hundreds of thousands of Texans make their voices good and loud, the roar of the lion hearted will scare the mice.

We are in the fight for our very existence and no one should doubt it for a second. This is it and every single American must step up to the plate and do their part. Yes, we have several other crucial wars going on, i.e., stopping the upcoming amnesty sell out by the Democrats which will be kissed by Bush and getting rid of draconian and unconstitutional junk laws like the John Warner Defense Authorization Act. These treasonous mechanisms are all inter-related and we must attack all of them as our top priorities until we run these globalists out of America and return to an independent, self sustaining nation.

How? First thing in January: Bombard Congress to adopt H. Con. Res. 487 or a new bill with the same text except change this: “Expressing the sense of Congress that the United States should not engage in the construction of a North American Free Trade Agreement (NAFTA) Superhighway System or enter into a North… (Introduced in House).” There is no expression or sense about this. Change it to “These united States of America will not enter into or engage in the construction of a North American Free Trade Agreement (NAFTA) Superhighway System or enter into a North… (Introduced in House).” Concurrently, we must get at least one state legislature to force a showdown on the Seventeenth Amendment; see here to understand why.

Once this legislation is passed, Bush must sign it and if he refuses, Congress can over ride his treachery. Second: Stop the Security and Prosperity Partnership. Stop SPP is a project of MinutemenProject.com. Get involved now because it’s the eleventh hour. Get creative. Paint a big sign and put it in your front yard: ‘Stop the merging of US with Canada and Mexico’ Your neighbors will want to know what it’s all about. Put the StopSPP web site address below the headline so people reading your sign will have someplace to go to find out what this means. Don’t put this off. Advertising pays and we need to bring this to the attention of all of our fellow Americans from Vermont to San Diego, Tampa to Anchorage. There’s no longer any pursuit of happiness, just the war we’re fighting for our freedom and sovereignty and this means sacrifice by all of us, not just a few.

Get very public which means going down to your local VFW or other organizations in your city or town and make this issue the number one dialogue. Tragically, we lost the Panama Canal to the communist Chinese because the American people were too busy. The commies are now lining up at the Texas ports in anticipation of this NAU and I cannot emphasize strongly enough that the communist Chinese are our enemy, not our friend. Please stop supporting communism with your hard earned money; buy Made in the USA. It’s easy and it’s the right thing to do for America. Stop supporting slave labor used by the communist Chinese government. More than 58,000 Americans died in the jungles of Viet Nam to stop the proliferation of communism, yet Americans continue to enrich the coffers of communist regimes. Stupid public officials let the first flood gates open in Long Beach, California and the commies got their foot in the door big time. Don’t let the same thing happen with this NAU and the SPP.

The Mexican government has deliberately treated its people as little better than cattle, and for the past decade, the drug lords have come in and are Columbia-izing Mexico. This horrific situation will simply be imported into our country on a mass scale if this NAU and the SPP isn’t stopped, period. Get to your political party meetings, attend city council meetings, board of supervisor meetings and start talking about this. Take a nice flyer with you that has the Stop SPP web site information. There’s no one else to do this, but each of us in our counties. It won’t be the mind numbing Shawn Hannity or the LA Times telling the American people the truth, it has to be you and me. We must begin to bury Congress in January with our demands that this whole process be shut down.

It’s too late to stop some construction of the roads, but we can and must stop this from going further before our fellow Americans are thrown off their land via eminent domain. All the agreements must be nullified, our sovereignty protected, the border closed and the fence built across the border with Mexico. This is our country, not Rick Perry’s, not some company out of Spain and not George Bush’s. Our children and grand children deserve their birthright to be free in a free united States of America. I pray Americans won’t be too busy to do their part because that’s exactly what the destroyers are counting on: laziness and apathy.

I will NOT live under international laws. I will NOT surrender my Second Amendment rights for any world body and that’s just the way it’s going to be. Land of the free, home of the brave? We shall see.