Campaign Contributions Push Doubtful High Speed Rail Project Forward

Anthony Marnell II donated at least $15,000.00 to various campaign committees for Senate Majority Leader Harry Reid. Gary Tharaldson donated $10,000.00 to Reid’s campaign. Sig Rogich is co-chairman of Republicans for Reid.  What do these three gentlemen have in common?

Marnell and his son Anthony Marnell III, along with Tharaldson, are investors in privately held DesertXpress, a company which has so far spent $270,000.00 lobbying for a $4.9 billion federal government loan to build a high speed rail line from Victorville, California to the Las Vegas casino strip. Rogich is a consultant to DesertXpress. Private investors expect to put up only $1.6 billion in capital towards the $6.5 billion cost of construction and rolling stock for the project.

Victorville, California is a small town, population about 115,000, on the edge of the Mojave Desert. Vacant stores are scattered across the downtown area. DesertXpress proposes a 15,000 car “park-and-ride” lot on a remote parcel of land between Victorville and Barstow, California, where they say Californians from throughout the Los Angeles Basin will leave their cars and hop onto a bullet train for a 200 mile, one hour and twenty minute, $75.00 luxury train trip directly to the Las Vegas Strip.  The doubters question whether California folks will drive 50 miles to embark on a 200 mile train trip rather than just mashing down on the accelerator and driving the rest of the way to Las Vegas.

Why not run the train all the way into LA? Well, once you get past Victorville, acquiring the right of way through urban southern California would make the projected $6.5 billion cost of the DesertXpress proposal look like a mere drop in the bucket. However, in order to pay back the federal government loan they are seeking, Majority Leader Reid’s buddies will have to attract at least 2.5 million train riders every year, at a fare beginning at $75.00 per trip. The odds are very good, in Las Vegas terms, that the loan would never be repaid, and American taxpayers would end up owning the unprofitable high speed rail line to nowhere.

Southern California Association of Governments Executive Director Hasan Ikhrata points out that high speed rail has never been profitable anywhere in the world to date: “When somebody comes and tells me ‘I will build a system that pays for itself,’ I’m suspicious,” Ikhrata says. “There is no high speed rail system in the world that operates without subsidies.” While Senator Reid and other supporters of the project glibly brag that their plan will produce 80,000 new jobs in the region, the Federal Railroad Administration documents show that only 722 of those jobs would be permanent.

Whatever the goal of the stimulus funding Congress passed for high speed rail in America may have been, I doubt that very many of the Congressmen and Senators who voted for that legislation were thinking of replacing airline gambling junkets from LA or Orange County to Las Vegas with a bullet train.

Despite Obama's Restrictions, Lobbyists Still Have Plenty Of Access

When the economic stimulus legislation passed, President Obama made a big show of restricting the federal officials charged with distributing the $787 billion from accepting meetings, e-mails, documents or phone calls from lobbyists from businesses seeking to share in the grants and contracts stemming from the huge appropriations. So, the front door of the administration was shut tight on K Street. However, as many industry groups have managed to discover, there's a wide open back door, and they are making good use of it.

Every rule coming out of the federal bureaucracy has to be vetted by the Office of Management and Budget for a review of its impact not only on government budgets but also on the parties to be regulated by the rule. The OMB office charged with this task is called the Office of Information and Regulatory Affairs, or OIRA. OIRA keeps meticulous records of who sits in on meetings to review each proposed rule. Regulations require OIRA to meet with anyone who asks, from a business or organization likely to be regulated under a proposed rule.

One of the rules drawing a lot of back door lobbying was the stimulus legislation's mandate that domestic industries be favored in government construction contracts funded with stimulus cash, called the "Buy American" provision. In March and April OIRA hoisted three meetings with more than 20 people to discuss the Defense Acquisitions Regulations Council proposed buy American rule, including six lobbyists from the United Steelworkers Union, the United Autoworkers Union, and the American Steel and Iron Institute. The Japanese Embassy (Japan makes steel, too) also attended one of these meetings. So much for closing the door on lobbyists.

A second proposed rule, on the renewable fuel standard provisions on calculating greenhouse gas emissions from ethanol production, attracted more than 40 people to four meetings in March, including lobbyists representing Shell Oil, the American Petroleum Institute, the Environmental Defense Fund and the Union of Concerned Scientists. The biggest lobbyist draw of all so far was the EPA proposed rule on industry reporting of greenhouse gas emissions, which attracted over 50 folks to six meetings last month, including lobbyists for Chevron, BP America, Exxon, Mobil, Shell, the American Petroleum Institute, and the American Paper and Forest Association. Seems like government always has a back door.

New Ethics Rules For Stimulus Grant Applicants

Do you think of yourself as a lobbyist? No? If you have applied for any sort of grant under any of the numerous economic stimulus programs enacted in the American Recovery and Reinvestment Act, you have become a lobbyist. Under new rules announced yesterday by Norm Eisen, Obama administration special counsel for ethics and government reform, any person or business seeking a share of the $787 billion in stimulus funding is now bound by rules which used to apply only to registered lobbyists.

Under the new rules, all grant applicants are forbidden from having any telephone or in person communication with the officials to whom their grant application was submitted, and anything the applicant submits in writing regarding the application or the grant must be published on the agency web site within three business days. So, if you are writing to inquire about the status of your grant application, or its merits as opposed to competing applications, be aware that your customers, competitors, employees and the general public will see exactly what you have written. This will include E-mails.

Remember, when writing in about your grant application, everything you say will become public and will reflect on your company, perhaps for years to come. Never write anything in anger or in haste, and it is probably a good idea to have someone else look it over before you send it in.