Matty Moroun, Detroit’s Border Baron

“I’ve never seen billionaires who are so good at playing the victim.”
– Michigan Lieutenant Governor Brian Calley

Bloomberg Businessweek

By Susan Berfield

On the morning of January 12, Matty Moroun, an 84-year-old billionaire, walked into the Wayne County courthouse in downtown Detroit for a hearing on sanctions for civil contempt. He was an hour late. The courtroom was full. Moroun took his place in the front row, next to one of his lawyers, looking frail, amiable, and slightly bemused.

A few miles from the courthouse is Moroun’s bridge, the only major border crossing in the country that’s privately owned, and the source of much of Moroun’s troubles. The Ambassador Bridge was built in 1929 by a New York financier and bought for $30 million by Moroun in 1979. Painted a striking blue, the four-lane, 7,490-foot-long steel span is suspended 152 feet above the Detroit River and connects the city to Windsor in Ontario, Canada. It’s the busiest commercial crossing in North America. Twenty-five percent of U.S.-Canada truck freight moves across the bridge, some $82 billion worth of goods every year. That’s more than the U.S. exports to Germany or Japan.

All of that stuff is loaded onto the 7,100 trucks that travel the Ambassador Bridge each day. The average toll for the trucks is $15 and cars pay $4, giving Moroun’s family business, the Detroit International Bridge Co., a rough daily take of $156,000. Through an accident of history and bad planning, every single truck and car has to pass through residential neighborhoods in southwest Detroit to reach the highway. Eight years ago the Michigan Department of Transportation worked out an agreement with the Morouns to share the costs of building new access roads and ramps to its bridge. The Gateway Project, as it is called, is essentially a $230 million driveway to the Ambassador Bridge. It was supposed to be finished by 2008.

But the Morouns and transportation officials tangled over some details. The Morouns built a road that didn’t go where the officials thought it should. Instead it went right past the Morouns’ new and very profitable duty-free shop and gas station. They constructed a pier that could support a second, unapproved, span. In 2009, Michigan accused the company of breach of contract, and Judge Prentis Edwards of the Wayne County Circuit Court agreed. He gave the company until the beginning of 2012 to properly finish its part of the project.

In January, Judge Edwards requested Matty Moroun’s presence in the courtroom for the first time. It seemed little more than an inconvenience. Then, in an even-toned voice, the judge ordered Moroun and the company president, Dan Stamper, to jail. They would be released when the Gateway project was complete. Their lawyers pleaded with the judge. Then two sheriff’s deputies took Moroun and Stamper out the back door to the nearby jail. A woman watching the proceedings applauded loudly.

The executives were put in a cell together. They had to wear the same green jumpsuits as other prisoners, though they were allowed to order in dinner from the Detroit Athletic Club. The next day an appeals court ruled they could be released but had to appear in front of Judge Edwards on March 8 with a progress report. Moroun, shielded by his son, Matt, left the prison at nightfall, saying to the reporters gathered outside, “I love my country. I love my family.”

The Ambassador Bridge is a small part of the Morouns’ trucking, shipping, and insurance empire, but it is an important status symbol. It brings in about $60 million in toll revenue every year and, recently, an inordinate amount of grief. The Morouns are fighting the Republican governor of Michigan, the Canadian prime minister, nearly every major business in the region, and residents on both sides of the border over a proposed multibillion-dollar bridge called the New International Trade Crossing. The bridge would be two miles downriver from the Ambassador, have six lanes, a bigger customs and immigration plaza, and direct connections to a new Canadian expressway and U.S. highways. It would be a public-private partnership. Michigan and Canada would own it but a private company would fund, build, and operate it for profit. Canada would loan Michigan some $550 million to build new highways. Responsibility for paying back the loans would fall to the bridge operator.

Its supporters hope the new bridge would help return Detroit, and maybe America’s industrial heartland, to prominence. “The new crossing will bring jobs and investment into Detroit, strengthen the city’s role as a center of international trade, and help it compete as a world-class community,” says Bill Ford, the executive chairman of Ford Motor (F), in an e-mail. It would also end the Morouns’ 30-year-long monopoly there.

Government and business leaders back a second bridge across the Detroit River

The Morouns argue that the new bridge is unnecessary, a waste of taxpayer money, and unfair to them. As Matty’s wife, Nora, told the Detroit News last year: “They want to destroy our family business and [have] government take it over. My husband is battling two countries and two governments. Is this the end of the American dream?” The Morouns believe their treatment in court is connected to their opposition to the new bridge. “The judge knows better than to admit he’s sending my father to jail so that we’ll stop fighting the government,” says Matt Moroun. “But that’s the underlying and overarching political aspect of the situation.” Later, he brings up another concern: “In this particular instance, it does seem to make a difference if you’re rich or poor. Maybe the judge couldn’t do that to a poor guy.” Matty and Nora Moroun declined to comment, letting their son speak for them.

The dispute has made the Morouns a public enemy to some in this struggling city. “They have co-opted the fears and mistrust of the government for their own ends,” says Sandy Baruah, the head of the Detroit Chamber of Commerce. “I am not a big fan of how they conduct their business, but mostly that’s not my business. It is my job to help grow the economy. And they are standing in the way of that.” Michigan Lieutenant Governor Brian Calley says: “I’ve never seen billionaires who are so good at playing the victim.”

Click here to read the full story from Bloomberg Businessweek.