Moroun campaign donations raise eyebrows in Detroit bridge vote

By Gary Heinlein

Lansing— The family whose patriarch owns the Ambassador Bridge has spent more than $1 million since 2009 in its legislative fight against a new span between Detroit and Canada.

That fight continues: Just last week, the GOP-led Senate approved a ban against state purchases of land for the bridge.

The Detroit News, using figures compiled by the Michigan Campaign Finance Network, a political watchdog group, found the family of Manuel “Matty” Moroun made political donations totaling more than $105,000 in the last five years to 18 of the 26 GOP senators who voted in favor of the New International Trade Crossing spending prohibition.

All told, Moroun and his family have spent tens of millions of dollars fighting the bridge, sought by Gov. Rick Snyder and the U.S. and Canadian governments, through a legislative blockadeand an unsuccessful 2012 statewide ballot measure. The $1 million in legislative giving includes contributions to House members and a wide variety of political committees — with the lion’s share going to Republicans and committees that support them.

The donations appear to have met legal limits and requirements.

“They are putting the interests of a billionaire campaign donor ahead of Michigan’s economy and the thousands of jobs that the bridge would bring,” said Senate Democratic spokesman Robert McCann. “I’m not sure I can think of a sadder commentary on the state of our Legislature under Republican control.”

Sen. Jack Brandenburg makes no apologies for his vote. The first-term Harrison Township senator and his Liberty Political Action Committee have received at least $10,000 from the Morouns.

“I will more than gladly let them donate to my re-election,” Brandenburg said. “I was on their side the first time I heard of (the bridge plan). I don’t think we need to spend state money on this bridge.”

Republican Snyder argues building the second span south of the Ambassador Bridge will further bolster commerce on America’s busiest international trade corridor and create more jobs for Michigan.

In response, the Ambassador Bridge owner has sought permission to build his own second span next to the existing bridge — a proposal that Canadian officials oppose.

Unable to win legislative approval, Snyder is pushing forward through an inter-local agreement he signed with the U.S. and Canadian governments. Land purchases for a customs plaza in Detroit are supposed to start this summer.

Irked GOP leaders inserted the land purchase ban into the $3.8 billion transportation budget. Under the provision the Republican majority approved with one Democratic vote, even land-buying reimbursed by Canada is prohibited.

The Ambassador Bridge and the Detroit-Windsor tunnel are operating below capacity and proponents’ projections for steadily growing cross-border traffic seem unrealistic, said Sen. John Pappageorge, R-Troy, who adds he has questioned the second bridge since it was first proposed under former Gov. Jennifer Granholm, a Democrat.

The head of the Senate’s transportation appropriations subcommittee said he has received far more campaign money from business leaders who back the new bridge than the Morouns’ combined $8,000 in campaign contributions to him and his leadership fund.

“I really rail at the idea that Matty Moroun’s contribution makes a difference,” added Pappageorge, who said he agreed to the provision written by Appropriations Committee Chairman Roger Kahn, R-Saginaw.

Kahn, long an opponent of the public bridge, has received $1,000 in direct campaign money from the Morouns, but two political funds connected to him have gotten $21,500 through the years.

But Sen. Glenn Anderson, D-Westland, said the latest effort to stifle the second bridge “is one last gasp on the part of those who are heavily influenced by the Morouns.”

“You can draw a pretty clear line between who got money and who has an objection (to the bridge),” Anderson said, noting $120 billion a year in international commerce passes across the Detroit River — most of it over Moroun’s bridge.

The transportation budget bill ultimately passed 27-11 with Democratic Sen. Tupac Hunter of Detroit joining the Senate’s GOP members in favor of it. The remaining 11 Democrats voted against it — primarily, Anderson said, because of the bridge spending ban.

How much of a problem the land-buying ban creates for Snyder is uncertain. The House’s transportation budget, also approved last week, broadly bars state spending on the bridge but doesn’t specifically target land-buying.

Snyder spokeswoman Sara Wurfel said legal advisers are reviewing the budget situation, but the governor hopes lawmakers strike it from the final bill.

Political observer Jeff Williams said Senate Republican opposition appears to stem more from political philosophy than Moroun money.

“I don’t by any means think (Matty Moroun) is buying votes,” said Williams, CEO of Public Sector Consultants in Lansing. “But he is encouraging beliefs the Senate majority already has.

“This is an issue that has no middle ground,” he added. “… They are saying repeatedly to two governors (Jennifer Granholm and Snyder): ‘We do not believe this (new) bridge is needed but if it is, it should be private.’”

Heaviest giving to Senate Republicans was in 2011 — when legislation to allow the bridge was defeated in a Senate committee headed by Sen. Mike Kowall, R-White Lake — and in 2012.

A leadership committee headed by Kowall has received at least $15,000 from the Morouns. The Michigan Campaign Finance Network also reported Kowall and his wife, Rep. Eileen Kowall, received $6,144 and $3,144, respectively, in non-monetary contributions in 2010 from the North Oakland Political Action Committee, another Moroun donation recipient.

“I don’t know the Moroun family all that well, and I’m not opposed to the bridge,” Kowall said. “What I’m opposed to is any state funds going toward it.”

Moroun spent at least $45 million on a failed 2012 ballot proposal that would have prohibited the bridge without statewide voter approval.

In late September that year, he gave $100,000 to the state Republican Party.

Spokesman Mickey Blashfield, government affairs director for Moroun’s Central Transport International Inc., said the Morouns are exercising their rights as citizens.

“They’re no different than a hockey stadium developer or anyone else,” Blashfield said. “We’re participating in the political process the way we learned in civics class.”

The Morouns’ giving, he added, “is absolutely transparent because you can look it up. We don’t have a shadowy 501(c)(4) that has paid for people in Detroit or anything like that.”

The reference is a shot at Snyder’s anonymous-donor Nerd Fund, since replaced by a fund whose contributors are more transparent. The Nerd Fund had covered some living expenses for Detroit Emergency Manager Kevyn Orr.

Michigan Campaign Finance Network Director Rich Robinson, who systematically tracks candidate and issue spending, described Moroun’s giving as a way of reinforcing his support.

“I’ve heard an explanation: ‘You can’t give me money to do something I wouldn’t otherwise do,’ and (from the donor’s point of view): ‘You know what I like, and I’m not going to give you any more unless you support me.’ ”

Originally posted in the Detroit News

Moroun sues to stop the NITC and 10,000 Michigan jobs. When is enough, enough?

Lawyers for Ambassador Bridge owner seek to block rival bridge permit

Written by
Todd Spangler
Detroit Free Press

WASHINGTON — Lawyers for Ambassador Bridge owner Manuel (Matty) Moroun asked for a preliminary injunction today to block the U.S. Coast Guard from issuing a permit for a proposed Detroit River span.

Moroun’s lawyers filed the request in U.S. District Court in Washington, saying that it recently came to their attention that the Coast Guard may be intending to issue a navigation permit soon for the New International Trade Crossing.

The lawyers have maintained throughout their years-long legal battle over the proposed bridge that both the U.S. and Canadian governments granted the owners of the Ambassador Bridge an exclusive franchise that can be overridden only by acts of each country’s legislative bodies.

“The basis for the preliminary injunction sought in this motion is simple: The Coast Guard is violating plaintiffs’ franchise rights and constitutional rights, and is causing plaintiffs irreparable harm right now,” the lawyers wrote U.S. District Judge Rosemary Collyer in Washington. “As plaintiffs have shown elsewhere … the construction of (the new bridge) will make it impossible for plaintiffs to build their proposed twin span.”

Moroun has been trying to get permission to build a second span for the 85-year-old Ambassador Bridge for some years, but the Canadian government, Michigan Gov. Rick Snyder and many local corporate leaders have thrown their support behind the NITC.

A hearing on the motion is expected in early April.

Originally posted by the Detroit Free Press

Ambassador Bridge Homes: The Affiliates

By Claire Brownell

Normally, finding out who bought a property, when and for how much is as simple as a trip to the land registry office, a computer search and an $8 fee. Ambassador Bridge owner Matty Moroun makes it a lot more complicated than that.

When the bridge company buys property in Windsor, a lawyer, a numbered company or one of Moroun’s many trucking and real estate companies almost always makes the initial purchase. The affiliate who made the initial buy then usually transfers the property to another affiliated company, and often yet another one after that. Moroun will also frequently combine and divide the registration numbers used to identify and search the properties at the land registry office, making it difficult to figure out whether the record is for one property or many and where it’s located.

Usually, the transfers among affiliated companies are for $0, but sometimes the documents will indicate that money changed hands, often hundreds of thousands of dollars. Moroun pays cash most of the time, but he has taken out large mortgages on some of his industrial and commercial property through DuraRock Underwriters, yet another affiliated company.

Michael Lamb, a real estate law professor at the University of Western Ontario, said this is legal and not particularly unusual. Selling the properties from one affiliated company to another can trigger a tax benefit, taking out mortgages can free up cash the business can use elsewhere and having a numbered company or lawyer hold property in trust helps keep the real ownership private, he said.

In order to determine the extent of Moroun’s real estate holdings in Windsor, The Star had to link each of the companies and lawyers whose names appear in the ownership histories back to the bridge company. Here’s the full list.

Residential properties

The following companies turn up in the ownership history of Moroun’s residential real estate in Sandwich:

The Canadian Transit Company – The Canadian arm of the bridge company. The CTC is listed as the current owner of the majority of the bridge company’s Windsor property.

2087341 Ontario Inc. – This numbered company appears in a single property purchase: 2856 Riverside Dr. W., the former Villa Maria nursing home. The administrator of 2087341 Ontario Inc. is Michael Carlone, according to a corporate search. In 2006, when the numbered company bought the former Villa Maria, The Star reported that Carlone was an employee of Warren-based Central Transport Inc., one of many companies owned by bridge owner Matty Moroun. In addition, one of the company’s directors is Peter Farah, who is also a director of 2094422 Ontario Ltd. and Central-McKinlay International Ltd.

Canbri Properties ULC – This company appears in the ownership history of just one property: 759 Mill St., an apartment building at Rosedale Avenue. 608261 Ontario Inc., another Moroun-affiliated company, purchased the building in 2007 and transferred it to Canbri Properties ULC in 2009. A corporate search lists Sandi Villeneuve, an employee at the Moroun-affiliated companies Central Transport, Advanced Border Processing Centre and Custom Services International, as the person authorized for filings.

608261 Ontario Inc. – This numbered company was listed as the owner in most of the bridge company’s property purchases from 1996 to 2006, especially purchases on or near Indian Road. A corporate search names bridge company president Dan Stamper as the president of this company.

2094422 Ontario Ltd. – Directors of 2094422 Ontario Ltd. include Michael Carlone, Peter Farah – who is also a director of the Moroun-affiliated companies 2087341 Ontario Inc. and Central-McKinlay International Ltd – and Robert Michael Lysy, who is listed as the buyer on 11 Sandwich property purchases from 2006 to 2007. The bridge company often transfers properties along the Bloomfield Road rail corridor to this numbered company. 2094422 Ontario Ltd. also tried to buy a downtown parking garage near the Windsor-Detroit tunnel in 2006, but Toronto developer Fercan Developments Inc. outbid it.

Robert Michael Lysy – Lysy is listed as the buyer on 11 Sandwich property purchases from 2006 to 2007. Lysy is also a director of 2094422 Ontario Ltd. Lysy later transferred all of those properties to either 2094422 Ontario Ltd. or 608261 Ontario Inc. for $0.

Brian McCutcheon – A lawyer with the Toronto law firm Himelfarb Proszanski LLP. McCutcheon is listed as the initial buyer on 12 Sandwich properties purchased between 2004 and 2007. From Dec. 23 to Dec. 24 of 2008, he transferred all of those properties to either 2094422 Ontario Ltd. or 608261 Ontario Inc. for $0.

David Himelfarb – A lawyer with the Toronto law firm Himelfarb Proszanski LLP. Himelfarb is listed as the initial buyer on 12 Sandwich properties purchased between 2006 and 2007. From Dec. 23 to Dec. 24 of 2008, he transferred all of those properties to either 2094422 Ontario Ltd. or 608261 Ontario Inc. for $0.

Peter Proszanski – A lawyer with the Toronto law firm Himelfarb Proszanski LLP. Proszanski is listed as the initial buyer on 12 Sandwich properties purchased between 2006 and 2008. From Dec. 23 to Dec. 24 of 2008, he transferred all of those properties to either 2094422 Ontario Ltd. or 608261 Ontario Inc. for $0.

Tonya Mah/Tonya Hall – There are references online to a lawyer by the names of both Tonya Mah and Tonya Hall with the Toronto law firm Himelfarb Proszanski LLP. Tonya Hall is listed as the initial buyer on 10 Sandwich properties purchased in 2006. Tonya Mah is listed as the initial buyer on three properties on Bloomfield Road and College Avenue in the spring of 2007. All of these properties were later transferred to either 2094422 Ontario Ltd. or 608261 Ontario Inc. for $0.

Industrial and commercial properties

The following companies turn up in the ownership history of Moroun’s industrial and commercial real estate in Windsor:

DuraRock Underwriters Ltd. – The vast majority of Moroun’s real estate transactions are done with cash. However, he has taken mortgages out on a few of his industrial and commercial properties in Windsor through DuraRock Underwriters Ltd. The address listed for the company on the mortgage documents is the same as the address for bridge company headquarters. Matty Moroun’s son Matthew is chairman of the similarly named DuraRock Reinsurance.

Central-McKinlay International Ltd. – Central-McKinlay is the name of one of Moroun’s trucking companies. A corporate search for this company names Peter Farah as the administrator of Central-McKinlay International Ltd. Farah is also a director of the Moroun-affiliated numbered companies 2087341 Ontario Inc. and 2094422 Ontario Ltd. and has a LinkedIn profile where he identifies himself as the chief financial officer of the bridge company.

MJM First Ltd. Partnership – A corporate search lists this company’s address as 12225 Stephens Rd. in Warren, Mich., which is bridge company headquarters.

5973 Corp. – An agent of MJM First Ltd. Partnership, according to a corporate search. MJM and 5973 Corp. often appear in the ownership histories as joint owners.

Mohawk Service Corp. – One of Moroun’s trucking companies.

Properties Management Inc. – A property transfer document describes Properties Management Inc. as a “general partner as to a 1% interest carrying on business as MJM First Limited Partnership.” The address listed is the same as the address for bridge company headquarters in Warren, Mich.

Transportation Assist Corp. – This company appears in the ownership history of a single property at Industrial and Ambassador Drives. The address listed in the property transfer document is the same as the address for bridge company headquarters in Warren, Mich.

Truck Realty LP – According to property documents, Truck Realty LP is the name the Canadian Transit Company and Central-McKinlay International, Ltd. are using for “carrying on business in partnership.” Truck Realty LP appears in the ownership history of property the bridge company owns at Devon Drive, just east of the Devonshire Mall.

Sandwich Entity – This company appears on property documents for commercial land the bridge company owns at 4000-4020 Sandwich St. Sandwich Entity bought the land in partnership with The Canadian Transit Company and Central-McKinlay International Ltd. in 2002.

Universal Am-Can, Ltd. – One of Moroun’s trucking companies.

GLS Leaseco Canada: Some of the property transactions list Universal Am-Can, Ltd. as “Carrying on business as GLS Leaseco Canada.”

Riverside Entity LP –This company appears in the ownership history of some of Moroun’s land on Riverside Drive East. A corporate search lists Central-McKinlay International as general partner and Michael Carlone, who is also a director of companies involved in Moroun’s residential purchases, as signatory.

1552875 Ontario Inc. – This company is listed in the ownership history of 8040 Riverside Dr. E. The company’s address is the same as the address for bridge company headquarters.

Leon Paroian – The late, well-known Windsor lawyer Leon Paroian’s firm facilitated a number of bridge company real estate transactions in Windsor. Paroian is listed as the initial buyer of 7880, 7910 and 7940 Riverside Dr. E. in 2001.

Originally posted in the Windsor Star

U.S. slams Ambassador Bridge owners’ ‘monopoly’ claim, moves to dismiss Moroun argument

By Todd Spangler

Detroit Free Press Washington Staff

WASHINGTON — The federal government moved today to dismiss Ambassador Bridge owner Manuel (Matty) Moroun’s arguments that he has an exclusive franchise to operate a span over the Detroit River, calling it an attempt to claim an “unfettered perpetual monopoly” over a sovereign border controlled by the U.S. and Canada.

In a strongly worded response to Moroun’s complaint against several federal officials, as well as a partnership between the nations and agencies in Michigan and Ontario to construct a new publicly owned span, federal lawyers slammed the bridge owner’s claims as “nothing more than an attempt to rewrite the entire history of the Ambassador Bridge.”

The filing said Moroun wants the court “not only to rewrite the Congressional statutes that authorized the construction and operation of the bridge, but to interfere with the United States’ and Canada’s sovereign powers to establish and maintain border crossings between their two nations.” The filing asks that all the claims be dismissed.

In separate filings, both the State of Michigan and the Canadian government also said any claims against them should be dismissed because they enjoy sovereign immunity and cannot be sued in federal court.

In May, Moroun’s lawyer in Washington asked U.S. District Judge Rosemary Collyer to issue an injunction reversing a U.S. State Department-issued presidential permit for the rival span — the New International Trade Crossing or NITC — which Canada and Gov. Rick Snyder want built two miles downstream from the Ambassador Bridge.

Moroun’s lawyer argued that legislation approved by both Congress and the Canadian Parliament in the 1920s authorizing construction of the Ambassador Bridge gave its owners, then and now, “statutory and contractual franchise rights” to operate the crossing between Detroit and Windsor.

A new bridge — especially one expected to draw traffic away from its span, the busiest border trade crossing in North America — would violate that franchise, the bridge company argued.

But the Justice Department, representing U.S. Secretary of State John Kerry and former Transportation Secretary Ray LaHood, who were among the defendants named in the complaint, said there was “no mention of exclusivity” in the authorizing acts that the bridge company is attempting to claim now.

“In short, Plaintiffs (or their predecessors) had the right in 1921 to build, operate and maintain a bridge in the vicinity of Detroit, and they continue to have that right today,” the response said. “It is not an unfettered, exclusive right in perpetuity.”

Federal lawyers also brushed off a claim that the procedure by which the State Department issued the presidential permit for the NITC in April was unconstitutional, noting that Congress gave it that authorization in 1972 with the guideline that it take “foreign policy and foreign relations” in consideration when making border decisions.

Michigan Attorney General Bill Schuette also filed a response saying the Ambassador Bridge owner has no exclusive right to a bridge over the river at Detroit, adding that the relevant authorization “does not mention a ‘franchise,’ let alone an ‘exclusive’ or ‘perpetual’ one.”

Moroun’s lawyers have been arguing for years that U.S. and Canadian government agencies have been dragging their feet on approvals for a second span Moroun wants to build himself next to the Ambassador Bridge, while aiding the effort to build the NITC. Canada has even promised to pick up Michigan’s $550-million share of the bridge.

Schuette’s office said in its filing that any claims against the so-called partnership created between Canada, Ontario, the federal government and the Michigan Department of Transportation should be dismissed because MDOT, as an arm of the state, enjoys sovereign immunity under the 11th amendment to the U.S. Constitution.

Meanwhile, the Canadian government said in its filing that any claim against it should be brought in Canadian courts, not in the U.S. It also maintained that far from giving the Ambassador Bridge’s owners an exclusive franchise, “A nation’s decision to open its borders to an international bridge is an inherently sovereign power” that can be exercised as the nation sees fit.

“This case is just one piece of a much larger effort by Plaintiffs to … preserve their monopoly profits,” the Canadian filing said.

The Canadian filing also said at least 18 court actions have been initiated by the bridge owners against the new span. Last November, voters in Michigan rejected a referendum pushed by the bridge owners to amend the state constitution to require statewide and local votes before state government could spend any money on any new international bridge.

Ambassador Bridge raises tolls by 20 percent

Bridge toll increasing

The Ambassador Bridge is raising its tolls again – just over a year since its last toll increase. The new $5.00 per crossing toll takes effect August 15, according to the bridge’s website. Last summer the bridge raised the toll from $4 to 4.75, which was the highest for all bridge crossings between Canada and the United States. Bridge management did not return requests for comment. Last year the bridge’s toll increase made the Ambassador’s toll almost 50 per cent higher than most other international crossings. The next highest was the Detroit-Windsor Tunnel, which is now $4.50 Windsor to Detroit and $4.75 Detroit to Windsor. Both the tunnel and bridge offer discounts with special travel cards. Prior to the previous bridge increase all other crossings in Ontario were under $3.50 with the cheapest being the Thousand Islands Bridge near Kingston at $2.50. According to the Public Border Operators Association 4.8 million passenger vehicles crossed the bridge last year. Year to date traffic until June showed traffic had increased 2.87 per cent – or more than 66,000 vehicles – over the first six months of 2012.

Moroun Gas Station Settles Lawsuit For $100,000+

A company in the Matty MOROUN portfolio has paid the Michigan Department of Agriculture and Rural Development (MDARD) $100,000 to settle a lawsuit over gas sales that allegedly violated state law.

A settlement agreement effective Feb. 1, 2013, stipulated that Ammex pay MDARD a $100,000 economic benefit fee within 30 days. MDARD spokeswoman Jennifer HOLTON said the fine had been paid. It goes to the department’s gas inspection fund.

The original violations, documented through samples taken from 2009 to 2012, were twofold.

One was higher-than-normal vapor ratings during the summer months, which meant more fuel vapor was entering the air, negatively affecting the environment.

The other violation had to do with octane levels: Ammex pumps were selling fuel with lower octane than advertised. Premium gas, for example, was labeled at 93 octane but really measured 91.4 octane during a May 2012 inspection.

After the company failed to respond to a stop sale order issued June 21, 2012, MDARD filed suit (See “Ag Department Pops Moroun For Selling Substandard Gas,” 10/25/12).

The settlement, which was executed in February, extends until 2016. If MDARD finds additional violations in this time period, the department can enforce those, as well. However, an MDARD inspection in June of 2013 determined the company was in compliance.

Under the agreement, MDARD will be allowed to view and copy all the paperwork related to receipt, transfer, delivery, storage and sale of gasoline by Ammex.

The company could also face up to $200,000 in further fines over a series of years if it fails to comply with the settlement agreement.

Ammex in the settlement denied liability in the matter, “as well as the applicability of the Motor Fuels Quality Act to the sale of fuel by Ammex.”

Originally posted by MIRS News.

Moroun loses another one in court

Judge dismisses state rep’s suit challenging new bridge to Canada

By Paul Egan
Detroit Free Press Lansing Bureau

LANSING — An Ingham County judge has dismissed a Democratic state representative’s challenge to Republican Gov. Rick Snyder’s plans to build a new public bridge to Canada.

Judge Joyce Draganchuk said state Rep. Fred Durhal, D-Detroit, lacked standing to bring the lawsuit. That means the judge determined Durhal does not have a strong enough connection to the issue to be an appropriate person to bring the lawsuit.

“I think that was not right,” Durhal said today.

He said part of his argument was that it was wrong for Snyder to go around the Legislature to approve a deal with Canada to build the New International Trade Crossing between Detroit and Windsor. Therefore, any state legislator should have standing to bring the challenge, he said.

Durhal sued in April after Snyder signed an agreement with Canada to build the bridge in May of 2012. Durhal said Draganchuk dismissed the suit two weeks ago.

Snyder acted on his own after he couldn’t get legislation out of a Senate committee to allow for the new bridge.

Durhal, who is running for mayor of Detroit, said he is considering an appeal but is busy with other issues. His Detroit attorney, Godfrey Dillard, could not immediately be reached for comment.

Ken Silfven, a spokesman for Snyder, said the ruling is “a win for working families who will benefit from the thousands of jobs resulting from the NITC.

“This project is important to Michigan’s future and we’ll continue moving forward,” Silfven said.

Snyder was represented in the case by the Attorney General’s Office.

Snyder has made the bridge a top priority, saying it will clear a border bottleneck, facilitate trade and create construction jobs. Most business groups in the state support the new public span.

The bridge is opposed by Ambassador Bridge owner Manuel “Matty” Moroun, who is challenging Snyder’s plans in federal court.