How one billionaire almost derailed the most important infrastructure project in North America

David Frum: How lobbyists almost derailed a much-needed Canada-U.S. bridge

National Post
David Frum

It’s just a toll booth on a bridge — but it symbolizes the challenges to Canadians of living next-door to an increasingly dysfunctional American political system.

The Ambassador Bridge over the Detroit River is the busiest Canada-U.S. border crossing. It’s been improved and modernized over the years, but shippers fear that the bridge’s capacity will soon be overwhelmed. Proposals to add a second span have gone nowhere. And anyway, a second span would be a poor solution: The bridge, built in 1929, is in the wrong place. It disgorges into Windsor city streets.

Shippers have long urged the construction of an entirely new border crossing that could connect U.S. Interstates 75 and 94 directly to Ontario’s Highway 401. On the eve of the 2008 financial crisis, those shippers finally got their way: The new crossing gained approval from the Michigan and Ontario highway departments.

The recession that began in 2007 temporarily depressed cross-border traffic. Yet it also added to the logic of a new crossing. With unemployment soaring in the Detroit-Windsor region, a big new bridge-highway project would deliver a welcome jolt to the local economy.

Plans for the new crossing failed, however, to reckon with two characteristics of the increasingly dysfunctional U.S. political system: Its extreme and intensifying tax aversion — and its vulnerability to manipulation by wealthy entrenched interest groups.

The existing Ambassador bridge is privately owned, and the main owner — Forbes 400 member Manuel Maroun — does not welcome competition. Even more than competition to his bridge, Maroun objects to competition for his duty-free gasoline stations. Those stations are exempt from taxes, yet sell gasoline for only marginally less than their tax-paying competition. Maroun has mounted a furious lobbying campaign against the second river crossing. He has gained some unexpected allies, including Americans for Prosperity, the Tea Party group headed by Dick Armey. The Michigan chapter of AFP posted convincing-looking (but fake) eviction notices on homes near the proposed crossing route. The group acknowledged that the tactic “was meant to startle people.”

AFP refused to say whether Maroun was paying for the campaign, explaining that its donor lists were private.

Bridges cost money: In this case, almost $4-billion. The state of Michigan’s share of the cost would have been $550-million, with the balance to come from the province of Ontario and the U.S. and Canadian federal governments. That $550-million sounds like a lot of money, but put it in context: Almost $500-million in traffic crosses the river every day. Yet the Tea Party Republican majority in the Michigan legislature — perhaps influenced by their friends, allies, supporters and donors at Americans for Prosperity — has objected to the cost, and passed a law forbidding the state to spend any money to build the bridge.

On Friday, Michigan governor Rick Snyder (also a Republican) announced a last-minute reprieve: Michigan would borrow its $550-million contribution from the government of Canada, with the money to be repaid from a bridge toll. It’s a creative solution to an embarrassing problem. But it’s also an excruciating demonstration of the global consequences of the special-interest domination of the U.S. Congress and the state legislatures.

It’s America’s political system — but it’s everybody’s problem.

The toll collector from hell

The Toronto Star

By David Olive
Business Columnist

There really is a troll under the Ambassador Bridge spanning the Detroit River at one of the world’s most congested transit points. His name is Manuel “Matty” Moroun. It’s a name worth remembering as symbolic of what’s toxic about America’s political culture.

A second crossing, by the reckoning of Michigan political and business leaders, would kick-start economic recovery in one of America’s states hardest hit by the global recession.

Governor Rick Snyder, a Republican, regards a second crossing as “critically important” to his vision of a rejuvenated Detroit as a major hub of international trade. The influx of Canadian tourists alone, no longer dissuaded by the notorious Ambassador Bridge bottleneck, could boost Michigan’s GDP by some 10 per cent. It’s all good, as the kids say.

And also not to be, after a five-year battle. On Thursday, a Michigan legislative committee killed a proposed joint Canadian-U.S. consortium’s bid to build a $2.2-billion bridge to compete with Moroun’s.

Moroun’s fingerprints were all over the outcome. The Ambassador Bridge owner dipped into his estimated net worth of $1.7 billion for a $5-million campaign of TV ads spreading the disinformation that a second crossing would be a taxpayer albatross.

Moroun recruited the Tea Party-funding Koch brothers, Charles and David, to kick in more millions for a mass-mailing to Michiganders spreading the same untruths. In the most recent election cycle, Moroun spent $565,000 in campaign donations to influential lawmakers in Lansing, the state capital. Moroun even recruited the slippery Dick Morris, strategist for hire for both major political parties and lately a Fox News talking head, as an advisor on legislative arm-twisting.

At 84, Moroun is two years older than the rickety Ambassador, world’s longest suspension bridge on completion in 1929, when a crank-handle was still required to start most cars then on the road.

An octogenarian relic no less than Moroun, who expects politicians who are bought to stay bought, as the saying goes, the Ambassador accounts for annual delays of 5.2 million hours for the 7,200 trucks crossing it each day.

The cargo of those vehicles is worth a staggering $150 billion a year. And the delays are costing Ford Motor Co. alone an estimated annual $13.5 million in productivity losses on the 600 or so trucks Ford sends across the U.S.-Canada border each day.

An estimated eight million jobs in the U.S., mostly in the economically crippled Midwest, depend on the Detroit-Windsor crossing.

For Canada, border delays add to production costs as manufactured goods repeatedly cross the border in the process of assembly. That costs Canada – and mostly the Ontario economy – between 1 per cent and 2 per cent of GDP, or between $15 billion and $30 billion a year.

Those costs, by the calculation of Université d’Laval economist Stephen Gordon, are big enough to offset the benefits of the North American Free Trade Agreement (NAFTA).

But the public interest does not overly tax Moroun’s thinking. Neither does logic.

In fact, Michigan’s costs would be minimal for a second bridge. Bonds issued by a newly created authority financing the bridge would not be guaranteed by Michigan. And Canada has offered Michigan $550 million in loans to finance the U.S. approach roads to a new bridge, to be recouped from tolls. “This is Canada’s No. 1 national infrastructure priority,” says Roy Norton, Canada’s consul general in Detroit.

That the proposed second bridge would be publicly owned but privately run is a distinction that doesn’t matter to the Kochs. The free-market ideologues have bought Moroun’s self-depiction as a beleaguered private citizen crushed under the iron boot of the state.

Yet there’s not a thimble’s worth of validity to Moroun’s stated justifications in defending his monopoly.

He claims that with Ambassador traffic having dropped 40 per cent since 2000, his bridge would be put out of business by a second crossing.

Yes, traffic has declined as Moroun’s bridge has become more decrepit. Many frustrated truckers schlep to the Blue Water Bridge at the Sarnia-Port Huron crossing, which was twinned not long ago. Or they try their luck with the three bridges at Niagara.

Yet Moroun also insists he wants to build his own second bridge. It would be another privately owned and thus, by his lights, wholesome enterprise. Except that Moroun’s been making this pledge for eons. And why would he do it if, as Moroun claims, a second crossing would put his Ambassador Bridge out of business?

With a straight face, Moroun’s son, Matthew, celebrated this week’s family victory by claiming “The Ambassador Bridge is the most efficient border crossing in North America.” He should pass that news to Bloomberg BusinessWeek, which last month asserted that “Few would deny the traffic jams on the Ambassador are anything other than epic.”

Think of it as amoral leverage: the reckless or calculated self-interest of just one or a tiny group of people in triggering a global recession. Or in turning on its head the centuries-old philosophy of the greatest good for the greatest number.

Moroun has long been scorned locally for his toll hikes, aging customs-inspection plazas and treacherous access roads. Yet he has held sway over two national governments that want a second crossing, two mayors, a U.S. county executive, most of the Democratic caucus in Lansing, and pretty much the entire Southwest Michigan business establishment, including chief mascot Bill Ford Jr.

That says more about the supine character of the bridge supporters than Moroun.

Rarely but occasionally in this capitalist part of the world, private property rights are trumped by the public interest.

In the dead of night, then-Chicago mayor Richard Daley simply bulldozed a seldom-used regional airport that stubbornly held out against the Millennium project for his city’s justly famed waterfront.

In the 1990s, then-Texas Rangers executive George W. Bush prevailed on Austin to expropriate private land in a Dallas-Fort Worth suburb for his new Ballpark at Arlington. Pierre Trudeau invoked eminent domain in seizing land in Pickering, when he had designs on a second Toronto airport.

“Everyone wants a private bridge,” says Michigan Lieutenant Governor Brian Calley, Snyder’s point man in trying to win legislative approval for a second crossing. “The question is, do they want a private bridge for one politically active family with exclusive access to a monopoly.”

So far, that view has not proved winsome in Lansing. Instead, Moroun’s undisguised self-interest has won the day with legislators whose campaign war chests are stuffed with who knows how many tens of thousands of dollars in donations from the troll under the Ambassador Bridge.

Willow Run Tea Party suspects proposed Detroit-Windsor bridge is secret Chinese plot

By Jeff T. Wattrick | MLive.com

The debate over Rick Snyder’s New International Trade Crossing proposal for new bridge between Detroit and Windsor has officially veered off into the crazy.

The Willow Run Tea Party released an ad suggesting the NITC project is really a big giveaway to China because Chinese companies can bid on the concessionaire’s agreement to construct and operate the proposed bridge.

Sept. 29, Detroit Free Press: Called “A Bridge (Gone) Too Far,” the ad implies that Snyder went to China on a trade mission this week to encourage the Chinese to build the NITC project so that Michiganders will lose out.

Technically, any firm with the requisite experience and wherewithal to build and operate a bridge of this scale could bid on the NITC. If such a thing existed and wasn’t subject to a U.S. or Canadian trade embargo, a Martian consortium could compete for the NITC. It’s a free market, after all.

If a Chinese firm or domestic firm or European firm were to win the bidding process, they would have to build and operate the thing, you know, here—under U.S./Canadian regulations. It’s not as though one can outsource a Detroit/Windsor border crossing to Shanghai. Or even Winnipeg.

But what evidence does the Willow Run Tea Party have to suggest China is behind the NITC push? Well, aside from the open bidding process, they’ve noticed Chinese firms working on other infrastructure projects. Pavement is a Chinese plot! Let’s return to dirt roads and mule carts like our Founding Fathers intended.

Also, Gateway Computers did business in China when Snyder was that company’s CEO. It’s all so clear now.

Except that it isn’t—even in the mind of Willow Run Tea Party founder Dennis Moore.

Sept. 29, Brian Dickerson in the Detroit Free Press: Willow Run Tea Party founder Dennis Moore told me his organization became suspicious about Beijing’s involvement in NITC when Snyder conceded that the Chinese would be free to bid on contracts to build and/or operate the proposed second span.

“I think the bridge is a quid pro quo that the governor gave to China,” Moore confided in a phone conversation Wednesday.

A quid pro quo for what? I asked him. And what evidence could Moore cite that China had any interest in a Detroit-Windsor bridge?

“I didn’t say I had evidence,” Moore said. “It’s a suspicion.”

Hmmmm…is it possible that Dennis Moore is really using this NITC/China canard to deflect attention from the fact that he might be the mysterious 1970s skyjacker D.B. Cooper? I have no evidence that Moore is D.B. Cooper. In fact, I have no idea if he is even old enough to have committed Cooper’s infamous 1971 hijacking. Dennis Moore probably isn’t D.B. Cooper, although he’s never denied it. That’s awfully suspicious, if you ask me.

More seriously, though, what Moore and company are engaging in something William F. Buckley famously called the John Birch Fallacy.

March 2008, Commentary Magazine: I volunteered to go further. Unless [John Birch Society founder Robert] Welch himself disowned his operative fallacy, National Review would oppose any support for the society.

“How would you define the Birch fallacy?” Jay Hall asked.

“The fallacy,” I said, “is the assumption that you can infer subjective intention from objective consequence: we lost China to the Communists, therefore the President of the United States and the Secretary of State wished China to go to the Communists.”

“I like that,” [Sen. Barry] Goldwater said.

It’s the same mania here. A Chinese company could theoretically bid on the NITC, therefore, as the Willow Run Tea Party’s thinking goes, the Governor of the state of Michigan supports the NITC to enrich the Chinese.

There is one major difference between the John Birch Society/Buckley example and the Willow Run Tea Party/NITC situation.

Back in the 1960s, everyone from Barry Goldwater to Bob Dylan rightly dismissed the Birchers as nutters. Today, we pretend the Willow Run Tea Party isn’t completely full of it.

Detroit International Bridge Company co-opts Tea Party for one man’s gain

By Average Joe

A curious commercial by the Detroit International Bridge Company keeps popping up on local television. The spot claims that dastardly Michigan politicians are trying to waste $2 billion in taxpayer money to build another “bridge to nowhere.”

While the commercial would have viewers believe it is the effort by a concerned group of citizens to stop a government boondoggle, it turns out the “Detroit International Bridge Company” is just a front for billionaire Manuel Moroun.  Mr. Moroun owns and operates that Ambassador Bridge, which connects Detroit and Windsor, Ontario.  As it turns out, Mr. Moroun’s private ownership of the bridge grants him a de facto monopoly over one of the country’s busiest commercial traffic routes.

So when his commercial proclaims “we don’t need [another bridge],” no one should take that statement as face value since we do need Mr. Moroun’s bridge.  And Mr. Moroun’s ownership of the crossing has proven quite lucrative for him.

Currently, the eighty year-old bridge is clogged with traffic.  Mr. Moroun insists that traffic is down by half since 2000 and construction of a new bridge would leave him unable to pay his bills.  Of course, much of the decline in traffic was due to the collapse of the Detroit auto industry and has rebounded since.  Further, the decline hasn’t stopped Mr. Moroun from planning how own brand-new bridge…right next to his current one.

If anyone wants an example of how the Tea Party mentality laid waste to effective public policy, Mr. Moroun’s campaign to keep his bridge monopoly is it.  With assistance from the Koch brothers, Mr. Moroun has effectively “co-opted some of the Tea Party movement” and made his bridge a case of “free enterprise versus big government,” making governing Republicans terrified of opposing him.

Indeed, watching Mr. Moroun’s commercial, the appeal to the Tea Party mentality is obvious.  Viewers would believe any new bridge would merely be another case of excessive government waste.  The truth, however, is that this appears to be the case of one man’s “free enterprise” standing in the way of everyone’s economic progress.

The new bridge’s biggest advocates are the state’s Republican executive and a coalition of local businesses and the Big Three automakers.  As Michigan’s lieutenant governor puts it: “Everyone wants a private bridge. The question is, do they want a private bridge for one politically active family with exclusive access to a monopoly?”

There’s a question that goes utterly unaddressed by the Detroit International Bridge Company.

Is this what the Tea Party truly stands for?

The Atlanta Journal-Constitution

By Jay Bookman

Imagine coming home from a hard day of work and finding a yellow eviction notice posted on your home. Imagine that your neighborhood is already struggling with foreclosures, and you yourself are unsure about being able to keep your property. Imagine the fear that would rush through your body.

Then imagine discovering it was just somebody’s cute and clever stunt to get your attention.

The somebody in question was Americans for Prosperity, the Tea Party group that calls itself “an organization of grassroots leaders.” And what did AFP, this “organization of grassroots leaders,” think it was doing?

“It was meant to startle people,” Scott Hagerstrom, the group’s state director, told the Detroit Free Press. “We really wanted people to take notice. This is the time that their opinions need to be heard. We wanted people to read it.”

A little background, in part because it’s related to my first post this morning about toll roads here in Georgia:

The Michigan DOT has proposed to build a new bridge across the Detroit River. The bridge in question would probably require buying up some of the homes in Detroit’s depressed Delray district.

But there’s something else about the new bridge. If built, it would compete with an existing, privately owned toll bridge. As the Free Press reports, the owner of that existing toll bridge is fighting the proposal tooth and nail, because it would end the monopoly he now enjoys:

“Businessman Manuel (Matty) Moroun, owner of the (private) Ambassador Bridge and its operating arm, the Detroit International Bridge Co., is lobbying heavily against the NITC project because it would draw traffic and toll revenue away from his privately owned bridge. His company is running a series of TV ads against the NITC project, claiming that the project would cost Michigan taxpayers $100 million a year, a charge that NITC supporters say is false.

Hagerstrom refused to say if the bridge company was supporting the Americans for Prosperity lobbying campaign, saying the group’s membership and donor lists are private.”

In their battle against the new bridge, Moroun and his supporters have apparently taken to describing the project as a “government bridge.” But is this what the Tea Party now stands for? Has it been reduced to a sham, a mere front group to do the dirty work of its secret corporate funders? Somehow, this doesn’t strike me as something “an organization of grassroots leaders” would come up with.

Stephen Henderson, writing in a Free Press column, concludes that “emotional terrorism is the cowardly refuge of someone on the losing end of an argument.”

“There’s nothing clever or insightful about fake eviction notices in a city with one of the highest foreclosure rates nationwide. It’s flat out emotional manipulation, the kind of crude dirty tricks that have no place in the circle of civil discourse.

And it’s sickening that Americans for Prosperity would have the nerve to pull this kind of tactic in Delray, part of the Southwest Detroit community that Moroun has treated as an industrial wasteland.

The raggedy properties he owns and refuses to maintain in that neighborhood are the foundation for much of the blight that has made Delray such a mess for years, and robbed residents of a decent quality of life. Now his surrogates have the nerve to scare residents about someone “taking” their homes?

Of course, Americans for Prosperity and Moroun are desperate, because their arguments against the bridge are largely factless.”

Is this really what this country is coming to?