By Robert P. Bomboy
On May's billion-dollar
overseas junket, President Trump quietly squeezed out a really rotten political
plum for one of his cronies.
During
the president's visit in-country, his longtime crony Stephen
Schwarzman picked up a $20 billion check from Saudi Arabia to take
control of our tunnels, bridges, highways, and drinking-water resources. Schwarzman, chief executive of a multi-billion-dollar Wall Street
tiger called the Blackstone Group, also has Trump's ear as chairman of his
Strategic and Policy Forum, where Big Business gets to put in its two cents -
and a lot more.
Schwarzman
is a back-door neighbor of Trump's Mar-a-Lago plantation in sunny Florida, and
the two have been doing more there than kicking the golf ball around on Trump's
weekends away from the White House.
Blackstone
has a long history of taking advantage of working families - from profiting off
the 2008 U.S. housing crash that repossessed nine million mortgaged American
homes, to fighting worker efforts for decent livelihoods.
Its
move to buy up some of our cities' and states’ most important infrastructure
assets (highways, tunnels, and bridges) at the expense of our communities is no
surprise.
When
our infrastructure is bought up this way, cities and states lose out on the
income that would traditionally go toward funding public services, like
low-income housing and education. Instead, taxpayers are forced to subsidize
billionaires and corporations who are raking in the dough.
Traditionally, cities and states have built highways,
tunnels, and bridges by selling municipal bonds and using earnings from the
bonds for public projects. Sales of these municipal bonds amount to more than
$3.7 trillion.
This Blackstone deal could suck up those earnings and hit
taxpayers with high tolls and user fees. “Why would we take some of the
resources we have, hand them away to Wall Street, and give them control over
the assets to do with as they want for 20, or 30, or 40, or 50 years?” asks
Donald Cohen of the anti-privatization group In the Public Interest [CQ]. It's a
good question.
The
states and cities whose infrastructure will be involved in Saudi-Blackstone
deals will need to look carefully for any loopholes.
In Virginia, a project to
expand the Hampton Roads car and truck tunnel is costing more than expected
because of a no-competition clause negotiated by a Swedish construction company
and an Australian financier. If toll revenues are lower than contracted, the
state might be required to make up the difference over the 58-year life of the
contract.
In 2012, Bayonne, New Jersey, cut one of these deals with a
private investment company to manage Bayonne's water system. Bayonne got
immediate money to update its water system, but bills to water customers went
up 28 percent so the investment company could make its profit.
The
bottom line is that Saudi Arabia’s $20 billion check will get funneled through
an-arm-in-arm Trump adviser in a grab for state and local infrastructure, with
the expectation of billions of dollars in profits off the roads, bridges, and
transit systems we have to use every day.
I read a lot of history, and deals like this - which are
a foretaste of how President Trump wants to manage his trillion-dollar American
infrastructure program - remind me of the Teapot Dome Scandal, almost a century
ago, when private companies had the squeeze, the influence, to use public
assets at bargain-basement prices. Until Watergate came along, Teapot Dome -
which had nothing to do with a teapot - was the greatest and most sensational scandal in the history of
American politics.
##
No comments:
Post a Comment