Megaprojects Invite Corruption
FBI agents posed as transit-oriented developers willing to bribe the mayor of Charlotte to get his support for a streetcar line, light rail, and related projects. The now-ex-mayor Patrick Cannon gladly accepted bribes in exchange for lying to investors and pushing city planning agencies to fast track the developments. When on the city council, Cannon had opposed construction of a streetcar line, but mysteriously changed his vote when he became mayor.
The Antiplanner isn’t enthusiastic about police entrapments, but this case brings to light one of the seamier sides of rail transit. These projects cost so much that they make some sort of corruption, if only in the form of campaign contributions, mandatory.
The FBI sting has to raise questions about other rail projects and developments, especially considering the current U.S. Secretary of Transportation was the mayor of Charlotte just prior to the one who was stung.
News from Washington reveals that Charlotte isn’t alone. A draft report to the Federal Transit Administration criticizes the Washington Metropolitan Area Transit Authority (Metro) for giving out millions of dollars worth of no-bid contracts, sending work to preferred but unqualified vendors, and keeping people on payroll after they left their jobs. Another investigation revealed that a Metro employee pocketed $60,000 by selling heavy equipment, including a bulldozer and roller, from a Metro warehouse.
While these actions may be illegal, there are plenty of legal but yet questionable activities around rail transit projects. For example, a recent consultant’s report concluded that a streetcar in Arlington, Virginia, would generate more than $3 billion worth of new development. This was based mainly on the experience of the Portland streetcar, yet the report never mentions that Portland gave developers close to a billion dollars worth of subsidies in the areas along the streetcar line, nor that virtually no new development took place where the streetcar went but the subsidies didn’t. Neither did the report mention studies that show that rail lines don’t generate new development; at best they merely influence where that development takes place, making the development a zero-sum game for a region.
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Why would the consultants leave these things out? Possibly because they hope Arlington will decide to build the streetcar and hire them to engineer and design it. At the very least, consultants want to get work from other clients, and they know that if their studies always come up negative, clients will go to other firms that are more accommodating.
True confession: As an economist with an interest in rail history, the Antiplanner was once asked to do a preliminary feasibility study for a potential tourist rail line. My work revealed that the key to a tourist train’s success is that it go to a highly scenic place not accessible by highway. The proposed line I was studying met neither of these criteria. But when the client learned of all the work I was doing, he blurted out, “If you do this much for a preliminary feasibility study, what would you do for a full feasibility study that would pay you ten times as much?”
It occurred to me that if my preliminary study came up negative, they wouldn’t hire me for a full study. So I ended up wording the report to not say the proposal wasn’t feasible, though I didn’t say it was feasible either. Fortunately, whoever was in charge of spending money could read between the lines and no full study was ever funded. Also fortunately, my work rarely puts me in a position have having to shade my results to please a client (and I’ve sometimes lost clients because I won’t). But I can see how other consultants can have their results shaped by prospects of future work.
In any case, another consultant report had such optimistic projections for ridership on a Washington-Norfolk high-speed rail line that even the Virginia Secretary of Transportation expressed skepticism. Yet even the newspaper writer reporting on this skepticism gets sucked into the fantasy, opening his article with, “Imagine speeding over the countryside at 220 mph on a train while darting from Norfolk to Washington in less than an hour and 40 minutes.”
How about, “Imagine speeding over the countryside at 400 mph on a plane that leaves Washington National five times a day and takes only an hour to get to Norfolk? You don’t have to imagine it, because US Air already provides such service for fares as low as $89, and didn’t require $3 billion worth of subsidies to do it.” Is $89 too expensive for you? Try Megabus, which takes longer but charges only $1.50 to $16.50 each way.
Meanwhile, a writer in the Washington Times questions the “vanity of public transit,” pointing out that rail projects “marginalize poor communities and waste tax dollars.” This should be required reading for every politician thinking about accepting contributions from rail contractors or developers.
Case against Patrick Cannon touches on Charlotte development, transit projects
Streetcar plays major role in federal charges against Cannon
Report questions Metro’s handling of billions in federal funds
Consultants: Columbia Pike streetcar would bring more money, growth than bus transit
Va. official: High-speed rail study may be too optimistic
Many rail projects marginalize poor communities and waste tax dollars