Roy Cooper's Political Bombshell

This past weekend the good folks over at WidenI77.org made public an Investigative Demand letter sent from AG Roy Cooper's office to I77 Mobility Partners/Cintra.

It's a very interesting read.

16 different demands for documents are made covering 3 main categoies.

• Information about I77 Mobility Partners' public communications plan.  For a project that was supposedly a "done deal" the firm has been sending out a lot of ads and press releases still "selling" the plan.
• Cintra's other failed projects in North America.  This would seem to be largely in reference to the issues brought up by Cornelius resident Diane Gilroy in a letter to Governor McCrory. Read the previous coverage at aShortChronicle on Gilroy's research here and here.
• Financial related questions about the project.  The AG's office wants to know more about how much money Cintra expects from the state as well as communications to the ratings agencies.  Read the previous coverage at aShortChronicle on the HOT lanes debt here.

All of these things have been questions/subjects aShortChronicle has been covering for months, so it's nice to see the AG's office finally catching up.

However, we want to point out something specific related to the first bullet listed above.  The one related to the ads.  The fifth demand is specific to lobbying and ad placement.

"5. All communications between You and Ross Communications, Mercury LLC, and any other firm engaged to advertise, lobby, or communicate to the public or third parties regarding the I-77 Express Lanes project."

Regular readers of aShortChronicle will recognize the name Mercury LLC.  The firm and its "man in NC", Russell Peck, have been covered here, here, and here over the past several months.

If Peck's name is ringing a bell more recently, that may be because he's reprising his role from 2012 as Governor Pat McCrory's campaign manager.

Having your campaign manager's firm involved in an official investigation conducted by your opponent can not be a good thing!

If/when that political bombshell gets dropped on the campaign trail by the mainstream media, it will be fun to watch.

After allies shellacked at polls, I77 HOT lanes contractor makes surprise announcement

In a surprise move, Cintra/I77 Mobility Partners announced Thursday that construction would begin this coming Monday on the I77 HOT lanes project.  The surprise announcement comes just over a week after pro-toll politicians took a shellacking at the polls.

The announcement also comes on the eve of a press conference called by members of the local delegation to the General Assembly.  The meeting will be Friday morning at the LKN Chamber.  The Chamber has been fighting the toll project alongside local activists.

This all sets an interesting stage for a supposed "summit" on the issue sometime next week with Governor McCrory.

This move could be seen as a sign of confidence by the company they will prevail in their January showdown in court with WidenI77.org, or it could be seen as a sign of panic at the recent change in the politics on the ground here in North Mecklenburg.

Either way, it amps up the pressure on the state level politicians to do everything they can to stop the project, or their own political tenures could end the same way as those in Huntersville did last week.

Press release below from I77 Mobility Partners PR flack, Jean Leier (pronounced liar).


Charlotte, N.C. (November 12, 2015) – I-77 Mobility Partners today announced that construction of the I-77 Express Lanes in the Charlotte and Lake Norman region will begin this Monday, November 16, 2015. A public-private partnership is providing a $648 million investment for a 26-mile expansion that will alleviate traffic congestion in one of North Carolina’s most important corridors.

Construction of the I-77 Express Lanes will occur in the median of I-77 with minimal disruption to commuters. Occasional lane shifts and closures will only take place in overnight hours. However, with day and night activity in the work zone, motorists should drive safely and stay alert at all times.

“I-77 Mobility Partners is excited to begin construction. The project will bring reduced traffic congestion, spur economic development through the hiring of 50-100 local firms and deliver a choice 
for North Carolina drivers at little cost to taxpayers,” said Jean Leier, Director of Corporate Affairs at I-77 Mobility Partners. “We are committed to regular and ongoing communications with residents, commuters and businesses in the area to ensure a successful and safe project.”

Construction will start in the area south of Exit 23 Gilead Road to north of Exit 28 Catawba Avenue. Traffic control measures include restriping the roadway and shifting the lanes, installing a concrete safety barrier near the median and placing road markers along the project area. Initial construction work involves clearing the land and grading of the area. In 2016 drivers will see construction work along most of the 26-mile project.

Once the project is complete, dedicated express lanes will run adjacent to the existing general purpose lanes. The number of general purpose lanes will remain the same as today. Drivers will have the choice of using the express lanes to avoid travel delays, the general purpose lanes or a 
combination of both. Carpoolers with three or more occupants (including the driver) may use the express lanes for free. The full 26-mile project is slated to be completed in 2018. 

“We believe this project will provide a benefit to I-77 users as an improvement to their daily quality of life,” Leier added. “With less congestion, drivers will have more time with their families or at the office, be able to make more service calls, and have greater access to goods and services.”

Area residents are encouraged to sign up for email updates by visiting I-77 Mobility Partners’ website: http://www.i77express.com/newsroom/newsletter-e-alerts/

Updates also will be posted to our social media channels:

•  I-77 Mobility Partners Facebook page
•  I-77 Mobility Partners Twitter page

I77 Toll Issue finally makes appearance in looming NC Governor's race

Well, it didn't take long for the political ramifications of last week's shellacking of toll road supporting politicians to make an impact on the upcoming 2016 NC Governor's race.

From Tuesday's CharlotteObserver.com story by Jim Morrill.

"I asked North Carolina Attorney General Roy Cooper about the tolls when he came to Charlotte on Tuesday. A Democrat running for governor, he said a statewide bond referendum offered “the perfect opportunity” to include money to widen I-77.

McCrory proposed a road bond measure, though it didn’t include money for I-77. But when the General Assembly put a $2 billion bond package on next year’s ballot, no road projects were in it.

“Strong governors can get things like that done,” Cooper said.

So expect the toll issue to continue to fester, at least as long as an I-77 traffic jam.
 “It’s going to be a huge thing in the governor’s race,” Phillips says. “If they don’t do something to stop this thing, I’d sure hate to be running for their office.”" So, how should McCrory respond?  He has a golden opportunity with the upcoming "summit" called by Rep Charles Jeter to turn this thing into a political positive for himself, but he has to take bold action. McCrory could show up in person at the summit, declare the State will cancel the contract based on the information handed to him personally by Diane Gilroy outlining the legal issues of the firms involved in the project.  We told you about that here.  The letter gives the Governor the political cover he needs to blow away one of the main reasons toll supporting politicians have been hiding behind,  That "reason" is other companies won't want to deal with NC on P3 contracts if the state walks away without cause.  Gilroy's letter gives the state "cause". McCrory should go on to demand the state fight any legal challenges from Ferrovial/Cintra/I77 Mobility to levy any penalties for canceling the contract.  IF the contract is invalid due to the points in Gilroy's letter, the State owes nothing! Finally, he could score a few cheap political points by throwing this back at Roy Cooper and saying the AG's office should have done a better job assisting NCDOT in vetting the application by Cintra. With Mecklenburg County having nearly 10% of the registered Republicans in the state, Governor McCrory will lose in 2016 if he loses a considerable portion of voters in this key county, his home county. The Governor should think long and hard about what his next step will be.

Read more here: http://www.charlotteobserver.com/news/politics-government/article44176308.html#storylink=c

NCDOT and their Spanish partners at Cintra have some splaaaynin' to do...

On Friday, WidenI77.org put out this piece which pretty clearly shows how the contract with Cintra is structured to avoid NC law.

The activists at WidenI.77.org lay out how the contract basically allows Cintra to get around ever paying anything to the state in revenue sharing as required by the P3 authorizing legislation.  This is due to the thresholds being set at levels likely never to be reached before the state would receive a dime from any excess toll payments.

What's even more egregious is that this wasn't made clear by the state until citizen activists essentially forced them to admit to it prior to signing the financial close with their partners at Cintra/I77 Mobility Partners.

...and remember, after all of this numeric tomfoolery, the debt for the HOT lanes still only came in one level above junk bond status.  If the contact was written fairly for NC taxpayers and forced them to give up any revenues, what does their rating likely look like?  Not good is the likely answer.

But that was just the first of a one-two punch combination with the second hitting the wires Saturday night.

In a press release sent out Saturday evening by Vallee Bubak and Diane Gilroy separate from WidenI77 and the story mentioned above, another potential bombshell is dropped.  Gilroy is the wife of Cornelius, N.C. Commissioner Dave Gilroy, and recently traveled to Spain to research Cintra's parent company Ferrovial and its subsidiaries.  She has become a real thorn in the side of Javier "Mr Who Knows" Tamargo and the folks at Cintra.  She has also been the target of some of the company's pushback.

The information in the press release is said to come from a 198 page Spanish language document received on Friday.

Press release below.

Charlotte, N.C. – September 6, 2015 – Opponents of the I-77 toll project may have just gotten a needed break as a result of documents revealing that Cintra, the subsidiary of parent company Ferrovial, failed to disclose in required contractual documents that its affiliate was being investigated for breaking Spain’s anti-trust laws. Ferrovial’s waste management subsidiary called Cespa had their offices raided in 2012 and 2013, yet failed to disclose those investigations as required by the NCDOT’s Request for Proposal (RFP) process in 2014. As a result of those investigations, Cespa (Ferrovial) was fined more than 13.6 million Euros (approximately $15 million USD) for engaging in market sharing and collusive activity.

Journalist Baltasar Montaño explained in Spain’s January 28, 2015 digital publication Vozpópuli how the “garbage cartel” was rigged. He explained, the CNMC [Comisión Nacional de los Mercados y la Competencia – Spain’s National Commission of Markets and Competition] went through thousands of emails from companies like Ferrovial, FCC, ACS, and Sacyr in which they divided contracts, clients, territories, and they expelled possible competitors among other illegal practices.

“A 198-page document by Spain’s CNMC dated January 8, 2015 details the investigations, scandalous emails and documents showing collusive joint agreements between Cespa (Ferrovial) and others,” said Diane Gilroy, a local Spanish professor who recently traveled to Spain and researched Cintra’s parent company Ferrovial. “Because Cintra failed to disclose this serious anti-trust investigation that Ferrovial/Cespa was notified of by the CNMC in 2012 and 2013, the toll contract

documents signed in 2014 between Ferrovial and the NCDOT are likely invalid and the so-called $100 million penalty is baseless.”

As more and more of these revelations start to pile up, everyone looking at this situation should channel their best Ricky Ricardo and say...

"NCDOT and Cintra, you got some splaaaaynin' to do!!!"

Cintra/NCDOT take aim at citizens opposing tolls

Well, it looks like Mr "Who Knows" has gotten his nose out of joint.

That's the first takeaway from a letter sent last week to WidenI77.org founder Kurt Naas along with State and Local elected officials regarding some financial analysis on the HOT lanes Naas published back on July 24th.

Let's just say this.  Cintra's Mr Javier Tamargo didn't like what WidenI77.org's Mr Kurt Naas had to say on the financial setup of his HOT lanes deal.

In his document, Naas points out a number of ways this project is/may/or could be not in the best interests of North Carolina taxpayers.  Tamargo responds by often answering claims different than the ones that Naas was making or by simply saying the equivalent of "no, that's not right" but then providing no real proof why he says that.  Maybe most importantly, Tamargo closes with what can best be described as a veiled threat - giving Naas 10 days to retract his comments in writing...the "or else" is implied.

This makes the second time in recent weeks that Cintra/I77 Mobility Partners has levied ominous warnings at those who oppose their project.  The other was against Diane Gilroy in a story over at the Carolina Journal. Somewhat ironically, Diane Gilroy is the wife of Cornelius Commissioner Dave Gilroy who asked Mr Tarmargo the question on toll rates that elicited the now infamous "who knows" response in the above picture.

This all comes on the heals of the release of another anti-toll document on the CharlotteAgenda.com website titled "10 thing you don't know about the toll lanes planned for I77 north".  The post has gone   viral on a local level receiving over 37,000 page views in a few days.  Combine this with the 739 comments received by CRTPO for their upcoming meeting where 720 of the comments were anti-toll.  That's according to analysis distributed by Cornelius town staff .  It shows 97% of respondents opposing tolls - a stunning figure.

Take all of that together and it's clear those who are pushing these tolls on the region should be worried about the rising opposition.  Which brings us to the most disturbing part of this letter, how it appears to have been generated and distributed.

According to emails obtained via public records requests, the creation and distribution of this letter appears to have been a coordinated effort between the private party I77 Mobility Partners and the state NCDOT.

The below is an email sent on the morning of Wednesday 8/12.  It's from Mobility Partners' Director of Corporate Affairs to NCDOT officials at the highest levels - including the new Secretary of Transportation, Nick Tennyson.  The tone of this email should make it crystal clear to anyone that this is not the first communication on this subject.  The level of detail on how this is being communicated shows it to be a highly coordinated effort.  See the below timeline for the partial chain of events gleaned from the other emails received via public records.  There are likely more emails that would fill in more gaps if one was to keep digging.

Weds 8/12
10:25am Jean Leier Director of Corp Affairs w/ I77MP sends letter to NCDOT staff
11:13am Scott Cole Division Engineer from NCDOT sends to Bill Coxe of Huntersville, Bill Thunberg with LNTC, and a bunch of people in Charlotte including Bob Cook - the main staffer for CRTPO.
11:49am Bill Coxe sends to Mayor Swain and others in Huntersville staff.  Mayor Swains response makes it clear she has not received it from I77MP confusing the document from Naas with the viral posting from charlotteagenda.com
2:59pm Leier sends directly to Sarah Mcaulay

Thursday 8/13
4:19pm McAulay thanks Leier for the document saying... "Jean Leier, thank you for the information. If I have questions about reading the document, I will contact you. Again, Thank you, Sarah McAulay"
4:21pm Mcaulay tells Bob Cook to send to CRTPO Members and TCC.
5:43pm Cook emails roughly 50 people involved in CRTPO.

Two things to note on Cook's email to CRTPO members.

1.  A shocking number of people including many elected officials are using personal emails for government business making them nearly impossible to track.  They include some of the biggest pushers of this deal.  Ned Curran (NCDOT Board of Transpotation), Brian Jenest (Davidson), and Dumont Clarke (MeckBOCC).

2.  Cook possessed the letter for a day and a half before McAulay told him to send it to CRTPO.  Who else did he send it to in that time?  A records request was not sent to Charlotte, but that would be interesting to know.

So, here you have both parties in a public private partnership, Cintra and Governor McCrory's NCDOT, actively working to apply pressure and disseminate information just days before a critical vote at the CRTPO.  In fact, they were circulating that letter before its intended recipient/target even received it according to the above timeline.  You also have the Chair of the CRTPO and the body's staff, Sarah McAulay and Bob Cook, actively involved in that dissemination.

In response to all this, WidenI77.org's Kurt Naas indicated on Saturday evening that there will be a response.  He said to be on the lookout for a press conference prior to the CRTPO vote.

This should be fun to watch!

Bonus Observation: Who is Jean Leier, I77 Mobility Partners Director of Public Affairs and the person at the center of Cintra's pushback?

According to her LinkedIn profile, Leier's previous job was as head PR flack for Charlotte's mass transit system, CATS.  The one municipality that will get any real benefit from this project through infrastructure paid for by LKN residents has its former mouthpiece working for the P3 contractor.

The public/private revolving door keeps turning.  Ain't our government grand!

Update:  See the WidenI77.org response here.