Politics

How Two Billionaires Are Destroying High Speed Rail In America

Editor's Update- 5/16/2015: Eight people are dead and more than 150 injured after an Amtrak Northeast regional train derailed in the Port Richmond neighborhood of Philadelphia earlier this week. Officials from the National Transportation Safety Board are currently investigating the tragedy and several press outlets and political leaders now allege that our nation's outdated infrastructure might be a culprit in the disaster. Regardless of the exact causes of derailment, infrastructure repair is once again a public policy issue in the national zeitgeist. ATTN: launched an investigation into America's lackluster railway investment late last year, and we believe the piece is still relevant as well as revealing in light of this national conversation.    

Eighteen years have passed since the establishment of the California High Speed Rail (CHSR) Authority. Over the course of those eighteen years, high speed rail in the state has been discussed and planned and delayed and delayed more. There have been proposals, referendums, debates, studies and budgets, but no tracks laid, no passengers queued, no trains roaring between Los Angeles and San Francisco in the promised three hour travel time at speeds exceeding 200 mph. I began looking into the state of American high speed rail in pursuit of a few simple answers. Why don’t we have the sort of rail infrastructure seen across Europe, in Japan and now in China? What do proponents and opponents say about the various projects underway today? Put simply, what are the pros and cons of funding and maintaining high speed rail lines in this country, and what do our legislators make of them?

As with every partisan issue (read: every issue), I expected to find two very different perspectives. One side of the aisle vehemently advocating for construction, their counterparts citing worrisome figures with equal fervor.  I expected to find debate, analysis, anger, passion, probably a fair amount of name calling and a more than fair amount of bureaucracy. But, naively, I expected to find the story of an imperfect democracy, clattering along toward something resembling compromise at a leisurely sort of pace. Instead I found myself down a deep rabbit hole of lobbyists, think tanks, fossil fuel billionaires, propaganda, and dark money. On the downside, it was disappointing to discover that private entities with explicit financial interest in destroying public transit wield significant influence in the debate over public infrastructure. On the plus side, it was a lot more interesting than poring over budgets.

It turns out that the high speed rail debate is anything but dry, but if you spend ten minutes- or even a few hours- googling the topic, you’re bound to think otherwise. I began with California, given the sheer longevity of the project, and there’s plenty of discussion about the progress and setbacks of CHSR. The total cost of the project is estimated at $68 billion, and funding has unsurprisingly been the primary source of partisan contention. In 2008, voters approved Proposition 1A, which allocated $9.95 billion in funding and requires federal matching funds. Over the next few years, plans continued to progress; you can find a more detailed and accurate summary than the one I could give here.

In July 2012, Governor Jerry Brown signed an initial funding bill, which included the issuance of $2.2 billion in state bonds, unlocking $3.6 billion in federal funds for construction. But since then, U.S. Representative Jeff Denham of Modesto has worked to unravel funding plans in Washington. Denham introduced an amendment to the 2015 Transportation, Housing & Urban Development (THUD) funding bill, approved by House Republicans over the summer, which specifically prohibits any funding from being used for high speed rail in California. After blocking federal money for the bullet train, Denham then characterized high speed rail as a pipe dream to the media, citing the funding gap but neglecting to mention his own role in creating the shortfall. Still, that’s politics; I was beginning to get bored. Some people want to build the train, some people say the train is too expensive. This all sounded like a big boondoggle and a bigger headache.

But as I continued to research CHSR funding, attempting to make sense of all the numbers and propositions and amendments, a claim on a site called California High Speed Rail Blog caught my eye. In a post titled, “Don’t Let the Reason Foundation Railroad California,” from 2009, the author states, “One of the most persistent HSR deniers and opponents of the California HSR project has been the Reason Foundation. Funded in part by oil and auto companies, they were behind the notorious Cox-Vranich report released last year in an effort to defeat Prop 1A.” The Reason Foundation- I’d heard the name mentioned in connection with a few experts in a few articles, but what was it? How was Reason influencing the debate surrounding high speed rail? And did it have some sort of vested interest in doing so?

reason foundation

Like most think tanks, the Reason Foundation describes itself in the sort of generic terms it’s difficult to find fault with. The name alone suggests a decidedly non-biased group of stoic scholars, quietly pursuing truth from behind half-moon glasses and distinguished facial hair. The Reasonable Foundation of People Who Always Consider Information Carefully. The Foundation of Being Extremely Logical Like Basically Vulcans on Earth. The Seriously What Even is Partisanship We’re Just Doing Research Over Here Foundation. The page marked “About Reason” on their site gives a similar impression, stating, “Reason Foundation's nonpartisan public policy research promotes choice, competition, and a dynamic market economy as the foundation for human dignity and progress. Reason produces rigorous, peer reviewed research and directly engages the policy process, seeking strategies that emphasize cooperation, flexibility, local knowledge, transparency, accountability and results.” Choice? Competition? Rigorous? Research? Those all sound okay. And so it should come as absolutely no surprise that, one click away, on a page titled “Trustees & Officers”, I came across an all-too-familiar name.

David Koch.

If you’ve never heard of the Koch brothers, I can’t hope to convey the full extent of their political activities in a few sentences, but perusing the information here is a good start. Briefly, David and Charles Koch are two of the richest men in the world, with a combined fortune of $44 billion. Their wealth derives from a vast network of businesses and subsidiaries under the umbrella “Koch Industries”, an oil and gas conglomerate which the brothers refer to as “the biggest company you’ve never heard of.” Koch Industries operates in 45 states and over 60 countries; along with fossil fuels, it is involved in commodities trading, agriculture, and timber. The Kochs describe themselves as staunch libertarians, but their political views can more accurately be characterized as pro-anything that translates into personal profit, anti-anything that does not explicitly advance their business interests. And over the past few decades, they’ve been constructing a network of influence that is rivaled in its expanse only by its brilliance. Certainly, they fund candidates who represent their priorities, but they also found and bankroll think tanks and political action groups across the country. These groups in turn produce “non-partisan” research in support of their political views, which is then used by candidates to justify legislation and opposition to legislation. They also hold odd biannual cabals in exciting billionaire locales, like Aspen and Palm Beach, where the business and political elite are invited to hang out with each other and discuss, you know, whatever comes to mind. Like say, reason. And how precisely, with what sort of laws, we can be more reasonable.

koch brothers
So what, specifically, are the Kochs’ policy priorities? Denying climate change is high on the list, and the Reason Foundation is one of several Koch-funded groups that continues to put out studies claiming that climate change is not man-made. The Cato Institute, founded by the Koch brothers in 1977, has also been a leader on climate change denial, referring to it as “the global warming myth,” hardly surprising given that much of the brothers’ fortune comes from the sale, refinement and distribution of fossil fuels. It’s lucky the Koch brothers did not own Marlboro cigarettes 70 years ago or we might all believe that lung cancer among smokers is a strange natural environmental phenomenon, possibly relating to El Nino, courtesy of experts at the Pure Wonderfully Good Health Foundation. Denying climate change is only the tip of the rapidly melting iceberg though. The Koch brothers are working to destroy net neutrality, to impede Wall Street reform, to prevent a minimum wage increase, and, of course, to keep corporate money in elections. Among other issues too numerous to detail, it seems they really have it in for public transit.

I should pause before I bother further elaborating on the activities of the Koch brothers to point out that, even if you agree with every single one of their platforms, and are into denying climate change, and despise net neutrality for some reason, and deeply hate trains, you still shouldn’t be cool with two random billionaires exerting crazily disproportionate influence over the legislation of our country. (Also, you should probably ask yourself why your priorities and needs seem to correspond absolutely to the priorities and needs of two people who are richer than everyone you’ve ever known smashed together, and consider that, possibly, you are a victim of propaganda. But that’s between you and your media outlets.) Even if you don’t think high speed rail is a good investment, you should ask yourself, do I want two strangers deciding for me and my constituents whether high speed rail is or isn’t a good investment? As American citizens, aren’t we all entitled to an equal say, an equal voice? How can we make informed judgments about who to elect if candidates are citing propaganda written at think tanks founded and bankrolled by the same billionaires funding the candidate’s campaign?

FLORIDA

Wherever the high-speed rail debate rages, Reason Foundation experts pop up.  While its studies are frequently referenced by politicians, its ties to the Koch brothers are not. A Reason Foundation study was instrumental in killing the high speed rail project in Florida that would have connected Orlando, Tampa and Miami. One of the authors of the study was Reason Foundation Vice President Robert Poole. At the time, he was serving as one of Governor Rick Scott’s transportation transition team advisors. Rick Scott, incidentally, received the maximum allowable campaign contribution from the Koch brothers and, after his election in 2011, attended a retreat hosted by the Koch brothers in Vail. (When Governor Scott neglected to include the Vail trip in his official schedule, speculation about his whereabouts spawned the hashtag #whereisrickscott on Twitter until local media in Colorado identified him). Poole’s study projected massive cost overruns, and Governor Scott accordingly rejected over $2 billion in federal funding. The Florida high speed rail project, the initial phase of which would have been completed this year, was killed. 

WISCONSIN

Governor Scott wasn’t alone in his decision to reject federal funds for high speed rail under the American Recovery and Reinvestment Act. Governor Scott Walker, unsurprisingly, also turned down $800 million in federal funding for a line between Milwaukee and Madison. The Koch brothers’ influence in Wisconsin was well-documented during the uproar over Walker’s bill to end collective bargaining rights. Although Wisconsin’s rail project, like the one in Florida, would have been fully paid for by federal stimulus funds, Walker again toed the Koch party line and took an aggressive stance against the train during his election campaign, even launching a website called stopthetrain.com. His campaign received $43,000 from the Koch Industries PAC during the 2010 elections. The PAC also contributed $1 million to the Republican Governors Association, which spent $65,000 in support of Walker and $3.4 million on ads attacking Tom Barrett, his opponent. While no one knows precisely what happens at the Koch brothers twice-annual summits of businessmen and politicians, it is worth noting that Walker received $1.3 million in contributions to his recall election campaign from known attendees of their 2010 meeting in Aspen.

OHIO

Meanwhile, over in Ohio, Governor John Kasich rejected $400 million in funds for a high speed rail line that would’ve connected Columbus, Cincinnati, and Cleveland. His campaign received the maximum allowable contribution from the Koch brothers, and he too has worked with their think tanks and political action groups to craft legislation. In this video, apparently filmed as a thank you and appeal for further involvement from Americans for Prosperity, he says “the strong support of Americans for Prosperity has made a really big difference,” listing several privatization efforts, and goes on to say, “It’s so important that Ohio’s fighters for freedom, the grassroots leaders of Americans for Prosperity continue to lend their support to the effort to get Ohio back on track.” Of course, Americans for Prosperity was founded by the Koch brothers, and has received substantial donations from both the Charles G. Koch Charitable Foundation and the David H. Koch Charitable Foundation. AFP has chapters in 32 states and makes massive political contributions, but the exact extent of Koch support is impossible to determine because the brothers favor the use of philanthropies like DonorsTrust to disguise contributions. DonorsTrust collects money for distribution to “liberty minded charities”, and, because it’s a philanthropy, it does not have to disclose donor information. For example, the Knowledge and Progress Fund, chaired by Charles Koch, gave $3.2 million to DonorsTrust in recent years. DonorsTrust gave almost $7.7 million to Americans for Prosperity in 2010 alone. Americans for Prosperity in turn spent $45 million in the last election cycle on candidates. Along with substantial funding from DonorsTrust, AFP receives money from Freedom Partners and American Encore, two similar organizations which also provide so called “dark money” to political candidates.

I know. “Dark money”? Dark money. You’d think anyone could hear the term “dark money” in association with the topic “campaign finance” and come up with “let’s have that be illegal,” but the various branches of our government have got a lot on their $1,000-a-plates. Basically dark money is money funneled through non-profit entities which, according to weird campaign finance laws, don’t have to report their donors. During the 2012 election, more than $300 million in dark money was distributed by non-profit groups like DonorsTrust. Thanks to the Sunlight Foundation, we know that eighteen congressmen elected that year received more than $1 million each in dark money. The second largest recipient of dark money? Jeff Denham, the Modesto Representative bent on destroying California High Speed Rail, who received over $3 million. But I bet it was all from a bunch of regular Joes like you and me and Joe. Joe, please stop giving so much money to Representative Jeff Denham.

High speed rail isn’t the only public transit under attack by Koch candidates, think tanks, and political action groups. Soon after his election, John Kasich appointed Jerry Wray, a former asphalt industry lobbyist, to run the Ohio Department of Transportation. Kasich was vocal about cancelling $51 million in funding for the planned Cincinnati Streetcar, a project that had previously been a favorite of the state board. In 2010, funding had been identified and casino revenues were expected to cover the cost of operations, but Kasich claimed that he couldn’t justify the project in the face of Ohio’s $8 billion budget deficit. He neglected to mention that the funding for the streetcar was federal money, and wouldn’t impact the state budget. I assume this is because Kasich was being duplicitous and disingenuous, but I will not totally leave out the more disturbing possibility that he does not understand the distinction between Federal and state money. TRAC- the board responsible for allocating transportation money- has continued to cancel public transit projects and send the money to highway expansion projects. As many proponents of rail point out, the cost of continually expanding highway infrastructure to meet population needs rivals or outstrips the cost of rail. Back in June, Governor Kasich had already raised $9.33 million for his re-election campaign- more than any Ohio gubernatorial candidate in history. His opponent, Ed Fitzgerald, had raised $1.9 million. In September alone, Kasich raised an additional $1.5 million to Fitzgerald’s $54,472. Kasich  just soared to reelection in 2014.

VIRGINIA

In 2012, construction was underway for the Silver Line in Virginia, a new extension of the DC metro system. Residents of Loudoun County were robocalled by Americans for Prosperity about the expense of the line, and warned “Loudon cannot afford this bail-out to rail station developers.” The Koch brothers may have dropped the ball on that one as robocalls are the least effective form of propaganda, just below strangers screaming incomprehensible demands in the street, and so Virginians ignored the calls and the Silver Line began running as planned earlier this year. Now the Purple Line in Maryland, also part of the expanded DC metro, is coming under similar attack. In a Wall Street Journal article titled “Maryland’s Incredible Purple People Mover: How the state’s proposed $2.4 billion light rail could take taxpayers for a ride” this past June, author Mary Anastasia O’Grady speculated about cost overruns and wasted money. Ms. O’Grady is featured on the Reason Foundation website as the recipient of the 2006 Bastiat Prize, a prize and cash award given annually by the foundation for journalism. For the record, I am not saying that Mary O’Grady is not a responsible journalist. I am only saying that an organization broadly opposed to public transit and actively promoting inaccurate climate science, funded by fossil fuel billionaires who directly benefit from the destruction of public transit, featured her on their website and called her a wonderful journalist, and then she wrote an article about how public transit is too expensive. That’s. All. I’m. Saying.

TENNESSEE

The planned Bus Rapid Transit (BRT) system in Nashville is another example of the Koch’s undue political influence. BRT systems carve out dedicated lanes for busses in order to cut down congestion and incentivize bus riding in cities. Such projects in China, Argentina, Brazil, and South Korea have been successful at reducing pollution and traffic in urban centers. It’s basically remedial public transit, for when you live in a state that would never even consider thinking about high speed rail. The BRT system in Nashville, called “Amp”, would’ve connected the east and west sides of the city, but the project came up against outsized opposition from Americans for Prosperity. AFP quickly set up an office in Tennessee and sent 2 lobbyists to campaign full time against the Amp project. They set up a website, stopamp.org, reminiscent of Governor Walker’s stopthetrain.com. In the midst of all this PR, Americans for Prosperity state director Andrew Ogles spoke with state senator Jim Tracy about the Amp project. Tracy in turn sponsored a strange bill- one that effectively would have made BRT illegal. Language in the bill banned the use of center lanes for bus transit systems across Tennessee, but was defeated in the state House of Representatives. However, a second bill which requires state approval of any transit project seeking federal funding was passed, essentially leaving the door open for the state legislature to cancel the project under next year’s budget- even though no state money would be utilized. In other words, Americans for Prosperity set up an office in Tennessee for the sole purpose of dismantling the BRT project in Nashville, inundated the city with anti-BRT marketing, lobbied local politicians, and helped craft legislation poised to influence the future of public transit in the entire state, all because someone in Nashville suggested building a bus lane.

Whether you care about any of the structures being targeted by the Koch brothers for destruction, you should care that, whatever your opinion, the Koch brothers didn’t ask for it. If you think global warming is a sinister plot to get us all to recycle, or if you only drive cars, only on asphalt, the Koch brothers do not care, not about you, not about your opinions, not about your place in the American political system. If they changed their mind tomorrow about any single position, that would be the position we’d hear defended and shored up, in a thousand different ways, from a thousand different sources. From the think tanks they’ve endowed, from the candidates they support, and from the hapless voters absorbing millions and millions of dollars in advertising.  

Yes, you can care because the Koch brothers want to strip away important social resources. I do. But you can also care simply because, whoever they are, whatever they want, there are men spending a lot of money to put ideas in your head and words in your mouth. Maybe if there weren’t any Reason Foundation, any public transit studies paid for by fossil fuel billionaires, any politicians being bankrolled by dark money, the American people would still decide that high speed rail just isn’t for us. But it would be our decision, our say. The Koch brothers, and others like them, don’t want us to have that choice. Whatever they choose to call their ideology, it is not libertarian to consign the fate of national issues to the hands of a few citizens. It is rather an appalling concentration of power, anathema to their stated goal of smaller government. Allowing two powerful dudes to decide everything for everyone? That sounds more like fascism than freedom.

I wanted to write a story about high speed rail in America, but the story of high speed rail in America turned out to be the story of special interests and big money. And it seems like, more and more, that’s the only story surrounding politics in this country. It’s the story of environmental deregulation, the story of economic policy, the story of healthcare reform and highway construction and FDA restrictions and prison privatization and education standards. It’s impossible to write a different kind of story because the same characters pop up, in the same roles. We are all tired of hearing this story, because the villains are too intimidating and the heroes are thin on the ground. It’s easier to tell stories where there are discussions and arguments, where there are two opposing opinions, where there are facts and where there is honesty. But to have a discussion or an argument, one first must have a voice. And in this swirl of dark money, campaign finance failures, propaganda, attack ads, think tanks, lobbyists, policy advisors, corporate interests, two billionaires of one mind, one country of two parties, that is what we have lost.