Tag Archives: Rail to Dulles

From Liz Essley in yesterday’s Washington Examiner:

The day after Mame Reiley resigned for health reasons from the airports authority overseeing the $6 billion Dulles Rail project, the authority quietly created a full-time job for her as a “senior adviser” to authority CEO Jack Potter and agreed to pay her $180,000 a year. …

Reiley, a longtime Democratic activist from Virginia, left the Metropolitan Washington Airports Authority on Feb. 15 after serving 10 years as the state’s representative. The next day the authority, which recently drew a rebuke from federal investigators for wasteful spending and questionable contracting practices, hired Reiley to consult with it on issues she helped oversee as a board member, authority officials said.

Reily, who is fighting cancer, had been donating between 75 to 100 hours per month to MWAA. When she she could no longer afford the volunteer time, airport officials suggested that she become a full-time employee. Potter defended the decision, citing her “invaluable” skills, professional contacts and institutional knowledge.

Well, at least you can’t say Virginia isn’t changing with the times. MWAA isn’t an old boy’s club anymore. It’s an old boy’s and girl’s club.

— JAB

The Commonwealth Transportation Board approved Wednesday the allocation of $150 million in state funds to the Rail-for-Dulles project in fulfillment of a financing agreement worked out with the Metropolitan Washington Airports Authority, Fairfax County and Loudoun County last year. Of that sum, $100 million will come from old balances from Virginia Department of Transportation (VDOT) projects that had never been allocated, and $50 million from the Department of Rail and Public Transit (DRPT).

There are no meaningful obstacles remaining to the transfer of the state funds to MWAA, which is in charge of administering the Rail-to-Dulles project as well as the Dulles Toll Road, which will pay for much of the construction. All that remains is for the McDonnell administration to finish work on a grant contract with MWAA, said Steve Pittard, DRPT’s chief financial officer.

Negotiators will have to write the language for setting up a trust account in which to deposit the $150 million and detail how the funds will be paid out to delay the increase in toll rates. A recent decision to eliminate any preferences for union Project Labor Agreements should eliminate the major political obstacle to the transfer of funds, Pittard said.

In an interview, Transportation Secretary Sean Connaughton added that the ongoing disagreements between the McDonnell administration and MWAA over governance of the authority — MWAA has refused to seat two McDonnell appointees and accept other changes called for by federal law until the interstate compact is amended by both Virginia and Washington, D.C. — are immaterial to the grant.

“The Dulles Rail issues are very different from the MWAA governance issues,” Connaughton said. “This is our project,” he added, meaning that it is the commonwealth of Virginia’s project. The McDonnell administration wants it to succeed.

No one on the CTB objected to the transfer of the $150 million. If the Loudoun County Board of Supervisors approves the project re-financing, Phase 2 of the heavy rail project is a go.

— JAB

The Metropolitan Washington Airports Authority (MWAA) board of directors voted today to eliminate its preference for Project Labor Agreements in the bidding for Phase 2 of the Rail-to-Dulles project, clearing the way for construction of the project estimated to cost $2.7 billion. Only a negative vote by the Loudoun County Board of Supervisors can sidetrack it now.

“Today’s vote is a major turning point for the Dulles rail project,” said Airports Authority Chairman Michael A. Curto in an official statement.  “This project is vital to the economic growth of this region and the Board is determined to do whatever is necessary to finish the project as quickly and cost effectively as possible”.

“Dropping the PLA preference was what we needed to do to move forward with this project and with our funding partners,” Thomas M. Davis III, MWAA vice chairman and chairman of the Dulles Corridor Committee, also in the prepared statement.  “This has brought us all closer to recognizing that this project is important to the entire region and requires a team effort.”

Other reactions to the 11-to-1 vote:

“This vote was a huge victory not only for the 97.4 percent of Virginia’s construction workforce that chooses not to join a union and for the taxpayers and toll road users who will be financing this important project, but also for Loudoun County and all regional transportation and economic development initiatives,” said Patrick Dean, president of Associated Builders and Contractors, Virginia Chapter, in a prepared statement.

Tweeted Fairfax County Board Chair Sharon Bulova, a Democrat: “Glad to see the MWAA board drop the PLA incentive. I looked forward to the state upholding its commitment just as we have done.”

The Loudoun County Chamber of Commerce tweeted, “We applaud” the decision. Loudoun Rail Now also took to Twitter to stated that it was “pleased” with the outcome.

Please note: The MWAA vote does not in any way discriminate against contractors using a union shop. There is a reasonable chance that Dulles Transit Partners, which constructed Phase 1 under a voluntary project labor agreement, could win the Phase 2 work as well. The board vote simply reversed a previously stated policy that would have given preference to bidders committing to PLAs over contracts using non-union labor.

While there still are concerns about the project — especially projected rates increases on the Dulles Toll Road — the PLA issue was the critical issue blocking the project. The McDonnell administration has no reason now not to contribute the $150 million it promised as part of a funding deal brokered by U.S. Transportation Secretary Ray LaHood. While Loudoun County still must approve its participation, I question that the toll issue is big enough to derail a project that nearly all of the powers-that-be in Northern Virginia want to see built. Personally, I still have major reservations, but I doubt Dulles Rail can be stopped now.

— JAB

Update: This response comes from Stewart Schwartz, executive director of the Coalition for Smarter Growth:  “Now that Governor McDonnell has secured a political victory that removes his stated objection to helping to fund the Dulles Rail project, it’s time for the state to make a fairer contribution.  Otherwise, the Governor is asking northern Virginians to shoulder far too much of the burden.  $150 million is far too small a contribution, leaving Fairfax and Loudoun tax payers and Northern Virginia drivers shouldering 95 percent of the cost.  The state should be contributing at least $500 million to Phase 2.”

Sardinia? Seriously, dude, let's party! Dennis Martire image from his Facebook page.

Is this really a guy we want on the board of the Metropolitan Washington Airports Authority right now? Dennis L. Martire, a senior executive with the Laborers International Union of North America (LiUNA), has racked up $38,000 in expenses attending five conferences in 2010 and 2011. Writes the Washington Post editorial board:

In May last year, for instance, he took a nine-day trip to attend a 36-hour conference on the Italian island of Sardinia, best known as the Mediterranean haunt of supermodels and Russian billionaires. He brought along a companion, as he did on previous trips to conferences in Prague and Belgium; the authority did not pay the companion’s expenses.

Mr. Martire’s ostensible purpose in Sardinia was to take part in a forum, at a luxurious seaside resort, that was sponsored by the Airports Council International, an industry group. However, the forum’s focus — small regional airports in Europe — was a tangential topic for U.S. airports, to put it mildly. Of the 160 or so delegates who registered for the event, he was almost the only American, according to conference organizers. And no wonder: The forum was irrelevant to U.S. airport executives.

On returning from his Sardinian adventure, Mr. Martire filed an expense claim for $10,586, most of it for a business-class air ticket. … He also wrote a brief trip report, noting that smartphones can be useful tools for airports to communicate with passengers.

In a statement, Mr. Martire defended the trip as “directly relevant to my duties as a Board member” and “fully legitimate and absolutely consistent with [airports authority] policies.” However, he did not explain how it was relevant or answer any of our specific questions — for instance, why he chose to attend a conference in Sardinia when the same sponsor holds almost 20 conferences and seminars in the United States and Canada each year.

Martire, who was appointed by former Gov. Tim Kaine, pushed for a mandatory Project Labor Agreement (PLA) on Phase 2 of the Rail-to-Dulles project that would require the prime contractor to hire through union hiring halls in an arrangement that also would funnel thousands of dollars into various union funds. MWAA determined that his involvement did not represent a conflict of interest.

It’s a positive sign that in response to questions about board travel practices, Chairman Michael Curto announced last week that he has suspended international travel. Curto, it appears, is less tone deaf than his predecessors. Good for him. But the real issue remains ensuring that Phase 2, estimated to cost $2.7 billion, is built for the least amount of money possible. Soliciting bids under the current board policies, which would give a major edge to contractors using PLAs, could limit the number of bids and lead to a low bid potentially costing millions of dollars more.

The revelations of Martire’s expense-account extravagances may have other ramifications. When Virginia and Washington, D.C., amend the interstate compact governing MWAA governance — assuming that D.C. does amend it — Gov. Bob McDonnell and other appointing executives will have the power to replace board members “for cause.” One could argue that pushing pro-union PLAs was a policy matter, not sufficient to justify bumping Martire from the board. But taking junkets to Italy could give McDonnell just the reason he needs to replace Martire with one of his own people.

— JAB

Oh, and one more thing… LiUNA accountants might want to take a close look at expenses that Martire has filed with the laborers’ union. If I were a LiUNA member, I’d like to know what what he’s doing with my union dues.

How many angels can dance on the head of a pin?

by James A. Bacon

Is it possible to create an interstate compact when one of the “states” is the District of Columbia, which, in fact, is not a state? To be more specific, is the agreement between the Commonwealth of Virginia and the District of Columbia that creates the Metropolitan Washington Airports Authority a true “interstate” compact, and should it be governed by the same rules as compacts between two actual states?

Dan Scandling, chief of staff for Rep. Frank Wolf, R-10, concedes that the issue is arcane. But the questions have come to the fore in the power struggle over the composition of the Metropolitan Washington Airports Authority (MWAA) board of directors.

Last year Congress passed a law, signed by President Obama, that would expand the MWAA board from 13 members to 17, including two appointees from Virginia. The law also required board members whose terms had expired to step down. (Two board members are currently serving even though their appointments have expired, and that number could increase to three by the end of this month.) The law also empowers appointing executives like Governor Bob McDonnell to remove board members with cause. If enacted, the provisions could lead to a major shake-up of the board.

MWAA has argued that it could not comply until both Virginia and D.C. amended their interstate compact. The United States Constitution gives power to Congress to review and approve compacts between two more states, MWAA contends. But the Constitution is silent on Congress’ authority to amend an interstate compact. The issue has never been addressed by a court, so the MWAA board contends, in effect, that it is exempt from the dictates of Congress.

Scandling disagrees. “It is the law. Period.”

When asked to elaborate, he added, “This. Is. The. Law. The authority knows it.”

The District is a federal entity, he continues, so the agreement between Virginia and D.C. is not an “interstate compact.” Dulles airport sits on federal land. The airport was created by the federal government. There are three federal appointees on the MWAA board. Therefore, MWAA is subject to the power of the federal government.

MWAA was opposed to the governance legislation as it worked its way through Congress. And the very same day Obama signed it into law, Scandling says, MWAA hired an outside law firm to advise the board on how it could avoid complying with the bipartisan law. That firm, Jenner & Block, duly obliged.

Furthermore, Scandling pokes a hole in Jenner & Block’s case. In its 24-page memo, the law firm stated:

In the entire history of interstate compacts, we are unaware of a single instance in which Congress purported to amend or rescind a compact that it had approved. Had Congress intended such path-breaking legislation, it likely would have provided some sign in the legislation or its accompanying materials indicating as such. … No such sign is present. Instead, the Legislation consists of a series of small changes in 49106 that were adopted as part of larger appropriations legislation and that contain no explanatory language indicating an intent to change the terms of the Authority substantially.

But the law firm got it wrong, Scandling maintains. A document accompanying the legislation, referred to as a “report,” does, in fact, provide explanatory language that summarizes the major changes of the law.

However, in possible contradiction of Scandling’s position, the report’s language also includes the following: “The conferees expect the jurisdictions to expeditiously implement these modifications.” That wording that could be interpreted as meaning that some other action from the jurisdictions/states was required to implement the law.

So, who’s right? I’m no lawyer. I checked with the state Attorney General’s office. Here is the response I got from the communications office: “We don’t have anything we can share right now, but I will get back to you as soon as we do.”

Murk alert: It gets even more complicated. A friend offers another twist on this issue. Under the U.S. Constitution, Congress exercises exclusive jurisdiction over the District in “all cases whatsoever.” Although it delegated much of its authority in 1973 to elected city officials under home rule, Congress can revoke that authority at any time. Thus, even if the District refuses to amend the interstate compact, Congress can overrule the mayor and city council.

by James A. Bacon

Overlooked in the contentious debate over Virginia’s representation on the Metropolitan Washington Airports Authority board is this salient fact: MWAA won’t seat the two new directors appointed by Governor Bob McDonnell until the District of Columbia joins Virginia in amending the interstate compact creating MWAA. While Virginia passed the necessary legislation, which goes into effect July 1, D.C. has not.

Indeed, there is no assurance that the District will play ball. According to my sources, Mayor Vincent C. Gray’s office agrees with MWAA that no new representatives can be added to the authority’s board until D.C. also amends the compact. And right now, the mayor’s office is reviewing its options. Nothing has been decided. No measures have been introduced to City Council.

Governor Bob McDonnell and the MWAA board have been battling over a number of issues relating to the cost and financing of the Rail-to-Dulles heavy rail project. Last year Congress passed a law, which was signed by President Obama, that would expand the MWAA board from 13 members to 17, adding one representative from Maryland, one from the District and two from Virginia. McDonnell promptly appointed two members but MWAA refused to seat them.

The United States Constitution gives power to Congress to review and approve compacts between two more states, explains Philip Sunderland, MWAA legal counsel. That makes sense, he says, because “you don’t want the states getting together and giving themselves power to perform federal activities.” But the Constitution is silent on Congress’ authority to amend an interstate compact. The issue has never been addressed by a court, so there is a legitimate question.

MWAA hired an outside law firm, Jenner & Block, to dig into the issue. In a 24-page review, the firm concluded that Congress does not have unilateral authority to impose its will on the states.

“We shared that opinion with a lot of people,” says Sunderland, including officials with the U.S. Department of Transportation, the Department of Justice and even the Virginia Attorney General’s office. “We are told that there are no lawyers with DOT or Justice who disagreed with the conclusions. … We never got anything back from Virginia.”

In a letter to the USDOT inspector general, which released a report critical of the MWAA board’s ethics and transparency, Rep. Frank Wolf, R-10,  declared that MWAA had retained the law firm specifically for the purpose of “advising the board on how it could avoid complying with a bipartisan law passed by Congress and signed by President Obama.”

Sunderlin rejects that characterization, insisting that MWAA hired the firm “to get direction on how to comply with the law.”

“We’re out to obey the law, not create the law,” he said. “We were not looking for a preordained conclusion.”

In theory, it would be marginally to D.C.’s advantage to increase the size of the board. By adding one seat to its existing three, it would juice the percentage of representation from 23.1% to 23.5%. However, that incremental gain may be offset by D.C.’s stance on MWAA’s decision to give preferences to Project Labor Agreements in the bidding process for Phase 2 of the Rail-to-Dulles project, or other issues.

I have put in calls to Wolf’s office and the Attorney General’s office and will update this post if they respond. If they do not contest Sunderland’s analysis of the legal issues, I may have to update my characterization of MWAA as a rogue agency. Wrong, perhaps. But not rogue.

James A. Bacon

It seems that “partisan Republicans” and “wild-eyed Tea Baggers” aren’t the only people who have problems with the Metropolitan Washington Airports Authority (MWAA) board of directors. The inspector general of the U.S. Department of Transportation in the Obama administration expressed concerns in an interim report on its review of the board’s policies regarding travel, ethics, transparency and the awarding of contracts. Some highlights:

MWAA’s policies and practices are generally less rigorous than corresponding State and Federal rules. Notably, MWAA’s government-appointed Board members are not bound to the same State ethics and financial disclosure laws as the elected officials who appointed them.

Our ongoing review has revealed a culture that is largely unaccustomed to external audits and inquiries by the accountability community. While MWAA has freely cooperated in most areas of our review, Board and staff in some areas were reluctant to provide access to key documents and grant us private interviews with Board members. MWAA’s reluctance to provid[e] us full transparency may be attributable to the fact that it has experienced few independent audits since its creation 25 years ago.

On the positive side, the inspectors found that MWAA’s assumptions for Dulles Toll Road revenues appear reasonable. MWAA will rely heavily upon toll road revenues to finance Phase 2 of Rail-to-Dulles construction.

In a letter to Transportation Secretary Ray LaHood, Rep. Frank Wolf, R-10, declared that he was “deeply troubled” by the findings, honing in on MWAA’s contracting practices, conflict-of-interest policies and recusal practices. Wrote Wolf:

Most egregious are the IG’s findings about MWAA’s contracting practices. … Particularly concerning are the number of sole source contracts issued. As you know, MWAA is required by law to fully compete any contract over $200,000, with limited exceptions. Yet the IG’s report states that “[d]uring the period of our review, MWAA awarded five sole source contracts that were over $200,000, but did not fall under any of MWAA’s categorical exemptions. These contract awards, which amount to $6 million, did not have Board approval.” Not only did MWAA abuse the exemptions permitted under federal law, they issued numerous contracts that failed to meet even these basic standards.

The report points out that while MWAA’s Contracting Manual says some exemptions are allowed, but “comprise only a small portion of MWAA’s contracts and their dollar value,” the IG found that the use of exemptions “has amounted to 40 percent of the Authority’s $589 million in contract awards during the period of our review.”

Wolf focused in particular upon the hiring of the Jenner & Block law firm to advise the board on how to avoid seating two new Virginia board members appointed by Governor Bob McDonnell:

The report details how “… one Board member’s recommendation led MWAA to initiate a $100,000 contract with a law firm despite the fact that an immediate family member worked for the firm.” The report goes on to say that “while this family relationship had been previously disclosed, the Board member did not refrain from participating in matters related to the firm when the issue arose (per MWAA policy), and MWAA awarded the contract to the recommended firm. ….

This particular contract was initiated to procure a legal opinion by the law firm Jenner & Block for the express purpose of advising the board on how it could avoid complying with a bipartisan law passed by Congress and signed by President Obama. Amazingly, the report shows that the contract was requested on November 18, 2011, the same day the president signed the bill into law. It also is worth noting that the report reveals that the law firm submitted its “completed legal opinion to MWAA before the noncompetitive contract [was] documented and officially signed.”

Interestingly enough, Chicago-based Jenner & Block, which maintains a Washington, D.C., office, has collected $78,000 in legal fees this year from the Democratic Party-Virginia Senate Caucus, according to the Virginia Public Access Project. Senate Democrats made it a top priority to fight for state funding for the Rail-to-Dulles project and blocked Governor Bob McDonnell’s efforts to seat two newly appointed board members upon the board. The Dems also fought Republican efforts to tie state funding for Rail-to-Dulles to impartiality between union contractors and open shop contracts in the awarding of the Phase 2 contract. So far, MWAA has held fast in its policy to favor union Project Labor Agreements in evaluating bidders for the estimated $2.8 billion contract.

So, Jenner & Block collected more than $100,000 from MWAA plus $78,000 from the Senate Dems. That certainly creates the appearance that MWAA’s board was actively colluding with Democrats in the Senate to thwart the McDonnell administration’s efforts to hold the board accountable. There is no other way to describe MWAA but as a rogue entity.