Bacon's Rebellion

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More Tidbits on the U.S. 460 Story…

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by

James A. Bacon
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kilpatrick
Charlie Kilpatrick, Virginia Highway Commissioner

Aubrey Layne was acutely aware of the wetlands permitting issues afflicting the U.S. 460 highway project before assuming his position as Secretary of Transportation in January 2014. As chairman of the funding corporation that sold bonds to investors, he had had to disclose in September 2013 that the Virginia Department of Transportation had not yet acquired the necessary permits from the U.S. Army Corps of Engineers to build the 55-mile highway. That’s one reason why, when he took the McAuliffe administration cabinet post, he acted so quickly to shut down the project — he’d been stewing over the matter for four months.

In an article yesterday, the Richmond Times-Dispatch gave a pretty good account of the testimony Layne gave to the House Appropriations Committee. The story made clear that the “secretary’s office” — led by former Transportation Secretary Sean Connaughton — was largely responsible for the decisions that created the debacle, which cost Virginia taxpayers roughly $300 million for work that will never be done or needed. But the T-D overlooked what I considered to be a critical topic: What role, if any, did then-deputy highway commissioner Charlie Kilpatrick play in the debacle?

I was able to glean a few more details in an interview with Layne this afternoon when, among other topics, I pressed him on Kilpatrick’s role in the policy meltdown. In a post this morning, I noted that Kilpatrick had made a presentation about U.S. 460 to the Commonwealth Transportation Board in mid-2013 that omitted the crucial fact that the project had not obtained the needed wetlands permits. Assured that there was no problem, the CTB approved the project financing.

Since then, Kilpatrick has been elevated to Virginia Highway Commissioner.

Layne defended the actions of VDOT personnel during the McDonnell administration. On multiple occasions, he said, VDOT officials went to the “secretary’s office” with issues relating to the wetlands permit. “Every time,” he said, “they got orders to keep on going.”

Without getting into specifics, Layne said that Kilpatrick and VDOT did “balk” at times at what they were told to do. “There was some pushback.” But Connaughton was determined to advance the project, which was the top transportation priority of Governor Bob McDonnell. While Kilpatrick did not inform the CTB of all the relevant facts, Layne said, he was acting as instructed. Layne is confident that Kilpatrick was not driving the decision-making process and does not bear responsibility for one of the biggest managerial screw-ups in Virginia government history.

I belabor this point only because I argued this morning that it is important to ascertain Kilpatrick’s role in the U.S. 460 fiasco. McDonnell’s people are all gone, but Kilpatrick now serves as a senior official of the McAuliffe administration. Unless new information surfaces, I consider Layne’s comments to be the final word on the matter.

— JAB

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7 responses to “More Tidbits on the U.S. 460 Story…”

  1. Cville Resident Avatar
    Cville Resident

    You are a good man and a good reporter. Thanks for clarifying this point.

    I would ask you a question that may shed some light on the McDonnell VDOT. Do you remember when the same Secretary made a big show of an “extra billion” dollars that the Kaine Administration “didn’t even know about”?

    I was told by a career VDOT employee that that was one of the biggest canards she had ever heard. The “missing billion” was all smoke and mirrors meant to embarrass Kaine’s folks.

    Now, I have no way of proving or disproving this. But I wondered if you knew anything about the validity of the claim.

    1. James A. Bacon Avatar
      James A. Bacon

      Cville, The Kaine administration had allowed large piles of cash to pile up in various VDOT accounts during the recession. I can’t recall the specific reasons, but as I dimly recall, there were legitimate concerns about how much money was coming in, and the Kainiacs thought it financially prudent not to start projects until they were 100% certain that there would be enough money to finish them. As I also dimly recall, a McDonnell administration audit showed that more money was being socked away than necessary. Bottom line: the McDonnellites did figure out how to put a bunch of under-utilized money to work. But it was an exaggeration for anyone to suggest that it was money that the Kaniacs “didn’t know about.” In reality, the McDonnell team took a different attitude toward risk management — one that, in retrospect, seems justified.

      I have been a huge critic of McDonnell’s transportation policy in many areas, but I have to give them credit for putting this money to work.

    2. billsblots Avatar
      billsblots

      The discovery of large stashes of unspent and unallocated money was very real.

  2. billsblots Avatar
    billsblots

    The role of Mr. Kilpatrick and his incomplete briefings was one I brought up several months ago. For certain, one reason Secretary Layne is eager to clear Mr. Kilpatrick’s name is so he will not have to deal with it. As Charlie’s immediate supervisor it is his responsibility to monitor and evaluate his performance, including any disciplinary action. Although the briefings happened before Layne became Secretary, it would be upon him to initiate an inquiry and make the decision to discipline or remove Mr. Kilpatrick from office. As he is now in the cat bird’s seat and in control of the information it is much easier to take the easy way out, avoid the task of making any unpleasant decisions, and throw someone under the bus from a previous administration where it would be forgotten and no one has to be accountable.
    And $300,000,000 later, that is exactly what has happened, no one is accountable.

  3. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    “Cronyism and corporate welfare are rampant across the world. Even in the U.S. they are increasingly evident in the interaction between business and politics. Business leaders now regularly and proudly collude with politicians and bureaucrats, boosting their bottom lines at the expense of economic growth … Such collusion leads to corruption …” This comes from Teaching Capitalism to Catholics article is today’s Wall Street Journal.

    I am coming to suspect that McDonnell’s Department of Transportation roll in the US 460 Highway Controversy and many other such controversies (take C’ville Bypass for another example) is part and parcel of the same ethic’s failure that drove the Governor’s Gift Gate convictions. That such collusion between business and government poisoned much road location decision making in his administration that performed quite admirably in numerous other areas and respect.

    The Catholic favor of the WSJ article is intriguing as well, a seeming paradox in the case of former Governor McConnell.

  4. salz Avatar
    salz

    Thank you for continuing to follow the 460 story. Wasting $300 million (and remember we’re still under contract for the remaining $900 million) should make every reporter in the state see a great story.

    As you keep nudging, “how” and “why” did this happen? And what’s to prevent it from happening again?

    Having interviewed Layne I too believe him to be attempting to bring transparency to the process and unwilling to lay blame on others in (or now out) of VDOT or the administration.

    Based on the 460 debacle, I laid out to him the P3 scenario which appears to be happening on virtually every “public private partnership” toll road in the nation of which taxpayers are left holding — but still paying for — an empty bag when the toll road shell companies go bankrupt as they almost inevitably do and suggested that the bankruptcy might be planned from the gitg0. His response: “It has happened.”

    The canard that the “privates” are paying for these things is a blatant lie. IN terms of actual cash — and not loans or taxpayer guaranteed bonds — privates put up less than five percent of any project and EVERY project costs taxpayers MORE money than if we’d have built it ourselves under traditional procurement.

    According to an Ontario audit of 74 P3s, for example, the province’s auditor-general found that Ontario had spent an additional $8 billion dollars over nine years to — in the roads sector– then have its citizens pay tolls to a private company. By additional, the auditor-general means that if Ontario had just gone ahead and used public financing to build those 74 projects and kept total ownership itself, the total tab would have been $8 billion less. that’s billion with a B.

    The chartered accountants of Scotland call P3s “financial black holes” and Streetblog in doing a 3-part series on P3 toll roads after the Indiana Toll Road bankruptcy called them “bailouts waiting to happen.”

    Here in the 460 story Virginia has lost massive, countable amounts of money and it’s not even a blip on most media radar’s. No wonder no one is getting to the even more disturbing, deeper story.

    So, again, thank you for continuing your coverage.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Yes, it used to be that the sponsors took the risk while the bond holders provided most to capital at low cost given limited risk. Now, with these public private deals it seems the other way around – the sponsors get hugely rich off fees and the bondholders and public typically get the shaft. Is this not what happened on Dulles Greenway, for example? That would seem to be the case.

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