When the last transportation bill became law, it contained an earmark for an interchange south of Ft. Meyers, between Southwest Florida's I-75, a key regional highway, and Coconut Rd.
Because a controversy rose about the funding of this interchange, many interesting facts about it are becoming public. The story is a - hopefully atypical - case study of the political allocation of scarce resources among competing ends.
This post is based on the newspaper stories and on a special expert report on the earmark in question. This story is developing, and there are twists, turns, clarifications, and corrections yet to come. Moreover, there are gaps, and sometimes inconsistencies, in the newspaper accounts. This is the way I piece it together this afternoon:
In February 2005, the Republican Party controlled the House of Representatives, and Alaska's representative in the House, Don Young, was the Chairman of the Transportation Committee.
As Chairman, Young had a lot of influence over the insertion of earmarks in transportation bills. Transportation bills come along every six years. One was scheduled for 2005, and was likely to be the last supervised by Young (Experts Question Legality, Ethics Of Young's Earmark, Laura McGann, TPMmuckraker, August 10). Earmarks involve the special designation of money for specific projects.
In mid-February 2005 Young flew to Florida in a plane owned by a Michigan charter company, for which Young's re-election campaign reimbursed the company$3,422. The New York Times notes that the Aronoff family in Michigan is one of the charter company's "biggest clients." (Campaign Funds for Alaskan; Road Aid to Florida , June 7) The Aronoffs are important to this story.
While he was in Florida, and at the invitation of Florida Congressman Connie Mack, Young attended a meeting on transportation at the Florida Gulf Coast University. (Campaign Funds for Alaskan; Road Aid to Florida , June 7). Mack's Chief of Staff, Jeff Cohen, has indicated that Young was invited in order to help secure $81 million in funding for improvements to I-75. The meeting is described as a town-hall meeting focused on widening I-75. (Controversial contributions paid for steak, sedans during congressman’s visit (Naples News, June 20). I-75 is a major regional highway. It runs across southern Florida from the Miami area to the Gulf Coast, and then turns north, running along the Gulf Coast to Tampa and then north through interior Florida.
While several news stories note that local officials hadn't requested the special earmark for the interchange between Coconut Rd and I-71, there may have been institutional interest from the Florida Gulf Coast University.
But the veteran congressman has always maintained that he earmarked the money for the Coconut Road interchange near Fort Myers, Fla., because residents told him they wanted it in 2005 when he attended one of their community transportation meetings.
Young was approached by leaders at Florida Gulf Coast University, which wanted the interchange for better access, said Young’s chief of staff, Mike Anderson. School officials also wanted it to serve as a demonstration project for a sophisticated transportation hub that could be monitored with cameras during hurricane evacuations.
“It’s captured in three words: Hurricane evacuation route,” Anderson said...
The university’s Washington lobbyist is listed as Rick Alcalde, a Young campaign donor and the same lobbyist who worked in Washington on behalf of Aronoff’s firm, the Landon Companies.... (Federal investigation targets Alaska's congressman, Greg Gordon and Erika Bolstad, McClatchy Newspapers, August 17)
One story indicates that, during this trip, Young and Mack attended a dinner, a "meet-and-greet" for potential campaign supporters and contributors at the Sanibel Steakhouse. The story indicates that a $4,000 in-kind payment from Aronoff and his family to Mack's campaign was used to help pay for the event. Additional in-kind contributions of $2,600 apparently paid for limousine services for Young and Mack during this visit. (Controversial contributions paid for steak, sedans during congressman’s visit).
The in-kind contributions to Mack from the Aronoff family came in $2,000 increments from Arnold, Daniel and Janet Aronoff and one donation of $611.70 from Lynn Aronoff.
Those are Aronoff’s only known donations to Mack since 2003. (Mack's the daddy of controversy surrounding Coconut Road interchange, Julio Ochoa, Naples Daily News, June 14)
From the same source, Don Eslick explains the role of a dinner like this:
Don Eslick is an Estero resident who’s been a lobbyist in his home state of Illinois. He’s also opposed to the interchange [thus he opposes the specific earmark that is the subject of this post - Ben].
“More often than not, ‘in-kind’ means you pick up the tab for something,” he said. “Nationally, it’s more prevalent than locally.”
The Sanibel Steakhouse event sounds like a pre-event event, Eslick said.
“A lot of times there’s something before the fundraiser for the real heavy hitters,” he said. “That’s really when people have the chance for more direct access in a more private setting to really tell the congressman what you want.” (Controversial contributions paid for steak, sedans during congressman’s visit, Charlie Whitehead, Naplesnews.com, June 19)
Other stories say that Young went to a fund-raiser at a nearby Hyatt hotel. The New York Times story says he went directly to this fund raiser from the meeting at the university,while Eslick's comments in the Naples News may imply the Sanibel event was a pre-event for the Hyatt event. It's not clear to me how these two events are related in time:
The invitations to the event [the Hyatt event - Ben] listed as hosts Mr. Mack, a business group called the Southwest Florida Transportation Initiative that includes Mr. Aronoff’s company and two executives of other Florida developers.
Asked in a telephone interview who had organized the fund-raiser, Mr. Mazurkiewicz, the consultant, said he was then at another fund-raiser with a member of Mr. Mack’s staff who would know.
“Aronoff,” the staff member told Mr. Mazurkiewicz, within earshot of his mobile phone.
“Just some local businessmen,” Mr. Mazurkiewicz said into the phone. When pressed, he confirmed that the staff member had named Mr. Aronoff. Later, Mr. Mazurkiewicz called again to list the names on the invitation.
The Times reports that Young raised over $40,000 at the fund-raiser, "mostly from southwestern Florida developers and builders." Daniel Aronoff gave $500 to Young, and subsequently gave $2,500 to Young's political action committee. Another, more recent, story refers to money being "collected" during the two weeks before and after the earmark was inserted (Federal investigation targets Alaska's congressman), which would have been in late July or early August (inserted, that is, in its final form - see below). My assumption is that the February event involved committments that were met later.
The $81 million for improvements to I-75 found its way into the transportation bill, and has not generated controversy. However, the bill the President signed into law also included a $10 million earmark for the interchange between I-75 and Coconut Rd. This earmark, and the way it became law, have been very controversial. The map below shows the relationship between Coconut Rd and I-75 (click on it to look at a larger version):
The vertical orange highway on the right is I-75. Coconut Rd across the map about midway up, from the water on the left almost as far as I-75. The area to the right (east) of I-75 along this segment of I-75 is undeveloped.
Aronoff manages the Landon Company, a real estate development and management firm. The Times reports that he owned "as much as 4,000 acres" near Coconut Rd. Florida stories indicate that he owns land to the east of the location of the potential interchange, and that this might become available to development if an interchange with Coconut Rd. led to access to the east as well. Aronoff is apparently associated with a property called "Edison Farms." In the past, the Edison Farms owners have expressed an interest in building 8,000 homes there. The environmental community is concerned about the impact such a development would have on local wetlands (Mack's the daddy of controversy surrounding Coconut Road interchange (Julio Ochoa, Naples Daily News, June 14; Campaign Funds for Alaskan; Road Aid to Florida ).
Connecting Coconut Road to I-75 could cost as much as $40 million and remains a low priority compared to the interstate widening project, Scott said. He said connecting Coconut Road east of I-75, where Aronoff's property is located, would face a series of regulatory hurdles, including concerns about sensitive wetlands in the path of the road. A recent study found the wetlands are a vital part of the region's water supply.
"It's possible, but I don't know if it's probable," Scott said of the interchange.
But Judah said Aronoff could use the interchange to justify zoning changes or even move to get the land annexed into nearby Bonita Springs with different development rules. Current zoning rules allow only one house per 10 acres on the land.
"I want to see those environmentally sensitive lands protected," Judah said. (Unwanted $10 million causing problems in Fla., MSNBC, June 14 - Scott and Judah are local officials)
Note the potential cost of connecting Coconut Rd to I-75. Here's a satellite image of the Coconut Rd area. The area east of this part of I-75 does appear undeveloped. I haven't seen news stories yet that show maps of who owns what to the east of the highway:
Carla Brooks Johnston, the chair of the Lee County Metropolitan Planning Organization, requested Darla Letourneau, a former deputy assistant secretary of labor in the Clinton Administration, to prepare a report on the earmark.
Letourneau reviewed the legislative history of the transportation bill and determined that the earmark had not been in the bill passed by Congress, but had been added to the version of the bill signed by the President.
A brief version of Letourneau's report can be found here: http://media.naplesnews.com/pdf/2007/08/mpo-documents.pdf. Here's the story she tells:
There were very few earmarks in the bills passed by the House (March) and Senate (May). Most earmarks were introduced very late in the process, when the bill was in a conference committee, reconciling the differences between the House and Senate versions. Letourneau explains the timing:
It is not unusual for the number of member earmarks to grow substantially as the bill goes through the legislative process. Committees (esp. in the Senate) often slip in the member's earmarks at the last minute in order to minimize the scrutiny of earmarks, and maximize the Chairman's leverage over the members seeking the earmarks.
The conference committee met on June 6 and filed its report on July 28.
The conference committee report contained four earmarks, totaling $81.1 million, for work on I-75 in Collier and Lee counties.
The conference committee also contained this, fifth, earmark: "Project #461, FL, Widening and Improvements for I-75 in Collier and Lee County, $10 million." When the House and Senate passed the final legislation on July 29, this is what they passed. Letourneau says that press reports said that Florida Congressman Connie Mack requested earmark #461. Jeff Cohen, Mack's Chief of Staff, has said that Mack first learned about the earmark - with surprise - in September 2005 (Controversial contributions paid for steak, sedans during congressman’s visit).
The bill then went through a process called "bill enrollment." Letourneau explains, "Bills that pass Congress must go through a technical "bill enrollment" process to ensure that the final bill sent to the President for signature reflects precisely the effect of all amendments agreed to by both bodies. Under House and Senate rules, just after Congress's final passage of the bill, the bill's conference committee manager requests unanimous consent for the Clerk of the House (under the direction of the Conference Committee Chairman), to make such changes after passage of the bill. By giving unanimous consent for these technical corrections to be made in the bill after it has been passed, the House and Senate are authorizing corrections to section numbers, punctuation, and cross references, and to make such other necessary technical and conforming changes as may be necessary to reflect the final actions of both bodies."
"In the case of H.R. 3, the enrolled version of the bill…redesignated the $10 million Lee County project #461 as #462 (most likely reflecting a clerical error in the bill as passed). Most importantly, after congressional passage of the conference report, the purpose of the project changed from its passed version of "widening and improvements for I-75 in Collier and Lee County" to "Coconut Rd. interchange I-75/Lee County." "
Letourneau says that Congressman Mack says he didn't know about the change in the purpose of the earmark until after the President signed the bill. That's consistent with a press release he issued the day the bill was signed (see below).
Letourneau says that this sort of substantive change is not allowed by Congressional rules, and it is hard to see how it would happen without the knowledge and/or involvement of the Chair of the Conference Committee, Don Young. Researchers at the TPMmuckrakers have reviewed all the earmarks in the bill (6,371) and indicate that this was the only substantive change in an earmark (1 in 6,371: The Young Earmark Caper Paul Kiel, August 22).
About this point in time, Young apparently recevied large sums of money from people with a potential interest in the interchange:
In the two weeks before and after the earmark was inserted in the spending bill, Young's campaign and political-action committee collected contributions from Florida developer Daniel Aronoff, his lobbyist and several other Florida business executives. The donations, mainly from real-estate interests, totaled more than $40,000. (Young's $10M earmark focus of inquiry (Greg Gordon and Erika Bolstad, Seattle Times, August 20)
One news story indicates that the original version of the earmark was put into the bill on July 29: "It was apparently added late in the legislative game on July 29 as Senate and House negotiators put the finishing touches on the lengthy legislative document." (Florida lawmakers net $91.1 million total for interstate, Larry Wheeler, news-press.com, August 11). This is a day after Letourneau says the conference committee submitted its report. This is the day Congress passed the bill.
The President signed a bill with this language on August 10 The change in the earmark probably was not available to the public when the bill was sent to the President.
On August 10 Mack's office sent out a press release announcing the unexpected discovery of an additional $10 million for the I-75 project. The press release thanked the two Florida Senators for putting the $10 million earmark into the bill ("Mack, Diaz-Balart: Additional $10 Million Approved for I-75 Expansion. Total Funding now Stands at $91.1 Million", press release):
Congressmen Connie Mack (FL-14) and Mario Diaz-Balart (FL-25) today thanked Florida Senators Mel Martinez and Bill Nelson for securing an additional $10 million that was approved for the expansion of I-75 in the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU).
This additional $10 million was added very late in a separate section of the bill by the United States Senate and brings the total federal funding for I-75 expansion in Southwest Florida to $91.1 million. The legislation now awaits President Bush’s signature.
Mack and Diaz-Balart said:
“We would like to thank Senators Mel Martinez, Bill Nelson and their colleagues in the Senate for their commitment to expanding I-75 in Southwest Florida. They played a critical role in securing nearly one-third of the $91.1 million funding for this important project, including this additional $10 million which was tucked into a separate section of the transportation bill.
Mack appears to be unaware that the purpose of the earmark has been changed.
Floridians subsequently debated what to do with the money. They were told by Mack and Young that if the money wasn't spent for this project, it would be unavailable for other work. A two-year, $800,000 interchange "justification" study was ultimately scheduled. (Unwanted $10 million causing problems in Fla.):
The Metropolitan Planning Organization, made up of 15 local elected officials, had considered connecting Coconut Road to I-75 in long-term plans, but twice pulled it — even after Young's appropriation. The organization was rebuked by Young when the members suggested applying the $10 million to more pressing I-75 projects.
Young's response, in effect: Use the $10 million for Coconut Road or lose it.
U.S. Rep. Connie Mack IV, R-Fort Myers, followed up with a January 2006 letter warning county officials of sending Congress an "unintended message ... that our region is willing to reject scarce federal resources." Mack also said rejection might keep the county from getting federal money for other important projects. Jeff Cohen, Mack's chief of staff, said this week the congressman now supports any decision local transportation officials make.
Ultimately, the study was abandoned. (Young's Florida earmark dropped from road plan, AP, August 17).
The Justice Department is now looking into this, and other earmarks (Young's $10M earmark focus of inquiry):
A Justice Department corruption task force is investigating whether Alaska Congressman Don Young took campaign cash in return for securing $10 million for construction of a proposed Florida highway ramp that would give a windfall to a local real estate developer, a source familiar with the inquiry said Friday.
The controversial funding, which was to pay for a study of a potential highway interchange abutting environmentally sensitive land, was slipped into a massive 2005 Transportation Department bill, congressional aides say.
Young's action is among a number of congressional "earmarks" for specific pet projects drawing scrutiny from the Justice Department and an FBI team investigating alleged influence peddling on Capitol Hill, said the source, who insisted on anonymity...
Following the collapse of the bridge in Minnesota, Transportation Secretary Mary Peters was interviewed by Business Week journalists (Infrastructure: Priorities Hit a Pothole, August 20).
Do you think earmarks are diverting money away from core projects such as routine repairs and maintenance?
They certainly are diverting money. The proliferation of earmarks, just to give you a feel for how they were, in the 1987 act, there were 152 earmarked projects valued at $1.4 billion. In the last bill that was signed into law in 2005, there were [more than] 6,400 earmarks valued in excess of $24 billion. That money comes right off the top of these [state] programs.
The dirty little secret of earmarks is that they're not the true cost of the projects. In many, many cases it only partially funds a project. In most cases, and I certainly experienced this as a state administrator, we had to take more money out of the rest of our programs to supplement the earmark in order to build that project because the earmark was rarely, if ever, the total cost of the project.
Peters would prefer an alternative approach to allocating scarce transportion dollars:
What that did was usurp the other priorities, the priorities that were set by state departments of transportation and local governments that went out in the public process and established priorities based on trying to take care of the systems they had. And, instead, that whole process begins to get usurped by these earmarks. I would hazard to guess that maybe earmarks, at most, would give you about a third of the project costs, and that's on the high side. The fact is that the cost of earmarks is really understated in terms of what it really takes out of the program.
In connection with this, at least one story has noted that the interchange would cost $40 million, much more than the $10 million in this earmark. (Unwanted $10 million causing problems in Fla.)
Is it fair to say that, because they take money off the top, the earmark system ends up encouraging spending on new construction vs. routine maintenance?
Yes. I'd like to say that it's just new construction. But some of these earmark projects aren't just for the bridge in Alaska and things like that. They're for museums…to study something that may or may not be the highest research priority we have.
But yes, to answer your question, it does divert money away from the core programs. It also uses the money in ways that isn't even really for new construction. It's for a variety of things....
One other interesting bit on earmark flexibility from Letourneau's report. Much of her report deals with whether local governments would lose access to the $10 million if it wasn't spent for the interchange. What flexibility is available for redeployment of the money? I'm not getting into this here, but this comment was interesting:
The House and Senate members have different interests; therefore, the flexibility rules have been designed to reflect those interests. Since the Senators represent the whole State, they provided some flexibility for projects with the State that were Senate projects. However, House members represent only their districts, so they have no interest in flexibility among projects within a State, thus, the flexibility provisions in the statute don't apply to the House projects in Section 1701...