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Counterpunch - Dec 28, 2006
http://www.counterpunch.org/cowell12282006.html

Highway Robbery:

Privatizing New Jersey's Toll Roads

By ANTHONY COWELL

Governor Jon Corzine intends to sell New Jersey's toll roads to private
investors for $10 billion. Selling or leasing publicly owned toll roads
degrades our public and financial security. Toll road takeovers led by
Goldman Sachs, where Governor Corzine was the Chairman and CEO before
taking elected office, prove the point.

Goldman Sachs took the Indiana Toll Road and the Chicago Skyway private in
2005. Goldman invested its own money in both deals. Goldman worked every
side of these deals, collecting fees as lobbyists, deal makers and
investors.

After privatization, tolls on the Indiana Toll Road and the Chicago Skyway
immediately doubled. Drivers unable to afford the tolls now use alternate
roads, increasing congestion and pollution. But these severely negative
impacts to the public don't concern MIG Cintra, the Australian and Spanish
corporations that operate these toll roads. MIG Cintra's motivator is
greed. MIG Cintra prohibits any competition with its toll roads. It forbids
any expansion of adjacent roads. And when MIG Cintra took over the Indiana
Toll Road, the 600 people formerly employed by the Indiana Department of
Transportation were told to start looking for new jobs. MIG Cintra holds a
locked down monopoly where states must pay protection cash to a toll road
mafia led by Goldman Sachs, foreign corporations, and super rich investors.

MIG Cintra uses "access management" schemes to squeeze every possible
dollar from toll road users. "Time of day pricing" imposes punitive tolls
on certain vehicles, like trucks, to keep them off the road. "Premium
pricing" allows access to congestion-free express lanes, although users pay
an even higher toll for the privilege. This is happening on public toll
roads that taxpayers bought and paid for generations ago.

MotherJones magazine (January/February 2007) destroys the false promises of
toll road privatization so desperately sought by Governor Corzine. The
bottom line is that Goldman Sachs is promising New Jersey quick cash in
exchange for control of public infrastructure, including toll roads, but
soon airports as well.

Goldman Sachs operates as lobbyist, advisor and investor in selling public
assets at fire sale prices - completing the three act play known as
"Conflict of Interest." Perhaps the play should be presented in four parts,
with Governor Corzine playing the lead role for his former paymaster. And
who is Goldman Sachs? In 2006, Goldman paid its executives $16.5 billion;
the average salary at Goldman is $623,000. A confraternity of the super
rich has New Jersey's public wealth in its gun sights, but New Jersey must
protect its transportation infrastructure from Wall Street snake oil
salesmen.

Corporations have no duty to the public. They exist for profit, not public
safety or security. Transportation infrastructure belongs to the people of
New Jersey, who rightly expect that public servants will operate pubic
property for the benefit of the people. Does MIG Cintra have its own police
force to patrol these roads? Who will the police answer to when the
Turnpike is sold, a corporate board of unaccountable, non-elected
businessmen? When there's an accident, who responds? If deadly chemical,
biological or nuclear agents are released on the Turnpike, will MIG
Cintra's executives and Goldman Sachs' investment bankers respond in space
suits to protect our citizens?

Governor Corzine insists that complicated issues are at hand. Is that
really so? Goldman Sachs already worked these issues out in Indiana and
Illinois. How much is at stake? The risk to New Jersey is immeasurable in
lost jobs, safety and profits, but profits for Goldman and its investors
are huge. Goldman's calculations on other deals show that investors break
even after fifteen years but these deals last 100 years, which proves that
Goldman orchestrates public asset sales at bargain basement prices. In
reality, it's fraud. Profit estimates also assume significant toll
increases every year or every other year. These deals allow private owners
to operate public roads as monopolies for 85 years.

As Governor Corzine arranges the sale of the Turnpike, you can rest assured
of two things: Turnpike tolls will climb every year, and New Jersey
politicians will make the super rich even richer by giving them the roads
you own. For political cover, the Governor may choose another investment
bank, or require Goldman to partner with another bank. The rotten result
for us is the same. If that's good public policy, I'm proud to be
thick-headed.

Governor Corzine, Ray Lesniak, and Bill Gormley are desperate to sell the
Turnpike. They whine that toll increases are intolerable, that maintaining
toll roads costs too much. So they won't raise tolls. Rather, they'll sell
the roads to private operators, and let them raise the tolls. In reference
to privatizing the Turnpike, Mr. Lesniak has said "we are going to allow
tolls to go up every year." Where is the public benefit? A few dollars in
property tax relief? It's not worth it.

Aren't Democrats against selling out our public wealth, not to mention our
safety, to private corporations? Don't Democrats oppose privatizing Social
Security? Isn't toll road privatization the same thing? Our toll roads are
vital, money making assets, but privatizing toll roads is the public
finance equivalent of strip mining, which permanently destroys the
environmental infrastructure level by level.

We can't trade transportation infrastructure for a few bucks up front,
because, in the end, we'll be much poorer, and much less safe.

[Anthony Cowell is a writer and a lawyer, and was a Deputy Attorney General
in New Jersey. He can be reached at .]

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