DALLAS – A federal lawsuit filed Tuesday by an environmental advocacy group contends that a cabal of real estate developers and other private parties is putting together the Trump administration’s infrastructure renewal proposal behind closed doors in violation of federal law.
The lawsuit filed by Food & Water Watch in the U.S. District Court for the District of Columbia seeks to compel the White House to disclose the roles played by the Infrastructure Council and co-chairs Richard LeFrak and Steven Roth in the development of the president’s 10-year, $1 trillion infrastructure renewal proposal. The group advocates for healthy food and clean water.
LeFrak and Roth are New York developers who have longstanding personal and financial ties to Trump and own development projects that stand to benefit from the council’s decisions and recommendations, according to the lawsuit, which cited Trump’s quote in an April interview with the New York Times that “everything is going to be run by them.”
The president is “in effect outsourcing policymaking to private individuals who are unfettered by conflict-of-interest rules and other public accountability standards,” the lawsuit charges.
Trump’s rebuilding plan “is nothing more than a massive corporate giveaway and a blueprint for selling American water systems, bridges, and roads to the highest bidder,” said Wenonah Hauter, executive director of Food & Water Watch. “That’s why in January President Trump tasked two financially conflicted real-estate developers with crafting and executing his infrastructure plan, and they’ve been working behind closed doors ever since.”
Transportation Secretary Elaine Chao, who is named in the suit along with Trump and Commerce Secretary Wilbur Roth, who relation to council co-chair Steven Roth, told senators at a Senate Appropriations Committee transportation panel hearing earlier this month that the infrastructure plan is being put together by representatives from 14 federal agencies. She assured the lawmakers that details on the plan would be unveiled in September.
The administration will likely seek the removal of the cap on transportation-specific private activity bonds, now set at $15 billion, and expand their use to other sectors with the new infrastructure program, Chao said.
A fact sheet released with President Trump’s budget proposal for fiscal 2018 suggested that the program could also include an increase in low-interest Transportation Infrastructure Finance and Innovation Act loans to $1 billion per year. The Fixing America’s Surface Transportation (FAST) Act enacted in 2015 provides a total of $1.435 billion for the TIFIA loans, which have helped finance a number of big-ticket infrastructure projects, through fiscal 2020.
Norman Anderson, chief executive officer of the consulting firm CG/LA Infrastructure Inc., said he was dubious when asked if an infrastructure plan could be ready by September that would be acceptable to Congress.
“I think that the stock market is answering, since infrastructure stocks went through the roof after the election and have been on a steady downward path since then,” he said. “The industry needs to raise its voice -- there may be a plan, although we are hearing rumors that there won't be one -- but there is no chance that it will get congressional support."
The lawsuit by Food & Water Watch seems to be an ill-advised move, Anderson said.
“These Food & Water people want to slowly strangle the country,” he said. “How about a dialogue rather than going to court?”
Trump announced an advisory council headed by LeFrak and Roth in January but did not officially establish an infrastructure group until an executive order was issued July 19 creating a Presidential Advisory Council on Infrastructure within the Commerce Department. The order did not name the members or set a date for the council’s first meeting.
The Federal Advisory Committee Act could apply whether the executive order simply recognized the earlier Infrastructure Council or created a successor, the group said in its filing. The legislation enacted in 1972 requires public notice of federal advisory council meetings and publication of any reports, transcripts, and other documents.
The council has met on “numerous occasions to provide advice and recommendations” since January without any notice or recordkeeping, the lawsuit contends.
A White House spokeswoman said all presidential advisory councils comply with federal law but would not discuss specifics of the Food & Water Watch lawsuit.
Meanwhile, Moody's Investors Service released a report Wednesday noting that President Trump's July 19 executive order added little clarity on how the administration's $1 trillion infrastructure plan would be accomplished.
Much of the plan’s success will depend on the administration’s ability to leverage the $200 billion of new, direct federal funding into $800 billion of public and private investments, said Kathrin Heitmann, a Moody’s vice president and the lead author of the report.
“The administration’s plan relies heavily on catalyzing investment from state and local governments, with only limited federal funding,” she said “This can be a tough prospect since infrastructure projects often compete for resources with other spending priorities.”
The proposed $200 billion of infrastructure funding is less than what is provided in the $305 billion FAST Act as well as the Obama administration’s proposal in 2015 for $478 billion of transportation infrastructure funding over six years, Moody’s said.
“The delayed release of an infrastructure bill and limited specific information in the administration's budget on funding measures and targeted investments has created significant policy uncertainties for state and local governments and for private developers,” the report said. “The final infrastructure bill could look very different from the budget proposal.”