The TC Palm: Rich Campbell: Even members of Congress limited in ability to clarify AAF’s financing activities

Posted on April 13, 2015

Treasure Coast officials and residents have raised legitimate questions about All Aboard Florida’s financing activities.


However, getting answers to these questions — even from federal officials, who should be able to provide them — is proving to be a challenge.


It turns out members of Congress are as powerless as the rest of us to ascertain the truth.


U.S. Rep. Bill Posey, R-Rockledge, has been fighting All Aboard Florida at the federal level. Earlier this year, the congressman attempted to reform the federal loan process for railroad projects by offering three amendments to the Passenger Rail Reform and Investment Act of 2015.


The amendments would have:

  • Capped the amount for federal loans authorized by the U.S. Department of Transportation to a single railroad in a five-year period at $600 million.

For the record, All Aboard Florida is seeking to raise $1.75 billion through private activity bonds: tax-exempt bonds issued by local or state governments for the purpose of providing special financing benefits for qualified projects.


All Aboard Florida also has a separate request on the table for a $1.6 billion federal loan.

  • Prohibited the Department of Transportation from authorizing exempt facility bonds — i.e. bonds that must be used almost exclusively to finance such things as high-speed inner-city rail facilities — unless the project meets the definition of “high speed”: trains that can attain speeds of 150 miles per hour.

All Aboard Florida has said its trains will reach speeds between 90 to 110 mph.

  • Required the federal government to obtain a resolution of support from each county government through which a rail project will operate before providing a direct loan or loan guarantee.

Such a resolution would be difficult to obtain from Treasure Coast counties.


Indian River County recently filed a lawsuit against the U.S. Department of Transportation, claiming the agency sidestepped federal regulations to allocate $1.75 billion of private activity bonds to All Aboard Florida. Indian River and Martin counties have earmarked $4.1 million to fight the rail project. St. Lucie County officials also have major concerns.


Posey’s amendments failed.


Undeterred, Posey sent a letter March 20 to the Inspector General at the U.S. Department of Transportation, seeking answers to key questions:


  1. Did the department have the authority to issue private activity bonds to All Aboard Florida?


  1. Does the rail project meet the legal definition for “high-speed” rail?


  1. Why did the department provisionally approve the private-activity-bond allocation before its analysis of public comment on the project’s draft environmental impact statement had been completed?


“The Department of Transportation authorized financing for this project before even determining if it is feasible,” said George Cecala, Posey’s press secretary.


On Tuesday, Posey received a response from Calvin L. Scovel III, Inspector General at the U.S. Department of Transportation.


The congressman got stonewalled.


Noting the recent legal filing by Indian River County, Scovel wrote: “The Office of Inspector General does not issue advisory opinions on questions of legal authority surrounding (Department of Transportation) actions, nor is it our practice to become involved in matters in which there is pending litigation.”


This is preposterous.


Cecala is incredulous.


“If you want to void an inspector general’s investigation, do you file a lawsuit?” he said.


So, on Thursday, Posey sent a letter to general counsel at the Department of Transportation. He also copied general counsel at the Federal Railroad Administration. Posey raised the same questions and added this statement: “I believe my constituents, who will be forced to live every day with the consequences of DOT’s decisions, deserve honest and straightforward answers to these basic questions.”



Treasure Coast governments and residents deserve answers — and federal officials, who appear to be greasing the rails for this project, ought to be providing them.


It is becoming clear that the only way to get the answers we seek is through the courts.

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