CARE FL Response to the IR County FDFC ruling
Posted on June 15, 2016
On June 10, a state court ruled against Indian River County’s administrative law challenge to the Florida Development Finance Corporation (FDFC) Private Activity Bond (PAB) approval proceedings of August 2015.
Citizens Against Rail Expansion in Florida (CARE FL) was not a party to this lawsuit—or the similar challenges brought forth by Martin County—but shares the counties’ ongoing and well-documented concerns regarding the improper procedural and substantive aspects of the 2015 FDFC proceedings. In addition, CARE FL notes that to date, there are no public reports that All Aboard Florida (AAF) has sold the PABs in question, and the project accordingly remains unfunded.
The court found a lack of “standing” due to AAF likely being built even if the PABs were not available. The Court also found the FDFC’s decision was “quasi-legislative”, not “quasi-judicial”, and therefore the court has no jurisdiction to rule. Finally, the court dismissed as unimportant the FDFC’s blatant violations of its own bylaws and the fact that its Board Members were not properly confirmed.
While the railroad will undoubtedly use legal “victories” like this to lead Treasure Coast communities to believe any efforts to stop AAF are futile, CARE FL could not disagree more.
On August 5, 2015, the FDFC approved the issuance of $1.75 billion in tax exempt PABS for AAF. The vote and approval was a foregone conclusion—despite a strong showing of opposition from CARE FL, the counties and other local officials and private citizens—and numerous aspects of the proceedings were of a questionable procedural, substantive, ethical and legal nature. These questionable proceedings included multiple ex parte meetings and communications between FDFC Board Members and AAF prior to the vote, prejudgment evidenced by including in its budget (before the August 5 approval) an allocation of a $1.8 million payment from AAF, and continued voting by improperly installed FDFC Board Members.
As a result of these concerns, Martin County and Indian River County filed different, well-documented lawsuits against the FDFC action, and with the June 10 ruling against Indian River County, this means that state courts have dismissed the county lawsuits, despite the well-documented and serious legal and ethical issues set forth below.
Ex Parte Communications with AAF
Public records requests revealed that extensive improper ex parte communications took place between FDFC Board Members/staff and AAF and/or its affiliates. This included multiple text messages between Board Members and AAF regarding lunch meetings and getting together to review documents. These texts continued for more than three months and revealed a very friendly relationship between the FDFC and AAF.
In addition, the records requests revealed meetings between FDFC and AAF—one even included AAF air travel to Nebraska to meet with a Board Member of the FDFC—that occurred leading up to the vote in August 2015. From March through July 2015, records reveal at least one such meeting per month.
Further, texts and emails revealed not only coordination on setting the date of FDFC hearing, but advance notice of such to AAF—days before the public received its notice of the FDFC hearing.
Substantive Legal Failures
During the August 5 bond meeting, FDFC Chairman Frank White discussed the balancing test the FDFC must meet with respect to winners and losers. Per the meeting transcript, Mr. White stated that in “thinking about this concept of economic development,” he looked at whether there was an infrastructure project, whether jobs were created, and the “offset of the negative impact.” He went on to state “[a]nd so juggling through and weighing these different – going through this process of weighing that, ultimately, the way I come down and see it is that this is a net positive economic development project for the state.”
Mr. White also stated in an email that the project was viewed “as a net positive economic development project for the state,” that “the negative impact, which disproportionately affects the Treasure Coast, was outweighed by the new jobs and infrastructure investment overall,” and that he “weighed the various tradeoffs as required by our statute to the best of my ability…”
But the FDFC never properly weighed these negative impacts to the Treasure Coast, despite repeated pleas to do so from CARE FL and local officials. CARE FL continues to believe this was unsound and unfair.
In closing, CARE FL reminds its supporters—and the Treasure Coast communities as a whole—of these egregious legal and ethical shortcomings that AAF and the FDFC repeatedly demonstrated throughout 2015 leading up to the August 5 bond approval. The FDFC and AAF should be held accountable for these actions.
Further, CARE FL reminds our communities that the fight against AAF is far from over. We continue to actively pursue all possible legal, political and public communication channels to stop the ill-conceived AAF rail project that threatens the public safety and current way of life of communities throughout the Treasure Coast.