Transit Lobby Backed Up by $2.3 Billion in “Suspicious Transactions”

Siemens, the maker of light-rail vehicles, has admitted to finding $2.3 billion in “suspicious transactions” — meaning probable bribes — on its books. Company salespeople apparently bribed government officials around the world to get them to buy Siemens products.

The German government recently fined the company about $300 million for the $635 million in suspicious transactions that it had previously reported. Now it appears this has only scratched the surface of the company’s moral problems.

The Antiplanner previously reported on the bribery scandal, noting that in the U.S. corporate “bribes” were legal when offered in the form of campaign contributions — and that Siemens had contributed to the campaigns of both ballot measures and political candidates who supported rail transit.

Of course, some will say, the highway lobby is probably guilty of the same practices. The problem is, there really isn’t any highway lobby. Automobile and oil companies hardly lift a finger in support of roads or anything else that would relieve congestion. Why should they? The auto companies know people will still buy their cars, and the oil companies know that congestion merely means more demand for fuel that people will burn sitting in traffic.
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The companies that build highways are, for the most part, equally adept at building rail lines. So they don’t really care whether we spend billions on roads or rails, just so long as we spend billions on something. If they thought about it, they might even prefer rails, because rails do less to solve congestion and so there will always be more rail business.

The American Road Builders Association changed its name to the American Road and Transportation Builders Association, reflecting the fact that its members sometimes build rail lines. Lately, they changed their name again to just TRIP, which stands for “the road information program.”

The only real highway lobby is the highway users lobby, consisting mainly of trucking companies and a few bus and taxi companies. But they are pretty small compared with the massive transit lobby. In 2005, the highway users had an annual budget of less than $750,000. Even if you add TRIP’s budget, which was less than $400,000, you get a total of less than $1.2 million.

By comparison, the transit lobby had an annual budget greater than $20 million. Of course, this doesn’t count any of the suspicious transactions campaign contributions made by Siemens, Parsons Brinckerhoff, and the many other companies that feed off of rail projects. So much for the supposedly all-powerful highway lobby.

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About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

8 Responses to Transit Lobby Backed Up by $2.3 Billion in “Suspicious Transactions”

  1. JimKarlock says:

    AntiPlannerSiemens, the maker of light-rail vehicles, has admitted to finding $2.3 billion in “suspicious transactions” — meaning probable bribes
    JK: Well, duhhh!
    How else would they get people to buy their overpriced, underperforming garbage?

    Light rail costs to much and does too little.

    Thanks
    JK

  2. davek says:

    … in the U.S. corporate “bribes” were legal when offered in the form of campaign contributions…

    I hear this put forward when libertarians talk of how corporations buy control of government, but when the topic switches to campaign finance reform, advocates of delimiting contribution ceilings argue that politicians take the money, but don’t favor the donors. One day I will make the time to look at this more closely, and see who’s got it right.

  3. aynrandgirl says:

    Libertarians want limited government because, among other reasons, it reduces corruption. You can’t buy influence from a government that can’t deliver it. The reason contributions usually don’t affect voting is because donors only give to politicians who already have the right “philosophy”. If you’re in favor of big socialist public works projects, are you going to contribute to Charles Rangel or Jeff Flake? Why bother trying to influence Flake when you already have a willing accomplice in Rangel? Delimiting contributions is only part of the puzzle; transparency is the other part. As long as we know, within 24-48 hours, who made contributions and in what amounts, and eliminate bundling, how much anybody gives is irrelevant.

  4. StevePlunk says:

    aynrandgirl,

    I agree with much of what you say but would like to float an idea for your opinion.

    What if we made all contributions anonymous through a third party collection mechanism and forced a disconnect between giving and political favors? We maintain the freedom of speech aspect of political donations while limiting the buying of influence. Anyone could claim donations so no one would know who to kowtow to. I would expect politicians to begin to represent their constituencies instead of special interests.

    It seems corruption of this sort is driving more and more planning and transportation decisions. We need to stop it somehow.

  5. msetty says:

    There’s a “highway lobby” in virtually every city, town and suburb in the U.S. They’re called “developers.” Only a small percentage of “developers” are actually involved in “transit-oriented development” which is still dwarfed by the “auto-oriented” kind.

    Randal, I was sure you’d go off because Algore got the Nobel Peace Prize from those socialist types in Europe…maybe that’s Monday’s blog?

  6. aynrandgirl says:

    Steve, that’s a very interesting idea, though I have one reservation. It replaces the influence of the donor with the influence of the bundler. This phenomenon is frequently seen in charities, where once the founders quit or die the employees “capture” the charity as a means of giving themselves salary, perks, and self-aggrandizement, rather than accomplishing the original mission of the charity. The bundlers will end up being run by people whose goal is to become a political player. Those in the organization who actually want to limit the buying of influence will be pushed aside. Bundling is also an easy way to launder money. Do we really want Saudi money to anonymously fund political campaigns, for example? It’s probably happening already but anonymous bundling makes it a lot easier to launder large sums of money. It also doesn’t prevent a donor from asking the bundler to tell the recipient where the money came from.

    Part of the reason corruption is affecting planning decisions is because of the planning process itself. I know a lot of pundits and the general public like to portray developers as evil money-grubbing people and that’s why they suck up to the planners. The truth is that every developer I know hates planners, especially when they demand (extort) things unrelated to the project in order to approve it, like contributions to the a “park fund” for a park that’s 5 miles away from the proposed development but will nevertheless improve somebody’s political aspirations, or when the planners want things to conform to the planner’s ideal of how people ought to live rather than what the developer’s customers want, or when they kill profitability with below-market setasides in order to make up for the unaffordability created by the planner’s own actions (which itself increases unaffordability). Developers would never suck up to planners if they didn’t have to in order to get things done. The more influence the NIMBYs and the planners have the more sucking up that needs to be done because otherwise they’d be out of business entirely. The losers are the homebuyers who pay increased prices to fund the sucking up.

  7. StevePlunk says:

    Thanks aynrandgirl. I’ll put more thought into it.

    msetty,

    Locally our developers get involved in lobbying on behalf of highway funds only because ODOT holds up development of land. A few years back they threatened a two mile radius around the south interchange would be put under moratorium unless money could be found to build a new one. The big developers suddenly found an interest in lobbying Salem. The local governmental agencies use similar tricks.

    Transit oriented development is sort of the same thing. One project I know of the builder told me the only reason they did any of it was expedite other developments they had before the same city. They were merely throwing the planners a bone to make them feel good and ingratiate themselves.

    It’s only through coercion that a portion of the private sector find themselves violating their own principals to lobby for increased taxes and spending. Then there’s the other portion who lobby to increase demand for their products, be it light rail or highway construction. In either case the common player is government in excess.

  8. Royko says:

    I’m curious as to how this slipped past the editors of Houston’s newspaper of record?

    Gee, I’m shocked if it is true Siemens paid bribes to unelected and unaccountable government officials as inducements to buy boondoggle systems.

    Could it have happened anywhere in the USA?

    Are there any Siemens boondoggle systems in Texas?

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