A sign points the way for drivers to enter a toll road in Dallas on Aug. 10, 2017. Photo: LM Otero/AP
LET’S BUILD INFRASTRUCTURE is preparing to launch formally in Washington, D.C., next week with a six-figure advertising blitz focused on pressing lawmakers to use privatization, rather than taxation, to pay for the infrastructure proposals debated in Congress.
The organization touts public-private partnerships and a process known as “asset recycling,” in which the government finances new construction and repairs by selling or leasing roads, bridges, water utilities, parking lots, and other infrastructure assets to private contractors instead of paying for them with public funding. The private operators in turn recoup costs by adding tolls or increasing user fees, such as water bills or parking fees.
The new group, helmed by two former mayors, Republican Mick Cornett of Oklahoma City and Democrat Michael Nutter of Philadelphia, has published virtually no information about its supporters on its website or how it’s paying for the wave of television advertisements.
There is scant information about Let’s Build Infrastructure anywhere on the internet. The website was registered anonymously in June and leaves no trace about its funding sources. Cornett and Nutter have not responded to requests for comment.
But a trail of evidence, including social media posts as well as nonprofit business registration and lobbying documents, suggests that toll road operators are affiliated with the pro-privatization push.
In 2019, Hans Klinger, a registered lobbyist for toll road operator Cintra, the U.S. subsidiary of the Spanish infrastructure conglomerate Ferrovial, S.A., served as director of a nonprofit called Invest in Texas Roads Now. The group promoted a partnership to build six new tolled lanes on an expressway near Dallas on Interstate 635 and four on Interstate 35 in Texas.
The website for Invest in Texas Roads Now now redirects to Let’s Build Infrastructure, and the two groups share the same website language, header graphic, and logo design.
Klinger, who did not respond to a request for comment, was the first and only person to retweet the Twitter promotion for Let’s Build Infrastructure before the group was unveiled in Politico this week. Black Diamond Strategies, the consulting firm for which Klinger serves as a partner, is registered to represent Cintra on issues related to transportation public-private partnerships.
Cintra has faced controversy over the years over its management of U.S. toll roads. In Indiana, the company more than doubled the rate for cars paying cash to drive the Indiana Toll Road, from $4.65 to $9.40. The 75-year lease to operate the road raised eyebrows at the time. But plunging traffic, in part from the high toll costs, led to bankruptcy for the project in 2014.
The company again faced a backlash in North Carolina after the Interstate 77 Express project, which gave a consortium led by Cintra the ability to collect toll money for 50 years in exchange for building and operating the lanes. Motorists have complained of uneven pavement, confusing lane design, and Cintra’s “dynamic tolling,” which uses congestion factors to hike tolls from a maximum of $7 to as high as $10.
The Cintra-promoted group is appearing just as Senate negotiations around the role of public-private partnerships in infrastructure have hit a critical point. Dueling proposals for the size, scope, and financing of the infrastructure legislation are working their way through Congress.
Many Democrats have converged on a plan that is financed through a mix of IRS enforcement, a higher capital gains tax for high-income individuals, a higher marginal tax increase on high-income households, and a mix of income taxes for corporations. Those funds will be used to directly pay for an expansion in broadband, electric vehicle infrastructure, upgrades to airports and ground transportation, and other investments.
But a rival proposal, backed by Sens. Kyrsten Sinema, D-Ariz., and Rob Portman, R-Ohio, released a bipartisan outline that relies less on taxes and more on the type of public-private partnerships that would benefit firms such as Cintra. The Biden administration readout of demands from the senators explicitly lists “public-private partnerships, private activity bonds, direct pay bonds and asset recycling for infrastructure investment” as key for financing the alternative proposal.
Recently released lobbying disclosures show that other toll road operators and investors are attempting to influence congressional negotiators. Transurban, a controversial toll operator that has charged as much as $30 for congestion pricing on its Washington, D.C., area roads, is lobbying on the bill. The Global Infrastructure Investor Association, which represents interests involved in water and transportation privatization, is also attempting to influence legislators.
In an opinion column announcing the effort, Cornett and Nutter wrote for The Hill that public-private partnerships are simply a cost-effective way to bring those with the most expertise into the process of rebuilding America’s aging infrastructure.
“The deals are designed to incentivize the private operators to pick up the tab for the repair and maintenance of existing infrastructure, as well as build new projects, leveraging expertise government officials simply do not have,” wrote the mayors.
The pair also suggested that such arrangements are best for the public and carry little risk or cost. “The state and taxpayers are fully protected, and the roadway always remains state-owned,” the pair wrote. “Funding these critical projects are no small task and should not have to rely solely on tax increases and new borrowing.”
The recent record, however, is less lofty than the rhetoric. In one infamous public-private deal, Chicago leased the city’s parking meters to a group of investors, which rapidly hiked fees by 800 percent. The lease agreement also forced the city to pay the investors every time a parade or street fair limited parking. The deal will last until 2083.
In one infamous public-private deal, Chicago leased the city’s parking meters to a group of investors, which rapidly hiked fees by 800 percent.
In 2012, private equity investors purchased a lease on the water utilities in Bayonne, New Jersey, and Middletown, Pennsylvania. The new operators swiftly began hiking water utility bills every year, and by 2019, water rates had increased by more than 50 percent.
Even the featured success stories on the Let’s Build Infrastructure website are fraught. The organization touts the work of the San Antonio Water System, a water utility, which completed a deal with a private operator to expand pipeline capacity to serve city residents. Residents are already facing a nearly 10 percent hike in water utility bills to help pay for the project.
Nutter, the co-chair of the new group, has his own ties to infrastructure privatization interests. He serves as an adviser to the law and lobbying firm Dentons, which maintains a practice on transportation public-private partnerships. The former Philadelphia mayor also recently served as a paid director on the board of Conduent, a toll road operator that has faced scandals across the country for overbilling motorists.
In the press release announcing the group, Nutter is touted as an expert and advocate for American infrastructure, though his recent work for a toll road operator is omitted from his biography.
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