Corporate Monorail Puts Profits First . . .
Public Transit Puts Our Community First
The Seattle Monorail Project wants to contract out the publicly funded Green Line monorail system to giant corporations like (click on the company name to see a special exposé on their past business practices):
When private companies operate public transit systems they take our tax dollars out of the community. They squeeze workers and they neglect safety and service for the sake of profits. And, when all is said and done, we all pay more because that's the only way these companies can make a profit running a transit system. There is a better way …
There are only 3 ways to make a profit off of the Monorail: screw the taxpayers, screw the workers, screw the riders. Demand that money does not leave our community as profits to greedy corporations. Demand that living wages and affordable benefits be a binding written requirement in perpetuity for all Monorail workers and don’t let Board members confuse the issue with verbal promises.
- Should we trust the same Bush-buddy corporations making obscene profits in Iraq from our tax dollars are not salivating over Monorail profits squeezed from our community?
- Does Monorail Director Joel Horn owe us an accounting of these profits when they will come at the expense of our local tax dollars, workers, and Monorail riders?
- Given the ethics record of some of the top Monorail corporate bidders, will Joel Horn agree to disclose Monorail officials' corporate conflict of interests including past corporate resumes, personal investments, and whether they will commit to no future profiting from these companies?
Demand answers from and express your opinion to the Board of Directors . . .
Seattle Monorail Project phone: (206) 382-1220
Joel Horn (Monorail Executive Director): joel@elevated.org
Tom Weeks (Monorail Board Chair): tweeks@elevated.org
Cindi Laws: claws@elevated.org
Cleve Stockmeyer: cstockmeyer@elevated.org
Kristina Hill: khill@elevated.org
Susan L. Secker: ssecker@elevated.org
Richard H. Stevenson: rstevenson@elevated.org
Richard Sundberg: rsundberg@elevated.org
Paul Toliver: ptoliver@elevated.org
Jeanne Kohl-Welles: jkohl-welles@elevated.org
Steve Williamson: swilliamson@elevated.org
Despite overwhelming arguments from the public, the Seattle Monorail Project Board of Directors voted 5 to 4 to contract out operation of the proposed Green Line monorail to transnational corporations.
Rally sponsored by Amalgamated Transit Union Local 587 and Washington State Jobs With Justice.
Is the Bechtel fox guarding the hen house?
Bechtel is a current Monorail contractor, advising the Authority on hiring and project oversight. Tom Horkan, recently a Bechtel manager, is now director of design and construction for the Green Line. Before the Monorail job, Horkan managed the Tacoma Narrows Bridge project for Bechtel. Washington House Speaker Chopp then scuttled Bechtel’s original Narrows contract because it was a lousy deal for taxpayers. The original deal set up by the private law firm Nossaman was a contract similar to the proposed Monorail deal. That deal to have the bridge privately operated and financed would have cost between $400 million and $1 billion more than keeping it all publicly operated and financed. When it didn’t work out for Horkan and Nossaman, they took their show to the Monorail. Now, Nossaman is the Monorail’s law firm working with Horkan to draft the proposal to privatize the Monorail operation and rip us off.
What Are Bechtel’s Government Ethics?
Bechtel operates closely with Bush Jr and Sr and Reagan Administrations. Bechtel managers have included the CIA Director, Secretary of Defense, Secretary of State, among other powerful players who decide government contracts. Bechtel generously contributes to politicians: $1,297,465; 59% to Republicans. The billionaire Bechtel family owns a controlling stake in the firm, generating total revenue (2002) of $11.6 billion.
In April 2002 and during the 4 year, $45 million San Francisco water system reconstruction, the PUC ousted Bechtel from the contract. According to Utilities managers, Bechtel's violations included billing for personal Bechtel manager expenses such as laundry services, international travel and meals, and donuts amounting to tens of thousands of dollars; duplicating work already done by the city; charging the city as much as $157/hour for staff.
USAID Administrator Natsios formerly oversaw the contract bidding for Bechtel's infamous Boston "Big Dig" project which had decades of delay and $12.1 billion of taxpayer funded cost overruns. The Massachusetts State Auditor has begun an intensive review of five major "Big Dig" contracts.
Bechtel is in the world's top-ten of water privatization firms. After taking over the water system in Cochabamba, Bolivia in 2000, Bechtel's massive water rate hikes provoked widespread protests. After the contract was cancelled, Bechtel sued South America's poorest nation for $25 million in lost profits. Bechtel won a victory in February 2003, when a secretive trade court announced it would not allow the public or media to participate in or even witness the proceedings.
Click here for more “revolving door” info between government transit officials and Monorail corporate contractors. After this article was published, WGI bought out Raytheon and now employs Jeffrey Warsh (former head of New Jersey Transit) as a consultant. AdTranz has been bought out by Bombardier.
Bechtel Profiting from Saddam and War
USAID awarded Bechtel "the plum" of the no-bid postwar Iraq contracts, funding of up to $680 million over 18 months. Yet, just 4 months after Saddam gassed the Kurds, Bechtel helped construct a petrochemical plant for the Saddam regime using dual-use technology that many fear was used in the production of chemical weapons. In 1991, the plant was found by UN weapons inspectors to provide significant evidence that Iraq was pursuing a weapons of mass destruction program.
In two Iraqi reports to the UN from 1996 to 2002, Bechtel was listed as one of two dozen US corporations that supplied Iraq with one or more forms of banned weapons, military logistics, and construction. Bechtel helped arm Iraq at a time when the US government was militarily enforcing international sanctions against the Saddam regime. Bechtel is the 17th largest defense contractor ($1.03 billion in defense contracts).
While Saddam was dropping 13000 to 19500 chemical bombs on Iran and its own people in the 1980s, Bechtel lobbied Saddam to sign a contract for the Aqaba oil pipeline.
Bechtel’s Environment and Safety Record
Bechtel is listed for 730 incidents of hazardous waste spills on the Environmental Protect Agency's (EPA) Emergency Response Notification System database for the period between 1990 and 1997. The spilled substances include asbestos, crude oil, and ethylene glycol.
Bechtel received about 40% of the US nuclear power plant construction contracts in the 30 years after WWII, and was responsible for botched plant construction all over the US. Among it notable failures, Bechtel installed California's San Onofre reactor backwards.
At the Three Mile Island, PA nuclear plant disaster, Bechtel was fined by the Nuclear Regulatory Commission (NRC) for not making necessary nuclear reactor repairs and improperly classifying modifications in order to avoid safety controls; disregarding health and safety of the cleanup crew, who were sent to radioactive sections without adequate protective clothing or respirators, and were routinely given already contaminated clothing; using malfunctioning equipment meant to detect radiation.
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Our Money Leaves the Community To Pay Extra for Profits
Bombardier is one of Canada’s biggest corporations and manufactures rail, trains, and airplanes. It operates in consortium with other large corporations that supposedly “compete” but more often partner with each other. A partnership of Washington Group International and Fluor Corp. will compete against Bombardier for the operations contract. Together, these firms make up an oligopoly and often dictate the terms of performance even when a government contract covers most scenarios. For example, Bombardier is a partner with Bechtel on the Southern New Jersey Light Rail project. This is a Design-Build-Operate-Maintain (DBOM) project similar to the one proposed for the Seattle Green Line. The line is more than a year late to open, $200 million overbudget, and under investigation by the New Jersey Attorney General. Bombardier and Bechtel have sued New Jersey Transit for $140 million in cost overruns on this supposedly fixed price contract.
The transit agency in British Columbia looked into setting up the new Millenium Skytrain line as a DBOM and discovered that it would cost them $3 million more per year to have Bombardier run it. Under the proposed Green Line DBOM, the contractor would be paid the same annual fee no matter how many people ride the system. Fares and taxes have to be high enough to pay the fee. In New York City, the fare on the new JFK AirTrain DBOM is $5.00. The fare on the Las Vegas Monorail DBOM is going to be $3.00 (or $5.50 round trip).
Safety Competes with Profits
In September 2002 a worker was killed in a crash during testing of a new automated light rail system serving JFK Airport in New York. The system was under the management of Bombardier, working under a DBOM contract similar to the one proposed for the Green Line. A subsequent investigation found gross lapses on the part of management that led to the worker's death: poor training, poor communications, and total carelessness. Was this manslaughter?
No Local Accountability
Bombardier is a part of the Metronet consortium that is participating in privatization of infrastructure maintenance on the London Tube, against the will of the London Government. (The national government required this set up as part of a transfer of the Tube to local control). The consortium (with Fluor) threatened to sue for up to £30 million if changes were made to the controversial London P3 financing model.
Our Money Down the Drain?
Until July, Bombardier had been on Standard and Poor’s credit watch list for a poor credit rating. In an April 2003 short form prospectus the company acknowledges:
“The occurrence of errors and failures in the Corporation’s products could result in warranty claims or the loss of customers. Correcting such defects could require significant capital investments. Any claims, errors or failures could have an adverse effect on the Corporation’s operating results and business. In addition, due to the nature of the Corporation’s business, the Corporation may be subject to liability claims arising out of accidents or disasters involving the Corporation’s products or products for which the Corporation provided services, including claims for serious personal injuries or death. The Corporation cannot be certain that its insurance coverage will be sufficient to cover one or more substantial claims. Furthermore, there can be no assurance that the Corporation will be able to obtain insurance coverage at acceptable levels and cost in the future.”
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Worker Rights
In April 2003, lawyers representing a group of black South Africans sued Fluor for at least $1 billion as compensation for discrimination and abuse under Apartheid. The suit was filed in a US federal court in California, where Fluor is headquartered. Allegedly Fluor and Sasol, a formerly state-owned South African corporation, paid black workers less than their white colleagues, acted violently to quell legal strikes and subjected the workers to “slave-like” working conditions. The lawyers alleged that during a strike in 1987, Fluor and Sasol managers used state police and their own security personnel to assault and set dogs on the striking workers. Some workers were killed in the conflict and all the employees were fired.
In 2002, Fluor’s Massey Energy subsidiary settled a civil case in the amount of $6.9 million for delinquent workers’ compensation premiums from the late 1980’s and early 1990’s. In five other employment or labor-related cases involving a Fluor subsidiary, the company paid fines or settlements totaling more than $1.1 million.
Environment
In 1997, a chemical tank exploded in a deserted factory at the Hanford Nuclear Reservation outside Richland, WA. the final storage location for more than two-thirds of US high-level nuclear waste. The explosion was the result of mismanagement by Hanford’s lead contractor, Fluor Daniel, a wholly owned subsidiary of Fluor. An internal US Department of Energy (DOE) assessment of the near-disaster allegedly skewered Fluor for numerous safety and reporting violations, noting that the chemical tank had not been inspected for over six months. Before the internal review was released to the public, Fluor’s lawyers were successful in allegedly editing out key findings relating to possible violations of federal law, risks to human health and the extent of off-site contamination.
Connection to Bush Administration
In 2003, Fluor was a recipient of the Bush Administration’s “no-bid” contracts to receive up to $100 million of our tax dollars for open-ended work in Iraq.
Phillip Carroll, Chairman and CEO of Fluor from April 1998 until February 2002, and formerly President and CEO of Shell Oil Company from 1993 until 1998, was appointed by the Defense Department as chairman of an advisory committee to oversee the production of Iraq oil. Carroll receives more than $1 million a year from Fluor in retirement benefits and bonuses pegged to the company’s performance. He also owns about 1 million of its shares, worth about $34 million.
Fraud
In 2001, Fluor Daniel settled a case in the amount of $8.5 million for charging millions of dollars in commercial costs to the government for violation of the False Claims Act in contracts with the Department of Defense. In 1997, Fluor Fernald settled another case under the same Act for $8.4 million for seeking government reimbursement for an employee party. In 1994, Fluor FD Services paid $3.2 million to settle a claim that it submitted heavily padded repair bills for cleaning up Navy bases after Hurricane Hugo. A law suit is still pending against Fluor Daniel for allegedly artificially inflating its reported profits and the price of its common stock so that top executives could collect millions of dollars in bonus compensation.
This is excerpted and summarized from the report “A Corporate Invasion of Iraq” by USLAW. Jobs with Justice makes no claims to the accuracy of this research by USLAW. We encourage you to check it out online.
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WGI Teams Up With Fluor to bid on Operation of the Monorail
You might also remember the New Jersey Transit project fiasco from our exposé above on Bombardier, of which WGI is a partner. WGI is one of the largest construction and engineering firms in the U.S. In 2002, WGI doubled its size when it purchased Raytheon’s engineering and constructing unit. However, the Raytheon acquisition resulted in financial difficulties that led the company to slide into bankruptcy.
WGI Spends Lavishly on Executives While Risking Our Taxpayer Funds and Living Standards
WGI is notorious for cutting wages and benefits to raise profits. On the Hudson-Bergen Light Rail in New Jersey, WGI train operators have no pension and they are paid $3.50 per hour less than public light rail operators at New Jersey Transit. WGI emerged from bankruptcy in early 2002. For a company just coming out of bankruptcy, WGI has given its executives generous bonuses. President and CEO Steve Hanks received a bonus of more than $1.4 million in 2002. This amount is more than four times greater than the $300,000 bonus he got in 2001. All together five current executives and one former executive received more than $5 million in bonuses in 2002 compared to just more than $1.2 million in 2001. According to the 2002 proxy statement, another round of large bonuses was scheduled in 2003.
WGI Has A Poor Safety Record
Since 1994, U.S. regulatory agencies have fined the company approximately $70,000 for significant health and safety problems at some of its facilities. From the "DBOM Update" report prepared by pro-DBOM consultants: "Information obtained from the union representative for Hudson-Bergen project indicates that wages paid to operators are low when compared with wages paid for comparable services on other projects. This circumstance has resulted in much greater turnover in personnel than normal."
WGI is also on Bush’s Buddy List in Iraq
The U.S. Army Corps of Engineers awarded WGI an initial contract in Iraq that could rise to $100 million.
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