Laura Bliss is CityLab’s west coast bureau chief, covering transportation and technology. She also authors MapLab, a biweekly newsletter about maps (subscribe here). Her work has appeared in the New York Times, The Atlantic, Los Angeles magazine, and beyond.
A lawsuit now alleges the president’s advisory council was convened illegally.
A lawsuit filed Tuesday against President Trump alleges that his infrastructure advisory council—tasked with hammering out the details of his $1 trillion plan to rebuild roads, bridges, and waterways—was convened illegally, in violation of federal disclosure law.
It’s another reason for skepticism around Trump’s much-touted, little seen “great national infrastructure program,” marketed as a jobs-creating New Deal for 2017. The list of reasons for concern is mounting:
“Plan” is a generous term
The frilly ceremoniousness of Infrastructure Week notwithstanding, the Trump administration has yet to produce any concrete proposals that outline the president’s infrastructure priorities, ambitions, and policies.
What is known about the $1 trillion plan, insofar as one exists, is that it leans heavily on partnerships between public and private actors. A Trump campaign document authored by billionaire-investor-cum-Secretary-of-Commerce Wilbur Ross outlines a vague strategy to leverage $200 billion in federal funds to generate an additional $800 billion from private investors, mostly by offering them massive tax credits.
These are optimistic calculations, to say the least, that have been mocked by policy experts. Still, the president has hewn closely to their logic in related remarks since. His White House draft budget echoed the same numbers, without much elucidation.
Meanwhile, the same budget blueprint calls for a 13 percent cut to the Department of Transportation funding. It’s confusing how the president plans to build infrastructure while cutting off the agency responsible for most of it. How does that much private capital get squeezed out of relatively few federal dollars?
A $1 trillion plan that relies on private financing = tax cuts for lucrative developments
Private financing works best for projects designed to generate a steady revenue stream, usually through user fees of some kind. Think toll roads, airports, or well-trafficked train stations.
That’s fine. But these sorts of projects aren’t what the U.S. needs most, by and large. That would be maintained highways, roads, bridges, transit systems, and waterways. The American Society of Civil Engineers estimates the funding gap to fix what’s broken (and to expand broadband networks) is a whopping $4.6 trillion. It’s not clear how private financing would help pay for the majority of such critical maintenance projects, since they don’t usually come with a clear path for recouping investments.
Critics of Trump’s “plan” fear a heavy reliance on public-private partnerships would simply heap tax credits onto lucrative projects that the private sector might have built on their own.
And, since most road, bridge, pipe-laying, and transit projects aren’t traditionally suited for private involvement, one wonders whether Trump and his advisors are imagining a more expansive definition of “infrastructure.” Housing is infrastructure, too, especially when new construction projects require new roads and utility connections. Real-estate developers might be in line for sweet tax cuts, for all the public knows. Which is concerning, since…
Surprise! Trump’s infrastructure advisors stand to benefit
Back in January, days before Inauguration, Trump appointed two old friends to lead a panel advising his infrastructure strategy. They were Steven Roth and Richard LeFrak, two giants of New York City real estate whose business endeavors and personal lives have linked them closely to Trump and his family. “Everything is going to be run by them,” Trump said in April.
Besides enjoying close access to the president, the two stand to benefit from the infrastructure investments and policy decisions they’re tasked with overseeing. LeFrak is a billionaire developer with projects and properties across New York, New Jersey, and Florida. He has complained to the media about the EPA’s arduous environmental reviews, and reportedly questions like “how much firms like his should pay for public works that benefit their assets.”
Roth is the CEO of Vornado Realty Trust, one of New York City’s largest landlords. In the 1980s, Roth and Trump were co-owners of the New York City department store Alexander's, which went bankrupt in the 1990s. Vornado still co-owns properties in San Francisco and New York City with Trump, and has a stake in 666 Fifth Avenue, the beleaguered office tower owned by Jared Kushner, Trump’s son-in-law and advisor. Vornado is also among the three finalists for a $2 billion contract to build the new FBI headquarters in Washington, D.C.
Other members of the panel include high-profile names from the world of private equity. LeFrak and Roth are the focus of Tuesday’s lawsuit, filed by the environmental advocacy group Food & Water Watch, which alleges that…
Trump’s infrastructure council may have been violating federal law
“To date, the Infrastructure Council has operated in private—meeting, suggesting policy proposals, and rendering advice,” the court filing states. “Taxpayers and potentially affected communities have no insight into whether and how the council is considering or is prepared to consider key aspects of infrastructure development”—such as addressing a national lead-in-water crisis or funding urgent transit projects.
The Federal Advisory Committee Act requires that the members and meetings of presidential advisory panels be made public. Trump assembled his infrastructure council to hammer out the details of the $1 trillion package in January, days before Inauguration. But it was only last week that this council was formally established, according to a notice in the federal register.
Natalie Strom, a White House spokeswoman, told the New York Times, “While we have no comment on any specific litigation regarding the president’s advisory council on infrastructure, the White House ensures that all advisory groups are fully compliant with any and all applicable federal rules and regulations.”
Strom has recently said that an infrastructure proposal will be released by the White House in late summer or early fall. More people are expected to be appointed to the advisory council in the coming weeks. According to the New York Times, some “broad outlines” of the president’s infrastructure priorities are taking shape. These reportedly include “massive” reforms to the project permitting process, loans and grants for rural infrastructure, and setting up new “incentives” for states and cities to further wean them from federal funding.
Meanwhile, the Trump administration has made other moves on infrastructure. The U.S. DOT recently withdrew from the board of the Gateway Program Development Corporation, the council overseeing the largest transit overhaul in U.S. history. Trump has also pushed legislation that calls to privatize air traffic control, rejected Wednesday by a Senate panel.
Infrastructure is hardly the only area in which conflicts of interest run deep for the Trump administration, nor is it the most important. This lawsuit also isn’t the first to underscore the black-box workings of the president’s friend-packed advisory councils. But what gets built matters, not just because Americans are losing time, money, and limb on crumbling roads and bridges. Trump’s promise to attract $800 billion of private capital is not a promise for free money. To return the investments, the public always pays. The lawsuit asks for all documents and records of meetings be made available to Food & Water Watch and other public-interest groups. So at least some uncertainty about whose priorities are guiding their dollars may now be cleared up in court.