The Union Connection the Expansion of the ITS System with ITIP, We Feel It Is Prudent to Com- Plete This [ITS] Strategic Planning Effort,” Kratoﬁl Concluded

The Union Connection the expansion of the ITS system with ITIP, we feel it is prudent to complete this [ITS] strategic planning effort,” Kratofil concluded. Nine months later, on August 4, 2004, MDOT would indeed sign an agreement with Traffic.com to participate in the ITIP program. It would turn out that the IBEW’s generous offer to help come up with the local agency match was unnecessary, as the agreement would stipulate that the “balance of funding” beyond the $2 million in federal funds—in other words, the $500,000 “non-federal match”—would come from “private sector partners.” That contribution from the “private sector partners” was pure fiction, of course, since it didn’t involve any new funds in the program to match the federal dollars. Traffic.com was simply given credit for its own in- vestment in its own profit making business. I heard through the grapevine from a well-placed source that MDOT would never have agreed to participate in the program had the normal local agency cash match not been “waived” in favor of this substitute “match” that really wasn’t any kind of match at all As of early November 2008, none of the other DOT’s I had sent FOIA requests to had discovered similar correspondence. I suspect that years earlier other IBEW locals had sent similar letters to other state DOT directors, but these letters had long ago been either tossed or filed away where no one would ever think to look.

Conclusion

The key question was whether the International Brotherhood of Elec- trical Workers Union was urging participation in the ITIP program out of a sincere desire for more local jobs for its members—however few and temporary those jobs might be—or was a much more compelling (and lucrative) incentive at play? Only the authorities, who had access to data and sources I didn’t, would be able to deﬁnitively answer that central question.

339 25

The Revenue Sharing Swindle

o prospective state and local agency participants, the idea of revenue- Tsharing was undoubtedly one of the TTID program’s most appealing aspects. After all, the main private-sector partner in this public/private partnership, Trafﬁc.com, had agreed to share a portion of its revenues from the sale and marketing of information based on TTID data to other private sector organizations. Since in most cases the local agency partner was not required to put any of its own funds into this partnership, this revenue-sharing kickback would be a real bonus. Virtually all of the agreements that state and local transportation agencies signed with Trafﬁc.com from 2002 to present include the same sliding scale showing what percentage of revenues was to be shared with the local agency partner:

(1) 0% for REVENUE up to $250,000 (2) 5% for REVENUE between $250,001 and $1,000,000 (3) 10% for REVENUE above $1,000,000

On-air (radio/TV) trafﬁc reports are a very lucrative market, and Traf- ﬁc.com routinely markets its travel reports to numerous radio and TV sta- tions and other related private sector customers (e.g., XM Satellite Radio),

340 The Revenue Sharing Swindle so such revenue sharing could result in a considerable amount of dollars shared back with the local agency partner. As if to underscore how much money is potentially involved, these agreements typically provide a sam- ple revenue-sharing calculation:

For example, if annual REVENUE is $1,500,000, the share reinvested in the PROJECT will be $87,500, calculated as follows:

(1) from $0 to $250,000, = $250,000 x 0% = $ 0 (2) from $250,001 to $1,000,000 = $750,000 x 5% = $37,500 (3) from $1,000,000 to $1,500,000 = $500,000 x 10% = $50,000 TOTAL = $87,500

Important Early Clues

Early on in my investigation of the “’smart road’ scam,” I discovered that the FY2002 Defense Appropriations Act played a key role in direct- ing $50 million of the program’s funding to Traffic.com for the TTID program’s nationwide expansion. (See sidebar, “How Did Defense Leg- islation Help Create Traffic.com’s Monopoly?”) That Act very emphatically required that the contracts for these new cities include the very same terms used for those initial deployments—and specifically the same “revenue-sharing model.” Here are the very specific requirements that were spelled out in the FY2002 Defense Appropriations Act (emphasis added):

(C) FOLLOW-ON DEPLOYMENT.(i) After an intelligent transportation infrastructure system deployed in an initial deployment area pursuant to a contract entered into under the program under this paragraph has received system acceptance, the Department of Trans- portation has the authority to extend the original contract that was competitively awarded for the deployment of the system in the follow-on deployment areas under the contract, using the same asset ownership, maintenance, ﬁxed price contract, and revenue sharing model, and the same competitively selected consortium leader, as

341 The ‘Smart Road’ Scam

were used for the deployment in that initial deployment area under the program.

How Did Defense Legislation Help Create Trafﬁc.com’s Monopoly?

Surprisingly, language inserted into a defense appropriations bill—not a transportation appropriations bill—helped ensure that the bulk of federal funding ($50 million) for the Transportation Technology Innovation and Demonstration program would go solely to Traffic.com on a sole-source basis. The key legislation: The Fiscal Year 2002 Defense Appropriations Act. In fact, the FY2001 Transportation Appropriations Act had appropri- ated $50 million to expand the TTID program to 25 new cities. However, the language in that bill did not specifically say where those funds had to be spent. After the Federal Highway Administration’s Deputy Executive Direc- tor ruled in early 2001 that the program’s $50 million expansion would “require recompetition,” Traffic.com’s lobbyists and legislative supporters went to work. They devised a clever legislative trick that would en- able a sole-source procurement for Traffic.com that completely bypassed the normal transportation appropriations process. Language in the unrelated FY02 Defense Appropriations Act gave the USDOT the option to extend the original small pilot program in Philadelphia and Pittsburgh nationwide solely to the same supplier (Traffic.com), and in early Febru- ary 2002 Transportation Secretary Norman Mineta announced that he was exercising that option. During the transportation reauthorization process in 2005, numerous companies who competed against Traffic.com in various markets com- plained to their legislators that the TTID program had created a monopoly for Traffic.com—and they were absolutely right.

In other words, the FY2002 Defense Appropriations Act very speciﬁ- cally and emphatically required that the same “revenue sharing model” used for those initial deployments in Pittsburgh and Philadelphia was to be followed for the later agreements.

342 The Revenue Sharing Swindle

But what was that original revenue-sharing model? As a result of the Sunlight Foundation’s Freedom of Information Act request for all TTID program contract documents and Senior Fellow Bill Allison’s persistence (see Chapter 17, “Finding Sunlight”), we had received copies of a June 2002 FHWA task order and most of the agreements that Traffic.com signed with state and local agencies representing the participating cities. Those agreements typically spelled out further details of the revenue-sharing provisions, and constituted the other part of the “contract.” However, despite Bill’s persistence, the Sunlight Foundation never received a copy of the “contract” for Pittsburgh and Philadelphia, consisting of the initial task order and an agreement with PennDOT, both likely signed sometime in the 1998-2000 timeframe. Since I didn’t have access to the initial TTID contract, I could only guess as to how much money was supposed to go to the state/local agency partner (PennDOT). But I had an excellent clue: On June 7, 2001, Traffic. com issued a press release in which it stated “The company also presented a check in the amount of $33,610.64 to the U.S. Department of Trans- portation (USDOT) and the Pennsylvania Department of Transportation (PennDOT), partners with Mobility Technologies in a unique public-private cooperative.” If Traffic.com could write a revenue-sharing check to the agency partner in the amount of $33K for just the first year of operation for one of the less populated cities (Pittsburgh), I reasoned, the total amount of shared revenue for 25 cities over the life of the program (at least 10 years) could be substantial. Using that initial check size as a (lowball) yardstick, I made a quick estimate:

$33K/yr x 10 yrs/city x 25 cities = $8.25 million

However, the total ﬁgure over the life of the program would likely be much larger, because:

1. Many of the cities represented much larger markets for Traffic.com’s traffic information than Pittsburgh, and 2. Over time as Traffic.com’s own portfolio of offerings grew, the revenue

343 The ‘Smart Road’ Scam would correspondingly grow. 3. For gross revenues over $1 million, the shared-revenue percentage would double (from 5% to 10%).

It seemed feasible, taking the growth of Trafﬁc.com’s business into account, that the total amount of revenue sharing for all 25 cities could easily reach $15 or $20 million or more.

What the Contract for the Follow-on Deployments Showed

That June 2002 task order between the FHWA and Signal Corpora- tion, which listed Mobility Technologies, Inc. (Trafﬁc.com) as the “critical subcontractor,” applied to all of the city agreements that followed the initial deployments in Pittsburgh and Philadelphia. It included the following revenue-sharing provisions:

(D) REVENUE SHARING

In the event that the Contractor performs marketing activities or re- ceives revenues from the sale/marketing of information obtained under this task order to other private sector organizations, the Govern- ment shall not be liable for any additional costs (i.e., in excess of the amounts provided under this task order) resulting from this marketing effort (e.g., marketing costs, advertising, operations, distribution, liability costs, etc.). The Government and the Contractor agree that such revenues will be shared by the Contractor with U.S. DOT and the affected state and local agencies in accordance with the following formula/arrangement per metropolitan area:

• 0% for gross revenue up to $250,000 • 5% for gross revenue between $250,000 and $1M • 10% for gross revenue above $1M

Those provisions seemed more designed to limit the federal government’s liability than to provide speciﬁc details of the revenue-sharing

344 The Revenue Sharing Swindle program in each state, such as who would receive those funds and what they would be used for. Those details were left to the second part of the “contract,” the agreements that state and local agencies would sign with Traffic.com. I immediately noticed quite a variation in what was typically item 15 in these agreements, “Revenue Share Reinvestment.” Only six city agreements (for Baltimore, Indianapolis, Norfolk, Providence, San Diego, and Tampa) called for direct payments to the state/local agency partner. At least eighteen of these agreements (representing Atlanta, Boston, Chi- cago, Cincinnati, Columbus, Detroit, Las Vegas, Los Angeles, Oklahoma City, Phoenix, Raleigh, Sacramento, Salt Lake City, San Francisco, San Jose, Seattle, St. Louis, and Washington, DC) called for no revenue-sharing payments back to the local partner at all. Instead, Traffic.com retained these revenue-sharing funds to spend as it wanted—ostensibly after consultation with the agency partner. For at least eighteen cities that had signed up for the TTID program, the promise of revenue-sharing seemed little more than a bookkeeping trick. While some of those eighteen agreements specifically called for the deployment of new traffic sensors, others permitted a very wide range of eligible expenditures. The August 2004 agreement for the City of Detroit between Traffic.com and the Michigan Dept. of Transportation was typical of several other agreements:

15 (d) MOBILITY TECHNOLOGIES, after consultation with the STATE, shall invest the amount of the REVENUE share escrowed ex- clusively for needs and activities related to the PROJECT. Examples of acceptable expenditures include, but are not limited to, operation and maintenance of existing ITS equipment as described above in this paragraph, defrayal of costs related to integration of legacy and new SYSTEMS and DATA SERVICES, DATA, and installation of additional sensors and different technologies for the PROJECT.

In other words, Trafﬁc.com could use these “REVENUE share” funds to install additional trafﬁc sensors or for normal business expenses like “operation and maintenance of existing ITS equipment.”

345 The ‘Smart Road’ Scam

While a whole lot of money seemed to be involved in these revenue- sharing provisions, that was only speculation until I could carefully scru- tinize the original contract for Pittsburgh and Philadelphia. The key question: Had the contracts for the 25 follow-on TTID deployments actually followed the terms of the initial contract, as was required by law?

Acquiring the Initial TTID Contract through Serendipity!

As the old saying goes, sometimes it’s better to be lucky than to be good. After two years of working with both the Sunlight Foundation and Project on Government Oversight to acquire the original TTID program contract for Pittsburgh and Philadelphia, I ultimately corralled both parts of that contract from totally different sources. The elusive agreement that PennDOT signed with Traffic.com magically surfaced while I attended the ITS World Congress in November 2008 in New York City. During a meeting with the Vice President for one of Traffic.com’s biggest competitors in the radio/TV traveler information business, I described the frustration I felt in my quest to obtain the original Pennsylvania agreement. Amaz- ingly, he had come across a copy of the Traffic.com/PennDOT agreement in the course of responding to an earlier federal solicitation, and readily provided a copy to me. Meanwhile, I had been urging Lance Walker, Sen. Hatch’s Legislative Assistant, to see if he could acquire the FHWA’s original task order with Signal Corp. from the U.S. DOT Inspector General’s office, with whom Lance had been communicating about the IG’s ongoing TTID program audit. Instead, Lance requested that task order through the Senate’s normal channels, the USDOT’s Office of Congressional Affairs. That request eventually filtered down to Jimmy Chu, the same FHWA Office of Opera- tions staff member who had been providing information to Bill Allison in response to the Sunlight Foundation’s earlier Freedom of Information Act request. Chu sent a copy of the 71-page ITOP (Information Technology Omnibus Procurement) umbrella contract under which the TTID program was funded to Lance, who promptly forwarded it on to me. Over the previous two years I had already received that same high- level ITOP contract from several different sources, and knew that it didn’t

346 The Revenue Sharing Swindle contain any of the specific requirements for the TTID program (including the revenue-sharing provisions). Hence, it was essentially useless. Those details were provided in the task order, but Jimmy Chu and the FHWA had steadfastly failed to provide that document first to the Sunlight Founda- tion, then to the Project on Government Oversight, and now to Senator Hatch’s office. The more difficult that task order was to procure, the more I suspected that it might contain information that Traffic.com—and perhaps even the FHWA—didn’t want out. I conveyed my suspicion to Lance, and urged him to specifically ask the Congressional liaison office to produce the task order covering the initial TTID deployment in Pennsylvania. Lance did so, and two and a half months later (Jan. 9) finally received the long-sought-after task order from the FHWA. He promptly faxed all 50 pages to me.

The Revenue-Sharing Provisions in the Philadelphia and Pittsburgh “Contract”

After over two years of trying, I had now acquired both components of the “contract” that provided details of the revenue-sharing provisions for Philadelphia and Pittsburgh speciﬁcally cited in the FY02 Defense Appropriations Bill:

1. Task order No. T990021 to Contract DTOS59-96-D-00421 between Signal Corp. and the Federal Highway Administration, dated 12/18/98. Argus Networks, Inc. (a previous name for Traffic.com) was listed on page 7 of that task order as a “critical subcontractor” for this task order. (Over the years, the vast majority of funding for this project has passed through Signal Corp. to Traffic.com.) 2. The “Agreement for Intelligent Transportation System Inte- grated Surveillance and Data Management Infrastructure,” dated 11/13/99, between the Pennsylvania Dept. of Transportation (PennDOT) and Traffic.com.

Section 7(F) of the task order described “Revenue Sharing” as follows

347 The ‘Smart Road’ Scam

(emphasis added):

(F) REVENUE SHARING

In the event that the Contractor performs marketing activities or re- ceives revenues from the sale/marketing of information obtained under this task order to other private sector organizations, the Govern- ment shall not be liable for any additional costs (i.e., in excess of the amounts provided in Section G, “Contract Administration Data,” (D) Appropriation Data) resulting from this marketing effort (e.g., marketing costs, advertising, operations, distribution, liability costs, etc). The Government and the Contractor agree that such revenues will be shared by the Contractor with the affected State Department of Trans- portation in accordance with the following formula/arrangement per metropolitan area: • 0% for gross revenue up to $250,000 • 5% for gross revenue between $250,000 and $1M • 10% for gross revenue above $1M

The wording for the revenue-sharing provisions of this initial task order was nearly identical to that of the later (June 2002) document. The only substantive difference I noted was that the original task order said that funds were to be shared “with the affected State Department of Trans- portation” and the language in the later task order was changed ever so slightly, to “with U.S. DOT and the affected state and local agencies.” The details of the revenue-sharing arrangement were left to items 16 (a) through (e) of the agreement between PennDOT (“the affected State Department of Transportation” in Pennsylvania) and Trafﬁc.com for the “initial deployment area” of Philadelphia and Pittsburgh. Here are some of the key elements of those provisions (emphasis added):

16a: Trafﬁc.com shall share any revenue in accordance with the following formula established by the FHWA, which shall be applied sep- arately for each metropolitan area and which shall not be subject to periodic renegotiation by the parties:

348 The Revenue Sharing Swindle

(1) 0% for gross revenue up to $250,000 (2) 5% for gross revenue between $250,000 and $1,000,000 (3) 10% for gross revenue above $1,000,000

16b: Trafﬁc.com will pay the COMMONWEALTH its share of the revenue annually, on the basis of TRAFFIC.COM’s ﬁscal year, which runs from January 1 to December 31, on or before May 1 of each year. Supporting documentation demonstrating how the COMMON- WEALTH’s share of the revenue was calculated shall accompany the payment.

16c: …TRAFFIC.COM shall make such deposits on or before May 1 of each year, and shall furnish the supporting documentation described above in Paragraph (b) to the Commonwealth…

16e: The COMMONWEALTH shall expend the revenues received ex- clusively for needs and activities related to either the PA Project or other ITS-related activities or equipment interconnected with or interrelated to the PA Project within the Philadelphia and Pittsburgh metropolitan areas. Examples of acceptable expenditures include, but are not limited to, operating and maintaining the existing ITS equipment as described above in this subparagraph, defrayal of costs related to integration of legacy and new systems and data, installation of additional sensors and different technologies to the PA Project. The COMMONWEALTH shall consult with TRAFFIC.COM concerning potential expenditures; provided, however, that the ultimate determi- nation about expenditures shall rest with the COMMONWEALTH.

Note that these provisions stipulated that:

1. Trafﬁc.com was required to make annual revenue-sharing payments to PennDOT, accompanied by supporting documentation. 2. While PennDOT agreed to consult with Trafﬁc.com, PennDOT solely determined how those shared-revenues were to be spent, so long as they are used for “either the PA Project or other ITS-related activities or

349 The ‘Smart Road’ Scam equipment interconnected with or interrelated to the PA Project within the Philadelphia and Pittsburgh metropolitan areas.” 3. A wide range of expenditures were eligible for those revenue-sharing funds. 4. There was absolutely no requirement that these funds be spent with Traffic.com. PennDOT could have any contractor/supplier—not just Traffic.com—install “additional sensors” or “different technologies.” In fact, having someone other than Traffic.com install such sensors would be advantageous to the agency, because the agency would then have full use of the data that these additional sensors provide, rather than the limited use of the data from the TTID program’s sensors.

Trafﬁc.com’s own June 7, 2001 press release (described earlier) showed that—at least initially—the company provided revenue-sharing payments back to PennDOT. A quick calculation showed that Trafﬁc. com’s $33,610.64 payment to PennDOT and the USDOT corresponded to gross revenues available for revenue-sharing of $922,212.80, using the following formula:

($922.212.80 - $250,000.00) x (.05) = $33,610.64

This revenue-sharing payment to PennDOT only covered the early deployment for one city, Pittsburgh, since the purpose of that press release was to announce that Traffic.com’s “Digital Traffic Pulse(SM) sensor network” was just then coming online in Philadelphia. In summary, the federal law (FY2002 Defense Appropriations Act) that provided $50 million to Traffic.com for the nationwide expansion of the TTID program contractually required that the same revenue-sharing provisions used for the initial deployment area (in Philadelphia and Pitts- burgh) be continued in all future city contracts. The initial “contract” (consisting of both a task order and agreement) for those cities stipulated an annual payment to PennDOT, according to a set formula. At least initially, Traffic.com made such a payment to PennDOT, which could solely determine how to spend those revenues in a wide variety of ways. There was absolutely no requirement that the shared funds be provided

350 The Revenue Sharing Swindle back to Trafﬁc.com. For most of the follow-on contracts, however, these revenue-sharing funds were not provided back to the state/local agency partner. Instead, Trafﬁc.com retained those funds in what can only be described as a multi-million dollar swindle.

How Much Money Was Swindled?

Providing a definitive answer to that question would require a com- prehensive audit of Traffic.com’s annual revenue-sharing statements for each city, which (as described in almost all of the agreements with its local partners) were to be made available for the partners’ review. Again, however, one publicly-disclosed data point (from Traffic. com’s 2001 press release) provides a useful sense of the magnitude of revenue-sharing funds that Traffic.com will avoid paying over the life of the program. Assuming that the Pittsburgh revenue-sharing payment ($33K+) is typical of the annual payments for an “average” city participating in the TTID program, and that the program runs for an average of 10 years from inception, a rough estimate of lost revenue-sharing funds would be:

18 cities x $33K/yr x 10 years = $5.94 million

Keep in mind that this estimate, like the earlier one for all 25 cities, is extremely conservative (i.e., low), because:

(1) The $33K figure represented only the initial year of operation in Pitts- burgh, and commercial revenues have likely grown substantially in subsequent years. (2) The gross revenue amount for Pittsburgh, for which Traffic.com paid $33K+ to PennDOT, was just under $1 million. According to the provisions of virtually all of the city agreements, the revenue share doubles (from 5% to 10%) for revenues over $1 million. Therefore, the shared revenue from larger cities (e.g., Los Angeles, Detroit) and/or cities in which Traffic.com is more commercially successful will be substantially greater than Pittsburgh’s initial amount.

351 The ‘Smart Road’ Scam

Taking those factors into account, it’s conceivable that the actual amount of lost (or swindled) revenue-sharing funds could easily exceed $10 million or even $15 million over the life of the program. Annual au- dits would be required to determine the exact amount of funds involved over the life of the TTID program. In any case it’s certain that over the life of the TTID program millions of dollars of program-related gross revenue that Traffic.com by law was required to share with its state/local DOT partners will never actually be shared. Since the agreements for the TTID program typically last 10 years and Traffic.com’s revenues have clearly grown significantly since the initial TTID deployment in Pittsburgh, the most lucrative years for this revenue-sharing arrangement are yet to come.

Summary

Federal law that funded the Transportation Technology Innovation and Demonstration (TTID) program required that the sole contractor (Traffic. com) share gross revenues from the program with the state/local agency partner in each city. However, the vast majority of the contracts for these cities were carefully worded so that such revenue-sharing never actually takes place, and Traffic.com simply retains any “shared revenue” for its own business purposes, such as operations and maintenance. Many millions of dollars of shared revenue from this “public-private partnership” will not in fact be shared with this program’s public-sector partners. This is a substantial breach of both federal law and the public’s trust. As a public/private partnership, both public and private partners should share in the TTID program’s success. In a time of extremely tight budgets, funds that are shared with state/local agency partners are extremely valu- able—especially when the state/local partners have the authority to decide how to spend those funds for maximum benefit. The TTID program’s state/local partners should have had full discre- tion to spend those shared revenues on a wide variety of eligible expenses, including the installation of new detectors whose data they could fully use and share. But most of these agency partners, victims of a very clever swindle, would never get the chance.

352 26

Sustaining the “Culture of Corruption”

hroughout the previous 25 chapters I’ve laid out, in intricate detail, Thow a group of individuals used their expertise in gaming our political system to enrich themselves and their friends and associates. Much of this enrichment was accomplished through the creation and maintenance, via earmarks and the influence of key legislators and lobbyists, of a federally-subsidized monopoly for the company Traffic.com. Through my investigation—aided by three non-profit government watchdog organizations—I accidentally discovered that Norman Mineta, a former Cabinet member in both the Clinton and Bush Administrations, apparently violated federal ethics/false claims laws. Mr. Mineta failed to disclose the details of his capital gains income of up to $1 million from stock options in a company (Trimble Navigation) while a sitting Cabi- net member, as is required by federal ethics laws. These are the same laws for which Alaska Sen. Ted Stevens was convicted in 2008 on several felony counts. Further investigation suggested that both the Commerce and Transportation Departments under Secretary Mineta’s leadership supported specific policies and programs that would benefit the GPS market in which Trimble Navigation was a leader. The built-in system of checks-and-balances in our federal government (Executive vs. Legislative Branch, Democrat vs. Republican, House vs.

353 The ‘Smart Road’ Scam

Senate) is supposed to help ensure integrity in our legislative process. But if fraud and corruption do occur, numerous federal watchdog agencies (FBI, SEC, Inspector Generals, etc.) are supposed to investigate and prosecute wrongdoing. Congress itself is supposed to perform an invalu- able oversight role, too. That’s the way the system is supposed to work but, as I learned from personal experience over several years, not the way it really works. In reality, unethical, dishonest “public servants” can get away scot-free, and the “authorities” (particularly the SEC) only step in after the fact—if they step in at all. So why don’t these checks and balances work? The answers are root- ed in what is often called the culture of corruption in Washington, DC. Most people undoubtedly have a visceral understanding of many aspects of the culture of corruption from their own experiences. They know that such clichés as “you scratch my back and I’ll scratch yours” are root- ed in real human behavior. Countless books have described the culture of corruption in different settings and contexts. The ‘Smart Road’ Scam describes that culture throughout; the efforts by unscrupulous and unethical high-level “public servants” to set up a monopoly so that they and their associates can cash in, and the authorities’ unwillingness to open up active investigations into clear violations of federal ethics laws. If one just scans selected pages of this book, one might come to the conclusion that the scam described here can’t possibly be true? How could three consecutive Chairmen of the House Transportation and Infra- structure Committee – Norman Mineta, Bud Shuster, and Don Young – all play pivotal roles in The ‘Smart Road’ Scam? The answer lies in our federal legislative process, and the fact that career legislators build up friendships and loyalties that often serve themselves (and their own pocketbooks) ﬁrst, and our nation’s citizens a distant second.

354 Sustaining the “Culture of Corruption”

The Downsides of Congressional Camaraderie

Figure 26-1: House Transportation Committee Chairman Bud Shuster, left, speaks with Reps. James Oberstar and Nick Rahall. (Ray Lustig/Washington Post)

As is thoroughly documented in this book, three consecutive Chair- men of the U.S. House Transportation and Infrastructure Committee, Norman Mineta (1993-1995), Bud Shuster (1995-2001), and Don Young (2001-2007), all played pivotal roles in creating and sustaining Traffic. com’s monopoly. Shuster and his close associates, of course, spearheaded the original earmark in the Transportation Equity Act for the 21st Century (“TEA-21”) that led to Traffic.com’s initial pilot project in Philadelphia and Pittsburgh. He also pushed hard legislatively to expand the program nationwide on a sole-source basis. Following Shuster’s retirement from Congress in early 2001 after being reprimanded by the House Ethics Committee and outed by 60 Min- utes, Cong Don Young readily took up Traffic.com’s cause and helped lead—along with Pennsylvania’s Senior Senator Arlen Specter and other friendly legislators—the conversion of this obscure Pennsylvania pilot program into a nationwide monopoly for Traffic.com. Not coincidentally, the record shows that Traffic.com regularly contributed to both Cong. Young’s and Senator Specter’s political campaigns all during this period. (See Chapter 20, “Pay-to-Play”.) Young and Specter essentially operated

355 The ‘Smart Road’ Scam as a tag team to undercut the new provision Senator Hatch inserted in SAFETEA-LU that was designed to open up the TTID program to competition: Specter made sure that the monopoly language (Part 1) remained in the bill, and Young directed all remaining funds to Part 1, effectively starving Hatch’s new Part 2 provisions. Mineta’s support for Traffic.com’s monopoly, while almost entirely behind-the-scenes, was perhaps most important of all. As Secretary of Transportation, he was the chief executive officer of the huge federal department that administered this earmarked program. In early 2002 he exercised an option to expand Traffic.com’s small sole-source contract in Philadelphia and Pittsburgh to 25 new cities nationwide. That option was enabled—but not mandated—by language Traffic.com’s legislative supporters inserted into an unrelated Defense appropriations bill. Mineta, along with his Deputy Secretary Michael P. Jackson, also made a key management change critical to the success of Traffic.com’s then nascent monopoly when they reassigned a senior FHWA manager, Dr. Christine Johnson, to a field position in Utah after she balked at going along with Traffic.com’s self-serving scheme. Mineta was and is a Democrat, and Shuster and Young were and are both Republicans. So why over a many year period would they all find themselves on the same side of an effort to create and nurture a very coun- terproductive federal monopoly? The answer lies in the camaraderie and bipartisanship that has been built up over the years in the House Transportation and Infrastructure Committee, which determines where billions of dollars are spent each year on our nation’s transportation infrastructure. An article in the March 9, 2002 issue of the National Journal, which contrasted the styles of Transportation and Infrastructure Committee Chairman Don Young with that of his predecessor Bud Shuster, empha- sized the “bipartisanship” long exhibited in that committee:

As Young tackles the difﬁcult task of restoring these highway funds, transportation experts have already noticed some similarities between himand Shuster. They note, for instance, that Young has run the committee in the same bipartisan manner that Shuster did; after all,

356 Sustaining the “Culture of Corruption”

as the saying goes, there’s no such thing as a Democratic or a Re- publican bridge. Earlier, there were questions about whether Young would embrace bipartisanship, given that he came from the mudsling- ing Resources Committee. Young admits that the more congenial tone at Transportation has been good for him: “It has given me more of a willingness to go to work in the morning than I had during the con- stant war at Resources.”

While most people would consider camaraderie and bipartisanship positive and welcome attributes, ironically they can set the stage for fraud and corruption. It works like this: each congressperson has his or her own pet transportation projects, and quickly learns that support for others’ pet projects is almost always reciprocated. Over time, this mutual support environment leads to lasting friendships with those from both political parties. The classic phrase “you scratch my back and I’ll scratch yours” was tailor made for this environment. The notion of bipartisan cooperation has become almost a mantra among Committee members. Transportation Secretary candidate Mineta, during his Senate confirmation hearing in January 2001, repeated that mantra. “There are no Democratic or Republican highways, no such thing as a Republican or Democratic traffic congestion,” he said at the time. The camaraderie built up over years of mutual support runs deep. On the very same day in October 2000 that Cong. Bud Shuster was being reprimanded by the House Ethics Committee, then Ranking Member James Oberstar (D-MN) was offering heartfelt sympathy and support for his demonstrably less-than-ethical colleague. (See sidebar, “Bud Shuster’s ‘Ordeal’”) Bud Shuster’s close relationship with Ranking Member Oberstar apparently paid off – for Traffic.com! Around the time that Cong. Ober- star was commiserating with his old friend Bud Shuster, he was working behind the scenes to get an unusual procurement mechanism (called the Information Technology Ominibus Procurement, or “ITOP”) approved for use by Traffic.com’s earmark in TEA-21. ITOP enabled the pilot ITIP deployment for Philadelphia and Pittsburgh (as well as later deployment

357 The ‘Smart Road’ Scam

Bud Shuster’s “Ordeal”

Perhaps nothing epitomizes the “culture of corruption” that exists in Congress—and the unhealthy juxtaposition of ethics and loyalty that regularly occurs—than a discussion that took place on the House floor on October 5, 2000. On that day, the House Ethics Committee was issuing a strongly worded “letter of reproval” to Cong. Bud Shuster, asserting that the Congressman’s unethical actions over several years “brought discredit to the House of Representatives.” Exercising a point of personal privilege, Cong. Bud Shuster thanked the Ethics Committee for “concluding what has been a 4-year nightmare to myself and my family.” “4 years, 1 month, and 31 days ago, a group associated with Ralph Nader filed an ethics complaint against me,” Shuster said. Of course, that “group” was the non-profit Congressional Accountability Project, co- founded by Ralph Nader and run by Gary Ruskin. In multiple filings to the Ethics Committee, Ruskin and CAP had painstakingly documented how “pay-to-play” worked in Cong. Shuster’s world: “pay” a healthy consult- ing fee to Shuster’s long-time former Chief-of-Staff-turned-lobbyist Ann Eppard and you could lock in tens of millions of dollars of Congressional support for your own transportation project. It was literally that simple. While one might have expected some contrition on Shuster’s part, that was not the case, as he only acknowledged that his actions involved “appearances of improprieties.” “I am very pleased that the committee dismissed the wild and inaccurate charges originally filed by the Nader group,” he stated triumphantly. “I am very pleased that not a single allegation, not a scintilla of evidence, not a hint of any of this referred to any actions that I took that influenced my activities as chairman of my committee.” On this day in October, 2000, Bud Shuster clearly just wanted his “nightmare” to come to an end. “I accept the findings to stop the hemor- rhaging of legal fees and to put this behind us,” he said. “…perhaps most significantly, as a result of the tremendous support I have received, our Committee on Transportation and Infrastructure has been able to be an effective committee.” That support was clearly evident when, at the conclusion of Shus-

358 Sustaining the “Culture of Corruption” ter’s remarks, the Ranking Democratic Member of the Committee, Cong. James Oberstar of Minnesota, asked for Cong. Shuster to yield the ﬂoor, which he gladly did. “Mr. Speaker, the apologia pro vita sua we have just heard from the gentlemen in the well is and represents one of the most intensely personal moments in this body; one of the most human experiences we engage in,” Oberstar said. “None of us, unless we stand in that well, as the gentleman has just done, can understand the pain and the difﬁculty, but also the strength of character it takes to deliver the statement the gentleman has just made, and to say ‘I accept the judgment.’ But it is characteristic of the gentleman to do so.” “The gentleman has led the committee throughout all this ordeal with dignity and effectiveness. I know how pained the gentleman is over this report, but I am proud of this moment that he has taken to address his colleagues and to address the country and to address this institution, and I thank the gentleman.” Oberstar made no direct reference to the numerous ethical violations alleged against Mr. Shuster that had caused the Ethics Committee to conduct a multi-year investigation and ultimately to conclude that his activities had brought “discredit to the House of Representatives.” Quite to the contrary, the Minnesota Congressman was extolling Shuster’s “strength of character” in surviving the ethics complaint. It was as if the ethical charges lodged against the Chairman were just a minor annoyance that came with the territory. The bipartisan camaraderie that had built up in the Transportation Committee as members supporting each others’ pet transportation projects completely trumped numerous documented cases of “pay-to-play” in Shuster’s case. After all, that’s the way that Congress—particularly the Transportation and Infrastructure Committee—worked. As a result of the Democratic Party’s victory in the November 2006 mid-year election, the party assumed control of the U.S. House of Repre- sentatives. Cong. Oberstar became Chairman of the House Transportation and Infrastructure Committee, succeeding Alaska Cong. Don Young. Once again, a Shuster protégé was running the Committee.

359 The ‘Smart Road’ Scam after the program expanded nationally) to bypass the normal USDOT procurement process. Quoting from the lead story in the January 15. 2001 issue of the Inside ITS newsletter:

Unlike other ITS projects, which go through the JPO, a demonstration initiative for the infrastructure program became a task order project under the DOT Information Technology Omnibus Procure- ment (ITOP) program. This program assigns tasks to preapproved large contractors.

Chung Eng, an ITS specialist in the DOT and the chair of the selec- tion committee for the task order, says the ITOP mechanism was used after several congressmen, including James Oberstar of Minnesota, the ranking Democrat on the Transportation Committee, sent memos clarifying their intent for the program. Congress was interested in using a single U.S. DOT procurement mechanism rather than multiple procurement mechanisms at the state level, he says.

Eng says he was not contacted by Shuster or his ofﬁce during the process.

Shuster had apparently enlisted the aid of several of his colleagues (including Ranking Member Oberstar) to act as proxies on his behalf to lay the groundwork for using this obscure procurement mechanism for the initial award for Traffic.com’s pilot deployment. Since this procurement did not go through the normal ITS procurement channels, many of Traf- fic.com’s competitors didn’t even know that a new “competition” was in process, which Traffic.com therefore easily “won.” With friends in high places willing to work on his behalf to pressure the USDOT to use this mechanism, Shuster was able to keep his personal fingerprints off of this initial phase of setting up Traffic.com’s monopoly. That was the way that things were (and are) done in Congress. As if to underscore the strength of the lifelong friendship between Cong. Oberstar and Cong. Shuster, in November 2007 Shuster, along with former Transportation Secretary Mineta, were invited participants at the

360 Sustaining the “Culture of Corruption” annual James L. Oberstar Forum at the University of Minnesota in Min- neapolis. “It was a privilege and pleasure to have worked with, in a learning experience, to work with Bud Shuster, who led us fearlessly through a very difﬁcult period—a time in which we made massive investments in surface transportation,” Oberstar said at the time. Indeed, Cong. Oberstar had long been singing Cong. Shuster’s prais- es. Quoting from a Washington Post news piece back in March 1998 about the passage of the big transportation authorization bill TEA-21 (that contained the original earmark for the ‘smart road’ scam):

Rep. James L. Oberstar (Minn.), the ranking Democrat on the Trans- portation Committee, praised Shuster’s skill and persistence in over- coming leadership resistance and dubbed the bill the “Bud E. Shuster Transportation for All Eternity Act.”

In that same piece, Cong. Ray LaHood of Illinois, also a member of the Transportation and Infrastructure Committee, likewise marveled at Chairman Shuster’s legislative skills:

“Shuster knows how to work the system,” said Rep. Ray LaHood (R- Ill.), a member of the committee. “He’s at the pinnacle of his power right now. And I think he goes into the conference with the Senate with an awful lot of clout and inﬂuence.”

In another Washington Post article the previous fall, LaHood had lav- ished praise on Transportation Committee Chairman Shuster:

“He’s got backbone. He’s got guts,” said Rep. Ray LaHood (R-Ill.), a member of the committee. “And he’s not afraid to go up against any member or leaders.”

LaHood Conﬁrmed as Transportation Secretary

On January 22, 2009, retired Illinois Republican Congressman Ray

361 The ‘Smart Road’ Scam

LaHood was conﬁrmed by the U.S. Senate as Transportation Secretary in the Obama Administration. And the top transportation leaders in both the Legislative and Execu- tive branches were former colleagues of retired Congressman Bud Shus- ter, one of the chief architects of The ‘Smart Road’ Scam. It was business as usual.

362 Epilogue

s I was putting the ﬁnal touches to The ‘Smart Road’ Scam, I came Aacross this ominous new story from FOX News.

House Kills Effort to Investigate Lobbyist-Lawmaker Ties

The proposal would have forced the House Ethics Committee to launch a probe into ties between the source and timing of campaign contributions by lobbyists and subsequent legislator requests for special projects or earmarks.

By Mosheh Oinounou

FOXNews.com

Wednesday, February 25, 2009

The House voted Wednesday to kill a resolution calling for an ethics investigation into potential quid pro quo between lobbyist campaign donations and lawmakers.

Rep. Jeff Flake, R-Ariz., sponsored the proposal that would have forced the House Ethics Committee to launch a probe into ties between the source and timing of campaign contributions by lobbyists and subsequent legislator requests for special projects or earmarks.

363 The ‘Smart Road’ Scam

While open-ended, Flake’s resolution was a direct response to the ongoing federal investigation into the PMA Group, a lobbying company accused of making fraudulent donations to lawmakers using names of people who did not exist.

The ﬁrm, which has contributed millions to politicians in the last de- cade, has close ties to senior Democratic appropriators including Reps. John Murtha D-Pa., and Pete Visclosky, D-Ind. The FBI raided PMA’s headquarters in November and is investigating the group’s founder and president, Paul Magliochetti, a former Murtha aide.

“Whereas numerous press reports and editorials have alleged several cases of inﬂuence peddling between members of Congress and outside interests seeking federal funding --the House of Representa- tives should respond to such claims and demonstrate integrity in its proceedings,” the resolution read.

The House decided to set aside the proposal by a mostly party-line 226-182 vote, though 17 Democrats joined Republicans in support of considering the measure.

The vote came just after the House approved a $410 billion spending to fund the government this year, which also contained $8.8 million on projects sought by client of the PMA lobbying group.

“Our own ethics committee may say that’s OK. The Department of Justice may see it another way,” Flake said following the vote. “Until we bring our Ethics Committee guidelines in line with the Justice De- partment, our members are exposed.”

Asked why he voted with the majority to table the resolution, Murtha said, “no comment.”

364 Sources and Notes

early all of the information in this expose comes from one of four Ndifferent sources:

1. My personal experience in digging into the ‘smart road’ scam while a subcontractor to the U.S. Department of Transportation and afterwards.

2. Exhaustive Internet searches for publicly available evidence, using both Google searches as well as speciﬁc site searches (e.g., the Congres- sional “Thomas” data repository).

3. Information provided to the non-proﬁt government watchdogs Project on Government Oversight and Sunlight Foundation in response to their many Freedom of Information Act (FOIA) requests to the U.S. DOT and other federal and state agencies.

4. Personal discussions and telephone conversations that I had with key players in this scam, including FBI agents and supervisors and staff members from the U.S. Ofﬁce of Government Ethics (OGE). In some cases (where noted) I legally recorded these conversations so that I could capture the exact substance of the conversation. (Since Texas, DC, and Virginia all legally allow one-party-consent telephone recordings, these recordings were in all cases perfectly legal.)

365 The ‘Smart Road’ Scam

Prologue iii Because of this proclivity: “Gingrich Tried to Reign In Ally On Big Spending for Highways,” New York Times, Sept. 18, 1997, http://query. nytimes.com/gst/fullpage.html?res=9E00EED91038F93BA2575AC0A9 61958260 iii Not surprisingly: “King of the Roads,” National Journal, Sept. 23, 2000, http://www.accessmylibrary.com/coms2/summary_0286- 28442587_ITM iii Because trafﬁc is so light: “Unchecked pork-barrel ethics pave road to hell,” Electronic Engineering Times, October 23, 2000, http://www. eetimes.com/op/showArticle.jhtml?articleID=18304813 iii The Bud Shuster Highway received: “CNN Highlights Retired Re- publican Congressman’s Pork in Anti-Earmark Segment,” CNN, August 8, 2007, http://newsbusters.org/blogs/matthew-balan/2007/08/08/cnn- highlights-retired-republican-congressman-s-pork-anti-earmark-seg iv In 1998, his former Chief : “Lobbyist Prospers as Charges Loom,” Washington Post, April 10, 1999, http://www.washingtonpost.com/wp- srv/politics/special/highway/stories/eppard041099.htm iv In both 1996: Letter dated September 5, 1996 to the House Ethics Committee entitled “RE: Ethics Complaint Against Representative Bud Shuster and Call for Investigation into Possible Violations of Criminal Law and House Rules,” http://www.congressproject.org/ethics/shuster. html iv In both 1996 and 2000: Letter dated October 16, 2000 to the House Ethics Committee entitled “RE: Request to Re-Open the Ethics Investi- gation of Representative E. G. “Bud” Shuster,” http://www.congressproject.org/ethics/shusethlet2000.html

366 Sources and Notes iv In October 2000: “Congressman Draws Rebuke But No Penalty,” New York Times, October 6, 2000, http://query.nytimes.com/gst/fullpage. html?res=9501EEDA173CF935A35753C1A9669C8B63 iv She’d walk back home: “‘60 Minutes’ report takes aim at Pennsyl- vania congressman,” CNN.com, October 16, 2000, http://archives.cnn. com/2000/ALLPOLITICS/stories/10/16/shuster.ethics.ap/index.html v In recent years: “A bridge to Nowhere,” Salon.com, August 9, 2005, http://dir.salon.com/story/news/feature/2005/08/09/bridges/ v In fact, his leadership: “Don Young Embodies What’s Wrong With the GOP,” Wall Street Journal, June 6, 2008, http://online.wsj.com/article/SB121270989481150353.html?mod=opinion_main_commentaries vi However, the way: “Justice asked to probe Young earmark,” An- chorage Daily News, April 18, 2008, http://www.adn.com/front/story/379679.html vi Young was already under: “Paper reports Young’s Veco ties inves- tigated in federal probe,” Anchorage Daily News, July 25, 2007, http:// dwb.adn.com/news/politics/fbi/story/9162143p-9077780c.html vi He also serves: “Norman Mineta, Former U.S. Secretary of Trans- portation and U.S. Secretary of Commerce, Joins AECOM Board of Directors,” AECOM press release, June 11, 2007, http://pr.aecom. com/phoenix.zhtml?c=211994&p=irol-newsArticle&ID=1013591&high light= vi Mr. Mineta never gave: “Mineta to quit as Transportation Secretary,” New York Times, June 23, 2006, http://www.nytimes. com/2006/06/23/washington/23cnd-mineta.html vii From 1995 through: “Smart Highways – as states work to make highways less congested and costly, integrators ﬁnd new proﬁt opportu-

367 The ‘Smart Road’ Scam nities,” Washington Technology, July 11, 1996, http://www.washington- technology.com/print/11_7/10111-1.html vii That situation: The Public I – an Investigative Report of the Center for Public Integrity, June 2001, http://www.publicintegrity.org/assets/ pdf/pi_2001_06.pdf vii He unexpectedly announced: “No. 2 Homeland Security Official Resigns,” CBS News/AP, Sept. 24, 2007, http://www.cbsnews.com/stories/2007/09/24/national/main3291619.shtml vii Mr. Jackson announced: A copy of that letter is online at: http:// www.itsonline.com/pogo_dhs_comm/pogo_dhs_foia_aug24_07.doc vii In that role: From Mr. Jackson’s official biography at http://www. whitehouse.gov/government/m_jackson-bio.html viii In this role: From a bio of Mr. Collins at http://www.netcaucus. org/events/2001/wp/ ix While a conservative: For more on the Hatch-Waxman Act see http://en.wikipedia.org/wiki/Hatch-Waxman_Act ix While a conservative: Sens. Hatch and Reid Push for Thorium Nu- clear Fuel Cycle (Hatch press release), Oct. 2, 2008, http://hatch.senate. gov/public/index.cfm?FuseAction=PressReleases.Detail&PressRelease_ id=bf8479e9-1b78-be3e-e031-1635aee6efa9&Month=10&Year=2008 ix As befitting a: Website for the Antitrust Subcommittee: http://judiciary.senate.gov/about/subcommittees/antitrust.cfm x Now companies will: “Federal Highway Legislation Creates Com- petitive Bidding Process for Traffic Data Collection: Traffic.com Loses Monopoly,” July 29, 2005 press release from Cong. Anthony Weiner, http://www.house.gov/list/press/ny09_weiner/052907traffic.html

368 Sources and Notes x An interesting subnote: See Stewart’s political donations record on “Newsmeat” at: http://www.newsmeat.com/celebrity_political_dona- tions/Jon_Stewart.php

Chapter 1

1 While I directly: FHWA Ofﬁce of Operations website: http://www. ops.fhwa.dot.gov

1 While I directly: JPO’s website: http://www.its.dot.gov

2 In June, 1997: “Trouble in Lobby: Kassoff Zapped at ITS America,” tollroadsnews.com, April 26, 1997, http://www.tollroadsnews.com/ node/2019

3 I had registered: “Newt Gingrich on Intelligent Transportation Systems,” as reprinted in Government Technology, May 1, 1995, http:// www.govtech.com/gt/95914?id=&story_pg=1

3 (Later that year: See: http://www.time.com/time/cov- ers/0,16641,19951225,00.html

4 In mid-2002 I: Trafﬁc.com has changed its name several times over the years, earlier names including Argus Networks and Mobility Tech- nologies. To avoid confusion, I will usually refer to the company simply as Trafﬁc.com.

4 Dr. Costantino, a “control freak”: “Trouble at Trade Group: Intell- moniker and Firing Create Tensions,” tollroadsnews.com, June 28, 1997, http://www.tollroadsnews.com/node/1880

5 Almost at the same time: “Mobility Technologies will Partner with Chicago and Dallas to Deploy Intelligent Transportation Sys- tem,” Trafﬁc.com press release, Jan. 7, 2002, http://web.archive.org/ web/20051215153345/http://corporate.trafﬁc.com/press/january_07_ 2002.html

6 One of those individuals: Not his real name, but similar phonetically.

369 The ‘Smart Road’ Scam

7 While kicking around: Not her real name, but similar phonetically.

Chapter 2

9 I’d always thought: “Carl Bernstein Laments U.S.’s ‘idiot Culture’,” MSNBC.com, Nov. 2, 2007, http://www.msnbc.msn.com/id/21595196/

11 I was clearly: More information here: http://www.saturnreturn.net

14 Trafﬁc.com’s contract: By “contract,” John Collins was really re- ferring to the June 2002 Task Order that the FHWA signed with Trafﬁc. com. Events preceding that signing, I would later discover, would add a big new piece to the puzzle.

17 A nearly full collection: “Don C. Hoeﬂer – Coined the term ‘Sili- con Valley,’” April 1986 Smithsonian obituary, http://smithsonianchips. si.edu/schreiner/hoeﬂer.htm

18 But Traffic.com President: Jannetta is just one (of many) of Cong. Shuster’s connections to Traffic.com. Years before he started Traffic. com he was the two-time mayor of Altoona, PA, the largest city in Con- gressman Shuster’s old district.

19 Last I checked: “HW” in this context stands for “highway” as in “highway bill,” the big transportation authorization bill that Congress passes every seven years or so.

19 Steve Lockwood: I would soon find out that Dr. Johnson’s “reassign- ment” had occurred because she saw through the Traffic.com scam and balked at signing the FHWA’s Task Order with Traffic.com that expanded the program from 2 to 27 cities.

21 It suggests why: “PPP” in this context stands for “public-private partnerships”

21 I was talking to: MTC refers to the Metropolitan Transportation Commission in the San Francisco Bay Area, a “metropolitan planning organization” that is also a long-time leader among public agencies in

370 Sources and Notes providing traveler information.

Chapter 4

34 During one evening stroll: Conrad’s picture available online at: http://www.streetsense.org/vendors.jsp

35 Several weeks later: “Shelf Life,” Washington Post Sunday Maga- zine, July 31, 2005, http://www.washingtonpost.com/wp-dyn/content/article/2005/07/26/AR2005072601841.html

37 That weekend, I read: A reprint of Prof. Chapman’s editorial is online at: http://www.utexas.edu/lbj/news/summer2005/chapman_africa. html

38 In September: “Uganda’s Leader Beats Drum on AIDS,” Washing- ton Post, September 30, 2005, http://www.washingtonpost.com/wp-dyn/ content/article/2005/09/29/AR2005092902225.html

38 He said he did: When I pulled these documents out of my suit jacket pocket and began to hand them to President Museveni, a number of hands of grabbed my wrist, preventing me from giving these documents to him. Afterward I realized that these hands belonged to security people—perhaps both Ugandan and U.S. It turns out that heads of state can get killed if certain deadly powders are sprinkled on paper documents, something that never occurred to me.

Chapter 5

44 So I did a Google: RE: Ethics Complaint Against Representative Bud Shuster and Call for Investigation into Possible Violations of Crimi- nal Law and House Rules, Sept. 5, 1996, http://www.congressproject. org/ethics/shuster.html

45 Four Years Later: “Congressman Draws Rebuke but No Penalty,” Oct. 6, 2000, New York Times, http://query.nytimes.com/gst/fullpage. html?res=9501EEDA173CF935A35753C1A9669C8B63

371 The ‘Smart Road’ Scam

45 A Major Part of the Complaint: Lobbyist Prospers as Charges Loom, April 10, 1999, Washington Post, http://www.washingtonpost. com/wp-srv/politics/special/highway/stories/eppard041099.htm

45 Less than two weeks later Ruskin: Request to Re-Open the Eth- ics Investigation of Representative E. G. “Bud” Shuster, Oct. 16, 2000, http://www.congressproject.org/ethics/shusethlet2000.html

46 While Murtha is best known: “Lobbying allegations cloud Murtha’s bid for House majority leader,” Pittsburgh Post-Gazette, Nov. 16, 2006, http://www.post-gazette.com/pg/06320/738810-84.stm

46 While Murtha is best known: “Trading Votes for Pork Across the House Aisle,” New York Times, Oct. 2, 2006, http://www.nytimes. com/2006/10/02/washington/02murtha.html?_r=1&scp=3&sq=%22Jack %20Murtha%22%20brother&st=cse&oref=slogin

46 In that role, he: Meet Congress’ “‘King of Pork,” CBS Evening News, April 4, 2008, http://www.cbsnews.com/stories/2008/04/04/as- signment_america/main3994689.shtml

46 While the conservative magazine: “Murky Jack Murtha,” The American Spectator, February 2, 2006, http://www.spectator.org/dsp_ar- ticle.asp?art_id=9359

46 Shortly after the November: “Ms. Pelosi and Mr. Payoff,” New York Post, Nov. 16, 2006, http://www.nypost.com/seven/11162006/post- opinion/editorials/ms__pelosi__mr__payoff_editorials_.htm

46 CREW currently lists Murtha: Beyond Delay, Citizens for Ethics and Responsibility in Washington, http://www.beyonddelay.org/summa- ries/murtha.php

47 Just after the election: Murtha: Ethics Reform “Total Crap,” Paul Blumenthal, Sunlight Foundation blog, Nov. 15, 2006, http://blog.sunlightfoundation.com/2006/11/15/murtha-ethics-reform-total-crap/

47 A report in the Washington Post: “Easy Street: the Bud Shuster In-

372 Sources and Notes terchange,” Washington Post, April 5, 1998, http://www.washingtonpost. com/wp-srv/politics/special/highway/stories/hwy040598a.htm

47 According to a report on CNN: “‘60 Minutes’ report takes aim at Pennsylvania congressman,” CNN, Oct. 16, 2000, http://archives.cnn. com/2000/ALLPOLITICS/stories/10/16/shuster.ethics.ap/index.html

48 Interestingly, Congressman Shuster: “Pennsylvania Rep. Shuster Retiring,” Brotherhood of Locomotive Engineers, http://www.ble.org/pr/ archive/headline010501a.html

48 From further Google searches: Lobbying report is online at: http://www.opensecrets.org/lobby/clientsum.php?lname=Trafﬁc. com&year=2001

51 While it provided the starting point: Renamed the Transportation Technology Innovation and Demonstration (TTID) program in 2005 in the big “SAFETEA-LU” transportation authorization bill

51 The lead story in: Available on the web at: http://www.itsonline. com/trfc/articles/insideITS_jan15_01.doc

52 With the support of Shuster: “‘Monopoly’ Continues for Pa. Com- pany,” The Hill, June 26, 2007, http://www.itsonline.com/trfc/articles/ Monopoly_continues_for_Pa_company.pdf

52 With the support of Shuster: FY01 Transportation Appropriations bill available online at: http://frwebgate.access.gpo.gov/cgi-bin/getdoc. cgi?dbname=106_cong_public_laws&docid=f:publ346.106

52 However, the story in the January: “Trafﬁc.com claim to $50 million ITS earmark raises questions,” Inside ITS, January 15, 2001, http:// www.itsonline.com/trfc/articles/insideITS_jan15_01.doc

54 “We have determined: Available online at: http://www.itsonline. com/trfc/letters/fhwa_letter_feb20_01.pdf

54 So the company worked with: FY02 appropriations bill language

373 The ‘Smart Road’ Scam available online at: http://www.asm.org/ASM/ﬁles/LEFTMARGIN- HEADERLIST/DOWNLOADFILENAME/0000000568/HR3338127[1]. pdf

55 In a letter to then Chairman: Available online at: http://www.itsonline.com/trfc/letters/mineta_feb5_02.pdf

55 On June 20, 2002: Available online at: http://www.itsonline.com/ trfc/contracts_agreements/Procurement_Request.pdf

55 In a 1987 article: “Veto Perils Altoona Dream of Economy Come- back,” New York Times, March 31, 1987, http://query.nytimes.com/gst/ fullpage.html?res=9B0DEFDC153CF932A05750C0A961948260&sec= &spon=&pagewant ed=1

55 Jack Schenendorf, the Chief: Mr. Schenendorf’s bio is located here: http://www.transportationfortomorrow.org/about/bio_schenendorf. aspx

55 Mr. Schenendorf” law ﬁrm: Trafﬁc.com’s IPO offering document is online at: http://www.secinfo.com/dVut2.vKq.a.htm

55 Cong. Shuster’s son, Robert L. Shuster: Robert L. Shuster’s bio is located here: http://www.buchananingersoll.com/professionals. php?PeopleID=463

56 While I was unable to ﬁnd records: Mr. Shuster’s 2006 lobbyist disclosure online at: http://www.itsonline.com/trfc_lobbyists/shuster_ robt_2006.pdf

56 A Google search: The lease arrangement was described in this SEC ﬁling: http://www.secinfo.com/dVut2.zWXa.g.htm

56 As recently as January 2008: Mr. Shuster’s 2008 lobbyist disclosure online at: http://www.itsonline.com/trfc_lobbyists/shuster_robt_ 2008.pdf

56 Mr. Nober, who according to: “The Business of Government Hour,”

374 Sources and Notes

Oct. 29, 2003, http://www.businessofgovernment.org/main/interviews/ bios/roger_nober_frt.asp

56 This jigsaw puzzle was undoubtedly: Former Cong. Bud Shuster’s photo is online at: http://www.tfhrc.gov/pubrds/novdec01/images/ bud001d.jpg

Chapter 6

57 While religion and computers: Pictures of our trip, including several of these “revival meetings,” are available here: http://www.kodakgallery.com/Slideshow.jsp?Uc=qnyzl03. vaeu13n&Uy=ox4gs8&Upost_signin=Slideshow.jsp%3Fmode%3Dfrom share&Ux=0&mode=fromshare&conn_speed=1

63 Nelligan would leave his position: These positions are shown in Jeff Nelligan’s “Linked-In” Internet page, http://www.linkedin.com/ pub/4/765/827

64 I would later learn that: “Nigerian link led to FBI raid in corruption case,” International Herald Tribune, June 8, 2006, http://www.iht. com/articles/2006/06/07/news/raid.php

67 On Friday, June 23: “Transportation Secretary Mineta Resigns,” CNN.com, June 23, 2006, http://www.cnn.com/2006/POLITICS/06/23/ mineta.resigns/index.html

67 While his resignation: “Prediction: USDOT Secretary of Transpor- tation Mineta Will Resign,” Buda Rabblerouser blog, April 10, 2006, http://budarabble.blogspot.com/search?q=low+public+approval

67 I immediately posted: “Mineta Resigns,” Buda Rabblerouser blog, June 23, 2006, http://budarabble.blogspot.com/search?q=CNN+that+Nor man+Mineta

67 Neither Mr. Mineta nor: “Transportation Secretary Mineta Resign- ing,” Associated Press (via National Public Radio), June 23, 2006, http:// www.npr.org/templates/story/story.php?storyId=5506710

375 The ‘Smart Road’ Scam

67 He also was clearly not: “Added Clout Sought for Lobbying Ef- fort,” Washington Post, August 29, 2007, http://www.washingtonpost. com/wp-dyn/content/article/2007/08/28/AR2007082801326.html

67 He also was clearly not: “Secretary Mineta Testiﬁes in Favor of Rail,” April 17, 2008, KHON2-TV (Honolulu), http://www.khon2.com/ home/ticker/17837824.html

67 The afternoon of June 23: Not his real name, which I have changed to protect his identity.

69 No telling what the recent: “The 2006 Pulitzer Prize Winners,” http://www.pulitzer.org/citation/2006,Investigative+Reporting

Chapter 7

71 Hatch has long been a strong: More information about Sen. Hatch’s role with the Antitrust Subcommittee is here: http://judiciary. senate.gov/subcommittees/110/antitrust110.cfm

73 In fact, Senator Hatch: Press release, “Hatch Puts the Brakes on Trafﬁc.com,” July 29, 2005, http://hatch.senate.gov/public/index.cfm?Fu seAction=PressReleases.Detail&PressRelease_id=9e462118-bfaa-428b- 952a-d6512ea9f9c7&Month=7&Year=2005

73 On the House side: Press release, “Federal Highway Legislation Creates Competitive Bidding Process for Traffic Data Collection: Traffic. com Loses Monony,” July 29, 2005, http://www.house.gov/list/press/ ny09_weiner/052907traffic.html

74 Back in mid-2002: “Close of an Era: Joint Program Ofﬁce in Transi- tion with Departure of Johnson,” IV Source, May 19, 2002, http://iv- source.net/archivep/2002/may/020519_JPOJohnson.html

75 “I know that you have: Google Finance thread available online at: http://ﬁnance.google.com/group/google.ﬁnance.704040/browse_thread/ thread/ce3bb04cbccc570f

376 Sources and Notes

80 By the way, a few weeks ago: Not his real name, which has been changed to protect his identity

83 On June 20, 2002, shortly: Available online at: http://www.itsonline.com/ttid/Procurement%20Request.pdf

83 He would later receive: Mr. Paniati’s ofﬁcial bio is available online at: http://www.fhwa.dot.gov/exdir.htm

84 In April 2008, President Bush: “New FHWA executive director,” Roads & Bridges, April 11, 2008, http://www.roadsbridges.com/New- FHWA-executive-director-NewsPiece15683

Chapter 8

86 Much to my surprise and: Copy of that letter is available online at: http://www.itsonline.com/ttid_letters/ﬁtzgerald_letter_sep26_06.pdf

98 Therefore, I was quite surprised: Available online at: http://www. itsonline.com/ttid_fbi/fbi_anderson_jul23_07.pdf

98 On October 27, 2007, just over: “Embattled Attorney General Resigns,” New York Times, August 27, 2007, http://www.nytimes. com/2007/08/27/washington/27cnd-gonzales.html

Chapter 9

101 I went to the USDOT Inspector General’s: Gen. Scovel’s bio is online at: http://www.oig.dot.gov/about.jsp

101 Because of Mike’s past failure: The OIG’s hotline is online at: http://www.oig.dot.gov/Hotline

106 The diagram in the “data lock scheme”: This white paper is online at: http://www.itsonline.com/ttid/datalock_scheme.pdf

106 Interestingly, months later: Diagram is on page 3 of this presenta-

377 The ‘Smart Road’ Scam tion: http://appnew.outreach.psu.edu/programs/tesc2006/presentations/ 1B_Collins.pdf

108 On July 23, 2007, Michael: Mr. Anderson’s letter to me is available online at: http://www.itsonline.com/ttid_fbi/fbi_anderson_jul23_ 07.pdf

Chapter 10

111 I know from your press release: “Hatch Put the Brakes on Trafﬁc. com,” July 29, 2005, http://hatch.senate.gov/public/index.cfm?FuseActi on=PressReleases.Detail&PressRelease_id=9e462118-bfaa-428b-952a- d6512ea9f9c7&Month=7&Year=2005

111 Some of that information: Letter available online at: http://www. itsonline.com/trfc/hatch_letter_jan23_07.pdf

112 In fact. Cong. Young: Cong. Young’s congressional statement available online at: http://www.itsonline.com/trfc/donyoung_jul29_ 05.pdf

112 I had written a new white paper: White paper available online at: http://www.itsonline.com/ttid/mineta_disclosures_analysis.doc

113 Echoing that sentiment: “The Scariest Guy in Washington,” Time, November 27, 2006, http://www.time.com/time/magazine/article/0,9171,1562974,00.html

115 I went through all of the inconsistencies: White paper available online at: http://www.itsonline.com/ttid/mineta_disclosures_analysis.doc

117 The Library of Congress’ excellent: Thomas available online at: http://www.thomas.gov/home/nomis.html

117 However, only the latter listing: Hearing transcript available on the web at: http://frwebgate.access.gpo.gov/cgi-bin/getdoc. cgi?dbname=107_senate_hearings&docid=f:92791.pdf

378 Sources and Notes

117 Just prior to that hearing: The last page of this letter, which is the source for the quotations, is included as the last page (page 17) of Mr. Mineta’s “New Entrant” Public Financial Disclosure Report dated Jan. 23, 2001 and available online from the Center for Public Integrity here: http://pfds.opensecrets.org/N00001701_2000.pdf

119 According to the U.S. Department: “Mineta Sworn in as 14th U.S. Transportation Secretary,” Public Roads, Jan/Feb 2001, http://www. tfhrc.gov/pubrds/janfeb01/along.htm

120 During preparations for my trip: Dan Zwerdling’s bio is online at: http://www.npr.org/templates/story/story.php?storyId=4173096

120 With that strong recommendation: Ridgeway’s bio on Wikipedia is online at: http://en.wikipedia.org/wiki/James_Ridgeway

121 Ten months after our meeting: “Hogging the Road,” Mother Jones (online edition), Nov. 1, 2007, http://www.motherjones.com/washing- ton_dispatch/2007/11/hogging-the-road.html

121 He had just co-authored a story: “The Highwaymen,” Mother Jones, Jan./Feb. 2207, http://www.motherjones.com/news/feature/2007/01/highwaymen.html

Chapter 11

124 Mr. Collins was Senior Vice President: This reference shows that afﬁliation: http://epw.senate.gov/105th/collins.htm

124 Mr. Collins was Senior Vice President: Jackson’s ofﬁcial government biography here: http://www.whitehouse.gov/government/m_jack- son-bio.html

124 While the ITIP earmark language: “Trafﬁc.com claim to $50 million ITS earmark raises questions,” Inside ITS newsletter, Jan. 15, 2001, http://www.itsonline.com/trfc/articles/insideITS_jan15_01.doc

124 I would later ﬁnd a quotation: “Master Persuader will Run the

379 The ‘Smart Road’ Scam

Leading Business Lobby,” New York Times, June 24, 1997, http://query. nytimes.com/gst/fullpage.html?res=9B04E2DB1631F937A15755C0A96 1958260&scp=1&sq=%22Master+Persuader+Will+Run%22&st=nyt

125 Mr. Holman was a registered lobbyist: Lobbyist registration available online here: http://www.itsonline.com/trfc_lobbyists/holman_ 2001.pdf

125 Mr. Holman was a registered lobbyist: Lobbyist registration available online here: http://www.itsonline.com/trfc_lobbyists/holman_ 2005.pdf

125 In between those stints: “Gov. Ridge Names Deputy Director for Homeland Security” (Press Release), October 29, 2001, http://www. whitehouse.gov/news/releases/2001/10/20011029-6.html

126 Trafﬁc.com President David Janetta: “Congress Requested to Create National ‘Infostructure’ Program for ITS, Homeland Security” (press release on BusinessWire), Sept. 11, 2002, http://www.thefreeli- brary.com/Congress+Requested+to+Create+National+’Infostructure’+Pr ogram+For...-a091323176

126 The organization’s co-founder and: Ken Boehm’s bio is online at: http://www.nlpc.org/about.asp?view=boehm

126 Further, their code of ethics: Available online at: http://www.nlpc. org/view.asp?action=viewArticle&aid=210

126 Further, their code of ethics: A good bio of Sen. Paul Douglas is on Wikipedia at: http://en.wikipedia.org/wiki/Paul_Douglas

127 Based on his painstaking research: “NLPC Complaint Alleges Ranking House Ethics Committee Member Hid Assets and Funded Busi- ness Partner’s Groups with Millions in Earmarks” (Press Release), April 7, 2006, http://www.nlpc.org/view.asp?action=viewArticle&aid=1346

128 Cong. Mollohan would shortly: “Democrat Leaves Ethics Panel,” Washington Post, April 22, 2006, http://www.washingtonpost.com/wp-

380 Sources and Notes dyn/content/article/2006/04/21/AR2006042101376.html

128 A Justice Department Investigation: “Audit questions Canaan Valley Institute grant spending,” Charleston Daily Mail, May 21, 2008, http://www.dailymail.com/News/statenews/200805210305

133 Mr. Mineta was conﬁrmed: Listing of “Secretaries” and their tenures, from the U.S. Dept. of Commerce’s website at: http://www.commerce.gov/About_Us/Secretaries/index.htm

133 Interestingly, Mr. Mineta actually: “Trimble Aligns Resources to Exploit Key Strategic Markets” (News Release), August 23, 2000, http:// www.trimble.com/news/release.aspx?id=082300a

134 Years earlier I had perused: See an example here: http://www. secform4.com

134 However, the oldest electronically available: The actual search results are online at: http://www.sec.gov/cgi-bin/browse-edgar?action=g etcompany&CIK=0000864749&type=&dateb=&owner=only&start=300 &count=100

Chapter 12

137 The Act had been enacted: More information on the Ethics in Goverment Act is available at: http://www.answers.com/topic/ethics-in- government-act

138 Using the range of stock prices: http://investor.trimble.com/stock- lookup.cfm

138 Using the range of stock prices: I would later write four separate white papers detailing my analysis of Mr. Mineta’s stock options transac- tion. This one goes into detail about his potential maximum proﬁt: http:// www.itsonline.com/mineta/mineta_disclosures_signif_may3_07.pdf

138 That ﬁgure assumed: Trimble had a 2:1 stock split after I originally performed this calculation, so the ﬁgures on the Historical Stock

381 The ‘Smart Road’ Scam

Lookup page need to be doubled for an apples-to-apples analysis.

141 On January 17, 2007, POGO: Letter available online at: http:// www.itsonline.com/ttid_letters/pogo_oge_foia.doc

141 On February 12, 2007, William E. Gressman: Letter available online at: http://www.itsonline.com/oge_foia_response_to_pogo.pdf

145 Shelton: “I destroy them.”: Wikipedia entry for “Pogo (comic strip character)”: http://en.wikipedia.org/wiki/Pogo_(comics)#.22We_ have_met_the_enemy.....22

Chapter 13

149 So on March 12, 2007, Scott: FOIA appeal letter available online at: http://www.itsonline.com/ttid_letters/pogo_oge_appeal.pdf

150 On April 7, 2007, Ms. Glynn: FOIA appeal response letter available online at: http://www.itsonline.com/ttid_letters/oge_foia_appeal_re- sponse.pdf

155 The website for the non-proﬁt: CRP’s website address: http:// www.opensecrets.org/about/index.php

156 As one might expect: Web page for Mr. Mineta’s disclosures: http://www.opensecrets.org/pfds/candlook.php?txtName=MIneta

158 I thought that this was all so funny: Blog posting at: http://budarabble.blogspot.com/search?q=%22Will+You+Take+This+One%3F%22

159 I posted an item on my: Blog posting at: http://budarabble. blogspot.com/search?q=%22Some+Good+News+for+the+Truth%22

Chapter 14

162 According to my analysis: “Signiﬁcance of Mr. Mineta’s Financial Disclosures in 1999-2000” (white paper), http://www.itsonline.com/mineta/mineta_disclosures_signif_may3_07.pdf

382 Sources and Notes

162 On page 4 of Schedule A: Mr. Mineta’s Commerce New Entrant ﬁnancial disclosure is available from the Center for Responsive Politics at: http://pfds.opensecrets.org/N00001701_2000_Nom.pdf

162 However, on that very day: “Further Insight from Mr. Mineta’s Commerce ‘New Entrant’ Financial Disclosure in 2000” (white paper): http://www.itsonline.com/mineta/mineta_commerce_disclosure.doc

162 In searching through Trimble: Trimble’s SEC filing for the “C. Trimble Nonstatutory Stock Option Plan” is available online here: http:// investor.trimble.com/secfiling.cfm?filingID=1056359-01-500015

167 In early 2007 I called Fred: Not his real ﬁrst name, which I have changed because he remains with the FHWA and continues to be a good inside source of information.

168 According to a statement to a congressional: Statement on Re- authorization of the Federal Surface Transportation Research Program Before the Committee on Environment and Public Works, United States Senate, March 15, 2002, http://www.fhwa.dot.gov/reauthorization/ rmrt10.htm

168 In fact, former Federal Communications: Hatﬁeld’s 2002 report to the FCC is available online at: http://www.locatemodelcities.org/library/HatﬁeldReport.pdf

169 In December 2007 I would: Not his real name, to protect his identity. The quotes attributed to George and me are taken verbatim from a recording of our conversation.

170 USDOT’s report about the: “DOT Releases Report Assessing Vul- nerability Of Transportation Infrastructure Relying on Global Positioning System” (USDOT Press Release), Sept. 10, 2001, http://www.navcen. uscg.gov/gps/geninfo/pressrelease.htm

170 USDOT’s plans to expand: “DOT, Defense set plan to expand use of GPS,” Government Computer News, April 15, 2002, http://www.gcn. com/print/21_8/18414-1.html

383 The ‘Smart Road’ Scam

170 Reports of the USDOT’s efforts: “GPS and Galileo Reach Signal Agreement,” GPS World, May 1, 2004, http://www.gpsworld.com/gpsworld/article/articleDetail.jsp?id=86656

172 Until, that is, I happened: Not his real name, to protect his privacy and his business.

172 I would connect with Louie: Also not his real name, for the same reasons as above.

173 It turns out that a major: http://www.ntia.doc.gov/aboutntia/ aboutntia.htm

174 In fact, the Department of Commerce: Capitol Coalition’s report is accessible at: http://www.opensecrets.org/lobby/client_reports. php?year=2000&lname=Trimble+Navigation

174 A footnote to the Executive Summary: “Assessment of Compat- ibility between Ultra Wideband Devices and Selected Federal Systems,” January 2001, http://www.ntia.doc.gov/osmhome/reports/uwb/uwb.pdf

175 In early January 2002 the publication RCR: “DoD Attempts to Thwart UWB Plans,” RCR Wireless News, Jan. 7, 2002, http://aerorﬁ. org/articles.html?id=29

175 A report a few days later in: “FCC Plans February Ruling on Ul- trawideband Devices,” Telecommunications Reports/Wireless, Jan. 11, 2002, http://www.tr.com/newsletters/trwn/wir011102.pdf

175 That was the same Charles Trimble: Trimble’s CEO Steve Berglund – Charles Trimble’s successor – is listed second on a panel to discuss “transportation needs of Silicon Valley” in a June 2000 seminar with then USDOT Transportation Secretary Rodney Slater, see: http:// transweb.sjsu.edu/mtiportal/research/publications/summary/f0002.html

175 I summarized my ﬁndings: “More on the Mineta/Trimble Connec- tion: Mr. Mineta’s Activities as both Commerce Secretary and Transpor- tation Secretary Related to Ultra Wide Band (UWB) Technology” (white

384 Sources and Notes paper), July 10, 2007, http://www.itsonline.com/mineta/mineta_uwb_ jul10_07.doc Chapter 15

177 Jim Ridgeway’s November: Available online at: http://www.motherjones.com/washington_dispatch/2007/11/hogging-the-road.html

177 The lead story in the October: Available online at: http://www. itsonline.com/trfc/articles/urban_tx_mon_oct26_07.pdf

177 Multiple stories in The Hill: First reference available online at: http://thehill.com/business--lobby/monopoly-continues-for-pa.-company-says-hatch-2007-06-26.html

177 Multiple stories in The Hill: Second reference available online at: http://thehill.com/the-executive/weiner-calls-for-hearings-ig-probe-on- trafﬁc-program-2007-10-19.html

177 “New Federally Funded Road: Available online at: http://www. itsonline.com/trfc/articles/New_Federally_Funded_cox_aug17_07.pdf

177 A terriﬁc Op-Ed piece: Available online at: http://www.itsonline. com/trfc/articles/sensors_and_insensibility_ajc.pdf

179 I came upon their “Good Government: Hall of Fame online at: http://www.pogo.org/halloffame/

180 His experiences in doing so: “The Man Who Knew Too Much,” Vanity Fair, May 1996, http://www.mariebrenner.com/PDF/TheMan- WhoKnewTooMuch.pdf

182 Lying in my bed watching: Dr. Wigand’s personal website is at: http://www.jeffreywigand.com

184 Bergman, Mike Wallace’s long-time: Prof. Bergman’s bio is on the web here: http://journalism.berkeley.edu/faculty/bergman/

184 Bergman, Mike Wallace’s long-time: Frontline’s website is at:

385 The ‘Smart Road’ Scam http://www.pbs.org/wgbh/pages/frontline/

184 Bergman, Mike Wallace’s long-time: CIR’s website is at: http:// centerforinvestigativereporting.org

184 Bergman, Mike Wallace’s long-time: Propublica’s website is at: http://www.propublica.org

Chapter 16

188 Coincidentally, Smith had been: http://ethics.house.gov/Media/ PDF/Press%20Statement%20Shusterend.pdf

188 In a piece he wrote for the Baltimore Sun: “Enabling Corruption” by Gary Ruskin, originally published in the Baltimore Sun, Jan. 7, 2005, and reprinted in the CommonDreams.org news center, http://www.commondreams.org/views05/0107-29.htm

191 On January 27, 2007, Senator Hatch: Available online at: http:// www.itsonline.com/trfc/hatch_letter_jan23_07.pdf

194 A week or so later in searching: Announcement available online at: http://www.allbusiness.com/services/business-services/3973862- 1.html

195 Finally, on May 29, Rep. Doggett: Letter available online at: http://www.itsonline.com/ttid_letters/doggett_letter_may29_07.pdf

198 On June 14, a little over a week later: Letter available online at: http://www.itsonline.com/ttid_letters/doggett_email_jun_14_07.pdf

Chapter 17

202 A relatively new watchdog organization: Complete list of projects that the Sunlight Foundation supports is available online at: http://sunlightfoundation.com/projects/

202 PublicMarkup.org: Available online at:http://publicmarkup.org

386 Sources and Notes

202 Where Are They Now?: Available online at:http://wherearethey- now.sunlightprojects.org

202 Earmark Watch: Available online at: http://earmarkwatch.org

202 Party Time!: Available online at: http://www.politicalpartytime.org

204 On the afternoon of January 23: Ms. Miller’s bio available online at: http://www.sunlightfoundation.com/people/emiller/

206 Here’s his bio from: Bill Allison’s bio available online at: http:// www.sunlightfoundation.com/people/ballison/

206 The USDOT backed away: “DOT Curbs ITOP Buys,” Fed- eral Computer Week, June 10, 2002, http://www.fcw.com/print/8_22/ news/76905-1.html

207 After reviewing the background: Available online at: http://blog. sunlightfoundation.com/2007/02/09/tracking-contractors-and-lobbyists- and-a/

207 His piece highlighted the role: The Hill piece available online at: http://www.itsonline.com/trfc/articles/monopoly_money_apr20_05.pdf

208 The USDOT’s initial (March 9: Letter available online at: http:// www.itsonline.com/ttid_foia/sunlight_FOIA_response_mar9_07.pdf

208 Bill soon sent off substantially: GSA FOIA request available online at: http://www.itsonline.com/ttid_foia/sunlight_gsaFOIA_mar21_ 07.doc

209 According to a report by the U.S.: “U.S. Dept. of Transportation Freedom of Information Act (FOIA) Report, Fiscal Year 2006,” http:// www.dot.gov/foia/reports/2006annualreport.htm#secxii

210 The Sunlight Foundation’s FOIA: Appeal letter available online at: http://www.itsonline.com/ttid_foia/sunlight_FOIA_Appeal_apr6_ 07.doc

387 The ‘Smart Road’ Scam

212 On February 29, 2007: Available online at: https://www.fbo.gov/ index?tab=core&s=opportunity&mode=form&id=a8d1144a468c7f74a9 b2bda7e0ccaf3a

213 Bill posted a synopsis of the issue: Blog posting available online at: http://realtime.sunlightprojects.org/2007/07/09/fhwa-discouraging- foia-requests-from-potential-contractors/

215 Bill was so astounded by that response: Blog posting available online at: http://realtime.sunlightprojects.org/2007/07/09/sf-lll-update- not-for-public-inspection/

216 On September 11, 2007, the FHWA: Announcement available online at: https://www.fbo.gov/index?s=opportunity&mode=form&id=0 12fefba1e4ab23d956e97e325727346&tab=core&_cview=0

217 In early 2008, the FHWA: Available on the web at: http://ops. fhwa.dot.gov/travelinfo/ttidprogram/ttidprogram.htm

Chapter 18

219 The Commission’s role as “the primary: From the agency’s description of “What We Do” at: http://www.sec.gov/about/whatwedo. shtml

219 It would turn out: “Senate report blasts SEC Enron oversight,” USA Today, Oct. 6, 2002, http://www.usatoday.com/money/industries/ banking/2002-10-06-sec_x.htm

219 In October 7, 2002 statement: Financial Oversight of Enron: The SEC and Private Sector Watchdogs, Oct. 7, 2002, Senate Committee on Homeland Security and Governmental Affairs, http://hsgac.senate. gov/public/index.cfm?Fuseaction=PressReleases.View&PressRelease_ id=c27bc628-bf89-4656-a0cc-9bb828f3fd36&Afﬁliation=R

220 Aguirre’s story, by three time: “S.E.C. Is Reported to Be Exam- ining a Big Hedge Fund,” New York Times, June 23, 2006, http://www. nytimes.com/2006/06/23/business/23fund.html

388 Sources and Notes

221 Aguirre had sent an 18-page: Aguirre’s letter available online at: http://www.faulkingtruth.com/Files/aguirre_congress0623.pdf

222 According to the New York Times story: “Report Says S.E.C. Erred on Pequot,” New York Times, August 4, 2007, http://www.nytimes. com/2007/08/04/business/04pequot.html?scp=2&sq=Aguirre%20Mack &st=cse

223 On October 5, 2008, perhaps one: “Impartiality of S.E.C. is Questioned,” New York Times, October 6, 2008, http://www.nytimes. com/2008/10/07/business/07pequot.html?scp=4&sq=Bogdanich&st=nyt

223 In November 2008, Aguirre: Website address: http://www.aguir- relawﬁrm.com/

224 This allegation was supported: The indictment is available online at: http://graphics8.nytimes.com/packages/pdf/washington/ 20080729stevensindictment.pdf?scp=3&sq=%22Ted%20Stevens%22% 20indicted&st=cse

224 On August 1, 2005, Trafﬁc.com: Available from BusinessWire here: http://ﬁndarticles.com/p/articles/mi_m0EIN/is_/ai_n14938855

224 It would subsequently amend: “Trafﬁc.com Completes Public Of- fering,” BusinessWire, Feb. 28, 2006, http://ﬁndarticles.com/p/articles/ mi_m0EIN/is_/ai_n26775287

224 Yet Trafﬁc.com’s huge (228 page): Jan. 20, 2006 amended version available online at: http://www.secinfo.com/dVut2.vKq.htm

225 Here’s an example: From the bottom of page F-33 of this particularly S-1 disclosure: http://bioportfolio.brand.edgar-online.com/EFX_dll/ EDGARpro.dll?FetchFilingHTML1?ID=4112500&SessionID=C4aiWW fPE61chm7

225 Could it have been Michael P.: “Lawmaker seeks more detail on DHS deputy secretary resignation,” Federal Times, October 2, 2007, http://www.federaltimes.com/index.php?S=3079658

389 The ‘Smart Road’ Scam

225 Could it have been Michael P.: FOIA request Available online at: http://www.itsonline.com/pogo_dhs_comm/pogo_dhs_foia_aug24_ 07.doc

225 Associated with the company’s S-1: Available online at: http:// www.secinfo.com/dVut2.zWXa.c.htm#1stPage

228 The attached writeup would summarize: Available online at: http://www.itsonline.com/ttid_letters/questions_for_the_sec_sep12_ 06.doc

229 On Nov. 6, 2006, I would send: Complaint guidance available online at: http://www.sec.gov/complaint.shtml

231 According to a July 22, 2006: “Silicon Valley Firms Scrutinized on Stock Option Policies,” New York Times, July 22, 2006, http://www. nytimes.com/2006/07/22/business/22options.html?_r=2&oref=slogin&o ref=login

231 A follow-on article in the New York Times: “Ex-Brocade Chief Convicted in Backdating Case,” New York Times, August 8, 2007, http:// www.nytimes.com/2007/08/08/business/08brocade.html

232 In fact, Mr. Goodrich has served: Mr. Goodrich’s bio is online at: http://www.trimble.com/jgoodrich.shtml

232 In digging around Wilson Sonsini’s: Mr. Kopel’s bio is online at: http://www.wsgr.com/WSGR/DBIndex.aspx?SectionName=attorneys/ bios/283.htm

233 On July 11, 2007 I would send: White paper available online at: http://www.itsonline.com/mineta/mineta_uwb_jul10_07.doc

234 On March 18, 2008 I would: All four white papers related to Mr. Mineta’s ethics problem are online at: http://www.itsonline.com/ethics/

235 I knew very little about Cox: “President Names Cox as New SEC Chair,” Washington Post, June 3, 2005, http://www.washingtonpost.com/

390 Sources and Notes wp-dyn/content/article/2005/06/02/AR2005060200641.html

236 In a letter dated February 25, 2008: SEC’s letter available online at: http://www.itsonline.com/ttid_letters/sec_feb25_08.pdf

239 “I was just the boy who cried wolf,”: “Madoff Misled SEC in ’06, Got Off,” Wall Street Journal, December 18, 2008, http://online. wsj.com/article/SB122956182184616625.html?mod=special_page_cam- paign2008_mostpop

Chapter 19

240 Armed with that appreciation: For more details of the data-lock scheme, see this white paper: http://www.itsonline.com/ttid/datalock_ scheme.pdf

241 Here’s an excerpt from a 2003 press release: “Illinois Tollway Partners With Mobility Technologies To Help Chicago-Area Motorists Improve Travel Plans” (press release), December 15, 2003, http://web. archive.org/web/20051215153319/http://corporate.trafﬁc.com/press/de- cember_15_2003.html

242 In the case of the Illinois Tollway: “DMS” stands for “dynamic message signs,” the large lit signs along roadways that provide information about road closures, “Amber alerts” or, in this case, travel times.

242 The Metropolitan Transportation Commission: More background on 511 online at: http://ops.fhwa.dot.gov/511/about511/history. htm

242 “With respect to trafﬁc data: “Publication of Interim Guidance on the Information Sharing Speciﬁcations and Data Exchange Formats for the Real-Time System Management Information Program,” Feb. 12, 2008, http://www.regulations.gov/fdmspublic/ContentViewer?objectId=0 9000064803acab0&disposition=attachment&contentType=msw8

243 Similar limitations in the Atlanta: “Sensors and insensibility:

391 The ‘Smart Road’ Scam state is asked to pay for trafﬁc info taxpayers already funded,” Atlanta Journal-Constitution, Aug. 29, 2007, http://www.itsonline.com/trfc/articles/sensors_and_insensibility_ajc.pdf

244 Here are brief descriptions of both: More detail about these and other DHS components is available online at: http://www.dhs.gov/ xabout/structure/#1

244 “His tenure was particularly focused: Jackson’s bio is online at: http://georgewbush-whitehouse.archives.gov/government/m_jackson- bio.html

244 On September 10, 2002, Trafﬁc.com’s President: Intelligent Transportation Systems Hearing No. 107-94 before the Subcommittee on Highways and Transportation of U.S. House Committee on Transpor- tation and Infrastructure, Sept. 10, 2002

245 The very next day, Trafﬁc.com: Press release located online at: http://ﬁndarticles.com/p/articles/mi_m0EIN/is_2002_Sept_11/ai_ 91323176

246 In making the announcement in the East: “Gov. Ridge Sworn-In to Lead Homeland Security” (press release), October 8, 2001, http://georgewbush-whitehouse.archives.gov/news/releases/2001/10/20011008-3.html

246 Later, on January 24, 2003, Mr. Ridge: “Ridge Sworn in as Secretary of Homeland Security” (press release), January 24, 2003, http://georgewbush-whitehouse.archives.gov/news/releases/2003/01/20030124-5.html

246 In an article in The American Prospect: “Security for Sale: The Department of Homeland Security has a section on its Web site labeled ‘Open for Business.’ It certainly is.” The American Prospect, Dec. 18, 2005, http://www.prospect.org/cs/articles?articleId=10750

247 On March 6, 2001, less than two: Copy of the lobbying registra-

392 Sources and Notes tion ﬁled with the U.S. Senate available online at: http://www.itsonline. com/trfc_lobbyists/holman_2001.pdf

248 In late 2000, Trafﬁc.com had been successful: FY01 Transpor- tation Appropriations Act available online at: http://frwebgate.access. gpo.gov/cgi-bin/getdoc.cgi?dbname=106_cong_public_laws&docid=f: publ346.106

248 However, while the company understandably: Letter available online at: http://www.itsonline.com/trfc/letters/fhwa_letter_feb20_01.pdf

248 Working with Pennsylvania Senator Arlen: Search for “5117” in this online document: http://www.asm.org/ASM/ﬁles/LEFT- MARGINHEADERLIST/DOWNLOADFILENAME/0000000568/ HR3338127%5B1%5D.pdf

248 In early 2002, USDOT Secretary Norman Mineta: Mineta’s letter to Cong. Don Young available online at: http://www.itsonline. com/trfc/letters/mineta_feb5_02.pdf

248 In early 2002, USDOT Secretary Norman Mineta: Task Order available online at: http://www.itsonline.com/trfc/contracts_agreements/ Procurement_Request.pdf

249 On October 29, 2001, despite: Announcement available online at: http://georgewbush-whitehouse.archives.gov/news/releases/2001/10/20011029-6.html

249 Walking back through the omnipresent: Available online at: http://www.itsonline.com/trfc_lobbyists/blank_rome_2003_registration. pdf

249 The 2003 year-end lobbying: Available online at: http://www. itsonline.com/trfc_lobbyists/blank_rome_2003_year_end.pdf

249 Additional lobbyist disclosures covering: Available online at: http://www.itsonline.com/trfc_lobbyists/blank_rome_2004_year_end.pdf

393 The ‘Smart Road’ Scam

249 Additional lobbyist disclosures covering: Available online at: http://www.itsonline.com/trfc_lobbyists/blank_rome_2005_ﬁrst_half.pdf

249 Blank Rome et al would ﬁle: Available online at: http://www. itsonline.com/trfc_lobbyists/blank_rome_2006_termination.pdf

249 (According to a June 2007 article: “‘Monopoly’ continues for Pa. company, says Hatch,” The Hill, June 27, 2007, http://thehill.com/business--lobby/monopoly-continues-for-pa.-company-says-hatch-2007-06- 26.html

249 On June 28, 2004, Hill Solutions LLC: Available online at: http:// www.itsonline.com/trfc_lobbyists/hill_solns_2004_registration.pdf

250 A mid-year 2004 report: Available online at: http://www.itsonline. com/trfc_lobbyists/hill_solns_2004_ﬁrst_half.pdf

250 A 2005 disclosure would show: Available online at: http://www. itsonline.com/trfc_lobbyists/hill_solns_2005_ﬁrst_half.pdf

250 According to a news report in citybizlist: “Buchanan Ingersoll Announces Combination with Lobbying Firm Hill Solutions,” citybizlist Philadelphia, October 12, 2005, http://philly.citybizlist.com/lstg/lstgDe- tail.aspx?id=2319

250 A Buchanan Ingersoll lobbyist disclosure: Available online at: http://www.itsonline.com/trfc_lobbyists/buchanan_regist_2005.pdf

250 Interestingly, Cong. Bud Shuster’s: “Buchanan Ingersoll, Klett Rooney plan to join forces July 1,” Pittsburgh Post-Gazette, June 14, 2006, http://www.post-gazette.com/pg/06165/697960-28.stm

250 Lobbyist disclosures show that Shuster: Available online at: http://www.itsonline.com/trfc_lobbyists/klett_2004_regist.pdf

250 Lobbyist disclosures show that Shuster: “Trafﬁc.com claim to $50 million ITS earmark raises questions,” Inside ITS newsletter, Jan.

394 Sources and Notes

15, 2001, http://www.itsonline.com/trfc/articles/insideITS_jan15_01.doc

251 In 2007—less than a year: “Norman Mineta, Former U.S. Secre- tary of Transportation and Former U.S. Secretary of Commerce, Joins AECOM Board of Directors” (AECOM Press Release), June 11, 2007, http://pr.aecom.com/phoenix.zhtml?c=211994&p=irol-newsArticle&ID= 1013591&highlight=

251 On January 9, 2006, President George Bush: “Buchanan Lawyer Leaves for Key Homeland Security Position,” The Legal Intelligencer, January 4, 2006, http://www.law.com/jsp/article.jsp?id=1136282710611

251 On January 9, 2006, President George Bush: Tomarchio’s biography available online at: http://www.atsva.com/about-us/board-of-directors/jack-tomarchio.cfm

252 In that role, among other tasks: “Tomarchio Takes Homeland Security Post,” Pittsburgh Business Times, January 3, 2006, http://www. bizjournals.com/pittsburgh/stories/2006/01/02/daily4.html

252 This position would be formally described: http://www.atsva. com/about-us/board-of-directors/jack-tomarchio.cfm

252 An October 2007 report by the U.S. General: “Homeland Secu- rity: Federal Efforts Are Helping to Alleviate Some Challenges Encoun- tered by State and Local Information Fusion Centers,” October 2007, http://www.gao.gov/new.items/d0835.pdf

255 So on August 24, 2007, Scott: Letter available online at: http:// www.itsonline.com/pogo_dhs_comm/pogo_dhs_foia_aug24_07.doc

256 POGO received two such acknowledgements: Available online at: http://www.itsonline.com/pogo_dhs_comm/dhs_foia_ack1.pdf and here: http://www.itsonline.com/pogo_dhs_comm/dhs_foia_ack2.pdf

256 His message included a link to an article: “Lawmaker seeks more detail on DHS deputy secretary resignation,” Federal Times, Oct. 2,

395 The ‘Smart Road’ Scam

2007, http://federaltimes.com/index.php?S=3079658

257 On June 26, 2008 in a letter: Letter available online at: http:// www.itsonline.com/pogo_dhs_comm/dhs_foia_response_jun26_08.pdf

257 It wasn’t at all clear that: A search of DHS email archives would be fruitful only if Jackson and Tomarchio had communicated with Traf- ﬁc.com or its lobbyists using their own departmental email accounts. Others in the Administration had gotten into trouble with ethics watchdog groups by using non-governmental email accounts to bypass normal governmental scrutiny. See “Inside the Bush E-mail Scandal” in the April 13, 2007 issue of Time Magazine at: http://www.time.com/time/nation/article/0,8599,1610414,00.html

257 Some time between May 27, 2008: Interview online at: http:// homelandsecurity.tamu.edu/outreach/ichs-weekly-radio-programs/homeland-security-inside-and-out/audio-matrix/federal-other-federal-departments

257 Some time between May 27, 2008: “ATS Corporation Appoints Jack Tomarchio to Board of Directors,” BusinessWire (via Reuters), August 18, 2008, http://www.reuters.com/article/pressRelease/ idUS195603+18-Aug-2008+BW20080818

257 Shortly before, on April 17, 2008, Tomarchio: Testimony available online at: http://www.dhs.gov/xnews/testimony/testimony_ 1208459749044.shtm

258 “Surely any letters between these ofﬁcials: FOIA appeal letter available online at: http://www.itsonline.com/pogo_dhs_comm/FOIA_ Trafﬁc_Appeal.doc

Chapter 20

259 On July 17, 1997, as legislators: A copy of this letter is available online at: http://www.itsonline.com/trfc/letters/jul_17_97_borski_to_ shuster.pdf

396 Sources and Notes

260 The January 15, 2001 story in Inside ITS: Available online at: http://www.itsonline.com/trfc/articles/insideITS_jan15_01.doc

261 On January 17, 2001, Shuster’s Chief: A copy of this letter is available online at: http://www.itsonline.com/trfc/letters/jan_17_01_wil- son_slater.pdf

262 “After a thorough review, we have concluded: A copy of that letter is available online at: http://www.itsonline.com/trfc/letters/fhwa_let- ter_feb20_01.pdf

262 (Wilson would later go through: More information online at: http://www.nscorp.com/nscportal/nscorp/Community/ Government%20Relations/contacts.html?leaf=Government%20Relation s%20Contacts

263 On June 6, 2007, the New York Times: “Campaign Funds for Alas- kan; Road Aid to Florida,” New York Times, June 7, 2007, http://www. nytimes.com/2007/06/07/washington/07earmark.html

264 In mid April 2008, the U.S. Senate: “Justice asked to probe Young earmark,” Anchorage Daily News, April 18, 2007, http://www.adn.com/ news/politics/fbi/young/story/379679.html

264 On March 26, 2001, Young would write: A copy of that letter is available online at: http://www.itsonline.com/trfc/letters/mar_26_01_ young_to_mineta.pdf

266 On April 19, 2001, Trafﬁc.com President: Borski’s contribution shown at: http://www.campaignmoney.com/political/contributions/david- jannetta.asp?cycle=02

266 On the very next day, Cong.: Copy of letter available online at: http://www.itsonline.com/trfc/letters/apr_20_01_borski_to_mineta.pdf

267 The sole “Speciﬁc lobbying issue: Copy of the lobbying registration ﬁled with the U.S. Senate available online at: http://www.itsonline. com/trfc_lobbyists/holman_2001.pdf

397 The ‘Smart Road’ Scam

267 On March 6, James H. Burnley: Mr. Burnley’s lobbying disclosure available online at: http://www.itsonline.com/trfc_lobbyists/win- ston_strawn_2001_registration.pdf

267 Burnley, who had served as Secretary: Mr. Burnley’s biography with Venable LLP, his employer after Winston & Strawn, is online at: http://www.venable.com/professionals.cfm?action=view&attorney_ id=418

267 The 2001 ﬁrst half report: Disclosure available online at: http:// www.itsonline.com/trfc_lobbyists/winston_strawn_2001_ﬁrst_half.pdf

268 The company’s work for Trafﬁc.com: Disclosure available online at: http://www.itsonline.com/trfc_lobbyists/winston_strawn_2001_sec- ond_half.pdf

268 My search of the Federal Election Committee: FEC Advanced Search form available online at: http://www.fec.gov/ﬁnance/disclosure/ advindsea.shtml

268 According to a business entity search: Search available online at: http://www.corporations.state.pa.us/corp/soskb/Corp.asp?1846167

268 Also on September 13, 2001, Brian: More info online at: http:// www.campaignmoney.com/political/contributions/brian-malewicz. asp?cycle=02

269 That amendment was agreed to: A copy of the web page from the Library of Congress’ “Thomas.gov” online resource shows this detail – see: http://www.itsonline.com/ttid/specter_amendment_from_thomas. pdf

270 On January 10, 2002, President George: “Bush Signs Defense Bill Into Law During Pentagon Ceremony,” DefenseLink (U.S. Dept. of Defense), Jan. 10, 2002, http://www.defenselink.mil/news/newsarticle. aspx?id=43865

270 Section 1101 of that bill: Excerpted online at: http://www.itsonline.

398 Sources and Notes com/ttid/sec3338_related_agcy_as_signed.pdf

271 On February 5, 2002, Transportation Secretary: Copy of letter available online at: http://www.itsonline.com/trfc/letters/mineta_feb5_ 02.pdf

271 The next day he sent nearly: Copy of letter available online at: http://www.itsonline.com/trfc/letters/feb_6_02_mineta_to_borski.pdf

271 On June 20, 2002, shortly after: Task order available online at: http://www.itsonline.com/trfc/contracts_agreements/Procurement_Re- quest.pdf

272 Over the next almost three years: Links to all of these agreements are available online at: http://www.itsonline.com/ttid/ttid_agreements. html

273 The lead story in the April 20, 2005: “Monopoly Money for Pa. Company,” The Hill, April 20, 2005, http://www.itsonline.com/trfc/articles/monopoly_money_apr20_05.pdf

274 At one point Cong. Weiner led: Copy of that letter available online at: http://www.itsonline.com/trfc/letters/weiner_letter_jun20_05.pdf

274 On that same day, Hatch’s ofﬁce issued: Press release available on Sen. Hatch’s website online at: http://hatch.senate.gov/public/index. cfm?FuseAction=PressReleases.Detail&PressRelease_id=9e462118- bfaa-428b-952a-d6512ea9f9c7&Month=7&Year=2005

275 On that same day, Cong. Anthony: Available on the House website online at: http://www.house.gov/list/press/ny09_weiner/ 052907trafﬁc.html

275 On the very same day they were heralding: Speech of Hon. Don Young of Alaska in the House of Representatives, Congressional Record – Extension of Remarks, July 29, 2005, http://www.itsonline.com/trfc/ donyoung_jul29_05.pdf

399 The ‘Smart Road’ Scam

Chapter 21

280 From the publication’s self-description: http://www.ukipme. com/downloads/pdfs/trafﬁcmedia.pdf

281 In the 1997-1998 timeframe: “Trouble at Trade Group: Intelli- moniker & ﬁring create tensions,” Tollroads Newsletter, June 1997, http://www.tollroadsnews.com/node/1880

281 In the 1997-1998 timeframe: “ITS America: Association Head Sued,” Tollroads Newsletter, July 1997, http://www.tollroadsnews.com/ node/2985

281 In a piece called “Snakeoil Sales: Available online at: http://www. tollroadsnews.com/node/2086

282 In a short piece called “Too Many Buds”: Available online at: http://www.tollroadsnews.com/node/2279

282 “We thought at ﬁrst it just: “IRF” stands for “International Road Federation,” and Cong. Bud Shuster shows up as the 1999 “IRF Man of the Year” at: http://irfnews.pmhclients.com/awards/moy-recipients

282 In a piece called “No Justice”: Available online at: http://www. tollroadsnews.com/node/2925

283 On November 8 I sent a draft: “The U.S. TTID Program: When Politics, Competition, and the Public Interest Collide” (white paper), available online at: http://www.itsonline.com/ttid/ttid_whitepaper.pdf

284 On November 30, 2007, “Traffic.com or Traffic.con”: Archived version of that news piece available online at: http://www.itsonline.com/ tti/traffictechnologytoday_blog_nov30_07.pdf

284 Prompted by the appearance of: Not his real ﬁrst name, which I have changed to protect his identity. More detail about this conversation with George is provided in Chapter 14.

400 Sources and Notes

287 The USDOT IG’s announcement: Announcement available online at: http://www.oig.dot.gov/StreamFile?ﬁle=/data/pdfdocs/TTID.pdf

288 On February 4 a replacement: Available online at: http://www. trafﬁctechnologytoday.com/news.php?NewsID=3313

288 Two days later Nick would email: Preliminary layout vailable online at: http://www.itsonline.com/tti/tti_article_layout.pdf

290 He immediately FAXed it to me: A copy of that FAX is available online at: http://www.itsonline.com/tti/trfc_tti_apr8_08.pdf

293 “Their contention that the local match: “How the USDOT’s Waiving of the Local Agency Match for the ITIP/TTID Program Fur- ther Enabled Trafﬁc.com’s Monopoly” (white paper), January 18, 2008, http://www.itsonline.com/ttid/itip_local_match_analysis_v1c.doc

294 Both had been suggested in: “Mobility Technologies Launches ‘Digital Trafﬁc Pulse’ Network in Philadelphia” (press release), June 7, 2001, http://web.archive.org/web/20051215154213/http://corporate.traf- ﬁc.com/press/june7_2001.html

296 In late September 2008 the fall issue: “The ‘Smart Road’ Scam,” Regulation, Fall 2008, http://www.cato.org/pubs/regulation/regv31n3/ v31n3-noted.pdf#page=1

Chapter 22

298 In early February, 2008, my long-time friend: Not his real name, which was changed to protect his identity (see Chapter 14)

299 The tail end of the newsletter: Newsletter available online at: http://www.itsonline.com/ttid/emails/quirarte_email_feb4_08v1.doc

300 Just three minutes later: The recall message is online at: http:// www.itsonline.com/ttid/emails/quirarte_email_feb4_08v1.doc

301 Under only a very restrictive set: Recalling a message in Outlook

401 The ‘Smart Road’ Scam only works if the recipients are on the same Microsoft Exchange server as the sender (see http://www.archivum.info/microsoft.public.exchange. misc/2006-04/msg00188.html). Therefore, if Ms. Quirarte’s attempt to recall this message worked at all, it would have recalled it only within ITS America’s ofﬁces.

301 Prior to joining NAVTEQ in 1995: “Harry Voccola Biography” associated with an August 11-15, 2008 seminar from Management Brief- ing Seminars, http://mbs.cargroup.org/2008/content/view/151/

302 Voccola served on the ITS America: List of 1995 ITSA Board Members is shown here: http://ntl.bts.gov/lib/jpodocs/edldocs1/1070/ mmbrs.pdf

302 During nearly the entire period: See page 11 of Mr. Mineta’s CY2000 Public Financial Disclosure Report, available online at: http:// pfds.opensecrets.org/N00001701_2000_2.pdf

302 When ITS America’s ﬁrst President: See “ITS America’s Presi- dent to Depart” in the January/February 1998 issue of Pubic Roads, http://www.tfhrc.gov/pubrds/janpr/along.htm

302 Voccola also served on the Board: According to ITS America’s 2002 Annual Report, available online at: http://www.itsa.org/itsa/ﬁles/ pdf/ITSA%202002%20Annual%20Report.pdf

302 Voccola also served on the Board: According to ITS America’s 2003 Annual Report, available online at: http://www.itsa.org/itsa/ﬁles/ pdf/ITSA%202003%20Annual%20Report.pdf

302 Denaro, a long-time executive: “Navigation Technologies Wel- comes New Vice President, General Manager of North America Business Solutions Unit,” October 1, 2002, http://www.directionsmag.com/press. releases/index.php?duty=Show&id=5675

304 I provided a link: http://www.itsonline.com/ttid/ttid_whitepaper. pdf

402 Sources and Notes

305 A little over a month later: “Selective Press (and Blog) Reports about the TTID Program/Trafﬁc.com Monopoly, in Reverse Chronologi- cal Order” (white paper), http://www.itsonline.com/ttid/ttid_press_cov- erage.pdf

Chapter 23

306 Deep Throat to Washington Post: http://www.dailyscript.com/ scripts/all_the_presidents_men.html

306 Senator Richard Shelby: Sen Shelby’s interview by CNN an- chor Paula Zahn on Nov. 25, 2002, http://edition.cnn.com/TRAN- SCRIPTS/0211/25/lt.03.html

310 Filing a Form S-1 Registration Statement: Available online at: http://www.sec.gov/Archives/edgar/data/1097503/000104746905022277 /a2162262zs-1.htm

310 Traffic.com went public: “Traffic.com’s IPO hits the gas,” Mar- ketWatch.com, January 25, 2006, http://www.marketwatch.com/news/ story/trafficcom-ipo-rises-debut/story.aspx?guid=%7BE217B3B5-1497- 49AA-A9F4-15C1EF935D15%7D

310 Traffic.com went public: “Traffic.com Announces Pricing of Ini- tial Public Offering” (company press release), January 25, 2006, http:// corporate.traffic.com/news/press_releases/Release_PricingIPO.htm

310 A ﬁnal prospectus for the IPO: Prospectus available online at: http://www.secinfo.com/dVut2.vqp.htm

315 A search on the PA Secy. Of State’s: Actual display on the Penn- sylvania Secretary of State’s website available at: http://www.corporations.state.pa.us/corp/soskb/SearchResults.asp?FormName=CorpNameS earch&Words=Starting&SearchStr=Convergence+Capital

316 Chartered in the Cayman Islands: See page 7 of this document: http://google.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFili ngHTML1?SessionID=YM_Mj2bI2E4Zd2B&ID=4953874

403 The ‘Smart Road’ Scam

318 Exhibit 10.2 associated with Trafﬁc.com’s: Available online at: http://www.secinfo.com/dVut2.zWXa.h.htm

319 While the average exercise price: Many of these early warrants were actually granted at a penny per share, but a one-for-three reverse stock split just prior to Trafﬁc.com’s IPO reduced the number of shares granted by one-third, and increased the exercise price by three times.

Chapter 24

321 That close connection ﬁrst became: Available online at: http:// www.itsonline.com/ttid/jannetta_testimony_sep10_02.pdf

322 This, of course, was very early: See this white paper: http://www. itsonline.com/ttid/datalock_scheme.pdf

322 Former Altoona, PA mayor Jannetta: The company was originally called Argus Networks, Inc. but has operated under several different names over the years. In 1999 it officially changed Traffic.com, but shortly later did business as Mobility Technologies. Later, it changed its name back to Traffic.com. All of these changes make tracking the company’s political donations and lobbyist connections challenging, to say the least.

323 He seemed eager to build: Available online at: http://www.city- data.com/elec2/98/elec-MECHANICSBURG-PA-98.html

323 Schaul’s special connection: Available from the I95 Corridor Coalition’s website at: http://www.i95coalition.org/PDF/Meetings/CIM/ CIM-DV-02-01-01-addendum.htm

325 Schaul was clearly using: Background on TEA-21 online at: http:// www.fhwa.dot.gov/tea21/

326 In that role, he was responsible: From David Jannetta’s bio at: http://alpnetworks.com/gln_c_mgmnt.html#DJ

326 Allowed the company to repay: Available online at: http://www.

404 Sources and Notes wrhambrecht.com/ind/auctions/openipo/trfc/trfc20060125.pdf

327 Oversight for the NEBF is provided: Board members shown online at: http://www.nebf.com/nebf/about/overview/beneﬁtboard.aspx

327 In May 1999 the project’s monthly Union: Available online at: http://www.nlpc.org/olap/UCU/02_11.htm

327 Both ofﬁcials later agreed to pay: Summarized online at: http:// www.nlpc.org/olap/UCU2/04_21.htm

328 After all, he was the lead person: Copies of these agreements are available through links in this white paper: http://www.itsonline.com/ ttid/ttid_agreements.html

329 According to the company’s Prospectus, NEBF: On page 89 of the Prospectus located online at: http://www.wrhambrecht.com/ind/auctions/openipo/trfc/trfc20060125.pdf

329 While this award was converted: On page 93 of the Prospectus described above.

330 In perusing the EBSA’s website: http://www.dol.gov/ebsa/

330 I immediately emailed him: White paper vailable online at: http:// www.itsonline.com/ttid/NEBF_connections_feb16_07.doc

331 In creating that brand new white paper: Bottom of page 91 of this document: http://www.wrhambrecht.com/ind/auctions/openipo/trfc/ trfc20060125.pdf

334 It turned out that the companies Bill: Columbia Partners’ website online at: http://www.columbiaptrs.com/main.php

334 It turned out that the companies Bill: All three companies are listed on Columbia Partners’ web page entitled “Private Capital Manage- ment Portfolio Companies” at: http://www.columbiaptrs.com/private- capital/portfolio.php

405 The ‘Smart Road’ Scam

335 I also provided links to news: “‘Monopoly’ continues for Pa. company,” says Hatch, The Hill, June 26, 2007, http://thehill.com/business--lobby/monopoly-continues-for-pa.-company-says-hatch-2007-06- 26.html

335 I also provided links to news: “Senator pans federal contract for trafﬁc information site,” National Journal’s Technology Daily, July 23, 2007, http://www.itsonline.com/trfc/articles/senator_pans_federal_con- tract_prtver.pdf

335 I also provided links to news: Blog postings available online at: http://realtime.sunlightprojects.org/2007/07/09/sf-lll-update-not-for-public-inspection/ and here: http://realtime.sunlightprojects.org/2007/07/09/ fhwa-discouraging-foia-requests-from-potential-contractors/

335 In an email message in mid-November: “The U.S. TTID Pro- gram: When Politics, Competition, and the Public Interest Collide” (white paper), http://www.itsonline.com/ttid/ttid_whitepaper.pdf

337 On November 3, 2003, Jeff Radjewski: Copy of letter online at: http://www.itsonline.com/ttid_letters/ibew_to_mdot_nov3_03.pdf

338 MDOT’s response nine days later by Tony: Copy of letter online at: http://www.itsonline.com/ttid_letters/mdot_to_ibew_nov12_03.pdf

339 Nine months later, on August 4, 2004: Available online at: http:// www.itsonline.com/ttid/Detroit%20ITIP%20080404.pdf

Chapter 25

340 To prospective state and local: The TTID program was originally called the Intelligent Transportation Infrastructure Program (ITIP). For convenience, it will be referred to as the TTID program throughout this chapter.

341 As if to underscore how much: Excerpted from the Detroit agreement, which is available online here: http://www.itsonline.com/ttid/ Detroit%20ITIP%20080404.pdf

406 Sources and Notes

341 Here are the very speciﬁc requirements: Search for “5117” on this web page: http://www.asm.org/ASM/ﬁles/LEFTMAR- GINHEADERLIST/DOWNLOADFILENAME/0000000568/ HR3338127%5b1%5d.pdf

342 After the Federal Highway Administration’s Deputy: Copy of letter from FHWA Deputy Executive Director Vincent Schimmoller to Darrell Wilson, Cong. Bud Shuster’s Chief of Staff, is available online at: http://www.itsonline.com/trfc/letters/fhwa_letter_feb20_01.pdf

342 They devised a clever legislative trick: Much more about the legislative history of the TTID program is in the white paper “The U.S. TTID Program: When Politics, Competition, and the Public Interest Col- lide,” available online at: http://www.itsonline.com/ttid/ttid_whitepaper. pdf

342 Language in the unrelated FY02 Defense: See Mr. Mineta’s letter to Cong. Don Young, then Chairman of the House Transportation & Infrastructure Committee, here: http://www.itsonline.com/trfc/letters/mi- neta_feb5_02.pdf

343 Those agreements typically spelled out: Available online at: http://www.itsonline.com/ttid/ttid_agreements.html

343 But I had an excellent clue: This press release is no longer available from Trafﬁc.com’s own website, but was captured from the web archive (“Wayback machine”) and can be seen online at: http://web. archive.org/web/20051215154213/http://corporate.trafﬁc.com/press/ june7_2001.html

344 That June 2002 task order: Available online at: http://www.itsonline.com/ttid/Procurement%20Request.pdf

345 The August 2004 agreement: Detroit agreement available online at: http://www.itsonline.com/ttid/Detroit%20ITIP%20080404.pdf

346 Meanwhile, I had been urging Lance: The IG’s audit announce-

407 The ‘Smart Road’ Scam ment is online at: http://www.oig.dot.gov/StreamFile?ﬁle=/data/pdfdocs/ TTID.pdf

346 Chu sent a copy of the 71-page ITOP: Available online at: http:// www.itsonline.com/ttid/ITOP%20contract%20DTTS59-99-D-00445. DOC

347 Task order No. T990021: Available online at: http://www.itsonline. com/ttid/itip_orig_task_order.pdf

348 The details of the revenue-sharing arrangement: Available online at: http://www.itsonline.com/ttid/itip_penndot_agreement.pdf

Chapter 26

355 (Ray Lustig/Washington Post): Photo comes from the article “House Panel Approves Highway Bill,” Washington Post, March 25, 1998, http://www.washingtonpost.org/wp-srv/politics/special/highway/ stories/hwy032598.htm

356 An article in the March 9, 2002: CONGRESS: “The Glare in Don Young’s Rearview Mirror,” National Journal, March 9, 2002, http:// lobby.la.psu.edu/_107th/125_SMART_Growth/News_Stories/National_ Journal_03092002.htm

357 “There are no Democratic or Republican highways: “THE 43rd PRESIDENT: THE CHOICES -- Man in the News/Norman Yoshio Mineta; A Clinton Holdover, a Reagan Veteran and a Departing Senator,” New York Times, Jan. 3, 2001, http://query.nytimes.com/gst/fullpage. html?res=9B04E1DD103BF930A35752C0A9679C8B63&sec=&spon= &pagewanted=all

358 On that day, the House Ethics Committee: That committee is of- ﬁcially called the Committee on Standards of Ofﬁcial Conduct

359 Cong. Oberstar became Chairman: “House Democrats Pick Oberstar to Chair T&I Committee in 110th Congress” (Cong. Oberstar Press Release), Dec. 7, 2006, http://www.oberstar.house.gov/index.

408 Sources and Notes asp?Type=B_PR&SEC={15B8640F-6770-48F9-8095-8EA6BEEC7471 }&DE={32AA36DB-E617-49DB-AC32-CB8F20B0FC85}

360 Quoting from the lead story in: “Trafﬁc.com claim to $50 million ITS earmark raises questions,” Inside ITS, January 15, 2001, http://www. i95coalition.org/PDF/Meetings/CIM/CIM-DV-02-01-01-addendum.htm

360 As if to underscore the strength: More information is available from the Univ. of Minnesota’s website at: http://www.cts.umn.edu/ Events/OberstarForum/2007/

361 “It was a privilege and pleasure: Cong. Oberstar’s speech is available on C-SPAN’s website at: http://www.c-spanarchives.org/library/index.php?main_page=product_video_info&products_id=201396- 2&highlight=Oberstar

361 Quoting from a Washington Post news piece: “House Panel Ap- proves Highway Bill,” Washington Post, March 25, 1998, http://www. washingtonpost.org/wp-srv/politics/special/highway/stories/hwy032598. htm

361 On January 22, 2009, retired Illinois: “Senate Conﬁrms 2 More in Cabinet,” Washington Post, January 23, 2009, http://www.washingtonpost.com/wp-dyn/content/article/2009/01/22/AR2009012203883. html

Epilogue

364 As I was putting the ﬁnal touches: “House Kills Effort to Inves- tigate Lobbyist-Lawmaker Ties,” Foxnews.com, http://www.foxnews. com/politics/2009/02/25/house-kills-effort-investigate-lobbyist-lawmaker-ties/

409 Frequently Used Acronyms

COTR – Contract Ofﬁcer’s Technical Representative (the government employee who coordinates a federal project on a day-to-day basis)

DHS – Department of Homeland Security

EBSA – Employee Beneﬁts Services Administration (part of the U.S. Dept. of Labor)

FHWA – Federal Highway Administration (one of the “modal administrations” within the U.S. Dept. of Transportation)

FOIA – Freedom of Information Act Request

GSA – General Services Administration

IBEW – International Brotherhood of Electrical Workers

IG – Inspector General (also see “OIG”)

IPO – Initial Public Offering

410 The ‘Smart Road’ Scam

ITIP – Intelligent Transportation Infrastructure Program (the earmarked program initially called out in TEA-21 and later renamed to “TTID” in SAFETEA-LU)

ITOP – Information Technology Omnibus Procurement (GSA program for procuring IT services)

ITS – Intelligent Transportation Systems (describes a wide range of com- puting and communication technologies to make travel on our nation’s roadways more safe, efﬁcient, and convenient)

ITS America – Intelligent Transportation Society of America (a large trade association)

JPO (or “ITS JPO”) – Joint Program Ofﬁce (an ofﬁce within the USDOT that coordinates the government’s ITS efforts)

MTC – Metropolitan Transportation Commission (public-sector entity that coordinates transportation system enhancement – including ITS deployment – in the San Francisco Bay Area)

NEBF – National Electrical Benefit Fund (huge national defined benefits/ pension program for retired members of the IBEW)

NLPC – National Legal and Policy Center (non-proﬁt, DC-area government ethics watchdog organization)

OGE – U.S. Ofﬁce of Government Ethics (federal agency that is supposed to ensure that elected and appointed ofﬁcials behave in an ethical fashion)

OIG – Ofﬁce of the Inspector General

POGO – Project On Government Oversight (non-proﬁt, DC-based government watchdog organization)

411 Frequently Used Acronyms

PPP – Public-private partnership

SAFETEA-LU – Safe, Accountable, Flexible, Efﬁcient Transportation Equity Act (the big transportation authorization bill enacted in 2005) SEC – Securities and Exchange Commission

TEA-21 – Transportation Equity Act for the 21st Century (the big transportation authorization bill enacted in 1998)

TTID – Transportation Technology Innovation and Demonstration Pro- gram (latest name for the ITIP program called out in SAFETEA-LU)

TxDOT – Texas Department of Transportation

USDOT – U.S. Department of Transportation

UWB – Ultra Wideband technology

412