Friday, February 16, 2018

Can it be Fraud, Waste, and Abuse if it’s only $10 million or so?


We posted many, many months ago, about wasteful projects NNEPRA is undertaking to “optimize” their Portland North Service.  One of these projects is the Royal Junction Siding, just getting underway at a cost of ~ $10 million.  Here’s a schematic of the proposal:


We also included it in the materials we brought before the Office of Program Evaluation and Government Accountability when they audited NNEPRA operations two years ago, at the direction of the Government Oversight Committee of the Maine Legislature.   Sad to say, but the committee ‘elected’ not to continue the audit when it came time for a new set of legislators to be elected.

Given our love of banging our head against walls, we thought about this particular project a good deal more, and decided we just could not give it a good leaving alone and still have a conscience we could look straight in the eye.

So in December, we submitted a memo asking for an oversight investigation of the project, coupled with a stop order for it until such time as it could be determined to be necessary and sound public policy and spending.  You can read the memo here:

Here’s an excerpt or two to whet your whistle:

To: Chairs and Members of the Joint Standing Committee on Transportation

cc: Governor's Office (Governor; McGough; Libby)

MDOT (Commissioner; Nass; Moulton; Hayes)

Government Oversight Committee; OPEGA

Joint Standing Committee on Appropriations and Financial Affairs

From: Pem Schaeffer

Brunswick, Maine


Date: December 10, 2017

Subject: Call for immediate investigation into NNEPRA management failings

My understanding is that the Maine State Legislature now has authority and responsibility for active oversight of the Northern New England Passenger Rail Authority (NNEPRA), and that it vests in the Joint Standing Committee on Transportation.

Accordingly, I request that you immediately schedule investigative hearings into two specific evolutions for which NNEPRA has direct responsibility. Each involves clear management ineptitude, and merits your attention as guardians of the public trust. These are the Royal Siding Project just getting underway, and deficiencies in the design, construction, and operation of the Brunswick Layover Facility, in use since late 2016.

And this conclusion:


Given these two grievous compromises of the public trust by NNEPRA, and the waste of both state and federal taxpayer funds they embody, I implore you in the strongest of terms to:

  • Immediately issue a stop order for the Royal Siding Project to minimize wasted funds.

  • Schedule investigative hearings on both as time critical priorities.

Sadly, as we feared, we got not a single word of acknowledgement or interest from any of the parties to which it was sent.  This ignited a slow burn in various elements of our essence,  and stimulated further thought on the Royal Juction Siding Project in particular.  The more we reflected on it, the more convinced we became that its need is a misrepresentation, and building it is a waste of taxpayer dollars and abuse of the public trust.  The only justification, as we could see it, is as a quid-pro-quo for Pan Am Railways, which owns the track in question, and would be the builder of the project.

So we drafted an addendum to the original memo and submitted it on 26 January to the same folks in Augusta.  You can read it here:

Here’s a few excerpts on this item:

To: Chairs and Members of the Joint Standing Committee on Transportation

cc: Governor's Office (Governor; Lusk; Libby)

MDOT (Commissioner; Nass; Moulton; Hayes)

Government Oversight Committee; OPEGA

Joint Standing Committee on Appropriations and Financial Affairs

From: Pem Schaeffer

Brunswick, Maine


Date: January 26, 2018

Subject: The Case for Halting NNEPRA's $10 Million Royal Junction Siding Project

(An Addendum to “Call for immediate investigation into NNEPRA management failings” dated December 10, 2017)


Executive Summary:

This addendum further examines the details of NNEPRA's proposed Royal Junction Siding Project, now underway at a cost of nearly $10 million. Justification on the basis of railroad operations is demonstrably unconvincing. The only credible barrier to Downeaster service expansion is Pan Am Railway's limit of six daily slots on their tracks between Portland and Brunswick when ten slots would be necessary. Since Pan Am will be doing all the project work, and is the owner of all related trackage, it is entirely possible that the $10 million is a quid-pro-quo for granting four more daily slots.

The Royal Junction Siding Project should be ordered stopped immediately, pending detailed investigation of all relevant facts by the Joint Standing Committee on Transportation, and other directly responsible State Government parties.

And the conclusion:


Careful examination of the arguments for construction of the Royal Junction Siding with $10 million of taxpayer funds shows reliance on impossibly precise timing of train co-positioning which is at best highly improbable, and at worst implausible. Train operations are manifestly not a rational limitation on Downeaster service expansion to 5 daily round trips to Brunswick, as insensible as it is. Instead, the only plausible explanation is the need for Pan Am to increase Downeaster daily slots on the Portland to Brunswick track segment from 6 to 10.

This leaves only the possibility that the proposal masks a consideration to Pan Am Railways, both in capital improvement and millions of dollars in make work activity, for increasing allotted slots. A quid-pro-quo to be quite blunt. It is not the purpose of NNEPRA, and not in the interest of state and federal taxpayers, to fund such gratuitous transfers.

Conclusion: The State's Legislature and Executive Branch should immediately call a stop to Royal Junction Siding work, pending a detailed investigation of the project including railroad peer review.

This drew exactly the same response from Augusta officials as the original memo….crickets.


So you can chalk one up for the dedicated public servants in Augusta; they’ve managed yet again to organize an Ignorathon when confronted with pretty hard evidence of a flagrant abuse of taxpayers.

It’s even worse when you consider the underlying realities.  This project is being conducted by NNEPRA, the Northern New England Passenger Rail Authority, which was created by statute as a virtually autonomous instrumentality of State Government.  In this regard, it operates much like the Maine Turnpike Authority, and the Maine State Housing Authority.  It has a Board of Directors to whom the governor makes nominations, and then it's up to the Senate to confirm them.

The statutory language is found in MRSA Title 23, Chapter 621.

We are not aware of any regular bills that move through the Legislature to fund projects like this.  Frankly, NNEPRA acts as un-monitored and with as little oversight as possible.  History shows the board to be a rubber stamp operation.  Two of the 7 members are ex-officio: MDOT and DECD.

NNEPRA built the $15million plus Layover Facility in Brunswick in recent years, and we’re not aware of any direct legislation that gave them the OK to do that.  We are even more certain that no legislative committee, or the Executive Branch, reviewed the project and approved it.  The same is true for the Royal Junction Siding Project, which is being built without any direct approval or oversight by anyone that we know of.

NNEPRA operates at a deficit of more than 50% annually, requiring more than $11 million in subsidies in FY 2017.  About $8M of that comes from federal sources, and the rest from the state.  The Royal Siding Project has roughly the same split.

Note that neither New Hampshire or Massachusetts contributes anything towards the operating deficit, even though nearly half of the ridership totals takes place south of Maine’s border.


So there you have it, fun seekers.  Endless deficit spending so a relatively few foamers can get their jollies on a train while untold thousands give of their dollars to pay more than half their fare, and all of their related capital projects.

Is this a great country and great state or what?

Reckless and unconcerned when it comes to spending OPM, but what else can you do when you are elected to serve?  Saying NO is a sure path to political oblivion.

We don’t know what we’ll do next to wake up at least one or two folks who might take interest in the subject, but we’re going to do all we can to rattle cages; you can count on that.

No comments:

Post a Comment