Originally published here on February 1, 2012
By Joel Thurtell
How do you spell Detroit/Wayne County Port Authority?
According to Gongwer News Service, Gov. Rick Snyder might use the port authority to bypass the Legislature in his quest to build a new international bridge between Detroit and Windsor.
Gongwer reported in Volume #51, Report #1, Article #3, Tuesday, January 3, 2012:
Exactly what option the (Snyder) administration might pursue is unclear at this point. The options said by one source to have been under closest review are, in no particular order, an intergovernmental agreement between Canada and public entities in Michigan, using the Detroit-Wayne County Port Authority or turning the project over to the federal government.
The chief obstacle in the Legislature has been all the pressure Ambassador Bridge owner Matty Moroun has put on state reps and senators using that ever-so-persuasive policy argument, his check book.
So, when the governor thinks of working around the Legislature, he needs to remember that what he’s REALLY trying to sidestep is not lawmakers, but the BILLIONAIRE, Manuel “Matty” Moroun.
That being the case, using the Detroit/Wayne County Port Authority would NOT be a good way to avoid the heavy hand of Matty.
The Detroit/Wayne County Port Authority and Matty Moroun are pretty much the same thing.
Oh, I know, the port authority has a grandiose title, making it sound governmental. And it was established under some 1978 state law allowing local governments to establish port authorities to promote transportation.
All the same, Matty owns the Detroit/Wayne County Port Authority.
How can that possibly be?
Doesn’t the governor appoint one of the authority’s board members?
Aren’t the other four members appointed two each by the Detroit City Council and Wayne County Board of Commissioners?
Those are good questions, given the fact that a fair number of elected and appointed officials have been complicit in handing over control of this potentially lucrative and powerful body to the billionaire, Matty Moroun.
There is much to question in the contract between Matty and the port authority, because the governing document setting up Matty’s Ambassador Port Company as “master concessionaire” for the port authority is shrouded in secrecy.
We the citizens were not supposed to know about this cushy deal made in 2005 when Kwame Kilpatrick was King of Detroit and hardly anyone knew who owned the Ambassador Bridge.
According to the Research and Analysis Division of the Detroit City Council, the Master Concession Agreement may violate the Michigan Open Meetings Act.
Despite its labeling, the contract can’t be confidential, because the open meetings law requires that “all decisions of a public body be made at a meeting open to the public” and “all deliberations of a public body constituting a quorum of its members shall take place at a meeting open to the public.”
According to a March 17, 2006 report of the council’s research agency, it is unclear whether the 2005 contract was adopted in an open meeting.
If it was adopted openly, then it can’t be confidential. If it was adopted secretly, then its legal standing could be challenged.
Why would Matty and his public official cronies want to hide this document?
Because it gives the Detroit/Wayne County Port Authority to Matty!
The pretext for this legalized piracy was a roughly $2 million debt the port authority owed.
Kind-hearted Matty stepped in to pay off the debt.
Then Matty worked a deal to repay himself — for a price.
His price was control over the operations and revenues of the port authority for 25 years, renewable three times for up to a century.
That’s right — for 100 years Matty agreed to pay the port authority a paltry 2.5 percent of gross revenues.
Well, not exactly 2.5 percent.
You see, there are deductions for interest costs.
The Master Concession Agreement is 30 pages long.
Lots and lots of words.
Remember, the port authority is supposedly a public body.
Not only is it subject to the Michigan Open Meetings and Freedom of Information laws.
But it is required under the state Constitution to be run for the benefit of the public.
Which is to say, for the good of you and me, taxpayers and citizens of Michigan and the United States.
The port authority was not meant to be given away to a pirate like Matty whose every intention — you can read it in the contract’s wording — is to milk the bejesus out of the port and line his billionaire’s pockets.
What happens to the remaining 97.5 percent of the port’s gross revenues? Matty has control of that, too.
So, Matty could actually reap more than 100 percent of port revenues. That’s because whenever he needs to invest in the port, he gets to charge the cost of construction or equipment or whatever to the port authority — that is you and me! — plus 6 percent interest.
Matty — excuse me, the port authority — uses the Nicholson Dock and Port Company to move freight, so-called “stevedoring” work. Matty gets to charge Nicholson “a percentage” of Nicholson’s revenues.
Whatever Matty wants, he gets.
Translated to the Master Concession Agreement lingo, “The Authority shall not unreasonably withhold the Authority’s consent to any Budget, Master Plan, Price Schedule, Operating Procedures or other proposals or requests of the Concessionaire.”
If Matty orders the authority to do something and it declines, it better be ready to defend its reasoning.
Nobody else can make such a request. Not you. Not me. That makes Matty the port authority’s one and only head.
As I said, Matty and the port are the same thing.
The port authority has 30 days to respond to Matty’s requests. If the authority fails to respond within 30 days, according to the contract, Matty gets his way.
The Authority can’t “pledge, sell, assign, let, lien, option” port authority property — public property! — without Matty’s permission.
The port authority gave up its right to sue Matty for breach of fiduciary trust.
Yes! Can you believe that?
In other words, Matty gets to screw them and they get to smile.
Public officials actually agreed to this language:
The Authority understands and acknowledges that master Concessionaire or its affiliates owns real property in and around the Premises that Master Concessionaire is interested in incorporating into the operations of the Facility and has agreed to perform the Facilities Work in part for the purpose of maximizing the value of such other properties and the profits to current and future business operating thereon. Preference shown to such other properties owned by master Concessionaire or its affiliates over the Facility shall not constitute a breach of any duty of Master Concessionaire hereunder or a breach of the Facility Operation Standard. The Authority, hereby waives any claim for breach of fiduciary duty or other cause of action in connection with any actions taken by Master Concessionaire or any Facility Operator whereby other property owned or controlled by them receives disproportionate benefits to the Facility. (Emphasis added)
The “emphasis added” was done by the author of the “confidential” contract, by the way, not by JOTR.
So what does the public get from this deal?
Not taxes: The contract exempts Matty from paying real estate taxes.
Matty’s whole purpose is “maximizing the value” of his own property, and if that happens to hurt the public, hey! It may have happened in secret, but we know this much — we got screwed.
Matty has the exclusive right to run a port in Wayne County.
Want to start a harbor at Detroit?
Fine, as long as you don’t mind Matty’s thumb on your business.
What if you wanted to spend a few hundred billion on a modern railroad tunnel under the Detroit River?
Great idea, as long as you don’t mind handing Matty the keys.
If the port authority wants to sell property to an outsider, first it has to offer the same deal to Matty.
Not surprisingly, the city council’s researchers had a few problems with this contract.
Homeowners, think about this: What would your mortgage-holder say if you failed to buy insurance on your house?
Matty’s got that base covered: “If insurance is not maintained by Master Concessionaire or the Facility Operator, such failure shall not constitute an independent cause of action and shall not result in liability of Master Concessionaire to the Authority or any other party for uninsured damages that may occur.”
If one of Matty’s trucks is full of dynamite and blows up, the port — that is, the public — can clean up the mess.
If Matty decides to assign his rights to run the port to someone else, the authority “can not unreasonably deny the Concessionaire’s request to assign its rights under the Agreement.”
Back in December, Gov. Snyder signed Public Act 258 of 2011 allowing a “public” agency like Matty Moroun — excuse me, I mean the port authority — to team up with a local government such as the city of Detroit or Wayne County to do pretty much any economic development project. In such a partnership, Matty would have the power to levy taxes, condemn property — eminent domain — as well as issue bonds. Matty, who runs ads excoriating government, could BE government, thanks to this new law and the Master Concession Agreement.
According to the city’s researchers, “The entire flavor of this Master Concession Agreement gives ‘preference’ to one business entity for the benefit of paying off the $2 million bonds. It also appears to render the Detroit/Wayne County Port Authority nearly constructively powerless to independently exercise its legal rights, duties and privileges.”
The contract “could relinquish control over the Authority’s options to finance current and future debts,” according to the researchers, who concluded:
“The Concessionaire could build a bridge, then bill the Authority.”
Hear that, guv??
Matty can build that new international bridge.
He doesn’t need you!