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A Bridge to Nowhere But The Bank

President Trump’s infrastructure plan may not provide a blueprint for rebuilding our roads or creating good paying jobs, but it does provide a blueprint for cronyism. The self-dealing approach Trump has already taken on infrastructure provides a window into who his plan would leave behind, and who it would help make rich.

—Trump rolled back flood regulations his infrastructure advisor’s firm opposed. In the wake of Hurricane Sandy, President Obama issued an Executive Order to “address current and future flood risk and ensure that projects funded with taxpayer dollars last as long as intended.” In implementing the E.O., the Department of Housing and Urban Development (HUD) proposed a rule increasing elevation requirements for projects receiving HUD assistance located in flood plains. However, on August 15, 2017—two weeks before Hurricane Irma slammed into the Gulf—Trump issued his own E.O. revoking the new flood protections, stopping the HUD proposal in its tracks.

SIDEBAR: From Trump’s inauguration until two days after Trump issued the E.O., billionaire real-estate developer Richard LeFrak co-chaired the President’s illegal Infrastructure Council. LeFrak’s company spent up to $320,000 lobbying on the “Flood map issue” between 2013 and 2016, and had long opposed new flood protections. It’s clear why: Post-Sandy flood protections had increaseddevelopment costs for a LeFrak development in Jersey City, requiring the company to raise the height of its site by about three feet before starting construction.

—He gutted pipeline safety rules cited as financial “risks” to an investment held by another infrastructure advisor’s firm. In 2010, a gas pipeline exploded in California, killing eight people and injuring dozens more. In response, Congress passed a law requiring the Department of Transportation (DOT) to revise gas pipeline safety regulations. After six years of work, DOT issued a proposed rule in 2016 to strengthen inspection and repair requirements for gas pipelines, and prevent an estimated 40 accidents each year. During the last week of the Obama Administration, DOT also issued a pre-publication copy of a similar rule for hazardous liquid pipelines. But since taking office, Trump has delayed the gas pipeline safety rule for at least a year and has indefinitely withheld finalizing the hazardous liquid pipeline rule.

SIDEBAR: Joshua Harris, another member of President Trump’s illegal Infrastructure Council, is a senior executive at Apollo Global Management, a private equity company with substantial investments in energy companies, including EP Energy and Northwoods Energy. In its annual reportfiled with the SEC, EP Energy listed the two pipeline safety rules as potential financial threats, claiming they could “expose us to significant costs and liabilities.”

—He approved a water pipeline development previously blocked due to concerns about arsenic in the water supply. In 2015, the Department of Interior (DOI) blocked Cadiz Inc. from developing a 43-mile water pipeline to pump water into southern California. DOI ruled Cadiz was required to secure federal approval for the project, which had long been stymied due to concerns about the presence of arsenic and chromium in the water supply. According to the LA Times, DOI’s decision was likely “tantamount to a death sentence” for the proposal. However, last year, Trump rescinded the 2015 determination and revived the controversial project. Trump’s transition team at DOI had placed the pipeline on a list of priorityinfrastructure projects. The team was led by David Bernhardt, whose lobbying firm represented Cadiz in trying to secure approval for the project. When pressed on the potential conflict, Bernhardt said he had no involvement in the Cadiz matter after Trump was elected.

SIDEBAR: But that’s not all. After Trump’s DOI revoked legal guidance used by the Obama Administration to block the pipeline, Apollo Global Management announced an investment in the project. In May 2017, Joshua Harris’ firm announced its affiliated funds would provide Cadiz $60 million of capital as well as a $240 million conditional commitment in construction financing for the water pipeline.

—He made it easier for construction companies that steal wages from workers to receive federal contracts. The Davis-Bacon Act makes it illegal to pay workers less than the prevailing local wage on federally funded construction projects. In 2014, President Obama signed an E.O. requiring companies competing for federal contracts to disclose whether they violated the Davis-Bacon Act or other labor laws combating discrimination, wage theft, and unsafe work conditions. Although construction workers praised the E.O., the construction industry—which received nearly $30 billion in federal contracts in 2016—opposed them, with one construction lobbying group even suing to block the protections. In March, President Trump revoked the E.O. without providing any justification for stripping workers of their protections

SIDEBAR: The theory behind the 2014 E.O. was simple: To ensure the billions spent on federal contracting each year are not awarded to companies that repeatedly and willfully violate federal labor laws. This was a significant problem. For example, a 2010 study found that almost two-thirds of the 50 largest wage-and-hour violations issued between FY 2005 and FY 2009 were at companies that went on to receive new government contracts.

—And even scrapped an industry-opposed initiative to bring infrastructure jobs to local communities. In 2015, DOT introduced a proposal to promote local hiring in federally funded infrastructure projects. The local job creation rule would have permitted cities using federal funds to use a preference for local hiring in the contract bidding process, allowing communities to build infrastructure projects and create jobs. In conjunction with the proposal, DOT piloted the program on fourteen projects in roughly ten cities, including New York, Los Angeles, Chicago, and New Orleans. According to Newsweek, the initiative “enabled states and cities to create thousands of new, high-wage transportation and construction jobs in some of the nation’s most depressed local labor markets.” In October 2017, Trump withdrew the local job creation rule and discontinued the pilot program, citing industry concerns.

SIDEBAR: While cities overwhelming supported the local job creation initiative, industry trade groups did not. For example, the rule was opposed by the Associated Builders and Contractors and the Associated General Contractors of America, the latter “recommend[ing] to the Trump transition team that it discontinue the pilot program and ensure that the rulemaking does not move forward.”

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