Epic Highway Land Swindle Costs Taxpayers $13 Million

By Bill Oakey – April 17, 2016

As Austin and Central Texas await potential downpours and the return of hazardous flooding, at least we can be thankful for one thing. The shower of State taxpayers’ money that has been raining down on two alleged North Texas swindlers has been cut short by Federal indictments. This past Friday, the Dallas Morning News reported the indictments of two developers who have “conspired to defraud the Texas Department of Transportation (TxDOT) by purchasing property and then selling it to TxDOT at an inflated price.” The scheme allegedly took place over the span of seven years, from June 2008 through July 2015.  The total taxpayer tab comes out to $12,948,321.

The former property owners caught up in this web had faced excruciating wait times for their land to be condemned and purchased. Then, like a scene from an old western movie, the alleged outlaws galloped to their doorsteps with checks in hand. Not more than a few months later, they flipped the properties to TxDOT for handsome profits.

The backstory to this still-unfolding saga raises disturbing questions about the State transportation agency charged with overseeing a massive highway network. In the highlighted news story, a lawyer for the accused states that the land transactions “followed TxDOT’s well-established and transparent guidelines.” Really? We can’t help be reminded of the similarity between this situation and the giant high-tech contracting scandal that engulfed State officials not so long ago.

All kinds of questions can and should be raised. Did other private parties engage in this type of scheme? If so, how much taxpayer money did we lose in total? Who amongst our State officials knew about it, and when did they know it? If in fact, such transactions were standard operating practice, who authorized that practice? And who should have been responsible for the oversight of those transactions, on behalf of the taxpayers? Can we expect another shoe or shoes to drop?

the-other-shoe

From Bandoleros to the Badlands of Austin

Mobility, traffic and affordability are a big deal here in Austin. Of course we depend on TxDOT to run efficiently and provide us with effective solutions. As for highways, we used to call those things “freeways.” That is until somebody flipped a switch and decided that nearly all new interstate road construction in our area would be for toll roads. Not only that, but we can brace ourselves for the pending launch of Austin’s very first “managed toll lanes” on North MoPac. TxDOT does not play a role in the MoPac deal, but get ready for “the heavier the traffic, the higher the toll.” That’s a sweet deal for our wealthiest residents, since even at a modest $4 per one-way trip as once suggested on the toll agency’s website, the monthly bill would be $168 per month for 21 working days.

Sorry for the Digression. Now Back to the Main Topic

Some of you may remember that land-flipping was quite the rage in Texas in the 1980’s. In those days, it was not unheard of for someone to buy a piece of land in the morning and have it flipped by the close of business that same day. Austin was in the throes of a big boom. But what came afterwards was not a pretty sight. The Savings and Loan Crash wiped out a lot of profiteers and speculators, but also took down too many good, hard-working people. History has a nasty way of repeating itself. In the meantime, If it turns out that the North Texas flipper-frenzy with TxDOT was not above-board, then everyone responsible should be held to account.

1920's silent film star, Buster Keaton

1920’s silent film star, Buster Keaton

Musical accompaniment for this blog posting:

  1. Angels Love Bad Men” – The Highwaymen, 1990
  2. This Land Is Your Land” – Pete Seeger (live version of Woody Guthrie’s 1940 classic)
  3. “In the Jailhouse Now” – The Soggy Bottom Boys, from the movie, “O Brother, Where Art Thou,” 2000
  4. “Highway 40 Blues” – Ricky Skaggs, from the album, “Highways and Heartaches,” 1982
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2 thoughts on “Epic Highway Land Swindle Costs Taxpayers $13 Million

  1. Vince May

    In the old days it was common for land owners to give give right of way to TxDOT so as to get road improvements sooner. For instance, 60% of the property owners along Hwy 290E signed pledges with TxDOT to donate land for the freeway project. But when TxDOT decided that 290E would be tolled the land owners revoked their pledges. CTRMA ended paying $35 million for the right of way. That cost us about $20 million. Even the City of Austin, which owned 2 of the parcels, sued CTRMA to get top dollar for their tracts. The Dallas deals were for toll roads. I think that is pertinent.

    Another example. By law, TxDOT must put out invitations for construction work and give the job to the low bidder. The law that created regional mobility authorities specifically exempted them from this requirement. Last summer when CTRMA opened the bids for the 183S project (Ed Bluestein Blvd) they chose a bid (from Fluor Corp) that was $90 million more than the low bid. This did not raise a single eyebrow among the commissioner’s courts of Travis and Williamson Counties. They appoint the CTRMA board. Nor was CAMPO flustered. They are supposed to oversee CTRMA. After all, the toll payers will pick up the tab. Why should they care? Right?

    BTW: After 13 years, CTRMA has opened 17 miles of toll roads and has $1.5 billion of bonded debt.

    Reply
  2. Jaded Austin

    Watch out for the multibillion dollar undergrounding of I-35 just north of the river, should it happen. Do we get to vote on that in November? Bet there’s some similar money made on condemnations in that area.

    Reply

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