On February 17, Governor Tom Corbett authorized the $42 million shipyard bailout. Two ships will now be constructed --- even though there are no buyers, nor any in the foreseeable future --- and hundreds of union jobs will now be subsidized. So much for the pledge of responsible government and fiscal restraint, especially in light of the $5 billion budget deficit.
The wildly successful model that Gov. Christie has given his colleagues --- popularity will rise if you stick to your campaign promises --- is, incomprehensibly, falling on deaf ears. It is bad enough Corbett is being labeled "Governor MIA" for scarce appearances during his first five weeks in office. But when his first sign of life is choosing a bailout associated with politically-connected powerbrokers over the taxpayers who just elected him, the idea that Pennsylvania is on the right track becomes a hard sell.
As of now, the status quo still rules the day...
Column originally published January 6, 2011:
Corbett Can Drop Anchor On Governor’s Taxpayer Boondoggle
In the movie Dave, Kevin Kline plays a presidential lookalike who finds himself running the country after the real President falls into a coma. Convening a Cabinet meeting, this political novice uses common sense to expose the ludicrous mentality of the entrenched Business As Usual crowd.
Kline asks the Commerce Secretary about an ad campaign his Department has implemented to boost consumer confidence in the American auto industry. “It’s designed to bolster individual confidence in a previous domestic automotive purchase,” the Secretary proudly explained.
Speechless at first, Kline fires back, “We're spending millions for somebody to feel good about a car they already bought? I don't want to tell an eight-year-old kid he's gotta sleep in the street because we want people to feel better about their car. Do you want to tell him that?” The shocked Secretary (finally) sees the light, and the program is eliminated.
Incredibly, that mentality isn’t limited to fictional Hollywood scripts, but is a large part of the way our governmental leaders operate. Look at what Pennsylvania’s Ed Rendell is trying to pull off before he walks out of the Governor’s Mansion a few weeks from now.
Shortly before leaving office, Rendell authorized $42 million in taxpayer money to be sent to the Philadelphia Regional Port Authority (PRPA) to help bail out the sinking Aker Shipyard in Philadelphia.
The funding, we are told, would prevent Aker from going under, since it would be building two new tanker ships.
Of course, there’s one small problem.
There are no buyers for the ships. And the prospect of that changing course anytime soon is virtually nonexistent.
Thousands of ships worldwide are lying at anchor because of the global recession, idled indefinitely because the demand for shipping is dismally low. It’s gotten so bad that some ship owners are even scrapping their vessels to eliminate harbor costs, receiving pennies on the dollar. But the remaining glut of vessels is still huge, depressing prices for the foreseeable future.
So, let’s be “Dave” for a second and get this straight.
Rendell wants to spend money --- our money, since there’s no such thing as “state” money --- to build ships…that no one is going to buy, ostensibly so some 1,000 workers can keep receiving a subsidized paycheck. And since there aren’t any buyers, the ships obviously wouldn’t be built-to-order, further devaluing them and making their eventual purchase all the more difficult.
Rendell may not care, but I certainly wouldn’t want to tell a mother that her child died in a bridge collapse that resulted from a lack of maintenance --- because $42 million was spent on ghost ships instead of bridge repairs.
But what type of Rendell move would it be if he didn’t take care of his political pals and big-time fundraisers?
The Chairman of the PRPA is none other than John Estey, former Rendell Chief of Staff and a longtime partner at Ballard Spahr, the Guv’s old firm which has received the lion’s share of millions in no-bid legal contracts from the state. And guess who the outside counsel of PRPA was? Ballard Spahr.
This is the same John Estey who is also Chairman of the Delaware River Port Authority (DRPA), which is intricately linked to the PRPA, sending millions their way over the years.
The DRPA couldn’t dole out legal contracts fast enough to Ballard when it served as its outside counsel --- over $3.2 million since Rendell was elected in 2002, up from $480 the year prior. And when Chairman Estey voted to approve those legal bills, he was, in fact, approving funds that went directly to Ballard --- his own firm.
Ballard and its associated entities, by the way, have contributed $1.5 million to Rendell.
The Philadelphia Port Authority is nothing if not politically-connected, too: two Board members alone have donated over $350,000 to the Governor’s campaigns.
It must be nice (and lucrative) to represent both Authorities when all that “Other People’s Money,” to quote the legendary Vince Fumo, is flying around, but that’s another story.
But to make the story even more interesting, enter Manny Stamatakis, Chairman of the nonprofit Philadelphia Shipyard Development Corporation. That is the entity which will receive the $42 million so it can buy Aker assets and lease them back to the company as part of the bailout. Some might call that a shell game.
“If they don't build these next two ships, this yard is shutting down," Stamatakis was reported as saying. Well then, let’s not mess around, Manny. Let’s make it $420 million and employ 10,000 workers. Or even $4.2 billion so that Aker can build 200 ships. No one will buy them, either, but so what? We’re keeping people employed and the political-elite will be happy.
Ironically, the entity that should be in the best position to throw money Aker’s way would be the DRPA with all the economic development money it controlled. But it was under Manny’s watch as DRPA Chairman that much of the $500 million in such funds were blown --- pretty much on everything not related to bridges or ports.
And now Stamatakis is Chairman of the Shipyard Development Corporation. Go figure.
Hope is not lost though. Attorney General Tom Corbett must still approve the contract.
Sources have told Freindly Fire that the lobbying on Corbett to let this contract sail through before his January 18 gubernatorial inauguration by has been extremely intense. Given the Rendell Administration’s track record with these types of contracts, that should be red flag enough to put the brakes on this deal until all questions are thoroughly answered. And clearly, questions abound.
The Rendell legacy has been one of abject failure for all Pennsylvanians not linked at the hip to the Governor, and the attempted Aker bailout is a perfect illustration of how he achieved that dubious status.
Like two ships passing in the night, Corbett and Rendell could not be any more different in their direction. Here’s hoping Corbett drops anchor on Rendell’s last hurrah and charts a course for safer harbors.
Chris Freind is an independent columnist, television commentator, and investigative reporter who operates his own news bureau, www.FreindlyFireZone.com
Readers of his column, “Freindly Fire,” hail from six continents, thirty countries and all fifty states. His work has been referenced in numerous publications including The Wall Street Journal, National Review Online, foreign newspapers, and in Dick Morris' recent bestseller "Catastrophe."
Freind, whose column appears nationally in Newsmax, also serves as a guest commentator on Philadelphia-area talk radio shows, and makes numerous other television and radio appearances, most notably on FOX. He can be reached at CF@FreindlyFireZone.com
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