Austin and Conroe, December 15 – In the March 6, 2018, Republican Primary Election, Republican voters will vote on Proposition 2, a nonbonding ballot proposition which reads, “No governmental entity should ever construct or fund construction of toll roads without voter approval.” As Republican Party of Texas Spokesperson Jamie Bennett explained, “The propositions are non-binding, meaning they do not create laws. However, they are a proven, effective way to poll Republican voters on various issues and inform elected officials on where those voters stand.”
Proposition 2 arose from a grassroots movement of conservative Republican Party activists from Montgomery County, a suburban area just north of Houston. Montgomery County suffers from corruption and crony capitalism to a terrible degree within its County government and has become a laughingstock nationwide. Fundamentally, the idea of Proposition 2 would be to seek legislation in the 86th Legislative Session to bring tollroads without voter approval to a statutory demise.
Montgomery County has come to represent the terrible corruption and cronyism behind the construction of tollroads.
The philosophy behind tollroads: “centralized government planning” (aka Communism)
The late Cuban communist leader Fidel Castro once said, “I became a Communist by studying capitalist political economy, and when I had some understanding of that problem, it actually seemed to me so absurd, so irrational, so inhuman, that I simply began to elaborate on my own formulas for production and distribution.” Castro’s attempt to have government provide its own formulas for production and distribution in Cuba was an abject failure.
On the other hand, Nobel laureate economist Milton Friedman remarked, “The greatest advances of civilization, whether in architecture or painting, in science and literature, in industry or agriculture, have never come from centralized government.”
The planning and construction of tollroads is one of the worst examples of centralized government planning that results in economic growth not in accordance with the wishes and needs of free markets but instead based entirely upon the backroom deals.
Tollroads are crony capitalism at its worst.
The story of Montgomery County’s Tx-249 Tollway, also known as the “Decimation of Hope Highway,” because it destroys the hope of freedom among taxpayers, particularly those on fixed incomes, illustrates how crony capitalism works.
Tx-249 Tollway, the “Decimation of Hope Highway”
The Texas Department of Transportation (“TxDOT”) has floated the idea of extending Texas State Highway 249 from the Houston Beltway all the way to College Station for many years. There was a lot of discussion, however, about how to fund the project and where the actual extension would go.
Tx-249 is currently a 26.643 mile road that extends from the junction with Interstate 45, where the road is called West Mount Houston Road, to the little town of Pinehurst, south of Magnolia, at the junction of F.M. 1774 and F.M. 149.
The aggressive Harris County Toll Road Authority (“HCTRA”), always looking for expansion to increase its money coffers, agreed with TxDOT to construct a tollroad section north of Houston’s Beltway 8 extending northwest to the Montgomery County line at Spring Creek. The question then arose who would construct the next section of road TxDOT had planned that would go to the tiny little town of Todd Mission about 19 miles northwest of Pinehurst in Grimes County.
Most of the planned road would go through Montgomery County. From Spring Creek to Pinehurst is approximately 4.5 miles (the “MCTRA Section”), while the remaining 15 miles or so would wind from Pinehurst through the Magnolia area to Todd Mission (the “TxDOT Section”).
Enter Craig Doyal, who previously served as Precinct 2 Montgomery County Commissioner from the Magnolia area and since 2015 is the Montgomery County Judge, and his right-hand man Charlie Riley, who succeeded Doyal as Precinct 2 County Commissioner in 2015. As Doyal explained during a candidate debate on December 14, 2017, he believes government, rather than free markets, should lead economic development.
At least when government uses tax dollars to cause economic development in the corrupt centralized planning world of Craig Doyal, Charlie Riley, and Fidel Castro, those people who are doing the governing can choose which of their favored supporters will receive the tax dollars and their benefits.
Doyal is a former democrat who switched political parties in 1998 “so I can win,” (as he told the Montgomery County Republican Party Candidates Committee one evening) since Montgomery County’s voters are strongly conservative and Republican. Doyal was a roofing salesman before he became a Montgomery County employee in the early 1980s. He’s lived off the public dole now for 30 years. He eventually rose to the position of Operations Manager for Precinct 2 Commissioner Malcolm Purvis who also switched parties to win re-election in 1998. Doyal’s formal job title was “Assistant” to Purvis. After Purvis passed away, Doyal won the Precinct 2 Commissioner’s post in the Republican Primary Election, which elects all candidates in Montgomery County, since so few people vote democrat.
Doyal hired his friend Riley in 2002. Riley and his wife had just suffered a business failure in Cleveland, Texas, when their truck stop and restaurant failed to garner sufficient business to stay afloat. Riley and his wife could not make ends meet in the challenging world of the free-market economy. Riley and his wife, Deanne, who also became a recipient of the Montgomery County government dole as an employee, filed Chapter 7 bankruptcy on February 4, 2002, so that they wouldn’t have to pay their personal debts. They received a discharge from the United States Bankruptcy Court in Houston on June 26, 2002. Even recently, the Rileys had debts they hadn’t paid, including some state tax liens in San Jacinto County.
Doyal and Riley, both of whom hail from the Magnolia area, have pushed the Tx-249 highway extension for several years, primarily because some of their major political supporters want the highway to cut through the vacant pastureland and scrub fields between Magnolia, Todd Mission, and the intersection with State Highway 105 to the north.
Who are those “major political supporters”? San Antonio real estate developer Rick Sheldon and Minnesota’s John Thuringer.
Varde Partners, a Minneapolis-based real estate investment company, owns approximately six thousand (6,000) acres of real estate near the proposed Tx-249 tollway and intends to develop commercial centers after the government completes the unnecessary tollway. Varde has mastered the art of giving small portions of rights-of-way to governmental entities throughout Singapore, East Asia, and Europe so that the government will bear the cost of roadway development rather than Varde having to create access and infrastructure itself.
One of Varde’s directors is Thuringer, who has contributed thousands of dollars to Doyal’s political campaigns over the years. Thuringer and Pete Peters, a political consultant since his release from federal prison with whom Varde has worked closely, established Doyal’s and Riley’s legal defense fund, which hired and paid at least in part for Houston criminal defense attorney Rusty Hardin to lead the defense of Doyal in the Texas Open Meetings Act (“TOMA”) criminal indictment which is now pending before the Beaumont Court of Appeals. Doyal and Riley, who are co-indictees along with Montgomery County local political boss Marc Davenport in the TOMA case, also known as the “Trial of the 21st Century” due to its potential impact on efforts to clean up corruption in Montgomery County, have worked closely together with Hardin and Riley’s other attorneys to attempt to fend off the criminal charges against them.
Making sure the MCTRA Section is a tollroad
A critical aspect of Doyal’s and Riley’s scheme is to make certain the MCTRA Section – all 4.5 miles of it – is a tollroad. Doyal and Riley need the MCTRA Section to be a tollroad, so that they can have the Montgomery County government enter into an agreement with TxDOT for the County to take “primacy” in the MCTRA Section’s construction, even though TxDOT would otherwise build the road anyway. If the TxDOT Section were not a tollroad, then it wouldn’t make sense for the MCTRA Section to be a tollroad either. Therefore, Doyal and Riley, want the entire road to be a tollroad.
Why do Doyal and Riley want the Montgomery County government to control construction of the MCTRA Section? Because that way they, as opposed to the State government, can choose to whom they’ll funnel the engineering, right-of-way acquisition, and construction dollars. And funnel the money they have!
At this point, there has been no construction on the Tx-249 Tollway. TxDOT announced on December 15, 2017, that it will begin construction of the TxDOT Section during the month of December, 2017. The MCTRA Section has not yet begun construction. Nevertheless, Doyal and Riley have spent almost $13 million (!!!) of general revenue funds of the Montgomery County government that they’ve “borrowed” for the Tx-249 Tollway project. To whom have they funneled that massive amount of money:
- More than $2 million to Halff Associates, Inc., for project management, even though there’s not really any project yet. Halff is the engineering firm of which Bobby Jack Adams is the Regional Vice President. Adams is Doyal’s best friend and business partner. That’s right. Doyal and Adams, an officer for this major County government vendor, are in business together! Halff Associates, by the way, also was a major group that helped to organized Doyal’s criminal legal defense fund.
- Jones & Carter engineers, who have received $1,487, 526.90 so far on the project only for design work. These engineers are also major political contributors to Doyal and Riley
- Muller Law Group, $136,170.00, lawyer who has become Doyal’s main Tollway spokesman, major political contributor. Rich Muller admitted on April 13, 2017, in Commissioners Court that the voters would never approve the Tx-249 Tollway in a referendum vote.
- Landtech, Inc., $297,354.84, surveyors, major Doyal-Riley political contributors.
- Restoration Systems, $2,527,500.00, environmental consulting firm, political contributors.
- Geotest Engineering, $100,298.00, engineering firm, Doyal-Riley political contributors.
- SWCA, Inc., $138,064.47, environmental consulting firm, Doyal-Riley political contributors.
- Aguirre & Fields, $1,533,316.00, engineering firm, hit jackpot on Tollway, major Doyal-Riley contributors.
- Brown & Gay Engineering, $831,466.24, engineering firm, major Doyal-Riley political contributors.
- Giti Zarinkelk, $173,250.00, engineering firm, Doyal-Riley political contributor.
- CDM Smith, Inc., $65,657.74, engineering firm, target of US Department of Justice bribery investigation, doing study to justify construction of Tollway for bond and securities markets.
Oh how the money flowed.
An ugly event in Austin: Texas Transportation Commission, June 29, 2017
On June 29, 2017, County Judge Doyal lied to the Texas Transportation Commission at a hearing in Austin and told them, in response to questioning from Transportation Commissioner J. Bruce Bugg, Jr., that he stood before the Commission on behalf of the “unified voice” of the local community of Montgomery County behind tolling the Tx-249 extension. Nothing could have been further from the truth.
Incredibly, the result of Doyal’s pleas to the Texas Transportation Commission is that Montgomery County will be the only county north of Harris County along the so-called “Aggie Parkway” from Houston to College Station which will have tollroads along it.
Doyal failed to disclose to the Commission that Muller, a consultant on the Tx-249 Tollway Project who works closely with Doyal, admitted in the April 13, 2017, Montgomery County Commissioners Court meeting that Montgomery County voters would never approve construction of the project in a referendum, if such a referendum ever came before them.
Instead, Doyal told the Commission, “we still stand behind this project firmly…We as the Montgomery County Toll Road Authority stand behind our commitment for a segment” of the tollroad. Doyal told the Commission that resolutions of the Commissioners Court and the Montgomery County Toll Road Authority have supported the Tx-249 Tollway, although he failed to mention that he should have recused himself from those votes due to severe conflicts of interest arising from his business partnership with Bobby Adams, the Tx-249 Tollway engineer who works for the project manager that’s received more than $2 million from the project so far. Without Doyal’s improper vote, the Commissioners Court vote for the Tx-249 Tollway would have failed.
Doyal also failed to mention to the Commission that the Montgomery County Commissioners Court did, in fact, vote against further funding for the Tx-249 Tollway on May 9, 2017, when Precinct 1 County Commissioner Mike Meador was absent from the meeting and the funding resolution died on a 2 to 2 vote. Doyal further failed to mention that the Tx-249 Tollway will not relieve congestion in Montgomery County but possibly increase it, while it has already taken more than $13 million of County general revenue funds away from more important uses to relieve the massive congestion in Commissioner Precinct 2 from Doyal’s and Precinct 2 County Commissioner Charlie Riley’s failure to allocate those resources properly.
In reliance upon Doyal’s lies to them, the Texas Transportation Commission voted to build Tx-249’s extension as a tollroad on June 29. Just to the northwest of Montgomery County, however, is Grimes County whose local leadership lobbied against tolling the Tx-249 Extension in that community. Tx-DOT will build Tx-249 as a free road in Grimes County.
After Doyal’s lying to the Transportation Commission worked, what did Doyal and cronies do? They celebrated with a fancy party with Doyal’s and Riley’s criminal legal defense fund contributors in Austin. They also began conveying land back and forth on which they had been speculating prior to TxDOT’s approval of the Decimation of Hope Highway as a tollroad.
Doyal, Riley, Meador, Muller, Adams, and the engineers and contractors working on the Tx-249 Tollway have consistently lied to Montgomery County citizens in the Commissioners Court. They represented that the County’s 4.5 mile section of the Tx-249 Tollway would only cost $73 million. They’ve already spent approximately $13 million on the crazed project.
On December 14, 2017, State Representative Mark Keough, running for Montgomery County Judge in the March 6, 2018, Republican Primary Election, against incumbent County Judge Craig Doyal, dropped a major bombshell during their first candidate forum of the electoral cycle: the 4.5 mile, Tx-249 Tollway, also known as the Decimation of Hope Highway, will actually cost approximately $20 million more than Doyal, Precinct 2 County Commissioner Charlie Riley, and their lawyers and engineers had assured the taxpayers!
Keough revealed his discovery of the Texas Department of Transportation’s Fiscal Year 2018 Current Letting Schedule by District, September 2017 through August 2018 during the County Judge candidate debate before the Liberty Belles Republican Women on December 14 at Panorama Village Club. On page 224 of that document, TxDOT revealed that the cost of construction alone for the Tx-249 Tollway portion that Doyal and Riley are shoving down Montgomery County citizens’ throats is $82,800,000.00.
The $82,800,000.00 cost, however, is the cost of construction and does not include the more than $13 million that Doyal, Riley, and Meador have already spent of general revenue funds from the Montgomery County government without any voter referendum or approval.
The Decimation of Hope Highway, now also called the $95 million, 4.5-mile Tx-249 Tollway, will actually cost more per mile than Doyal and Riley had lied to Montgomery County citizens. Their previous statements were that the Tollway would cost $73 million for 3.6 miles of road, or $20.278 million per mile, already making it one of the most expensive road projects in the history of the United States. In actuality, however, the road will cost $95 million for 4.5 miles, or $21.111 million per mile.
How Proposition 2 got onto the ballot
After the lies and “bait-and-switch” schemes they’ve observed out of their corrupt Montgomery County Commissioners Court, citizens in Montgomery County have had enough. Therefore, on August 15, 2017, the Republican Precinct Chairs in the GOP County Executive Committee brought to a vote a resolution calling upon the State Republican Executive Committee to place a proposition on the ballot that no governmental entity should ever construct or fund construction of toll roads without voter approval.
The establishment-controlled County Republican Party Chairman tried to kill the tollroads referendum by adjourning the Executive Committee meeting. A brilliant young Precinct Chairman, Reagan Reed, outmaneuvered the Party Chairman’s illegal parliamentary tactics. When the matter finally came to a vote, the anti-tollroads referendum passed 34 votes in favor with 1 vote against, a 97% margin.
The “establishment” newspaper in Montgomery County wrote a lead article the next day that contained the following editorialization as a fact: “A vote by the Montgomery County Executive Committee of the Republican Party to get a nonbinding referendum on the ballot in March won’t go anywhere because the local group has no authority to take such action, according to the head of the Montgomery County Republican Party [Wally Wilkerson].” (Emphasis added.)
On December 1, 2017, a group of Montgomery County conservative activists, including Reed, Precinct Chair Paul Gebolys, Diane Gebolys, Tamara Yollick, and others went to Austin to lobby the State Republican Executive Committee to place the proposition on the statewide ballot. On December 2, 2017, under the brilliant parliamentary leadership of Terry Holcomb, the SREC Committeeman from Senatorial District 3, the hope of all citizens finally to bring an end to tollroads shoved down their throats by backroom crony politics renewed: the SREC overwhelmingly voted to place Proposition 2 on the ballot.
Proposition 2: “No governmental entity should ever construct or fund construction of toll roads without voter approval.“
Texas Republicans have the chance to shut down crony politics once and for all. Proposition 2 makes a strong statement for citizen vigilance and against Fidel Castro-style “economic planning.”