Image: Paid lobbyist and Texas Transportation Commissioner Victor Vandergriff of Arlington, whom Montgomery County Judge Craig Doyal brought to the December 19, 2017, Commissioners Court meeting to bolster Doyal’s weak argument for the Tx-249 Tollway, now finds himself at the center of a statewide scandal.
Conroe, Arlington, and Austin, January 11 – What can (1) an indicted County Judge, (2) an indicted County Commissioner, (3) a bureaucrat and lobbyist who charges Texas taxpayers to pay for his lobbying expenses to lobby for a group of private auto dealers, (4) a San Antonio land speculator (5) a Minnesota land speculator who helped to set up the criminal legal defense funds for the indicteds, (6) an Austin consultant who got out of federal prison, (7) an engineer who is the business partner and best friend of one of the indicteds, and (8) an engineering firm that has paid millions of dollars in fines for bribery all over the world cook up together?
The Tx-249 Tollway at the far southwest edge of Montgomery County, of course.
Montgomery County Judge Craig Doyal’s and Precinct 2 County Commissioner Charlie Riley’s pet project, the $95 million 4.5 mile Tx-249 Tollway, also known as the Decimation of Hope Highway, or the Tx-249 Taxway, seems to attract some of the most unsavory characters in Texas.
Victor Vandergriff, the Arlington lobbyist and Texas Transportation Commissioner with whom Doyal staged a presented on December 19, 2017, before the Montgomery County Commissioners Court to try to support the Tx-249 Tollway, is now at the center of a statewide scandal.
Several newspapers, including Texas Tribune and the Austin American-Statesman, have reported that Vandergriff billed the Texas Department of Transportation (TxDOT) for Austin trips when he was actually there to lobby on behalf of automotive dealers who had hired him as a private lobbyist to advocate for them before the Texas Legislature. The Tribune reported on January 9, 2018:
“While there’s nothing new about hired guns for auto dealers advocating for carve-out bills at the Capitol, Vandergriff was billing taxpayers for his trips to Austin as a commissioner for the Texas Department of Transportation at the same time he was getting paid by a company Berkshire had just bought to represent its interests before the Legislature.
“It wasn’t an isolated incident. Vandergriff has repeatedly conducted private business in Austin while TxDOT was paying for his travel and other expenses…”
Investigations have shown that Vandergriff has engaged in that practice for at least two years. After reporters finally caught him, Vandergriff now said he’ll reimburse TxDOT for expenses he incurred on those trips.
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.
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”).
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 and Charlie Riley, 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 Charlie 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.
Sheldon, the extremely successful real estate developer based in Waco and San Antonio. Sheldon also was one of the people mentioned in a July 21, 2016, email that discussed that Sheldon and two others from the Austin area hired Rusty Hardin to represent Doyal for Doyal’s criminal indictment under the Texas Open Meetings Act and that Sheldon was instrumental in “setting up” Doyal’s legal defense fund used to pay Hardin.
Sheldon just happens to own land in Montgomery County along the route for the proposed Tx-249 Tollway, the $443 million, 11.4 mile portion from Pinehurst to Todd Mission that seems to end up in the middle of nowhere after it carefully bypasses the City of Magnolia.
Sheldon also owns land along the 3.6 mile portion of the Tx-249 Tollway over which Montgomery County residents are currently arguing, because the County government has chosen to take that approximately $73 million project away from Tx-DOT and has already spent $13.1 million of funds for engineering and other design work as well as right-of-way acquisition.
As another example of how dangerous the “consent agenda” items are, it turns out the Montgomery County Commissioners Court unanimously approved a Master Plan for Sheldon’s 585.5 acre tract, prepared by none other than David Hamilton, one of Doyal’s best friends (remember the wedding Doyal and Bobby Adams attended? That was Hamilton’s!), for Sheldon.
When TxDOT, including Vandergriff, voted to approve Tx-249 as a Tollway in Montgomery County Sheldon and Thuringer became gigantic winners in the land speculation along the planner pathway of the road.
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. While Doyal dissolved one business venture with Adams named WS&G, they remain co-owners of other business ventures together.
- 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.
Doyal and Riley must desperately seek a new study from CDM Smith that will cost Montgomery County taxpayers $405,500 and which will, of course, conclude that the tollroad will be able to support the massive bond payments Doyal and Riley are placing upon the shoulders of the citizens.
The $405,500 price tag for the study is completely outrageous. Under Section 2254.003 of the Texas Government Code, professionals providing services to the County government must only charge a “fair and reasonable” price. In this instance, neither Doyal, Riley, nor anyone else inside the County government made any effort to examine the price CDM Smith will charge for the work most of which it did three years ago.
The Golden Hammer sought the opinions of three independent engineers for fair and reasonable pricing for the job. The highest opinion of the three was $84,775, while the lowest was $58,700.
Why would CDM Smith overcharge Montgomery County? First, of course, they’re able to get away with it. Second, CDM Smith has regularly overcharged under many contracts and landed in quite a bit of legal trouble as a result. The letter form the Criminal Division of the United States Department of Justice, dated June 21, 2017, is below.
CDM Smith agreed to disgorge $4 million of funds it used for bribing contract officials. The World Bank also sanctioned the company for “failing to disclose a subcontract on a project in Vietnam” and conditionally debarred CDM Smith from doing business under World Bank and International Monetary Fund financing arrangements for a year and a half.
On July 15, 2017, the Indian government asked state chief secretary Dharmendra Sharma to investigate bribes from CDM Smith in India.
On August 3, 2017, Cabinet Minister Niti Gadkan told the lower house of the Indian Parliament that the Central Vigilance Commission, the anti-corruption government agency in India, has taken “suo moto cognizance” of the situation and has formed a three-member investigation committee to examine CDM Smith’s bribery of highway officials.
CDM Smith admitted to the U.S. Justice Department that it earned $4 million of profits through the use of fake service invoices used in generating cash for bribing government officials.
Incredibly, Doyal and Riley seemed to know nothing about these matters. When they learned about them during the presentation of “The Golden Hammer Award” during the August 22 Commissioners Court meeting, they didn’t seem to care.