Cost of Lies Rising – Has the Threshold of Pain Been Reached?

Has MITA's Spending Now Slammed Into Its Members' Financial Limits?

liar-liar-pants-on-fireMITA (Michigan Infrastructure & Transportation Association) just added $ 205,000 to the SafeRoadsYes! war chest yesterday.  Not much when you consider that they have already lavished $ 5.19 million on SRY. The Detroit Regional Chamber‘s ‘Powering the Economy’ PAC political committee, on the other hand, went one better and added $ 250,000 to the SafeRoadsYes! war chest yesterday. Dwarfs their $ 125,000 in contributions during the regular reporting period. The Detroit Regional Chamber contribution far exceeds the $ 17,105 DRC reportedly had on hand only a few days ago. Someone has given Powering the Economy a lot of money this week, but we won’t be privileged to know whom for three months. Both of these contributions were made to SRY on April 27th, three days after the closing date for the SafeRoadsYes! pre-special general report.SRY Late Contribution Report - 2015-04-28

SafeRoadsYes! has evidently burned through the $ 8 million plus they received in contributions during the regular reporting period and is now heading towards a $ 9 million cash burn.  Hard to tell how much SRY have spent with any exactitude, the latest figures from April 24th show expenditures of $ 7.212 million.  But they had a balance of $ 843,482 on that date which is presumably gone or going quickly.  Expect more thrilling stunts and stimulating advertising in any event.  Their war chest just got reloaded.

The paltry late contribution from MITA, taken together with the outsized contribution from the Detroit Regional Chamber, suggests that MITA is scraping the bottom of their member’s bank accounts.  Or that they are employing a new form of campaign contribution concealment, feeding contributions through DRC’s Powering the Economy so contributors’ identities won’t be reported until after the election.  Their servants in Michigan’s media reported the outsized involvement of road constructors in pushing Proposal 1 this week and it hasn’t played well with the voting public.

Will the Proposal 1 fight decapitalize Michigan’s road constructors?  Will they raise their bids to recoup their political expenditures, further draining Michigan’s road funding?  Are MITA and DRC gaming Michigan’s campaign finance laws to avoid any further embarrassing disclosures?  Or have we just found out what $ 1.2 billion in additional annual contracts are really worth in profits to Michigan’s road constructors?

You Betcha! (11)Nuh Uh.(0)

  7 comments for “Cost of Lies Rising – Has the Threshold of Pain Been Reached?

  1. Corinthian Scales
    April 28, 2015 at 4:52 pm

    It's interesting. The one thing is not being discussed is the $10,000,000.00 taxpayers are forced to spend on the election itself while also having a bunch of crooked jackasses throw another $9 - $10 million against us just so they can run their finger through a guaranteed $2 Billion every year with a 5% increase on fuel taxes in perpetuity.

    You Betcha! (8)Nuh Uh.(0)
  2. KG One
    April 29, 2015 at 7:46 am

    First off, good work on these donation pieces!

    Second, I would be curious as to who these people are with deep pockets (or more than likely, have more than one mailing address).

    If Prop 1 goes down like we all are hoping that it would (yes, I'm being skeptically optimistic here), hopefully one of the
    Numerous Plan B's that don't "officially" exist yet, will include a provision that will force each and every one of the SRY donors to eat the loss of their donation and be barred from recouping back the money they gambled on the hope of it passing.

    Just my $0.02.

    You Betcha! (2)Nuh Uh.(0)
    • 10x25MM
      April 29, 2015 at 10:47 am

      My concern here is that the road constructors have funneled money through MITA and DRC's PtE into SRY thinking that their political donations thus become tax exempt. That is true insofar as MITA and PtC are concerned, but under IRS Section 162 (1) and (2), the full tax liability passes back to the original donors/members. MITA has ponyed up so much money that their membership are going to get rude surprises as they prepare their 2015 federal returns.

      MITA has spent approximately four times their usual annual revenue from membership dues on Proposal 1. We don't know much about the finances of Michigan's road constructors because most are privately held, but they have just been through some very lean years. They have blown something in the vicinity of 20% of one year's gross profits from all MDoT construction contracts on this proposal. The tax bills they are going to get at the end of their current fiscal year will cripple many of the smaller members, and some of the larger members too. First indications of this will be debt service failures and credit downgrades in 2016. Then the industry will 'consolidate'.

      The temptation to use their Builder's Exchanges to drive contract bids higher will be overwhelming as they figure out the ramifications of their actions. Even without outright collusion, consolidation will drive up bid prices.

      When the dust settles on Proposal 1, there will be no winners regardless of the outcome. Only losers in varying degrees.

      You Betcha! (3)Nuh Uh.(0)
      • Corinthian Scales
        April 29, 2015 at 11:05 am

        Ah! Now, let's talk about the big financial assist MDOT gives to the road builders by allowing 52% of their warranties to expire.

        Taxpayers in Michigan were already losers before any of the slugs cast their vote.

        You Betcha! (6)Nuh Uh.(0)
        • 10x25MM
          April 29, 2015 at 11:18 am

          MDoT knows the financial conditions of their cadre of road constructors better then most. Almost certainly why they let warranties lapse, again and again over many years. Warranty follow through isn't rocket science, even by MDoT standards. No way to determine whether specific contractor's project warranties were more frequently overlooked than others. Only MOAG could dig that out and they certainly didn't go there in their latest performance audit.

          You Betcha! (3)Nuh Uh.(0)
          • Corinthian Scales
            April 29, 2015 at 12:02 pm

            Or, Bill Schuette's Public Integrity Unit could get off its ass and do the job he created it to do. Read through the links.

            Mr. Constitutional Defender™ sits and rubs elbows with Steudle.

            You Betcha! (2)Nuh Uh.(0)

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