Daniel Schulman

Daniel Schulman

Deputy DC Bureau Chief

Dan is Mother Jones' deputy DC bureau chief. He is the New York Times best-selling author of Sons of Wichita (Grand Central Publishing), a biography of the Koch brothers that is now out in paperback. Email him at dschulman (at) motherjones.com.

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The Highwayman: DeFazio to Take on Privatization

When I met with Peter DeFazio in his office last summer, the Oregon democrat was, to put it mildly, a bit exercised. Having flown in from Oregon the night before after participating in a charity bike ride, he was going on basically no sleep. And, when I asked him about the nascent trend of leasing the nation's highways to the private sector, he was particularly blunt: "It's a scam, basically," he told me. He was even more candid in his comments about Indiana Governor Mitch Daniels, the former Bush administration official who pushed to privatize his state's 157-mile toll road, ultimately leasing it for $3.8 billion to a foreign consortium.

Daniels had appeared before the House Subcommittee on Highways and Transit that May to talk up so-called public-private partnerships and DeFazio, then the ranking democrat on the committee, questioned him pointedly on the logic of such deals during the hearing. "Are we outsourcing political will to a private entity here?" he asked at one point, referring to the fact that Indiana had chosen to lease its road rather than increase its profitability by raising tolls. When we spoke later that summer, DeFazio, questioning how good these deals are for the public, said Daniels had "just screwed the state of Indiana and the people of the state of Indiana." (By one estimate, the Indiana Toll Road, in state hands, could have earned as much as $11.38 billion over the next 75 years. If so, then Indiana taxpayers will lose out on more than $7 billion in revenue.) "The point is these are very, very tricky things," he said. "You're making a 75 year commitment of vital public infrastructure and you're not getting a very good deal."

As Jim Ridgeway and I report in the current issue of the magazine, there are other problems with these public-private transactions. One of them is the keen interest investment banks, Goldman Sachs in particular, have taken in opening the toll road market to private investment. In doing so, Goldman has played the role of lobbyist, municipal finance advisor, and, controversially, would-be principal investor. In this new market, the potential for conflicts of interest abounds.

Last summer, when I asked DeFazio where he saw this trend going, he said, "if the Republicans retain control of everything, the Bush administration will push this hard I'm sure." But, he added, "this is nowhere near a done deal." At the time, he was particularly concerned by a blue ribbon panel, known as the National Surface Transportation Policy and Revenue Study Commission, which had been tasked, after the passage of the last highway bill in 2005, with the lofty mission of looking at ways to "preserve and enhance the surface transportation system to meet the needs of the United States for the 21st century." "My understanding is it's turning more and more and more toward a sole focus of how to justify the privatization of infrastructure — just like Bush's Social Security commission," DeFazio told me. With several privatization advocates appointed to the committee, including transportation secretary Mary Peters, DeFazio certainly had reason to be concerned. "If we take control, we'll drag those people in here and remind them of their charge," DeFazio said.

Well, the Democrats have retaken control of Congress and DeFazio, who now serves as the chairman of the Highways committee, has kept his pledge. Yesterday, he gaveled to order the committee's first hearing of the new Congress, dubbed the "Surface Transportation System: Challenges of the Future." Among the witnesses, were two members of the transportation policy committee. "You should expect this subcommittee to be very active over the next two years as we conduct oversight on the implementation of the last highway and transit reauthorization, SAFETEA-LU, and prepare to meet the many challenges we will face in crafting the next reauthorization," he said yesterday. Then, he addressed the transportation policy committee directly, perhaps offering a subtle warning. "Congress created the Commission in hopes of getting a thorough and objective analysis of what our surface transportation system needs to become to support our economy in the future, as well as short and long term funding solutions to increase revenue into the Highway Trust Fund." But yesterday's hearing was just the precursor for what's to come. Expect the real fireworks to arrive when the committee holds a hearing specifically on the topic of private-partnerships, which is expected to take place sometime next month.

Even though DeFazio has now ascended to the key post on the Highways committee, it remains to be seen whether or not his efforts will slow the privatization trend, which has the enthusiastic backing of the Bush administration. To this end, the president recently nominated D.J. Gribbin to be general counsel to the Department of Transportation. Who is Gribbin you might wonder? A former general counsel to the Federal Highway Administration, he has most recently been working on behalf of Macquarie Holdings, Inc., a branch of the very same company that has been so avidly buying up the nation's highways.

Dick Cheney vs. Reality

By now there is a consensus, among lawmakers, military leaders, and the American public — even among the very same hawks who were beating the drum for this war —that Iraq is a horrible debacle. Of late, even our notoriously stubborn commander-in-chief has tempered his "mission accomplished" rhetoric, allowing, in a recent policy address, that the situation in Iraq is "unacceptable" and that "mistakes have been made."

Apparently Dick Cheney didn't get the memo. He is still telling that same old Iraq fairytale. "Bottom line is that we've had enormous successes and we will continue to have enormous successes," he told Wolf Blitzer in an interview aired by CNN yesterday. Of course, you'll remember that Cheney has been responsible for uttering, with his trademark grimace, the administration's more outlandish claims about Iraq. First, he told us days before invasion that he expected U.S. forces would be "greeted as liberators." Two years later, when it was evident that Iraq was descending into chaos, he suggested that the insurgency was "in the last throes." He insisted a month later that Iraq will be an "enormous success story." While it is the responsibility of our leaders to evoke confidence, the power of positive thinking only goes so far, and there is a point when optimism becomes lunacy. Cheney crossed that line long ago.

But if you were to ask Cheney why his statements about Iraq are so at odds with the bloody reality on the ground, he will tell you, as he has told many incredulous interviewers in the past, that the press is at fault for fostering the notion that Iraq is coming apart at the seams. In his view, we, in the media, have ignored the positives in Iraq — the school openings, the elections, the deep gratitude of the Iraqi people — only showing our readers and viewers the dark side of the conflict. "If the history books were written by people who are so eager to write off this effort or declare it a failure, including many of our friends in the media, the situation obviously would have been over a long time ago," he told Blitzer yesterday. Over the years, "blame the media" has been the oft-used mantra of the administration. But while most of the members of the president's inner-circle have largely dropped this claim (as it became increasingly absurd in the face of escalating violence in Iraq), Cheney has clung to this delusion.

Ignoring reality has long been the hallmark of an administration that believes it can manufacture its own. As a Bush aide once boasted to Ron Suskind: "We're an empire now, and when we act, we create our own reality. And while you're studying that reality — judiciously, as you will — we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors… and you, all of you, will be left to just study what we do."

This mentality, I'd argue, is what has kept the administration from revisiting its Iraq strategy for so long. In the interim, the administration and, to an extent the military as well, has simply tried to mask the truth instead of adapting to it.

How did this manifest in Iraq? At one point, with a propaganda campaign aimed both at Iraqi citizens and the American public. In one case, efforts were made to slant military press releases to play down, or altogether omit, the involvement of U.S. troops, making it appear that everything from civil works projects to heroic military victories were the product of Iraqi initiative. This couldn't have been further from the truth. Under heavy political pressure to better communicate successes in the war on terrorism, the military also began to blur the lines between public affairs and information warfare, co-mingling these disparate functions (one deals in truth, the other in "truth-based" messages or outright misinformation) in strategic communications, or stratcom, offices in Baghdad and Kabul. Then, of course, there was the Lincoln Group's half-baked (and military funded) effort to secret propaganda into fledgling Iraqi new outlets — a campaign that backfired, in spectacular fashion, when it was exposed by the press. Of the military's information operations in Iraq, a senior military officer once told me, "Perhaps Iraq is a unique situation, but I think some of our IO efforts may have hurt our overall efforts at supporting an elected government and democratic, free institutions. Saddam fed the people propaganda for decades — should we continue to feed them propaganda and expect them to support us and/or their elected officials?"

Just as propagandizing to the Iraqi people is no way of introducing them to the democratic process, continuing to shade the truth, as Cheney has done repeatedly in his public remarks, is no way for the administration to regain the credibility it's lost with the American people. The president, who for so long has mistaken denial for resolve, finally seems to get this. Not so Cheney.

While some might argue that Cheney is intentionally misleading the public, just as some believe administration officials purposely misstated the facts about Iraq to sell a pre-emptive war to the public, I think there's another, more realistic, possibility: That Cheney has misled himself. And that's just as dangerous.

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