Senate leader refers Penn Turnpike chief to SEC over TOLLROADSnews report

Jake Corman a prominent member of the Pennsylvania Senate has lodged a complaint with the US Securities and Exchange Commission (SEC) citing a report in TOLLROADSnews of comments made by Turnpike CEO Joseph Brimmeier at IBTTA in Vienna. Corman's letter dated October 24 addressed to the chairman of the SEC says the commission should "investigate whether these comments may have violated federal securities law due to misrepresentation that the Federal Highway Administration has already approved the tolling of I-80."

Corman, chairman of the Senate Republican Policy Committee says he encloses an article from TOLLROADSnews in which the FHWA corrected the record but says he is "unconvinced that everyone who may have heard the original inaccurate comments (by Brimmeier) regarding the FHWA's approval of the tolling (of) I-80 would be aware of the correction by FHWA."

Corman's letter to the SEC says that a critical part of Act 44 is the issuing of bonds by the Turnpike Commission but their viability depends on whether the state gets permission to toll I-80.

Background

Brimmeier's statements were in a breakout session of the annual general meeting of the International Bridge, Tunnel and Turnpike Association the world toll industry trade association. We were told of the comments by telephone from Vienna Austria by an attendee who thought they should be on the public record. We questioned the attendee as to whether he was really sure that Brimmeier had claimed FHWA approval. He told us he too wanted to be sure he had heard Brimmeier right and raised the issue with several other attendees immediately they broke up for refreshments. Everyone in the small group agreed with his hearing of Brimmeier's remarks and there was general amazement, the attendee said.

We were called immediately after we posted the report by a Turnpike press officer in Harrisburg who said "Brimmeier can't have said that."

We said "could not have said" was not a denial. However if he could contact Brimmeier and then could tell us flatly that Brimmeier had not said it, we said we would run the chief's denial immediately on TOLLROADSnews. Better still if he could get Brimmeier to call us direct and deny making the claim, we'd immediately get that on the record.

We got no denial.

Denial took nearly three weeks

Brimmeier was silent for nearly three weeks following our report although the report got wide circulation.

The Turnpike chief seemed content to allow his claims to remain undenied. Only then in a letter to the FHWA did the Turnpike chief deny having claimed in Vienna that the deal for tolling I-80 was done (federal approval for tolling I-80).

We published that denial immediately we got a copy of the letter.

Witnesses to Brimmeier's claim in Vienna of having a deal tied up to toll I-80 thought his intent was that to tell the potential bidders on a concession lease of the Turnpike that they were wasting their time.

In the audience in Vienna were many senior officers of European and Australian toll operators and toll investors, the people who'd be deciding whether it was worth their while responding to requests for proposals for a lease concession being pursued by Governor Ed Rendell and the state DOT.

Brimmeier was getting across the message, they said, that with tolling I-80 a done deal the Turnpike Commission was able to generate the surplus revenues needed to fund transportation throughout the state, and therefore nothing would come of the Governor's efforts to privatize the Turnpike.

SEC reply to Corman

The regional director of the SEC has replied to Senator Corman in a letter dated Nov 9 thanking Senator Corman for his information. He says he cannot report what followup action, if any, the SEC is taking. Any inquiries made by the SEC must be confidential.

Corman's letter of complaint to the SEC should download here.

SEC reply should download here.

TOLLROADSnews 2007-11-19