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MTA Seeks $5 Billion in Sandy Aid After Firing Lobbyists

MTA Seeks $5 Billion in Sandy Aid After Firing Its Lobbyists
Sandy struck New York on Oct. 29, triggering a tidal surge that inundated rail stations and tunnels. It coated electrical and communications equipment with corrosive saltwater, and destroyed Manhattan’s newest subway stop. Photographer: Victor J. Blue/Bloomberg

Dec. 13 (Bloomberg) -- New York’s Metropolitan Transportation Authority fired its Washington lobbyists six months before Hurricane Sandy inflicted the most damage in the 108-year history of the subway system. Now the agency is trying to get at least $5 billion in federal aid without them.

The MTA jettisoned its four lobbying firms in March and April, according to federal disclosure reports. The terminations were “all about cost cutting,” Chairman Joseph Lhota said in an e-mail message, part of a drive to cut administrative spending as the biggest U.S. transit agency battles rising debt and labor costs.

The state authority is already underfunded compared with other mass-transit providers, and the firings may exacerbate that, said Andrew Albert, a member of New York City Transit Riders Council and the MTA board. Federal aid for MTA capital projects fell to $6.3 billion in the 2010-2014 capital budget from $9.1 billion in the previous five-year plan, according to the agency’s annual financial report.

“I’m very surprised that they have nobody there right now, especially at this time when so many municipalities are clamoring to get Sandy aid,” said Albert, who wasn’t aware of the firings until contacted by Bloomberg News. “To have nobody there strikes me as a big mistake. Maybe you don’t need four, but you certainly need more than zero.”

Tidal Surge

Sandy struck New York on Oct. 29, triggering a tidal surge that inundated rail stations and tunnels. It coated electrical and communications equipment with corrosive saltwater, and destroyed Manhattan’s newest subway stop.

MTA Chief Financial Officer Robert Foran pegged the infrastructure damage at $4.75 billion and operating losses incurred while the system was shut down, including lost revenue and increased operating costs, at $268 million. The agency is also seeking funds to protect against future storms.

Last year, the MTA paid a combined $440,000 to three registered Washington lobbyists: Porterfield & Lowenthal LLC, Chambers, Conlon & Hartwell LLC and Vierra Associates Inc. Patton Boggs LLP, another firm registered to lobby for the agency, wasn’t active that year, records show.

“The lobbyists on retainer by the MTA were not providing an adequate return on investment,” Lhota said in the e-mail, without elaborating. The agency will rely on the “legislative prowess” of Cuomo and New York’s congressional delegation in the quest for federal dollars, he said.

Obama’s Request

President Barack Obama on Dec. 8 asked Congress for $60.4 billion to pay for storm damage, $22.6 billion less than the amount sought by Governors Andrew Cuomo of New York and Chris Christie of New Jersey.

Of the president’s request, $6.2 billion is targeted to repair and restore public-transportation infrastructure controlled by the MTA, the Port Authority of New York and New Jersey, New Jersey Transit and New York City’s Transportation Department. Obama asked for $5.5 billion to prevent damage to transportation infrastructure from future storms.

Efforts to secure aid for the states hit by Sandy may be complicated by the U.S. government’s own fiscal strains. Obama and congressional Republicans are attempting to negotiate a deal to stop more than $600 billion in automatic tax increases and spending cuts from taking effect starting in January. Those talks are focused on steps to shrink the federal budget deficit, which is projected at about $1.1 trillion this year.

In addition to the rebuilding aid, the MTA is also seeking a $3 billion loan from the Federal Railroad Administration to help complete an $8.2 billion project giving suburban Long Island Rail Road commuters access to Grand Central Terminal on the east side of Manhattan.

As Necessary

Lhota, a former New York City budget official who took control of the MTA in November 2011, made the decision to terminate the lobbying firms. No board resolution or vote was required, according to Aaron Donovan, an agency spokesman. All four had been working for the agency since at least 2006, he said.

“We will use lobbyists if necessary on an as-needed basis,” Lhota said. “There’s no reason to have lobbyists on retainer unless there’s a specific purpose.”

The MTA, which moves 8.4 million passengers each weekday, has a $12.4 billion operating budget and faces deficits of $333 million through 2016, according to a financial plan released last month.

Dennis Vierra, chairman of Vierra Associates, didn’t return calls seeking comment on the firm’s firing. Adam Nordstrom, a partner with Chambers, Conlon & Hartwell, and Dawn Callaghan, a vice president with Porterfield & Lowenthal, didn’t respond to a request for comment. Elliott Freider, a spokesman for Patton Boggs, declined to comment on the MTA’s decision.

Other Agencies

Agencies smaller than the MTA, including operators of the Los Angeles County, Chicago and Washington transit systems, have Washington lobbyists, according to federal disclosure data.

New Jersey Transit, which suffered damage to 30 percent of its locomotives and 22 percent of its rail cars after parking them in yards that flooded, also fired its lone lobbyist this year, federal records show. The agency runs bus and train service across the state and into New York City.

Without any outside representatives on Capitol Hill, the job of promoting the MTA falls on David Garten, who has served as director of federal affairs since February 2011, said Donovan. It’s his job to keep track of transportation policy and build relationships with elected officials. Garten, 36, also serves as a senior adviser to the executive director of the Port Authority.

His $180,000 salary is split between the MTA and the port agency, which runs the New York City region’s three major airports, the PATH trains and six marine-cargo terminals.

To contact the reporters on this story: Esme E. Deprez in New York at edeprez@bloomberg.net; Martin Z. Braun in New York at mbraun6@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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