recently obtained a copy of an Investigative Demand of the NC Department of Justice to I-77 Mobility Partners, the wholly owned subsidiary of Cintra. An investigative demand is an order from a law enforcement agency requiring the requestee to produce materials as part of a legal investigation.

The demand was sent on Dec 16, 2015 with an order to comply by January 16. It is not known if Cintra has complied with the request. Information regarding an ongoing investigation is typically confidential, as is the status of the investigation.  Given this, WI77 does not know the status or nature of the investigation.

We do know what information was requested however, and it is sweeping, comprising sixteen separate requests.

Advertising and Marketing

Several requests dealt with the much-derided marketing campaign launched last summer. The Justice Department demanded each document comprising I77MP’s marketing campaign, including every “direct mailing, print advertisement, television advertisement, radio advertisement, Facebook post, Twitter post and press release.”

The Justice Department also demanded “all supporting documentation” for several of I77MP’s claims in those advertisements, including “between 50-100 local firms involved with this project” and “the I77 Express Lanes project will generate 8,000 direct, indirect and induced jobs.”  Additionally, I77MP was required to divulge all internal memoranda and documents “regarding the accuracy of the statements made.”

It appears we are not the only ones who found Cintra’s claims of “Texas based” and “construction will start this summer” to be dubious.

Contacts and Lobbying

The Justice Department wanted a copy of all communications between Cintra and Mercury (Cintra’s lobbyist in Raleigh) as well as Ross Communications, presumably a public relations/marketing firm. In addition the demand covers “any other firm engaged to advertise, lobby, or communicate to the public or third parties regarding the I-77 Express Lanes project.”

Then there’s this: the Justice Department wanted every document that encouraged any “person or entity to support, promote, or endorse the I-77 Express Lanes project,” as well as a list every person or entity that I77MP contacted as part of that promotional effort.

That could turn out to be an interesting list.

Tolls & Traffic

I77MP was required to provide all internal memoranda and strategic documents regarding traffic impact projections, taxpayer toll subsidies, anticipated “bonus allocation” funds for the benefit of the project, and the number of vehicles using the toll lanes and general purpose lanes.

And, at long last, the Justice Department wants to know Cintra’s anticipated toll rates.

We can’t help but find this gratifying. We have editorialized previously that debt payments were timed so that “by design” they take maximum advantage of the taxpayer subsidy. We questioned the propriety of public “bonus allocation funds” being used to build private toll lanes ramps. And we look forward to learning just how bad Cintra thinks congestion will really become.

Apparently the Justice Department is interested as well.

Finances & Disclosures

The Justice Department wanted “all documents evidencing disclosure” of Cintra’s other troubled projects, namely the bankrupt Indiana Toll Road and the troubled SR130 as well as any project delays on other projects. Interestingly, they specifically wanted to know if these projects and delays were disclosed to NCDOT and CRTPO.

They also made a sweeping request for “each and every complaint, whether formal or informal” for all of Cintra’s projects in North America including “complaints from the users of the roads, government officials, investors or internal whistle-blower complaints.”

Whew!

Lastly, the Demand requires I77MP to produce all communications with any credit rating agency in connection with seeking a credit rating. Specifically, the Demand lists communications with Standard & Poor’s, Moody’s, Fitch and DBRS.  The first two were approached but did not give a rating, and the latter two supplied the require investment grade bond ratings.

Political Implications

This information has come to light as part of Attorney General Roy Cooper’s rebuttal to Governor McCrory recent assertion that the AG did not do enough to stop the Cintra contract. Cooper, of course, is the presumptive Democratic challenger in November’s gubernatorial election.

We were struck by how many of the requests evidenced a deep understanding of the issues with this project. This was not something that was casually put together but obviously required a good bit of time and effort to develop.

Whether or not anything will become of this remains to be seen. We can’t help but wonder if anything does result from this if it will be timed to maximize political leverage.

This could be an interesting couple of months.  Buckle up.

Here is the document:

12 16 2015 I-77 Mobility Partners CID

 

 

 

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