Saturday, April 29, 2017
Messenger: Is St. Louis leaving the future of its airport to a coin flip?
By Tony Messenger
The St. Louis (MO) Post-Dispatch
The Federal Aviation Administration could decide this month whether to include Lambert International Airport in a pilot program studying whether private management might be a good fit.
The Wright Brothers used a coin flip to see which brother would have a chance to make history.
More than a century later, city leaders in St. Louis might be leaving the future of St. Louis Lambert International Airport to a similar fate.
On March 16, then-Mayor Francis Slay signed a “memorandum of representation” with three private entities allowing those organizations to pursue the potential privatization of Lambert’s operations for the city.
There had been no public meetings. No community discussion. The airport director didn’t know about the contract. Neither did the airport commission nor the Board of Aldermen.
The agreement has been presented to the public as a deal with nonprofit Grow Missouri — funded by retired investor and chess philanthropist Rex Sinquefield — and the city, with Sinquefield paying the costs of the city’s attempt to investigate privatization.
But it’s much more than that. It’s officially a contract between city counselor Michael Garvin and Washington law firm Wicks Group PLLC, because the city charter allows Garvin to hire special counsel without Board of Aldermen approval. It’s a contract with politically connected consulting company McKenna & Associates, also a Beltway firm, known in part for its founder’s ability to raise dark money in Republican circles. And it’s a contract that allows all three of those entities to ultimately seek compensation if the city signs a contract with a private vendor to operate the airport.
So, when Slay says, “It’s not going to cost the city anything,” that’s not entirely true.
But this is: The man to whom Slay has entrusted the process to market perhaps the city’s greatest asset is embroiled in a dispute over paying his bills.
Lobbyist Travis Brown is the man to whom Sinquefield has long given control of his political operation. Brown and his then-wife, Rachel Keller, founded Pelopidas Inc. in 2007. It has grown into a large operation that encompasses lobbying, fundraising, multimedia and consulting, nearly all of it tied to and funded by Sinquefield, such as his nonprofit Grow Missouri.
Last year, Keller sued Brown and Pelopidas — she is still a manager of the company — alleging that Brown failed to make payments due her on multiple occasions, that his record keeping wasn’t accurate, and that he was operating their jointly owned company “for his own personal benefit.”
Keller and Brown have an interesting procedure outlined in their company bylaws should they reach an impasse on a decision.
They flip a coin.
“For the coin toss,” says their agreement, which is in the court file, “Rachel will choose the coin and the face of the coin after showing Travis both faces of the coin.”
Brown didn’t return a phone call for this column. But his spokesman, Ed Rhode, did.
Rhode doesn’t just work for Brown. He also is a top adviser to new Mayor Lyda Krewson, who will hold tremendous sway over what happens with the contract that her predecessor signed. Rhode is also an adviser to St. Louis County Executive Steve Stenger, who also will play a role.
The cozy relationship between Rex Inc. and the public officials who will decide what happens to Lambert is not an accident.
Ever since Sinquefield started trying to get rid of the city’s 1 percent earnings tax in 2010, he’s been floating the idea of privatizing Lambert as a way to make up the lost revenue, about a third of the city’s budget. Slay said he first started studying the issue in 2015, after a former official in the Obama administration paid him a visit. Talks got more serious when his former chief of staff, Jeff Rainford, brought attorneys from Husch Blackwell to meet with the mayor about the idea.
Later, Slay met with Brown and Sinquefield to discuss them financing the effort that led to last week’s preliminary approval from the federal government to pursue privatization. Sinquefield was one of Slay’s largest campaign contributors.
“Rex has brought up the idea” of using the airport proceeds to replace the earnings tax, Slay says. “But this isn’t going to be up to Rex. It’s going to be up to the city.”
Privatization supporters point to the San Juan, Puerto Rico, airport as a shining example of the sort of income the city might realize from privatization. Indeed, the comparison is a worthy one. Four years after privatizing its airport the island is facing a worsening debt crisis. The privatization effort was rife with ethical conflicts, in part because of the sort of secrecy at the beginning of the process that seems to be the hallmark of what’s happening so far in St. Louis.
Before the privatization effort in Puerto Rico was consummated, here’s what San Juan attorney Mario Pabon Rosario wrote about it: “From its beginning, this privatization process has been plagued by questionable practices on the part of the (public-private partnership),” he wrote, “such as contracting as advisors entities that would later become bidders in the privatization process, and contracting as a legal advisor a firm that previously had bidders as its clients.”
Grow Missouri was last in the headlines three years ago, when the Sinquefield nonprofit sent solicitations to reporters across Missouri, offering to pay them for propaganda pieces, while promising to protect their identities. Now the same operation has the future of Lambert in its hands, and secrecy is still its currency.
Heads, Rex wins. Tails, taxpayers lose.