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    Port's Lobbyist Says Major I-710 Fed'l Money Is Related To Rebuilding Desmond Bridge (Which Would Allow 10,000 TEU Mega-Ships); Claims Credit For Helping Defeat Increased Container Fee (For Homeland Security); Says Port Should Let Council Take Lead on LNG

    E.Del Smith 8/8/04(August 8, 2005) -- The Port of LB's senior Washington, D.C. lobbyist, E. Del Smith -- whose firm is simultaneously paid by LB taxpayers to advocate City Hall's interests under a separate Council-approved contract -- said major I-710 improvements are now part of a major federal project desired by the Port to rebuild the Gerald Desmond bridge (which would allow 10,000 TEU mega-container ships to use the Port).

    In his presentation to a LB Harbor Commission committee meeting (which all Commissioners attended), Mr. Smith also said he had helping defeat legislation that would have increased container fees (for homeland security).

    He also said the Port should let the City Council take the lead on a proposed Port-sited Liquefied Natural Gas (LNG) facility.

    Mr. Smith made his presentation on the same day President George W. Bush signed an Energy bill containing LNG provisions undermining City Hall local control while possibly speeding approval of an LNG facility proposed in the Port, roughly two miles from downtown LB.

    Meanwhile, a closely watched federal Transportation bill ("Transportation Equity Act" or TEA) -- for which Smith's firm was paid additional sums to lobby -- ended up delivering only $100 million of $745 million sought by LB. Roughly half of the $745 million was for the mega-ship inviting Desmond Bridge project; the other half was for I-710 corridor work...which Mr. Smith indicated is now tied to the Port-sought bridge project. He added that the roughly $350 million sought by the Port for the bridge was only about half of the project's total cost.

    Public records obtained by indicate that beginning at some point in 2002, Smith's firm (Smith, Esposito & Lyerly) began being paid extra sums for work related to the Transportation bill. A Port document indicates that starting at some point in 2002, Smith's firm began receiving $25,000/mo extra, split between the Port and City Hall ($12,500/mo paid by each). However a June 2004 City management memo says Smith's firm was paid an extra amount of $13,100/mo from October 2003 through September 2004, meaning during this period LB taxpayers paid Smith's firm $22,580/month. has learned that in September 2004, citing budget constraints, City Manager Jerry Miller informed Smith that he [Miller] would recommend that the Council resume paying Smith's regular monthly fee of $9,840 without the additional sum for work on the Transportation bill. (In a letter to Smith, City Manager Miller noted that City Hall provides $37,000 annually to the Gateway Cities Council of Governments specifically for I-710 expansion efforts, a portion of which goes to Smith's $2,500 monthly COG retainer "which we assisted in facilitating for you.")

    City Manager Miller advised Smith to seek additional Transportation bill-related payments from the Port...which agreed to increase its monthly payments to Smith's firm to $22,500/mo. for work on the Transportation bill...on top of Smith's "regular" monthly fee paid by the Port of $13,700 (totaling $36,200/mo,)

    Per LB city management's recommendation, in late November 2004 the Council voted to renew the Smith firm's contract for $9,840/mo ($113,760/yr.) As in the past, this was done on a "no bid" basis. The contract recites:

    "By reason of extensive experience in dealing with governmental agencies and officials, [Smith's firm] is particularly and peculiarly qualified to serve in establishing and maintaining liaison for the City and representing the City with other governmental entities and officials." The contract is terminable by either party on 30 days notice. posts below an extended transcript excerpt of Mr. Smith's presentation to LB's Board of Harbor Commissioners. Our transcript is unofficial, prepared by us.

    E.Del Smith 8/8/04Mr. Smith: ...Although this [transportation] bill did not turn out as Congress and this Port had intended, this Port is now $100 million richer, and no other Port and no other project did much better than that...

    The Port estimated that the [Desmond] bridge was going to cost $700 million. We advised you folks to ask for half of that, $350 million was reasonable. And we also advised that the I-710 should be a part of the project, one project. CalTrans later tried to separate those. We got special language to get that back into the bill, it's still one project. What we did not want to risk was to have the Committee, or Dept. of Justice or somebody else say 'well, you can't build a bridge if it goes nowhere and you can't build an interstate that is not connected to something' because that's a, quote, misuse of federal funds. That's why we kept them together and it's very important and it continues to be important, although the first money it was always agreed would go to Desmond bridge.


    [W]e brought the [Transportation Committee] chairman here several years ago...It was explained that the two Port produced 42% of all U.S. trade value, that I-710/Desmond alone carries 18% of all U.S. trade value, so that our project became the most obvious nationally significant project. But the bill stalled. The Committee assigned $6.6 billion to the projects of national significance, and the mouths of the members of Congress...began to drool, this became a target.

    So by May it became obvious that this was going to be a rout, and members of Congress were going to pile on wanting to get some of that 6.6 for their [House] districts...And so we asked the Board [of Harbor Commissioners] to come to Washington, because by that time the Chairman had asked the Board to go to Sacramento and get the Governor to support the project. That did not happen...

    [But] you folks came [to Washington]. We are indeed grateful...

    ...The Committee on Transportation and Infrastructure has 75 members. We had to talk to every one of them. We have to believe, Board members please, that $100 million plus the other two appropriations...that we got to help get the bridge moving is going to be useful in some way. It's going to be some kind of a jet assist, and I know you folks are examining that.

    ...In all, we need to keep the Port as a major federal money recipient and that's what we've been doing. Yes, there is room to upgrade our work product. For example, Mayor O'Neill, now of course being President of the U.S. Conference of Mayors, is increasingly valuable to us and we should use her as long as she has that spot and even after...

    We'd like to recommend that all of our reports...that the Board get our reports directly, and we recommend that because we're increasingly convinced that you members of the Board need to understand what's happening back in Washington even more than you do...

    We'd like also to understand that we revive our Board work sessions as we had up to about two years ago, we'd come up and sit with the Board and go over things.

    We'd like to recommend that the state advocacy be better coordinated with what we do in Washington, and that's going to be important in getting this $100 million. You have to keep in mind that the Congress passes a bill, [then] it goes to DOT [Dept. of Transportation], the regulations have to be applied, it has to flow through Sacramento.

    We'd like to recommend that we stay with the Governor and try to get the Governor's participation...The Governor of California could call the President, the President could be more cooperative, that would not happen. You folks went to Sacramento, you did not see the Governor, it did not happen. However, we got a message to Karl Rove, that helped. It just shows how we work.

    ...All of this we're pleased to do while we execute seven other tasks for you. Harbor maintenance...Homeland port has gotten more homeland security money than you folks.

    There has been an effort to increase container fees, a piece of legislation that we helped defeat just recently.

    [ comment: The container fee legislation was authored by Cong. Dana Rohrabacher (R, HB-LB-PV) for homeland security purposes. The Port of LB is in Cong. Rohrabacher's district. We are unaware of any publicly voted action by LB's Board of Harbor Commissioners opposing this sensible legislation.]

    The Alameda Corridor shuttle now going to Barstow is a way to cut down on congestion here, we're working that very hard also...

    And finally LNG. I have a report here that you folks perhaps haven't seen, and we're going to be reporting tomorrow night on LNG to the City Council. And we know that the Port, probably very wisely, is letting the City Council take the lead on that.

    The fact is that the Energy bill's passed. The eminent domain that FERC had, in fact, wanted never made it into the bill. There are some other provisions in there that give local authority on that and we know that that's important to you folks too.

    Mr. Sante Esposito [member of the firm]: ...My that over the next two or three week we put together a summit meeting of staff from the Port, from the City, from our firm and from the other folks that you've been working with on this projects, and we sit down and we go through all the possible opportunities here for getting additional funding for this project.

    And then we identify which ones are viable, which ones are more fruitful than others, and then we come back with recommendations both to the [Harbor] Commission as well as to the Mayor and City Council.,,

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