How do you feel about this, Seattle? Sound Transit donors often get big contracts | KUOW News and Information

How do you feel about this, Seattle? Sound Transit donors often get big contracts

Jun 21, 2016

If you see an ad pushing the Sound Transit 3 ballot measure anytime soon, odds are it will have been paid for by a group that stands to make millions of dollars from ST3’s passage.

That’s because, according to a KUOW analysis, 83 percent of the money raised by the committee supporting ST3 comes from a handful of companies that have each done at least $2 million in business with Sound Transit since 1997, as well as unions representing members working on Sound Transit projects.

In fact, as of June 21, nearly every single cash donation to the committee can be tied directly to a Sound Transit vendor, or a labor union representing members who work on Sound Transit projects, or an employee of Sound Transit itself.

Related: Sound Transit: Light rail and heavy marketing

Sound Transit’s board will decide Thursday on the final ST3 package it sends to voters – a $54 billion goliath that’s among the biggest public works projects ever in Washington state. That's six times more expensive than the original Panama Canal.

It’s no surprise that interested parties are giving money to influence that November vote, nor is there anything illegal about it. Washington doesn’t place a cap on donations to ballot measures, and there’s a long history of companies donating to initiatives that might impact their business.

“If you think about it, who else will pay?” observed University of Washington political science professor Mark Smith. “Very few individuals, foundations or interest groups [have the money]. … It’s worrisome, from the standpoint that the people funding [the initiative] will benefit directly.

“It should raise some eyebrows.”

Workers weld rails for Sound Transit light rail on Capitol Hill, 2013.
Credit Flickr Photo/Sound Transit (CC BY NC ND 2.0)/https://flic.kr/p/eCZopm
Contributions and contracts

This isn’t the first Sound Transit ballot initiative to see this kind of spending. In 2008, voters approved the much smaller Sound Transit 2 expansion, and many of ST3’s donors kicked in big money then, too.

Following ST2’s passage, many of the companies that donated tens of thousands of dollars to the initiative received contracts worth millions.

In fact, all eight companies that donated at least $20,000 each to support the initiative received contracts after ST2 passed.

Nearly four in five companies that gave at least $10,000 were awarded a contract. And many of those companies are now giving tens of thousands more dollars to support ST3.

It’s worth noting that Sound Transit has a competitive bidding process in place to ensure that contracts are awarded on the basis of merit and price. And not every company that receives a contract from Sound Transit has donated to the ballot committee.

“Whether a firm has contributed to a campaign has no bearing on whether they can receive work through a competitive procurement,” said Sound Transit spokesperson Geoff Patrick.

Patrick also pointed out that there are “some pretty hard-and-fast rules around public agencies not being involved with campaigns, and we’re careful about observing those rules.” (Read more of our recent coverage of Sound Transit's marketing)

To get the campaign’s side, we spoke with Sandeep Kaushik, a consultant for Mass Transit Now. That ballot committee supports ST3 and supported ST2 in 2008 as well.

Kaushik stressed that, while some companies might donate hoping to secure a contract, “That’s perfectly above-board and only natural. The insinuation … that somehow there’s some sort of quid-pro-quo here or that somehow campaign contributions make any kind of difference in actually getting work related to light rail or Sound Transit – that’s absolutely false.”

Kaushik also pointed out that ST3’s fundraising was in its early stages and said that money would be raised from a more diverse group of donors as the campaign progresses.

However, critics of the ST3 proposal raised concerns about the funding. One of them is Maggie Fimia, a former King County Council member.

“When you have millions going into a campaign, that really puts the public at a disadvantage, in terms of a fair message and a fair game,” Fimia said. “People who are going to oppose [ST3] officially, they're not going to have that kind of money, at all."

Money alone doesn’t guarantee the passage of an initiative, but it does help. After looking at the last 10 years of statewide initiative results, KUOW concluded that the side that raised more money won about 70 percent of the time, excluding cases in which neither side appeared to raise any money.

In the eight close races in that period (those decided by five percentage points or less), the side that raised more money lost only once, according to records from the Washington State Secretary of State and the Washington State Public Disclosure Commission.

 

The players

So far companies giving money to support ST3 have donated a total of about $350,000. They include firms like Pasadena, California-based Jacobs Engineering, currently helping to build the East Link and Lynnwood Link portions of Sound Transit 2

In March, Jacobs cut a $50,000 check to Mass Transit Now, which ties for the largest donation Mass Transit Now has received to date. In 2008, Jacobs donated $10,000 to support passage of ST2.

Sound Transit has awarded contracts worth over $350 million to joint ventures of which Jacobs is a principal participant. Jacobs did not respond to repeated requests for comment.

Another of Sound Transit’s largest vendors is HDR Engineering, based in Omaha, Nebraska. It has received over $165 million in contracts and purchase orders from Sound Transit since 2000.

HDR contributed $25,000 to support ST2 in 2008 and has already nearly doubled that amount for ST3, giving $23,000 last December and another $25,000 recently in May.

In 2014, HDR received a contract worth just over $100 million to manage construction of ST2’s light rail expansion in Bellevue.

Asked about the firm’s support for ST3, Rex Fisher, HDR’s director of corporate relations, said in a statement, “We support this ballot initiative because having robust mass transit benefits the Seattle/Puget Sound community, state and region.”

Not every big ST3 campaign donor is a corporation. A few of the largest supporters are labor unions representing construction workers and others employed by this kind of infrastructure project.

On May 13, the Washington State Building and Construction Trades Council kicked in $50,000 to Mass Transit Now, tying the largest donation the ballot committee has received to date.

Executive secretary Lee Newgent explained that the council is supporting ST3 in part because it’s “one of the biggest infrastructure investments in Washington state history.”

“It’s one of the best investments we’ve ever had in the state for construction trades, and for what it adds to transit-oriented development,” Newgent said.

When asked whether voters might raise their eyebrows at donations from an organization with a financial stake in the outcome, Newgent responded that the council was hardly alone in being in such a position. “If you were to add all the donations to all the ballot measures, ours is pretty minimal,” he said.

Sound Transit's light rail shot from the SeaTac Airport Station.
Credit Flickr Photo/Michael @NW Lens (CC BY NC ND 2.0)/https://flic.kr/p/9P9hnJ

The history

Corporations and unions are often heavily involved in Washington’s ballot initiatives, in part as a result of the state’s campaign finance laws. There are no limits on how much money anyone can contribute to a ballot initiative.

Big donors, free to spend heavily on initiatives, do so particularly when they have something at stake. In 2011, Costco spent over $22 million to support Initiative 1183, which closed state liquor stores and allowed Costco (and others) to sell spirits.

An opposition group, Protect Our Communities, raised over $9 million from the Washington, D.C.-based Wine & Spirits Wholesalers of America. According to a Seattle Times editorial at the time, the wholesalers opposed the measure in order to protect their business with the Washington State Liquor Control Board.

In 2013, when Initiative 522 requiring the labeling of genetically engineered foods was on the ballot, No On 522 raised well over $20 million – still the largest amount ever raised to oppose an initiative in Washington.

Much of that money came from multinational industrial companies based outside Washington like Monsanto, DuPont, Bayer and Dow, as well as major food conglomerates like Pepsico, Nestle, Coca-Cola and General Mills.

No On 522 won, barely, with a margin of 38,046 votes out of 1.7 million ballots cast. Over the course of that campaign, Yes on 522 was out-raised by more than $12 million.

At least one jurisdiction is taking steps to address the flow of money in elections. Seattle voters last fall approved a ballot measure that aimed to change how local races are funded. Under that initiative, candidates for office this year can’t take money from anyone who has at least $250,000 in contracts with the city or has paid lobbyists at least $5,000 to sway city officials.

However, Seattle’s new clean-elections rules don’t apply to Sound Transit, a regional agency that taxes and answers to voters in the most populated parts of three counties. And statewide, there are no upper limits on giving to support or oppose ballot measures.

Sound Transit employees holding Link light rail replica at Seattle Pride Parade, 2015.
Credit Flickr Photo/Sound Transit (CC BY NC ND 2.0)/https://flic.kr/p/vMtfBw
The win/loss record

The recent record in Washington state ballot initiatives indicates that the side that raises more money wins more often. But Smith, the UW professor, said that the academic literature on this question is mixed.

“Wealthy interests are pretty good at blocking stuff they don’t like,” Smith said.

The reverse situation – wealthy interests trying to get legislation passed at the ballot box – is a more uphill climb.

“You can pay to get onto the ballot, especially with paid signature gatherers. You can pay to get a ballot measure to indict a ham sandwich,” Smith said. But all that spending, “Doesn’t get you a yes vote; people have to be convinced on the merits. … If voters in the Sound Transit region think it’s a good idea, they’ll vote for it.”

Additional reporting by John Ryan