Thursday, August 04, 2016

Another rail boondoggle

The troubled Honolulu rail project faces an uncertain future. Voters deserve answers before they go to the polls this fall.

From Honolulu's Civil Beat:

Federal Transit Administration officials have given the Honolulu Authority for Rapid Transportation and the City and County of Honolulu until the end of the year to put forth a new proposal to finish the Honolulu rail project as currently planned or complete a shortened route.

It’s not what the feds wanted. The FTA initially laid down an Aug. 7 deadline, but Mayor Kirk Caldwell asked for a reprieve for the financially embattled project until next summer, to allow the Legislature to consider rail’s options in its 2017 session.

The FTA was in no mood to be generous, as its terse July 21 letter to Caldwell underscored. Neither, we suspect, are Honolulu voters, who even in good times, have only supported the project by the smallest of margins.

With the project now $1.5 billion over budget, red ink continuing to flow and elections just around the corner, voters and community organizations should put city leaders — and by extension, the semi-autonomous transit authority — on an even shorter leash...

Rob's comment:
Critics of this project tried in vain to warn Hawaii that it was making a mistake with this project. See also this and this.

But once underway these projects are hard to stop, and good money must be thrown after bad.

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Trump the loser: How will he react?

The Associated Press

I wonder if Trump has any idea how bad this is going to get for him. He's basically a B-list celebrity laughingstock, and the only thing that's made people take him seriously over the past year is his poll numbers. Once those tank, and there's no longer any fear of going after him, he's going to become the target of more mockery and derision than he can bear. Literally the entire world will be laughing at him. After November I wouldn't be surprised if he ends up retreating permanently to his gilded apartment to become this era's Howard Hughes.

As Drum reports, his poll numbers are tanking. Trump knows it's going bad, which is why he's talking about how the election is rigged, leading to the notion that he and his followers won't accept defeat and will then try to undermine the legitimacy of American democracy itself.


What the $400 million to Iran was about

by Scott Beauchamp
...In very simple terms, this payment is the first installment of a refund for a weapons purchase America never delivered. It starts in 1979, the year of the Iranian Revolution.

In November 1979, a group loyal to the revolutionary regime took 52 Americans hostage at the US Embassy in Tehran. In response, the United States severed diplomatic relations with Iran and froze Iranian assets in America.

Crucially for the present issue, it also halted a delivery of fighter jets that Iran’s pre-revolution government had already paid $400 million for. Normally the US would return the money if it wasn’t going to deliver the planes — countries don’t just break formal agreements like that. But it had frozen Iranian assets in the US as punishment for the hostage-taking — and that included the $400 million.

The hostage crisis was eventually resolved in 1981, at a conference in Algiers. But the Algiers Accords didn’t resolve every outstanding issue — including the legal status of the $400 million.

Instead, it set up an international court, based in the Hague, to deal with any legal claims that the governments of Iran and the United States had against each other, or that individual citizens of the two countries had against the other country.

This court, called the IranUnited States Claims Tribunal, functioned as a kind of binding arbitration. In any case, the involved parties could either negotiate a settlement out of court or take it to a panel made up of three US-appointed judges, three Iranian-appointed judges, and three neutral judges. The panel would then hear the case and issue a binding ruling.

This process, as you might guess, was very, very slow. By the time Obama’s second term in office began, the tribunal still had not come to a ruling on the issue of the $400 million. Sometime afterward, the Associated Press’s Matt Lee reports, the US government apparently concluded that it was going to lose the case — and lose big: Iran was seeking $10 billion in today’s dollars.

"US officials had expected a ruling on the Iranian claim from the tribunal any time, and feared a ruling that would have made the interest payments much higher," Lee writes.

So the Obama administration decided to settle out of court, opening up negotiations with Iran on the terms of the settlement. It did this at the same time it was negotiating the nuclear deal and the return of four US citizens who had been detained by Iran more recently. However, the people working on the nuclear deal and the prisoner release were different from the team working on the court case — some of whom had been involved with the claims tribunal for years.

By January 2016, the countries had struck a deal — the US would pay Iran $1.7 billion, which amounts to about $300 million in interest on top of the originally frozen assets (accounting for inflation).

The settlement was announced the same day in January as Iran received its first round of sanctions relief from the Iran deal.

The $400 million payment, delivered in foreign cash because US law prevents the government from giving Iran dollars, was the first installment toward the $1.7 billion total. Getting together large amounts of foreign cash is hard, apparently — hence the installment plan...

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Trump exports jobs

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