SPECIAL REPORT: Highway dollars wasted on luxury rentals, dinner parties

| 2/18/2009

Wednesday, Feb. 18, 2009 – Transportation dollars are a precious resource that truckers and other highway users have fought to protect from those who want to siphon it away for other uses.

Calls for oversight and accountability are louder than ever as highway users learned this month that their fuel taxes and other user fees have fattened up engineering and design contracts for luxury rental cars, dinner parties, sporting events and trips to places like Atlantic City.

An oversight report conducted by U.S. Department of Transportation Inspector General Calvin Scovel revealed that of the $4 billion paid to engineering and design firms each year over a seven-year period ending in 2004, approximately $1.4 billion – or 35 percent – was spent on fringe benefits to executives and employees.

Such indirect uses are not authorized under Federal Highway Administration rules.

“That’s what you get when you push the federal oversight out to the states, but you don’t give the states a good understanding of how these firms should be complying with the law,” Mike Joyce, director of legislative affairs for the Owner-Operator Independent Drivers Association, told Land Line.

“When nobody’s looking over your shoulder and the accountability requirements are lax, it’s not surprising we would find excessive expenditures that don’t live up to the requirements.”

Joyce said the oversight report should send a message to everyone in the chain that it’s not OK to use highway funding for any other purpose than to build and maintain highways.

The oversight report contained several examples of indirect uses of highway funding:

  • $301,667 for 45 automobile leases – including five luxury cars – with no stated business purpose;
  • $280,609 in executive compensation in excess of a federal cap;
  • $247,685 for social dinners; dining club memberships; outings to sporting events; theme and holiday parties; and trips to Atlantic City, a city zoo and a country expo fair;
  • $60,000 paid to a consultant based on verbal agreements only; and
  • $8,273 for employee Christmas gifts.

OOIDA officials have said and continue to say that truckers should not be content with paying higher taxes and fees without the federal and state governments providing more oversight of the funding streams.

“We will not enter into a discussion about tax increases or tolls when we know that highway dollars are being mismanaged in this way,” Joyce said.

Scovel urged federal and state transportation officials to put more oversight in place to ensure funds are spent correctly. Federal Highway Administration officials responded by saying they will, or have already, put new measures in place.

U.S. Rep. James Oberstar, D-MN, chairman of the House Transportation and Infrastructure Committee, and Highways and Transit Subcommittee Chairman Peter DeFazio, D-OR, ordered Scovel to attend a committee hearing within 90 days to follow up on corrective measures taken by the FHWA.

In a separate but related issue concerning oversight, Joyce pointed out that U.S. Transportation Secretary Ray LaHood has formed an oversight team to ensure that funds from the recent economic stimulus legislation are spent correctly.

– By David Tanner, staff writer