Crony Capitalism and Passenger Rail Plans

Publish Date: 
Thursday, July 3, 2014 - 8:15am

Letter from John E. Preschlack of Vero Beach July 2, 2014 Wall Street Journal

An excellent example of crony capitalism is the proposed federal loan for a passenger rail line between Orlando and Miami.

Regarding Holman Jenkins's "What's an Alternative to Crony Capitalism?" (Business World, June 28): An excellent example of crony capitalism is the proposed federal loan for a passenger rail line between Orlando and Miami, dubbed All Aboard Florida. The owner and loan beneficiary is the Fortress Investment Group FIG +0.80% (FIG) which has applied for a $1.6 billion low-interest, long-term, nonguaranteed loan from the U.S. Department of Transportation, the keeper of the soon-to-go broke Highway Trust Fund.

No modern passenger rail has made money in the U.S., and when Fortress Group's limited-liability subsidiary goes bust, a sister company and FIG will use the expanded rail lines, at taxpayer expense, to vastly expand freight traffic from the Port of Miami where FIG has considerable real estate and container-handling investments.

Local communities and the state will have to spend the millions needed to upgrade the more than 340 grade crossings on the route. Citizen efforts to get a response, much less action, from Congress or the DOT have been futile.

John E. Preschlack

Vero Beach, Fla.