Wisconsin

DOCUMENTS: Ald. Bauman Opposed Barrett’s “Strange Real Estate” Deal for Rail Project

Policy

By: Brian Sikma

Milwaukee Alderman Bob Bauman was originally opposed to a rail deal touted by Mayor Tom Barrett as a major job creator for the city, e-mails obtained by Media Trackers show. Specifically, Bauman blasted Barrett’s plan for a creative real estate transaction that benefited a company working on rail projects that Barrett favored and touted during his 2010 bid for governor. A recent spat between Bauman and fellow alderman Bob Donovan over the mayor’s proposed downtown light rail streetcar system has once again highlighted just how controversial Barrett’s commitment to subsidized passenger rail projects is.

The proposed streetcar could cost taxpayer and the public $134.6 million to build. Alderman Bauman has vigorously defended the project and stood with Mayor Barrett in insisting the streetcar offers Milwaukee a tremendous economic development tool.

Bauman joined forces with Mayor Barrett on another rail project, a now-cancelled plan to use an abandoned factory in Milwaukee as a factory for the construction of high-speed trains. Talgo, a Spanish train manufacturer, worked with the city to obtain a favorable lease that would have allowed them to use taxpayer subsidized facilities to build high speed trains for proposed rail lines in Wisconsin and Oregon. The state government, led by Governor Jim Doyle, was the planned purchaser of the Talgo trains for use in Wisconsin. Governor Scott Walker opposed the plan saying that the $800 million deal was a waste of taxpayer money, especially as Wisconsin confronted a massive budget deficit.

As Barrett worked with the City Council in early 2010 to formalize a taxpayer subsidized lease for the Talgo factory it appears that behind closed doors Bauman was arguing against the deal. On March 19, Bauman sent three e-mails to fellow council members explaining why he was opposed to the plan. The first e-mail, sent in early afternoon, contained an explanation for why he voted against the deal in a committee meeting earlier in the day.

“Based on what has been presented this is potentially a very bad deal for the city,” Bauman wrote. He cited the $6 million cost of renovating the factory at taxpayer expense only to lease it to the train company on terms that would allow them to walk away after only paying the city an estimated $688,940 in rent as a problem. His second email to the council elaborated on this point a little more expressing concern that the terms of the lease would allow Talgo to leave taxpayers holding the bag on the cushy subsidized real estate deal.

Bauman’s final email was his strongest denunciation of the project. “This is very [sic] strange real estate transaction,” he wrote. Bauman then recounted his effort to launch the Milwaukee Rail Car Corporation nearly two decades ago. “I know something about this business,” he said of the rail industry. After emphasizing his company’s hardscrabble launch to its eventual employment of 85 people, he made this startling statement:

“My company never received one nickle of government subsidy or investment. In addition, I did not have the benefit of a $40 M order from the State of Wisconsin.”

He also appeared to criticize Governor Jim Doyle’s special deal for Talgo.

“The State of Wisconsin’s no bid purchase of two train sets from Talgo has given Talgo a significant leg up on their competition.”

Just days after raising his several concerns and expressing frustration with the “strange real estate transaction,” Bauman voted to approve the deal anyway. Campaign finance records available at Milwaukee City Hall show that a few months after his vote Bauman received a campaign contribution of $378 from Gary Goyke, a lobbyist working to promote the high-speed rail project that included the “strange” real estate deal. Goyke is also a Barrett donor who contributed $900 to Barrett’s mayoral campaign account over the months in which the real estate deal was on the table.

Goyke is a former lawmaker who pled guilty to four felony counts and also faced charges of corruption in another incident involving an elected official.

As Mayor Tom Barrett’s various rail projects come and go, it is interesting that his biggest public ally for the current streetcar project, Alderman Bob Bauman, would privately blast part of his plan as a “strange real estate transaction” and then wind up sharing a political supporter who is a four-count felon and corrupt former lawmaker.