Touring Wall Street Mogul's Company, Corbett Denies Politics Influences His Visits
While touring the ACF Industries rail car manufacturing plant today in Milton, Northumberland County, Governor Corbett faced questions about whether campaign contributions and political influence factor into decisions about which companies he comes to visit.
He says they don’t.
“We don’t go to places just because we may or may not have gotten a campaign contribution,” Corbett told reporters.
The issue came up in the wake of an investigation into another Milton company Corbett toured in 2012. Minuteman Environmental Services was raided by federal and state officials last week. It’s owner Brian Bolus has given $10,000 to Corbett’s campaigns.
The company hauls waste and equipment for the natural gas industry, although the nature of the investigation remains unclear. Minuteman has denied any wrongdoing.
Corbett says his staff thoroughly vets companies.
“We came to [ACF Industries] because this is clearly what we’ve been talking about. Trying to grow the economy, let the private sector come back.”
Wall Street’s Richest Man
The private sector is well-represented at ACF Industries.
It’s is owned by Carl Icahn — the famous financier who Forbes calls “the richest Wall Streeter” and a man “with a hand in every major corporate story in America.”
Icahn’s net worth has been estimated at $20 billion, and he’s been frequently described as a “corporate raider” for his hostile takeovers of companies.
In a lengthy profile in April, Forbes reported Icahn has “quietly become perhaps the biggest beneficiary of America’s hydraulic fracturing revolution” :
For decades Icahn has owned a massive fleet of oil-carrying railcars that, if lined up, he claims, you could walk on from Manhattan to Ohio without ever touching the ground. He also owns two railcar producers, ACF Industries and the Nasdaq-listed American Railcar Industries. Demand and lease prices for these cars have surged as the Midwest fracking boom has yielded an ocean of oil. Shares of ARII have jumped 75% since last March as producers scramble for tank cars to ship fuel across America.
Railcars have been shipping cash flow to Icahn’s exploits for years. He bought ACF in 1984 for $469 million and immediately sold off three divisions for $360 million and fired most of the 180 people employed in its New York headquarters (he says neither he nor hired consultants could figure out what they were doing) . He would later use ACF money to arrange financing for many of his takeover attempts, including his $4.2 billion tender for 45% of Phillips Petroleum, when he faced off against T. Boone Pickens.
Corbett was visiting ACF to promote the fact that although the plant closed in 2009, it’s now back in business due to the boom in shale drilling.
The facility has hired 230 workers to build rail tank cars that will be shipped to gas fields in the Dakotas and Canada. They’ll carry oil to refineries across the country.
The company also plans to build stationary propane tanks for the Pennsylvania’s Marcellus Shale industry later this year.
“A Small Investment” of Public Money
ACF is doing all of this with the help of public money. The company received $483,000 in state grants this year to purchase equipment and train employees.
Corbett said the state money was critical to helping ACF open it’s doors again and hire workers.
“The state funding continues to be critical,” he said, “A lot of the funding had to do with training.”
Steve Kratz is a spokesman for the Department of Community and Economic Development, the agency administering the grants.
Kratz defended giving the money to Icahn’s company, saying DCED does not make grant decisions based on net worth of the individual running the company.
“This is an investment in jobs for Pennsylvania.” Kratz said, “It’s a very small investment.”
When asked by StateImpact Pennsylvania, ACF’s President James Bowles refused to discuss grant money or the ownership of the company.
“It’s not pertinent to the story. It’s about Milton,” he said, “We need to move to another topic or complete the interview.”
ACF Used Firm Owned By Corbett’s Friend and Contributor
Bowles did acknowledge ACF hired a consulting firm called Penn Strategies to help them “get educated” about the grant.
Penn Strategies is owned by John Moran Jr. — a Northumberland County businessman who is a campaign contributor and personal friend of Governor Corbett.
Moran made news last year after StateImpact Pennsylvania reported he paid for private flights and a vacation on a yacht for the governor and First Lady Susan Corbett.
Moran’s involvement with a Sunbury rail transfer facility which shipped gas drilling waste has also caused controversy.
When reached by StateImpact Pennsylvania, Moran declined to comment.
But for his part, Corbett told the crowd of workers at ACF he just enjoys seeing factories.
“I love factory tours. This was a great one.” he said.