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First, they were dealing with Goldman Sachs, which acted as an adviser to Chicago and Indiana — and as an investor in both deals. “When Goldman Sachs began advising Indiana on selling its toll road, it failed to mention to the state that it was putting together a fund whose sole purpose would be to pick up infrastructure for the best price possible in order to maximize returns for its investors. Nor did the bank advertise the fact that, even as it was advising Indiana on how to get the best return, its Australian subsidiary’s mutual funds were … becoming de facto investors in the deal.”
Finally, in the words of Oregon congressman Peter DeFazio, “When you look at the Chicago Skyway, that’s even worse. They are not even reinvesting the proceeds of the sale in transportation. They’re using them for operating costs. That would be like anybody selling their assets in order to live. You can’t sell your assets very long to put food on the table — before long you’re out of assets.” [SEE UPDATE IN COMMENTS — THIS IS ONLY PARTLY TRUE.]
