Lawmakers Rip Hogan Plan to Withhold $55M from Transit Agency

Gov. Lawrence J. Hogan Jr. (R), with state Transportation Secretary Pete K. Rahn behind him. Maryland Governor's Office photo by Steve Kwak

On his first day as a member of the board that oversees the Washington, D.C., region’s transit agency, Maryland Transportation Secretary Pete K. Rahn announced that the state is withholding $55.6 million in capital funds from the agency, citing “an ongoing pattern of fiscal obfuscation and a lack of cooperation.”

The letter to the Metro board and its general manager and CEO, Paul Wiedefeld, was dated July 1, 2019, the day the funds were due, and it appeared to catch everyone outside MDOT by surprise.

It was released to the news media at 5:15 p.m. Monday. 

Immediately there was strong criticism of the Hogan administration’s timing and tactics from lawmakers who have been involved in efforts to boost the region’s commitment to stabilize the beleaguered agency.

Rahn’s letter to the Washington Metropolitan Area Transit Authority cited “the continued lack of a Capital Funding Agreement,” which he described as a “basic and necessary safeguard to hold the recipient of any grant funding responsible and accountable.”

Rahn also accused WMATA of being “steadfast in resisting MDOT’s attempt to implement meaningful financial oversight.” He said the agency has failed to share “the actual projects in the Capital Improvement Program and their timing,” an inability to provide data on past capital projects, and a solicitation for fiscal year 2020 funds “without having a capital funding agreement in place.”

“It is as if WMATA expects the State to simply deliver cash in a briefcase and walk away, no questions asked,” the letter concludes.

Members of the General Assembly reacted harshly to the state’s actions. Rahn just joined the WMATA board as part of the state’s efforts to bring more accountability to the transit agency.

Del. Marc Korman (D-Montgomery), who spearheaded efforts to boost funding for WMATA in 2018, noted that “at the WMATA budget hearing during the [2019 legislative] session Secretary Rahn represented to an Appropriations Subcommittee that he was satisfied with WMATA’s reporting. I look forward to hearing more from the secretary as to the huge disconnect between his public testimony and this letter.”

In a recording of the Feb. 25 hearing, Korman questions Wiedefeld, Rahn and a top Rahn deputy approximately 68 minutes into the session. The two MDOT officials testify that they are satisfied with the reporting they are receiving from WMATA.

A request for clarification from MDOT did not generate a response Monday night. 

Sen. Brian J. Feldman (D-Montgomery), another leader in that funding push, questioned whether the state can legally withhold funds it has promised for the reasons Rahn provided.

“The legal authority here seems very sketchy and vague,” he said. “I just think it doesn’t really make a lot of sense, other than it’s some kind of a pretext for other issues.”

“Otherwise I think we would have heard about this prior to the very day the disbursement was due.” 

Feldman said it is possible that Hogan wants the $55 million for “other projects,” a suspicion echoed by Sen. Cheryl K. Kagan (D-Montgomery).

She called Rahn’s move “an outrage,” “a betrayal” and “petty politics.”

“This is about payback for Montgomery County opposing the governor’s plan to widen I-270 and I-495,” she said. “His administration’s trying to make a statement: ‘I’ll show you who’s boss.’ It’s shortsighted and will really hurt the local economy.” 

Sen. Malcolm Augustine (D-Prince George’s), a former member of the WMATA board, called the withholding of funds “a very serious matter.” 

“It will have an impact on capital programs,” he said.

“I understand the frustration of Secretary Rahn and of the governor in their attempts to try to get better information. I definitely do,” Augustine said. “But there will be a cost to pay for this. It could have a chilling effect, actually, on the ability of WMATA [to maneuver] in the capital markets.” 

Sen. Nancy J. King (D-Montgomery), the head of the powerful Budget and Taxation Committee, sees the state’s actions as counterproductive.

“Even though I know that WMATA could do better, I think withholding that much money from them will just keep them from doing what needs to be done,” she said. 

Kagan warned the state’s decision could have a ripple effect with WMATA’s other major funding partners, the District of Columbia and the Commonwealth of Virginia.

“Everyone else is supposed to step up and keep their commitment to Metro, and somehow we’re supposed to get a pass? It’s absurd,” she said. 

In an email, Ian Jannetta, a Metro spokesman, said, “We will meet with Maryland officials as soon as possible to fully understand and address the issues raised in their letter.”

Attempts to reach Prince George’s County Executive Angela D. Alsobrooks (D), Montgomery County Executive Marc B. Elrich (D) and D.C. Mayor Muriel E. Bowser (D) were unsuccessful Monday evening.

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