Who’ll own the superport? Austin The hottest issue involved in the planning and development of a Texas superport is still the question of who will own the thing. The Offshore Terminal Commission, the nine-member board that has been doing the state’s end of the planning, voted 5-4 for public financing in late January. In April, the Senate Economic Development Committee voted 5-2 to recommend private ownership. Its chairman, Sen. Tom Creighton, has asked Atty. Gen. John Hill for an opinion on whether the state can legally use its money or credit to pay for a facility to be used exclusively by oil companies. Sen. Roy Harrington, one of the two committee members who supported state ownership, thereupon ran a provision specifically allowing such use of state credit through the Constitutional Convention’s General Provisions Committee. The question won’t be finally settled until the Legislature meets and passes enabling legislation, and perhaps not until Congress finishes with its work on the subject. One of the most interested observers of the process is SEADOCK, a consortium of 13 oil and petrochemical companies, which wants to be the private owner. SEADOCK has been doing two things at once: it is proceeding with plans to build its superport and it is marshalling the arguments for private ownership. Given the reputation oil companies have for looking after their interests, its not surprising that everyone expects SEADOCK to put on a massive lobbying campaign next session. Nor is it surprising that there is dark talk about SEADOCK’s relations with members of the TOTC. TAKE THE case of Floyd Dellinger. Dellinger is one of the nine TOTC commissioners and was, until late December, president of Johnson Loggins Incorporated Realtors. Dellinger owned half of the company; the other half is held by Johnson-Loggins, Inc., a Houston real estate and development company. \(Johnson-Loggins, Inc. is in turn a wholly-owned subsidiary of First Realty Investment Corp., a Miami-based and In April of last year, the ‘three partners in Johnson-Loggins, Inc., \(Larry Johnson, contracted as individuals to buy 8952.53 acres of land near Freeport, in Brazoria County, from Austin Colege. The purchase was closed in June. In early December, Continental Pipe Line Co., one of the members of SEADOCK, took an option on the land. In late December Dellinger sold his interest in Johnson Loggins Incorporated Realtors and resigned as its president. On Jan. 24 of this year he was one of the four commissioners who voted in favor of private ownership of the facility. A SEADOCK engineer told the Observer the land will be used for storage facilities or, possibly, refinery sites. This is the sequence of events that raises questions about Dellinger’s position. Dellinger denied that the land deal had anything to do with his vote. He told the Observer that he had no role in the purchase or sale of the land “no ownership, no commissions, no fees” and that it had nothing to do with Johnson Loggins Incorporated Realtors, either. He described the purchase of the land as a “speculative venture” by three individuals, entered into after SEADOCK had announced that it preferred an off-Freeport site for a superport \(as early as September of 1972, SEADOCK was saying in an informational brochure that the waters off Freeport looked more “There were a lot of speculators down there buying land, and that’s what Johnson Loggins is in business for.” Asked if he advised his friends on the purchase, Dellinger said, “My position has been from the outset that I don’t know anything about it and I don’t want to know anything about it.” \(The Austin College trustee who chaired the board of trustees subcommittee on the purchase also said that Dellinger took no part in Which leaves only the question of whether Dellinger had a conflict of interests when he voted on the question of ownership of a superport. Legally, of course, he did not have any “personal or private interest” in the vote, which is the way the new ethics law defines conflict of interest. And, Dellinger says, there was no moral conflict of interests, either: “Everybody has known my position since I got on this commission. I’ve always been for the free enterprise approach.” He said he never thought of abstaining on the vote because he had no interest in how it affected SEADOCK or the Brazoria County land. ANOTHER commission member who wholeheartedly. supports private ownership of a superport is George Brown. That’s Brown, as in Brown and Root, which happens to be the company doing the preliminary engineering sutdies for SEADOCK’s marine facilities. Then again, Brown and Root would be a front-runner for engineering contracts with a state-owned facility, too: Engineering News-Record, a construction trade journal, ranked the company number one in its list of construction firms last year. As one source told the Observer “Listen, Brown. and Root would probably get contracts if Jesus Christ himself owned the superport.” Red Pruett is president of a construction company in Baytown and was mayor of that oil-industrialized city for eight years. On Jan. 11 the Baytown Sun said Pruett had expressed a preference for public financing of the superport project. On Jan. 24 he voted for private financing. Pruett could not be reached for comment. Captain William Fredeman was another commissioner who voted for private ownership of the superport. Fredeman owns the Port Arthur Towing Co., which, among other enterprises, hauls oil company barges. Fredeman said it never occurred to him that his vote on public financing had anything to do with his business. “I just didn’t think of it that way. The oil companies are the only ones who have the money and the know-how to build this thing, that’s my position.” Regardless of what lobbying SEADOCK did or did not do before the commission, the issues involved in ownership of any superport will he fought over again in the Legislature. Much of the scrapping will be over labels folks who favor private ownership are not averse to dropping words like “free enterprise” and “socialism” into the conversation. Much will be made of control over the facility: Sherman Fricks, AFL-CIO secretary and a member of the TOTC, has said repeatedly that he opposes private ownership because it would increase monopoly control over distribution of oil and its products. The final report of the TOT\(‘ recommends state financing largely because of the cost factor.. Assuming that whoever builds a given superport will have to sell bonds to finance it, the report compares the consequences in terms of cash flow of public and private financing. If corporate bonds are used, the staff’s calculations estimate that the per-barrel tariff for oil imported through the May 10, 1974 11
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