Early Returns Are In
By Jim Jensen
The call to action is at the bottom
Language is a wonderful thing. There’s a word that exactly fits whatever you need to describe. And the word that perfectly depicts the Utah Inland Port initiative is “boondoggle.” It’s a funny-sounding word that seems to have somewhat fallen out of favor but should always be kept around for just such an occasion as this.
A boondoggle is a project that is considered a waste of both time and money yet is often continued due to extraneous policy or political motivations. There is no other word that so accurately and succinctly conveys what the Utah Inland Port project has become. A lot has happened since we published our last report earlier this year and since then even more concerns have been raised.
Here’s a list of seven red flags that have popped up recently.
- The only leader with port and logistics experience is retiring. Trying to accomplish the vision spelled out for/by the Utah Inland Port Authority (UIPA) would be a challenge for any Steve Jobs-caliber CEO, but at least UIPA had Jack Hedge. Hedge came to Utah in 2019 to be the executive director for UIPA. Soon thereafter he took on the role of president.
Hedge was previously the Director of Cargo and Industrial Real Estate for the Port of Los Angeles. He led the development, leasing, and asset management functions of the largest container port complex in North America, managing a $4 billion portfolio and more than $270 billion in cargo annually. The fact that Hedge came from what is likely one of the most corrupt organizations in America was a big concern, but at least he seemed qualified to head up this project.
In September, after 3 quick years in the role, Hedge announced his retirement. We wish him the best, but we are deeply concerned that the experience vacuum he leaves in his wake will quickly be filled by local bureaucrats surfing a wave of taxpayer funding.
- The new board is wholly unqualified for launching an inland port. It didn’t take long for our fears to be realized. The Utah State Legislature wasn’t happy with how they configured the previous board, so they passed a law this year and rearranged it. The board now consists of two members appointed by the governor’s office, one appointed by the state house of representatives, one by the state senate, and one appointed jointly by the house and senate.
Nothing against any of the new board members personally; they all seem brilliantly successful in their lives. It’s just that none of them have the background to get such a huge, specialized project as complex as an inland port off the ground, and done ethically. Just being a successful business owner or government hack doesn’t seem like enough to courageously captain a Titanic-size initiative to the shores of prosperity, not to mention what is best for the PEOPLE OF UTAH.
You be the judge and decide whether this board, with their background and experience are qualified to produce out of thin air a multi-billion-dollar inland port. Keep in mind that the UIPA board is the main oversight body for the inland port project.
- Ben Hart, executive director, 15 years of state government administrative experience.
- Miles Hansen, board chair, former federal government employee.
- Mike Schultz, successful home developer and state politician.
- Jerry Stevenson, nursery business owner, mayor, state politician.
- Dan Hemmert, law-degree, Red Hanger franchisee, state politician.
- Abby Osborne, state house chief of staff, SVP at Salt Lake Chamber.
- Victoria Petro-Eschler, leader of a non-profit for classical music education.
While these people sound awesome separately, it seems like a project of this magnitude would take an Elon Musk type to successfully pull it off, and once again how do we keep this port being focused on what is BEST for Utah and not a global UN agenda?
- 3. The project has no vision or master development plan. When getting started, the UIPA published an “executive summary” of their plan. The point of an executive summary is to skip the details. Unfortunately, those missing details are exactly what is needed for the project to go forward.
The absence of this plan was called out in a blistering audit by the Utah State Legislative Auditor General’s Office. To his credit, Ben Hart, the newly minted executive director was open to following the auditors’ recommendation and said UIPA would put all capital expenditures on hold until they have a master development plan. There is currently no timeline on when that might happen.
This would be like a business paying all their employees while they have no product and no plan to get one. And the fact that the UIPA is now putting out a request for proposal (RFP) to pay someone to come in and make a plan for them, shows that there is no one at UIPA with the vision to pull this off.
What we end up with at the end of this RFP process is a group of unqualified people with good intentions (hopefully) voting on what they think is the best master plan for UIPA, who can be led by lobbbysists down a very alarming path.
UIPA has it completely backwards. People get into business to solve a problem. And if you solve a problem big enough, people will pay you for it. UIPA doesn’t exist to solve a problem. Their four objectives, according to their own executive summary are to:
(1) Position Utah as the top logistics hub. (International global economic hub, their words not ours)
(2) Advance smart supply chains. (We’ve heard the word SMART before and often in relation to a certain agenda, hint smart grid)
(3) Be responsible stewards of communities and the environment. (ESGs?)
(4) Effectively manage their own resources. (Where are the checks and balances?)
They’ve already failed at the fourth objective. Everyone knows they will never achieve the first one. No one can even define what a “smart supply chain” is, and who made UIPA the steward of our communities?
This whole mess is a 100% disaster, and the Utah State Legislature should pull the plug immediately. Does Utah need a port? Yes! Does it need a port beholden to the people that GENUINELY wants to help rural Utah? Yes. Is that what we have? No!
- 4. UIPA has been blasted in two different audits. In the past few months, the results of two quick audits have come in. One was performed by the Utah State Auditor and the second by legislative auditors. Both audits politely raised numerous concerns.
To be fair, UIPA requested auditors to come in and “provide direction.” But how bad of shape are you in if you invite auditors to come in and give you pointers?
In multiple places in their report, auditors cautioned that findings are preliminary and they haven’t been given enough time to unravel all the questions raised in their own audit. Here are some of the concerns found in the audits:
- Financial expenditures without adequate planning. The auditors charged with finding out what is going on with the $150 million bond UIPA controls concluded that UIPA must not continue spending without a master plan. They noted in their report that they are “concerned that [the utter lack of a plan] has not been a higher priority at the port.”
It sounds like the audit came just in the nick of time (if not a little late). Personnel expenditures increased 41% in fiscal year 2021 and 75% in 2022! The port has been hiring like crazy without any sense of where they are going. Overall, UIPA current expenses are 5x higher than last year.
- Organization structure gaps are reducing internal controls. One of the first thing auditors noticed is that UIPA has no audit committee or treasurer. Instead, they have one person, who performs many other duties, in charge of handling invoices and drawing up/monitoring contracts. Unsurprisingly, this resulted in 81% of contracts being entered into without board approval or any kind of bid process.
Also, rather than employ a qualified financial director who would normally manage the fiscal concerns of an entity like UIPA, auditors pointed out that GO Utah was providing accounting and financial services to UIPA. This is somewhat like having the fox guard the henhouse.
GO Utah is the cute name for the Governor’s Office of Economic Opportunity, which was previously managed by Ben Hart, the new executive director for the UIPA. In short, the governor’s office kicked off a new pseudo-government entity that ended up with loads of cash and authority, and then offered to provide financial services for it.
- Weak procurement and contract management. To leverage the unorthodox org chart and lack of internal controls, the previous executive director, Jack Hedge, was granted sole discretion to make contracting decisions, and did so pretty much unilaterally for almost all UIPA contracts.
For example, Hedge set up a lucrative, sole-sourced contract with QuayChain, a supply chain startup that was launched in 2018, about the time UIPA was coming online. The fact that QuayChain was founded by Andrew Scott, a former business associate of Hedge, was not lost on the auditors.
Brian Dean, a state audit manager, was quoted by The Deseret News as saying the contract “creates some red flags and some concerns, just on the appearance of it.” Questions about the propriety of this deal and why the contract wasn’t put out for bid are “not easily resolved,” according to the audit.
The agreement itself raised additional questions for auditors when it was discovered that the SOW provided by QuayChain detailed $1.7 million more work than was agreed to in the $2 million dollar contract. Most companies must work hard to earn $1.7 million. They don’t just write it into a statement of work and expect it to be covered by a government agency.
To muddy up the water even further, auditors surfaced the December 2020 creation of a nonprofit organization called the Intelligent Crossroads Lab (ICL). According to the audit, the registered agent of the nonprofit is the UIPA’s COO. ICL directors (who were appointed in December 2021) are the QuayChain CEO, UIPA CEO, and UIPA technology director.
The UIPA contract with QuayChain was signed in July 2021 (about seven months after the nonprofit was created). We’ll leave it to the reader to judge the propriety of this situation.
After reviewing existing contracts, auditors determined many had inadequate measurable metrics and timelines necessary to provide structure and accountability with vendors. Without metrics and timelines, UIPA cannot determine when the terms of the contract have been met and fulfillment “work” could drag on indefinitely.
- Large, chaotic capital expenditures. Straight out of the gate, UIPA has burned through over $20 million on large assets without any kind of master plan.
- $8.02 million for an up-front, lease-to-own payment for the Stadler Rail test track.
- $2.4 million for land in case they want to build a transloading facility.
- $4.6 million to build a road in the Northwest Quadrant.
- $6.31 million as security for the $150 million bond.
So now UIPA owns and must develop and manage a “test track,” a swath of wasteland, and a random road. Surprised auditors pointed out that typically governments don’t foot the entire bill for new roads but are accustomed to having them paid for in large part by developers. Asking why UIPA agreed to unilaterally pay for the road construction left auditors scratching their heads.
According to Hart, their “planning process” has not yet determined whether a transload facility is right for Utah. Nevertheless, UIPA dropped $2.4 million on land as a precaution right when Utah real estate prices are at an all-time high. This is what happens when you put government (lack of) planners in charge of spending other people’s money.
All these issues were raised in the preliminary audits, but auditors also highlighted insufficient board oversight and lack of transparency. Previous UIPA leaders seem to have been wearing their board seat as a badge of honor or using it as resume padding more than making sure UIPA was meeting their fourth objective of “effectively managing resources.”
- An expert report has raised serious doubts about the probability of success of a Utah inland port. At this point, it seems that an organization that is trying to stop the port has done more and better due diligence than anyone associated with UIPA.
An opponent of UIPA called Stop the Polluting Port tasked Dr. Robert C. Leachman to do an evaluation of the project. Leachman is a Professor of Industrial Engineering and Operations Research from the University of California at Berkeley. Their request was to produce a report on the probability of success for the proposed transload facility for which UIPA has already spent at least $2.4 million.
Unfortunately, no one launching the UIPA concept thought of getting a second opinion before forging ahead and spending tens of millions of dollars. But, better late than never?
First a quick primer on Leachman’s credentials taken from his personal introduction published in the report. He has been on the UC Berkeley faculty since 1979 and the principal of his consulting firm. For the last 40 years he has been:
- Teaching and researching supply chain management.
- Consulting to governments and corporations worldwide.
- Offering expertise concerning supply chain economic analysis, design, and management.
- Conducting operational and environmental analyses like the one that enabled funding and construction of the Alameda Corridor in Southern California.
- Producing elasticity analyses of import volumes as a function of change to transportation rates, logistics services, and infrastructure for several West Coast ports.
- Formulating and analyzing plans to restructure supply chains for major American importers.
(Yes, people like this exist.)
In the report’s executive summary, Leachman notes, “for reasons explained [in the next 50 pages] the proposed facility would have a very difficult time attracting enough business to fill a typical-size cross-dock [and] it is unlikely to achieve any significant reductions in supply-chain emissions.” So much for UIPAs stated third objective of being responsible stewards of the environment. It will also have no impact on the current supply chain backlog as hoped by the UIPA fan base.
- The UIPA has granted itself taxing authority through a public infrastructure district (PID). It wasn’t that long ago that proponents of UIPA lamented the constraint the legislature imposed by denying it tariff authority. So, one of the first things it did is find a loophole and formed a public infrastructure district. A PID is a local district with taxing authority and the power of eminent domain.
According to the PID governing document, the five trustees of the PID are “the Executive Director of UIPA (was Hedge, now Hart), the Chair of the UIPA Board (Hansen), the Vice Chair of the UIPA Board (Hemmert), and two technical experts appointed by the PID board. In other words, the PID is the UIPA and the UIPA is the PID.
The PID is the legal entity that was used to issue a $150 million bond in December 2021. As expected, the September 2022 report to the Utah legislature by the Office of the Legislative Auditor General noted “additional audit work is necessary to understand, document, and make a determination on the appropriateness” of the bond transaction.
This is for a bond that was first announced last year on September 8th with a vote planned for September 20th. The public outcry caused by the announcement resulted in a three-week delay on the vote, but it went through anyway.
What would it be like if a start-up could just announce they were going to do their series A funding and then a month later have a $150 million in venture capital?
Cash from the bond was needed to repay “state-appropriated funds” that were used as a pre-payment for a lease (presumably the lease-to-own arrangement for the Stadler Rail test track.)
The bond “appears to be a loan from UIPA to the PID,” the auditors said, “and we would expect a loan contract to be executed prior to payment.” Auditors have begun to document the process to “determine whether any resolutions were passed by the UIPA and PID boards, and if any agreements were in place prior to the payment being made.”
This whole operation has already become a giant tangled web that is going to take a long time to unravel and understand.
- Deep concerns about the Deep State. It’s little wonder that Hedge recently stepped down as executive director of the UIPA as his contracts and business associates suddenly began to come under the intense scrutiny of auditors. While Hedge appears to be far more qualified than his replacement, the new executive director comes with baggage of his own.
Ben Hart has been entrenched in the governor’s office administrative work for years. During that time, he has clearly become indoctrinated with United Nations code words. According to his bio on the UIPA website, Hart begins with the “mission of providing smart, sustainable, and equitable supply chain solutions.”
Who even allows their profile to contain globalist buzzwords like that, let alone stuff them all in the opening paragraph? As shown in our work on the smart grid, everything with the word “smart” in it is designed to chip away at the control you have over some area of your life.
If you’re not sure what we’re talking about here, just google “sustainable equitable” and see what pops up. Hit after hit of government and NGO links where the words are used together. These are words that don’t actually mean anything but are slopped on a description to add fat and calories to a word salad.
While being a UN simp is bad enough, we’re even more concerned about the background of the UIPA board chair, Miles Hansen.
Hansen was one of two voting members of the board appointed by Utah Governor Spencer Cox. Being that trusted by a governor who shares his pronouns when speaking with school kids on video is alarming enough, but Hansen is also president and CEO of the Utah World Trade Center. (The other governor-appointed UIPA board member, Dan Hemmert, is also on the UWTC board.)
How does one gain the necessary experience to head up the globalist Utah WTC? You simply have to work at the . . . *checks notes* . . . National Security Council?
Yes! Before returning to Utah to head up the WTC, Hansen was “Director for Gulf Affairs” at the NSC. Nothing to see here.
Nor should we be at all concerned that Hansen is fluent in Russian, Farsi, and Arabic, or that he worked at the State Department for 6 years prior, and served as a member of the Council on Foreign Relations.
All this leads one to think that Cox may not have had as much say in who he “appointed” to the UIPA board as it appears.
To summarize, UIPA is the definition of a boondoggle at best, a globalist usurpation of our dynamic Utah economy at worst.
In its short, stormy history it has failed to make any progress. The original leadership has been gutted. They have recently cancelled every contract they could get out of. All capital projects are on hold. Yet they still managed to spend over $30 million dollars and the staff is expanding like a supernova.
They have no vision or master development plan. The auditors of two stakeholders have exposed the lack of transparency and failure to follow standard control processes. The president has resigned. The new board is unqualified to direct such an ambitious project.
Experts have determined the inland port will have a very difficult time meeting their business and environmental objectives. They have gone beyond their charter and set themselves up with authority to tax. There are unanswered questions about improper business associations and contracts.
Any normal thinking businessperson employed at UIPA should be looking for a good job asap. If the Utah Legislature doesn’t scrap this heap in the next legislative session, we’ll know they don’t have taxpayers’ best interests at heart. They will just let it limp along and we’ll be forced to keep watching it like a slow-motion train wreck.
The Titanic has struck an iceberg and we better man the lifeboats as quickly as possible. Share this article with your selected representatives. Ask them: Why do we have a pseudo-governmental entity run by people with no domain experience trying to figure out how to improve importing and logistics? This is a complicated problem that should be the concern of businesses that import and export. Taxpayers should not be footing the bill.
Please send them an email and or text in your own words but highlighting the below issues:
- Why has the UIPA been given PID and eminent domain?
- What actions are you taking about the port failing two audits? We are aware it’s on hold currently but there are serious concerns about the port. How are you going to address those moving forward?
- Can you please tell me exactly what the “Utah Inland Satellite Port” is for and going to do?
- Why was the port given a $75 million dollar bank essentially?
- Does it concern you that the world trade center Utah is very involved with the UIPA?
- Does it concern you that the committee went from 11 down to 5 people?
- Were you aware of the Iron County port? Do you think the public knew about this port and did they have proper input?
- Are you comfortable with the current restrictions on public comment about the port?
- What parts of the port do you agree with an disagree with?
This is to help get you started. If you have questions or get a reply that you are unsure about or want us to know about, please send to email@example.com