Obama’s ‘No Work’ Transportation Sec. Settles in Bankruptcy Lawsuit

(Emily Larsen, Liberty Headlines) A long legal battle surrounding allegations of fraud over former Transportation Secretary Anthony Foxx’s involvement – or lack thereof – in now-bankrupt green bus company DesignLine is ending.

Anthony Foxx photo

Anthony Foxx (left)/Photo by MDGovpics (CC)

A lawsuit alleged that the Democratic rising star did hardly any work as deputy general counsel at the hybrid bus company, but received $421,000 during that time. He served as mayor of Charlotte during the same period he served as counsel for DesignLine, from 2009 to 2013, before joining the Obama administration as Transportation Secretary in 2013.

“You purport to serve as this company’s General Counsel, and yet I cannot get an answer to a simple question from you without several emails and/or phone calls spread out over weeks or months,” DesignLine CEO Joe Smith wrote to Foxx in 2012, court documents showed.

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A new agreement in a motion filed in federal bankruptcy court will allow Foxx and several other defendants involved with DesignLine from different lawsuits (including former North Carolina Governor Jim Martin and retired Air Force Persian Gulf hero Buster Glosson) to pay $8.25 million to the bankruptcy estate, and the other lawsuits will be dropped. Almost all of that will be covered by directors’ and officers’ insurance, except for $125,000.

The original lawsuit against Foxx alleged that he “spent little to no time at [DesignLine’s] facilities during the relevant time period,” and noted that DesignLine spent millions of dollars on outside law firms.

The lawsuit said Foxx’s compensation while he was mayor violated state bribery laws, and the $16,000 he received after being nominated for Transportation Secretary violated federal bribery laws also.

Foxx did not vote on any issues involving DesignLine while he was Mayor, due to potential conflict of interest. The city attorneys at the time said that as long as he excused himself from city council duties in matters related to DesignLine, he could continue in his role at the green bus company.

But Foxx’s position as Mayor did help him sell more DesignLine buses. Former CEO Brad Glosson also praised Foxx’s contributions – but not for legal work.

“They have these big mayors’ conferences once or twice a year, and he would expose the other mayors to this company he had in Charlotte that makes electric buses,” Glosson told the Associated Press. “We know that he was effective because we got invitations to go give presentations in places where there was no other way we had to get a foot in the door.”

DesignLine sold buses for Baltimore and Denver, but the vehicles also faces performance issues and contract cancellations. New York City’s MTA returned its buses in 2011 after purchasing them in 2009 when they were found to not be reliable enough for public transit. The FBI also investigated the company after allegations that it installed used parts in the buses.

“[Foxx] is a man of impeccable integrity and was underpaid, given the $7,000,000 in revenue he made possible,” Glosson told the Charlotte Observer.

But court documents showed that Glosson also had trouble communicating with Foxx about DesignLine matters.

“Partner, you and I are friends from way back; However, I cannot help you if you do not return calls from the Chairman of the Board,” Glosson wrote to Foxx in 2011.

While Foxx was mayor, Charlotte-Douglas International Airport paid about $5 million for 10 buses with airport money and federal grants. Those buses faced mechanical issues also, including fire and brake issues, causing delays for passengers. But even after performance issues emerged, the airport bought more buses. After DesignLine filed for bankruptcy, the airport auctioned the vehicles for only about $3,000 to $4,000 each.

The Atlantic called Anthony Foxx a “rising star” in the Democratic Party when he was appointed as Transportation Secretary in 2013. WikiLeaks emails showed that Foxx was on a list of potential running mates for Hillary Clinton in March 2016. Foxx was the first cabinet member to endorse Clinton, in January 2016.

Leaving the Department of Transportation, Foxx said that Washington, DC’s struggling Metro system made improvements under his leadership.

“This is a situation where success looks like failure,” Foxx told the Washington Post. “The fact that issues are being exposed is actually an advancement for Metro, because there were many years there where there were issues that were not being exposed.”

Foxx recently joined the board of the Volcker Alliance, a nonprofit organization which aims to “address the challenge of effective execution of public policies and to help rebuild public trust in government.”

In January, Foxx said he hopes to make money from speaking engagements and wants to write a book. He is featured on the Leading Authorities speakers bureau, quoting $20,000 to $35,000 for a speech.