In my line-by-line review of the current Criteria’s Background section, I noticed a small detail that seems significant as to precisely where the Criteria go off the rails. That detail is covered in the review, but I thought it worth surfacing in further depth.

First, read the following sentence as the primary premise for a series of questions about WIFIA loan eligibility for a Section 3908(b)(8) non-federal cost share:

To limit Federal credit participation in a federally involved project consistent with FCRA law and 1967 Budget Report principles, only non-Federal projects or assets are eligible for WIFIA loans and loan guarantees.

That seems OK, right? It is saying that a non-federal cost share in a federally involved project has to be an authentic non-federal asset for a WIFIA loan, which is obviously true and not just because of FCRA treatment. As for the non-federal project part, that’s true as well, but not relevant because the WIFIA loan is specifically for the cost share asset, not the overall project. With this premise, answers to any eligibility questions can focus on the non-federal cost share asset, where things should be pretty straightforward — a non-federal borrower, non-federal repayment and no funny business with the federal participant.

A Barely Noticeable Deletion

Now read this one:

To limit Federal credit participation in a federally involved project consistent with FCRA law and 1967 Budget Report principles, only non-Federal projects are eligible for WIFIA loans and loan guarantees.

Almost the same words — except the ‘or assets‘ part is missing. That barely noticeable deletion entirely changes the premise. Now the focus is solely on (and implicitly limited to) the overall project — is it federal or not? Yes or no? And if the federally involved project is found to be a ‘federal project’ (it will), then ineligibility is established right there — and the facts about the non-federal cost share don’t matter.

Of course, the Criteria essentially use the latter language as the conclusion of the Background section and the premise of the questions. Of course, because it leads directly to the rabbit hole of vague consolidation concepts that can turn any federally involved project into a ‘federal project’. We knew that, but the story is in fact worse.

Everywhere in the Background section, the phrase ‘projects or assets‘ is used, as in the first example sentence above. This persuades the reader to think that when the various aspects of the FCRA problem are considered with respect to a specific non-federal cost share, eligibility as a non-federal asset won’t be difficult to establish. Then, on the very last line, the rules of the game are subtly changed to make that effectively impossible, as only non-federal projects can be eligible. On its jargon-filled surface, the Background section might look like an honest analysis, judiciously seeking the correct application of FCRA principles to specific loans for specific assets. But in the conclusive step, its authors essentially pull a classic three-card monte move, apparently in the expectation that the mark — uh, applicant — will be too confused and intimidated to question the con.

J’accuse…

Was this intentional? As a well-thought-out strategic plan, probably not. But on another level, it’s easy to imagine that there was a near-final draft of the Background section that had ‘projects or assets‘ throughout. Someone then suddenly realized that the ‘or assets‘ words in the final line would not necessarily lead to the desired outcome, so the words were simply deleted, regardless of the rest of the text.

Perhaps that’s not deception per se. But it seems to me that the deletion is specific evidence that the Criteria are and always were intended to reach a certain conclusion about eligibility. With that objective, FCRA law and the principles in the 1967 Report don’t need to be really understood or even read, and they obviously weren’t. Instead, all that arcane technical stuff is simply useful camouflage to confuse others. Just toss a jargon-filled word salad, ask a bunch of leading questions to go through the motions, and make the pre-ordained and unappealable judgement of ineligibility. Convicta et combusta.

J’accuse…the current Criteria aren’t just wrong. They were developed in bad faith from the start. If not, what else could be the purpose of deleting the words ‘or assets‘ in the most consequential sentence of the Criteria? Can the authors of the Criteria explain that?