MTA board member Richard Katz said: "The feds need to be concerned. If they bailed out the companies, they also need to bail out the public agencies impacted by the companies' actions."
The credit crunch has eased a bit in recent days as interest rates for inter-bank loans have inched downward and short-term lending to corporations has picked up. But it's unlikely that conditions will improve fast enough to provide significant relief to the MTA.
Both Matsumoto and LaRusch said the Federal Transit Administration encouraged transit agencies to make lease-back deals as a way to make extra money. The MTA said it made about $65 million on the deals.
But an FTA spokesman disagreed. "FTA was not a cheerleader for these transit lease-back agreements," agency spokesman Dave Longo wrote in an e-mail. "We reviewed lease-back agreements submitted to us by transit agencies in terms of their compliance with federal transit law requirements. When we determined those agreements met the requirements, we approved them from that perspective."
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martin.zimmerman@latimes.com
