Has SNP Acquired Chrome's ERHE Shares?

Anyone watching the meteoric rise of Sinopec NYSE: SNP), our partner in Blocks 2, 3 and 4 of the Nigeria-Sao Tome Joint Development Zone, has to wonder what's driving the stock's price - it's been up about $25 since last Friday, and is up $17 today to about $171.

As I thought about it, I realized that when Sir Emeka Offor transferred all of his 42% holdings in ERHC Energy (OTCBB: ERHE) to Chrome, Inc., his wholly-owned trading Cayman Islands holding company, he would be free to make any deal he wished with Sinopec with respect to those holdings.

Here's how that would work: He could sell out to Sinopec and simply not promptly or formally notify the officers of ERHC Energy until the very last moment. ERHC would have a reporting requirement if it were officially aware of the sale. But Cayman Islands law would not require Mr. Offor to notify ERHC, and since it would only drive up the stock price, he would have no motive to do so until the very last minute since he is no longer an officer or director of the company.

Sinopec, and indeed all of the Chinese-held oil companies, have stated openly that they are interested in expanding their ties to oil resources in Africa. What could be a better acquisition than ERHC's substantial share of equity in those blocks and others? Acquiring them at a fixed cost from Mr. Offor would save them a frenzy that might drive ERHE shares through the roof, but with First Atlantic Bank's shares would give them controlling interest in the company.

He has told us, however, that he hoped to enhance the value of his shares, and an ERHE-for-SNP stock swap would have accomplished that with no one being the wiser. The price of SNP is up $105 dollars over the past 52 weeks.

SNP would have been required to report the swap at some point, but when? Typically, a reporting company that acquires greater than 5% of the outstanding shares of another publicly-held company is required to report the acquisition within 10 days of doing so; if this swap occurred in recent days, driving the huge price spike, an announcement may be forthcoming.

This is pure speculation. However, under such a circumstance, it is unclear what value the remaining investor-held shares of ERHC Energy would have. I would like to invite discussion on this issue.

Joe McClash Stands Up To Boss Tar

BRADENTON, Fla., Oct. 2, 2007 - A lot of politicians would have accepted a "bribe" - a big, fat and legal campaign contribution - and let any outstanding issues of principle between them and a major developer slip away. Not Manatee County Commissioner-At-Large Joe McClash, who has taken the sometimes lonely and dangerous stance that the county's biggest developer, the owners of Lakewood Ranch, should use its own funds to expand the local highways its vast size and growing population may demand.

Naturally, the developers, Schroeder-Manatee Ranch, Inc. (SMR), want the county to pay the freight, even though the legislation that created the 8,500-acre master-planned community permits it to float up to $4 billion in bonds to pay their own way. (As an aside, a local reporter who covered the issue didn't even know that, and when he found out, never reported it.) But as local governments around Florida start to run out of money for such projects due to property tax reductions by the Republican legislature and the bite Big Oil is taking out of everyone’s pocket, money for new roads doesn't get approved as automatically as it once was.

The Lakewood Ranch development has up to 20,000 residents in peak season, and there are 11 schools and colleges there; it's a mixed-race community, with 1 percent Asian, 86 percent white, 7 percent black and 6 percent Hispanic. It's a clean and pretty place, but it's also a hungry one - hungry for new home sales, new projects within the master community, and for roads, roads, roads.

Until recently, when the good times cooled, no one ever noticed who paid the bills. Counties and cities believed that if they paid for the roads, developers would build homes and people would come buy them, local banks would prosper, the population would grow along with property and sales tax revenues, and both their own and the community's image would benefit.

But in much of Florida, people are moving out, not in, and homes go begging for buyers for months or years even at deep discounts. On one street near me, of about 30 homes, six are for sale; in my condominium building, part of a large, older development, six of the 32 units are for sale.

In the Sarasota-Bradenton area, one of the two fastest-growing markets in the nation until the hurricanes of 2004, about 30,000 homes and condominium units are waiting to be sold or are in litigation. On Bradenton's waterfront, dozens of small, affordable homes were abandoned to make way for a luxury high-rise building; now, squatters move into the affordable homes, for free, and most units in the the luxury building remain empty.

A condominium saleswoman known as the "Condo Queen" says that when she held a Sunday "open house" for six houses and apartments recently, no one - not one person - came. The financial devastation that keeps threatening to wreck the world's stock markets is already real to localities here and throughout the United States. And it's not clear that anyone can afford new roads.

It's important, then, to understand that the mother's milk of modern metropolitan politics is not money, but asphalt and its vast number of associated industries. The people who pump the tar and pave the roads have tens of billions of dollars in dedicated highway funds to slurp up whenever they "recommend" it.

Counties and cities, supported by sales, gasoline and property taxes, usually pay at least half the cost of road work and are partly dependent on state funds - unless an Interstate or federally-owned highway is involved, when the $15.7 billion Highway Trust Fund may pay 80 percent or more of the cost. Now, though, according to hearings in Washington earlier this year, the Highway Trust Fund is going broke because it is being spent at double the rate of revenue increases, the Congressional Budget Office (CBO) says; since 2001, highway spending has exceeded its revenues by about $16 billion.

"If annual [bond] obligation limits are set at the levels authorized in 2005, CBO projects that the highway account of the Highway Trust Fund will become exhausted at some point during fiscal year 2009; the Administration also projects that the balances in the highway account will be exhausted that year," the CBO said. "CBO expects that the mass transit account will have sufficient revenues to cover its expenditures until 2012; the Administration estimates that the mass transit account will become exhausted in 2011," a 2007 summary of the CBO findings said.

And if higher fuel efficiency standards are met (thus reducing gas tax revenues), if the economy doesn't improve, if oil rises further, and if gasoline taxes don't rise to make up the difference, the CBO says the National Highway Trust Fund could run out of money in 2009.

The expense of building roads, of course, has jumped with the price of oil, the base material of asphalt and macadam, but fear not: no lobby is more stealthy or more powerful, and no lobbyists are more skilled in assuring themselves a big pot of gravy each year than those of Boss Tar. That's why road jobs (try visiting Miami International Airport from LeJeune Road) go on in Miami for years and years and years, disrupting traffic and draining billions of man-hours from drivers. Manatee County has experienced the same thing on a smaller scale, frustrating drivers who can’t understand why roads remain torn up while no work goes on. The frustration only helps Boss Tar by driving voters to their politicians, demanding what Boss Tar not-so-subtly tells them to demand.

Read part of the Page 1 account from this morning's Sarasota Herald Tribune of a crash that killed two men and caused an 11-car pileup very early this morning and you may understand how that can be so:

Roadblock blamed in fatal I-75 pileup
FHP says the driver of the semi
that started the carnage had no warning
By TODD RUGER
todd.ruger@heraldtribune.com

SARASOTA -- The driver of a semitrailer that caused a fatal crash Monday on Interstate 75 likely will not face criminal charges, since he had no warning that traffic would be stopped for a construction project, the Florida Highway Patrol said.

Instead, trucker Pablo Merlos, 33, will probably be cited for careless driving because there is no evidence to support his claim that his cruise control malfunctioned, said FHP Sgt. Herbert Head.

The multivehicle crash occurred about 12:30 a.m., at the Bee Ridge Road interchange, where workers and an off-duty FHP trooper had set up a temporary roadblock while working to reopen a lane that was closed earlier in the night.

According to the FHP, drivers said the roadblock stopped them at the bottom of the back side of the overpass, which moves I-75 traffic over Bee Ridge Road. Northbound I-75 drivers coming over the elevated interstate had to brake quickly, including Merlos and another trucker driving next to him who stopped in time.

"I think there was a more appropriate place to be doing a roadblock or slowing down the traffic as it was approaching the construction zone," Head said.

The 11-vehicle crash killed two men, sent one boy to the hospital in serious condition and injured at least six more people. The other semi driver said Merlos accelerated up the overpass.

A construction supervisor, Robert Dowdell, told television reporters that the crews had warning signs drivers could see before the crash site, but had moved them by Monday afternoon.

Zep Construction of Fort Myers did not return a call for comment Monday.

The hapless driver of the truck is facing a careless driving ticket from the Floriday Highway Patrol; the people who put up and took down the roadblocks amd warning signs go free. At the trial of the driver, or maybe later, speaking of the injured and killed, and the damaged cars and trucks, someone will say that Manatee County needs to re-grade the overpass. "Even if it saves just one life," he or she will say, "it's worth the $100 million it will cost." And that will be the voice of Boss Tar.

Boss Tar Gets Paid Twice
Remember that Interstate bridge in Minneapolis that collapsed during rush hour a few months ago? Remember the collapse of Interstate 10 in the Northridge Earthquake, or the collapse of an elevated section of Interstate 5 that killed an LAPD officer the same day? Remember how Interstate 10 was washed away during Hurricane Rita in 2004? Remember the huge Sunshine Skyway bridge near Tampa that fell into the bay? Remember how Oakland's Bay Bridge collapsed on itself during the World Series Quake? All were occasions when Boss Tar got paid to build the same roads and bridges twice - and always for an awful lot more the second time.

Even in my hometown of Monroe, N.Y., my high school classmate, the student council president who became the Justice of the Peace and ran his father's paving machinery firm, went to jail for taking kickbacks. Between them, multiplied many times, you gave Boss Tar tens of billions of dollars - twice. And Boss Tar doesn't even have a face, does he? Who do you think of?

The roadbuilders and associated industries are also, of course, untouchable. No newspaper, magazine or investigative tv show will take them on. You need only raise a mild objection to anything the road-builders propose and they will flood you with complaints about traffic, potholes, rutted roads, flooded roads, and road hazards. They have an unending supply of supporters - thanks only to the knee-jerk indoctrination of the public with respect to roads - and so this industry is more powerful than banks, insurance companies and utilities. They know where the money comes from.

So Boss Tar always gets his way, except in those rare cases when a community or someone like McClash is willing to stand up and fight for everything they're worth. Boston doesn't have people like that, so they got the "Big Dig;" neither did L.A., so they got the shoddy construction of the (badly needed) Metro Rail subway. In the Greenwich Village area of New York City, however, in the late '50s and early '60s a group of upstarts - in politics, they are called insurgents - took over the corrupt local Democratic Party club, led by the immensely powerful Carmine DeSapio, and installed a new regime called the Village Independent Democrats.

They did so in the process of fighting the corruption that accompanied the planned construction of Robert Moses's proposed West Side Highway, which would have ripped the Colonial-era heart out of Greenwich Village. Once in power, the insurgents elected people like future Congressman and Mayor Ed Koch - and dozens of others - so they could stop the highway, and they did. It is the only instance I know of a community overcoming the asphalt business; the highway never got built, and still - 40 years later - isn't needed.

In facing off with Rex Jensen,, the developer of Manatee Ranch, Joe McClash takes the risk of losing his countywide base as an At_large-Commissioner, because Lakewod Ranch - now 6,000 homes and 3,675 more on the drawing board - is becoming a substantial part of the countywide population. Jensen's current vista includes seven different villages, thousands of businesses, two newspaper and a big hospital, affluent residents - averaging more than $56,000 per year in personal income - and 9 elementary, middle and high schools and a community college annex all built at public expense to serve his vision. in 2006 alone, developers like him have asked the county commission to add a cent to the county sales tax, $300 to the property tax and $0.045 percent to the property transfer tax - just to pay for roads.

When push came to shove at a commission meeting last Wednesday, Sept. 26, according to Herald columnist Vin Mannix, "Jensen said if the county commission requires developers to wait until State Road 64 improvements are completed in 2009 before their projects are permitted, they'd better be prepared for a fight."

In Jensen's corner, too, whether he knows it or not, is Boss Tar.

"Very few people realize," said E.L. Powers, Secretary of the [American Road Builders'] Association, "that highway construction has become one of the country's greatest industries. There are identified with it 80,000 highway oficials, 7,000 road contractors, 2,000 bridge contractors, 1,100 manufacturers and dealers in road building machinery, materials and appliances, 7,338 firms manufacturing highway transportation equipment, 15,000 civil and highway engineers, 10,000 automotive and chemical engineers, and 842 highway associations and engineers' and contractors' organizations, not to speak of the many publications devoted to good roads.

"In addition to these there are 7,338 firms manufacturing vehicles dependent on good roads, having a total invested capital of $6,000,000,000 and an annual output of 1,500,000 passenger cars valued at $400,000,000, and 165,000 tractors valued at $225,000,000. The 7,000 road contractors have a total invested capital of $65,000,000.

"Road building is largely in its infancy. Eighty-five percent of American roads have yet to be surfaced. ..."

-- New York Times, Nov. 6, 1921

Those were the days when the roadbuilders - Boss Tar - had a name and a face; it was 86 years ago.

Standing up to Boss Tar is a rare and illuminating event. At-Large Commissioner Joe McClash, whom I have never met or telephoned or contributed to (he does respond to email messages, and will meet with anyone), who is in the opposition party and whom I have never even seen except in many reruns of commission meetings on the Manatee Government Access channel, is one of the most exceptional and determined public servants it has ever been my pleasure to witness. I was on a first-name basis with every member of the Los Angeles City Council, and one of the County Supervisors, and the last and present mayor, but with all their good qualities combined they do not equal one Joe McClash. Only an exceptional man makes the leadership decisions he does.

Standing Up To Boss Tar
McClash is a cool, wise, tough, sometimes brush-cut ex-Marine and transplanted New Yorker from Astoria, Queens, who owns a heating and cooling business and 100 or so small rental homes. He has served on the County Commission since 1990 and been its chairman twice. Now 50, married and the father of two, he's both a sailor and a flyer and probably a jet-skier, water-skier and even a surfer, for all I know, and it wouldn't surprise me to learn he's one of those guys that paraglides over Bradenton Beach - he's soaring hundreds of feet above all but a few of his colleagues in the tricky business of politics. I see him as Governor of Florida one day soon.

All of these encomiums were brought into focus again today when the Bradenton Herald, a relentless patsy of the roadbuilders and developers, reported a series of man-in-the-street comments from ordinary citizens who have witnessed McClash in action in his confrontation with Jensen. Not one or two, but a rather healthy majority of Manatee County residents queried by the Herald told the paper how much they admired McClash and his strong stand against paying for the developer's paving projects. That didn't get onto their Website for posterity, though.

One of McClash's fellow commissioners, a former Florida Highway Patrol officer named Ron Getman, cast the deciding vote to stick another 5-cent tax dedicated to new road-building on the backs of Manatee County drivers. It's gone into effect as gas prices have gone through the roof.

I tried to run against Getman a year ago on that issue and the road issue, and so far as I know was the first politicians to say - in an article published in the Herald, with my picture - that folks weren't coming to Florida anymore, and that the roads and the ten of thousands of homes then approved would not be needed, positions vindicated by events ever since. Remember?

Shea added that he will fight to repeal Manatee's gas tax, which was raised by 5 cents last month for road improvements. He said commissioners are ignoring the need to preserve Manatee lands each time they approve a new development.

"I'm taking a pro-preservation stance," Shea said. "It's a mistake to think (developers) can build an unlimited number of homes, and an unlimited number of people are going to come here and buy them up. The hurricane cycle we're going through will severely cramp home sales and substantially reduce the flow of tourism and retirees moving to this part of Florida."

-- Bradenton Herald, June 1, 2006

On Sept. 29, 2007, the Wall Street Journal's top weekend story was entitled, "Is Florida Over?" But back in 2006, the coming crunch was apparent to anyone who was capable of telling the truth to themselves. Joe McClash was one of the very first, if not the first, to listen, understand and agree. His courage in facing the developers, and my regret that I could not join him in doing so, has persisted ever since. Electing Getman was like turning the county treasury over to Boss Tar, but the Herald, the local Gannett daily newspaper, was only too happy to oblige.

Troopers and asphalt go together like oil and Brylcreem, and now Getman's tax and Jensen's roads are joined on the battlefield of Big Tar against a man the angels named McClash - he's a fighter, and a prince among men.

Joe Shea is Editor-in-Chief of The American Reporter and a member of the Manatee County Democratic Executive Committee. Joe McClash is a Republican.