Alaska-Alberta railroad founder loses his Porsche, Ferrari, Land Rover, Tesla

The Alaska-Alberta railroad dream continues to fall apart. One of the chief “assets” is a decision announced on Twitter late one night last fall by former President Trump just after a $100,000-per-person fundraiser at which he was lobbied to push the project.

Alaska news organizations that printed hyperbolic statements from Gov. Mike Dunleavy and former Lt. Gov. Mead Treadwell have failed to cover the disintegration of the railroad scheme.

Alaska Business Monthly has checked in with a delusional account that quotes Treadwell as saying the work done so far has been valuable and that the financial collapse of its sole owner, Sean McCoshen, may not be as bad as it seems.

“The main point is that a lot of work has been done, and no matter what happens on the financing side, that work has created a lot of value,” says Treadwell, vice chairman of the company.

“If you were planning to build a house and got an option on the land, preliminary designs from the architect, an estimated path with the building code department, and knew where the rent would come from once it was built—you might say that’s worth something,” Treadwell said.

Whatever the project is worth, the value is far outweighed by the scale of the financial scandal regarding A2A and Bridging Finance, which has left the enterprise running on wishful thinking. With interest, the railroad owes $212 million (Canadian) to Bridging Finance and is unable to pay it back.

The company is insolvent. One open question is how many millions borrowed by the railroad were “dissipated” and spent elsewhere. Tens of millions in borrowed funds went to McCoshen’s personal account.

Investigators say “it appears that over $128 million (Canadian) of the $145.8 million (Canadian) in loan advances under the A2A loan was advanced to Sean McCoshen” or companies owned and controlled by him. The corporate receiver “has significant concerns that these funds have not been utilized to fund the Railway Project and have instead been dissipated to the detriment of the Lender and the other stakeholders of A2A.”

About $82.5 million (Canadian) of the money lent to the railroad actually went to another company controlled by McCoshen that is not a legal party to the loan. McCoshen transferred $19.5 million from that company to the personal checking account of David Sharpe, the former head of Bridging Finance who had approved the loan to McCoshen.

Alaska Business Monthly doesn’t mention that the former A2A chairman and owner, McCoshen, who allegedly spent $100 million of his own money on the venture, was deemed bankrupt on July 19. He has claimed to be medically incapacitated and has hired criminal lawyers.

McCoshen has liabilities of $175 million in U.S. dollars and assets of about $25 million. Bridging Finance, which lent McCoshen about $160 million in U.S. dollars for the Alberta to Alaska Railroad, is in receivership and trying to get its money back.

“The McCoshen-Bridging relationship was one of the alleged problems cited by the Ontario Securities Commission when it asked the court to place Bridging under the control of a receiver. Investigators with the OSC determined that a company controlled by Mr. McCoshen made $19.5-million in transfers into the personal bank account of Bridging's then chief executive officer David Sharpe - deposits that came within days of Bridging releasing funds to Mr. McCoshen's companies,” the Globe and Mail Reported.

The newspaper said McCoshen is selling his Vancouver home for $3.1 million, is returning his leased Ferrari and his leased suite and season tickets to the Los Angeles Rams and will give up his $100,000 art collection. His 1984 Porsche 911, his 2020 Land Rover and his 2019 Tesla Model S have been pledged to Bridging Finance as collateral.

“Collecting other assets will prove more difficult. Mr. McCoshen says he pledged his art collection to Bridging, but acknowledged that some of his art may have been taken by his ex-fiancée from a mansion he owns in Oregon,” the Globe and Mail said.

One of the issues going ahead is whether the border-crossing permit Trump issued for the railroad last fall has any value. The railroad will claim it has immense value, but that’s doubtful.

PricewaterhouseCoopers, which is trying to collect money owed by A2A, says it the main assets of the project are “certain executory contracts or agreements and the presidential permit signed by former President Donald Trump.”

Promoters of the railroad, including Dunleavy, say the railroad would be use to export tar sands from Alberta through Alaska to Asia.

“If we build a 1,500-mile railroad, what’s going to happen is they’re going to ship their tar sands up through Alaska as a trans-shipment point because we are going to be the only sovereign on the Pacific Ocean in North America, north of Mexico, that is still resource friendly,” Dunleavy said in 2019.

The permit says that it can be revoked by the president at any time. If and when any value is attached to the permit through the Canadian review, look for President Biden to revoke the permit because of the tar sands link.

In addition, the bizarre manner in which Trump approved the permit, announcing it after midnight on Twitter after a $100,000-per-person campaign fundraiser, makes the permit more vulnerable.

Treadwell didn’t pay $100,000, but attended as a guest of McCoshen’s then-fiancee and asked Trump to back the project, the Washington Post reported last fall.

“One attendee's plea on behalf of an obscure railway project in Alaska in need of federal approval appeared to get immediate results,” the Post reported.

"Based on the strong recommendation of Sen. Dan Sullivan and Rep. Don Young of the Great State of Alaska, it is my honor to inform you that I will be issuing a Presidential Permit for the A2A Cross-Border Rail between Alaska and Canada,” Trump said late that night on Twitter.

“Treadwell attended as a guest of the fiancee of the railway company's chairman, he said. He said his comments were brief, thanking Trump for considering the project — and the White House for taking it over,” the newspaper reported.

"I can't tell you how or why the White House made the decision when they did," Treadwell told the Post. "All I can say is, we've had a long series of consultations on this."

"I don't think there was any quid pro quo,” Treadwell said.

The Trump administration claimed later that Trump’s post-midnight tweet after the fundraiser endorsing the border crossing permit had nothing to do with the fundraiser or his decision on the permit.

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