The binational Desert Line may soon be deserted by Pacific Imperial Railroad, the company that leases the 70-mile track stretching from the border near Campo to Plaster City.
Pacific Imperial, according to a statement from a Metropolitan Transit System spokesperson, failed to pay the first of two $500,000 lease payments to MTS, the owner of the track.
The railroad's fate has been in question for several years. Since taking control of the Desert Line in 2011, there has been little progress made to resurrect the line. In addition, accusations of fraud and money laundering have plagued Pacific Imperial and the shareholders who controlled the railroad under the name of Carrizo Gorge.
Last year, Carrizo Gorge's former CEO, attorney James Warner, admitted to hiding drug money for a client and has since been disbarred. Before changing names to Pacific Imperial, the railroad was fined $1.6 million for smuggling two pounds of marijuana from Mexico. Then there are the dozens of lawsuits involving the company's shareholders.
According to emails obtained through a public records request, despite the lack of progress on the line and an apparent lack of funds as shown by the missed lease payment, MTS honcho Paul Jablonski continued to go to bat for the company and continued to strike out.
Emails show that Jablonski lobbied Mexican officials to meet with Pacific Imperial representatives and reach an agreement for the two lines to operate in conjunction. Then the relationship between Pacific Imperial and Baja Rail deteriorated. According to statements made by Pacific Imperial president Donald Stoecklein, Jorge Beltran, the head of Baja Rail, refused to meet with the company. Beltran reportedly had concerns about the legitimacy of Pacific Imperial.
Jablonski wanted to fix that. For months, the MTS chief tried to arrange a meeting between the railroads. He eventually succeeded. The meeting, however, didn't have the positive results he’d hoped for.
Jablonski's lobbying can be seen in emails during the months leading up to the December meeting. On November 19, 2014, Jason Vorderstrasse, political consultant at the U.S. consultate's office in Tijuana, responded to MTS's request for them to host a meeting between representatives from Baja Rail, Jablonski, MTS attorney Karen Landers, county supervisor Ron Roberts, and executives from Pacific Imperial.
"I'll go ahead to work with [Baja Rail] to come up with who will represent them. Please let me know who you think should attend from [Pacific Imperial]," Vorderstrasse wrote to Landers and Jablonski. "I'll also plan to meet with [Baja Rail] ahead of the joint meeting to stress the importance of the joint meeting and to make sure that [Baja Rail] is committed to making the line work."
Landers responded the following day by asking if Vorderstrasse could invite Tijuana mayor Jorge Enrique Astiazaran and "[bring] the parties together."
Vorderstrasse suggested minister of economic development Carlo Bonfante would be better. Jablonski agreed.
"I think Carlo would be good also, thanks for getting back to us."
Jablonski also suggested that Roberts invite Larry Irving, president of the Irving Group, a consulting firm that provides "strategic advice and assistance to international telecommunications and information technology companies."
The meeting took place on December 15.
Unbeknownst to Jablonski and others, Beltran was at work negotiating an agreement with another U.S. company, FPN-USA, run by the founder of Carrizo Gorge Railway, Gary Sweetwood, to haul freight on the Mexican side of the line. The agreement created another expensive obstacle for Pacific Imperial and essentially stripped them of any chance to connect the Desert Line with Mexico.
Now, with Pacific Imperial unable to make the lease payment, as well as the haulage agreement between Sweetwood and Baja Rail, Jablonski's time and efforts for Pacific Imperial appear to have been for naught.
Pacific Imperial executive Donald Stoecklein declined to comment on questions about the missed payment.