A French memorial of a railcar used to deport French Jews during WWII at the Holocaust deportation site of Drancy near Paris. (FACELLY/SIPA)

A $900 million federal grant to build a light-rail Purple Line would be jeopardized if Maryland lawmakers require an affiliate of one of the project’s bidders to compensate Holocaust victims it transported to Nazi death camps, according to a top attorney for the Federal Transit Administration.

The legislation, which targets the government-owned French rail company SNCF, presents “legal concerns,” according to a letter, dated Thursday, from FTA Deputy Chief Counsel Dana Nifosi to the Maryland Transit Administration. Federal procurement rules require “full and open competition,” Nifosi wrote, and would not allow federal money for a contract solicited with “exclusionary or discriminatory” specifications.

The FTA’s finding — its first formal opinion on the legislation — puts Maryland lawmakers in a bind: choosing between the emotionally charged pleas of aging Holocaust survivors and the need for highly competitive federal money if they want to build a 16-mile Purple Line between Montgomery and Prince George’s counties.

SNCF owns 70 percent of the rail company Keolis North America, which is bidding as part of a consortium of firms on a public-private partnership to design, build, operate, maintain and help finance the light-rail line. Historians say SNCF trains carried 76,000 Jews and other Holocaust prisoners to Nazi extermination camps in stifling, packed cattle cars during World War II.

Maryland Senate and House committees heard emotional testimony this week from Holocaust survivors and from relatives of people sent to their deaths on SNCF trains. As Keolis’s parent company, they said, SNCF shouldn’t profit from a government contract funded by their tax money until it compensates all deportees and their families.

Map of the proposed Purple Line

But state lawmakers have heard previously from Maryland transit officials that the state can’t afford to build a $2.37 billion Purple Line without the $900 million in federal construction grants that the Obama administration recently recommended. Maryland also is pursuing $732 million in a low-interest federal loan that would be repaid by the private partner.

“We want the Purple Line, but is this the price we pay — to do business with these guys?” Sen. Roger Manno (D-Montgomery) said Thursday after a Budget and Taxation Committee hearing. “Maybe if that’s the case, maybe we can’t build it.”

A Purple Line public-private partnership, which would span 30 to 35 years, is valued at more than $6 billion. That would make it one of the largest government contracts ever in Maryland.

SNCF officials have said the railway was forced to transport Nazi prisoners after it was commandeered during the German occupation of France. Some Holocaust survivors, however, say the SNCF willingly collaborated with the Nazis under the country’s World War II-era Vichy government.

It was unclear Thursday what impact the FTA’s finding would have on the legislation’s chances of passing. The sponsor of the House bill, Del. Kirill Reznik (D-Montgomery), has said he would amend his proposal, if necessary, to prevent putting any Purple Line funding at risk. Maryland officials have raised legal concerns about possible threats to the project’s federal funding.

In a letter sent Wednesday to the House of Delegates, the state attorney general’s office said the legislation would violate federal law that “requires states to award contracts involving federal transportation [funds] to the lowest responsible bidder and prohibits states from interposing a social policy — no matter how meritorious — that might increase the project cost.”

A 2011 Maryland law that required SNCF to disclose its Holocaust records as part of a Keolis bid on a MARC commuter rail contract didn’t threaten federal funding because the state was able to pay for the contract using all state funds. That contract, to operate MARC’s Camden and Brunswick lines, went to a lower bidder.

French government officials say France’s Holocaust-compensation program has paid more than $6 billion in reparations, including to people transported on SNCF trains. However, those payments do not cover most non-French citizens. French and U.S. officials recently began formal discussions about incorporating Americans into that program.

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