Monday, January 12, 2015

New chiefs ID'd for FRA, AAR law department

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New chiefs ID'd for FRA, AAR law department

As the White House considers candidates for Senate confirmation as the next Federal Railroad Administrator, Transportation Secretary Anthony Foxx says he will name his Department of Transportation chief of staff Sarah Feinberg — a long-time Democratic operative with strong White House ties — as acting administrator upon the voluntary departure this week of FRA chief Joe Szabo.

At the Association of American Railroads, the heir apparent to general counsel Louis P. Warchot appears to be Washington, D.C., trial attorney Kathryn D. Kirmayer, who possess a formidable background in antitrust law and dispute resolution. The search for Warchot's successor commenced several months ago when he indicated a desire to retire this year as senior vice president of law and general counsel after some 18 years on the job. Previously, Warchot had an extensive career in the law department of Southern Pacific (later merged into Union Pacific). The AAR confirms Kirmayer is joining the AAR law department, while a carrier source says "the plan" is for her to succeed Warchot upon his retirement.

Feinberg, whose transportation background is sketchy, at best, may, however, be the ideal choice to succeed Szabo — even if it be for a short period, assuming the White House nominates someone else for the post — given that the FRA in recent months has become a convenient punching bag for many in Congress, the National Transportation Safety Board and the rail industry. As acting administrator, Feinberg does not require Senate confirmation.

Szabo, who will join the Chicago Metropolitan Agency for Planning as a senior fellow after some five years at the FRA helm, did not have a pleasant 2014. In October, Sen. Richard Blumenthal (D-Conn.), termed the FRA "a lawless agency, a rogue agency" for not being more aggressive in regulating rail safety, not meeting statutory deadlines and not following statutory guidelines relating to rail safety. Blumenthal's accusation followed five rail accidents over 10 months (four on Metro-North Railroad; one on CSX) in Connecticut and New York that killed six and injured 126. Joining Blumenthal in criticizing the FRA was Sen. Chuck Schumer (D-N.Y.).

Additionally, National Transportation Safety Board Acting Chairman Christopher Hart said all five accidents could have been avoided had the FRA followed NTSB recommendations with regard to rail safety.

Throughout 2014, Republicans in Congress ridiculed the FRA's alleged free spending of billions of dollars on high-speed rail programs that lawmakers said lacked focus and often weren't high-speed at all. Congress has since stripped from the federal budget all funding for high-speed rail. (In 2011, Railway Age presented Szabo with its W. Graham Claytor Award for Distinguished Service to Passenger Transportation.)

Freight railroads, meanwhile, are stewing over what they consider Szabo's heavy-handed attempt last April to require, through a regulatory rulemaking, a minimum of two-person crews on most mainline trains despite the FRA's previous finding of no factual evidence to support a prohibition against one-person crew operations -- and no opposition by NTSB to one-person crews. While Szabo created a Railroad Safety Advisory Committee (RSAC) working group (comprised of FRA, carrier and labor members) to consider the matter, the AAR called the process "a sham ... There was no consensus. There was no vote taken" — an assessment (as to no consensus and no vote) the FRA confirmed. The proposed rulemaking has yet to be published.

Into this unpleasantness walks Sarah Feinberg, who further must lead the agency's consideration of new regulations affecting the movement of crude oil by rail, completion of dozens of languishing NTSB recommendations and congressional mandates (some dating to 2008), and an industry request to delay year-end implementation of Positive Train Control owing to a Federal Communications Commission delay in authorizing placement of poles and towers. Absent an FRA authorized postponement of the effective date, or congressional action, the industry faces fines of tens of thousands of dollars daily for delaying implementation.

Feinberg will assume FRA leadership with no deputy administrator. Deputy Karen Rae departed in 2011 to become New York Gov. Andrew Cuomo's transportation deputy; her successor, Karen Hedlund, left the FRA in mid-2014. Both had extensive transportation experience.

Feinberg, age 37, is no stranger to the frying pan or fire. Her resume is both a who's who of Democratic Party politics and a hopscotch of privileged professional addresses (she calls her resume a "bit schizophrenic").

Prior to becoming DOT chief of staff just 16 months ago, she was director of business communications and strategy with Bloomberg LP and director of strategic and corporate communications at Facebook (while FRA already has a Facebook page, it has fewer than 6,100 likes).

Previously, Feinberg was a Senate aide, press secretary to former Senate Minority Leader Tom Daschle (D-S.D.), communications director for the House Democratic Caucus and the Democratic Congressional Campaign Committee, and a senior adviser to former White House Chief of Staff Rahm Emanuel (now mayor of Chicago).

Feinberg earned in 1999 a degree in politics from Washington & Lee University. Her father, an attorney, is a former West Virginia state legislator and her mother is a magistrate judge of the federal district court in Charleston, W.Va. Her former husband, Daniel Pfeiffer, is a senior adviser to President Obama. The two met while working for the Al Gore for President Campaign in 2000. Prior to becoming FRA administrator in 2009, Szabo spent his entire career as a train conductor and rail union officer, although concurrently, at one point, he was elected mayor of a Chicago suburb.

At the AAR, Kathryn Kirmayer is expected to serve as an understudy to Warchot, pending his retirement — perhaps as early as mid- or late spring.

Kirmayer's resume at the 500-attorney strong international law firm of Crowell and Moring said she is "a trial attorney who focuses on complex business litigation and arbitration [with] particular experience in disputes that disrupt or threaten to disrupt long-term commercial relationships." Among her clients was CSX, for which she is helping to defend against an alleged price-fixing conspiracy related to fuel surcharges.

She said her "active docket usually includes antitrust cases." Washington, D.C., based, she recently represented AT&T in a merger-related Clayton Antitrust Act challenge brought by the Justice Department. While Republican control of the House and Senate suggests strongly that long-standing shipper initiatives to expand the railroads' antitrust exposure are now doomed, antitrust questions could become foremost should a new round of mergers be initiated -- a reasonable industry concern given Canadian Pacific Chairman Hunter Harrison's recent comments indicating a desire to combine with an eastern U.S. railroad.

For sure, Kirmayer will find an immediate friend at the FRA in Washington & Lee graduate and acting administrator Feinberg as Kirmayer earned her law degree from Washington & Lee following undergraduate study in psychology at Williams College. Warchot earned his law degree from the University of California at Berkeley. His predecessor as AAR general counsel was Yale Law School graduate Robert W. Blanchette, who was FRA administrator under President Reagan.

Frank N. Wilner, Contributing Editor

Frank N. Wilner is author of six books, including, Amtrak: Past, Present, Future; Understanding the Railway Labor Act; and, Railroad Mergers: History, Analysis, Insight. He earned undergraduate and graduate degrees in economics and labor relations from Virginia Tech. He has been assistant vice president, policy, for the Association of American Railroads; a White House appointed chief of staff at the Surface Transportation Board; and director of public relations for the United Transportation Union. He is a past president of the Association of Transportation Law Professionals. Wilner drafted the railroad section of the Heritage Foundation’s Mandate for Change (Volumes I and II), which were policy blueprints for the two Reagan Administrations; and was a guest columnist for the Cato Institute’s Regulation magazine.

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