Friday, October 10, 2014

Sen. Durbin emerging as STB chairman's nemesis

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Sen. Durbin emerging as STB chairman's nemesis

"Tawdry," is how one Washington transportation attorney describes the self-interest assaults by powerful congressional lawmakers on federal regulatory agency officials.

Indeed, a 2008 Surface Transportation Board (STB) decision permitting the acquisition by Canadian National of regional railroad Elgin, Joliet & Eastern fueled the anger of the Senate's second most powerful member, Majority Whip Dick Durbin (D-Ill.). His victim was fellow Democrat Frank Mulvey, surely among the most qualified — by education and experience — member of the STB in at least a generation. Mulvey voted to approve the transaction and, on the advice of the STB's general counsel, had denied Durbin a private lobbying audience prior to the vote.

So Durbin intervened with fellow Illinois pol, President Obama, to ensure that second-term STB member Mulvey — despite possessing a Ph.D. in economics, years advising congressional Democrats on rail issues, and a stint as a DOT deputy inspector general for rail matters — was not named STB chairman, as widely expected. Instead, in a public snub to Mulvey, Obama named STB newcomer Dan Elliott — a labor attorney with limited experience in rail economic issues — to the chairmanship after the Senate confirmed Elliott's White House nomination to the board.

Now it's Elliott's turn -- if we might borrow lyrics from Gilbert and Sullivan's comic opera, "Mikado" — to "sit in solemn silence in a dull, dark dock ... awaiting the sensation of a short, sharp shock."

The rail transportation community — and Elliott himself — have been in a fog as to why Elliott, whose term expired Dec. 31, 2013, has not been renominated by Obama. Not in the 127-year history of the Interstate Commerce Commission (ICC) and its STB successor has a member not been renominated by the same president who initially nominated them (where the president, such as Obama, had more than a few months remaining in their term).

By statute, Elliott, if not renominated and reconfirmed, is permitted to remain at the board one additional year beyond term expiration, through this Dec. 31. Then it's adios. His chances of renomination and reconfirmation before then are disappearing more quickly than gambling dens in Atlantic City.

Durbin, as in the case of Mulvey, is emerging as the source of Elliott's kampf.

Notwithstanding Elliott's limited experience in rail economic issues, he proved to be a quick study since his August 2009 arrival at the STB, proving neither deaf to captive shipper perceptions of rate and service discrimination nor blind to data demonstrating railroad revenue need. Both sides in the regulatory debate acknowledge Elliott's efforts to bridge the divide by injecting greater transparency in decision making, moving to lower shipper hurdles in presenting evidence, and raising ceilings that previously limited dollar recoveries for aggrieved shippers proving their grievance.

Captive shippers insist they are not behind Elliott's travail, with one of their long-standing counsel saying Elliott "may genuinely care about shipper problems." That pretty much absolves Senate Commerce Committee Chairman Jay Rockefeller (D-W.Va.), the Senate protagonist-in-chief for captive-shipper concerns, as the culprit. Railroads, meanwhile, recognize that a replacement Democrat could be a regulatory disaster for them, strongly suggesting they are not engineering Elliott's departure.

And while it is true some railroad interests would prefer Democrat Deb Miller — a former Kansas transportation secretary with proven leadership abilities, a bipartisan following and friends at BNSF and Kansas City Southern — to be the agency chairman, Elliott need not walk the plank for that to occur.

Ronald Reagan, who nominated fellow Republican Reese Taylor to the ICC in 1981, fired Taylor as chairman in 1985, in favor of another Republican, Heather Gradison, whose Republican House-member husband, Willis, was the swing vote on B-1 bomber funding. Yet Taylor didn't depart until his seat was abolished as part of a congressionally ordered agency slim down.

So what has given Senate Majority Whip Durbin his latest apoplectic convulsion? It's spelled, A-M-T-R-A-K.

The senator is said to be frantic that Elliott has not moved the STB to take more forceful action against Canadian National — yes, the same CN at the root of Durbin's personal raid on Mulvey — for running so many freight trains on its tracks between Chicago and points south that Amtrak passenger trains have but a 54% on-time arrival record.

Durbin, who advocated successful passage of 2008 legislation giving the STB authority to enforce Amtrak's statutory priority rights over freight trains, had sought "immediate attention and action" by the STB, whose chairman he thinks has been loafing in that regard.

That Durbin-supported provision in the Passenger Rail Investment and Improvement Act (PRIIA) provided that if a host freight railroad fails to meet an 80% on-time performance standard for Amtrak passenger trains in two consecutive quarters, then the STB may impose hefty fines payable to Amtrak, and prescribe a remedy. (In Elliott's defense, but seemingly of no appeal to Durbin, is that the metrics for determining Amtrak on-time performance are the subject of a freight-railroad court challenge to be argued before the Supreme Court in December.)

And that brings us to another Durbin Illinois buddy, the former union boss and Chicago condo-neighbor to Durbin, Joe Szabo, whom Durbin advanced to be Obama's federal railroad administrator. The rumor persists that Durbin wants Elliott to walk the plank to make room for the embattled 56-year-old Szabo, who would move from the FRA to a safer haven at STB to wait out his eligibility for a full Railroad Retirement and union pension. (http://www.railwayage.com/index.php/blogs/frank-n-wilner/is-fras-szabo-headed-to-the-stb.html?channel=)

Were Durbin to engineer Szabo's move to the STB, Szabo would be expected to do more than water dead plants in exchange for his transformation from a pungent source of FRA reproach by the Office of Management and Budget, DOT inspector general and National Transportation Safety Board.

Szabo's Durbin-desired role at the STB would be to promote vigorously the enforcement of that PRIIA provision allowing the STB to levy fines and prescribe remedies to ensure on-time performance by Amtrak passenger trains.

Of course, Szabo would require Senate confirmation; and while a freight-railroad encouraged Republican-block of the nomination is conceivable, it would be problematic, as no sane railroad would risk its fingerprints on a challenge to Durbin so long as Democrats control the Senate and Obama remains in the White House.

Szabo does not deny the rumor of a move to the STB. In fact, in a Sept. 30 memo to FRA staff, he urged them to "ignore the noise and continue to do your good work" and let him "absorb those shots."

One further note on Joe Szabo. He also is said to be interested in the Amtrak presidency, creating yet another Capitol Hill rumor that Durbin, with support from Obama, would pressure the mostly Obama-loyal Amtrak board of directors to buy out Amtrak President Joe Boardman's contract (extended in May 2013 to year-end 2015) and insert Szabo. The Amtrak presidency, unlike an STB nomination, does not require Senate confirmation.

At least in theory, placing a former union boss in the Amtrak presidency, to hold sway over collective bargaining on future wage, benefits, crew consist and contracting-out provisions, would be a noxious action with measurable negative consequences so long as Republicans retain at least one congressional chamber.

Unlike Garrison Keillor's fictional Lake Woebegone, official Washington, D.C., is not a town where "all the children are above average." It is a town where those "children" revel in the teachings of 16th century political theorist Niccolo Machiavelli, who famously said, "Politics have no relation to morals."

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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