Wednesday, January 06, 2016

Show us the letters, STB

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Show us the letters, STB

On January 5, 2016, Reuters published a story containing excerpts of letters reportedly sent to the Surface Transportation Board by industry groups representing several major Norfolk Southern freight customers. The letters ask the STB to reject a merger of Canadian Pacific and NS, should a merger application be filed. We contacted the STB for copies of those letters and came up empty.

When the STB’s public affairs office suggested a Railway Age journalist ask Reuter’s news agency—not the STB—for copies of letters reportedly sent to the STB opposing a CP-NS merger, a fissure wider than the gulf separating CP CEO Hunter Harrison and NS CEO Jim Squires opened between the STB’s spokesperson and its Senate-confirmed Democratic member Deb Miller.

Miller, as reported by Railway Age (Watching Washington, October 2015, “Speak to Improve the Silence”), advocates greater agency transparency and fewer limitations on communications between STB Senate-confirmed members and its stakeholders—with a caveat that such meetings be summarized promptly and provided to the public.

While the STB’s public affairs office might hide behind an assertion that there is no official CP-NS merger file requiring public disclosure—and that maybe journalists should deal with Reuter’s news agency and not the STB—such self-indulgent and clumsy attempts at clouding transparency speak as ill of the agency as backroom political brokering speaks ill of its oft-nefarious practitioners.

Those who wrote the letters seem chary of fessing up to having written them, as evidenced by their failure to issue a press release or speak on the record. This is understandable. Shippers, suppliers and others dependent on a Class I railroad’s goodwill have eminent good reason to do more than listen politely when a railroad salesperson, marketing officer or other official comes calling and suggests it would be in everyone’s best interest that a certain letter be written. A suggested draft might also be left behind as a memento of the informal, friendly chat.

It is well established that independent regulatory agencies such as the STB treat such letters with no greater nor less respect than formal submissions. Thus, the real audience for such letters is more likely stockholders who can stop this merger attempt in its tracks by refusing to vote in favor of a voting trust that is conceded the first crucial step toward CP control of NS. Indeed, establish enough uncertainty, and the hearts and minds of stockholders will see the light. Hence the “leak” strategy. As muckraking journalist Drew Pearson confirmed, “Mark something confidential and everyone wants to read it.” Any so-called leak of these letters quite likely was from a well-intentioned outside public relations firm looking after NS interests.

When the late Linda Morgan ran the STB during an initial kerfuffle between CSX and NS over a carve-up of Conrail, Morgan asserted her leadership and ensured that the public docket contained every missive sent the STB, no matter the title of the sender. Transparency ruled.

This is not STB Chairman Dan Elliott’s first brush with questionable transparency. Not long ago, a written exchange between Elliott and Senate Commerce Committee Chairman John Thune (R-S.D.) regarding Positive Train Control somehow was “lost’’ between his office and the public file. If these instant shipper letters relating to a CP-NS marriage are sitting on Elliott’s desk, protected by a coffee cup or whatever, he should sense the obligation to send them post-haste to the public docket and ensure they are accessible from the STB’s website—and that his public affairs office take a refresher course in agency protocol. We suggest creating a correspondence section on the website.

Meanwhile, if Elliott’s fellow Democrat Deb Miller is sincere in her desires to create a more transparent STB—and we think she is—Elliott should be expecting a phone call or personal office visit from her shortly.

It is well and long settled that actions and decisions of the STB are to be in the public interest. Letters sent to the Board regarding what could be the most consequential railroad merger in a generation—and perhaps one of its most problematic—are the stuff of the public interest.

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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