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Former STB Member Owen Dies

Written by Frank N. Wilner, Capitol Hill Contributing Editor
Gus A. Owen, a former Republican Member of the ICC and its successor STB, died last month at age 89.

Gus A. Owen, a former Republican Member of the ICC and its successor STB, died last month at age 89.

Gus A. Owen, a Republican Member of the Interstate Commerce Commission (ICC) and its successor Surface Transportation Board (STB) from Oct. 4, 1994 to Dec. 31, 1998, died Dec. 17, 2022 at age 89.

Controversy escorted Owen into office and accompanied his departure, with celebrity and politics attending much of his life. In his four years as a rail regulator, he voted to approve three Class I railroad mergers: Burlington Northern with Atchison, Topeka & Santa Fe; Union Pacific’s (UP) acquisition of Southern Pacific (SP); and Conrail’s joint acquisition by CSX and Norfolk Southern. He advocated liberalizing unionized-worker post-merger income protection implementing agreements and expressed skepticism during his term over the agency’s findings that railroads were not revenue adequate.

A three-member agency during Owen’s tenure, his relationship with Democrat Chairperson Linda J. Morgan was cordial, at best, while Owen closely bonded with Democratic member Jacob J. Simmons III owing largely to their Oklahoma roots—Simmons in the family’s oil business, Owen having been raised there. After Morgan ceased hosting in her office a weekly informal—no agency cases discussed—coffee and doughnuts meeting, Owen and Simmons met regularly numerous times weekly in each other’s open-door offices to chat informally on politics and other subjects unrelated to agency cases.

Despite not completing high school—on his LinkedIn page, he emphasized having left Central High School in Muskogee, Okla., in the ninth grade, earning a general education degree (GED) in the Marine Corps—Owen became immensely successful in California real estate, which included purchasing distressed multi-resident properties, rehabilitating them, and flipping them for profit.

Owen’s business success channeled him into California Republican politics. He worked on the presidential campaigns of Republicans Barry Goldwater, Richard Nixon and Ronald Reagan. Future Republican President Gerald R. Ford, when a House member from Michigan, recruited Owen as a congressional campaign manager for 15 Western states.

Owen also was a founder of the Republican Orange County Lincoln Club that funneled campaign contributions from a wealthy business elite to state and federal Republican candidates. But it was his wife Kathryn Thompson’s controversial political activity that secured his nomination to the ICC by Bill Clinton.

Kathryn Thompson

Thompson—also immensely successful in California real estate, an inductee into the California Building Industry Hall of Fame, and also a Lincoln Club Member who reportedly backed the 1988 successful presidential run of Republican George H. W. Bush with a $100,000 contribution—turned on Bush in 1992 to back his Democratic opponent, Clinton.

Her opposition to a second Bush term was owed to Bush’s backtracking on his “read my lips: no new taxes” pledge during the 1988 Republican National Convention—new taxes and other economic policies that cost real estate entrepreneurs significant sums. It was reported that Thompson, Orange County’s third largest home builder in 1991, quickly tumbled to “no ranking” as the economy under Bush’s presidency ebbed.

In her role as a founder of California Republicans for Clinton—a group credited for turning Bush’s 1988 California electoral victory into a 13-percentage point win for Clinton in 1992—she elicited public outrage from California Republicans, including arch conservative congressmen Robert K. Dornan and Dana Rohrabacher. Thompson’s subsequent appearance on Larry King’s network television talk show earned additional displeasure from Republicans nationwide, including Senate Republican Leader Bob Dole of Kansas. A month into Clinton’s White House stay, he praised Thompson in a Feb. 23, 1993, speech.

Owen not only survived the embarrassment of the Clinton-Thompson political alliance, but a year following Clinton’s inauguration, Clinton nominated Owen in May 1994 to a vacant Republican slot on the ICC, with Dole overlooking bygones to back Owen’s September 1994 Senate confirmation. Clinton later named Thompson to the Federal National Mortgage Association’s (Fannie Mae) Board of Directors.

Owen enjoyed celebrity, frequently recounting a personal friendship with singing-cowboy movie star Gene Autry, private conversations with fellow Californians Nixon and Reagan, and oft stopping by the congressional office of singer-turned-California-politician Sonny Bono for a chat. In winter, Owen walked about outside in a full-length mink coat he proudly said was a gift from his wife and formerly belonging to movie star Rock Hudson, who had worn it in the movie, “Lover, Come Back.”

During the pendency of the UP-SP transaction, Owen met privately with SP’s majority owner, Phillip Anschutz, who was escorted to Owen’s STB office by UP lobbyist Mary McAuliffe. Owen later said that he and Anschutz spoke alone only of their mutual interest in soccer. Owen had coached youth soccer, including teams he took to England and Germany, and was instrumental in bringing a FIFA (Fédération Internationale de Football Association) soccer tournament to Los Angeles in 1994. Anschutz was a co-founder of multiple professional soccer teams, including the Los Angeles Galaxy.

In 1995, when the STB found eight of then-11 Class I railroads not to be revenue adequate, Owen wrote, “Class I freight railroads exceeded earnings per share estimates of independent financial analysts in 1995, they have posted sustained ton-mile growth over the past decade, and they have made remarkable and sustained productivity gains through rationalization of the workforce, fixed-plant, and equipment. Such an incongruity begs for further study of the methods we utilize to determine revenue adequacy.”

In 1998, Owen withdrew his name from consideration for renomination to a second term following commencement of an investigation into him by U.S. Department of Transportation Inspector General (DOT IG) Kenneth Mead—a probe requested by Senate Commerce Committee Chairperson John McCain (R-Ariz.) following a complaint by the Ralph Nader-aligned Congressional Accountability Project. Questioned was whether Owen’s outside business activities “are compatible” with his STB responsibilities; whether he violated ethics rules by receiving outside income; and whether his financial disclosure reports “have significant gaps, omissions or false statements.”

Owen departed the agency upon the Dec. 31, 1998, expiration of his first term, with the investigation not concluded.

A subsequent 22-page IG “Summary of Findings” concluded Owen had failed to disclose his leadership role in a Southern California Edison-backed group advocating deregulation of California electric utilities, discussed deregulation of electric utilities with a Federal Energy Regulatory Commission Member without disclosing his membership in a group backed by utilities, omitted on his financial disclosure forms information as to real estate holdings, and spent some one-third of average work weeks away from his office. Mead said there were “no clear findings of wrongdoing,” but “questionable judgment in certain instances.”

Only two other of 117 ICC/STB members have come under ethics probes since the regulatory agency was created in 1887.

In 1955, ICC Member Hugh W. Cross resigned following a Senate probe into influence peddling—Cross alleged to have assisted a motor carrier in obtaining a contract to shuttle passengers and baggage between Chicago’s then-numerous rail-passenger stations. The ICC had no regulatory authority over the transportation at issue. In resigning, Cross admitted to “indiscreet” conversations with three railroad CEOs, but denied he acted improperly. The Senate Government Operations Committee agreed, calling his resignation “quite proper” and concluding there was “no useful purpose” in further inquiry.

In 1990, ICC Chairperson Heather J. Gradison came under investigation by the DOT IG following her term-expiration departure. An IG report outlined improper contacts and communications between ICC officials and members of the Maine congressional delegation and their staffs, including Senate Majority Leader George Mitchell (D-Maine). At issue, according to news reports, were “agency practices while handling various cases involving Guilford Transportation Industries.” No further action was taken, and Gradison said she felt “totally redeemed” by the findings. “There was no indication anywhere in the report of criminal intent or illegal activity,” she said. “No Canons of Conduct were broken by members of my staff and certainly I didn’t break any.”

After Owen departed the STB in December 1998, he left California for Dallas, with intermediate residential stops in Kanas City and Muskogee. He continued to operate Owen Properties, a commercial and residential property firm, until his death. His wife of 33 years, Kathryn Thompson, survives him, and operates in Dallas as a mortgage banker. 

Railway Age Capitol Hill Contributing Editor Frank N. Wilner wasprior to being recruited by Owen as his Chief of Staff and appointed to the post by President Clinton—Assistant Vice President for Policy at the Association of American Railroads. Wilner also served a term as President of the ICC/STB bar association and is author of seven books on railroad economics and regulation.

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