[Senate Hearing 106-1050]
[From the U.S. Government Publishing Office]
S. Hrg. 106-1050
NOMINATIONS OF LINDA J. MORGAN, TO BE A MEMBER OF THE SURFACE
TRANSPORTATION BOARD; AND DR. STEPHEN D. VAN BEEK, TO BE
ASSOCIATE DEPUTY SECRETARY AND DIRECTOR, OFFICE OF INTERMODALISM,
AND MICHAEL J. FRAZIER, TO BE ASSISTANT SECRETARY FOR GOVERNMENT
AFFAIRS, OF THE U.S. DEPARTMENT OF TRANSPORTATION
=======================================================================
HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 28, 1999
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
U.S. GOVERNMENT PRINTING OFFICE
74-643 WASHINGTON : 2002
_____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina
CONRAD BURNS, Montana DANIEL K. INOUYE, Hawaii
SLADE GORTON, Washington JOHN D. ROCKEFELLER IV, West Virginia
TRENT LOTT, Mississippi JOHN F. KERRY, Massachusetts
KAY BAILEY HUTCHISON, Texas JOHN B. BREAUX, Louisiana
OLYMPIA J. SNOWE, Maine RICHARD H. BRYAN, Nevada
JOHN ASHCROFT, Missouri BYRON L. DORGAN, North Dakota
BILL FRIST, Tennessee RON WYDEN, Oregon
SPENCER ABRAHAM, Michigan MAX CLELAND, Georgia
SAM BROWNBACK, Kansas
Mark Buse, Staff Director
Martha P. Allbright, General Counsel
Ivan A. Schlager, Democratic Chief Counsel and Staff Director
Kevin D. Kayes, Democratic General Counsel
C O N T E N T S
----------
Page
Hearing held September 28, 1999.................................. 1
Statement of Senator Breaux...................................... 6
Statemenmt of Senator Burns...................................... 10
Prepared statement........................................... 10
Statement of Senator Cleland..................................... 9
Statement of Senator Dorgan...................................... 8
Statement of Senator Hollings.................................... 2
Prepared statement........................................... 2
Statement of Senator Hutchison................................... 1
Prepared statement of Senator McCain............................. 5
Statement of Senator Rockefeller IV.............................. 3
Witnesses
Frazier, Michael J., nominee, Assistant Secretary for Government
Affairs, U.S. Department of Transportation..................... 28
Prepared statement........................................... 30
Biographical information..................................... 30
Morgan, Linda J., nominee, Member of the Surface Transportation
Board.......................................................... 11
Oral statement............................................... 12
Prepared statement........................................... 14
Biographical information..................................... 21
Kennedy, Hon. Edward M., U.S. Senator from Massachusetts......... 6
Lofgren, Hon. Zoe, U.S. Representative from California........... 7
Van Beek, Dr. Stephen D., nominee, Associate Deputy Secretary and
Director, Office of Intermodalism, U.S. Department of
Transportation................................................. 36
Prepared statement........................................... 37
Biographical information..................................... 39
Appendix
Inouye, Hon. Daniel K., U.S. Senator from Hawaii, prepared
statement...................................................... 69
Response to written questions submitted by Hon. Ernest F.
Hollings to:
Michael J. Frazier........................................... 69
Response to Written Questions Submitted by Hon. John McCain to:
Dr. Stephen D. Van Beek...................................... 70
Michael J. Frazier........................................... 73
NOMINATIONS OF LINDA J. MORGAN, TO BE A MEMBER OF THE SURFACE
TRANSPORTATION BOARD; AND DR. STEPHEN D. VAN BEEK, TO BE ASSOCIATE
DEPUTY SECRETARY AND DIRECTOR, OFFICE OF INTERMODALISM, AND MICHAEL J.
FRAZIER, TO BE ASSISTANT SECRETARY FOR GOVERNMENT AFFAIRS, OF THE U.S.
DEPARTMENT OF TRANSPORTATION
----------
TUESDAY, SEPTEMBER 28, 1999
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The committee met, pursuant to notice, at 10:01 a.m., in
room 253, Russell Senate Office Building, Hon. Kay Bailey
Hutchison presiding.
Staff members assigned to this hearing: Virginia Pounds,
Republican professional staff; and Jonathan Oakman, Democratic
staff assistant.
OPENING STATEMENT OF HON. KAY BAILEY HUTCHISON,
U.S. SENATOR FROM TEXAS
Senator Hutchison. Good morning. Our hearing will come to
order.
The Commerce Committee meets today to examine the
qualifications of three individuals, who have been nominated to
serve in important transportation posts in the government.
I am pleased the President has decided to renominate Linda
Morgan for another term as Chairman of the Surface
Transportation Board. I think Ms. Morgan has done an excellent
job in the face of difficult circumstances and issues.
I believe that Congress could help Ms. Morgan by passing an
STB reauthorization and provide her guidance on some of the
major issues facing the rail industry and the STB. I also think
we can do that this year.
I have discussed it with Senator McCain, and he, too,
desires a reauthorization. I am committed to working with him
and all the affected parties so that we can get a bill out of
the committee before Congress adjourns this year. I plan to sit
down with the parties and Senator McCain in the near future.
I know that there are multiple views on this committee
about this issue. But I think we all agree that full and fair
competition is really the answer to any problems that are being
experienced in the rail industry. Fostering that competition
would be the best thing that we could do for our transportation
industry.
Let me also welcome before the committee our other two
nominees. Mr. Michael Frazier has been nominated to be
Assistant Secretary for Government Affairs at the Department of
Transportation. And Dr. Stephen Van Beek has been nominated to
be Associate Secretary and Director of Intermodalism for the
department.
I would also like to take a moment to welcome the family
members and special guests of our nominees in the audience.
At this time, let me turn the podium over to the ranking
member for a statement. And then I will invite the nominees and
Senator Kennedy and any other Members of Congress who will be
introducing the nominees today.
So, Senator Hollings, welcome.
STATEMENT OF HON. ERNEST F. HOLLINGS, U.S. SENATOR FROM SOUTH
CAROLINA
Senator Hollings. Thank you, Madame Chairman. You have made
my statement, in essence.
I support the confirmation of Michael Frazier and Dr. Van
Beek. And I particularly wanted to be here--I have another
conference ongoing--for the confirmation of Linda Morgan. She
served as counsel for our committee for years here, and did an
outstanding job. I have reviewed her statement.
The Surface Transportation Board under her guidance has
done an outstanding job in my opinion, really has accelerated,
handled more cases and everything else of that kind, and has
given satisfaction to the shipping community that they have so
long sought for.
And I know her. She is a better lawyer than me on these
things. And I will leave her to her own wits with all the cross
examination. But I appreciate it very, very much. I have a
prepared statement that I will insert in the record.
[The prepared statement of Senator Hollings follows:]
prepared statement of hon. ernest f. hollings, u.s. senator from
south carolina
I am proud to say that I have known Chairman Morgan for many years
and, while she is sitting on the other side of the table, I am pleased
to see her back in this room. Although we may not always agree, I have
a great deal of respect for her and know that two qualities she
possesses in abundance are fairness and integrity. Those qualities,
coupled with her commitment to public service, make her an outstanding
Chairman.
As many of you know, Linda Morgan served as counsel for the Surface
Transportation Subcommittee for eight years and then as General Counsel
for the Full Committee for seven years. During that time I found Linda
Morgan to be one of the most intelligent and thorough professionals
that I have worked with. She is smart and she cares about the issues --
I know that she is committed to her position as Chairman of the Surface
Transportation Board.
Linda Morgan has served as Chairman of the Surface Transportation
Board (STB) since it was created in 1995. Prior to that, she served as
Chairman of the ICC. In 1995 she was responsible for implementing the
changes that Congress envisioned in the Interstate Commerce Commission
Termination Act. She pared down the ICC and established a new, more
streamlined agency in its place, the STB.
Chairman Morgan is to be commended for her achievements and
commitment to the mission of the STB. The STB operates with only 135
people, half the staff of it predecessor, but it is charged with
regulating the entire railroad industry. Among her accomplishments,
Chairman Morgan has facilitated creating a more efficient process for
resolving rate disputes between shippers and carriers. Under her
leadership, she has helped the private sector come to agreements on
short line access and agricultural services arbitration which have
benefitted the entire transportation industry.
Chairman Morgan has done an outstanding job moving the agency
through several different phases. She successfully transitioned the
agency in 1995 from the ICC to the STB. She has seen the railroad
industry through three very large merger transactions. She helped
resolve the service issues in the West. And last year she ended the
practice of using product and geographic competition in determining
appropriate rates for shippers.
Linda Morgan has done a lot of heavy lifting during her tenure as
Chairman of the STB. She has my full confidence and support and I look
forward to working with her in the future.
I look forward to hearing from Michael Frazier, who is nominated to
be Assistant Secretary for Governmental Affairs at the Department of
Transportation. I am sure that he knows what he is getting into, but I
can imagine that keeping up with Secretary Slater, the U.S. Congress
and state and local elected officials will be enough to keep him very
busy. There are many transportation priorities before this Committee
that we will work together on: aviation, motor carrier, maritime,
pipelines and hazardous materials issues to name a few. I look forward
to hearing your thoughts on how we will coordinate our efforts on these
matters.
Since Dr. Van Beek has spent several years at the Department of
Transportation already, he seems well qualified for his position as
Associate Deputy Secretary and Director of Intermodalism. I have a
great interest in this office since my state has many modes of
transportation which are critical to the survival and growth of the
manufacturing industry. Intermodal traffic is the largest growth
segment of the transportation industry and one that certainly merits a
comprehensive review and the focus of the office which you have been
nominated to lead. I look forward to hearing how you will strengthen
the nation's ability to compete in the global economy and obtain the
optimum yield for the nation's transportation system.
I appreciate all three of the nominees appearing here before us
today and look forward to working with them.
Thank you.
Senator Hutchison. Thank you, Senator Hollings.
Senator Rockefeller, would you like to make a statement?
STATEMENT OF HON. JOHN D. ROCKEFELLER IV,
U.S. SENATOR FROM WEST VIRGINIA
Senator Rockefeller. I would, Madame Chairman. I do not
really have an opening statement, but I have some comments.
Obviously, we are going to have all three witnesses before
us. I am going to focus on Linda Morgan for the chairmanship
and where we are today and where I think we are going on
railroad issues. Ms. Morgan knows I have been very outspoken in
my views about the railroad industry and what I consider to be
their inexcusable and really destructive pattern of behavior in
terms of competition in key segments of our national rail
system.
As you know, Madame Chairman, together with Senators
Dorgan, Burns and Senator Roberts and Breaux and others in this
committee, including the chairman herself in other iterations,
we have expressed a lot of interest in curing some of these,
what I consider, outrageous behavior on the part of the
railroads.
I have introduced a bill. It addresses some of these
egregious practices. I am serious about the bill. It is a good
bill. It is an important bill. It proposes a solution to the
bottleneck issue, which is enormous. It codifies the market
dominance aspect that the STB made earlier.
It emphasizes competition as our rail policy. It eliminates
the rail revenue adequacy task, which is silly and beneath all
of us. As I say, it is an important bill.
I have invited feedback from the railroads. I have invited
compromise from the railroads. I have had an absolute open door
policy to the railroads. And in spite of my frustration with
them, I might say, and in spite of the fact that they have made
a very large issue in my home state of West Virginia, where I
remember everything and forget nothing, of saying that I am
trying to take jobs away from West Virginians and cause safety
problems, which further angers me and further causes me to--in
my motivation, rather than what they should be doing, which is
to improve rail competition and the economy of West Virginia.
As you might predict, the railroads have refused my
overtures. I have met with executives of various levels, of
various kinds. They refuse that there is even a problem, almost
laughing at me, at the situation, at the problems that I bring
up. And, of course, they refuse to come to the table.
In fact, many of them refuse to acknowledge that there
even, as I said, is a problem around. They sort of enjoy the
sparring, it seems to me, sort of verbal competition, no
concern about the economic consequences in our chemical
industry, coal industry and other industries at all.
And all of this, Madame Chairman, despite all of the
testimony brought before Ms. Morgan, before the STB, before
this committee by many of us on many occasions, the series of
GAO studies, which were absolutely devastating to the railroad
industry, absolutely devastating.
They ignore that, showed that some 70 percent of shippers
view the current system as fundamentally flawed, not to speak
of the intimidation, which is a routine part of their practice.
In any event, I am obviously very committed to making some
changes in this industry. And I would like to see us take up
and demand an STB authorization bill this year. I recognize the
high caliber and the deep nature of the lobbyists that this
very small group of class A railroads has assembled. Usually
when we have these meetings, it is the fullest hearing of any
of our sessions.
But we need to debate, Madame Chairman, in this committee
this year the tough issues about railroad competition. We
cannot avoid that. We need to talk about STB's serious
underfunding and understaffing. We need to talk about STB's
undermining of collective bargaining rights. And we need to
look at a variety of other things.
Now, Ms. Morgan knows that I have had my differences with
her. And yes, I would probably prefer to see somebody else as
chairman of the STB. But I honestly believe that the real
problem does not lie with her, but it relies with the law,
which is us, which is this committee to begin with. She has
made that clear in the past, and I will have questions for her
about this.
But I want to take up my bill. I want to take up your bill.
And I want to do it this year. And there are some very ugly
rumors going around here, some of which have been published,
that the leadership of the full committee on both sides is
talking about an effort to attach a clean, multi-year STB
reauthorization bill to an omnibus budget bill at the close of
the session.
That would be, in plain terms, a breaking of the word that
I had with the chairman of the committee and the ranking member
of the committee.
They had agreed to prevent this kind of deal from happening
in conversations that some of us have had with them earlier in
the year, last year and again earlier this year. Both of them
committed to allow us the opportunity, both of us, the
opportunity to bring amendments to an STB bill during committee
authorization this year.
I want to say publicly I would be very troubled and would
be inclined to be more mischievous and obnoxious on the floor
if there was a back room or a stealthy deal to circumvent this
word to this member and other members of this committee. And I
hope that the chairman will work with me and with Senator
Dorgan and others to make sure that this does not happen.
I thank the chairman.
Senator Hutchison. Thank you, Senator Rockefeller. I would
just respond by saying that I think it is very important that
we have a reauthorization. And I do not think a reauthorization
that does not address the issues and concerns that have been
brought forward since the emersion of the STB would not be in
anyone's best interest. I think it is important that we address
those concerns.
I think it is important that we come to terms so that we
assure a healthy rail system in our country and assure that
shippers have access to competition and fair pricing.
So I very much want that to happen. I have spoken to
Senator McCain about it. Even though we differ on substance, he
has said that we will be able to bring forward his bill and
then have the ability to amend. And that is fair.
So as long as we have the ability to discuss it, offer our
amendments, let the majority rule, that is the process. So that
is what I am pushing. And I hope very much for that to happen
this year.
I ask unanimous consent that Senator McCain's statement be
put in the record. Without objection, it will be.
[The prepared statement of Senator McCain follows:]
Prepared Statement of Hon. John McCain, U.S. Senator from Arizona
As Chairman of the Committee, I would like to thank Senator
Hutchison for chairing today's hearing on several pending nominations.
I also want to take this opportunity to express my strong support for
the reconfirmation of Linda Morgan to serve as a member, and Chairman,
of the Surface Transportation Board (STB).
Ms. Morgan's extensive professional experience and impressive
qualifications have been invaluable to the Board. Throughout her
tenure, she has consistently worked to enforce the transportation
policies and public interest standards as established by law. Ms.
Morgan further deserves our commendation for the leadership she
demonstrated in managing the closure of the Interstate Commerce
Commission (ICC) and the establishment of the STB. That was no small
feat. We owe thanks to both Chairman Morgan and her very dedicated and
capable staff.
Since its creation, the STB has made tremendous strides. It has
dealt with some of the most challenging rail transportation matters
that have arisen in many years, including the very difficult service
crisis in the West. It has also managed to reduce the backlog of
pending cases which it inherited from the former ICC. I can think of no
other federal entity that has carried out such a vast work load with
such a limited level of resources.
Many critical transportation decisions and responsibilities remain
before the STB and these challenges are not expected to diminish. The
achievements already attained by the Board are greatly attributed to
Chairman Morgan's tireless dedication and commitment. Therefore, in my
judgement, Linda Morgan's reconfirmation as Chairman of the STB should
be a top priority. The American citizens would be well served by Ms.
Morgan's reappointment. We need more forward-thinking and committed
individuals like Linda to serve in the federal government.
It is my intent for the Committee to act swiftly on her
confirmation.
Senator Hutchison. Senator Breaux, did you have an opening
statement?
Senator Breaux. Good morning.
Senator Hutchison. The best opening statement of the day.
Thank you.
[Laughter.]
Senator Hutchison. With that, I would like to ask Senator
Kennedy and Congresswoman Lofgren to come forward. If there any
other Members of Congress wishing to introduce nominees, I
would ask them to come forward at this time. And then after
their statements, I will call the nominees, and we will
proceed.
Senator Kennedy, I welcome you to the committee. And as you
can see, our committee is just easy going----
Senator Kennedy. Thank you very much, Madame Chairman.
Senator Hutchison. --just like judiciary, just what you are
used to.
Senator Kennedy. I thought the Human Resource Committee and
the Judiciary Committee were the only committees where we had
differences.
Senator Hutchison. Right.
Senator Kennedy. It is good to see that Senator Rockefeller
is in good spirits here this morning.
[Laughter.]
Senator Hutchison. Mischievous and devious, I think is what
he said.
[Laughter.]
STATEMENT OF HON. EDWARD M. KENNEDY, U.S. SENATOR FROM
MASSACHUSETTS
Senator Kennedy. Madame Chairman, I know we have a full
agenda here, but I wanted to take this opportunity to bring to
the attention of this committee really an outstanding public
servant, someone who has been a long and dear friend of mine,
and someone who has had a very distinguished life of commitment
in terms of public service. And that is Mike Frazier, who has
been nominated by the President with the support of the
Secretary to be Assistant Secretary of Transportation in the
area of Intergovernmental Affairs.
Michael Frazier worked in my office for a number of years,
starting in 1985. And in 1986, when we had the real debate here
in the Congress of the United States on the issue of apartheid,
in which I was very active with a number of other members of
the Senate, Mike Frazier was one of the very strong and
effective staff members whose knowledge about the situation and
whose help and assistance in the development of legislative
strategy were absolutely invaluable, not only working with one
side of the aisle, but working on both sides of the aisle.
It was at that time when I became enormously impressed with
his ability. Since that time, he has been involved in a number
of different areas of important responsibilities, serving as
Senator Moseley-Braun's chief of staff, where he gained
experience in terms of management techniques and budgetary
factors.
Over the period of recent years, he has worked very
effectively as Deputy Assistant to the Assistant Secretary in
the area of intergovernmental affairs.
He has a broad and wide understanding, I believe, of local
government, of state government, as well as a broad experience
in terms of the functioning of the House and the Senate. He
also has experience in the Department of Transportation.
I find him diligent. I find him hardworking. I find him
absolutely trustworthy. And I find him strongly committed to
the best in terms of public service.
I think we are very lucky to have him as a nominee. I know
he will do an outstanding job in this position, if approved by
this committee.
I know his mother is here today. I know she will be
recognized by Christine Cooper and the Cook family and the
Qualter family and a number of other friends. I know how proud
they are of Mike Frazier for all that he has represented in
terms of someone who has been a loving son and devoted to his
mother and members of his family. He is really an extraordinary
individual.
I have the highest recommendation for him. Many times we
are in situations where we make representations and appear
before committees on the basis of individuals we have some
knowledge of or some awareness of. But today is a very special
privilege and a real pleasure because of my very, very high
regard for him. I know he will do an outstanding job. I would
hope the committee would consider him favorably.
Senator Hutchison. Thank you, Senator Kennedy. I certainly
appreciate your taking the time to come on behalf of your
friend and colleague, Mr. Frazier.
Representative Zoe Lofgren for Dr. Van Beek.
STATEMENT OF HON. ZOE LOFGREN, U.S. REPRESENTATIVE
FROM CALIFORNIA
Ms. Lofgren. Thank you, Madame Chairman, members of the
committee. I am pleased to be here today to talk about someone
I have known for years and whom I respect a great deal. That is
Stephen Van Beek.
Following his graduation with a bachelor of arts degree in
political science from the University of California Santa
Barbara, Steve served as a legislative assistant in the House
of Representatives from 1983 to 1986. He then returned to study
at the University of Virginia, earning both a master's degree
and a doctorate in government and foreign affairs.
Afterwards, he taught as a professor of political science
at San Jose State University, a position from which he is
currently on leave. It was there, while teaching at that fine
university in the heart of my district, that we met.
Steve's knowledge of and experience in public
administration and transportation is impressive by any
standard.
While at San Jose State, he taught and wrote about the
American political system in transportation. He has published
more than a dozen studies and articles and was also a research
associate at the Norman Manetta International Institute of
Surface Transportation Policy Studies, where he participated in
studies on transit policy and transportation education.
He has already proven himself as a capable administrator at
the Department of Transportation in the Research and Special
Program Administration (RSPA), where he has served as Special
Assistant and Deputy Administrator for Modal Administration.
As chief operating officer responsible for 870 employees
and a $300 million budget, he shaped the RSPA's strategic plan,
research and technology strategies, emergency preparedness and
response activities, and new regulations for the pipeline and
hazardous material safety programs.
Also as a member of the Secretary's management council at
the Department of Transportation, he has been a leader in
establishing a quality award process and championing a
management development process for the future of the DOT. He
played a strong role in strengthening ties with minorities
serving institutions, colleges and universities.
His distinguished career inside the educational world and
within government demonstrates his strong ability to serve as
the senior advisor and representative of the Department of
Transportation. I know absolutely that he would be an asset to
our government at the Department of Transportation in the
position of Associate Deputy Secretary.
I am so pleased that the President has recognized him with
this nomination. I hope that you will advise that the Senate
should consent to his nomination. I would further add that
Steve is someone with whom you will enjoy working. He is
responsive, smart, and public spirited. Indeed I think we are
lucky that he is willing to take time out of his academic
career to serve in the public sector for this short period of
time.
Thank you very much for listening to me this morning.
Senator Burns [presiding]. We thank you for your statement
today. Since the chairman has jumped up and run away--what did
she do, get scared or what?
[Laughter.]
Well, let me see. I guess I am about the only Marine up
here, right? The odds are about right.
[Laughter.]
Senator Burns. I think--Senator Dorgan, I understand that
you have come late, and I just got here. Do you have an opening
statement that you would like to give at this time, before we
call the witnesses?
STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR FROM NORTH
DAKOTA
Senator Dorgan. Mr. Chairman, I will just briefly mention
that I am interested in a number of issues. I specifically will
want to ask Linda Morgan a couple of questions about the Rail
Shipper Protection Act and the issues related to the
overcharging of consumers and shippers in my State of North
Dakota and around the country. She well knows my concern about
that and the concern of a number of us who have introduced
legislation.
I was going to inquire, and I understand Senator
Rockefeller has inquired, about the opportunity to offer
amendments to the Surface Transportation Board reauthorization,
about the opportunity to get a hearing on the piece of
legislation that you have worked with us on, the Rail Shipper
Protection Act.
These are very important issues. We have not made as much
headway as we should and as we will. So we need the
opportunity, and a hearing is one opportunity. The ability to
amend the STB Reauthorization Act is another.
And one other opportunity, of course, is with the
renomination of Linda Morgan to hope and expect that we will
also have a very aggressive administrator and commissioner to
work on these issues.
But I will ask Linda Morgan some questions about that. My
understanding is that the response to the request for hearings
on the Rail Shipper Protection Act has been positive and that
we will be able to expect to have a hearing on that, which I
think will be a positive development.
Senator Burns. That is correct.
Oh, you are back.
Senator Hutchison. Yes.
[Laughter.]
Senator Hutchison [presiding]. I would like to call the
nominees forward. Was there someone else who wanted--were you
trying to give an opening statement?
Senator Burns. I have a little statement I would like to
make, if the chairman does not mind.
Senator Hutchison. All right. Let me just say that we have
had a period for opening statements. And then we went forward
with the hearing. I will drop back for anyone who wishes to
make an opening statement, but we also have the ability to
question witnesses.
So with that, however----
Senator Burns. Well, I have been since 6 o'clock making it
in from Tysons Corner this morning. So----
Senator Hutchison. So because of that and because----
Senator Burns. I have been on the world's largest----
Senator Hutchison.--these nominees are going to have the
power to ease the traffic jams----
[Laughter.]
Senator Hutchison. So let us not make them too mad.
Well, in that case then----
Senator Burns. Mr. Dorgan has made his statement.
Senator Hutchison. I see. OK.
Senator Burns. I will submit my statement for the record.
Senator Hutchison. No. I understand.
Senator Burns. And I will be very short.
Senator Hutchison. That is fine. Say what you would like to
say, and then I will call on Senator Cleland. And then we will
ask the nominees to come forward.
STATEMENT OF HON. CONRAD BURNS, U.S. SENATOR FROM MONTANA
Senator Burns. Madame Chairman, thank you very much. I just
want to--I will have some questions for Ms. Morgan also this
morning.
But anybody that thinks that the Surface Transportation
Board is working on behalf of shippers right now and on behalf
of the majority of people in this country, I have a little
piece of land out in Montana that I will guarantee that you
will get gold and silver on. It is just not working right now.
And when I come home this time, after meeting some of my
shippers in Montana, which is principally agriculture, we are
getting killed. And I will go back. We have some real problems
in agriculture, and some of it goes right back to
transportation. It goes back to 3 years. And now it is rates.
Everybody is living on the backs of this producer, including
our good friends that are in rail transportation.
And I realize we have to have them, but there has to be
some fairness. And small shippers and big shippers alike have
got to have some kind of a way to gain forum before this
transportation board.
And we need to move our bill that Senator Rockefeller and I
and a host of us, and Senator Dorgan, have worked on to get rid
of this bottleneck and to get some equity on shippers, because
we cannot continue to see this kind of a situation continue.
So I thank the chairman for holding this hearing. I have
some questions for the witnesses, and I have a prepared
statement that I will insert in the record.
[The prepared statement of Senator Burns follows:]
prepared statement of hon. conrad burns u.s. senator from montana
Thank you Madam Chairwoman, I would like to thank you for chairing
this full committee hearing in the absence of the chairman.
Today, we will be discussing the renomination of Linda Morgan to
the Surface Transportation Board. During the last couple of weeks many
rumors have been reported about the intent of members regarding this
nomination. I also understand this nomination is very important to the
ranking member of this committee.
However, there are many questions that, although they have been
responded to in past proceedings before this committee, remain
unanswered.
I want answers to those questions. I want to know what the Surface
Transportation Board is going to do about the excessive rates Montana's
farmers pay to transport their grain to market. I want to know what the
STB is going to do to make the rail rate complaint process more
accessible and affordable for small shippers.
It remains a mystery to me how this body can continue to support
the Surface Transportation Board's policy that has a very poor record
of providing an adequate forum to the nation's small shippers.
I ask my farmers why they aren't more vocal. Their response? They
have given up. Let me remind my colleagues about McCarty Farms vs.
Burlington Northern. McCarty Farms was a group of Montana grain farmers
that brought a class action suit against the Burlington Northern in
1980 challenging the rates charged for transporting wheat from Montana
to Portland. This suit was presented to the STB's predecessor, the ICC
(Interstate Commerce Commission) in 1980 and eventually awarded in the
favor of Burlington Northern in 1997. And the case remains in appeal.
I would also like to say that the STB's decision on product and
geographic competition was an admirable effort to discontinue railroad
legal strategies but that will not have a significant impact on
providing competitive rail service. In fact, Montana's rail
transportation is so desperate that very few elements of S. 621 would
even have an impact on my state.
I must say that I am not impressed with the actions of the STB and
until I start to see the scales of justice leveled out between the
shippers and railroads, I will continue to oppose the continued
policies of this Board.
I have a few questions I would like to ask Mrs. Morgan in a few
moments. Thank you, Madam Chairwoman.
Senator Hutchison. And, Senator Cleland, did you have an
opening statement?
Senator Cleland. Madame Chairman, thank you very much. I do
not have an opening statement today. We are just delighted to
have the witnesses with us.
Thank you very much.
Senator Hutchison. I would like to ask the three nominees
to come forward. And as they are coming forward, I will say
Senator Breaux won the award for best opening statement.
Senator Breaux. Thank you.
[Laughter.]
Senator Hutchison. Before we start, I would like to ask any
of the nominees whose families are with them, if they would
like to take this opportunity to introduce them. They are very
important to the work that you do, and they should be
recognized.
Ms. Morgan. Well, I do have my husband, Michael Karam, in
the audience. And I do want to take this opportunity to thank
him for all of his encouragement and patience during these last
few years.
Needless to say, it seemed many times as though there was
no friend in sight, but I could always count on his friendship
and support. I could not have survived these last few years
without him. I am grateful for that.
Senator Hutchison. Thank you.
Mr. Frazier.
Mr. Frazier. Madame Chairwoman, I do have my mother in the
audience, who I would like to acknowledge during the course of
my statement. So I will pass until then.
Senator Hutchison. Thank you.
Dr. Van Beek.
Dr. Van Beek. Yes. Madame Chairwoman, I would like to
introduce Elizabeth Tucker Van Beek, my wife, who has been
generous in her support as I have gone through this process.
And she is also an ex-Senate staffer.
Senator Hutchison. That will win you points.
All right. Ms. Morgan.
STATEMENT OF THE HON. LINDA J. MORGAN, NOMINEE, MEMBER OF THE
SURFACE TRANSPORTATION BOARD
Ms. Morgan. Yes. Well, I know that there will be many
questions for me today. And I do have an oral statement. But as
I see the situation here, I think what I would like to do is to
ask your indulgence that I be able to insert in the record my
written statement, which you already have, and my oral
comments, so that I do not take up the time of the committee
today, as I know there will be time spent on questions.
But I did want to spend just a couple of minutes now. First
of all, I do want to recognize the presence of my two fellow
board members, Vice Chairman William Clyburn and Commissioner
Wayne Burkes. I appreciate their support here today and every
day, as we strive at the Board to remain committed to
competence, fairness, professionalism and collegiality.
I also have some Board employees in the room. I always say
that the leader is only as good as those who are led. And the
Board employees are some of the finest public servants around,
and I feel privileged to have had the opportunity to work with
them over the last few years.
I particularly thank members of my personal staff, who are
in the audience. They have had quite a challenge these last few
years, but have met the challenge without skipping a beat. I
did not want to miss this opportunity to thank my fellow Board
members and the staff.
With that, I think I will just let the other two nominees
give their oral statements, or however you want to proceed,
because I know that the time is limited.
[The oral statement, prepared statement, and Biographical
Information of Ms. Morgan follow:]
Oral Statement of the Hon. Linda J. Morgan, Nominee, Member of the
Surface Transportation Board
Thank you for the opportunity to appear before you on the occasion
of my renomination by President Clinton for a second term on the Board.
I am honored that President Clinton has reappointed me, and I look
forward to assisting the Committee as it considers my qualifications
for reappointment.
I would like to spend a few minutes making some personal remarks
and then a few minutes making some substantive remarks.
Turning to my personal remarks, a few introductions and related
comments are in order.
I understand that my husband, Michael Karam, is in the audience. I
thus take this opportunity to thank him for all of his encouragement
and patience, particularly during the last few years. When it seemed as
though there was no friend in sight, I always could count on his
support. I could not have survived these last few years without him,
and I am eternally grateful.
The other important family member I wish to recognize is my 14-year
old daughter, Meredith, who is not here but instead is enjoying, I am
sure, another challenging day in 9th Grade. I want the record to show
that I could not have managed these last few years without her
resilience and understanding, for which I also am eternally grateful.
I also wish to note the presence of my two fellow Board Members,
Vice Chairman William Clyburn and Commissioner Wayne Burkes. I
appreciate their support here today and every day as we strive at the
Board to remain committed to competence, fairness, professionalism, and
collegiality in our work.
There are also some Board employees in the room. I always say that
a captain is only as good as the team; that a leader is only as good as
those being led. The Board employees are some of the finest public
servants around, and I feel privileged to have had the opportunity to
work with them and to lead them over the last few years. And I
particularly thank the staff members from my personal office, who have
had quite a challenge in the last few years but who have nevertheless
met the challenge without missing a beat. I could not have done it
without the commitment of all of these employees.
I also wish to make a few personal comments to you, Senator
Hollings. As I was mentally preparing myself for this hearing today, I
was reminded of my first nomination hearing over 5 years ago, which you
kindly chaired, and of my swearing-in ceremony at which you did the
honors. While at that time I had a general understanding that I would
face challenges, I had no idea how challenged I really would be.
In this regard, Senator Hollings, you need to know that not one day
goes by without my feeling grateful for the 11 years I spent under your
tutelage. You taught me toughness, intellectual rigor, and fairness in
understanding all sides of an issue. By your example, I learned the
value of responsible public service, of loyalty to purpose, and of
personal and professional integrity. If I have erred during my first
term, it was not because you did not provide me with the necessary
tools. I am eternally grateful for your good training and good example.
And finally, let me say to the other Members of this Committee that
I certainly have appreciated the professional courtesy and interest of
Members as we have tackled the many challenging transportation issues
that have confronted all of us during the last few years. If confirmed,
I look forward to our continued constructive interactions.
______
Now, let me turn to my substantive comments. I have submitted
written testimony with attachments that I ask be included in the record
in full. I will make a few additional oral remarks, focusing
specifically on rail matters.
During my Chairmanship, I have faced many challenges, including the
termination of the ICC and the significant restructuring that has gone
on in the rail industry. This has been a period of transition,
volatility and unrest in the rail sector as all elements have struggled
with the changing environment. During this time, shippers have raised
concerns about inadequate service, rate levels, and the complexity of
the regulatory process for resolving disputes and obtaining redress.
And employees have raised concerns about the negative effects of this
railroad restructuring on their rights.
I believe that the Board has heard these concerns and has responded
to them appropriately and to the fullest extent in accordance with the
law. We have applied a common sense approach to these issues, promoting
private-sector initiatives and resolution where appropriate and
undertaking vigilant government oversight and action where necessary.
With respect to rate and service issues, I believe that in the past
few years, we have done more to address specific shipper concerns than
anyone had done in a long, long time. We have decided rate complaints
promptly; we have streamlined the rate review process; we have repealed
the product and geographic competition standards; and we have adopted
small rate case guidelines. We have also adopted rules permitting a
shipper receiving poor service to obtain the services of a new carrier.
And we have brought together large and small railroads, and
railroads and their customers, to communicate commercially with each
other as they have not done in years. As a result, we have seen large
and small railroads work out an unprecedented agreement that sets rules
for more balanced dealings; we have seen the Association of American
Railroads and the National Grain and Feed Association reach
groundbreaking agreements providing for arbitration or mediation to
settle disputes; and we have seen the railroad industry and the shipper
community getting together for regular and ongoing formal outreach
sessions that would have been unheard of before.
I know that some shipper groups say that we have not done enough.
However, I believe that significant steps have been taken to alter the
rail environment in a positive way, and the support that we have
received from shippers for what we have done testifies to that.
In addition to the broader initiatives that have been undertaken to
address shipper concerns, the Board has been faced with specific
matters that have affected the shipping community. Shippers of course
were significantly impacted by the service crisis in the West. We
vigilantly monitored the situation; we worked informally with shippers
to fix specific problems; and we formally redirected operations in a
focused and constructive way. In addressing this situation, the Board
had to be careful not to take actions that would inadvertently harm
certain shippers and regions while helping others. And we ensured that
our actions did not undermine, but rather encouraged, important
private-sector initiatives that facilitated and were integral to the
service recovery that has occurred.
Under my Chairmanship of the Board and the ICC before that, four
mergers involving large railroads have been approved, which were
supported in varying degrees by the shipping community, as well as
employees and various localities. To address concerns raised by those
mergers, we encouraged private-sector agreements, and where agreements
were not reached, we imposed many significant conditions protecting
competition, the environment and safety, and employees, and providing
for oversight of both competitive and operational issues. We concluded
that these mergers as conditioned would not diminish competition and in
fact could enhance competition, would produce transportation benefits,
and were otherwise in the public interest. The Board will continue to
exercise its oversight authority in accordance with these objectives.
With respect to rail labor matters, employees have raised concerns
about the direction taken by the ICC starting in the mid-1980s
regarding the override of collective bargaining agreements (CBAs) in
connection with rail consolidations. I believe that we have acted on
these concerns. Even in the face of statutory language and court
precedent on CBAs not favorable to rail labor's position, I believe
that the Board under my Chairmanship has worked to move the disposition
of these matters in what I view as a more positive direction for rail
employees. The Board*s focus on narrowing what can be overridden by
arbitrators in its Carmen III decision, the messages that it has sent
in recent merger decisions regarding overrides, its use of stays in the
arbitration appeals process, and its efforts to leave labor matters to
private negotiation as much as possible, I believe, have all resulted
in a more level playing field that has produced more privately
negotiated agreements between labor and management than we have seen in
recent memory.
I understand that labor concerns remain. As I suggested in my
December 21 letter, to ensure that the positive trend is secured, and
that consolidations found to be in the public interest can be carried
out with minimal disruption to all involved, legislation would be an
appropriate way for Congress to reflect an interest in preserving CBAs
and the wisdom in promoting private negotiation.
In closing, let me say that I believe that my record exemplifies a
focus on constructive change to address concerns that have been raised
during this period of transition and unrest. Under my Chairmanship, the
Board has changed in significant, and I believe positive, ways the
rules applicable to shipper issues regarding rates and service. We have
brought about positive change in the way in which the railroads are
interacting with their customers, and in the way larger railroads are
interacting with smaller railroads. We have worked to make the playing
field more level between labor and management and encouraged private
negotiation as the way of resolving employee issues. And we have
addressed environmental and safety issues in innovative and
constructive ways. I have listened to the concerns of the various
segments of the rail community, as well as those of Members of this
Committee, and have acted on these concerns in accordance with the law
that the Board is charged with implementing.
I realize that concerns remain. I am committed to continuing the
positive momentum that has been brought about by the change that has
been initiated under my Chairmanship, and I will continue to look for
appropriate ways to address ongoing concerns. At the same time, as I
have indicated to this Committee in my December 21 letter and in prior
testimony, there will be areas in which legislation will be necessary
if Congress believes that the current direction is still not good
enough.
During my first term, I have been committed to implementing the law
as I believe Congress intended. I have had no personal or political
agenda. If confirmed, I look forward to continuing to work with this
Committee and interested parties on the transportation issues that
confront us, particularly in hopes that we can bring more stability and
certainty to the rail sector.
I would be happy to answer any questions that you may have at this
time.
______
Prepared Statement of the Hon. Linda J. Morgan, Nominee, Member of the
Surface Transportation Board
introduction
My name is Linda J. Morgan, Chairman of the Surface Transportation
Board (Board). I am appearing at the request of the Committee to
discuss my renomination to the Board. I have already appeared before
this Committee twice over the past two years in connection with the
Board's reauthorization hearings, and have discussed at great length
the issues before the Board and the accomplishments of the Board under
my Chairmanship. For easy reference, I have appended as Attachments 1
and 2 the written testimony (without attachments) that I submitted for
those two hearings [available in S. Hrg. 105-1062 and S. Hrg. 106-624].
This hearing is a bit different from the two recent reauthorization
hearings, in that it is intended to focus more on me personally and on
my record than on the Board as an institution. Nevertheless, as I have
been Chairman of the Board since its creation, I have been of necessity
an integral part of everything that the Board has done. Therefore, any
questions that might arise in this hearing, particularly regarding rail
matters, could overlap with those that have been previously addressed
at the reauthorization hearings. Accordingly, this written testimony
briefly reviews my approach and my record, with an emphasis on major
rail issues that have been raised in connection with Board decisions.
the transition to the board
I was named Chairman of the Interstate Commerce Commission (ICC),
the Board's predecessor, in March 1995, just as the Congressional
deliberations over what was to become the ICC Termination Act of 1995
(ICCTA) were getting underway. I faced several challenges during that
first year of my Chairmanship. I had to motivate the ICC's staff to
continue to produce notwithstanding the uncertainty surrounding their
personal futures and the future of the agency at which many of them had
worked for their entire professional careers. I worked with Congress to
ensure that whatever bill was ultimately passed would be workable. And
I had to figure out, once the ICCTA became law, how to make the
transition from the ICC to the Board on just a few days' notice between
Christmas and New Year's Day. The days after the passage of the ICCTA
presented many logistical challenges of their own. Fewer than half of
the personnel who had worked for the ICC were retained by the Board.
Yet, the case load remained heavy, and indeed increased in complexity
and degree of challenge, particularly with the significant
restructuring taking place in the rail industry and the focus of
parties on testing the law in certain areas. We had to find ways to do
more with less.
We hit the ground running, and quickly became what I believe to be
a model Federal agency. We were given many rulemaking deadlines in the
ICCTA, and we met each and every one of them. We revamped the old ICC
regulations to reflect the new law; we streamlined the regulations that
remained relevant to make them work better; and we issued new
regulations so that we could move cases to resolution more quickly. And
we did move cases faster, and as a result have made great strides in
clearing up the docket.
Many of the cases that we have tackled at the Board--some of which
had been pending at the ICC for many years, and some of which have been
new--have been extremely difficult and controversial. But one of the
messages that I have delivered to the Board's staff repeatedly is that
parties that bring disputes to the Board want and should have the
certainty of resolution and that we are here to make decisions in hard
cases. Not everyone will like every decision we issue, but our job is
to take the controversies that come our way, review the records
carefully, and then put out decisions as expeditiously as possible that
implement the law to the best of our ability. The competence of our
staff and the integrity of our decisionmaking process are reflected in
our record of success in court: since I became Chairman on March 24,
1995, of the several hundred ICC and Board cases decided, 134 decisions
have been challenged, and only 8 of those challenges were successful,
with 19 not yet decided by the courts. Fair and expeditious case
resolution and the certainty and stability that come from success on
appeal will continue to be objectives of mine if I am confirmed for
another term at the Board.
the board's overall approach to its responsibilities
under my chairmanship
I believe that the Board under my leadership has been a model of
``common sense government,'' promoting private-sector initiative and
resolution where appropriate and undertaking vigilant government
oversight and action where necessary. In many circumstances, private
sector initiative can provide for better solutions because it can be
tailored to the needs of the individual parties, can go beyond what
government is able to do under the law and with its resources, and can
create a dynamic in which all the parties to the initiative have been
involved in its development and thus are invested in its success. And
government can use its presence and its processes to encourage such
results.
The work of the Board exemplifies the balance of private-sector and
government action. With regard to the rail crisis in the West, for
example, the Board required substantial and unprecedented operational
reporting, engaged in substantial operational monitoring, and
redirected operations in a focused and constructive way. The Board was
successful in working on an informal basis with affected shippers to
resolve service problems, and it was careful not to take actions that
might have helped some shippers or regions but inadvertently hurt
others. And the Board proceeded in such a way as not to undermine, but
rather to encourage, important private-sector initiatives that
facilitated and were integral to service recovery, such as the
unprecedented creation of the joint dispatching center near Houston,
TX, and the significant upgrading of infrastructure.
With the active encouragement of the Board, the National Grain and
Feed Association and the Association of American Railroads recently
reached groundbreaking agreements on issues of concern to agricultural
shippers that provide dispute resolution procedures that are more
tailored to the interests of both parties. These agreements will
hopefully provide a model for other such carrier/customer agreements.
Furthermore, the Board has attempted to move in the direction of
private negotiation rather than government fiat as the way of resolving
employee matters, a trend which I discuss later in my testimony.
There are circumstances in which more direct government action is
necessary, and in such situations, the Board has used its authority
appropriately, creatively, and to the fullest extent in accordance with
the law. For example, responding to the concerns of Members of this
Committee, and in particular Chairman McCain and Senator Hutchison, we
held extensive hearings on access and competition in the railroad
industry, which resulted in a broad mix of private-sector and
government initiatives, summarized in my letter to Senators McCain and
Hutchison dated December 21, 1998 (December 21 letter). Those
initiatives included the revision of the market dominance rules to
eliminate product and geographic competition as considerations in rate
cases and the adoption of formal rules providing for shipper access to
a new carrier during periods of poor service. They also included the
formal railroad/shipper customer service ``outreach'' forums (which I
have attended) that are continuing to be held on a regular basis, and
that have produced, for the first time, the public dissemination of
performance data by the major railroads. And they included the
unprecedented formal agreement between large and small railroads
addressing certain access issues of concern to the smaller carriers and
to various members of the shipping public, the implementation of which
the Board will be closely monitoring.
In individual cases brought to it, the Board has used its authority
fully as well. For example, in a case in which Amtrak sought to carry
certain types of non-passenger traffic, we interpreted the statute in
such a way as to bring about a private agreement between Amtrak and
individual freight railroads on the matter after the Board's decision
was rendered. In railroad consolidation and construction proceedings,
our process has encouraged private-sector solutions with respect to
environmental and other issues, but where the private parties have been
unable to reach resolution, the Board has imposed conditions to remedy
the concerns expressed in a way that preserves the benefits of the
transaction under consideration. And with respect to the ``bottleneck''
rate complaint cases (involving rates for a segment of a through
movement that is served by a single carrier), while shipper parties
argued that the Board should have gone farther in granting rate review,
the Board's decisions do provide for rate relief where there is a
contract for the non-bottleneck segment, based on a pragmatic reading
of the statute that is being challenged in court by the railroads.
I should note that there have been times when a more expansive
reading of the statute by the Board has not been upheld. Of the handful
of court cases that the Board has lost, one involved an abandonment in
West Virginia that the Board disallowed in reliance on a broad view of
the ``public interest''; another involved a labor case in which the
court found that the Board acted beyond the scope of the law by
interpreting the labor protection provisions of the ICCTA as covering
too broad a class of employees of class II railroads.
If confirmed, I will continue the theme of common sense government.
I will continue to apply the Board's authority as necessary and
appropriate, acting directly or promoting private-sector initiative.
rail mergers and competition
One of the areas in which the Board has issued some high-profile
decisions under my Chairmanship involves rail mergers. Some have said
that rail mergers are inherently anti-competitive, that they cause
service problems, and that we should be discouraging them. Although
mergers and other changes in corporate structure have been going on in
the rail industry for many years, I recognize that there has been
substantial rail merger activity since the Staggers Rail Act of 1980
was passed, reflecting what has been occurring throughout the Nation's
economy. In 1976, there were, by our calculations, 30 independent
``class I'' (larger railroad) systems; nine of those systems have since
then dropped down to class II or III (smaller railroad) status because
the revenue thresholds for class I status were raised substantially
some years ago; two large carriers went into bankruptcy; and the
remaining 19 systems have been reduced to 7 independent systems in the
past 23 years. Not all of that has happened under my Chairmanship, nor
has it occurred because the Board (or the ICC) has sought out mergers.
When market conditions motivate two class I railroads to want to merge,
our statute tells us to review the proposal presented to us, applying
certain statutory standards, and to approve the merger if it is in the
public interest.
On the basis of the governing statute, under my Chairmanship of the
ICC and the Board, four class I rail mergers have been approved. These
mergers were not approved, however, without many significant Board-
imposed competitive and other conditions. The conditions in a variety
of ways provide for substantial post-merger oversight and monitoring
that permit us to stay on top of both competitive and operational
issues that might arise. They provide for the protection of employees
and the mitigation of environmental impacts, and our recent decisions
provided for the compilation of a ``safety integration plan'' that
draws on the resources of the Board, the Federal Railroad
Administration, and the involved carriers and employees. And they
assure that no shipper's service options were reduced to one-carrier
service as a result of a merger.
In varying degrees, these mergers have had the support of segments
of the shipping public, as well as employees and various localities,
and were considered by interested parties to be in the public interest.
A variety of shippers actively supported the Burlington Northern/Santa
Fe merger, the inherently procompetitive Conrail acquisition, and the
recent Canadian National/ Illinois Central (CN/IC) merger. And the
Union Pacific/Southern Pacific merger, which segments of the shipping
community opposed while others supported it, was necessary, the Board
believed, not only to prop up the failing Southern Pacific, but also to
permit the development of a rail system in the West with enough of a
presence to compete with the newly merged Burlington Northern/Santa Fe.
Some say that, while each merger, reviewed individually, might seem
acceptable, the cumulative effect is that the industry is now too
concentrated, and so competition must be added throughout the industry
to temper this new market power. As I have testified previously, in
analyzing this premise, we must carefully review proposals intended to
address it. We should want to make sure that the rail system will look
the way we want it to look for now and for the future. We have to be
sure about the mix of shippers that will be served, about the level of
rates that will be charged and the service that will be provided, about
the quality and extent of the infrastructure that will exist, and about
the impact on employees, and that the result in those areas is what we
want. As I have also testified before, as we examine proposals for
change, we must be sure that we do not take actions that, while perhaps
benefitting some shippers or regions, could hurt others in an
unintended way. Of course, if I am confirmed, I will faithfully
implement any changes to the law that Congress might adopt.
In any event, the Board will continue its active oversight of rail
service and the implementation of these four mergers. In approving
these four mergers, the Board (and the ICC before that) concluded that,
with all the conditions imposed, they would not diminish competition
and in fact could enhance competition; would produce significant
transportation benefits; and were otherwise in the public interest. The
Board will continue to exercise its oversight authority in accordance
with these objectives.
rail rate and service issues
Since becoming Chairman of the ICC and then of the Board, I have
tackled several important rail rate and service matters, and in this
regard I believe that I have been responsive to shipper and other
concerns in accordance with the law. In particular, I have been
committed to resolving formal and informal shipper complaints
expeditiously, clarifying applicable standards for resolution of formal
complaints, and leveling the playing field to ensure that the formal
process is not used simply to delay final resolution and that it
encourages private-sector resolution where possible. I believe that my
record reflects those objectives.
With respect to rate matters, the Board has established deadlines,
never before in place, and procedures to expedite the decisional
process, and decisions resolving large rail rate complaints have
refined the standards for developing the record in these cases.
Furthermore, as I have already noted, we eliminated the product and
geographic competition elements from the market dominance rules, and I
feel confident that this action will be upheld by the court in the
appeal brought by the railroads. The ``constrained market pricing''
(CMP) procedure for determining whether a rate is reasonable or not is
now a well accepted way of measuring rate reasonableness for larger
rate cases, and of the three large rail rate cases that have been
decided by the Board, the shippers won two, while the defendant
railroad won one. Some new large rate cases are pending, and several
others have been settled without involvement of the Board.
Although most parties agree to the use of CMP in major rate cases,
not all agree as to how it should be applied. Thus, much debate over
the past two years has centered on the Board's ``bottleneck'' decisions
that I referenced earlier, which construed the statute as permitting
challenges to bottleneck rates (as explained before, rates for a
segment of a through movement that is served by a single carrier) only
when the shipper has a contract over the non-bottleneck segment. The
court reviewing the challenge to those decisions brought by the
shippers--which sought a broader interpretation of the availability of
bottleneck segment rate challenges--found that the Board had correctly
interpreted the existing statute. With respect to the relief granted by
the Board, the appeal of the bottleneck decisions brought by the
railroads--in which the railroads are asking the court to require the
Board to adopt a more narrow interpretation of the availability of
bottleneck segment rate challenges--is still pending before the D.C.
Circuit. Two bottleneck rate challenges pursuing the rate relief
provided in the Board's bottleneck decisions are currently before the
Board.
The Board at the end of 1996 adopted simplified rules for small
rail rate cases. However, no such cases have been brought to date under
these rules. Concerns remain that those rules are still too complex. In
my December 21 letter, I explained that the Board's rules reflect the
statute and the standards that must be balanced, but I also recommended
that Congress consider adopting a single benchmark test or some other
simplified procedure for small rate cases to address those process
concerns.
On the matter of service, as I discussed previously, the Board
applied its formal and informal powers judiciously in dealing with the
recent rail service crisis in the West. And it is actively monitoring
and dealing with service issues in the East in connection with the
implementation of the Conrail acquisition. In addition, as I also have
noted, we have adopted new rules that permit a shipper to obtain the
services of an alternative railroad when service is poor. Those rules,
which require prior consultation among all of the involved parties to
ascertain whether the problem can be readily fixed by the ``incumbent''
carrier, and, if not, to make sure that the proposed service will solve
the problem without creating new problems, have been invoked in three
cases thus far. In one, the Board granted relief; in the other, the
parties worked out their concerns privately before the Board acted; and
the third case is still pending. I believe that the Board can fully
address service disruptions.
rail employee issues
Background. Under the law, the Board becomes involved in rail
employee issues as a result of its approval of various types of rail
transactions. Certain significant employee issues are raised by class I
consolidations. When larger railroads consolidate, the individual
collective bargaining agreements (CBAs) and protective arrangements
into which the merging railroads earlier entered are not always
compatible. The law that the Board administers provides for imposition
of the so-called New York Dock conditions upon such transactions. The
New York Dock conditions have their origins in the negotiated
Washington Job Protection Agreement of 1936, which sets up the
framework within which consolidations are to be carried out. New York
Dock provides (1) substantive benefits for adversely affected employees
(including moving and retraining allowances, and up to 6 years of wage
protections for employees dismissed or displaced as a result of the
consolidation), and (2) procedures under which carriers and employees
are to bargain to effectuate changes to their CBAs if necessary to
carry out the transaction, with resort to arbitration and, as a last
resort, limited Board review if bargaining is not successful.
When the parties go to arbitration, the arbitrator must make a
determination in all areas of disagreement, including, the extent, if
any, to which it is necessary to override a particular CBA where a
change in a CBA is being proposed. In 1991, the Supreme Court confirmed
that the law provides that agency approval of a consolidation overrides
all other laws, including the carrier's obligations under a CBA, to the
extent necessary to permit implementation of the approved transaction.
Thus, among the issues that may come to arbitration are whether a
particular CBA change is necessary to effectuate a transaction, and
whether a particular transaction that implicates a CBA at issue is
sufficiently connected to an approved transaction. Neither the
arbitrator nor the Board can override ``rights, privileges, or
benefits.'' And the Board's review of the often fact-bound decisions
made by arbitrators chosen under the auspices of the National Mediation
Board with substantial experience in labor law is based on a
deferential standard of review.
Labor Concerns. Certain employee interests have argued that the
Board under my Chairmanship has stacked the deck against rail
employees. They assert, for example: that the override of CBAs is
purely an administrative remedy that the Board could readily reverse if
only it chose to do so; that the Board has too broadly construed the
``transactions'' pursuant to which a CBA may be overridden; that the
Board has too broadly construed the ``necessity'' of an override of a
CBA; and that the Board has too narrowly construed the rights,
privileges and benefits that may not be abrogated. They have also
argued that the Board has handled arbitration appeals in such a way as
to favor management.
I understand the concerns of rail labor about the law concerning
CBA overrides. In fact, in my December 21 letter, I suggested that
Congress consider addressing these issues through legislation. Where I
disagree with the arguments made by labor in this area is not with
their concerns about the wisdom and propriety of CBA overrides, but
rather with their argument that CBA overrides were the Board's idea,
that we have caused labor concerns in this area, and that we have gone
out of our way to implement the law in a way that they term as ``anti-
labor.'' It is in this vein that I feel compelled to respond.
Accordingly, I make the following points concerning how the agency has
implemented the existing law under my Chairmanship.
First, while I do understand the concerns of rail labor regarding
CBA overrides, I do not view the override of a CBA as simply an
administrative remedy that the Board could readily reverse if only it
chose to do so. The 1991 Supreme Court decision (often referred to as
the ``Dispatchers'' case, rendered before I arrived at the ICC) and
other court decisions have made that clear. The Supreme Court pointed
out that ``the consolidation provisions of the Act . . . were designed
to promote `economy and efficiency in interstate transportation.'''
Citing a 1939 Supreme Court opinion, it recognized that consolidations
may result in dismissals and transfers, involving the loss of seniority
rights. And the Court pointed out that it was for this reason that
``the Act imposes a number of labor-protecting requirements to ensure
that the Commission accommodates the interests of affected parties to
the greatest extent possible.'' However, the Supreme Court found that,
once the consolidation is approved and those labor protection
requirements are met, the law ensures that obligations imposed by
contracts such as CBAs, or by other laws such as the Railway Labor Act,
``will not prevent the efficiencies of consolidation from being
achieved.'' In short, given its view of the statutory scheme, the
Supreme Court did not simply hold that the ICC had the ``discretion''
to decide whether to find that CBAs could ever be overridden, but
rather stated that CBAs are to be overridden, when necessary to do so,
because that is what the law and Congressional intent require. Thus, to
change this overall approach and to prevent any override of a CBA would
require a change in the law.
Second, with respect to ``necessity,'' court precedent established
in a 1993 D.C. Circuit decision (rendered before I came to the ICC),
followed by another D.C. Circuit decision in 1994 reviewing a 1992 ICC
decision, established that the necessity standard is met by a showing
that override of the CBA is necessary to produce transaction-related
transportation benefits beyond those resulting simply from the override
itself. Moreover, the application of the standard of necessity was
explicitly approved in a more recent D.C. Circuit decision, in which
the court stated that it is ``obvious on its face'' that incompatible
agreements for work crews would impede a consolidation and interfere
with the ability of the merged carriers to offer ``reduced rates to
shippers and ultimately to consumers.'' Thus, the discretion with
regard to the determination of necessity has been shaped by court
precedent, although in its ``Carmen III'' decision, discussed later,
the Board limited what could be overridden in this regard. That
unappealed decision is now binding on all arbitrators in addressing CBA
override issues, although, of course, legislation could codify such
limitations.
Third, with respect to the transactions pursuant to which a CBA may
be overridden, again court precedent in a 1994 D.C. Circuit decision
(affirming an ICC decision voted on before I became a Commissioner)
established that the test for determining a covered transaction is not
based on the passage of time, but rather is based on a linkage to the
original transaction. The court noted that carriers sometimes
effectuate their consolidations gradually; that when employees are
adversely affected in those instances, they are entitled to their
substantial New York Dock protections; but that ``the passage of time
does not diminish a causal connection.'' Again, the discretion to
determine a covered transaction has been shaped by court precedent. A
limit on covered transactions to a particular time period following
approval of the underlying consolidation would need to be adopted
through legislation.
Fourth, with respect to the preservation of ``rights, privileges,
and benefits,'' the Board did rule that they include benefits such as
life insurance, hospitalization and medical care, sick leave, and so
forth. At the same time, the Board ruled that, in accordance with prior
court precedent arising out of review of ICC decisions issued before I
came to the ICC, mergers of seniority districts could not be included
as ``rights, privileges, and benefits.'' Indeed, the D.C. Circuit in a
1997 decision upheld the Board's decision, finding that under this
approach, ``the public interest in effectuating approved consolidations
is ensured without any undue sacrifice of employee interests. In our
view, this is exactly what was intended by Congress.'' Again, the
determination of ``rights, privileges, and benefits'' was made in light
of prior court precedent. Of course, what is not absolutely protected
as ``rights, privileges and benefits'' could only be overridden if
necessary to implement the approved transaction, subject to the
limitations of the Carmen III decision discussed herein.
With respect to arbitration, employee interests believe that
railroads have the upper hand in the collective bargaining process,
because of their perception that, during the 1980s, the ICC would
always agree to break CBAs at the merging railroads' request whenever
the issue was presented to it by way of an arbitration appeal.
Therefore, their sense is that railroads have no incentive to bargain
in good faith over implementing agreements. I understand that concern;
it is my clear impression that, prior to 1985, more agreements were
bargained, while during the next several years, more were imposed by
arbitration.
Agency Approach. Since I have been Chairman of the ICC and the
Board, I have attempted to make the playing field more level in this
entire area. As I have already noted, by the time I arrived at the ICC,
court precedent in addition to the 1991 Supreme Court decision dealing
with the override of CBAs had already established standards with
respect to the definition of necessity and the standard for determining
the necessary nexus to the approved transaction. Even given this
precedent, the Board has worked to move away from the breaking of CBAs,
has taken action to limit overrides in the decisions that it has
rendered, and has encouraged private negotiation as a preferred way of
resolving related issues.
Indeed, in its landmark 1998 Carmen III decision already
referenced, the Board specifically held that the authority of
arbitrators to override CBAs is limited to that which was exercised by
arbitrators during the years 1940-1980, a period marked by peaceful
relationships between rail labor and rail management with regard to
mergers. Responding to the concerns of rail labor that CBA overrides
were more expansive starting in the 1980s, this decision thus restores
the pre-1980 way of handling CBA overrides. In connection with its
approval of the Conrail transaction and the CN/IC merger, the Board
expressly confirmed, as requested by rail labor, that approval of a
transaction did not indicate approval of any of the CBA overrides that
the applicants may have indicated are necessary, and it admonished the
carriers to bargain in good faith with their employees with respect to
necessary changes to CBAs. I am aware that certain rail labor interests
have cited an arbitration award by Arbitrator Fredenberger in
connection with the Conrail transaction as evidence that the Carmen III
decision was not favorable to employees because, while purporting to
rely on Carmen III, he did not limit the override of a CBA accordingly.
But I should note that, after the Fredenberger Award was appealed to
the Board, the involved railroads reached an agreement with the
Brotherhood of Maintenance of Way Employes (BMWE) and the International
Association of Machinists and Aerospace Workers (IAM) rather than risk
having the Board reverse the award. Thus, the matter was resolved
through negotiation among the parties, and, as a result, the
Fredenberger Award cannot be used as an indication of how the Board
will implement its Carmen III decision.
Moreover, while the Board has generally deferred to the expertise
of arbitrators, it has reversed arbitrators' decisions or otherwise
used the appeal process with favorable results for labor. In one case,
the Board granted a United Transportation Union (UTU) appeal as it
pertained to health benefits; in another arbitration appeal brought by
a railroad, the Board supported the Transportation Communications
International Union's position that dismissed employees do not forfeit
their dismissal allowances if they refuse to accept a recall to work
that would require them to relocate to a location that would require a
change of residence. In other cases, the Board has stayed arbitration
awards for the following reasons: to provide time for consideration of
labor appeals (at the request of the American Train Dispatchers); or to
provide time for the parties to negotiate further (at the request of
UTU and the Brotherhood of Locomotive Engineers, in two related cases,
and BMWE in another case). The disputes impacted by those stays were
ultimately settled by the parties, except for the American Train
Dispatchers case, which remains the subject of a stay at the union's
request due to safety concerns. In another arbitration review case
(involving BMWE and a smaller railroad), the Board issued three
separate decisions favorable to labor.
The Board has specifically placed emphasis on negotiation as the
preferred way of resolving labor implementation matters, which is
consistent with the tenor of the Railway Labor Act. In connection with
the four mergers approved under my Chairmanship, many if not most
employees were covered by negotiated rather than imposed agreements.
Some employee interests have said that they have entered into
unsatisfactory agreements only to avoid arbitrations that would have
left them in even worse positions. But in connection with the recent
Conrail transaction, the Board's action on appeal in staying the
Fredenberger Award, referenced earlier, was credited by the
representative of one of the major unions as ``enabling the parties to
reach agreement.'' And in supporting for the first time ever a merger
of two class I railroads in the recent CN/IC merger, the BMWE stated
that the implementing agreement it negotiated with the applicants
should serve as a guide as to how the New York Dock implementing
process should work. Thus, the focus on leveling the playing field has
resulted in negotiated agreements viewed more favorably by labor
interests.
Even in the face of court precedent on CBAs not favorable to rail
labor's position, I believe that the Board under my Chairmanship has
worked to move the disposition of these matters in what could be
characterized as a more positive direction for rail employees. The
Board's focus on narrowing what can be overridden by arbitrators in its
Carmen III decision, the messages that it has sent in recent merger
decisions regarding overrides, its use of stays in the arbitration
appeals process, and its efforts to leave labor matters to private
negotiation as much as possible, I believe, have all resulted in a more
level playing field that has produced more privately negotiated
agreements between labor and management than we have seen in recent
memory. However, to ensure that this trend is secured, and that
consolidations found to be in the public interest can be carried out
with minimal disruption to all involved, legislation would be an
appropriate way for Congress to reflect an interest in preserving CBAs
and the wisdom in promoting private negotiation. As I have indicated
before in my December 21 letter, I understand the concerns of labor
regarding the existing law and court precedent on CBA overrides, and
have indicated that legislative relief would be necessary to fully
address these concerns.
conclusion
Under my Chairmanship, the Board, pursuant to Congressional
directive in eliminating the ICC, has been a model of doing more with
less in a common sense way--of putting its limited resources to the
most efficient use in handling its caseload expeditiously and resolving
complex matters before it in an effective and responsible manner in
accordance with the ICCTA. The Board has approached its work with
fairness, balancing the many varied and often conflicting interests
under the statute in reaching its decisions on the record.
During the hearings before this Committee in the recent past, not
all of the Members of the Committee have agreed with my position as to
the law governing each of the several difficult issues that come before
the Board. I have heard the concerns raised, I have understood them,
and I have not ignored them. At the same time, I have made decisions
that I believe have been appropriate based on the records compiled and
the mandates of the existing law. There may be areas in which certain
Members of this Committee would like to see legislative changes, and
indeed I have recommended in my December 21 letter changes that
Congress could consider, particularly with respect to small rail rate
cases and rail labor matters. However, until the law is changed, I will
continue to implement current law as I believe Congress intended, using
my existing authority fully and fairly, in accordance with the goals of
common sense government and the decisional directions that I have
outlined. If confirmed, I look forward to continuing to work with the
Committee, other Members of Congress, and all other interested parties
as we tackle the many important transportation issues that confront us.
______
A. Biographical Information
1. Name: (Include any former names or nick names used.) Morgan,
Linda Joan.
2. Position to which nominated: Member, Surface Transportation
Board, with Presidential Redesignation as Chairman Once Confirmed.
3. Date of nomination: August 5, 1999.
4. Address: (List current place of residence and office addresses.)
Residence:6206 Newburn Drive, Bethesda, MD 20816-1134;
Office: Surface Transportation Board, 1925 K Street, N.W.,
Washington, D.C. 20423.
5. Date and place of birth: May 19, 1952, in Chester County, PA.
6. Marital status: (Include maiden name of wife or husband's name.)
Married to Michael E. Karam.
7. Names and ages of children: (Include stepchildren and children
from previous marriages.) Meredith Lyn Morgan Karam, 14 years old.
8. Education: (List secondary and higher education institutions,
dates attended, degree received and date degree granted.) Harvard
University's John F. Kennedy School of Government, August 1991, Program
for Senior Managers in Government; Georgetown University Law Center, 8/
73-5/76, JD; Vassar College, 9/69-5/73, AB, Hispanic Studies; and The
Sidwell Friends School, 5/59-6/69, High School Diploma.
9. Employment record: (List all jobs held since college, including
the title or description of job, name of employer, location of work,
and dates of employment.) l/96-present, Chairman, Surface
Transportation Board; 4/94-1 2/95, Member, Vice Chairman, and Chairman,
Interstate Commerce Commission; 1/87-4/94, U.S. Senate Committee on
Commerce, Science, and Transportation, General Counsel; 10/78-12/86,
U.S. Senate Committee on Commerce, Science; and Transportation,
Democratic Staff Counsel; 9/76-10/78, Welch & Morgan, Attorney/
Associate; 6/74-1/76, Georgetown University Law Center, Research
Assistant for Professor of Administrative and Antitrust Law, and
Tutorial Program Coordinator and Student Assistant, Office of the Dean;
and Summer of 1974 and 1975, Bowl America, Part Time Administrative
Work (5-10 hours/week).
10. Government experience: (List any advisory, consultative,
honorary or other part-time service or positions with Federal, State,
or local governments, other than those listed above.) None.
11. Business relationships: (List all positions held as an officer,
director, trustee, partner, proprietor, agent, representative, or
consultant of any corporation, company, firm, partnership, or other
business enterprise, educational or other institution.) None.
12. Memberships: (List all memberships and offices held in
professional, fraternal, scholarly, civic, business, charitable and
other organizations.) Civic: President, Board of Directors, Sumner
Square Condominium, 1982-85, elected but nonpaying position which
involved operating the condominium and interacting with local
governmental entities on issues of importance to the community.
Co-President and Co-Vice President, Board of Directors, Wood Acres
Citizens Association, 1990-92, elected but nonpaying positions which
involved coordination of neighborhood activities and interaction with
local governmental entities on issues of importance to the
neighborhood.
In addition, I have held various volunteer positions in connection
with my daughter's school, and before that with the Senate Day Care
Center.
Professional: Member, D.C. Bar; Member, Women's Bar Association;
Member, American Bar Association; Member, Women's Transportation
Seminar.
Other: At various times throughout the last 30 years, I have served
in various alumni fundraising positions for my high school, college,
and law school.
13. Political affiliations and activities:
(a) List all offices with a political party which you have held or
any public office for which you have been a candidate.
(a) None.
(b) List all memberships and offices held in and services rendered
to all political parties or election committees during the last 10
years.
I have been a registered Democrat all my adult life.
(c) Itemize all political contributions to any individual, campaign
organization, political party, political action committee, or similar
entity of $500 or more for the past 10 years.
Linda J. Morgan
5/97 Citizens Committee for Ernest F. Hollings $1,000
8/98 Citizens Committee for Ernest F. Hollings $1,000
Michael E. Karam
9/98 Citizens Committee for Ernest F. Hollings $1,000
9/98 Citizens for a Competitive America $1,000
Joint Checking Account Contributions
11/92Democratic National Committee Federal Account $1,000
10/95Democratic National Committee Federal Account $5,000
10/98Citizens for a Competitive America $5,000
14. Honors and awards: (List all scholarships, fellowships,
honorary degrees, honorary society memberships, military medals and any
other special recognitions for outstanding service or achievements.)
Georgetown University Law Center Alumna of the Year Award, 1999;
Women's Transportation Seminar's Woman of the Year Award, 1998; One of
The Washington Post's Five People in Business to Watch in 1998;
Cooperstown Conference Award for Contributions to the Rail Sector,
1994; One of the Outstanding Young Women in America, 1980; Georgetown
University Law Center Award for Most Outstanding Student Contribution,
1976; Athlete of the Year/President of the Student Athletic
Association, Vassar College, 1972-1973, and Cum Laude Graduate, Sidwell
Friends School, 1969.
15. Published writings: (List the titles, publishers, and dates of
books, articles, reports, or other published materials which you have
written.) None. During law school, in my capacity as a Research
Assistant to a professor, I did research for, and worked on draft parts
of, articles on administrative and antitrust law that were later
published under his name. In my staff positions with the Senate
Commerce Committee, I worked on statements and articles submitted by
Members whom I staffed. During my service at the ICC and more recently
at the Board, I have issued several commenting opinions in decisions on
which I have voted, and I have submitted two letters to the editor in
my capacity as Chairman of the Board--one on the computer advancements
at the Board and the other clarifying the Board's actions in dealing
with the recent rail service problems in the West and the recent
acquisition of Conrail in the East.
16. Speeches: Provide the Committee with two copies of any formal
speeches you have delivered during the last 5 years which you have
copies of on topics relevant to the position for which you have been
nominated. During my tenure at the ICC and the Board, I have given
numerous speeches. I write my own speeches and talk primarily from my
notes, and I do not put my speeches on the Board's web site nor do I
formally or widely circulate them. Also during my tenure at the ICC and
the Board, I have presented statements at oral arguments and voting
conferences. In addition, I have submitted formal written testimony to
Committees in both the Senate and the House during this period, and as
referenced in the previous question, I have voted on numerous decisions
and have submitted commenting opinions in certain of them.
17. Selection:
(a) Do you know why you were chosen for this nomination by the
President?
I was President Clinton's first nominee to the ICC. He then
designated me as ICC Chairman, in which capacity I managed the closure
of the ICC in accordance with his directive and that of Congress. I was
designated by the President as Chairman of the Board, the ICC's smaller
successor, in which capacity I have managed the agency during a period
of dramatic change in the rail industry. Throughout my time at the ICC
and the Board, I have remained committed to this Administration's
articulated goal of common sense government.
(b) What do.you believe in your background or employment experience
affirmatively qualifies you for this particular appointment?
My 15 years in various staff counsel positions with the Senate
Commerce Committee, including staff responsibility for many relevant
surface transportation issues, and my 5 years at the ICC and the Board,
particularly as Chairman, clearly provide me with the necessary
qualifications for this particular appointment.
b. future employment relationships
1. Will you sever all connections with your present employers,
business firms, business associations or business organizations if you
are confirmed by the Senate? Not applicable.
2. Do you have any plans, commitments or agreements to pursue
outside employment, with or without compensation, during your service
with the government? If so, explain. No.
3. Do you have any plans, commitments or agreements after
completing government service to resume employment, affiliation or
practice with your previous employer, business firm, association or
organization? Not applicable.
4. Has anybody made a commitment to employ your services in any
capacity after you leave government service? No.
5. If confirmed, do you expect to serve out your full term or until
the next Presidential election, whichever is applicable? Yes.
c. potential conflicts of interest
1. Describe all financial arrangements, deferred compensation
agreements, and other continuing dealings with business associates,
clients or customers. None.
2. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated. None of which I am
aware.
3. Describe any business relationship, dealing, or financial
transaction which you have had during the last 10 years, whether for
yourself, on behalf of a client, or acting as an agent, that could in
any way constitute or result in a possible conflict of interest in the
position to which you have been nominated? None.
4. Describe any activity during the past 10 years in which you have
engaged for the purpose of directly or indirectly influencing the
passage, defeat or modification of any legislation or affecting the
administration and execution of law or public policy. As staff counsel
to the Senate Commerce Committee, I was involved of necessity in the
passage of legislation. During my 5 years at the ICC and the Board, I
have been called upon by Members of Congress for my expertise and
counsel, including testimony before relevant Congressional Committees,
related to the legislation that eliminated the ICC and created the
Board, bills reauthorizing the Board and providing appropriations, and
proposals to amend the law that the Board implements. And as a Member
and Chairman of the ICC and the Board, I have necessarily been involved
in the administration and execution of law and public policy.
5. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items. (Please provide a copy of any trust or other agreements.) During
the 5 years that I have served at the ICC and the Board, I have
conducted myself with the utmost integrity. I would continue to
approach my work in that way. If there are any conflicts of interest
that might prevent me from performing my adjudicatory responsibilities
impartially and ethically, I will recuse myself from deliberations on
any matters that would be so affected.
6. Do you agree to have written opinions provided to the Committee
by the designated agency ethics officer of the agency to which you are
nominated and by the Office of Government Ethics concerning potential
conflicts of interest or any legal impediments to your serving in this
position? Yes.
d. legal matters
1. Have you ever been disciplined or cited for a breach of ethics
for unprofessional conduct by, or been the subject of a compliant to
any court, administrative agency, professional association,
disciplinary committee, or other professional group? If so, provide
details. No.
2. Have you ever been investigated, arrested, charged or held by
any Federal, State, or other law enforcement authority for violation of
any Federal, State, county, or municipal law, regulation or ordinance,
other than a minor traffic offense? If so, provide details. No.
3. Have you or any business of which you are or were an officer
ever been involved as a party in interest in an administrative agency
proceeding or civil litigation? If so, provide details? No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? No.
5. Please advise the Committee of any additional information,
favorable or unfavorable, which you feel should be considered in
connection with your nomination.
I am not aware of anything else in this regard that should be
considered in connection with my nomination.
e. relationship with committee
1. Will you ensure that your department/agency complies with
deadlines set by congressional committees for information? Yes.
2. Will you ensure that your department/agency does whatever it can
to protect congressional witnesses and whistle blowers from reprisal
for their testimony and disclosures? Yes.
3. Will you cooperate in providing the committee with requested
witnesses, to include technical experts and career employees with
firsthand knowledge of matters of interest to the committee? Yes.
4. Are you willing to appear and testify before any duly
constituted committee of the Congress on such occasions as you may be
reasonably requested to do so? Yes.
f. general qualifications and views
1. Please describe how your previous professional experience and
education qualifies you for the position for which you have been
nominated. My legal education, my 15 years in various staff counsel
positions with the Senate Commerce Committee, including staff
responsibility for many relevant surface transportation issues, and my
5 years at the ICC and the Board, particularly as Chairman, all provide
the qualifications necessary for the position for which I have been
nominated.
2. What skills do you believe you may be lacking which may be
necessary to successfully carry out this position? What steps can be
taken to obtain those skills? None that I can think of. Given the many
challenges that I have faced during my 5 years at the ICC and the
Board, I believe that I have acquired and honed the skills necessary to
successfully carry out the position for which I have been nominated.
3. Why do you wish to serve in the position for which you have been
nominated? I have spent 20 years in public service, and continue to
believe that public service is an honorable profession and one in which
I can continue to contribute in a positive way. In addition, I would
like the opportunity to continue to advance the positive initiatives
that I have undertaken during my 5 years at the ICC and the Board
particularly with respect to the furtherance of both common sense
government and the appropriate balance among the interests of the
various constituencies associated with the rail sector. Given the
dramatic changes that have taken place in recent years particularly in
that sector, a steady, conscientious, attentive and common sense
regulatory hand at the helm of the Board is critical, and I believe
that I can provide the needed leadership to that end.
4. What goals have you established for your first two years in this
position, if confirmed? During my last 5 years at the ICC and the
Board, I have been committed to common sense government. Two goals for
the next two years relate to that objective. One is to continue to
strive for efficient, expeditious and fair decisionmaking, and the
rendering of decisions that withstand judicial challenge. The other is
to continue to strive for the appropriate balance between private
sector initiative and resolution and governmental oversight and action.
Both goals would continue to be pursued in the context of the spirit of
the law that the Board implements.
I also want to continue to foster improved and more productive
relationships among rail shippers, rail carriers, rail employees and
other affected interests. Under my chairmanship, for example, the Board
has taken several initiatives to improve commercial communication
between railroads and their customers, to establish better mechanisms
for dispute resolution between railroads and their customers whether at
the Board or privately, to ensure more balanced dealings between larger
and smaller railroads, to promote private-sector negotiation of
employee concerns, and to further safety and the environmental
interests of state and local communities. In accordance with the law,
if confirmed I would be committed to continuing the positive momentum
begun by those initiatives.
5. Please discuss your philosophical views on the role of
government. Include a discussion of when you believe the government
should involve itself in the private sector, when should society's
problems be left to the private sector, and what standards should be
used to determine when a government program is no longer necessary. As
my record over the last 5 years at the ICC and the Board reflects, I
believe that government as a general rule should facilitate appropriate
market-based initiatives and private-sector solutions to problems,
intervening when the private sector is unable to provide a suitable
resolution. The Board is principally an adjudicatory agency, and
therefore, many of the cases that we handle either must come to us
before certain market-based commercial transactions can be effectuated,
or they involve situations where private-sector resolution has not
proven possible. Nevertheless, even within the framework of the Board's
mission, there are ways in which private-sector initiative and
resolution can and should be encouraged and promoted. Private-sector
initiative can provide for better solutions because it can be tailored
to the needs of the involved parties, can go beyond what government is
able to do under the law, and can create a dynamic in which all the
parties to the initiative have been involved in its development and
thus are invested in its success.
As an example, during the western rail service emergency of 1997
and 1999, the Board required substantial reporting and conducted
significant oversight, but it intervened operationally in a focused and
restrained way, allowing the involved railroads, with the active
involvement of employees, to work as much as possible through their
operational issues themselves. The Board's restraint, in my view,
permitted a more rapid and comprehensive service recovery than the
Government could have produced through more direct and expansive
intervention.
As another example, several legal issues arose in connection with
the recent Conrail transaction. Although the Board promptly and fairly
resolved all questions that remained before it, as it has done in other
cases the Board strongly encouraged the acquiring railroads to enter
into privately negotiated settlements that advanced competition and
resolved labor and environmental issues. I believe that the agreements
that were worked out in response to the Board's prodding were superior
to those that the Government could have imposed under the law.
Finally, various interests that appear before the Board have, with
the Board's strong encouragement, entered into private-sector dispute
resolution programs. The large railroads have reached a ``Railroad
Industry Agreement'' with their smaller railroad connections, and the
railroads and the National Grain and Feed Association have entered into
agreements under which certain disputes are to be resolved through
mandatory arbitration. These industry-wide agreements can provide
effective means by which parties can resolve their differences in the
private sector without any governmental involvement.
On the other hand, there are circumstances when the marketplace is
imperfect and where the playing field is not level. It is in these
situations that government intervention is necessary, to ensure that
disputes can be resolved fairly and that the interests of all involved
can be appropriately balanced.
Accordingly, when it has been involved with dispute resolution, the
Board, I believe, has been vigilant in implementing the law fairly and
expeditiously. For example, the Board has been committed to moving rail
rate complaints to resolution, issuing deadlines and simplified
procedures for various cases. Where rail rates are reasonable, the
Board has allowed them to stand, but where they are not, the Board has
set them aside and afforded shippers full relief. While concern has
been raised that the Board's rail ``bottleneck'' rate decisions did not
go far enough to protect shippers, I do believe that the Board's
decisions were creative in providing certain bottleneck rate regulatory
relief within the confines of existing law. The Board has focused on
leveling the playing field by eliminating product and geographic
competition from ``market dominance'' rules that apply to maximum rate
cases. And it has promulgated specific regulations dealing with
situations involving inadequate rail service.
The record of the ICC and the Board under my leadership, I believe,
clearly stands as a model of good government. If the marketplace and
the private sector are able to achieve the public interest goals
reflected in a particular governmental program, then those goals are
better met without governmental involvement. At the same time, if the
marketplace is imperfect, then governmental action is appropriate in
accordance with the policies established in the applicable law.
6. In your own words, please describe the agency's current
missions, major programs, and major operational objectives. The Board
is responsible for economic regulatory oversight of surface
transportation in accordance with the laws that it implements. It is
principally an adjudicative body that resolves disputes and handles
other matters, based largely on a written record, to advance the
policies embodied in the law. Its responsibilities involve primarily
rail issues, although it has certain other responsibilities relating to
motor carriers, pipelines, and noncontiguous domestic water trade.
In carrying out its regulatory responsibilities, the Board must act
independently and balance many oftentimes competing public interest
objectives, reflected in the law, that involve carriers, shippers,
employees, state and local communities, and other affected interests.
The decisions that the Board issues are often controversial, but one of
our most important missions, I believe, is to tackle the hard cases and
move them to resolution.
7. In reference to question number six, what forces are likely to
result in changes to the mission of this agency over the coming five
years? There continues to be strong support for retaining an
independent forum in the form of the Board to adjudicate the matters
now brought to it. Any changes relating to the Board and its mission
would likely come by way of substantive changes to the law that the
Board implements, particularly with respect to railroads. Certain of
the changes being proposed raise fundamental questions about the
current law. These proposed changes principally reflect a view that the
current regulatory scheme does not provide for the appropriate balance
among the interests of the carriers, shippers and employees. Certain
parties have expressed the position that, particularly in view of the
recent consolidations in the rail industry, there is not enough rail-
to-rail competition and thus that rates are not as low as they could be
and service is not as good as it should be. In addition, concern has
been expressed that those aggrieved by what they perceive to be
inadequate service or unreasonably high rates do not always have real
and sufficient access to regulatory relief. And rail employees have
expressed the view that, in the context of railroad consolidations,
their rights with respect to collective bargaining agreements are not
protected as fully as they should be. The parties that have expressed
these concerns have sought legislative changes that would alter the law
that the Board implements and that could accordingly change the Board's
mission.
8. In further reference to question number six, what are the likely
outside forces which may prevent the agency from accomplishing its
mission? What do you believe to be the top three challenges facing the
board/commission and why? Notwithstanding the questions that have been
raised about what the Board's mission should be, and despite the
Board's more limited resources, I believe that the Board has fulfilled
the mission reflected in the law that it implements. With strong
leadership and focus, the Board should continue to be able to pursue
this mission. However, the Board continues to be faced with uncertainty
and controversy surrounding its reauthorization, its mission and the
law that it implements. Depending on the Board's membership and
leadership, this uncertainty and controversy can have a negative impact
on the Board's ability to function. As long as the Board is not
reauthorized and the law remains at issue, the Board will be challenged
to continue to make decisions fairly and independently, even in the
face of political uncertainty. Additionally, if the debates about the
law persist indefinitely, the Board will continue to be challenged to
focus on what it believes its mission to be as reflected in the law,
despite a variety of divergent messages from individual Members of
Congress. Finally, this debate, if left unresolved, could challenge the
Board with more regulatory contention reflected in cases brought to the
Board, as parties try to argue their view of policy before the Board
while the Board's mission is still being debated in Congress. In
general, the Board will continue to be challenged to adjudicate matters
independently and on the written record in a manner that reflects what
it believes Congress intended with the current law until Congress
affirmatively and clearly expresses its position on the various
legislative issues that have been raised.
9. In further reference to question number six, what factors in
your opinion have kept the board/commission from achieving its missions
over the past several years? As I have already indicated, I believe
that, even with limited resources and in the face of much pressure,
controversy, and disagreement among certain Members of Congress as to
its mission, the Board has been able to achieve the objectives
reflected in the existing law that it implements.
10. Who are the stakeholders in the work of this agency? The
stakeholders cut across a broad spectrum of our Nation's economy. They
include shippers, carriers, employees, and communities and individuals
throughout the country. They also include Congress, as well as the
Administration and other Federal agencies.
11. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in question number ten.
Obviously, the policies that the Board implements and the individual
decisions that it issues will affect the various stakeholders. But all
of the stakeholders have a right to influence those policies and
decisions by participating formally in any proceeding before the Board.
The Board typically decides matters based on the entire written record
before it and must not be partial to any one stakeholder. With
particular respect to the Administration, the Board as an independent
agency must be careful to afford Administration representatives
appropriate regard as parties along with the other parties. With
respect to Congress, the Board, as a creation of Congress, must be
prepared to explain its actions in the context of the law that the
Board implements, but it also must consider Congressional views on
pending matters in the same manner as it considers the views of other
parties.
12. Please describe your philosophy of supervisor/employee
relationships. Generally, what supervisory model do you follow? Have
any employee complaints been brought against you? I believe in a team
and consensus building approach to reaching decisions. Thus, in my 4
years as Chairman of the ICC and then of the Board, and before that as
General Counsel for the Senate Commerce Committee, I have been
committed to seeking out the views of involved staff and have worked at
coming to a final resolution that reflects those views as much as
possible. While my management style is one of mutual respect for a
divergence of views, equality among employees in their importance to
the finished product, and expansive inclusion during the deliberative
process, I also feel strongly that deliberations must be brought to a
conclusion, decisions must be rendered expeditiously, and the one who
is in charge has ultimate responsibility to make the necessary
decisions and must assume that responsibility fully. No employee
complaints have been brought against me personally; in fact, I believe
that you would find that those who have worked for me and with me would
comment favorably on their experience.
13. Describe your working relationship, if any, with the Congress.
Does your professional experience include working with committees of
Congress? If yes, please describe. During my 15 years in various staff
counsel positions with the Senate Commerce Committee, I developed an
appreciation for having a good working relationship with Congress and
believe that during my 5 years at the ICC and the Board I have built on
my experience and have developed a good working relationship with
Congress.
14. Please explain how you will work with this Committee and other
stakeholders to ensure that regulations issued by your board/commission
comply with the spirit of the laws passed by Congress. During my 5
years at the ICC and the Board, I have strived to ensure that my
decisions and the Board's decisions are in compliance with the spirit
of the laws that the agency implements. While I recognize that there
have been legitimate differences of opinion in this regard, they are
just that, and I do believe that no one could reasonably disagree with
the good faith efforts and commitment to uphold the spirit of the law
that the Board has shown, which is confirmed by the success experienced
by the ICC and the Board in having their decisions upheld by the
courts. I will continue to be committed to this end if confirmed for
another term.
15. In the areas under the board/commission jurisdiction, what
legislative action(s) should Congress consider as priorities? Please
state your personal views. Congress must consider reauthorizing the
Board as a priority. The Board was affirmatively created by Congress
and needed to be reauthorized last year. The Board has implemented the
law as Congress intended in creating the Board; has tackled many
difficult issues with fairness, professionalism, and resolve; has been
a model of good government; and continues to perform an important
function. The uncertainty associated with not having a reauthorization
can have a negative impact on the retention of qualified staff, and on
the decision-making process. Apart from the reauthorization issue,
there are pending proposals to amend the law that the Board implements.
I believe that it is important for Congress to decide on these
proposals, sooner rather than later, one way or the other so as to
provide the needed certainty and predictability for the Board and the
transportation community with respect to the regulatory rules of the
road for the future.
16. Please discuss your views on the appropriate relationship
between a voting member of an independent board or commission and the
wishes of a particular president. A Board member is an independent
adjudicator and must make decisions in pending matters based on the
record and free of bias or political influence from any quarter. At the
same time, there are certain general good government policies, such as
the streamlining of governmental processes, that an independent Board
can and should pursue voluntarily in accordance with Administration
policy.
Senator Hutchison. Yes. I would like to ask each one to
give opening statements first up to 5 minutes. And then we will
open it for questions.
So, Mr. Frazier.
STATEMENT OF MICHAEL J. FRAZIER, NOMINEE, ASSISTANT SECRETARY
FOR GOVERNMENTAL AFFAIRS, U.S. DEPARTMENT OF TRANSPORTATION
Mr. Frazier. Thank you, Madame Chairwoman and members of
the committee. It is an honor to appear before you today as you
consider my nomination to be Assistant Secretary for
Governmental Affairs of the Department of transportation.
I am pleased that Secretary Slater has recommended me to
President Clinton for this position and that the President has
sent my nomination forward to this committee. I am deeply
honored to serve President Clinton and am gratified to serve
the American people.
Let me take a moment to express my deepest appreciation to
Senator Kennedy, not only for his gracious introduction but
also for his invaluable support for the past two decades. He
has taught me to believe in the principle, ``To whom much is
given, much is required.''
From the time Senator Kennedy invited me to join his staff
in 1985 as a legislative assistant until my departure in 1992,
he reminded me that those who serve the American public at the
highest levels have a special obligation to preserve the values
of this country and to advance the goals of truth, integrity,
justice and responsibility for all Americans. I will not forget
his kindness nor his support.
Senator Kennedy, I thank you.
Also, let me take the opportunity to introduce my mother,
Mrs. Christine Cooper, who has been an indomitable source of
strength, inspiration and support all of my life. I have asked
her here today because it is an honor to my family, as well as
myself, to be considered for this office.
I am also accompanied today by several of my dearest
friends from Pennsylvania, as well as from here in Washington,
D.C. I have no doubt that they will help me to ensure that I
honor my commitment to this committee, to the President and to
Secretary Slater to deliver honest, dedicated, compassionate
and efficient service to the American people during the balance
of this administration.
Madame Chairwoman, as you know, the Department of
Transportation has enormous responsibilities that touch the
fabric of American life. Indeed, the Department must strive to
ensure that American citizens can travel the nation's transit,
waterways, highways, railways and air routes into the next
millennium with confidence, efficiency and safety; that
businesses can transport their products to domestic and
international destinations in a manner that promotes economic
development and fiscal responsibility; that the Nation will
invest in transportation infrastructure and technology to
maintain the United States at the pinnacle of international
economic leadership for generations to come; that state and
local governments can rely upon the Department of
Transportation for guidance, leadership and responsiveness to
the individual local needs; and that the American public can
rest assured that American transportation policy during this
administration will reflect our national commitment to hold our
environment in trust for our children and the generations who
follow them.
During my brief tenure with the Department of
Transportation, I have been impressed by Secretary Slater's
dedication to ensuring that transportation services are
delivered to the American people in a safe, efficient and
responsible manner, recognizing that these objectives may only
be accomplished by the interplay between public and private
partnerships, between national and local governments, and by
the interdependence of the executive and legislative branches
of the Federal Government.
If confirmed as Assistant Secretary for Governmental
Affairs, I would welcome the responsibility of assisting
Secretary Slater in achieving those objectives.
Indeed, in nearly 10 years of working on Capitol Hill,
initially with Senator Kennedy and later as chief of staff to
Senator Moseley-Braun, I learned to appreciate the need for a
close working relationship between the public and private
sectors, the various levels of government, between the White
House and the Congress and, as I learned more recently,
especially between the Department of Transportation and this
committee.
Moreover, I offer to you, Madame Chairwoman, my solemn
commitment to work closely with this committee in an open,
frank and collegial manner to carry out the transportation
policies of this nation for the benefit of your constituents
and the American people as a whole.
For these reasons, if I am confirmed, I am confident that
my service to this country will honor the decisions of the
President, Secretary Slater and the U.S. Senate to the best of
my abilities during the balance of this administration.
Madame Chairwoman, I thank you and the committee for your
time today. If I might aid your deliberations by responding to
any questions you might have, I am happy to do so.
Thank you.
[The prepared statement and Biographical Information of Mr.
Frazier follow:]
Prepared Statement of Michael J. Frazier, Nominee, Assistant Secretary
for Government Affairs, U.S. Department of Transportation
Thank you, Madame Chairwoman and Members of the Committee. It is an
honor to appear before you today as you consider my nomination to be
Assistant Secretary for Governmental Affairs of the Department of
Transportation. I am pleased that Secretary Slater has recommended me
to President Clinton for this position, and that the President has sent
my nomination forward to this Committee. I am deeply honored to serve
President Clinton and I am gratified to serve the American people.
Let me take a moment to express my deepest appreciation to Senator
Kennedy-not only for his gracious introduction, but also, for his
invaluable support for the past two decades. He has taught me to
believe in the principle: ``To whom much is given, much is required.''
From the time Senator Kennedy invited me to join his staff in 1985 as a
legislative assistant, until my departure in 1992, he reminded me that
those who serve the American public at the highest levels have a
special obligation to preserve the values of this country, and to
advance the goals of truth, integrity, justice and responsibility for
all Americans. I will not forget his kindness, nor his support. Senator
Kennedy, I thank you.
Also, let me take the opportunity to introduce my mother, Mrs.
Christine Cooper, who has been an indomitable source of strength,
inspiration and support all of my life. I have asked her here today
because it is an honor to my family, as well as myself, to be
considered for this office. I am also accompanied today by several of
my dearest friends from Pennsylvania as well as from here in
Washington, D.C. I have no doubt that they will help me to ensure that
I honor my commitment to this Committee, to the President and to
Secretary Slater to deliver honest, dedicated, compassionate and
efficient service to the American people during the balance of this
Administration.
Madame Chairwoman, as you know, the Department of Transportation
has enormous responsibilities that touch the fabric of American life.
Indeed, the Department must strive to ensure that American citizens can
travel the Nation's transit, waterways, highways, railways and air
routes into the next millennium with confidence, efficiency and safety;
that businesses can transport their products to domestic and
international destinations in a manner that promotes economic
development and fiscal responsibility; that the Nation will invest in
transportation infrastructure and technology to maintain the United
States at the pinnacle of international economic leadership for
generations to come; that State and local governments can rely upon the
Department of Transportation for guidance, leadership and
responsiveness to their individual local needs; and that the American
public can rest assured that American transportation policy during this
Administration will reflect our national commitment to hold our
environment in trust for our children and the generations who follow
them.
During my brief tenure with the Department of Transportation, I
have been impressed by Secretary Slater's dedication to ensuring that
transportation services are delivered to the American people in a safe,
efficient and responsible manner, recognizing that these objectives may
only be accomplished by the interplay between public and private
partnerships, between national and local governments, and by the
interdependence of the Executive and Legislative Branches of Federal
Government. If confirmed as Assistant Secretary for Governmental
Affairs, I would welcome the responsibility of assisting Secretary
Slater in achieving those objectives. Indeed, in nearly ten years of
working on Capitol Hill, initially with Senator Kennedy and later as
Chief of Staff to Senator Moseley-Braun, I learned to appreciate the
need for a close working relationship between the public and private
sectors, the various levels of government, between the White House and
the Congress, and--as I learned more recently--especially between the
Department of Transportation and this Committee.
Moreover, I offer to you, Madame Chairwoman, my solemn commitment
to work closely with this Committee in an open, frank and collegial
manner to carry out the transportation policies of this Nation for the
benefit of your constituents and the American people as a whole. For
these reasons, if I am confirmed, I am confident that my service to
this Country will honor the decisions of the President, Secretary
Slater and this Committee, to the best of my abilities, during the
balance of this Administration. Madame Chairwoman, I thank you and the
Committee for your time today. If I might aid your deliberations by
responding to any questions you might have, I am happy to do so.
______
A. BIOGRAPHICAL INFORMATION
1. Name: Michael James Frazier
2. Position to which nominated: Assistant Secretary for
Governmental Affairs United States Department of Transportation
3. Date of nomination: August 3, 1999
4. Address: Residence: 7620 Old Georgetown Road, #117 Bethesda,
Maryland, 20814. Office: 400 7th Street, S.W., Room 10408 Washington,
D.C., 20590
5. Date and place of birth: August 3, 1956 Somerset, Pennsylvania
6. Marital status: Divorced
7. Names and ages of children: None
8. Education: Central Connecticut State College, 1976-1979 Bachelor
of Arts, Political Science, May 1979
9. Employment record: Perry-White Associates, Computer Personnel
Placement Service, Waltham, Massachusetts, June, 1979 - December, 1979;
Kennedy for president, 1980 Field Organizer, Washington, D.C.,
December, 1979 - August, 1980; Carter/Mondale for President, 1980,
Field Organizer, Washington, D.C., August, 1980 - November, 1980;
Office of the Mayor, Special Assistant, Washington, D.C., February,
1981 - March, 1982; Marion Barry for Mayor Campaign, Field Organizer,
Washington, D.C., March, 1982 - November, 1982; Mondale for President,
1984, Advance/Field Organizer, Washington, D.C., February, 1983 -
November, 1984; Fund for a Democratic Majority, Political Action
Committee, Field Organizer, Washington, D.C., January, 1985 - July,
1985; United States Senate, Office of Senator Edward M. Kennedy,
Legislative Assistant, Washington, D.C., July, 1985 - January, 1993;
United States Senate, Office of Senator Carol Moseley-Braun, Chief of
Staff, Washington, D.C., January, 1993 - December, 1993; United States
Department of Commerce, Consultant/Office of the Secretary, Washington,
D.C.; January 1994 - December 1994; United States Department of
Commerce, Deputy Assistant Secretary for Intergovernmental Affairs,
Washington, D.C., January, 1995 - June, 1998; L.Clinton/Gore 1996
General Campaign, State Director, Pennsylvania, August, 1996 -
November, 1996; United States Department of Transportation, Deputy
Assistant Secretary for Governmental Affairs, Washington, D.C., June,
1998 - present.
10. Government experience: Mayor Sharon Pratt Kelly Transition Team
Transition Team Leader, Washington, D.C., November, 1990 - January,
1991.
11. Business relationships: None.
12. Memberships: None.
13. Political affiliations and activities:
(a) List all offices with a political party which you have held or
any public office for which you have been a candidate.None
(b) List all memberships and offices held in and services rendered
to all political parties or election committees during the last 10
years. Clinton/Gore 1996 Campaign, State Director/Pennsylvania, August,
1996 - November, 1996.
(c) Itemize all political contributions to any individual, campaign
orqanization, political party, political action committee, or similar
entity of $500 or more for the past 10 years. None.
14. Honors and awards: None.
15. Published writings: None.
16. Speeches: None.
17. Selection:
A. I believe I have been chosen for this position because of my
service in the Clinton Administration since 1994. I also believe that I
have proven my capabilities to Secretary Rodney Slater since joining
the Department of Transportation in June of 1998. I am most
appreciative of this recognition, and if confirmed, I will do
everything in my power to justify the confidence shown in me.
B. I believe my staff experience with two United States Senators
from 1985 through 1993, as well as my tenure as Deputy Assistant
Secretary at both the Transportation and Commerce Departments have
served to prepare me well for the position for which I have been
nominated.
b. future employment relationships
1. Will you sever all connections with your present employers,
business firms, business associations or business organizations if you
are confirmed by the Senate? Yes.
2. Do you have any plans, commitments or agreements to pursue
outside employment, with or without compensation, during your service
with the government? If so, explain. No.
3. Do you have any plans, commitments or agreements after
completing government service to resume employment, affiliation or
practice with your previous employer, business firm, association or
organization? None.
4. Has anybody made a commitment to employ your services in any
capacity after you leave government service? No.
5. If confirmed, do you expect to serve out your full term or until
the next Presidential election, whichever is applicable? If confirmed,
I would hope to serve until the end of this Administration.
c. potential conflicts of interest
1. Describe all financial arrangements, deferred compensation
agreements, and other continuing dealings with business associates,
clients or customers. None.
2. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated. None.
3. Describe any business relationship, dealing, or financial
transaction which you have had during the last 10 years, whether for
yourself, on behalf of a client, or acting as an agent, that could in
any way constitute or result in a possible conflict of interest in the
position to which you have been nominated? None.
4. Describe any activity during the past 10 years in which you have
engaged for the purpose of directly or indirectly influencing the
passage, defeat or modification of any legislation or affecting the
administration and execution of law or public policy. As legislative
assistant to Senator Kennedy, I worked on a wide variety of issues. I
worked specifically on the Fair Housing Act of 1989 and the Americans
with Disabilities Act. While here at the Department of Transportation
and serving in an acting capacity since December of 1998, I have worked
on legislation concerning DOT FY 2000 appropriations, FAA
reauthorization, motor carrier safety, rail safety, and various other
legislative matters.
5. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items. Please refer to the Deputy General Counsel opinion letter.
6. Do you agree to have written opinions provided to the Committee
by the designated agency ethics officer of the agency to which you are
nominated and by the Office of Government Ethics concerning potential
conflicts of interest or any legal impediments to your serving in this
position? Yes.
d. legal matters
1. Have you ever been disciplined or cited for a breach of ethics
for unprofessional conduct by, or been the subject of a compliant to
any court, administrative agency, professional association,
disciplinary committee, or other professional group? If so, provide
details. No.
2. Have you ever been investigated, arrested, charged or held by
any Federal, State, or other law enforcement authority for violation of
any Federal, State, county, or municipal law, regulation or ordinance,
other than a minor traffic offense? If so, provide details. No.
3. Have you or any business of which you are or were an officer
ever been involved as a party in interest in an administrative agency
proceeding or civil litigation? If so, provide details? No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? No.
5. Please advise the Committee of any additional information,
favorable or unfavorable, which you feel should be considered in
connection with your nomination. None.
e. relationship with committee
1. Will you ensure that your department/agency complies with
deadlines set by congressional committees for information? Yes, to the
best of my ability.
2. Will you ensure that your department/agency does whatever it can
to protect congressional witnesses and whistle blowers from reprisal
for their testimony and disclosures? Yes.
3. Will you cooperate in providing the committee with requested
witnesses, to include technical experts and career employees with
firsthand knowledge of matters of interest to the committee? Yes.
4. Please explain how you will review regulations issued by your
department/agency, and work closely with Congress, to ensure that such
regulations comply with the spirit of the laws passed by Congress. My
intention is to work closely with the Department's Office of General
Counsel to ensure that regulations issued by the Department comply with
the spirit of enacted laws. The Office of Governmental Affairs will
also continue to work closely with the Congress to apprise members and
staff of important regulatory developments.
5. Describe your department/agency's current mission, major
programs, and major operational objectives. The Department of
Transportation is a visionary and vigilant Department leading the way
to transportation excellence in the 21st century. The mission is to
serve the United States by ensuring a fast, safe, efficient, accessible
and convenient transportation system that meets our vital national
interests and enhances the quality of life of the American people,
today and into the future. The strategic goals are - Safety: Promote
the public health and safety by working toward the elimination of
transportation-related deaths, injuries, and property damage; Mobility:
Shape America's future by ensuring a transportation system that is
accessible, integrated and efficient, and offers flexibility of
choices; Economic Growth and Trade: Advance America's economic growth
and competitiveness domestically and internationally through efficient
and flexible transportation; Human and Natural Environment: Protect and
enhance communities and the natural environment affected by
transportation; National Security: Advance the nation's vital security
interests in support of national strategies such as the National
Security Strategy and National Drug Control Strategy by ensuring that
the transportation system is secure and available for defense mobility
and that our borders are safe from illegal intrusion.
6. Are you willing to appear and testify before any duly
constituted committee of the Congress on such occasions as you may be
reasonably requested to do so? Yes.
f. general qualifications and views
1. How have your previous professional experience and education
qualified you for the position for which you have been nominated.
I believe my past experience in the legislative branch has been
enormously helpful in teaching me the legislative process and the
related skills necessary to perform the job for which I have been
nominated. I also believe that my experiences at both the Department of
Commerce and here at Transportation have given me insight into the
balance needed between the executive and legislative branches.
2. Why do you wish to serve in the position for which you have been
nominated?
First, I am proud that Secretary Slater has developed an
appreciation for my abilities and has chosen me to carry out
theDepartment's legislative initiatives and strategies. Second, I am
equally proud of the fact that President Clinton has concurred with
Secretary Slater's decision and is giving me such an outstanding
opportunity to serve him and the American people. I cannot think of a
better way to continue my role in public service.
3. What goals have you established for your first two years in this
position, if confirmed?
In the remaining 16 months of the Clinton Administration, my only
goal is to do the best job that I am capable of to show both the
Secretary and the President that they made the right choice.
4. What skills do you believe you may be lacking which may be
necessary to successfully carry out this position? What steps can be
taken to obtain those skills?
Patience may be the skill I most lack. Continued self awareness may
be the best vehicle for improving that skill. It is most likely there
are other skills that need improvement as well, but I believe I am
fully capable of doing this job given the opportunity.
5. Please discuss your philosophical views on the role of
government. Include a discussion of when you believe the government
should involve itself in the private sector, when should society's
problems be left to the private sector, and what standards should be
used to determine when a government program is no longer necessary.
I believe the role of Government is to help those who are not in a
position to help themselves. That means equal opportunity for all in
getting an education, the ability to compete for employment, to
guarantee equal access for the physically challenged, etc. The
government's role in the private sector should be to primarily
guarantee equal opportunity, individual employment rights, and help
American corporate interests compete in markets around the world.
Society's problems can be left to the private sector only when the
private sector proves itself free from discrimination or barriers both
in the board room as well as the workplace. Applicable standards for
Government intervention in the private sector may best be done on a
case by case basis.
6. In your own words, please describe the agency's current
missions, major programs, and major operational objectives.
The Department's primary goal and objective, along with Congress,
is to develop and promote the safest and most efficient transportation
system possible. Our mission is to have the safest skies, surface
transportation systems and waterways in our nation's history. But, it
is also important to find ways to provide economical and expedited
movement of goods to markets worldwide.
7. In reference to question number six, what forces are likely to
result in changes to the mission of this agency over the coming five
years.
Over the next five years, we are likely to face increased air
passenger travel and cargo shipments. These likely increases are why it
is so critically important to begin our FAA modernization program now
so that we can begin to address our anticipated delays and safety
concerns. We can likely anticipate increased highway use as well and
therefore it is our mission to find ways to make highway travel safer
yet somehow less congested.
8. In further reference to question number six, what are the likely
outside forces which may prevent the agency from accomplishing its
mission? What do you believe to be the top three challenges facing the
department/agency and why?
I am not certain that any outside forces actually exist in keeping
DOT from reaching its mission, however, there is always the possibility
of the unforeseen, such as, a lack of cohesion between management and
labor or budgetary constraints. Concerning the top three challenges
this agency faces, I believe the amount of time left in this
Administration to fulfill its mission is the biggest challenge. The
second biggest challenge is to be able to fulfill our mission under
difficult budget restraints. Third, the difficulty of an agency this
size to work in unison in fulfilling our mission.
9. In further reference to question number six, what factors in
your opinion have kept the department/agency from achieving its
missions over the past several years?
I believe the Department has, in fact, done a good job in
accomplishing its mission. The number of aviation related deaths over
the last year has declined dramatically. The aviation industry
continues to develop new technology to improve air service for both
passengers and cargo. The number of passengers flying continues to
increase at a record pace. The Administration has successfully
negotiated thirty-five ``open skies'' agreements with foreign
governments opening the way for increased services for U.S. carriers.
The Administration has begun a thoughtful ``safe skies'' program to
bring along underdeveloped foreign aviation partners to a higher
standard of aviation safety decreasing the risk of aviation related
fatalities. We have significantly increased seatbelt use through our
``Buckle Up America Program'', which at the same time has decreased the
number of automobile related fatalities. We have successfully decreased
drunk driving through an aggressive incentive program designed to work
in partnership with the States. These are just some of a number of
examples of how this agency has achieved its mission thus far.
10. Who are the stakeholders in the work of this agency?
The American public in general, but more specifically, State and
local governments, industry, labor, safety groups, environmentalists
and others with an interest in transportation.
11. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in question number ten.
If confirmed, I will make every effort to work with all
stakeholders to develop the best transportation policy possible.
12. The Chief Financial Officers Act requires all government
departments and agencies to develop sound financial management
practices similar to those practiced in the private sector.
(a) What do you believe are your responsibilities, if confirmed, to
ensure that your agency has proper management and accounting controls?
I would, to the best of my ability, work in concert with the Office
of General Counsel and the Office of Inspector General to insure that
DOT is adhering to all rules of law set forth by Congress.
(b) What experience do you have in managing a large organization?
As former Chief of Staff for former Senator Carol Moseley-Braun, I
hired and managed a staff of fifty nine people. Also, while serving as
State Director of the Clinton/Gore Pennsylvania Campaign, I supervised
a staff of forty-seven people. Lastly, while serving as Acting
Assistant Secretary since December 1, 1998, I have been supervising a
staff of twenty-three in this office.
13. The Government Performance and Results Act requires all
government departments and agencies to identify measurable performance
goals and to report to Congress on their success in achieving these
goals.
(a) Please discuss what you believe to be the benefits of
identifying performance goals and reporting on your progress in
achieving those goals.
Performance goals are beneficial in assessing strengths and
weaknesses within an organization in two ways. First, they give a
reasonable assessment, in most cases, regarding personnel. Second, they
give some assessment, over a period of time, as to whether goals are
realistic and/or achievable.
(b) What steps should Congress consider taking when an agency fails
to achieve its performance goals? Should these steps include the
elimination, privatization, downsizing or consolidation of departments
and/or programs?
Congress' role in assessing performance goal achievement should be
decided on a case by case basis. Agencies have different track records
in achieving stated goals and therefore should be judged on those
records. In fact, in a recent study released jointly by GAO and the
Senate Governmental Affairs Committee, the Department of Transportation
was lauded for having the best performance plan in Government.
(c) What performance goals do you believe should be applicable to
your personal performance, if confirmed?
My performance should be judged on a variety of factors including
accessibility to Members of Congress and their staffs' timely responses
to Congressional questions before the Department, supplying witnesses
and testimony for Congressional hearings, adequate grant notification
to Congressional offices, and practicing sound judgment when giving
advice to other officers of the Department.
14. Please describe your philosophy of supervisor/employee
relationships. Generally, what supervisory model do you follow? Have
any employee complaints been brought against you?
My own personal philosophy of supervisor/employee relationships
does not necessarily relate to any one known model, but instead it is
more of a composite of what I have experienced over the course of my
professional career in Washington, D.C. I believe that every supervisor
should have an open door policy for all of his/her employees. I believe
it is important to lay out your expectations early on as a supervisor
and to let your employees know that they will be meritoriously judged
based on those expectations.
15. Describe your working relationship, if any, with the Congress.
Does your professional experience include working with committees of
Congress? If yes, please describe.
I believe that I have a good working relationship with Congress. My
experience here at the DOT in both capacities as the Deputy Assistant
Secretary and Acting Assistant Secretary have given me excellent
opportunities to build what I would consider solid working
relationships with both Members and staff on a range of issues. My time
spent working in the Senate (eight years) for Senators Kennedy and
Moseley-Braun, were invaluable in teaching me the legislative process
as well as affording me the opportunity to build work-related
relationships.
16. Please explain what you believe to be the proper relationship
between yourself, if confirmed, and the Inspector General of your
department/agency.
I believe that the Inspector General of this agency commands and
deserves the utmost respect of all DOT employees. I believe it is
important for the Inspector General to maintain as much independence
from other DOT officers and offices as his job requires. If the
Inspector General were doing any type of audit or investigation, which
in any way, would require my participation, I would treat that action
with the utmost seriousness and attention.
17. Please explain how you will work with this Committee and other
stakeholders to ensure that regulations issued by your department/
agency comply with the spirit of the laws passed by Congress.
If the Committee or others were to call into question regulations
issued by this Department, I would, to the best of my ability, work to
find the answer to that question.
18. In the areas under the department/agency's jurisdiction, what
legislative action(s) should Congress consider as priorities? Please
state your personal views.
DOT's top legislative priorities are as follows: A fully funded FY
2000 budget, FAA reauthorization, rail and motor carrier safety
legislation and Surface Transportation Board reauthorization.
19. Within your area of control, will you pledge to develop and
implement a system that allocates discretionary spending based on
national priorities determined in an open fashion on a set of
established criteria? If not, please state why. If yes, please state
what steps you intend to take and a time frame for their
implementation.
Yes. The criteria for discretionary funds are, in fact, determined
not by this office, but by the mode responsible for the actual funding.
The role of this office is to insure that members of Congress who are
recipients of discretionary funds are properly notified and given the
opportunity to release that information to their constituents. If, in
fact, there is some question about DOT's discretionary spending, I
would be willing to help find the answers to whatever concerns there
are.
Senator Hutchison. Thank you, Mr. Frazier. Dr. Van Beek.
STATEMENT OF DR. STEPHEN D. VAN BEEK, NOMINEE, ASSOCIATE DEPUTY
SECRETARY AND DIRECTOR, OFFICE OF INTERMODALISM, U.S.
DEPARTMENT OF TRANSPORTATION
Dr. Van Beek. Madame Chairwoman, Senator Hollings, members
of the committee, let me first thank Representative Lofgren for
coming and speaking on my behalf today. I genuinely appreciate
it, as I appreciate the support of Senator Dianne Feinstein,
who I know could not be here today.
First, I want to thank you for convening this hearing today
to consider my nomination to the position of Associate Deputy
Secretary of Transportation and Director of the Office of
Intermodalism.
My professional life has been dedicated to public service.
And should the Senate honor me with confirmation to the
position, I pledge to you that I will carry out the
responsibilities entrusted to me in an ethical and professional
manner, which justifies your, President Clinton's and Secretary
Slater's confidence.
As you know, the Associate Deputy Secretary is charged with
helping the Secretary and Deputy Secretary of the Department
provide leadership to the Department's agenda and management
concerns. In this capacity, the position acts as a senior
policy advisor to the Secretary with a special emphasis on
issues that cut across modal boundaries. These include safety,
environment protection, mobility, technological innovation and
security.
As the Director of Intermodalism, the position is an
important voice in articulating the needs of all transportation
users, including those in the intermodal community. Government
policy needs to promote the seamless operation of the nation's
transportation system, so that the Department, Congress and
American citizens receive the optimal yield on their
transportation investments.
In order to accomplish these ends, I will work with the
Department's leadership, including Secretary Rodney Slater,
Members of Congress, the states, industry and other
stakeholders to advocate an intermodal systems perspective of
our transportation network and make it a reality in
departmental programs and initiatives.
The Department and Congress have together made great
progress in supporting an intermodal transportation system.
Thanks to the innovative provisions of recent authorizations,
such as ISTEA and TEA-21, more intermodal projects are eligible
for support, and many have been funded, promising significant
gains in both the passenger and freight sectors.
But there is more to be done to improve services,
performance, safety and economy for all modes and combination
of modes. Future changes, whether in demographics on the
passenger's side or the projected increases in trade on the
freight side, will require further adaptability of the
transportation system. If the system is to be responsive to
these changes, increases in capacity must be predicted and
built into the policy and investment decisions of the
Department.
To accomplish these goals, one priority will be to
buildupon Secretary Slater's ONE DOT management initiative that
has improve teamwork among the different modal administrations
and offices in the Department, using such mechanisms as the
Secretary's Safety and Policy Councils.
These tools are essential for implementing priority
initiatives, such as the development of the 21st Century Marine
Transportation System, MTS, an initiative which will involve
extensive interactions with stakeholder groups and DOT modal
administrations, such as the Maritime Administration, the
United States Coast Guard, and the surface modes which
transport maritime commerce to and from the interior of the
United States.
For the MTS to be successful, we must make transportation
connections responsive to the demands which will be placed upon
them. These demands will be significant indeed, given forecasts
that marine trade will double in the next 20 years.
With the increase in international land and sea trade,
international ports and border crossings pose special
challenges of administrative complexity and national standards.
To deal with these potential choke-points and to promote
the free flow of freight generally, the Department and the
state transportation agencies are addressing the border
crossing and trade corridor provisions of TEA-21.
In addition, in conjunction with other Federal agencies, we
are examining how to use innovative technologies, such as
intelligent transportation system and electronic manifests, to
streamline clearance processes at border crossings.
Another personal priority of mine is to address key
intermodal projects in the ten Federal regions which will
enhance regional mobility. Among many others, these include the
Alameda Corridor, the Salt Lake City Olympics, and the Miami
Intermodal Center. Other sponsors of intermodal projects,
seeking to emulate these innovative solutions, will have my
office as a departmental point of contact and lead in providing
assistance on these initiatives.
On these and other initiatives, I look forward to working
with the professionals in the Office of Intermodalism to
advance the nation's transportation system. I especially look
forward to working with Congress and intermodal stakeholders to
tackle these issues and resolve outstanding challenges.
Once again, thank you for the opportunity to appear before
you today. I also would be happy to answer any questions you
might have.
[The prepared statement and Biographical Information of Dr.
Van Beek follow:]
Prepared Statement of Dr. Stephen D. Van Beek, Nominee, Associate
Deputy Secretary and Director, Office of Intermodalism, U.S. Department
of Transportation
Madam Chairwoman, Senator Hollings, members of the Committee:
I want to thank you for convening this heating today to consider my
nomination to the position of Associate Deputy Secretary of
Transportation and Director of the Office of Intermodalism. My
professional life has been dedicated to public service and should the
Senate honor me with confirmation to the position, I pledge to you that
I will carry out the responsibilities entrusted to me in an ethical and
professional manner which fully justifies your and President Clinton's
confidence.
As you know, the Associate Deputy Secretary is charged with helping
the Secretary and Deputy Secretary provide leadership to the Department
of Transportation's agenda and management concerns. In this capacity,
the position acts as a senior policy advisor to the Secretary with a
special emphasis on issues that cut across modal boundaries. These
issues include safety, environmental protection, mobility,
technological innovation and security.
As the Director of Intermodalism, the position is an important
voice in articulating the needs of all transportation users, including
those in the intermodal community. Since the creation of the Office of
Intermodalism by the Intermodal Surface Transportation Efficiency Act
of 1991 (ISTEA), this position has included the responsibility of
ensuring that government policy promotes the seamless operation of the
Nation's transportation system so that the Department, Congress, and
American citizens receive the optimum yield for their transportation
investments.
In order to accomplish these ends, I will work with the
Department's leadership, including Secretary Rodney Slater, members of
Congress, the states, industry, and other stakeholders to advocate an
intermodal, systems perspective of our transportation network and make
it a reality in departmental programs and initiatives.
Secretary Slater has been a leader in expanding our vision about
what transportation means for our nation. He has challenged us to help
create additional economic opportunity by increasing accessibility to
transportation, to consider how we can enhance the environment and the
livability of communities, and to establish a climate for innovation as
we work with public and private partners to insure that new
technologies are developed and deployed in the transportation system.
As Deputy Administrator of the Research and Special Programs
Administration (RSPA), I have had the opportunity to work on these and
many other intermodal initiatives of the Department. These include
response to man-made and natural disasters, hazardous materials
transportation, university programs, and research and technology
issues. In addition, I have had direct responsibility for the Volpe
National Transportation Systems Center, a leading government center
supporting transportation programs of the Department, states, and other
transportation organizations.
Five years ago the National Commission on Intermodal Transportation
issued its report to Congress stressing the benefits of intermodalism
and the need for DOT leadership in developing a consistent intermodal
policy. Congress reaffirmed this need when it passed the Transportation
Efficiency Act of the 21st Century (TEA-21). Potential benefits of
intermodalism include lowering transportation costs, increasing
economic productivity and efficiency, reducing the burden on over-
stressed infrastructure, generating higher returns from public and
private investments, improving accessibility for under-served
populations, and reducing energy consumption and contributing to
improved air quality and environmental conditions.
The Commission found that while the private sector had adopted an
intermodal perspective, the public institutions were not evolving as
swiftly as necessary to keep up with new developments and look for
intermodal solutions to transportation problems. In short, all levels
of transportation agencies--federal, state and local--must stay in
touch with the intermodal transportation community to make sure that
decision-making, public infrastructure and management practices are
adapting to and complimenting user needs.
The Department and Congress have together made progress in
supporting an intermodal transportation system. Thanks to innovative
provisions of ISTEA and TEA-21 more intermodal projects are eligible
for support and many have been funded, promising significant gains in
both the passenger and freight sectors.
But there is more to be done to improve services, performance,
safety, and economy for all modes and combinations of modes. Future
changes, whether in demographics on the passenger side, or the
projected increases in trade on the freight side, will require further
adaptability of the transportation system. If the system is to be
responsive to these changes, increases in capacity must be predicted
and built into policy and investment decisions of the Department.
To accomplish these goals, one priority will be to build upon
Secretary Slater's ONE DOT management initiative that has improved
teamwork among the different modal administrations and offices in the
Department, using such mechanisms as the Secretary's Safety and Policy
Councils.
These tools are essential for implementing priority initiatives
such as the development of the 21 st Century Marine Transportation
System (MTS), an initiative which has, and will, involve extensive
interactions with stakeholder groups and DOT modal administrations such
as the Maritime Administration, the U.S. Coast Guard, and the surface
modes which transport maritime commerce to and from the interior to the
United States. For the MTS to be successful, we must make
transportation connections responsive to the demands which will be
placed upon them. These demands will be significant indeed given
forecasts that marine trade will double in the next twenty years.
With the increase in international land and sea trade,
international ports and border crossings pose special challenges of
administrative complexity and national standards. To deal with these
potential choke- points and to promote the free flow of freight
generally, the Department and the state transportation agencies are
addressing the border crossing and trade corridor provisions of TEA-21.
We will continue to advance innovative projects to advance
intermodalism. I will also lead the Department's efforts to work with
other federal agencies, such as the U.S. Customs Service and its
counterparts, to identify potential means of streamlining clearance
processes through the use of compatible databases and electronic
manifests.
Another personal priority is to address key intermodal projects in
the ten federal regions which will enhance regional mobility. Among
many others, these include the Alameda Corridor, the Salt Lake City
Olympics, and the Miami Intermodal Center. Other sponsors of intermodal
projects, seeking to emulate these innovative solutions will have my
office as a departmental point-of-contact and lead in providing
assistance on their initiatives. The office's organizational structure
supports this by giving its transportation specialists regional
responsibility for following projects and establishing working
relationships with state agencies, Metropolitan Transportation
Organizations (MPOs), and private industry.
The tools for achieving a truly intermodal transportation system
include promoting, advancing, and deploying technology, creating
innovative financing tools, and expanding research and education
initiatives. New applications of technologies whether in logistics,
collision avoidance systems, or location technologies such as Global
Positioning Satellites, offer promises of new efficiencies, capacities
and services. Only by working multimodally and intermodally can the
full promise of these technologies be realized.
I will continue efforts of the Department to use innovative
financing to further intermodal connections and linkages. The Office of
Intermodalism was instrumental in devising a funding strategy for the
Alameda Corridor project, and supports TEA-2l's innovative financing
provisions in the Transportation Infrastructure Finance and Innovative
Act (TIFIA) and the Railroad Rehabilitation and Improvement Financing
program (RRIF). These programs use federal funds as leverage to
encourage the use of private investment capital. The ultimate aim of
innovative finance should be to establish a climate whereby federal
funds are but one resource of many available to create transportation
infrastructure.
Having come from the university environment and having had direct
responsibility for university programs at RSPA, I believe we can expand
DOT's education efforts to focus more attention on the intermodal
components of the transportation system. Topics for more research and
education include rail and highway grade crossing safety; automated
equipment identification; vehicle location systems; safety performance
standards; high-speed rail technology; multimodal revenue accounting
and ticketing systems; and transit information networks. Already the
Office of Intermodalism has sponsored, and will continue to develop,
intermodal training materials for transportation professionals at all
levels of the transportation sector. On these and other initiatives, I
look forward to working with the professionals in the Office of
Intermodalism to advance the nation's transportation system.
I especially look forward to working with Congress and intermodal
stakeholders to tackle these issues and resolve outstanding challenges.
Once again, thank you for the opportunity to appear before you
today. I would be happy to answer any questions.
______
A. BIOGRAPHICAL INFORMATION
1. Name: (Include any former names or nick names used.) Stephen
Dart Van Beek (Steve).
2. Position to which nominated: Associate Deputy Secretary, U.S.
Department of Transportation.
3. Date of nomination: August 2, 1999.
4. Address: (List current place of residence and office addresses.)
Residence: 1631\1/2\ 19th Street, Apt. B, N.W., Washington, D.C. 20009;
Office: Research and Special Programs Administration, Department of
Transportation, 400 7th Street, S.W., Washington, D.C. 20590.
5. Date and place of birth: November 9, 1961, Washington, D.C.
6. Marital status: (Include maiden name of wife or husband's ame.)
Married, Elizabeth Tucker Van Beek, maiden name: Tucker
7. Names and ages of children: (Include stepchildren and children
from previous marriages.) I have no children.
8. Education: (List secondary and higher education institutions,
dates attended, degree received and date degree granted.) University of
Virginia (1986-1991), Ph.D. Government and Foreign Affairs, 1991;
University of Virginia (1986-1991). M.A. Government and Foreign
Affairs, 1988; University of California Santa Barbara (1980-1983), B.A.
Political Science, 1983; University of Maryland College Park (1979-
1980), no degree; Albert Einstein Senior High School, Kensington MD
(1976-1979), Diploma 1979.
9. Employment record: (List all jobs held since college, including
the title or description of job, name of employer, location of work,
and dates of employment.)
Full-Time Positions; Deputy Administrator, Research and Special
Programs Administration (RSPA), Department of Transportation,
Washington, D.C. (August 1998-present); Special Assistant to the
Administrator, RSPA, U.S. DOT, Washington, D.C. (February 1998-August
1998); Assistant/Associate Professor of Political Science, San Jose
State University (August 1990 to January 1998). Also served as
Assistant to the Academic Vice President (1993 to 1995); Assistant
Chair of the Department of Political Science (1995 to 1997). I am
currently on professional leave as a professor from this assignment.
Lecturer, Department of Politics, Washington and Lee University,
Lexington VA (April 1990 to June 1990); Teaching Assistant, University
of Virginia, Charlottesville VA (Fall and Spring Semesters between
August 1987 and June 1989); Consultant, Democratic Congressional
Campaign Committee, Washington, D.C. (May 1986 to August 1986);
Legislative Assistant/Staff Assistant, Representative Tony Coelho,
Washington, D.C. (September 1983 to May 1986).
Part-Time Positions; Research Associate, Norman Y. Mineta
International Institute of Surface Transportation Policy; Studies (non-
profit entity of San Jose State University), (August 1995 to January
1998); Teacher-Consultant, Working Partnerships USA, AFL-CIO, (January
1997 to December 1997); Visiting Professor, De Anza Community College,
Cupertino, CA, (1993 and 1995); Temporary Work, Manpower Inc.,
Charlottesville VA (May 1987 to August 1987).
10. Government experience: (List any advisory, consultative,
honorary or other part-time service or positions with Federal, State,
or local governments, other than those listed above.) Member, Santa
Clara County Charter Review Commission (California), (September 1997 to
January 1998). I resigned after my acceptance of the DOT position.
Member, Mayor's Blue-Ribbon Panel on Ethics (San Jose,
Califomia),(September 1997 to December 1997).
11. Business relationships: (List all positions held as an officer,
director, trustee, partner, proprietor, agent, representative, or
consultant of any corporation, company, firm, partnership, or other
business enterprise, educational or other institution) (listed above).
Research Associate, Norman Y. Mineta International Institute of
Surface Transportation Policy; Studies (non-profit entity of San Jose
State University), (August 1995 to January 1998); Teacher-Consultant,
Working Partnerships USA, AFL-CIO, (January 1997 to December 1997).
12. Memberships: (List all memberships and offices held in
professional, fraternal, scholarly, civic, business, charitable and
other organizations.)
Previous Memberships:
California Faculty Association (served as a member, and as a member
of the statewide political/legislative action committee); American
Political Science Association; Western Political Science Association;
Midwest Political Science Association; Research Committee of
Legislative Specialists (International Political Science Association);
Pacific Islands Political Science Association; California Studies
Association; Phi Kappa Phi Honor Society.
13. Political affiliations and activities:
(a) List all offices with a political party which you have held or
any public office for which you have been a candidate.
I have not been a candidate for any office.
(b) List all memberships and offices held in and services rendered
to all political parties or election committees during the last 10
years.
California Faculty Association. Statewide Political Action and
Legislative Committee (1993 to 1997); Clinton-Gore Rapid-Response
Volunteer, Victory 1996, Northern California (1996); Coordinated
Campaign (South Bay Central Labor Council and Santa Clara County
Democratic Party), Unpaid Advisor and Volunteer (1990 to 1996); Ken
Yeager for California State Assembly, Advisor and Fundraiser (1995 and
1996); Democratic Century Club (Santa Clara County) (1993 to 1997)
(c) Itemize all political contributions to any individual, campaign
organization, political party, political action committee, or similar
entity of $500 or more for the past 10 years.
I have not contributed $500 to any candidate, committee or entity.
14. Honors and awards: (List all scholarships, fellowships,
honorary degrees, honorary society memberships, military medals and any
other special recognitions for outstanding service or achievements.)
Member, Phi Kappa Phi Honor Society (for faculty service to San Jose
State University)
15. Published writings: (List the titles, publishers, and dates of
books, articles, reports, or other published materials which you have
written.)
Haas, P., S.D. Van Beek, et. al. 1997. Capital Versus Operating
Grants for Transit: Economic Impacts for California. San Jose, Calif.:
Norman Y. Mineta International Institute for Surface Transportation
Policy Studies. [Mineta Institute Report, one of six team members]
Van Beek, S.D. 1997 (Editor). Toward a Cooperative Future? Labor-
Management Relations in Surface Transportation. San Jose, Calif.:
Norman Y. Mineta International Institute for Surface Transportation
Policy Studies. [An edited collection of a conference session held in
March 1997]
Van Beek, S.D. 18 May 1997. ``Why Single-Shot Primary Favors
Incumbents.'' San Jose Mercury News. [electoral reform]
Van Beek, S.D. 8 July 1996. ``The Simple, Cheap, Fair Solution.''
San Jose Mercury News. [electoral reform]
Van Beek, S.D. 1995. When the House and Senate Meet: Bicameral
Resolution in Congress. Pittsburgh, Penn.: University of Pittsburgh
Press. [An analysis of congressional action on savings and loan, trade,
and budget policy-making]
Van Beek, S.D. 1995 (Contributor). C-SPAN Guide to the 1996
Election. Washington, D.C.: C-SPAN. [A guide for college professors on
using the resources of C-SPAN to follow the election]
Van Beek, S.D. 1995. ``Pacific Island Governments.'' In the Survey
of Social Science. Government and Politics, ed. Joseph Bessette.
Pasadena, Calif.: Salem Press. [An analysis of pacific island
governments, economies, and culture]
Van Beek, S.D. 1995. ``Legislative Function of Government.'' In the
Survey of Social Science: Government and Politics, ed. Joseph Bessette.
Pasadena, Calif: Salem Press. [An analysis of representational and
progressive models of lawmaking]
Van Beek, S.D. 1995. ``Elections and Democracy.'' In Politics in
the United States and California, ed. Julian Foster. Dubuque, Iowa:
Kendall/Hunt Publishing. [Comparison of 1992 and 1994 national and
state election results]
Van Beek, S.D. 1994. ``Three Efforts at Managing Crises from
Franklin D. Roosevelt's White House.'' In the Handbook of Bureaucracy,
ed. Ali Farazmand. New York: Marcel Dekker. [Description of crisis
leadership]
Van Beek, S.D. 4 November 1993. ``Spending Constraints Handcuff
State Lawmakers.'' San Jose Mercury News. [legislative budgeting]
Van Beek, S.D. 18 March 1992. ``Let the House and Senate Judge One
Another's Ethics.'' Los Angeles Times. [congressional reform]
Butler, D.O. and S.D. Van Beek. 1990. ``Why Not Swing? Measuring
Electoral Change.'' PS: Political Science and Politics, 13: 178-84.
[Comparative piece analyzing British and United States elections]
16. Speeches: Provide the Committee with two copies of any formal
speeches you have delivered during the last 5 years which you have
copies of on topics relevant to the position for which you have been
nominated.
17. Selection:
(a) Do you know why you were chosen for this nomination by the
President?
I am honored to be selected by the Secretary and nominated by the
President for this job. I believe I was selected because of my
knowledge, education and experience in the transportation field and in
public administration. In addition, my service to the Research and
Special Programs Administration as Deputy Administrator has
demonstrated my skills for this position.
(b) What do you believe in your background or employment experience
affirmatively qualifies you for this particular appointment?
First my education qualifies me. My graduate and undergraduate
education centered on public administration and public policy, American
political institutions, and political economy. Second, I have taught
and written about the American political system and transportation for
seven years, involving a wide set of topics. Third, I have practical
experience, serving as a legislative assistant to a member of Congress,
and serving as Deputy Administrator for a modal administration with 870
employees and a $300 million budget. Finally, many of the issues, such
as technology applications and emergency transportation, and people
with whom I have dealt, inside and outside of DOT, are important to the
Associate Deputy Secretary position. This is significant as the
Secretary has made ``One DOT,'' unifying the disparate parts of the
Department into a team focusing on systemic goals reflected by the
Secretary's Strategic Plan, an important management strategy.
b. future employment relationships
1. Will you sever all connections with your present employers,
business firms, business associations or business organizations if you
are confirmed by the Senate?
I am currently on leave. uncompensated, as an Associate Professor
of Political Science at San Jose State University; please refer to
questions 3-5 below.
2. Do you have any plans, commitments or agreements to pursue
outside employment, with or without compensation, during your service
with the government? If so, explain. No.
3. Do you have any plans, commitments or agreements after
completing government service to resume employment, affiliation or
practice with your previous employer, business firm, association or
organization?
I intend on returning to teaching at San Jose State University.
4. Has anybody made a commitment to employ your services in any
capacity after you leave government service?
No, my current professional leave expires in December 1999. I
intend on seeking an extension until January 2001.
5. If confirmed, do you expect to serve out your full term or until
the next Presidential election, whichever is applicable? Yes.
c. potential conflicts of interest
1. Describe all financial arrangements, deferred compensation
agreements, and other continuing dealings with business associates,
clients or customers.
1. My only continuing association remains my professional leave
granted by San Jose State University.
2. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated.
I will continue to be recused, as I have been since my employment,
from any Department of Transportation business with San Jose State
University. Please refer to attachment 2.
3. Describe any business relationship, dealing, or financial
transaction which you have had during the last 10 years, whether for
yourself, on behalf of a client, or acting as an agent, that could in
any way constitute or result in a possible conflict of interest in the
position to which you have been nominated?
There are none.
4. Describe any activity during the past 10 years in which you have
engaged for the purpose of directly or indirectly influencing the
passage, defeat or modification of any legislation or affecting the
administration and execution of law or public policy.
I have visited the California legislature to argue on behalf of
higher educational funding for the California State University system.
Since joining the Department, I have represented the agency on Year
2000 issues, hazardous materials reauthorization, pipeline safety
reauthorization, and appropriation bills for RSPA.
5. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items. (Please provide a copy of any trust or other agreements.)
Please refer to the Deputy General Counsel opinion letter.
6. Do you agree to have written opinions provided to the Committee
by the designated agency ethics officer of the agency to which you are
nominated and by the Office of Government Ethics concerning potential
conflicts of interest or any legal impediments to your serving in this
position? Yes.
d. legal matters
1. Have you ever been disciplined or cited for a breach of ethics
for unprofessional conduct by, or been the subject of a compliant to
any court, administrative agency, professional association,
disciplinary committeeor other professional group? If so, provide
details. No.
2. Have you ever been investigated, arrested, charged or held by
any Federal, State, or other law enforcement authority for violation of
any Federal, State, county, or municipal law, regulation or ordinance,
other than a minor traffic offense? If so, provide details. No.
3. Have you or any business of which you are or were an officer
ever been involved as a party in interest in an administrative agency
proceeding or civil litigation? If so, provide details? No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? No.
5. Please advise the Committee of any additional information,
favorable or unfavorable, which you feel should be considered in
connection with your nomination.
I know of no additional information.
e. relationship with committee
1. Will you ensure that your department/agency complies with
deadlines set by congressional committees for information? Yes.
2. Will you ensure that your department/agency does whatever it can
to protect congressional witnesses and whistle blowers from reprisal
for their testimony and disclosures? Yes.
3. Will you cooperate in providing the committee with requested
witnesses, to include technical experts and career employees with
firsthand knowledge of matters of interest to the committee? Yes.
4. Please explain how you will review regulations issued by your
department, agency, and work closely with Congress, to ensure that such
regulations comply with the spirit of the laws passed by Congress.
I will work closely with the members and staff of the Senate
Commerce Committee to ensure that there is an open line of
communication between my office and the committee. I will make myself
available to the committee to discuss the ways in which the Department
executes laws consistent with their letter and spirit. From my
experience in RSPA, I believe the Department and Administration have in
place a thorough regulatory review process that ensures consistency
with the intent of the law.
5. Describe your department/agency's current mission, major
programs, and major operational objectives.
The Associate Deputy Secretary is responsible for designing,
planning and implementing intermodal transportation policies,
procedures, and operations. This includes developing and implementing
Departmental initiatives that will develop a national intermodal
transportation system in the United States that moves people and
freight in an energy efficient and cost-efficient manner. By working
within the immediate Office of the Secretary, the Associate Deputy
Secretary is empowered to examine transportation policies within the
Department to ensure they are compatible with intermodal concerns and
take full advantage of the public investment in transportation.
Intermodal exchange involves connections, those hubs for the
transport of people and goods which involve more than one mode of
transportation. There is a growing recognition that passenger terminals
connecting modes such as aviation, rail, ferries, highways and transit
provide an availability of choices and convenience that allow for less
congestion and greater ease of travel. Similarly, major freight hubs
such as seaports, airports, intermodal rail terminals, and transfer
facilities provide efficiencies which improve productivity growth and
strengthen the nation's ability to compete in the global economy. A key
responsibility of the Associate Deputy Secretary is to develop
relationships with state and local transportation officials as well as
other federal agencies, with transportation responsibilities that
impact the performance of transportation systems.
6. Are you willing to appear and testify before any duly
constituted committee of the Congress on such occasions as you may be
reasonably requested to do so? Yes.
general qualifications and views
1. How have your previous professional experience and education
qualified you for the position for which you have been nominated.
They have provided me with managerial, policy expertise, and a full
understanding of the legislative process. I have an established track
record of managing organizations, demonstrated by my service to the
university and my service as the Deputy Administrator of RSPA, where I
have acted as the Chief Operating Officer of an agency with a diverse
mission and a disparate collection of direct constituent offices. I
have policy expertise, reflected by my collection of writings and
teachings on public policy (including transportation) and my direct
experience as a legislative assistant. In addition, I have an extensive
academic background in American political institutions, with a
specialization on the U.S. Congress.
2. Why do you wish to serve in the position for which you have been
nominated?
I find the Associate Deputy Secretary position a challenging one to
both help the Secretary and Deputy Secretary provide leadership to the
Department's agenda and management, but also to be an important voice
in articulating the needs of the transportation system. The many issues
that cut across the different modes of transportation--such as
mobility, technological innovation, and security--require that there be
an office accountable for connecting modes and promoting a systemic
analysis of transportation system performance. This office provides a
single point of contact, for example, for those reliant on the smooth
flow of freight in the nation, particularly as the role of global trade
increases in the U.S. economy and requires the intermodal movement of
goods across domestic and international boundaries. Where bottlenecks
in the system exist, I will employ a problem-solving approach to work
with all responsible officials, both in the private and public sectors,
to help improve connections to ports, airports, rail, and other
facilities. In carrying out these responsibilities I will work with the
different modal administrations, the DOT leadership, members of
Congress, the states, industry, and other stakeholders to improve the
transportation system. Congress itself, in 1991, recognized the
importance of intermodalism by naming the major authorizing legislation
the Intermodal Surface Transportation Efficiency Act (ISTEA) and
creating the Office of Intermodalism. Advocacy for this principle
remains a priority both within and outside of the Department.
3. What goals have you established for your first two years in this
position, if confirmed?
My immediate goal is to meet with transportation organizations and
agencies in order to understand how my position and office can be a
catalyst for improving services, quality, safety and economy for all
modes or combination of modes in an environmentally sound manner. I
will continue to address key intenmodal projects in each of the ten
federal regions. Among many others, these include the Alameda Corridor,
the Salt Lake City Olympics, and the Miami Intermodal Center. In
addition, seeking to emulate these innovative partnerships, sponsors of
other intermodal projects from across the nation are currently working
to address their own transportation problems. I will be the
departmental point-of-contact and lead on these initiatives.
It is also important to provide the leadership for ensuring the
seamless operation of the Nation's transportation system. An intermodal
perspective is required at the planning stage, before projects are
built, and during the construction and implementation stages. A key
duty of the position is making certain that the Department and Congress
receive the optimum yield for the Nation's transportation investments.
To accomplish these ends, one priority will be to build upon the
teamwork established among the different modal administrations and
offices at the Department, using such mechanisms as the Secretary's
Safety and Policy Councils. Another priority initiative will be to
facilitate development of the 21st Century Marine Transportation System
(MTS), an intermodal initiative of the Secretary which involves
extensive interactions with stakeholder groups and DOT modal
administrations such as the Maritime Administration, the U.S. Coast
Guard, and the surface modes which transport maritime commerce to and
from the interior of the U.S. For the MTS to be successful,
transportation connections between waterborne traffic ports and
highways and aviation modes must be responsive to the new demands which
will be placed upon them.
4. What skills do you believe you may be lacking which may be
necessary to successfully carry out this position? What steps can be
taken to obtain those skills?
I believe I possess the requisite skills for the position. However,
intermodalism is a dynamic process and I will reach out to listen to
those who are the customers and operators of the intermodal
transportation system. Accordingly, I will strengthen and establish
contacts in the freight and passenger communities to facilitate the
best decision-making possible by the Department.
5. Please discuss your philosophical views on the role of
government. Include a discussion of when you believe the government
should involve itself in the private sector, when should society's
problems be left to the private sector, and what standards should be
used to determine when a government program is no longer necessary.
I believe the government should play a leadership role in
protecting and enhancing public goods. These are goods valued by the
public, which individual private concerns cannot profitably provide.
Examples include education, environmental protection, national defense,
and safety and security. In these instances, government can provide the
service directly, contract with a private concern and regulate it, work
with states, or subsidize a service through the tax code. Generally,
the more market forces can be used in the provision of a good, the more
likely that public intervention will be successful. For example, the
U.S. Coast Guard has the responsibility for saving lives and provides
that service directly through its operational responsibilities. But
much of the equipment and the vehicles it uses are produced by the
private sector and many services which do not require direct provision
by public employees are contracted out. Once a service can be
profitably provided by the private sector, government's role should be
reduced or eliminated.
I also believe that the government plays an essential role in
representing U.S. interests in international arenas both to ensure that
U.S. companies and workers are treated fairly in foreign markets and
are able to compete on an equal basis. As intermodal transportation is
a global reality, and an integral part of the U.S. economy, it is
imperative that the Department take a leadership role in dealing with
foreign governments by setting the agenda for intermodal
transportation.
6. In your own words, please describe the agency's current
missions, major programs, and major operational objectives.
The charge of the work of the Associate Deputy Secretary is to work
with the Secretary and Deputy Secretary on management initiatives for
the Department as well as other assignments, particularly those that
require the participation of more than one mode of transportation.
Examples include the innovative use of technologies such as Intelligent
Transportation Systems (ITS) and the Global Positioning Satellites
(GPS) which have benefits that cross modal boundaries, and security and
disaster response duties which necessarily involve more than one mode
of transportation.
As the Director of the Office of Intermodalism, the position
requires an examination of the transportation system to ensure that it
is planned and structured in a way that allows for the efficient
movement of people and freight. To be successful in implementing
intermodal policies, initiatives, and program strategies, extensive
consultation and collaboration with the modal administrations,
intermodal stakeholders, and state and local governments are required.
7. In reference to question number six, what forces are likely to
result in changes to the mission of this agency over the coming five
years.
I identify at least three forces that will remake the
transportation system as we know it. The first is the increase in
intermodal freight due to the expansion of trade and the efforts by
shippers to find the most efficient way to move goods. More and more
pressure will be placed on the connectors within the transportation
system. For example, the movement of air cargo is anticipated to grow
rapidly in the next decade and will place increasing demands on
capacity issues. Accounting for over 50% of the total value of all
goods imported and exported, the value of domestic air freight is
expected to double. To accommodate a general increase in intermodal
traffic, airports, water-based transportation, and surface modes must
be tied into national, regional, state and local intermodal strategies.
Second, technological innovations are offering new ways to build
efficiencies into the transportation system. Whether with logistics,
collision avoidance systems, or location technologies such as the
Global Positioning Satellites, applications of private sector
initiatives offer promises of new efficiencies, capacities, and
services for the transportation system. Only by working both
multimodally and intermodally can the full promise of these
technologies be realized. Third, new patterns of passenger movement--
suburb to suburb movement, reverse commuting, and an aging demographic
profile--require intermodal solutions that allow riders and drivers to
have access to transportation and the ability to move seamlessly from
one mode to another. Only by addressing these challenges can the
Department aid in the reduction of congestion and adverse environmental
impacts which troubles many of our Nation's regions.
8. In further reference to question number six, what are the likely
outside forces which may prevent the agency from accomplishing its
mission? What do you believe to be the top three challenges facing the
department/agency and why?
Adapting to the new intermodal environment remains a challenge. If
the passenger and freight systems are to be facilitators rather than
barriers to commerce and movement, they require all concerned to have
an intermodal perspective. Traditional approaches which advocate the
interests of one mode need to be shifted to examine the role each mode
individually plays in a transportation system that must serve a diverse
set of public and private interests. While more and more participants
in the system recognize the necessity of an intermodal perspective,
individual budgetary demands for investments in highways and transit
properties may crowd out intermodal investments. In short, the lack of
an intermodal constituency vis-a-vis traditional lobbies such as those
which represent highways and transit, pose a challenge for policy and
budgetary decisionmaking. For example, if additional investments are
required to implement the 2lst Century Marine Transportation System
(MTS), present-day interests may fight against future investments in
port facilities or connectors, seeing them as competitors for scarce
federal resources. The truth is that everyone has at least some
interest in a safe, environmentally sustainable, and intermodal MTS.
The top three challenges facing the Associate Deputy Secretary and
the Office of Intermodalism are:
First, shifting the transportation paradigm from a modal
perspective to an intermodal one, which focuses on moving people and
goods as seamlessly and as efficiently as possible. Our challenge is to
highlight the benefits of an intermodal perspective and to continue to
shift the Department to a ``One DOT'' approach and stakeholders to an
``integrated transportation system'' approach.
Second, facilitating the improvement of intermodal connectors.
Across the nation there is a pent-up demand for addressing harbor
improvements, grade-crossing conflicts, airport and port access, and
special challenges such as the movement of visitors during the Salt
Lake City Olympics in 2002.
Third, addressing these and other intermodal challenges will pose
capacity and fiscal constraints requiring prioritization and innovative
financing strategies. Prioritization can only happen with extensive
communication with congressional committees, Members of Congress, state
and local transportation agencies, industry, and other stakeholders.
Among other sources, guidance is provided by the Secretary's Strategic
Plan.
9. In further reference to question number six, what factors in
your opinion have kept the department/agency from achieving its
missions over the past several years?
The paradigm shift from a modal perspective to a transportation
system perspective, shaped by intermodalism, is not yet complete.
Having said that, a few important projects have been started and few
major discussions about transportation have occurred that considered an
intenmodal perspective. Greater efficiencies are possible, however, and
many regions continue to need assistance with planning and supporting
connectors. Therefore, the Department needs to continue to advocate an
integrated approach to transportation problems, both internally and
with stakeholders.
10. Who are the stakeholders in the work of this agency?
Stakeholders include a variety of interests beginning with
passengers and those providing services to them, including airport,
ferry, rail, intercity bus, transit, highway and bicycle interests.
Freight interests are a significant constituency, including carriers
(shiplines, airfreight, railroads, highways and those moving intermodal
containers) and those involved with logistics and the development of
intelligent transportation systems to increase system efficiency.
Stakeholders include decisionmakers at the Federal, state, regional,
and local levels and those engaged in transportation research and
analysis at many of the Nation's universities and research centers with
which the Department is a partner.
11. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in question number ten.
Stakeholders should be valued as those with information and
experience that help the Department make intelligent decisions about
how we do our job. They must be seen as partners in the transportation
enterprise. After gathering different perspectives and information,
however, it is the Department's job to make decisions in the public
interest and consistent with laws and directions passed by the
Congress. We also have a responsibility to conduct ourselves fairly
with regard to individual and organizational interests, ensuring no
group gains an unfair advantage by virtue of their relationship with
us.
12. The Chief Financial Officers Act requires all government
departments and agencies to develop sound financial management
practices similar to those practiced in the private sector.
(a) What do you believe are your responsibilities, if confirmed, to
ensure that your agency has proper management and accounting controls?
As the Associate Deputy Secretary, I share the responsibility that
all Federal employees have to ensure efficient and effective management
of government programs. I will ensure that the Office of Intermodalism
has the internal controls and accounting systems which meet the
standards of the Federal Managers' Financial Integrity Act.
(b) What experience do you have in managing a large organization?
For one year I have been the Deputy Administrator of the Research and
Special Programs Administration (RSPA). In addition to managing the
daily operations of the agency (870 employees, $300 million budget,
with two fee-for-service organizations), I have served on the
Secretary's Management Council which has management oversight
responsibility for departmental management issues. I also have held
significant management positions at San Jose State University, a public
university in California with 28,000 students.
13. The Government Performance and Results Act requires all
government departments and agencies to identify measurable performance
goals and to report to Congress on their success in achieving these
goals.
(a) Please discuss what you believe to be the benefits of
identifying performance goals and reporting on your progress in
achieving those goals.
I have found managing toward goals in my current position very
helpful in two important respects. First, it provides information about
the ultimate success of agency initiatives. A cold, hard statistic
often tells more than an intricate analysis. Second, once data
baselines are established, it allows an agency to manage with the
information. If agency goals are not being met after the first quarter,
for example, it provides the opportunity to make adjustments of
personnel, resources, or policies in the short-term.
(b) What steps should Congress consider taking when an agency fails
to achieve its performance goals? Should these steps include the
elimination, privatization, downsizing or consolidation of departments
and/or programs?
Given that the Department will provide performance results
beginning with the end of the Fiscal Year 1999 budget, the Department's
leadership will have the opportunity to work with Congress to interpret
the results. Failing, meeting, or exceeding a performance goal for a
particular year should begin, not end, the analysis of programs and
management. Often times, a one-year piece of data is better understood
as part of a trend analysis. External factors, too, need to be
evaluated to determine whether they were accurately predicted when the
goal was formulated. Finally, after receiving performance results and
analyzing the cause of success or failure, certainly changes in public
policy should be considered. These could include eliminating,
privatizing, downsizing, or consolidating programs or offices, but it
also may require more resources or expansion if a particular area is
not being adequately addressed despite a well performing agency and
management.
(c) What performance goals do you believe should be applicable to
your personal performance, if confirmed?
As a member of the Department's senior leadership, I have the
responsibility to assist in achieving the goals of the Department and
Secretary. I also have the direct responsibility for fulfilling the
agenda and goals listed in the above questions and answers as well as
the sound management of resources made available to my Office.
14. Please describe your philosophy of supervisor/employee
relationships. Generally, what supervisory model do you follow? Have
any employee complaints been brought against you?
I believe in empowering employees by delegating work to them,
monitoring its quality and timeliness, and assessing their performance.
Delegating work effectively requires constant communication between
employees and supervisor. What this means in a large organization is
working with senior managers to collaboratively set organizational
goals and expectations. In RSPA, I have tried to align all individual
performance plans with the Department and agency's strategic plans,
thereby tying individual work with organizational need. Ultimately,
organizations work most effectively when there is trust and loyalty
among the employees. This is most often successful when there is
frequent contact and a sense of shared mission. No employee complaints
have been brought against me in any capacity.
15. Describe your working relationship, if any, with the Congress.
Does your professional experience include working with committees of
Congress? If yes, please describe.
As Deputy Administrator I have worked with the Transportation
Committees in each chamber as well as a great number of individual
Member offices. Typically this interaction has been on our
authorization legislation, both pipeline safety and hazardous
materials, and the annual appropriation hills. In addition, I have
traveled occasionally to announce grants and have invited Members and
their staffs to participate. I also worked during the mid-1980s for
former Representative Tony Coelho, where I served as a legislative
assistant and worked with several committees on the House side.
Included in my professional background is extensive academic work
focusing on the Congress. My dissertation, published book, several
papers, and teaching all centered on the work of the Congress. This has
provided me with a great appreciation for our bicameral legislature.
16. Please explain what you believe to be the proper relationship
between yourself, if confirmed, and the Inspector General of your
department/agency.
My responsibility is to provide all of the information necessary
for the Office of Inspector General to fulfill its statutory
responsibilities. Having been impressed by the analytical capability of
the Office, I have also benefitted from the advice and publications of
the Inspector General and will continue to support its work in any way
I can.
17. Please explain how you will work with this Committee and other
stakeholders to ensure that regulations issued by your department/
agency comply with the spirit of the laws passed by Congress.
I will work closely with the members and staff of the Senate
Commerce Committee to ensure that there is an open line of
communication between my office and the committee. I will make myself
available to the committee to discuss the ways in which the Department
executes laws consistent with their letter and spirit. I believe the
Department and Administration have in place a thorough review process
that ensures consistency with the intent of the law. The key for me in
working with stakeholders is to gain information about the ways in
which they conduct their operations. For example, I have often made
myself available for meetings and tours of facilities to assure that I
had adequate knowledge about important issues facing them. This is a
view not adequately acquired by simply reviewing a proposed regulation.
Once proposed regulations are put out for comment, I treat each comment
we receive with respect and due consideration.
18. In the areas under the department/agency's jurisdiction, what
legislative action(s) should Congress consider as priorities? Please
state your personal views.
As one of its many legislative priorities, I believe that Congress
must continue to fund the Office of Intermodalism as a separate Office
within the immediate Office of the Secretary to promote the intermodal
policies and advance the integrated solutions to transportation needs
that Congress sought in establishing the Office under ISTEA and in the
TEA-21 reauthorization. The Associate Deputy Secretary, as Director of
the Office of Intermodalism, is empowered by the Secretary to assemble
the resources and make the commitments on behalf of the Department to
address intermodal issues of importance to public officials and
transportation users.
I do not think that it would be advisable to consolidate the Office
of Intermodalism within the Office of the Assistant Secretary for
Transportation Policy, as proposed by the House appropriations bill
(H.R. 2084) and accompanying committee report (106-180). The two office
functions are diverse and reflect different missions. The Office of
Intermodalism carries out crosscutting Departmental intermodal
initiatives at the Secretary's direction and serves as a field-oriented
communications and coordination resource. in addition to formulating
intermodal policy. The OST Policy Office, by comparison, has broader
responsibility in matters of general transportation policy.
If the Senate should confirm me, I intend to review the
organizational and operational role of the Office of Intermodalism and
alternative funding sources, such as the Highway Trust Fund as proposed
in the Senate appropriations bill (S. 1143) and accompanying committee
report (106-55).
In addition to legislation directly impacting intermodal concerns,
there are a number of legislative proposals currently before the
Congress which are important to the sound functioning of the intermodal
transportation system. These include the Federal Aviation
Administration, the Railway Safety program, Hazardous Materials
Reauthorization and the U.S. Coast Guard reauthorization.
19. Within your area of control, will you pledge to develop and
implement a system that allocates discretionary spending based on
national priorities determined in an open fashion on a set of
established criteria? If not, please state why. If yes, please state
what steps you intend to take and a time frame for their
implementation.
Yes. The charge I have is to implement the Congressional and
Administration priorities as detailed in authorizing legislation and
yearly appropriation bills. For further information, I will also refer
to the President's Budget, the Secretary's Strategic Plan, and my
individual performance agreement which I will negotiate with the
Secretary. I am also committed to providing Members and committees of
Congress with information about my office's decisions.
Senator Hutchison. Thank you very much, Dr. Van Beek.
I would like, if everyone is comfortable with this, to ask
if there are questions of Mr. Frazier and Dr. Van Beek in our
first round. And then if they wish to stay, fine, or if they
wish to go. I think the focus on the STB is a little different
from the other two, that are more related. So that is what I
intend to do.
So I would like to start the questioning, because I am very
concerned about truck safety, particularly with NAFTA and the
trucks that are coming in from Mexico and Canada, and making
sure that they are meeting the same safety standards that
American trucks are required to meet for the safety of other
people traveling on the highways.
I was very interested, Dr. Van Beek, in your opening
statement regarding border crossings.
So I would like to ask first, Mr. Frazier, if you have
looked at the Inspector General report that was critical of the
Department's safety programs for commercial trucks coming in
from Mexico especially, and Canada somewhat, and that this
report cited that too few of the inspected trucks met U.S.
safety standards. And, in fact, cited at one crossing in El
Paso, Texas, which receives an average of 1,300 trucks daily,
only one inspector is on duty, and he can inspect 10 to 14
trucks daily. Well, I am concerned about the safety issue.
Dr. Van Beek, I am concerned about being able to get the
trucks through because if we are talking about trucks that have
fresh vegetables, if they meet the safety test a week later,
that is not going to help consumers very much. And it is
certainly not going to promote commerce.
So I would like to ask the two of you to speak to the I.G.
report, Mr. Frazier; and the ease of transportation on our
borders and what you think is the next step to provide safety
and commerce, Dr. Van Beek.
Mr. Frazier.
Mr. Frazier. Thank you, Madame Chairwoman.
Yes, I am familiar with the I.G.'s report as it relates to
truck safety, particularly in the border crossing area. And I
believe that we have taken steps to, in our motor carrier
legislation, which the Administration has put forward, deal
with some of the concerns that are raised in the Inspector
General's report, specifically to the issues of how we conduct
inspections first and foremost, but also to deal with increased
funding to pay for additional inspectors that we believe need
to be placed at the border, the process in which we do this.
I think we recognize in a number of areas that we need to
do more, particularly as we talk about the possibility of NAFTA
moving forward.
I would also say that we feel it is very important for the
states as well to make an effort to increase the number of
inspectors at the border. I believe you know, Madame
Chairwoman, that the State of California has done an aggressive
job of hiring truck inspectors for the trucks that come across
their border.
We are hopeful that New Mexico, Arizona and Texas will in
some fashion be able to increase the number of inspectors on a
state-wide basis as well. But I think that we have taken steps,
again, in our legislation to try to deal with this issue. We
realize it is a very important issue.
I will also add, that I remember when the Secretary met
with you in your office not long ago, you expressed these very
same interests. And we have pledged to work with you to try to
figure out a way to make sure that when we do come through this
situation, particularly with NAFTA, that we are able to work on
this problem together.
Senator Hutchison: Well, I certainly think this is Federal
issue. And I would hope that you are not going to rely on the
states to pick up the burden that really is a Federal
responsibility. These are trucks that go through the border
states, but today they are in 24 states. They are going on the
highways in 48 states in the near future. And it is a huge
safety concern.
Dr. Van Beek.
Dr. Van Beek. Yes, Madame Chairwoman. I look forward to
working with the committee on this issue increasingly, should I
be confirmed.
Two areas that I am familiar with now where the
Department's activities, I think, are supporting trying to
reduce this choke-point in commerce right now: First is the use
of intelligent transportation systems, which would help
identify risky carriers or carriers that should have a very
thorough inspection as they come across the border.
This would allow a sifting out or a targeting of the
enforcement which Mr. Frazier has spoken to about the
Secretary's position and increasing our resources there to
ensure that safety is first at the border and everywhere else
in the United States.
The other place is a current project that the Department is
working on with the U.S. Customs Service, where I will have an
important role on the ITDS program, which will create an
electronic manifest and data base, which will allow the
agencies to cooperate so that you are talking to each other in
real time and you are sharing records and data with each other,
so decisions can be made quickly and not allowing that to back
up and suffering mobility with the fresh vegetables or whatever
commerce may be moving across the border.
Senator Hutchison. Thank you.
Senator Rockefeller, do you have questions of these
nominees?
Senator Rockefeller. No. Although I respect them both and
will vote for them both, I do not have questions.
Senator Hutchison. Thank you.
Senator Breaux.
Senator Breaux. I support them both and welcome them on
board.
Senator Hutchison. Senator Burns.
Senator Burns. I have none.
Senator Hutchison. Senator Cleland.
Senator Cleland. Senator Hutchison, I would like to thank
Mr. Frazier and Secretary Slater for meeting with me and other
members of the Georgia delegations on the possible assistance
of the Georgia Regional Transportation Authority there in
Atlanta.
It is a new approach that is an effort to deal with the
growing issues of quality of life and deteriorating air quality
by balancing out our transportation system in Georgia.
We want to thank the Secretary and you, Mr. Frazier, for
your efforts, particularly your efforts to make sure that the
Georgia Regional Transportation Authority is eligible for
Federal funds to deal with our daunting transportation and air
pollution problems.
So I thank you very much for that support. And it means an
awful lot to us.
I would just like to move on now to a wonderful innovative
program that the Department of Transportation has. The effort
to award slots to communities for air service: I think it is a
very innovative program.
The Department was very kind in selecting the Savannah-
Hilton Head area on an experimental basis to assist communities
like that in acquiring nonstop air service, in this case to
O'Hare. The Savannah-Hilton Head area was the biggest and
fastest growing area in America that did not have nonstop air
service to Chicago O'Hare. And your Department has made that
possible. And I thank you very much for that. And I understand
that maybe today will be able to make those slots permanent.
We were hoping to get another slot. And you and I have
discussed this from time to time. And we hope that in the very
near future the Department can expand its limited service from
Savannah to O'Hare and back.
Is that your hope as well, that in the very near future we
can continue to march down this road and allow communities,
like Savannah and Hilton Head, to expand based on the wonderful
air service that you are granting those communities?
Mr. Frazier. Well, Senator, it is our hope that in some
fashion we are able to help you in the very near future. As you
know with the slot process, there are criteria that have to be
followed by the Department.
But I will say that I am very aware of your request of the
Department. I will make every effort to work with you to try to
make that happen as quickly and efficiently as possible.
Senator Cleland. All right. Thank you very much, Mr.
Frazier. I will support you and Dr. Van Beek.
Madame Chairman, I return the program to you.
Senator Hutchison. Thank you.
Senator Dorgan, for Dr. Van Beek or Mr. Frazier, did you
have questions?
Senator Dorgan. Let me just--I do not have a question, but
I do want to say I think they are extraordinarily well
qualified. I am happy to support their nomination and will be
pleased to vote for confirmation.
Senator Hutchison. Thank you.
Senator Brownback.
Senator Brownback. I do not have any questions of the
nominees. I will be supporting both nominees.
Senator Hutchison. Thank you.
I want to say I appreciate the cooperation of the
committee. I think this is merciful to the other two nominees.
[Laughter.]
Senator Hutchison. I do appreciate the cooperation, because
I really do think that Mr. Frazier and Dr. Van Beek will be
working together on one area that we have discussed, safety and
ease of commerce in the intermodal system. And we will want to
work very closely with you, because I think these are major
issues coming forward.
I would just say if you would like to stay, you are welcome
to. But if not, I think you will have a quick confirmation. And
we will be pleased to support you.
Now I would like to start with Ms. Morgan and say that I
want you to know that I appreciate very much that you have not
taken responsibilities and rights into the STB that were not
specifically given to you by Congress. I think that your
approach to staying within the delegated authority has been
commendable. And I thank you for that.
I think that Senator Rockefeller was correct in his opening
statement, that it is the fault of Congress for not being
clearer.
The STB is a relatively new agency. I think when it was
created, Congress tried to cover all the bases. But I think it
has been clear that in implementation there have been a few
gaps. So I think it is our responsibility to fill those gaps.
And I hope we can meet that responsibility so that the STB will
have the authority it needs to do the job.
My view is that we need a healthy rail industry, and we
need to have fair shipping costs and rights for the people who
are depending on rail for that transportation. And I think
there should be a balance. And I think we need to give the
power to the STB to keep that balance.
So having said that, I want to ask you to start by telling
us what you believe are the key areas that you have not been
able to address, that would make an impact on a strong rail
industry and a fair shipping climate.
Ms. Morgan. Let me answer that in a couple of ways. First
of all, I think that the Board has gone as far as it believes
it can go under the statute, based on the way we read the
statute and the judicial precedent. Now----
Senator Hutchison. What I am asking you, though, is to tell
us where the gaps are.
Ms. Morgan. If Congress does not feel that the direction in
which we have gone is enough, then legislation is necessary.
The legislative proposals that have been out there in various
degrees focus on opening up access, adding competition. And the
way I view those proposals is that they would be a fundamental
change in the statute that we administer.
So if Congress feels that the tenets of the statute that we
administer now no longer work, then we would have to have
legislation. And I think it would be based on the notion that
we want to add competition. And we do not have a statute now
that is what I would term an open-access statute.
Now the second half of your question----
Senator Hutchison. Let me just ask you: Do you think that
competition is part of your mandate?
Ms. Morgan. Yes, it is part of my mandate. But there are
balancing--other interests that are balanced, as I implement
the statute. So competition----
Senator Hutchison. Would you consider those----
Ms. Morgan. --is one of the elements that we look at, but
it is not the only element that we look at. So if that were the
key element to be looked at, then Congress would need to change
the law in order for that to be the case.
Senator Hutchison. Let me just ask you one other question,
because I am going to have a 5-minute rule. And I think we
started a couple minutes after I started.
You said in your testimony that in the last 23 years, 30
class-one railroads have been reduced to 7. Do you believe that
that does continue to allow competition? And is that, in your
opinion, a steady number that we canlook at in the future, or
do you see that dwindling as well?
Ms. Morgan. Well, first of all, there has been a
significant restructuring in the rail industry, as in other
parts of economy. Obviously, we did not believe, in approving
the mergers, that they were not in the public interest and that
they were anticompetitive.
We approved them with significant conditions that we felt
would protect competition. So we believe that those mergers
were not anticompetitive.
Now, will there be more mergers? I cannot really answer
that. Obviously, I would have to rule on that if another one
were to come my way. And I would not want to prejudge or
speculate about that. But I think we have been through a period
of restructuring. And now it is time to stabilize and to
solidify the restructuring that has been approved, and that has
been ongoing.
Senator Hutchison. Thank you.
Senator Rockefeller.
Senator Rockefeller. Thank you, Madame Chairwoman.
Chairman Morgan, there are two areas that I want to focus
on. And I will submit my other questions for the record and
would hope for a response from you within a short period of
time.
Competition obviously is one of them. But the one that you
and I have not discussed before is the whole cram-down issue.
And it is a very dramatic and rather graphic term, but I think
in this case it is a very appropriate term. It is not
overblown. And cram-down refers to the decisions of the STB,
and most recently under your leadership, to abrogate rail
employees' collective bargaining rights at a time that
railroads either merge or make an acquisition.
We had recently the sale of Conrail to CSX and Norfolk
Southern. The STB basically inserts--it inserted, inserts,
whichever you want--its own opinion in place of actual
contractual agreements that have been reached between the
railroad and the labor unions.
So, for example, in West Virginia, one of the people that I
have talked to, who is a senior rail employee, who would have
been No. 3 on the list--and this is technical, but it makes my
point--on the seniority list, which entitled him to work within
ten miles of his home. All of a sudden, because of what you
did, your commission did, now he is ranked 351st, which means
he is entitled to work 80 miles from his home.
It is not so much the mileage, but it is the arbitrariness
of the way it was done that concerns me. This happened without
any requirement that rail management negotiate with its
employees, even though seniority lists and duty stations are
specifically bargained for in employee rights.
Now I find this to be extraordinary and outrageous. I fully
support rail labor's efforts to change the law and to clarify
that STB does not have the authority to toss out contract
rights in merges and acquisitions.
Cram-down is an issue that I am determined to address in
the bill. And people may agree or disagree with me, but that is
why I think it is so important we bring it up.
So my questions of you are three. Is this similar to some
of the shipper issues, in that you believe that the law has to
be changed in order to fix the cram-down problem, or do you--
well, no.
The second question would be: Do you support a bill like
Senator Crapo's that would eliminate any authority,
discretionary or otherwise, for the STB to abrogate collective
bargaining agreements that have been worked through and fought
for?
If you do support that concept, what are you going to do to
help get it accomplished? And if you do not support that
concept, how do you justify what has happened?
Ms. Morgan. First of all, in your statement before your
question, you discuss my record as it relates to collective
bargaining agreements. And I understand and respect your view
on that.
My written testimony goes into a little more detail about
how I believe that I have not been the cause of this problem.
In fact, I was faced with law and judicial precedent, and I
have tried to move the matter in a more positive direction. But
that is--I just wanted to make that point and then move on to
your questions.
With respect to your first question, which is, does the law
need to be changed in this area to better reflect the concerns
of rail labor as it relates to the override of collective
bargaining agreements? The answer is yes.
I have communicated that in my December 21 letter to you,
Senator Hutchison, and to Senator McCain, as well as indicating
that there are certain areas in which Congress would need to
act to change the statutory provisions as they apply to shipper
concerns. So, yes, that is the first answer.
The bill that Senator Crapo has introduced obviously goes
that route. It suggests that the law does need to be changed
and accordingly moves in that direction. And I think that in
order to address this concern, legislation is needed. And I
have already on the record indicated my support for a
legislative approach to correcting this area.
Senator Rockefeller: Thank you. Now, let us get to
competition, and specifically, because my time will run at the
end of this question, bottleneck reform. You know very well,
Chairman Morgan, that that is the issue that disturbs me the
most.
Ms. Morgan. Yes, I understand.
Senator Rockefeller. We have a 15-year history on this.
Ms. Morgan. Yes, we do.
Senator Rockefeller. I simply cannot understand how or why
we have created a system in which railroads are allowed to
exploit bottleneck segments, which are really nothing more than
local monopolies, to the extent that they are.
I have no problem with differential pricing. That is called
the marketplace. What I have a problem with is allowing the
railroads to use their power over bottlenecks to control prices
over non-bottlenecks. I think, again, it is egregious that a
railroad can refuse to quote a price, a separate price, in a
bottleneck segment.
I have used this before. If I were flying to Dallas and I
was going via two or three other cities, which one often does
from West Virginia, I would expect to know the price of each of
the segments of the flights that I was going to take. I mean,
every American would. Only railroads are allowed not to have to
quote a price. And that is extraordinary.
So what we have done, I think, by protecting railroads in
this situation is taken local monopolies and turned them into
national monopolies, particularly now that we have so few class
A railroads. That is not what the Staggers Act, in my judgment,
ever intended to do.
So now let me walk through the STB bottleneck decision with
you and get your reaction as to how we might fix it. And I will
just ask you a few questions sequentially.
First, am I correct in saying that what the STB's 1996
bottleneck decision said was that the Board would order a
railroad to provide a separate rate for a bottleneck segment,
if a shipper first got a contract from a competing railroad for
the non-bottleneck portion of the journey?
Ms. Morgan. I would clarify that to say that if the non-
bottleneck contract would take a shipper to a new source, then
the bottleneck rate would have to be automatically provided. If
it was to the same source as the bottleneck carrier already
served, then you would go through the competitive access rules
that we have at the Board.
Senator Rockefeller. All right. Does this mean that a
shipper has to have an actual signed contract from the
competing carrier, or would a written offer or other evidence
suffice?
Ms. Morgan. Well, this issue--we have had three bottleneck
cases before us. One has recently settled. We have two pending
before us now. In both of those cases, the record indicates a
contract, an agreement between the parties. We have not had
this issue come up, where there is some disagreement on that. I
hope we will not have such an issue, but I certainly do not
want to prejudge a record on that down the road.
Senator Rockefeller. I thank you. Rail customers tell me
that one of the reasons that the STB's approach does not have a
real effect on the industry is that the major railroads are now
so few, 50 or so when we started this and 4 or 5 or whatever
now, is that they all benefit from the current state of play on
this bottleneck question.
So none is willing really to poach on another's area or
territory. It is kind of a silent acquiescence. Nobody
complains; and, you know, no poaching on each other's captive
customers by giving them a contract or an offer for the non-
bottleneck segments.
Several shippers have told me that they have requested such
contracts, and they have always been refused. Do you know of
any signed contract or formal offer--perhaps signed contract is
not what you want to focus on--for the non-bottleneck segments
since your 1996 decision? Have any shippers approached you with
such a contract and asked you to get them a rate on a
bottleneck segment?
Ms. Morgan. Well, we do have two pending cases. We had
three, and one was settled.
Senator Rockefeller. So far.
Ms. Morgan. So far. That is correct. And I have heard this
concern on the part of shippers. And I would just make a couple
of points on that. One is----
Senator Rockefeller. The answer to this point is no, not
pending, but of any--since 1996 there have been none.
Ms. Morgan. Well, if the cases are pending, the shippers
obviously have contracts. And they are trying to get the
bottleneck rate. And the FMC case has been the case that, as
you know, involved the market dominance proceeding and what to
apply and so forth. And that has been a big case in this
context.
So I am not sure I--I may not be answering your question,
but my understanding is--are you asking me whether there have
been contracts that have been obtained and then a case
following from that? The answer is yes.
Senator Rockefeller. Yes. But in my question, what I said
was, since your 1996 decision.
Ms. Morgan. Yes. These cases have come to us since the 1996
decision.
Senator Rockefeller. Are those the pending cases that you
referred to?
Ms. Morgan. Yes.
Senator Rockefeller. So that they----
Ms. Morgan. But they are pending since 1996.
Senator Rockefeller. Yes. So technically the answer is no.
And we do not know, since they are pending, what the matter
will be, what the answer will finally be.
Ms. Morgan. Well, you do not know what the answer will be
from us, no.
Senator Rockefeller. OK.
Ms. Morgan. But I will say that in a separate commenting
opinion on the bottleneck decision, I made it clear that the
relief that we were providing was real and that we would be
following along this course.
Senator Rockefeller. Are these matters that have been
pending for 3 years?
Ms. Morgan. No. I cannot recall when the FMC case was
actually filed. The second one that is pending has been a
recent filing that we have been involved in discovery on. The
FMC case, as you recall, because we had a discussion about this
in March, had something to do with the market dominance
proceeding and whether product and geographic competiton would
be reviewed in that particular case. So that came in earlier.
Senator Rockefeller. I still--I ascribe to your answer a
no.
Ms. Morgan. I guess we are just not----
Senator Rockefeller. But we may disagree on that----
Ms. Morgan. I do not want to----
Senator Rockefeller. --because of the word ``pending.''
Senator Hutchison. Senator Rockefeller.
Senator Rockefeller. Can I ask----
Senator Hutchison. Your time is up.
Senator Rockefeller. Well, then, I will wait and have a
second round, I hope.
Senator Hutchison. We will have a second round.
Senator Breaux. Senator Dorgan.
Senator Dorgan. Thank you very much.
Let me just understand the answer you just gave to Senator
Rockefeller. You indicated that these cases were pending since
1996. And then he asked you if they had been pending for 3
years, and you said no.
Ms. Morgan: Well, I cannot recall. They came in after the
bottleneck decision. What I cannot recall--and I just--I will
be happy to get you that information. I have a lot of cases
pending, and I do not always remember exactly when they were
filed. I do not recall when the FMC case was actually filed.
The Minnesota Power case has been--was filed more recently,
and we have just been in a round of discovery on that and have
issued decisions regarding discovery.
Senator Dorgan. But you had said they were pending since
1996. And I guess the point is: We want to get things moving.
If something is spinning for 3 years, the question is: Why?
Ms. Morgan. Let me say that my record on moving rate cases
is a good one. Now----
Senator Dorgan. All right. Let me ask you about a number of
other issues. You and I have talked about this. Let me describe
to you a shipper's angst.
You raise wheat and you put it on a railhead in Bismarck
and ship it to Minneapolis. And they charge you roughly $2,300
for a rail car to ship to Minneapolis; or you raise wheat and
you put it on a railhead in Minneapolis and ship it to Chicago,
about the same distance. It is $1,000.
Why more than double charge to the North Dakota shipper for
the same distance? Lack of competition or monopoly pricing. We
have a public service commission in North Dakota that say North
Dakota shippers, mostly farmers, are overcharged $100 million a
year. I have just described a small circumstance of
overcharging.
But do you agree with the proposition that with massive
concentration in the rail industry occurring very quickly, we
have less competition and, therefore, overcharging and
overpricing, and something must be done? Would you agree with
that?
Ms. Morgan. I believe that the Board is there to make sure
that no rate is unreasonable, in accordance with the statute
that we implement. And I hope that we have done that in the
cases that we have pursued.
Your example and the discussion that I had just a minute
ago with Senator Rockefeller both relate to the concept, as you
know, of differential pricing, which we have discussed, that is
inherent in the statute that I now implement. Equalization of
rates is not inherent in the statute that I implement.
So within this construct of not having an open access
statute and not having a rate equalization statute, what the
Board is responsible for doing is trying to make sure that no
rate is unreasonable.
Now I realize that some shippers would like lower rates. I
understand--you know, you and I have had this conversation. And
I understand----
Senator Dorgan. Now let us assume that either you or I have
that weight, and we put it on the railhead in Bismarck. And we
are being charged $2,300 a car. And we say, that is outrageous.
That is piracy. We want to complain about that.
What does it cost me to file a complaint with your agency?
I am just a farmer, maybe part of a group of farmers, with a
country elevator. What does it cost me to file a complaint?
Ms. Morgan. If you are a small shipper, it would be $5,400.
Senator Dorgan. $5,400?
Ms. Morgan. Yes.
Senator Dorgan. How many of those complaints have been
filed in the last year, two, 3 years?
Ms. Morgan. Well, under the small rate guidelines that we
have discussed, that I issued at the end of 1996, no one has
filed any cases.
Senator Dorgan. No one has filed any cases?
Ms. Morgan. We had one case that was an older case,
Southwest Car Parts, which was then resolved under those
guidelines. But then it was settled. So----
Senator Dorgan. No one has filed a case since 1996?
Ms. Morgan. Not since we issued those rules, no.
Senator Dorgan. None, in all of America?
Ms. Morgan. Not in the small rate case arena, no.
Senator Dorgan. Let me ask you what you think that means.
Does that--do you think that means that everyone out there is
pretty well satisfied with their rail rates, or is there
something wrong with the complaint process, if no one in the
country has filed a complaint?
The reason I ask you this question is--this is not on your
watch, but you know that a Montana complaint, which my friend,
Mr. Burns, will well recognize, I think took roughly 14 years--
--
Senator Burns. Seventeen.
Senator Dorgan. Seventeen years. A Montanan had the
temerity to complaint about rail rates. And 17 years later, I
do not know if they ever got a real answer to that.
Senator Burns. They lost.
Senator Dorgan. But one wonders whether the process itself
works at all. And I would just say to you that given the
concern about rail rates and the knowledge that shippers have
that they are radically overcharged--you put corn on in Iowa
and run it to the West Coast and run it through North Dakota,
you pay less money than putting it on in North Dakota and
moving it less distance. We pay more money to move it less
distance.
You know, our shippers understand that that does not make
sense. They are being cheated. And yet no one files a
complaint. What does that say about the complaint process?
Ms. Morgan. Well, let me say in response to that, that in
my letter of December 21 to you, Madame Chairman, and to
Senator McCain, I indicated that there continued to be concern
about the complexity of the small rate guidelines, and that if
that is the case, I suggested some sort of legislative relief
to respond to those concerns, as the guidelines that we had
issued, we felt, were within the parameters of the statute.
Now, with respect to processing cases, we have procedures
and I believe that we have made great strides. And I have been
committed to this, and I will continue to be committed to it,
to processing these cases.
I know about the Montana case, and I was the one that, you
know, got on top of that. I am sorry we did not get the result
you would have wanted, but I did step up to the plate and get
it done.
That has been a commitment of mine. It will continue to be.
And I think I have tried to improve the processes of the Board.
I have tried to indicate to Congress when I thought the statute
needed to be changed and if concerns still remain.
And I have encouraged arbitration. For example, as to the
agreement with the National Grain and Feed Association, dealing
with mandatory arbitration of certain matters with the
railroads, you know, I was very active in that.
Senator Dorgan. Well, my time is up, and I do not know that
I will be able to stay for another round.
But let me just make this point. The import of my question
is not that all of this has happened under your watch. We have
had massive concentration occurring in galloping fashion in the
railroad industry. In my judgment, the complaint process is
broken. It is unfathomable to me that the overcharging that is
occurring in some areas is not subject to complaint. And I
understand why, because this process does not work.
You indicate you work within the parameters of the statutes
and so on, but we need to fix all this. We need to fix it. Our
public service commission in North Dakota says we are
overcharged $100 million a year in rail overcharges. That is
not fair.
We must, as a Federal agency and as a group of legislators,
decide that we are going find out what is wrong and take action
to fix it and do it soon. We cannot talk about this 14 more
years.
Senator Hutchison. Senator Burns.
Senator Burns. Thank you, Ms. Morgan. This morning I have
just one question, I guess, and I would like your opinion on
it. And it comes from page four of your testimony this morning.
It is the second paragraph, and I quote, ``With the active
encouragement of the Board, the National Grain and Feed
Association and the Association of American Railroads recently
reached ground-breaking agreements on issues of concern to
agricultural shippers that provide dispute resolution
procedures that are more tailored to the interests of both
parties. These agreements will, hopefully, provide a model for
other such carrier customs agreements.''
I guess these agreements were made about a year ago, I am
told. And I have a couple of questions. Have they worked? And I
would just like a little more of an explanation on that
particular issue.
Ms. Morgan. Well, first of all, there actually have been
two agreements that have been entered into. One, I believe, in
the last two, 3 months, and one earlier last year. And they
focus on dispute resolution of matters that come up daily
between shippers and carriers. And they are favorably looked
upon and are being pursued.
I would have to go to the National Grain and Feed
Association to ask them specifically what cases might have been
filed under that because we are not involved in that process.
That is a private sector arbitration process.
But I know there was quite a bit of good feeling on the
part of shippers about those two agreements. And I think it is
a process that can work to remove from the regulatory process
disputes that perhaps can be better handled privately so that
the bigger disputes can be handled by the regulatory----
Senator Burns. Now were these disputes based on rates, or
was it based on service?
Ms. Morgan. The agreements relate to both issues, issues
such as discrimination and car supply and interchange. So I
would say, as a general matter, they relate to both issues.
Senator Burns. Well, I guess we have learned a lot since
the meltdown in Houston 3 years ago, whenever we tried to -- UP
and SP, you know, just got in a regular bind down there.
Of course, it involved Burlington Northern, which they
tried to help out the situation. And they got some cars tied up
down there. As a result, we had grain on the ground in Montana.
And in fact we lost some markets.
Then the next year the Pacific Rim goes down financially.
And that is our biggest export market from the northern tier
states. And we have not recovered from that. So I guess there
is a little bit of animosity, because everywhere I go in my
country, I will tell you, in Montana--you know, Senator Dorgan
was talking about, you know, you can--the disparity of shipping
corn from Kansas to Portland less than you can ship wheat from
North Dakota.
Well, I will tell you an instance. I do not know if it
still exists today. I will have to look at it. But there was a
time where we could ship wheat to North Dakota and then
reassign it and ship it back to Portland cheaper than we could
ship it from Montana directly to Portland. Now for those of you
who flunked geography, that is going the other way to go
somewhere else.
It is disparities like that that we really ought to try to
address. And also, I think on that meltdown down there, I think
it lends a little bit of credibility to S. 621. And we would
like to get this resolved.
But those are the areas that I am concerned with. I am
going to continue to be, because even as I look at the National
Grain and Feed Association, do they accurately reflect the
interest of the producer? That is who is getting kicked in the
teeth right now, the guy on the farm. That is the person that I
am going to be looking out for as this thing goes on.
So I thank the chairman for the time. I cannot make the
next round, but I am going to watch this very, very closely. I
guess we will have a dialog before it is all over.
I thank you for coming this morning and understanding. I
think you understand. Not sure. Those first two, there is no
comment.
Senator Hutchison. Thank you, Senator Burns.
Senator Cleland.
Senator Cleland. Thank you, Madame Chairman.
Let me just say that this committee is absolutely
fascinating to me. I am new, Ms. Morgan, on this committee and
relatively new to the Senate. But every time I attend a hearing
here, I learn something. It is like going to graduate school
very quickly on these issues.
It is fascinating to hear the son of John D. Rockefeller,
grandson of John D. Rockefeller, complain about monopolistic
pricing of railroads.
[Laughter.]
Senator Cleland [continuing]. It is a great moment in
American history. My friend and colleague.
Let me just say that I am curious as to what you really do.
Ms. Morgan. I sort of wonder about that myself.
Senator Cleland. I understand that in the deregulation
frenzy of the eighties that the Interstate Commerce Commission,
which was created around the turn of the century ostensibly to
iron out these issues, particularly between businesses, that
that was abolished and in its place has become the Surface
Transportation Board. And we have a deregulated environment,
but not really.
I mean, where are we? What do you do and what is the
mission of your Board? And after 5 years, how would you change
it?
Ms. Morgan. Well, I think the mission of the Board is the
subject of the discussion here today. I think, in terms of
pursuing legislation, that one of the issues is what is
expected of the Board.
But right now under the statute, the Board is there to
allow competition where that exists and to provide protection
where effective competition does not exist. So with respect to
shippers that do not have competition, we are there to make
sure that they are not abused and that their rates are not
unreasonably high.
We also, of course, oversee restructuring in the rail
industry. So we approve abandonments, line sales, mergers and
so forth. And then, of course, as part of that, there is an
important labor component, which we discussed earlier, that
deals with the impact of that restructuring on employees and
the labor protective arrangements that we impose.
Senator Cleland. Do you see yourself as a pro-competition
entity acting on behalf of the American people and on behalf of
businesses, when they feel that they are unfairly charged or
unfairly competed against or unfairly taken advantage of? Are
you a citizens advocate? Are you an advocate for shippers? Are
you an advocate for railroads? Where are you?
Ms. Morgan. Well, I think that the Board is an entity with
interests outlined in the statute that I am supposed to
balance. There is shipper interest, carrier interest, employee
interest, locality interest, economic interest. So I view my
role as balancing--as I understand it, Congress intended
several different interests in implementing the law.
Senator Cleland. What do you do, or what does the ICC do,
that you do not do?
Ms. Morgan. Well, with respect to railroads, we pretty much
do what the ICC was doing when I arrived at ICC.
Senator Cleland. Does not the ICC set tariffs and charges
and things like that? But you do not do that, do you?
Ms. Morgan. No.
Senator Cleland. They did, but you do not.
Ms. Morgan. Well, back in the old days there was--you know,
the ICC before 1980 was quite involved in rate setting and in
route choice.
Senator Cleland. Right.
Ms. Morgan. But that has not been the case, obviously,
since the reform legislation. But in terms of the--you know, I
was first a commissioner at the ICC. So what I did at the ICC
as it relates to rail matters is essentially what I do today.
Now there was some other streamlining as it relates to the
trucking industry, but that is a separate matter.
Senator Cleland. The Railway Labor Act has been around a
long time. There is some feeling in the organized labor
community that somehow the Surface Transportation Board has the
authority to modify or cancel privately negotiated collective
bargaining agreements. What is going on?
Ms. Morgan. Well, the law, as interpreted by the Supreme
Court in 1991 and further judicial decisions since that time,
provides for the override of collective bargaining agreements,
if necessary, to implement an approved transaction. And the
Supreme Court in 1991 upheld that notion. So the Board has been
involved in that implementation.
Senator Cleland. Did the ICC have that authority before the
Surface Transportation Board had that authority?
Ms. Morgan. Well, prior to 1980, which is important perhaps
to your later questions, those issues that surfaced as a result
of restructuring in the rail industry were negotiated between
labor and management under what was called the Washington Jobs
Protection Agreement of 1936. Changes were made in agreements,
but they were made privately.
Then during the 1980's, which of course preceded my time at
the Commission, there was a change in direction and then
subsequent cases that followed therefrom. And the Commission
got a little more involved, in my view, in this whole process.
What I have tried to do, since I have joined the
Commission, but more importantly the Board, is to get out of
this business of overriding. We issued an important decision,
the ``Carmen III'' decision, which limits overrides in
accordance with the law.
There have been other decisions that I have rendered and
processes that I have used to level the playing field more,
with the result that, in the recent mergers, more agreements
have been privately negotiated than before.
Senator Hutchison. Senator Cleland, your time is up.
Senator Cleland. Thank you very much, Madame Chairman.
Thank you, Ms. Morgan. I would be glad to support you.
Ms. Morgan. Thank you.
Senator Hutchison. I want to ask another question, and then
I know Senator Rockefeller wants a second round, as well.
Senator Rockefeller started talking about the situation
that I have also heard discussed, and that is the inability of
shippers to even get a contract quotation by a railroad in a
captive shipper situation. And I am troubled by that.
I want to make sure that railroads are not forced to use
their railroad spurs at a time that would keep them from being
able to use them in another way, as they see fit. I think that
is a legitimate rail argument.
But on the other hand, if we require a contract in order to
get a quotation, and you cannot, in reality, get one, how would
you address that issue? I think that is the biggest, one of the
biggest, concerns we have in trying to right something that is
balanced.
Ms. Morgan. Well, I believe that you are speaking
specifically about the bottleneck situation----
Senator Hutchison. Yes.
Ms. Morgan. --which is the crux of that problem. I believe
that your bill, Senator Rockefeller, would essentially direct
that a railroad provide a rate and a route upon demand of the
shipper, which is not what our bottleneck decision says.
Now our bottleneck decision is based----
Senator Hutchison. That is not what is in my bill. My bill
is more----
Ms. Morgan. Well, your bill goes beyond the bottleneck
decision, but I do not believe as far as that.
Senator Hutchison. Because it really codifies what you have
done, but does try to determine that the rail can set the
timing. But I am concerned that if, in reality, the railroads
will not give quotations without contracts, that that is a bar.
Ms. Morgan. Well, as I--I appreciate that. What I was
starting to say was that in our bottleneck decision we balanced
several different interests in the law. The Staggers Act does
provide for rate and route initiative on the part of railroads,
which was a big part of the reform in 1980. Prior to that, the
ICC had directed routes and had established rates.
The whole view was to move away from that so that the
railroads would, in the marketplace, have the ability to direct
routing and rates. And there are also some other provisions
with this in mind, which I will not go into.
But we balanced that against other provisions in the law
and came up with, as you know, relief, which is now pending in
the D.C. Circuit--we may or may not win that case--providing
for shipper relief in the situation where there is a non-
bottleneck contract. And we discussed that earlier.
Senator Hutchison. Are there any other legal challenges to
the rule, to your rule?
Ms. Morgan. Well, as you know, there were two parts to the
bottleneck decision. The one did not go as far as the shippers
would have liked. The other went further than the railroads
would have liked.
On the shipper end, that was on appeal in the 8th Circuit.
We did win that. But then the provision providing for shipper
relief is pending in the D.C. Circuit. We have filed a brief in
that case, and argument is in November.
Senator Hutchison. So we are basically getting it from both
ends.
Ms. Morgan. So we could win that or not.
Senator Hutchison. What is the current legal status of the
Board's decision to eliminate product and geographic
considerations?
Ms. Morgan. We had a petition for reconsideration before
us, which we denied. So that case is now on appeal in court.
Senator Hutchison. Let me just ask you, in looking at the
bills that have been introduced, you have, I am sure, seen the
Burns/Rockefeller bill, you have seen mine and you have seen
Senator McCain's, I would like to ask you to comment if you
think there is a good approach in any of those bills. If so, if
you would point out which ones would be a positive. Or
secondly, if there is something that all of us have missed,
that you think would not be a balancing of the competing
interests, would you state that?
Ms. Morgan. Well, just by way of summary, as between your
two bills, I think there is language that would elevate
competition in the rail transportation policy. There are
bottleneck provisions, slightly different in each bill. There
are provisions dealing with market dominance, which of course
the Board has taken care of. At least we are on appeal, in any
event.
Then finally, if I recall, there are some small shipper
provisions in each of the bills. I believe yours provides for
arbitration. And if I recall correctly, there is one bill that
provides a statutory revenue to variable cost ratio above which
a rate would be found unreasonable. I think that summarizes the
bills.
Getting back to something I said earlier, obviously if
competition is elevated and bottleneck relief is provided
beyond where the Board has provided it, that is in my view a
change in the policy, in the statute. And if that is the
direction in which Congress wants to go, then that is the
decision of Congress. But that is a fundamental change.
In terms of how that will impact the rail system and so
forth, I think that is something we have discussed previously.
And I am sure you will have further study on that.
On small shippers, I did recommend in my letter to you that
something perhaps be done in that area. And I have had
conversations on that subject. So I----
Senator Hutchison. That is the other thing. I understand
that you are not going to take a position on policy. But the
small shipper issue, obviously we have tried to deal with it in
both of our bills to varying degrees. Are you doing anything
else that would streamline or make more open the ability for
small shippers to come to you with this agreement?
A $5,400 fee is pretty high for a real small shipper, just
a farmer, I think. Are you looking at anything else that would
open your access for a small shipper, other than what you are
doing now?
Ms. Morgan. Well, let me answer that in two ways. First of
all, with respect to the fees--and obviously this has been a
discussion that I have had with members previously--the user
fee process is not my idea. This is something that has come
through the appropriations process. As you may know, the
Administration has suggested that the Board be totally funded
by user fees.
If I could be funded straight out of appropriated funds,
that would be fine. The fees are not my idea. This is something
I have had to come up with in order to meet the revenue needs.
I do need the money that I am getting now. And I cannot afford
to have that number reduced.
Now in that context, we have tried to be responsive when it
comes to special needs of individuals who want to file before
us. And we have kept down some fees below what the cost of
actually processing some of these cases is. In fact, the DOT
Inspector General was concerned about some of the fees that
they felt were lower than the cost of taking care of those
cases.
So I understand your concern along those lines. Now with
respect to small rate cases and processing those, of course the
market dominance decision applies across the Board to all rate
cases, and discovery rules and procedures. We have applied
procedures to large cases, because we have not had any small
ones. But certainly, if we had small ones, streamlining of the
process would certainly be a way we would go. And we have also
put deadlines on both types of cases.
So we have done what I consider to be a significant amount
in trying to streamline. I will continue to focus on ways to
improve the process and to streamline access to the regulatory
process. This has been a commitment that I have made
previously. And I will continue, if confirmed, to do that.
Senator Hutchison. Senator Rockefeller.
Senator Rockefeller. Thank you, Madame Chairperson.
Chairman Morgan, I want to actually make two unrelated
comments. In answering a question, you, just recently in this
last round, from our chairwoman, used the word ``on appeal.''
And that occurs to me as a very, very important phrase, that
virtually anything that is going to be done -- and this is one
of the problems that you face.
This is why I think this is not about Linda Morgan, but it
is about us and the way we do law in this committee and this
Congress. The railroads are going to take everything,
everything, on appeal, and they will keep it there for years
and years and years. And you said that. I mean, you have done
something, and it is on appeal. And I suspect you say that a
great deal, and I suspect it is very frustrating to you.
Actually, I want to also, Madame Chairperson, reflect on
something, on a joke that Max Cleland said. My great-
grandfather was a master at rebates, and a monopolist he
certainly was. And I have often said those four railroads would
be only one, were he still living. But there is a little
difference. And that is the rebates he forced from the
railroads.
My interpretation of the current situation is that the
railroads are allocating to themselves rebates. It has nothing
to do with the shipper, which is what my great-grandfather did.
But they are giving to themselves the rebates because of a
whole series of things.
He also indicated that the ICC, what was the difference
between the ICC and you. And what failed to be made clear was
that the ICC kind of, if it was a captive shipping situation,
they went ahead and protected the shipper. Under the new
situation, somebody has to bring a case, a reasonableness case.
One of the problems is that in order to bring that, case
one, you have to pay $54,500 to be able to bring it, if it is
not a small shipper, but a regular shipper. Second, it is going
to take forever.
Third, as the GAO report pointed out--I forget whether it
was 65 or 70 or 75 percent of them--believe that there is no
point in bringing them, because they will never win. So they do
not bring them. So the whole sort of system is skewered to
discourage captive shippers from helping themselves.
With respect to again that problem, let me just assume for
the moment that a shipper cannot get the railroads to compete
for a non-bottleneck segment. Make that assumption. And that
they do not want the railroads to poach on each other's captive
customers. So they will not even get in the game.
My question to you would be: What can a shipper do? Can a
shipper have any remedies with you? Does the shipper have any
options? Can the shipper go to court? What can a shipper do?
Ms. Morgan. Well, in that particular circumstance the
shipper could pursue competitive access, which I know is
controversial, but that is--that is a remedy at the Board. And
shippers would argue anticompetitive conduct in that
circumstance.
Senator Rockefeller. But they would have to go through this
what I have just described.
Ms. Morgan. They would have to file a case. That is
correct.
Senator Rockefeller. So very, very few have, because of
reasons that I have just described, all of which, it would seem
to me, would make you want to, as you have been--this is to
your credit--encourage this committee and this Congress to
change the law, so that some of these things do not raise their
heads, and that competition can flow more easily. And I will
give you credit for saying that we have to change the law.
I also am not sure how far you would push that. But you
have been, I think, forthright, at least, on that part.
Ms. Morgan. May I just say, for the record, shippers do win
some cases that come to us.
Senator Rockefeller. There have been a couple.
Ms. Morgan. So I do not want the record to reflect that
they never win, because that is not the case.
Senator Rockefeller. Yes. I am just thinking, you know, of
the thousands of people from Montana and Texas and West
Virginia, thousands of people that would want to, if they
could. The word goes around, do not do it, it will not work.
And I think that is correct.
One last question on this. If you could decide the
bottleneck decision today and you were hampered in no way by
precedent, by law, by circumstance, it was just Chairman Morgan
and her commissioners, or just Chairman Morgan, and you are
unrestrained by judicial precedent, you are unrestrained by
Staggers, and you had that option, would you opt for opening
bottlenecks? Would that be your instinct, to increase
competition, if you could write the law for us?
A subset of that question, obviously, which you may want to
answer first, is: Are you not very troubled by the anti-
competitive effects of bottlenecks?
Ms. Morgan. Well, let me go through that with a couple of
points. The first point I am going to make, which I think we
have talked about previously, is that in any comment that I
make to any answer to any question, I never want to be viewed
as prejudging a situation that could come.
If Congress changes the law and presents me with a
situation, something similar to what you have just described, I
do not want to have answered in such a way that parties feel
that I would not come to the table willing to implement the law
fairly and unbiasly. So let me just say that first of all.
Second of all, I think your description of the situation
obviously goes to the heart of whether we agree that it is
anticompetitive in the context of the way we want to regulate
railroads. I know it appears that way, but I think what we need
to ask ourselves is what areas do we want to regulate
differently from the way we are regulating now.
One of the underpinnings of the current law is that there
will be captive shippers and that we do not have an open access
statute. To change that and to go in a different direction, of
course, is what this debate that we are having is all about.
And that is fundamental, and that raises, obviously, as you and
I have discussed previously, serious questions about what it
will mean down the road.
I think your comment earlier about how you are not sure how
far I would go, I think what I have tried to share with
everyone here is that when you make fundamental changes, there
may be consequences. And we just need to understand what those
are. And I am prepared to work with you through that process.
But I feel obligated to at least say that there are some
questions that I think we all collectively need to answer as we
proceed ahead with changes.
Senator Rockefeller. I expected that.
Do I have a last one? OK.
This just has to do with revenue adequacy. And we have been
through this so many times before. It is the most absurd. It is
not the most damaging compared to bottlenecks, but it is the
most absurd, I think. The STB's annual survey came out, I guess
it was, last week. And every major railroad but one was found
to be revenue inadequate in 1989.
Now, traffic world is a big deal in that world. And they
point out how ridiculous that is, given that in 1998, three
examples, lenders gave CSX and Norfolk Southern $10 billion in
cash to buy Conrail; two, Burlington Northern CEO told his
stockholders that 1998 was a record-breaking year ``no matter
what measure was used,'' including a 20 percent increase in
their dividends; and three, so many investors approached Union
Pacific last year to buy into a $1.5 billion bond issue that
the railroad had to turn people away.
Gus Owens used to say that this ought to be repealed. I
think it is one of the most self-evident changes that needs to
be made. And if you want to comment on that, I would be happy.
Ms. Morgan. Well, I indicated in my December 21 letter that
the revenue adequacy determination required by Congress could
be eliminated. We do not really apply it specifically in any
particular case.
But I also offered up in that letter that, if Congress did
not want to eliminate that finding, that requirement that we
determine revenue adequacy, the issue of how we determine it is
controversial. And I suggested that a panel of experts come
together and determine what would be the right way of
determining revenue adequacy.
Now as a general matter, I think that, in any regulatory
scheme that we decide on, the financial health of the industry
is important. And we need to understand what that health is and
have some general idea about it as we regulate it, along with
the other interests that we need to pay attention to--shippers,
employees, and so forth.
But I understand what you have said, and I have indicated
in my letter a way Congress could go on this, but also
indicating that as a general matter we continue to need to have
some understanding of what the financial health of the industry
is.
Senator Hutchison. Thank you, Senator Rockefeller. I want
to say that I do agree that financial health of the industry
should be a factor. I would hope that we could promote
competition. But the last thing we want is not to have that as
a factor, as a safety net. Now how we get there, I think
perhaps there could be a fairer basis that would be looked at
by a panel of experts.
But I just think balance is the important factor here. And
I hope we can strike that balance. And I hope we can do it this
year.
With that, if there is no further comment, I will adjourn
this hearing and look forward to continuing to work with you,
Chairman Morgan. I think you are doing a terrific job, and I
hope we can give you a law that will make it even easier for
you to make the right decisions. Thank you.
Ms. Morgan. Thank you.
[Whereupon, at 11:50 a.m., the hearing was adjourned.]
A P P E N D I X
prepared statement of hon. daniel k. inouye, u.s. senator
from hawaii
Madam Chairwoman. First of all, I'd like to thank you for your
leadership in convening this hearing to consider these nominations. The
three nominees we are considering today will play a vital role in
shaping our nation's transportation policy. Intermodalism and
transportation issues are critical to the continued economic growth
that our country is experiencing. The professionals before us are
veterans of both the Hill and the Administration--they are clearly well
qualified for the positions they have been nominated for. I look
forward to hearing from them.
Linda Morgan has already served as the Chairman of the ICC and
following the sunset of that agency, as Chairman of the Surface
Transportation Board (STB). I have known and respected Linda Morgan for
many years and I believe that she has served with great enthusiasm and
commitment during her first term as Chairman of the STB.
The magnitude of the job we require the STB to do is staggering and
under the leadership of Chairman Linda Morgan the STB has had some
notable successes. I commend her for efforts in leading the STB from
its creation as an agency. It was no easy task to pare down an agency,
and create a new one in its place. She also has helped to eliminate the
rail crisis in the Western United States, and has spear headed the
initiative to review the regulatory structure as it pertains to
railroad service and railroad rate cases.
I do not to claim that nothing more needs to be done, rather, I
want my colleagues and to know that I appreciate how far Chairman
Morgan has come in helping the Board fulfill its mission.
Mister Frazier in his capacity as Assistant Secretary of
Governmental Affairs will be charged with working with all of us and
our staff on a regular basis--surely that will be a challenge. I have
no doubts that he can handle such a role given his experiences in the
past. I look forward to hearing of your plans and goals as we consider
your appointment to this position.
The Associate Deputy Secretary and Director of Intermodalism is a
position which I have a great deal of interest in, Dr. Van Beek. As you
know, my state relies heavily on multiple modes of transportation for
not only commerce, but to ensure its existence. I am particularly
interested in your ideas about enhancing federal intermodal
transportation policy.
To all of the nominees here today, thank you for your attendance
and I look forward to working with you in the future.
______
response to written questions submitted by hon. ernest f. hollings to
michael j. frazier
Question 1. You are replacing Steve Palmer, who watched carefully
the needs of South Carolina. As you know, notice to all of our offices
is critical. You also will play a crucial role in negotiations with the
House on the aviation bill. Do you see a way to take the Airport and
Airway Trust Fund off budget, or at least spend what is in the Trust
Fund on key safety and capacity projects?
Answer. As has been communicated to Congress, the Administration
strongly opposes off-budget treatment of the Airport and Airway Trust
Fund. At some point in the future, it may be possible to spend down the
balances of the trust fund, but unless reasonable offsets are found,
that is not possible under the discretionary caps without jeopardizing
the funding of other necessary federal programs. The President's Budget
has proposed what we consider to be adequate funding for aviation
safety and capacity projects, particularly when viewed in conjunction
with our proposal to raise the cap on Passenger Facility Charges. As we
saw in 1996, when aviation taxes lapsed and trust fund balances
plummeted, it is important to keep some balances in the trust fund.
Question 2. What are the major initiatives that DOT will be pushing
in the coming year?
Answer. During the coming year, DOT's top transportation priorities
(beyond a fully funded DOT budget) are reauthorization of critical
transportation programs and agencies such as the Federal Aviation
Administration, Coast Guard and the Surface Transportation Board; and
building upon Secretary Slater's commitment to safety, thereby reducing
deaths and injuries across the modes through securing passage of strong
motor carrier safety, rail safety, and hazardous materials legislation.
______
response to written questions submitted by hon. john mccain to
stephen d. van beek
Question 1. During your tenure at DOT, both in your capacity as
Deputy Administrator of Research and Special Programs (RSPA) and as
Special Assistant to the Administrator, what do you consider your
greatest accomplishment or contribution?
Answer. I believe that the enhancement of RSPA's transportation
emergency response capabilities is my greatest accomplishment. I worked
hard to make sure that RSPA could support the Emergency Response Plan
issued by the Federal Emergency Management Agency (FEMA) to address
natural and man-made disasters. RSPA's Office of Emergency
Transportation (OET) plays a key role in assuring that federal assets
are pre-positioned and available during and after disasters to help
those coping with the consequences of a severe event. In the last 18
months, we built up capacity to address emergencies through staffing
and planning. This has served us well in working with FEMA and the
states on the recent transportation emergencies caused by severe
hurricanes such as Georges, Mitch and Floyd. In addition, the Office
has played key roles in the Department's efforts on Year 2000
contingency planning and its development of procedures for Continuity
of Operations and Continuity of Government functions required by
Presidential Decision Directives.
Question 2. As Deputy Administrator, what were your highest
priorities? What goals did you establish in that position and to what
extent were those goals achieved?
Answer. Working with the Administrator of RSPA, I had the lead
responsibility for management issues in the agency, including the
development of RSPA's Strategic and Performance Plans, evaluating
senior leadership, and reorganizing the agency to better reflect our
changing responsibilities. In addition, addressing Year 2000 issues was
a top priority, both internally with RSPA's own systems (all of which
are compliant), and externally working with stakeholders and the
President's office to support federal sector working groups.
Implementation of the Transportation Equity Act for the Twenty-First
Century (TEA-21) was an important priority, particularly with the
Office of Pipeline Safety where we have initiated, with congressional
support, efforts at preventing third-party damage to the underground
infrastructure -- through supporting One-Call programs of the states,
launching a national education campaign on damage prevention, and
producing a well-received study of best practices. We have also awarded
grants to each of the 33 University Transportation Centers authorized
in TEA-21 and assured that their educational and research agendas meet
national transportation goals. Lastly, RSPA has moved forward on
several safety-critical rule-makings for hazardous materials
transportation and oil and gas pipelines.
Question 3. The Office of Intermodalism is responsible for
providing the Secretary and the heads of each DOT Operating
Administration with information and recommendations on projects,
programs, and policies involving or affecting more than one mode of
transportation. How will your previous work experience enable you to
successfully fulfill the responsibilities of the Associate Deputy
Secretary and Director of Intermodalism?
Answer. My experience with DOT as RSPA Deputy Administrator has
provided direct experience both with offices within the Department as
well as with external stakeholders who are interested in intermodal
issues, including members of Congress, state, and private sector
representatives. RSPA performs many multi-modal functions such as
university research, preparation and response to natural and man made
disasters, and the development of hazardous material regulations. As
Deputy Administrator, I also sit on the Secretary's Management Council,
a senior leadership team examining management issues for the
Department. My academic training and experience also provided me with
experience with a wide variety of issues important to public policy and
public administration.
Question 4. If confirmed, what policies would you initiate to
promote efficient intermodal freight and passenger transportation
throughout the United States? How should the Office of Intermodalism
coordinate federal policy on intermodal freight transportation?
Likewise, how should the Office of Intermodalism coordinate federal
policy on intermodal passenger transportation?
Answer. Should the Senate honor me with confirmation, I would
advance our country's intermodal freight and passenger transportation
through program development, planning and investments that enhance
transportation access and capacity, and through cooperative and
innovative partnerships with our stakeholders in State and local
government, industry and others. Intermodalism uses modal choice and
innovation as an evolving and dynamic solution to transportation
challenges. To coordinate federal policy on intermodal freight
transportation, I would lead a Department group including FHWA, FRA,
FAA, USCG, and the Maritime Administration and rely on input from other
federal agencies, such as the Department of Defense, and industry. One
of the goals of this group should be to advocate for better recognition
of the importance freight transportation plays to the economic health
of the United States. Similarly, with federal policy on intermodal
passenger transportation, I would participate in efforts to examine
current and future needs of the system and its users, and lead DOT
efforts to fashion policy recommendations for addressing critical
needs. This would be done in consultation with DOT operating
administrations, advocacy groups, public officials and members of
Congress.
Question 5. In your opinion, what do you see as the major role for
the federal government in promoting intermodalism? What are the
appropriate state, local, and private roles in promoting intermodalism?
Answer. A major role for the federal government is to take and
advocate a systems perspective of the nation's transportation network
to make sure that it operates in a seamless fashion, enabling American
citizens to receive the optimum yield for their transportation
investments. This requires a focus on improving the connectors for both
passenger (e.g. terminals) and freight (e.g. ports) movement, as well
as ensuring that the various modes of transportation are working
together. When the National Commission on Intermodal Transportation
released its report to Congress five years ago, it emphasized that
public institutions were not responding quickly enough to keep up with
new developments which required intermodal solutions. This requires
that the federal government provide leadership and work with the states
and local governments to ensure that decision-making and management
practices are complementary and focused on user needs. It also requires
assessing the needs of industry by working with both the shipping and
the carrier organizations.
Question 6. What strategic initiatives will you undertake to
improve interagency cooperation at the Department of Transportation?
Answer. I would continue to build upon Secretary Slater's ONE DOT
management initiative that has improved teamwork among the different
modal administrations and offices in the Department, and use mechanisms
such as the Secretary's Safety and Policy Councils. In addition, the
Department will be forming intermodal groups to deal with policy
initiatives such as the Marine Transportation System and freight
issues.
Question 7. In your opinion, are state Departments of
Transportation and metropolitan planning organizations expending their
transportation dollars on improving regional intermodal transportation
facilities? What should the U.S. DOT do, if anything, to broaden state
involvement in enhancing intermodal facilities?
Answer. State Departments of Transportation and metropolitan
planning organizations (MPOs) are doing a better job of investing in
intermodal transportation facilities to address regional transportation
needs, but much work remains to be done. For example, more improvements
are needed to upgrade the NHS intermodal connector projects that serve
as vital links to join segments of our national transportation system.
The short length (2 miles or less) and generally low project cost of
these NHS connectors does not reflect their significant role in
enhancing movements of people and goods. Other regional needs could be
met by intermodal projects that are quite costly--ones that exceed the
funding that is typically available to MPOs and transportation
agencies. The Office of Intermodalism is a principal member of the ONE
DOT credit programs working group that is implementing the loan
provisions of the Transportation Infrastructure Finance and Innovation
Act (TIFIA) and Railroad Rehabilitation and Improvement Financing
(RRIF) programs. Office staff and other working group members assisted
sponsors of potential TIFIA projects in preparing applications for FY
1999 loans, and a number of the projects selected have intermodal
functions. Office staff will work with financial advisors to evaluate
future applications for TIFIA credit assistance and help DOT negotiate
the terms of the assistance for those projects selected.
technology questions
Question 1. What role do you believe the Office of Intermodalism
should play in expanding the Department of Transportation's research
and technology development activities?
Answer. I believe that the Office of Intermodalism should play a
leadership role within the Department to advance transportation
research and technology to shape a safe, fast, efficient, accessible
and convenient transportation system for the 21st century. To do this,
we must rely upon strategic planning, world-class research, better
exchange of information on useful technological innovations,
partnerships, research and education and training. The Office of
Intermodalism would work with the National Science and Technology
Council (NSTC) on Technology and DOT's Research and Technology
Coordinating Council to implement the Department's Transportation R&D
Plan and pursue a common set of performance measures for R&D that is
consistent with DOT strategic goals. The Office of Intermodalism would
also ensure that its contributions to strategic plans for R&D support
the priorities identified in the DOT Strategic and Performance Plans,
the annual OMB/OSTP R&D priorities guidance, the DOT Transportation R&D
Plan, and the NSTC Transportation Technology and National Strategic
Research Plans.
The Office of Intermodalism would also work with other Federal
agencies, state and local governments, industry and academia to move
technology into the market place more efficiently and effectively. We
would lead or participate in major multi-agency, multi-modal
partnerships for the National Science and Technology Council (NSTC) and
the Department. We would lead or participate in major multi-agency,
multi-modal partnerships such as the Intermodal Freight Technology Core
Group and the International Trade Data Systems Office on behalf of the
NTSC and the Department.
Question 2. What is your view on Intelligent Transportation Systems
(ITS) technology and what role do you foresee for ITS in the area of
intermodalism?
Answer. DOT believes that operational deployments are needed to
test concepts for a national ITS architecture and greater harmonization
of tracking technologies and electronic data interchange (EDI)
standards in the intermodal freight arena. Federal initiatives are
essential to convene the public and private interests that have a stake
in transportation improvements in intermodal transport by providing
both financial resources and the forum for operational deployments. DOT
believes that sharing information through linked ITS systems can
facilitate movements of intermodal freight by identifying and bypassing
transportation bottlenecks, and eliminating stops for vehicle and cargo
documentation that increase operating costs and contribute to
congestion. It is important to note that these transportation system
improvements will not just benefit the intermodal freight industry or
even the freight industry at-large; these operational improvements
benefit all transportation users -- both passengers and freight. Given
my experience as RSPA Deputy Administrator, I would also strive to
ensure that the technologies applicable to multiple modes, such as
Global Positioning Satellites and Fuel Cells, are fully exploited to
address outstanding transportation challenges.
maritime questions
Question 1. Our nation's maritime transportation system is facing
increasing demands from users as the role of maritime changes in an era
of increased intermodalism. This includes increased demands on our
nation's waterways and associated infrastructure. What role should the
federal government take in port maintenance and development,
maintenance of locks, dams and bridges, and the development of
navigational aids?
Answer. Except for the Coast Guard's roles regarding navigational
aids, DOT's statutory authority for port infrastructure is limited to
landside access issues. Congress has given the U.S. Army Corps of
Engineers, along with local and state port authorities the
responsibility for waterside infrastructure. However, DOT programs and
planning processes have had some success in increasing awareness and
cooperation among diverse maritime interests such as in the Alameda
Corridor in California, Washington State's Freight Strategic Mobility
Investment Board, and the eight States working in the Gulf Rivers
Intermodal Partnership.
Additionally, the Administration has submitted legislation to
address the issue of funding and maintenance of our harbors and
channels. H.R. 1947, the Harbor Services Fund Act of 1999, was
introduced by Representatives Shuster and Oberstar on May 26, 1999. The
bill seeks to ensure necessary harbor channel capabilities for our
Nation's waterborne commerce through the establishment of user fees.
The proposed Harbor Services Fee is intended to approximate the harbor
benefits and services received, and would be imposed on the commercial
vessel and not the cargo. The fee structure is based on the harbor
services required and benefits received by four different categories of
commercial vessels.
Question 2. What role does our maritime transportation system play
in intermodal transportation and what can be done to improve its
integration into our intermodal system?
Answer. As the world's leading maritime and trading nation, the
United States relies on an efficient and effective maritime
transportation system to maintain its role as a global power. More than
95 percent of our international trade moves through the Nation's ports
and waterways. More than 2 billion metric tons of domestic and
international commerce moves on the water, and 134 million passengers
travel annually by ferries. Furthermore, our maritime transportation
system supports military deployment, commercial fishing, and
recreational uses. Last September, under the leadership of Secretary
Slater, the Department released A Report To Congress on An Assessment
of The U.S. Marine Transportation System. A highlight of the assessment
is that integral to the Marine Transportation System (MTS) are inland
rail, highway and pipeline intermodal connections that permit freight
and passengers to reach the marine facilities. The report provides a
blueprint for the Nation's maritime transportation system and its
integration into our intermodal system. The report calls for strategic
areas of action including the creation of a National Advisory Council
to advise on MTS issues.
______
response to written qestions submitted by hon. john mccain to
michael j. frazier
Question 1. During your tenure as a Deputy Assistant Secretary for
Governmental Affairs at DOT, what do you consider your greatest
accomplishment or contribution? What were your highest priorities? What
goals did you establish in that position and to what extent were those
goals achieved?
Answer. Before coming to the Department of Transportation, I had
minimal experience relating to transportation. As Deputy Assistant
Secretary, my biggest accomplishment was in learning about
transportation issues, the Department, and the concerns of the various
stakeholder groups.
My priorities included assisting Secretary Slater and the Assistant
Secretary of Governmental Affairs in promoting the Department's
commitment to safety, mobility, and economic growth. My goals included
improving relationships with the Congress, state and local governments
and transportation interests and providing a high level of
responsiveness.
Question 2. During the past nine months that you have been Acting
Assistant Secretary for Governmental Affairs at DOT, what do you
consider your greatest accomplishment or contribution? What were your
highest priorities? What goals did you establish in that position and
to what extent were those goals achieved?
Answer. While serving as Acting Assistant Secretary for
Governmental Affairs, I was instrumental in promoting and securing
support for major transportation initiatives and legislative proposals.
I have worked closely with Secretary Slater and others in the
Administration in coordinating DOT efforts and providing technical
assistance to Capitol Hill on FAA reauthorization legislation. I have
played a key role in negotiations with the conferees and their staff in
addressing issues to help secure passage of reauthorization
legislation.
As truck and bus safety are of paramount importance, I have also
worked to help craft legislation that meaningfully addresses motor
carrier safety issues.
Question 3. Recognizing the limited time period left in this
Administration, could you identify for the Committee the top three
transportation priorities for the administration during the next year?
Answer. Beyond a fully funded DOT budget, DOT's top transportation
priorities are reauthorization of critical transportation programs and
agencies such as the Federal Aviation Administration, Coast Guard and
the Surface Transportation Board; and building upon Secretary Slater's
commitment to safety, thereby reducing deaths and injuries across the
modes through securing passage of strong motor carrier safety, rail
safety, and hazardous materials legislation.
Question 4. If confirmed, what initiatives will you undertake to
improve interagency cooperation at the DOT?
Answer. I am committed to Secretary Slater's ONE DOT initiative,
which seeks to bring an intermodal approach to transportation
decisionmaking. If I am fortunate enough to be confirmed, I will work
to establish a better integration of efforts within the Office of the
Secretary (OST) and between OST and the modes. I have already
established a framework for representatives of OST and the modal
governmental affairs offices to meet and work together on issues of
importance.
nafta/truck safety
Question 1. As you probably know, last December the DOT Inspector
General issued a critical report on the Department's safety program for
commercial trucks at the U.S. borders. The report cited that "far too
few" trucks were being inspected and "too few" of the inspected Mexican
trucks met U.S. safety standards. More recently, the IG reported that
Mexican trucks were found traveling widely throughout the United
States. Mexican carriers were found in 24 states beyond the border,
including New York, Florida, Washington, Montana, North Dakota,
Colorado, Iowa, South Dakota, and Wyoming.
(a) What is your view regarding the Administration's preparedness
to fulfill the cross-border traffic requirements of NAFTA and more
important, what is the Department doing in response to the report that
Mexican trucks are already traveling throughout the U.S.?
(b) What specific actions has the Department taken to address the
shortcomings identified by the Inspector General and what future
initiatives are planned?
(c) Given that the border states were scheduled to open almost 4
years ago, why has it taken so long for the Department to take these
actions?
(d) Under NAFTA, Mexican trucks are scheduled to have access to the
contiguous 48 states in 2000? What are the chances the ratified
treaty's schedule will be met?
Answer. (a) DOT believes it has made substantial progress in
addressing the safety concerns associated with cross-border
transportation. However, it recognizes that additional improvements are
needed. In light of the support extended by Congress in this effort and
the additional resources made available in TEA-21 for safety related
projects, I believe DOT will be able to fully implement the safety
initiatives that it has put in place and ensure that cross-border
operations do not present an undue safety risk to the American public.
DOT and the Inspector General's findings that trucks are already
traveling throughout the U.S. reaffirm that a more aggressive
enforcement program is needed to make certain the Mexican trucks are
properly registered and do not operate outside the scope of their
registration. It should be noted that there are several types of
exemptions in law for Mexican-based carriers to operate within the
United States.
However, carriers found to be in violation are currently subject to
civil penalties and loss of operating privileges.
DOT is considering a variety of other enforcement options that may
be available to encourage greater compliance. Since the majority of the
States do not have authority to enforce federal registration
requirements, enforcement remains a federal responsibility. DOT
supports legislation that would allow it to deny entry to all carriers
that are not properly registered and to place vehicles out-of-service
if they are found to be operating outside the scope of their
registration authority.
(b) The Department agrees with the Inspector General
recommendations and is taking steps to implement them as follows:
The Department has hired an additional 27 Federal
inspectors for ports of entry in Texas. This will supplement
the existing DOT staff of 13 (10 in Texas and 3 in Arizona) and
will complement the enforcement activities of the four border
States.
The Department is strengthening partnerships with the border
States in border enforcement activities. TEA-21 provides for a
5 percent takedown from the Motor Carrier Safety Assistance
Program for border enforcement activities ($25 million from FY
1999 through FY 2001). In FY 1999, $4.5 million was made
available for this purpose. Since 1995 we have provided the
southern border States with over $10 million in additional
grants.
The Department is also encouraging the border States
to apply for a share of the discretionary funds available in
the TEA-21 for new border infrastructure and corridor planning
to build inspection stations at key locations.
The Department expects to publish new operating
authority application procedures to address the NAFTA traffic
that will be operating beyond the commercial zones. This
includes an identification number to ensure that only those
carriers with authority to operate beyond the commercial zones
are so identified.
The Department expects to establish a NAFTA Program
Director to coordinate all our NAFTA activities.
The Department continues to play a very active role in
the coordination of Federal and State border activities.
In all border enforcement activities, the Department's approach is
to create multiple points within the system where unsafe vehicles and
carriers can be identified before problems occur. This system begins
with the application process, makes use of Mexican oversight and
information systems, continues with inspections at the ports of entry,
and includes additional checks with roadside inspections in the
interior of border States.
(c) Since December 1995, when the Administration made the decision
for safety reasons to postpone implementation of NAFTA's truck access
and investment provisions, DOT has worked with the States, the
Commercial Vehicle Safety Alliance (CVSA), the International
Association of Chiefs of Police (IACP) and Mexico to improve the safety
infrastructure on both sides of the U.S.-Mexico border. During this
time DOT's view has been that the most effective means to ensure safe
cross-border operations is through continued strengthening of the long-
standing Federal-State partnership created by the Motor Carrier Safety
Assistance Program (MCSAP). Since 1984, federal funds received by the
states under MCSAP have been instrumental in improving highway safety
and increasing uniformity in the enforcement of motor carrier safety
regulations throughout the country. While much more remains to be done,
over the years DOT has been using this successful partnership to
effectively address both the border and national safety issues.
(d) While the United States and Mexico have been working for some
time on truck safety issues and much has been accomplished, additional
work remains to be done. In light of this, no decision has been taken
with respect to when Mexican commercial truck vehicles may be allowed
more liberalized access into the United States.
Question 2. The Transportation Equity Act for the 21st Century,
TEA-21, included a provision directing the Secretary to conduct a
review of the qualifications of any foreign motor carrier who has
applied to operate in the U.S. but whose application has not been
processed due to the current operating moratorium. The Secretary was
required to report his findings to the Committee 120 days after
enactment (October 6, 1998), yet, to date, the Secretary has failed to
meet this statutory directive.
(a) Given that you have served at the Department since the law was
enacted, when can the Committee expect to receive this long-awaited
report? Let me point out that back in April, this same question was
asked of Mr. Conti and we were told ``the report is in the final stages
of preparation and approval.'' But again, we have received nothing.
(b) If confirmed, what, if any, initiatives will you take to
strengthen the Department's commitment to meeting statutory
requirements, carrying out timely rulemakings, and improving
responsiveness to Congressional inquires?
Answer. (a) The report is currently in the Office of the Secretary
for concurrence, and I will make it a priority to get the report issued
quickly in final form.
(b) I pledge to work closely with those offices that have the major
responsibilities for meeting statutory requirements and carrying out
timely rulemakings. Since my arrival at the Department, I have made it
a top priority to increase overall responsiveness to the Congress. I
will continue to make that a top area of emphasis.
Question 3. TEA-21 further provides that one year after enactment,
most Federal Motor Carrier Safety Regulations would apply to all
commercial vans carrying more than 8 passengers except to the extent
that DOT, after a rulemaking proceeding, provides for exemptions. As
you know, there have been a number of deadly accidents involving these
vans-the so-called ``camionetas,'' particularly in the border states of
Texas and Arizona. DOT failed to issue an implementing rule by the June
9, 1999 deadline and is not enforcing the law in this regard.
Let me remind you that the Department was directed to address this
van safety issue 4 years ago as part of the ICC Termination Act of
1995. The TEA-21 provision was included out of frustration over the
lack of action by the Department to regulate these vehicles. Yet, DOT
is still not regulating these potentially deadly vehicles, and instead,
has actually ``exempted'' the entire class of vehicles from regulation
until further notice.
When can we expect DOT to uphold the law and require these van
operations to comply with our federal safety regulations?
Answer. On September 3, 1999, the Department's Office of Motor
Carrier Safety (OMCS) issued (1) an interim final rule that amends the
definition of ``commercial motor vehicle'' (CMV) to include vehicles
designed or used to transport between 9 and 15 passengers (including
the driver) for compensation, but temporarily exempts the operators of
such vehicles from the Federal Motor Carrier Safety Regulations
(FMCSRs); and (2) an NPRM that would propose to learn more about
operational safety of small passenger-carrying CMVs by requiring
operators of these vehicles to file a motor carrier identification
report, mark their CMVs with a USDOT identification number, and
maintain an accident register.
Additionally, I am aware of a provision concerning this issue in S.
1501, the Motor Carrier Safety Improvement Act of 1999, which you
introduced on August 5. I understand the serious concerns about the
extended length of time it has taken to address this issue. I promise
to work with the various offices in the Department, which have
responsibility for this issue and with the Committee to move more
expeditiously on this important issue.
maritime questions
Question 1. In recent years, we have experienced a serious decline
in the number of American-flagged carriers in the international
maritime trade. In your view, what can and should be done to improve
the competitiveness of American-flagged carriers engaged in the
international trade?
Answer. The differences between U.S. and foreign standards-of-
living, taxes, business and labor practices, public safety, and
environmental protection contribute to higher production costs in the
United States, relative to other nations. These disparities make it
more difficult for U.S.-flag companies, and the national-flag lines of
other advanced economies, to compete internationally.
While we cannot eliminate these differences, we can seek to ensure
the availability of a U.S.-flag fleet and related transportation
infrastructure that is committed to support Department of Defense
sealift requirements and our Nation's economic security. The most
effective means to accomplish this objective is to continue full
funding of the Maritime Security Program.
In addition, we are working to reduce or eliminate trade barriers
that restrict U.S.-flag carriers' access to foreign markets. Our
strategies include negotiating agreements, understandings and
arrangements to reduce barriers that restrict U.S.-flag carrier access
to foreign transportation markets, add to costs, limit revenues, and
impede efficient operations of the U.S. maritime industry in
international trade. An example of this effort is the new maritime
agreement with Brazil that was signed on October 20, 1999. This
agreement achieved the removal of several discriminatory practices that
had burdened the operations of U.S. carriers serving the Brazil trade.
Question 2. There is a growing concern that the rise in
international organized crime, rogue states and terrorism pose a
serious threat to our nation's maritime transportation system. What
should be done to insure the safety of our maritime transportation
system and prevent costly cargo losses?
Answer. We must be aware that, while there is a need to invoke
safeguards to protect against the array of security threats, there
should also be a balance with the rising demands for efficient/
uninterrupted maritime transportation system operations to service
projected growth in passenger and cargo movements.
The Presidential Interagency Commission on Crime and Security in
U.S. Seaports (established in April 1999) will heighten national
awareness of security issues in the areas of cargo crimes, smuggling,
and terrorism. It will develop a coordinated interagency approach to
port security, which addresses seaport organized crime and terrorism.
The Commission will be addressing security awareness, system
transparency, public and private sector coordination, and international
cooperation. A goal of the Commission is to provide recommendations for
improvements in security. A final report is due in Spring 2000.
The Department of Transportation plays a major role in the
Commission. The Maritime Administrator serves as one of the three co-
chairs and the Commandant of the U.S. Coast Guard is a member of the
Commission. Under their leadership, the critical issues related to
cargo and other seaport crime, smuggling, and terrorism will be
considered by the Presidential Commission.
Question 3. In a report to Congress earlier this month, Secretary
Slater stopped short of providing detailed recommendations on how port
maintenance and development should be funded. What is the
Administration's view on how port maintenance and development,
including dredging, should be funded?
Answer. My understanding is that the purpose of the report was not
to solve the funding issue. The Task Force recognized that funding is
at the core of many issues relating to the Marine Transportation System
(MTS). While a consensus could not be reached on all funding issues,
the Task Force recommended a four-step process to gain a better
understanding of MTS funding. This process included:
Coordinating Federal funding processes.
Defining existing MTS funding mechanisms (public and
private).
Forecasting future demands on the MTS.
Exploring innovate funding mechanisms.
With respect to funding channel improvements and maintenance, the
Administration believes that user fees are a proper approach to
ensuring that the U.S. has the necessary harbor channel capabilities to
handle our nation's waterborne commerce. As you know, the
Administration submitted legislation to address the issue of funding
the development and maintenance of our harbors and channels. The
Administration's bill, Harbor Services Fund Act of 1999 (H.R. 1947),
was introduced by Congressmen Shuster and Oberstar (by request) on May
26, 1999.AVIATION QUESTIONS
Question 1. What will you do to ensure that the DOT complies with
deadlines set by congressional committees for information or reports?
Answer. As I stated in Question 2(b) under ``NAFTA/TRUCK SAFETY,''
a high level of responsiveness has been and will continue to be a major
emphasis area in this office. I will also continue to work closely with
the various offices within the Department which have the lead
responsibility for reports to Congress and ensure that deadlines are
closely adhered to.
Question 2. It appears as if ``open skies'' negotiations with the
United Kingdom have stalled. What is DOT doing to open up the
restricted UK market?
Answer. The Department shares your frustration with the British
unwillingness to eliminate the restrictions in the U.S.-U.K. Air
Services Agreement. During informal discussions with the British on
October 18-19, U.S. representatives began exploring the U.K. offer to
open up all-cargo operations, while also emphasizing our continuing
interest in liberalizing the passenger regime.
Establishing new opportunities for U.S. carriers and U.S. cities
for U.K. services remains our international aviation priority. We are
continuing to assess all options for changing this unsatisfactory
aviation relationship.
Question 3. Some observers of the FAA believe that the agency has
difficulty controlling the costs of many of its programs, particularly
those that involve acquisition of major air traffic control
modernization systems. What role does DOT play in ensuring that the FAA
spends taxpayer dollars wisely? Should DOT shoulder any of the
criticism when the FAA makes mistakes?
Answer. Spending taxpayer dollars wisely is a high priority for the
Department of Transportation, and the Office of the Secretary (OST)
does have the responsibility to set overall policy for agency
management. To keep abreast of major programs, we ask that project
status reports be submitted to OST that describe these programs and
progress against baseline cost and schedule goals. When FAA is not
meeting those goals, we meet to discuss the problems and FAA's intended
solutions. With the management freedoms provided by the Congress, only
FAA can implement the needed changes to solve programmatic problems,
but establishing a healthy dialogue concerning management issues is
beneficial to both FAA and OST.
Question 4. The DOT has been without an Assistant Secretary for
Aviation and International Affairs for quite some time, and the
department just lost one of the key deputies in that office who had a
great deal of expertise and institutional knowledge. There are many
important international issues, however, that need attention. When can
the Congress expect to receive a nomination for that Assistant
Secretary position?
Answer. The Department expects that a nomination will be forwarded
in the near future.
Question 4a. What is the current status of efforts to get the
European Union to withdraw its discriminatory rule restricting the use
of hushkitted and re-engined aircraft? What role is DOT playing in
those efforts?
Answer. U.S. officials, including those from DOT, have continued to
meet with EU officials at various levels to resolve this issue. To
date, the Commission has remained unwilling to agree to proposing
withdrawal, and as yet has not produced a credible alternative to
withdrawal of the rule. DOT has been deeply involved in these efforts.
Question 5. If the President is presented with an FAA
reauthorization bill that provides budgetary firewalls for FAA
spending, will the Secretary advise him to veto the bill?
Answer. The Administration would strongly oppose a proposal to
create a discretionary budget category (a.k.a. firewall) for a specific
program. A firewall would provide the FAA with a guaranteed funding
stream without providing incentives to use those funds efficiently.
Question 6. The Transportation Research Council recently issued a
congressionally-ordered report on domestic airline competition. The
members of the committee that prepared the report apparently differed
on the extent to which the DOT should formally police anti-competitive
practices in the industry. But all members agreed that the DOT should
do what it can to increase airline competition, and it made numerous
recommendations. What is the DOT's response to this report: What
actions, if any, are being taken to implement its specific
recommendations? Are there any conclusions or recommendations with
which the DOT disagrees?
Answer. I am glad to make available to you a copy of the
Department's response, which was submitted to Congress on October 21.
The Department, at Secretary Slater's direction, has already
undertaken a number of actions that are consistent with the
recommendations of the TRB, as follows:
DOT has just released a major study ``Airport Business
Practices and Their Impact on Airline Competition,'' which
deals with the critical importance of airport access.
DOT has proposed legislation that would eliminate over
time the slot restrictions at JFK, LaGuardia, and O'Hare.
DOT is currently conducting a study of the
Department's Computer Reservation System rules that will
encompass consideration of the TRB's recommendations regarding
changes in the airline distribution system and the multiple
listing of code share services.
The Department's attached response to the TRB report noted that
some of the TRB's recommendations would require legislation, some were
worthy of further study, some would be difficult to implement, and some
did not appear to be necessary. The Department agrees with the TRB that
the Department has an important role to play in promoting competition
in the airline industry, shares the TRB's vision that "preserving and
expanding opportunities for competition should remain the principal
goals of aviation economic policy," and agrees with the TRB on the lack
of adequate competition in some markets and the importance of providing
travelers with viable competition that will produce lower fares and
better service.
Question 7. Section 337 of the Department of Transportation and
Related Agencies Appropriations Act, 1998, P.L. No. 105-66, 111 Stat.
1425, 1447 (October 27, 1997) (``the Shelby Amendment'') authorizes
carriers at Love Field to operate nonstop flights to Mississippi,
Alabama, and Kansas. Do you agree that federal law is clear as to the
type of flights that can be operated under this statute?
Answer. Yes. In December 1998, the Department issued an order
stating that the Shelby Amendment expressly allows airlines to operate
nonstop flights from Love Field to points in Kansas, Mississippi, and
Alabama, using any kind of aircraft. Order 98-12-27 (December 22,
1998), affirmed on reconsideration, Order 99-4-13 (April 13, 1999). The
Department simultaneously held that it had the authority to interpret
the federal statutes that apply to Love Field services and that govern
Dallas' authority to limit Love Field operations. Order 98-12-28
(December 22, 1998), affirmed on reconsideration, Order 99-4-14 (April
13, 1999).
Question 8. Do you agree that local authorities do not have
authority to limit and/or bar such nonstop services to those states?
Answer. The Department's orders stated that federal law does not
allow the City of Dallas, the owner of Love Field, to bar airlines from
operating the kind of services authorized by the Shelby Amendment,
notwithstanding claims by the City of Fort Worth that Dallas'
contractual obligations to Fort Worth require Dallas to prohibit those
services (and certain services authorized by section 29 of the
International Air Transportation Competition Act of 1979, 94 Stat. 35,
48-49 (1980), known as the Wright Amendment). While airport owners like
Dallas have legitimate management needs allowing them to impose
reasonable regulations for airport operations, as the Department
stated, federal law prohibits them from engaging in route regulation.
Question 9. Do you recognize that under the Airline Deregulation
Act, control over airline routes is entirely a federal issue, which
cannot be limited by state and local parties' agreements?
Answer. The Department's order stated that 49 U.S.C. 41713(b), a
provision enacted by the Airline Deregulation Act, preempts state and
local governments from regulating airline routes. The Department
recognized that a state or local government operating an airport may
exercise its proprietary rights. The Department noted that the courts
had upheld a perimeter rule imposed at LaGuardia Airport by the Port
Authority of New York and New Jersey on the ground that the Port
Authority's demonstrated need to alleviate severe congestion problems
at LaGuardia justified its adoption of the perimeter rule. Virtually no
other airport operated by a state or local government has adopted a
perimeter rule, and neither the courts nor the Department have upheld
any such rule. The Department determined that there was no
justification for Dallas' imposition of any perimeter rule at Love
Field or any other restriction that would prevent airlines from
operating the types of service authorized by the Wright and Shelby
Amendments.
Question 10. Is it not true that airport funding grants awarded to
airport proprietors are dependent upon airport proprietors' actions
that demonstrate nondiscriminatory behavior and that such actions are
in compliance with all federal aviation requirements?
Answer. In accepting a grant, each airport operator is required to
provide assurances to the FAA that the airport will be operated in
accordance with a number of Federal requirements, including the
requirement to make the airport available for public use on reasonable
conditions and without unjust discrimination. The FAA enforces those
assurances through its grant compliance program, with sanctions that
include withholding of grant funds.
Question 11. There is a lawsuit before the Fifth Circuit Court of
Appeals that questions the authority of the Department of
Transportation to address discriminatory actions involving the
regulation of routes. Can we expect that the Department will continue
to aggressively pursue this litigation to ensure that decisions that
pertain to interstate commerce are made at the federal level?
Answer. In the Fifth Circuit Court of Appeals litigation, Fort
Worth, American Airlines, and the Dallas-Fort Worth International
Airport Board are challenging the Department's December 1998 and April
1999 orders on Love Field service. They contend that the Department did
not have the authority to issue its interpretation of the federal
statutes applicable to Love Field service and that Dallas may bar
airlines from operating Love Field services authorized by the Shelby
Amendment or the Wright Amendment. The Department believes that its
conclusions are correct. I understand that the Department will continue
to defend its decision in that litigation and will enforce that
decision against Dallas if the city violates its obligations under the
federal statutes interpreted by that order.
Question 12. Do you agree with independent studies that show that
competition, particularly from low fare carriers, increases passenger
loads and results in significant consumer savings?
Answer. In 1996, the Department released a study, The Low Cost
Airline Service Revolution, that showed that at that time low-fare
competition was saving consumers $6.3 billion annually. The effects of
low-fare competition are tremendous. When a low-fare carrier enters a
market for the first time traffic often doubles or triples, and average
fares decline by 50 percent to two-thirds.
Low-fare airlines serve a demand sector that is greatly underserved
when only the large network airlines serve a market. This means in the
absence of low-fare service, literally millions of consumers who would
like to travel by air are not able to do so. The presence of low-fare
service promotes substantial economic growth to the benefit of local
communities, travel related industries, and the aerospace industry.
Question 13. A recent draft FAA/DOT report on airport practices and
competition emphasized how important new entrants are to competition
and fares and notes that the lack of facilities keeps new entrants out
of airports. Do you agree that DOT should take immediate steps to
eliminate barriers to entry?
Answer. The Department issued its final report on this subject,
``Airport Business Practices and Their Impact on Airline Competition,''
on October 21. The report sets out a number of steps that the DOT and
the FAA can and will undertake today to improve airline competition. In
particular, the DOT/FAA will:
Encourage airports to adopt a set of ``best practices'', as
appropriate for the airport, as cited in FAA/DOT report ``Airport
Business Practices and Their Impact on Airline Competition.''
Designate the Assistant Secretary of Aviation and International
Affairs as DOT's ``competition advocate'' for promoting competitive
access to airports.
Ensure that airports meet their legal obligation to provide
reasonable access in support of competition and provide training and
guidance to field offices and airports for assistance in meeting this
goal.
Ensure that passenger facility charge applications for terminal
projects include the required explanation for any competitive
limitation at the airport before approving terminal development
projects.
Provide AIP funding only for airport master plans that include a
description of competitive effects resulting from the addition of gates
or related facilities.
Implement a new database that will provide current information on
various aspects of PFC projects, including the number of terminal
gates, ticket counters, baggage carousels built or renovated, the net
increase in those facilities and their respective funding source (PFC
or non-PFC), and the types of air carriers to which the facilities are
or will be leased and the specific terms that apply.
Conduct a public outreach effort to explain how the PFC program can
enhance airline competition.
Encourage airports to establish a ``terminal use monitoring
program'' before any PFC applications are approved for terminal
projects.
Require airport operators to (1) resolve new entrant access
complaints within a reasonable period, and (2) clearly specify and
publish what is required for a new entrant to acquire a gate and for an
incumbent carrier to expand.
Question 14. Do you agree that noise at high-density airports is
significantly lower than it's ever been and is likely to continue to
decrease with the phase out of Stage 2 aircraft and the introduction of
even quieter aircraft?
Answer. Yes, for the most part. The key factors that determine the
direction and extent of the airport noise exposure change are the
aircraft fleet mix and operational growth rate. Those airports that are
capacity constrained and have a high proportion of Stage 2 aircraft
should show the greatest reduction in both noise contour area and
number of people impacted. Absent any new regulation, FAA would
anticipate that, on average, the reduction in noise contours will level
off after 2000. The reason for this is that as aviation continues to
grow, the natural replacement of older aircraft by newer (quieter)
airplanes compensates for the greater numbers of aircraft flying.
Question 15. Isn't it difficult for a carrier to compete in
important East-West and North-South markets when it cannot operate at
LaGuardia and Reagan National?
Answer. I believe that it is vital that air carriers have adequate
access to all airports within their base of operations. Large cities in
particular provide substantial traffic to support a carrier's
operations. For example, AirTran's service between Atlanta and New York
is an important source of feed for its operations beyond Atlanta.
And it is also important for a carrier to be able to meet a
traveler's needs, particularly business travelers' needs, for service
to important business centers such as New York and Washington.
LaGuardia and Reagan National are the airports preferred by business
travelers in the New York City and Washington metropolitan areas.
Unfortunately, entry in some highly constrained airports is difficult.
This problem is felt most acutely by the smaller, new entrant carriers,
although Southwest has operated successfully without serving slot-
controlled airports.
Question 16. The Transportation Research Board's report entitled
``Entry and Competition in the U.S. Airline Industry: Issues and
Opportunities'' calls on the federal government to take actions to
increase domestic airline competition. In particular, it notes that
slots and perimeter rules make it extremely difficult for new entrant
and low fare carriers to get into important airports. Do you agree with
the TRB report that slots and perimeter rules should be modified in
order to open important markets to new entrant and low fare carriers?
If not, please explain in detail why not?
Answer. We agree with the TRB report that the High Density "slots"
Rule has outlived its usefulness and has become an impediment to
competition, especially for new entrants. For this reason, Secretary
Slater proposed legislation to terminate the slots rule by 2004 at New
York LaGuardia and Kennedy Airports and Chicago O'Hare, with earlier
elimination of the slot restrictions at those cities for the new
generation of very quiet regional jets.
As you know, in recent years the Department has used its slot
exemption authority to allow low-fare airlines access to these three
slot constrained airports, most recently granting JetBlue 75 slot
exemptions at JFK to be phased in over a 3-year period. Regarding the
TRB's recommendation regarding the perimeter rules, we noted that any
modification to the rules should be addressed by Congress.
Question 17. Can you explain why more slots have been given to
foreign carriers at high density airports than to new entrants? How
many permanent slots at LaGuardia and National have been given to new
entrants in the last five years?
Answer. U.S. and foreign air carriers can gain access to the High
Density Rule (HDR) airports in three ways: (1) the allocation of
international slots (seasonally) by the FAA; (2) the open market
pursuant to the "buy/sell rule"; and (3) slot exemptions granted by the
Secretary of Transportation.
FAA regulations provide that if an international slot is not
available to accommodate an international request from a foreign air
carrier that has the right to serve O'Hare International Airport, a
domestic slot will be withdrawn from a domestic carrier for allocation.
Due to a statutory cap on the number of slots that may be withdrawn
from domestic carriers and allocated for international requests, the
U.S. continues to provide access to O'Hare through the grant of
exemptions by the Secretary. In return, U.S. carriers have received
market access to foreign markets that would otherwise be unavailable.
In 1994, Congress gave the Secretary the authority to grant
exemptions for certain operations at LaGuardia, JFK, and O'Hare
airports. Since that time, 30 permanent slot exemptions have been
granted to new entrant carriers at LaGuardia Airport. The Secretary has
no statutory authority to grant slot exemptions that would increase the
total number of operations at Reagan National Airport.