[Senate Hearing 107-968]
[From the U.S. Government Publishing Office]
S. Hrg. 107-968
NOMINATIONS OF MR. DAVID McQUEEN LANEY
TO BE A MEMBER OF THE REFORM BOARD
(AMTRAK) AND MR. ROGER P. NOBER TO BE
COMMISSIONER OF THE SURFACE
TRANSPORTATION BOARD
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 5, 2002
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
87-972 U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2003
____________________________________________________________________________
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COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii JOHN McCAIN, Arizona, Ranking
JOHN D. ROCKEFELLER IV, West Republican
Virginia TED STEVENS, Alaska
JOHN F. KERRY, Massachusetts CONRAD BURNS, Montana
JOHN B. BREAUX, Louisiana TRENT LOTT, Mississippi
BYRON L. DORGAN, North Dakota KAY BAILEY HUTCHISON, Texas
RON WYDEN, Oregon OLYMPIA J. SNOWE, Maine
MAX CLELAND, Georgia SAM BROWNBACK, Kansas
BARBARA BOXER, California GORDON SMITH, Oregon
JOHN EDWARDS, North Carolina PETER G. FITZGERALD, Illinois
JEAN CARNAHAN, Missouri JOHN ENSIGN, Nevada
BILL NELSON, Florida GEORGE ALLEN, Virginia
Kevin D. Kayes, Democratic Staff Director
Jeanne Bumpus, Republican Staff Director and General Counsel
C O N T E N T S
----------
Page
Hearing held on September 5, 2002................................ 1
Statement of Senator Breaux...................................... 1
Statement of Senator Dorgan...................................... 4
Statement of Senator Hutchison................................... 3
Statement of Senator Wyden....................................... 6
Witnesses
Baucus, Hon. Max, U.S. Senator from Montana...................... 2
Nober, Roger P., Nominee to be Commissioner of the Surface
Transportation Board........................................... 8
Prepared statement........................................... 9
Biographical information..................................... 10
Laney, David M., Nominee to be a Member of the Reform Board
(Amtrak)....................................................... 16
Prepared statement........................................... 17
Biographical information..................................... 17
Petri, Hon. Tom, U.S. Representative from Wisconsin.............. 3
Warner, John W., U.S. Senator from Virginia...................... 2
Appendix
Burns, Hon. Conrad, U.S. Senator from Montana, prepared statement 31
Response to Written Questions Submitted by Hon. Ernest F.
Hollings to:
David McQueen Laney.......................................... 34
Response to Written Questions Submitted by Hon. John McCain to:
David McQueen Laney.......................................... 32
Roger P. Nober............................................... 34
Response to Written Questions Submitted by Hon. Conrad Burns to:
Roger P. Nober............................................... 36
NOMINATIONS OF MR. DAVID McQUEEN
LANEY TO BE A MEMBER OF THE REFORM
BOARD (AMTRAK) AND MR. ROGER P. NOBER
TO BE COMMISSIONER OF THE SURFACE
TRANSPORTATION BOARD
----------
THURSDAY, SEPTEMBER 5, 2002
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 2:30 p.m. in room
SR-253, Russell Senate Office Building, Hon. John B. Breaux,
presiding.
OPENING STATEMENT OF HON. JOHN B. BREAUX,
U.S. SENATOR FROM LOUISIANA
The Chairman. The hearing will come to order.
This afternoon, the Commerce Committee will hear from two
nominees to become board members of the Surface Transportation
Board, as well as the Amtrak Reform Board.
I will ask the candidates to please take their seats at the
witness table, in which case we will do both of them
consecutively.
I am very pleased to welcome and also recommend Mr. Roger
Nober and Mr. David Laney to our Committee. I think the two
candidates present good credentials in transportation, law,
education and politics. As a veteran of the House
Transportation and Infrastructure Committee, Mr. Nober's
knowledge and background will serve him well as he moves
through the confirmation process and into his new role as a
Surface Transportation Board member. As former Chair of the
Texas Transportation Commission, Mr. Laney is up to the task of
serving on the Amtrak Reform Board as a member.
We do not want to in any way downplay the host of
challenges awaiting both of our nominees to these respective
positions. We will talk about some of our concerns in a moment
about both of these areas, both surface transportation and
Amtrak, but I note that we have a number of our colleagues who
are with us this afternoon to make comments about our nominees,
and I am delighted to recognize them.
One is the Chairman of the Finance Committee, my Chairman,
so I will recognize him first, because you are Chairman of my
Committee and your name starts with a ``B'', Max Baucus. Max,
welcome.
STATEMENT OF HON. MAX BAUCUS,
U.S. SENATOR FROM MONTANA
Senator Baucus. Thank you, Mr. Chairman. Thank you. We are
in strong support of the nominee. Mr. Chairman, I am honored to
be here today to support someone for whom I have a tremendous
respect. I have worked closely with the nominee for many, many
years, particularly when he was over working for Bud Schuster,
and I have to tell you, I have the highest regard for him.
Last week, I sent a letter to the Committee urging the
Committee to confirm Roger Nober as a member of the Surface
Transportation Board, and I am very honored to be here with my
colleague, who has a very deep interest in surface
transportation issues, and I am just thrilled, frankly, that he
will be named Chairman of that Commission by the President
Now, why am I so pleased? Roger is from Massachusetts. I am
from Montana. Roger is Republican. I am a Democrat. But in the
transportation field, there is an old saying that there are no
Republican bridges, there are no Democratic roads, or vice
versa, and I think Roger is really proof of that. I work
seamlessly with Roger's boss, as I mentioned, Bud Schuster.
Roger had a great working relationship, it could not have been
better, in working with my office and my staff along with
Senator Warner and Congressman Tom Petri and others who are
interested in surface transportation issues. It is just first
class.
He has been a kindred spirit and is an outspoken defender
of the Highway Trust Fund and a proponent of the importance of
transportation in general. I might say, I am particularly
interested because of our unique problems in Montana. We have a
transportation situation that is similar to many other problems
of many other states, and that is with respect to our grain
growers and shippers who are having a tough time making ends
meet and working out good deals with the railroads to get their
products to market. Senator Burns, my colleague and a Member of
this Committee, and I introduced a bill to try to deal with
these problems. I know Roger is fairly sympathetic, and so I
will not take any more of the Committee's time.
I commend the Committee to act very quickly and
forthrightly on the nomination. I commend the President for his
well-thought-out selection and, Mr. Chairman, it is with the
highest regard that I support, along with my colleagues, and
introduce to this Committee Roger Nober, because he is, I
think, going to be a great credit, frankly, to this Nation.
The Chairman. Thank you very much, Senator Baucus and, of
course, I thank our colleagues, who would be excused if they so
desire, after they make their comments.
Next on Mr. Nober's behalf, Senator Warner.
STATEMENT OF HON. JOHN W. WARNER,
U.S. SENATOR FROM VIRGINIA
Senator Warner. I thank you, Mr. Chairman and Members of
the Committee. That was a beautiful introduction, given by my
long-time friend and fellow colleague in the world of
transportation and other things, Max Baucus. Out of deference
to you, I am not going to read my prepared statement, because I
could not do any better, or make it any more heartfelt.
This is an incredible individual here, because I at that
time was Chairman of this Subcommittee on our Committee, and
Senator Baucus, Senator Chafee and I, the three of us worked as
a team with your former Chairman, and you, my good friend, and
we put together one of the most historic pieces of legislation
that I have been privileged to work on in my 24 years in the
Senate. That was TEA-21, and Roger, you did a wonderful job. I
think at this point maybe we ought to ask Roger to introduce
his lovely family, who are right behind him.
The Chairman. We will give him a chance just as soon as we
hear from all of our colleagues. Then we will have him
introduce his family. Thank you very much, Senator Warner.
Senator Warner. Thank you very much.
The Chairman. Our friend and colleague from the other side,
Tom Petri. Congressman.
STATEMENT OF HON. TOM PETRI,
U.S. REPRESENTATIVE FROM WISCONSIN
Mr. Petri. Thank you. I would like to, on behalf of my
colleagues, certainly in my own role as Chairman of the House
Surface Transportation Subcommittee, support the candidacy of
Roger Nober, who was our Subcommittee General Counsel, and then
the Full Committee General Counsel, who has a distinguished
academic and professional career. He is an outstanding family
man and is a very bright individual with tremendous judgment. I
think our country is fortunate to have a person of his caliber
who is willing to serve as a member of the Board to which he is
nominated, and so I would urge his thoughtful consideration.
The Chairman. You all trained him well over there.
Mr. Petri. Yes.
The Chairman. Thank you again, and our colleagues, if they
have other things they need to attend to, they certainly would
be excused.
To introduce and present Mr. David Laney to be a member of
the Amtrak Reform Board, our colleague on this Committee and
from Texas, Senator Kay Bailey Hutchison.
STATEMENT OF HON. KAY BAILEY HUTCHISON,
U.S. SENATOR FROM TEXAS
Senator Hutchison. Thank you, Mr. Chairman. I appreciate
your holding this hearing because I would like to see David
Laney get through the Senate before the recess. We all know
that Amtrak is facing many crises. It seems like every week we
wake up to a new one, and I cannot think of anyone more
qualified to sit on the Amtrak Board than David Laney.
David graduated from Stanford University and received his
law degree from SMU, Southern Methodist University. In Dallas,
he has been a managing partner of Jenkins and Gilchrist, a very
prestigious national law firm, and for 12 years he also served
as a gubernatorial appointee in Texas. He was appointed to the
Texas Finance Commission and later to the Texas Transportation
Commission.
As Chairman of the Texas Transportation Commission, he
functioned basically as the CEO of the Texas Department of
Transportation. That is a major state agency in Texas, with
14,000 employees and a $5 billion annual budget. As you might
know, coming from Louisiana, we have great highways in Texas
and we have more of them than any other state in America, so
this really has given David Laney a lot of experience in
managing a big agency. I cannot think of an agency that needs
management more than Amtrak.
Now, that is not to say he is going to replace the CEO, but
certainly the CEO needs a lot of help from the Board and from
experienced business people. I am a supporter of Amtrak and I
have worked with Members of this Committee to support Amtrak,
but we cannot keep putting Band-Aids on Amtrak. We need to
recognize that Amtrak is a national passenger rail system that
serves a vital function as one of our types of intermodal
transportation. I hope that we will be able, through good
people like David Gunn and like David Laney, to save Amtrak and
put it on a course where it can succeed, grow, and attract the
passengers that it would if it were on a solid financial
footing. I think the important thing is looking for ways to
assure solid financial footing in order to make it a strong
national system.
You know, after 9/11, a lot of people took Amtrak, and they
were looking for alternative modes of transportation to air. I
think now that almost a year has passed, we know that rail
should be a permanent part of our intermodal transportation
system in America, and I cannot think of anyone more qualified
to be helpful in that regard than David Laney. So I recommend
him to you, and I hope that you can swiftly confirm him.
The Chairman. Thank you very much, Senator Hutchison, for
your participation and assistance in these very important
areas.
Before we hear from our two nominees and give them a chance
to make an opening statement and introduce their families or
associates that are with them, I would like to recognize any of
our Committee Members for any comments they may have.
Senator Dorgan.
STATEMENT OF HON. BYRON L. DORGAN,
U.S. SENATOR FROM NORTH DAKOTA
Senator Dorgan. Mr. Chairman, thank you very much. Let me
first say that I intend to support the nomination of Mr. Laney
and Mr. Nober. I think they are good candidates. I want them to
do well. I am going to be pleased to vote for their
confirmation on the floor of the U.S. Senate.
I want to say one other thing, just as a prelude. I would
not put a hold on their nominations and will not do that. I
believe that these positions are important. We need these
people confirmed. We have, since last September, had an opening
on the Democratic seat on the Federal Communications
Commission, the FCC. There was a name advanced for that last
November. That person is not yet confirmed, and I think it is
an outrage. I say to those who hold these things up that we
need that rural voice on the Federal Communications Commission,
and we need it now, but I am not going to hold up other
nominations because of it. I think it is unfair and would not
do that. But I say to my colleagues who do hold up these
nominations, we need that person on the FCC right now. Jonathan
Adelstein has been nominated. His nomination is before the
Senate. This thing has been open a year. It is an outrage and a
shame. Mr. Chairman, I hope you will agree with me that--and
this is not anything we have been involved in--we need to find
our colleagues on the Senate who are holding these up, and say
to them that we are not going to hold your nominations up; and
we do not expect you to hold ours up.
Now, having said all that, Mr. Laney, the Amtrak issue is a
very important issue to me and to many Members of the U.S.
Senate, and I am a strong believer in having a national rail
passenger system. I want to be working with all the folks who
are interested in that. The two of you would be on the board,
as I understand it, so I am pleased to support your nomination.
Mr. Nober, I want to make a comment to you, a couple of
comments, because it is therapeutic for me, and I think it is
important for you. Linda Morgan is the former Chairman of the
Surface Transportation Board. You were one of the people
instrumental in actually abolishing the ICC, an agency that I
said was dead from the neck up for at least a decade, or
perhaps more, in the creation of the Surface Transportation
Board, which you now aspire to lead. Linda Morgan, I think I
indicated this to her, the one action they took that
symbolically and also substantively was very important, and
took some guts was to establish a moratorium on mergers. They
used some authority that some people question to do that, but
we have a massive problem in rail transportation in a state
like North Dakota.
You and I had a long visit about this yesterday, but we
have testimony from people who tell us about what is happening
with rail rates, it is an outrage, and we need help from the
Surface Transportation Board. I am going to vote for you. You
have a great background. You have a reputation of working in a
bipartisan way to solve problems. If you do not have authority
to solve problems, I want you to come to us and tell us what
authority you need and let us work with you to get you that
authority.
It is not fair for farmers in North Dakota or grain
elevators in North Dakota to pay $2,400 to ship a carload of
wheat that the same shippers over in Minneapolis will pay
$1,000 to ship for the same distance from Minneapolis to
Chicago versus Bismarck-Minneapolis. That is not fair. That is
price fixing, and $100 million is taken out of the hides of my
constituents by railroads that are fixing prices. That is
according to our own Public Service Commission. That is not me,
and I could go on and on. I went on and on with you yesterday.
This is not your fault, but it is your charge to help us fix
it, and I hope you aspire to this job to help us solve some
problems.
Railroads are fine. I like the railroads, I just do not
like their pricing strategy. I do not think this notion of
having free and fair and open competition, this system of
capitalism of ours, is working. We do not have competition in
most areas of North Dakota with respect to railroads, we have a
monopoly. They say, ``Here is our price and here is where we
will stop. If you want to get on, get on at that point and put
your products on. If you do not like it, tough luck, find some
other avenue of transportation.''
I am not willing, and neither are my colleagues, Senator
Rockefeller and others, to sit idly by and say that is all
right. It is not all right as far as I am concerned. It is not
all right for our farmers, our Main Street business people, or
our country grain elevators.
Having said all that--and you need to hear that, because
you will hear a lot from myself and others on this Subcommittee
and Full Committee about it--I will be happy to support your
nomination, and I expect that is your family behind you. I
cannot stay for the entire proceeding today because of another
commitment, but are those your two sons?
Mr. Nober. Yes, sir, and my wife, Jane.
Senator Dorgan. I know the Chairman will ask you to
introduce them more formally, but it is nice to see your family
with you as well. Thank you very much, and Mr. Laney, thank
you.
The Chairman. Thank you.
Senator Wyden.
STATEMENT OF HON. RON WYDEN,
U.S. SENATOR FROM OREGON
Senator Wyden. Thank you, Senator Breaux. I appreciate your
scheduling this in a timely way, and just a few comments for
each of our nominees, because I, too, am only going to be able
to be here briefly.
Let me also say, I have only heard positive things about
both of you individuals, and certainly it is my intent to
support both of you, but let me just share briefly with you
several concerns I have.
Mr. Laney, last April I released a General Accounting
Office report showing that Amtrak's process for making route
decisions is fundamentally flawed. I hope that you are familiar
with the report, but I think what the New York Times said in
summing it up is pretty clear. They said, and I will quote
here: ``Amtrak set out to make major changes in its trains
without knowing what the changes would cost or how much
business they would generate.''
The General Accounting Office said not only did Amtrak make
bad decisions, they simply did not do their homework. They did
not get the essential information that is necessary to make
informed choices, so as a result, a variety of their strategies
have been derailed. Only 3 of 15 route decisions proposed in
Amtrak network growth strategies have been implemented, and
already one of those three routes has been abandoned. As I am
sure you are aware, this is not the first time the General
Accounting Office has been extremely critical of the way Amtrak
goes about finding these routes.
In 1997, the General Accounting Office found that when
Amtrak cuts routes in an effort to save costs, it cut routes
such as the Pioneer from Chicago to Portland that, in fact, had
better financial performance than other routes that Amtrak
maintained. You will hear me talk at some length about this
when we have debates about Amtrak.
I am prepared to make these calls on the merits, and if we
want to say to the General Accounting Office, ``You make
calculated decisions with respect to the objective criteria for
making route decisions.'' I am for it; we will take the
consequences in Oregon and everywhere else. What I am not
willing to accept is the politicizing of the way these routes
are made, and in the last 5 years Amtrak has basically jumped
track enough times to make your head spin.
First, they thought cutting routes would be their financial
salvation. That is when they made the political choice that
eliminated the Pioneer route. Then, 3 years later, they decided
that expanding routes would make them self-sufficient. Now,
they are back to cutting routes once again. It seems to me that
what is especially damaging here is that there is no
predictability, certainty, or consistency. So I am anxious to
hear particularly your views on what you will do to get Amtrak
decisions on routes made on the merits. We can have a debate
about how to do that, and whether it ought to be assigned to
the General Accounting Office or whoever. But I am going to do
everything in my power as a Member of this Committee to get
these calls made on the merits, because I think to do otherwise
just flouts any effort at rational transportation policy.
Mr. Nober, just a couple of comments. As you might gather,
the wheat growers and the agricultural interests in our part of
the world are very hard hit; it's been a very difficult year.
They have concerns about rail-to-rail competition, how it is
limiting service options and raising rates, or in some cases
driving them off the rails altogether. I think what we would
like to get today, and in the days ahead, is a sense of how you
would balance the use of our national transportation
infrastructure and the appropriate role of competition among
railroads for the future.
You have got 19 short line railroads in our part of the
world. Many short lines can physically interchange with both UP
and BNSF, and they are prevented from determining which routing
decisions are best for their customers by either economic or
contractual conditions imposed by the companies, depending upon
which of the Class I carriers originally sold off the branch
line to the independent short lines. So in light of all the
consolidation and the fact that short lines are the most
immediate means by which some of the competition is brought to
bear, I think we are going to be interested in knowing your
views regarding the appropriateness of Class I carriers
determining what route the short line carrier can offer to the
customers through their methods.
But again, I have heard only positive things about both of
you. I am looking forward to supporting you in the Committee
and on the floor, and suffice it to say, the jobs in which you
are nominated to serve are not for the faint-hearted. You are
going to be busy people, and these are important issues.
I thank you, Mr. Chairman, for the chance to make some
remarks.
The Chairman. Thank you, Senator Wyden. You have heard from
us. It is now time for us to hear from you.
Mr. Nober, we would like to go with you first. Your family
is waiting out there very patiently with two youngsters who
have been behaving quite well, and having grandchildren about
that age I know how difficult that is. We welcome you, and we
will take your testimony first.
STATEMENT OF ROGER P. NOBER, NOMINEE TO BE COMMISSIONER OF THE
SURFACE TRANSPORTATION BOARD
Mr. Nober. Thank you, Senator Breaux, Members of the
Committee. I very much appreciate your taking the time to hold
this hearing today and hear from me. I would like to start by
introducing my family, who seem to be sitting very well, which
is always a struggle. My wife Jane is there. She is in her
ninth month of pregnancy with our third child, and our other
two children are here, William and Benjamin. William has the
white shirt, and Benjamin the blue shirt, and my parents Linda
and Harris Nober are also here. Thank you very much for holding
this hearing today, early in September, because it allowed my
family to be here. We were nervous as to when my wife might
actually give birth. She is scheduled to give birth in the next
2 weeks.
The Chairman. If she has to leave before we finish, please
feel free to let her go.
[Laughter.]
Mr. Nober. It will be a trick to get that to happen.
I am pleased to appear before this Committee today as
President Bush's nominee to the Surface Transportation Board. I
would like to make a very brief oral statement, and ask that my
full remarks be included in the record.
I would like to take a moment to thank Senators Warner and
Baucus and Congressman Petri for the kind introductions, and
for taking time out of their busy schedules to come and attend
this hearing. I would also like to thank Transportation
Secretary Mineta and Deputy Secretary Jackson for their
support. They unfortunately could not be here today.
I appear before this Committee today as President Bush's
nominee to the Surface Transportation Board. The President has
indicated that if I am confirmed he will designate me as
Chairman. The STB is an independent agency, and the President
has nominated me to implement the portion of the national
transportation policy under his jurisdiction effectively,
impartially, and fairly.
I am particularly pleased to be nominated to this position
since, as a staff member in the House, I had the privilege to
work on the legislation that created this agency back in 1995.
Since then, I have continued to work closely with the Board,
the Members of the House and Senate, and the Board's
stakeholders on the matters that it oversees. If confirmed, I
will be able to continue my many years of public service in
transportation policy.
I was a staff member on the House Transportation and
Infrastructure Committee for 8 years, ultimately serving as
Chief Counsel. Since May of last year, I have been counselor to
Deputy Secretary Jackson at DOT, where I advised him and
Secretary Mineta. In performing my duties, I have always given
the full consideration to the input of all parties. I have
worked hard to reach consensus wherever possible in a fair and
bipartisan manner, and if confirmed I would continue to do so
as a member of the Board.
The STB is an independent adjudicatory body and, if
confirmed, you can be sure that I will give all the issues that
come before it full, fair, and impartial consideration. I would
not take office with any preconceived notions but, rather,
would examine each issue on its merits and strive to make the
best decision possible consistent with the facts, the law, and
precedent. If I am confirmed, those who bring matters before
the Board may not agree with every position that I take, but
can be sure that I will give all matters thoughtful, fair,
impartial and full consideration.
If confirmed, I would work closely with Congress. I worked
for this institution for many years, and have the utmost
respect for the letter and spirit of the laws it passes. I
believe it is important to be open and accessible to all
Senators and Members of Congress and their staffs. Similarly, I
believe it is important to be open and accessible to the
agency's stakeholders and, if confirmed, I would have an open
door policy to the extent permitted.
Finally, I would like to take a minute just to recognize
the accomplishments of the current Chairman of the STB,
Commissioner Linda Morgan. She has led the agency for the past
8 years, and her tenure has included some trying times for that
organization. I hope that if I am confirmed and appointed
Chairman, I will at least be partially as effective as she has
been, and I look forward to the opportunity to serve with her
and Commissioner Burks, both of whom were kind enough to be in
attendance today.
In closing, I hope you give me the opportunity to serve the
public as a member of the STB, and I thank you for your
consideration and look forward to answering any questions you
might have.
[The prepared statement of Mr. Nober follows:]
Prepared Statement of Roger P. Nober, Nominee to be Commissioner of the
Surface Transportation Board
Thank you Chairman Breaux and Ranking Member Smith. I am pleased to
appear before this Committee today as President Bush's nominee to the
Surface Transportation Board (STB).
I want to thank Senators Warner and Baucus and Congressman Petri
for their kind introductions. I have had the honor of working with them
over the past 9 years and am deeply grateful to them for their kind
words. I would also like to thank Transportation Secretary Mineta and
Deputy Secretary Jackson. I have had the privilege of working for them
over the past 15 months and I appreciate their support for my
nomination.
I would also like to express my appreciation to the Committee for
holding this hearing early in September. My wife Jane is pregnant with
our third child and due to deliver later this month. She is in the
audience today and easy to find. By scheduling this hearing today the
Committee has made it possible for her, my children, William and
Benjamin, and my parents Linda and Harris Nober to all be here.
I appear before this Committee today as President Bush's nominee to
the STB. The President has indicated that if I am confirmed, he would
designate me as Chairman of the STB. The STB is an independent agency,
and the President expects that if confirmed, I will implement the
portion of the national transportation policy under its jurisdiction
effectively, impartially and fairly.
I am particularly pleased that the President has nominated me to
serve as a member of the STB, since, as a staff member in the House, I
had the privilege to work on the legislation that created it. As all of
you know, the Interstate Commerce Commission Termination Act of 1995
eliminated the ICC and created the STB. I was the lead staff member of
the House Committee on Transportation and Infrastructure with respect
to trucking and pipeline issues on that bill. Since then, I have
continued to work closely with the Members of the Board, the Members of
this Committee and the Board's stakeholders on matters under its
jurisdiction.
I am committed to public service, and if you confirm me as a Member
of the STB, you will allow me to continue my many years of public
service in transportation policy. I was a staff member for the House
Committee on Transportation and Infrastructure for 8 years, ultimately
serving as Chief Counsel of that Committee. Since May of 2001, I have
served as Counselor to Deputy Secretary Michael Jackson at the
Department of Transportation where I have advised him and Secretary
Mineta, particularly on the broad range of policy issues facing the
Department since the September 11 terrorist attacks. In these
positions, I have been deeply involved in transportation policy matters
of all types. In performing my Congressional duties, I always gave full
consideration to the input of all parties on issues and worked hard to
reach consensus wherever possible in a fair, bi-partisan manner. If
anything, my time in the Executive Branch has reinforced the importance
of the vital transportation policy issues facing the STB and the need
to work on them in a fair, bipartisan manner.
The STB is an independent, adjudicatory body, and its Members must
be open minded, impartial and fair with respect to the decisions they
make. If I am confirmed to be a Member of the STB, I will give all of
the issues that come before it full, fair and impartial consideration.
I would not take office with any preconceived notions about the outcome
of any particular issue, but rather would examine each matter on its
merits and strive to make the best decision possible consistent with
the facts, the law and precedent. If I am confirmed, those who bring
matters before the Board may be sure that I will give all matters
thoughtful, fair, impartial and careful consideration.
Finally, I would like to make clear that if confirmed, I would
continue to work closely with the Congress and all stakeholders in the
agency. I worked for the Congress for many years, and have the utmost
respect for the letter and the spirit of the laws passed by this
institution. I recognize the need to work closely with the Members of
the House and Senate, and if I am confirmed, all Senators can be sure
that I will be open and accessible to them and their staffs.
Similarly, I believe it is important to be open and accessible to
the agency's stakeholders, and if confirmed, I would have an open door
policy to the extent permitted.
In closing, I hope I will have the opportunity to continue to serve
the public as a Member of the STB. I thank you for your consideration
and look forward to answering any questions you might have.
______
A. BIOGRAPHICAL INFORMATION
1. Name: Roger P. Nober.
2. Position to which nominated: Member, Surface Transportation
Board.
3. Date of nomination: July 18, 2002.
4. Address: (Information not released to the public).
5. Date and place of birth: September 19, 1964, Syracuse, NY.
6. Marital status: Married, October 13, 1991 to Jane C. Nober.
7. Names and ages of children: William H. Nober, 6; Benjamin E.
Nober, 3; Child due September, 2002.
8. Education: High School: Amherst Regional High School, Amherst,
Massachusetts, Attended 9/79-6/82, Diploma awarded June, 1982; College:
Haverford College, Haverford, PA, Attended 9/82-5/86, B.A. in Economics
awarded May, 1986; Law School: Harvard Law School, Cambridge, MA,
Attended 9/86-6/89, J.D. awarded June, 1989.
9. Employment record: 5/O1-present: Counselor to the Deputy
Secretary of Transportation, United States Department of
Transportation, 400 Seventh Street, SW., Washington, DC. 20590; 7/93-5/
01: Committee on Transportation and Infrastructure, U.S. House of
Representatives, Washington, DC. 20515, Chief Counsel, 1/01-5/01,
General Counsel, 1/97-12/00, Counsel, Subcommittee on Surface
Transportation, 1/95-12/96; Minority Counsel, Subcommittee on Surface
Transportation, 7/93-12/94 11/91-5/93, Skadden, Arps, Slate, Meagher &
Flom 6/89-8/89, 4 Times Square; 6/88-8/88 New York, NY 10036,
Associate, 11/91-5/93 Summer Associate, 6/88-8/88; 6/89-8/89 9/89-8/91,
Law Clerk, Chambers of Judge David N. Edelstein (deceased), U.S.
District Judge, United States District Court for the Southern District
of New York, 1/89-5/89; Sophomore Tutor in Economics; 1/88-5/88 Harvard
University Department of Economics, Cambridge, MA, 5/87-8/87, Dunnells,
Duvall, Bennett & Porter (now dissolved), Washington, DC., Summer
Associate.
10. Government experience: (beyond that in question 9). None.
11. Business relationships: None.
12. Memberships: Massachusetts Bar; New York Bar.
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. Contributing Author, Republican Platform, Transportation
Section, 2000; Transportation Committee, Dole for President Campaign,
1996.
(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. None.
14. Honors and awards: None.
15. Published writings: Note: Federal Highways and Environmental
Litigation: Toward a Theory of Public Choice and Administrative
Reaction 27 Harv. J. on Legis. 229 (1990).
16. Speeches: All speeches I have given in the past 5 years have
been in my capacity as an official representing the Committee on
Transportation and Infrastructure or the U.S. Department of
Transportation. I have always spoken from notes, not from a prepared
text.
17. Selection: (a) Do you know why you were chosen for this
nomination by the President? I believe I was selected by the President
to be a Board Member of the Surface Transportation Board (STB) for
several reasons: that the President was confident I would make honest
and fair decisions in the matters that come before the agency; that I
share the President's philosophy with respect to the matters that are
expected to come before the STB; that the other Board Members, the
Congress, the STB's stakeholders and the public would share his
confidence in my ability to do so; and my experience in surface
transportation matters, particularly those under the jurisdiction of
the STB.
(b) What do you believe in your background or employment experience
affirmatively qualifies you for this particular appointment? I am
qualified to be a Member of the STB because of my background as a
lawyer in the private sector and my experience in all three branches of
government.
Most pertinently, for the past 9 years I have been involved in
setting and implementing surface transportation policy. My work during
my 8 years of service on the House Transportation & Infrastructure
Committee and the past year at the Department of Transportation has
involved the STB and the matters that come before the agency. The STB
was created by Congress on January 1, 1996 as part of the Interstate
Commerce Commission Termination Act of 1995, which among its many
provisions eliminated the ICC and created the STB as its successor
agency. In 1995, I was the Counsel for the Subcommittee on Surface
Transportation, and was the primary House staff person responsible for
the motor carrier and pipeline portions of that bill. In working on
that legislation, I gained an understanding of the STB's jurisdiction,
statutory framework, mission and administrative structure, as well as
perspective on Congress' intent in creating the agency. Since the
passage of the legislation creating the STB, I have continued to work
with stakeholders, the Congress and the STB on legal, policy and
administrative matters within its jurisdiction.
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? My present employer is the United States
Department of Transportation. While decisionally independent, the
Surface Transportation Board is administratively housed within the U.S.
Department of Transportation and the Board Members are employees of the
U.S. Department of Transportation.
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. I have no such commitments.
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 have no such plans, commitments or agreements.
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. I have no such arrangements or dealings.
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. Please see the attached
letter from the Designated Agency Ethics Officer of the STB.
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. I have no such business
relationships, dealings or financial transactions.
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. In my positions
with the Committee on Transportation and Infrastructure and at the
Department of Transportation, I have been involved in the consideration
of much of the transportation legislation that has been enacted since
1993.
My express duties have been to advance the views of the Ranking
Republican Member, the Chairman or the President and Secretary with
respect to such legislation.
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 see the attached letter from the Designated Agency Ethics
Officer of the STB.
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? In 1989, I was
a party along with four others in a civil action in small claims court
in Cambridge, Massachusetts regarding a security deposit on rental
property. At that time, small claims court in Massachusetts had a
jurisdictional limit of $1500. I was one of four renters of residential
property who sublet the property to others during the summer of 1988.
During the time that the property was occupied by the sublessors; water
damage occurred to the kitchen floor. The Judge determined that while
the sublessors had caused the damage, the security deposit had not been
properly kept and thus I along with the four others ultimately paid the
landlord for the damage.
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. In 1999, I was called by the Committee
on Standards of Official Conduct of the U.S. House of Representatives
to be a witness as part of its investigation into the activities of
Congressman Bud Shuster. I was one of approximately 75 individuals,
including several employees of the Committee on Transportation &
Infrastructure, called before the Committee on Standards of Official
Conduct. I was called because of my position as General Counsel to the
Transportation and Infrastructure Committee, and the questions asked of
me related to the Transportation and Infrastructure Committee's
consideration of certain legislative matters. No questions were raised
about me personally or any of my actions. The Ethics Committee issued
its Investigative Report in the matter involving Congressman Shuster on
October 4, 2000. That Report is available on the website of the
Committee on Standards of Official Conduct of the U.S. House of
Representatives, www.house.gov/ethics. I am not referred to in the
Report.
E. RELATIONSHIP WITH COMMITTEE
1. Will you ensure that your department/agency complies with
deadlines set by congressional committees for information? I will do so
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? I will do so to the best of my
ability.
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? I will do
so to the best of my ability.
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.
As a former employee of the Congress who participated in drafting
numerous bills, I believe that the executive branch has an obligation
to follow both the letter and the spirit of the statutes passed by
Congress when implementing and interpreting laws. If I am confirmed as
a Member of the STB, I will to the best of my ability ensure that all
regulations issued by the STB comply with both the letter and spirit of
the laws passed by Congress. In cases where that intent is not clear, I
would seek the guidance of the Congress.
5. Describe your department/agency's current mission, major
programs, and major operational objectives. The STB was created as the
successor agency to the Interstate Commerce Commission and was
established on January 1, 1996. It was created as part of the
Interstate Commerce Commission Termination Act of 1995 (ICC Termination
Act). Congress intended that the STB be a decisionally independent body
that was administratively housed within the U.S. Department of
Transportation.
The ICC Termination Act was one of a series of acts of Congress
deregulating various segments of the surface transportation industry
regulated by the ICC. These included deregulation of interstate
trucking (1980, 1994 and 1995), intrastate trucking (1994), intercity
busses (1982 and 1994) and railroads (1980 and 1995). As the modes
within the jurisdiction of the ICC were deregulated, Congress began
considering whether to continue the agency at all. In the ICC
Termination Act, Congress reviewed each of the remaining functions of
the ICC and determined that certain functions needed to be continued by
a decisionally independent agency. Congress created the STB and vested
it with these functions.
With respect to railroads, the STB's jurisdiction includes rate and
service issues, mergers, line sales, revenue adequacy, line
construction and abandonments, and certain labor matters pertaining to
these rail matters. With respect to trucking, these include approval
for certain collective activities including antitrust immunity,
activities of the moving industry and movements by truck and over water
to non-contiguous U.S. States and possessions, including Alaska, Hawaii
and Puerto Rico. With respect to intercity busses, its jurisdiction
includes structural, financial and operational matters. Finally, the
STB also has jurisdiction over economic regulation of certain pipeline
matters not covered by the Federal Energy Regulatory Commission.
The major operational objective facing the STB is to continue its
tradition of independence and excellence in decisionmaking. As an
agency that has risen from the termination of another, it has adapted
to best serve its customers and achieve its mission of making
independent, fact-based decisions grounded in precedent.
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
qualifies you for the position for which you have been nominated? My
background as a lawyer who has worked in the private sector and all
three branches of government has provided me with the substantive
policy, political, administrative and management experience to qualify
me for a position as a Member of the Surface Transportation Board.
I graduated from Harvard Law School, where I wrote and taught about
transportation policy. My experience in the Judicial Branch occurred
following law school, where I was a law clerk on a busy trial court,
the United States District Court for the Southern District of New York.
I worked on the full range of criminal and civil cases, including one
of the largest civil cases in the country. Following my clerkship, I
was associated with a large law firm headquartered in New York, where I
was part of the litigation department and had experience with
commercial disputes.
While at the Committee on Transportation and Infrastructure and at
the Department of Transportation, I have focused on setting and
implementing transportation policy and while at DOT, the management of
transportation agencies. My duties at the Committee included
responsibility for substantive policy expertise and developing
legislation on all matters within the jurisdiction of the Committee,
including railroad, motor carrier and pipeline matters. My duties
entailed meeting with the agencies that administer the programs under
the Committee's jurisdiction and stakeholders in those programs, as
well as communicating with Members of the Committee, the House of
Representatives and the Senate. I also worked closely with Members and
staff of both parties.
Since joining DOT, I have worked extensively with the Secretary,
the Deputy Secretary, and the White House, as well as the various
operating agencies that comprise DOT in developing and implementing
policy. I have learned about the management challenges in large
organizations and the circumstances which govern the development and
execution of policy and the management of agencies in the Executive
Branch. I have also gained experience with respect to the Department's
adjudicatory functions, a function often exercised by the STB.
2. Why do you wish to serve in the position for which you have been
nominated? I wish to serve on the STB for many reasons. First, I would
like the opportunity to serve the President as a Member of the Board
and represent his general philosophy on the matters that will come
before it. Second, I look forward to continuing to use my policy
expertise in surface transportation matters. Third, I would like the
opportunity to further work with the current Board Members, the expert
staff at the STB and the stakeholders in the matters under the
jurisdiction of the STB. And finally, since I was involved in the
creation of the STB and the termination of the ICC, I would like the
opportunity to serve on the Board and help it continue its high level
of independence and professionalism.
3. What goals have you established for your first 2 years in this
position, if confirmed? My major goal is to work with the existing
Board Members to further the work done by them since the creation of
the STB to establish and maintain its independence and excellence in
decisionmaking.
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 will need to work to further develop my
organizational management skills, and have been working here at DOT to
become more involved in management, in addition to policy issues.
5. Who are the stakeholders in the work of this agency? The primary
work of the Board relates to railroads, and so the stakeholders in the
rail area include large, medium and small (Class 1, 2 and 3) freight
railroads, railroad workers, rail shippers, operators of passenger
railroads and the communities dependent upon railroads. With respect to
its motor carrier and pipeline functions, the stakeholders include
trucking companies, household goods carriers, shippers using motor
carriers, operators of bus lines, shippers, and operators of solid
material pipelines.
6. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in question No. 5? As a
member of an adjudicatory body, a Board Member must remain independent
from the influence of any particular stakeholder. However, I believe it
is important to be accessible to stakeholders, and I would make being
open and accessible to all parts of the stakeholder community a high
priority.
7. 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? Since the
STB is administratively housed within DOT and its budget functions are
performed there, I would work with DOT's Assistant Secretary for Budget
and Chief Financial Officer to ensure that the STB's management and
accounting controls meet the standards set by the Congress in the
Government Performance and Review Act (GPRA) and by the President's
Management Agenda.
(b) What experience do you have in managing a large organization?
For the past year, I have been the Counselor to the Deputy Secretary of
Transportation, who is the Chief Operating Officer of DOT. In this
position, I have worked with him and on his behalf on numerous
management matters at the Department.
8. 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. Government agencies, like all large
organizations, should set identifiable performance goals so that the
members of the agency, the rest of the Administration, the Congress,
its customers and the public can measure the organization's
performance. Perhaps most importantly, GPRA's requirements help ensure
that an agency's annual budget supports its identified performance
goals, thereby helping ensure that resources are devoted to the
agency's most important missions. Properly constructed, performance
goals help focus the organization on its core mission, as reflected by
those goals. Regular reporting on goals and the progress made in
achieving them helps keeps the organization focused on its priorities.
(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, in its oversight capacity, must measure
whether government organizations have achieved their goals. Congress
has a range of options for improving the performance of agencies that
consistently fail to meet their goals, including closer oversight over
their budgets--such as erecting strict controls over spending authority
or earmarking funds for specific purposes, passing reauthorization
legislation to restructure the organization or eliminate obstacles to
achieving performance goals, or calling for management changes and
reforms. However, identifying measurable performance metrics can be
difficult for government agencies, since the mission of such agencies
cannot always be measured in the same manner as private sector
companies. Thus measuring performance only on whether a set of
performance metrics have been achieved may not fully reveal whether the
organization is performing adequately.
The STB itself is an example of the kinds of action Congress may
take when it believes changes are needed in an agency. The STB is a new
organization that was created when its predecessor agency, the ICC, was
eliminated. In the course of the transition from the ICC to the STB,
many of its programs and responsibilities were eliminated and others
streamlined and reformed. Its staff was significantly downsized, and
some functions previously performed by the ICC were transferred to DOT
or privatized.
(c) What performance goals do you believe should be applicable to
your personal performance, if confirmed? I would look to ensure that
the agency continues to resolve the matters before it in a fair and
expeditious manner, that its rulemakings continue to be completed in a
timely manner, and that the organization continues to perform in a
professional manner.
9. 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 that
qualified, experienced employees should be trusted to perform their
duties in a highly professional manner. I try to give latitude to
employees to use their best professional judgment to perform their
duties. No employee has ever brought any complaints against me.
10. Describe your working relationship, if any, with the Congress.
Does your professional experience include working with committees of
Congress? If yes, please describe. As a former employee of Congress, I
have a long and close working relationship with Congress and
Congressional Committees.
11. Please explain what you believe to be the proper relationship
between yourself, if confirmed, and the Inspector General of your
department/agency. As an administrative part of DOT, the STB has no
Inspector General of its own and instead is overseen by the Inspector
General of DOT. The proper relationship between the head of a part of
DOT and the Department's Inspector General is to work closely to
monitor agency performance and evaluate its programs and personnel for
waste, fraud or abuse.
12. 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. As a
former employee of the Congress who participated in drafting numerous
bills, I feel strongly that the executive branch has an obligation to
follow both the letter and the spirit of the statutes passed by
Congress when implementing, and interpreting laws. If I am confirmed as
a Member of the STB, that I will ensure to the best of my ability that
all regulations issued by the STB comply with both the letter and
spirit of the laws passed by Congress. In cases where that intent is
not clear, I would seek the guidance; of the Congress.
13. In the areas under the department/agency's jurisdiction, what
legislative action(s) should Congress consider as priorities? Please
state your personal views. In my personal view, with respect to matters
under the jurisdiction of the STB, the most, important matter for
Congress to take up is the reauthorization of the STB. Its predecessor
agency, the ICC, had a permanent authorization, which did not
facilitate a regular review of its programs and laws. As a result,
pressure built to make major changes and the agency was ultimately
eliminated. One reform included in the ICC Termination Act was to set
the authorization for the STB for a term of 3 years, to ensure that its
programs and laws would receive regular oversight. The STB's
authorization expired at the end of fiscal year 1998, and it has
continued unauthorized since then.
14. 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 timeframe for their implementation.
Yes. I would work with DOT to submit annual budgets that reflect the
need and workload of the STB.
The Chairman. Thank you, Mr. Nober, very much.
Next, Mr. Laney, welcome.
STATEMENT OF DAVID M. LANEY, NOMINEE TO BE A MEMBER OF THE
REFORM BOARD (AMTRAK)
Mr. Laney. Thank you, Senator. Let me begin by introducing
my wife, who has apparently been told not to sit in the first
row, Eleanor Laney. She is four rows back in a probably more
protected position with respect to Amtrak than I am.
It is a pleasure to be here, Senator Breaux, and I
appreciate the opportunity to appear, and my comments will be
very brief. It is an honor to appear before you as President
Bush's nominee to the Amtrak Reform Board. Although I think at
this point, after visiting with a number of transportation
colleagues throughout the industry, many of them have concluded
that I must have committed some punishable offense, but I do
not think that I would be the one sitting here had you already
ironed out all the challenges now facing Amtrak. I am delighted
to step into the position that I am currently considered for,
if in fact, I am confirmed.
As you know, the challenges of Amtrak have mounted steadily
during the last year, and even since my nomination in the
spring. Those challenges are only partially passenger
transportation challenges such as performance, reliability,
levels of service, perceived safety issues, and competitiveness
with other modes. To a much greater extent, those challenges
are those endemic to virtually any faltering business, issues
relating to organization, management, operations, financial
management and performance, funding, and information
management, internally and externally.
Except in this context, those challenges are aggravated, as
all of you well know, by a number of contractual and statutory
constraints that limit Amtrak's management maneuverability
considerably. Despite my transportation expertise, it is those
challenges that are most likely the reasons for my nomination,
and the principal ingredients of my interest in serving as a
member of the Amtrak Reform Board should this Committee approve
and the Senate confirm my nomination.
I should add with particular emphasis, however, that my
perceptions and understanding of Amtrak, its operations, and
its challenges are not the product of any information provided
to me by Amtrak itself. To date, I have received no information
from Amtrak.
Aside from the challenges facing Amtrak, I am also here
because I believe that there is an important role for intercity
passenger rail within our overall transportation policy
framework. I believe that it will become increasingly valuable
to mobility and economic opportunity throughout our country in
light of projected population growth and inevitable declines in
highway and airport capacity and levels of service.
Handled properly, your challenge, that of the
Administration, and that of the Amtrak Reform Board, is to set
the foundation from which we might begin to shape the pattern
of redevelopment of intercity passenger rail in this country
for decades. It is difficult to project with any certainty, at
this point, the role that Amtrak might ultimately play in a
staged revitalization of intercity passenger rail, but it has
to be the point from which we begin. I look forward to your
questions, and I would add again, though, that I have very
little first-hand knowledge of Amtrak operations or Amtrak
Board activities, other than what has appeared or is available
through newspapers and public sources.
I want to thank Senator Hutchison for her recommendation
and her support as well as the current Administration, and
particularly President Bush. Should the Committee approve and
the Senate confirm my nomination, I look forward to serving and
working with you closely and other Members of the Committee,
and I will be happy now to answer any questions you might have.
[The prepared statement of Mr. Laney follows:]
Prepared Statement of David M. Laney, Nominee to be a Member of the
Reform Board (AMTRAK)
Good afternoon, Mr. Chairman and Members of the Committee. I
appreciate the opportunity to appear today, and my comments will be
brief.
It is an honor to appear before you as President Bush's nominee to
the Amtrak Reform Board. Although I am convinced that some of my
colleagues throughout the transportation industry have no doubt
concluded that I must have committed a punishable offense. On the
contrary, had you and the Amtrak Board ironed away all the challenges
now facing Amtrak, I doubt I would be the one sitting here before you
today.
As you know, the challenges of Amtrak have mounted steadily during
the last year, and even since my nomination in the spring. Those
challenges are only partially passenger transportation challenges, such
as: performance reliability; levels of service; perceived safety;
competitiveness with other modes.
To a much greater extent, the challenges are those endemic to
virtually any faltering business: issues relating to: organization;
management; operations; financial management and performance; funding;
information management, internally and externally.
Except in this context, those challenges are aggravated, as you
well know, by a number of contractual and statutory constraints that
limit Amtrak's management maneuverability.
Despite my transportation experience, it is those challenges that
are most likely the reasons for my nomination and principal ingredients
of my interest in serving as a member of the Amtrak Reform Board,
should this Committee approve and the Senate confirm my nomination.
I should add, with particular emphasis, however, that my
perceptions and understanding of Amtrak, its operations and its
challenges are not the product of any information provided to me by
Amtrak itself. To date, I have received no information from Amtrak.
Aside from the challenges facing Amtrak, I am also here because I
believe that there is an important role for inter-city passenger rail
within our overall transportation policy framework. I believe that it
will become increasingly valuable to mobility and economic opportunity
throughout the United States in light of projected population growth
and inevitable declines in highway and airport capacity and levels of
service. Handled properly, your challenge, that of the administration,
and that of the Amtrak Reform Board, is to set the foundation from
which we might begin to shape the pattern of redevelopment of inter-
city passenger rail in this country for decades. It is difficult to
project with any certainty at this point the role that Amtrak might
ultimately play in a staged revitalization of inter-city passenger
rail, but it has to be the point from which we begin.
I look forward to your questions, but please understand again that
I have very little first-hand knowledge of Amtrak operations or Amtrak
Board activities other than what has been available through newspapers.
Thank you for the opportunity to make this statement. Should the
Committee approve and the Senate confirm my nomination, Mr. Chairman, I
look forward to serving, and to working with you and other members of
the Committee. And I will be happy now to answer any questions you
might have.
______
A. BIOGRAPHICAL INFORMATION
1. Name: David M. Laney.
2. Position to which nominated: Amtrak Reform Board, Member.
3. Date of Nomination: April 30, 2002.
4. Address: Office: 2445 Ross Avenue, Suite 3200 Dallas, Texas
75202.
5. Date and place of birth: January 19, 1949, Dallas, Texas.
6. Marital status: Married. Eleanor Watkins Laney.
7. Names and ages of children: Margaret Preston Laney, 19; Virginia
McQueen Laney, 16.
8. Education: St. Marks School 1956-1967, high school diploma;
Stanford University 1967-1971, A.B., Honors (1971); Brown University
1973-1974; SMU Law School 1974-1977, J.D. (1977).
9. Employment record: Texas Transportation Commission, Austin,
Texas 1995-2001, Chairman, Member; Jenkens & Gilchrist, Dallas, Texas
1977--Present, Lawyer; Strasburger & Price, Dallas, Texas 1976
(Summer), Law Clerk; Jenkens & Gilchrist, Dallas, Texas 1976 (Summer),
Law Clerk; Judge Robert Porter, District Judge, Northern District,
Dallas, Texas 1975 (Summer), Law Clerk; Judge Charles E. Long, State
District Judge 134th District Court, Dallas, Texas 1974 (summer), Law
Clerk; Volunteers in Asia, Staff--Palo Alto, California, Taichung,
Taiwan 1971-1973; Chung Hsing National University, Assistant Professor
(Literature), Taichung, Taiwan 1972-1973; YMCA, Language Instructor,
Taichung Taiwan 1971-1972.
10. Government experience: Finance Commission of Texas 1989-1995;
Texas Transportation Commission 1995-2001.
11. Business relationships: (Current Positions) Jenkens &
Gilchrist, Shareholder; Stanford University, Trustee; Chair, Audit
Committee; Laney Investments, Ltd., General Partner (family
investments); L Management, LLC, Manager (general partner, Laney
Investments, Ltd.); Moroney Farm, Ltd., General Partner (family
investment); Southwest Medical Foundation, Trustee; Dallas Chamber of
Commerce, Chairman, State Affairs Committee; SMU Law School Advisory
Board, Member.
12. Memberships: (Current Memberships; no offices held); American
Bar Association; Texas Bar Association; Dallas Bar Association; Texas
Bar Foundation; Dallas Bar Foundation; Crescent Club; Dallas Country
Club; Dallas Assembly; Stanford Alumni Association; Dallas Committee on
Foreign Relations.
13. Political affiliations and activities: (a) None. (b) None. (c)
See Schedule A-13, attached.
14. Honors and awards: None.
15. Published writings: None.
16. Speeches: None (relevant to the position for which I have been
nominated).
17. Selection: (a) Although the reasons for my nomination by the
President have not been expressly stated to me, I assume that the
combination of my legal, management, leadership, government, and
transportation experience, together with the confidence the President
developed in my abilities during my performance as Texas Commissioner
of Transportation (while he was Governor of Texas), contribute in
combination to my nomination. (b) The experience and abilities referred
to in 17(a) above qualify me for appointment.
B. FUTURE EMPLOYMENT RELATIONSHIPS
1. Will you sever all connections with your present employers,
business firms, business association or business organizations if you
are confirmed by the. Senate? To the extent necessary to eliminate any
conflict of interest, I will discontinue business relationships. I am
not currently aware of any need to do so.
2. Do you have any plans, commitments or agreements to pursue
outside employment, with or without compensation, during your services
with the government? If so, explain. I intend to continue my current
position with Jenkens & Gilchrist; the position for which I have been
nominated is part-time and non-compensatory.
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. Salaried shareholder in the law firm of Jenkens &
Gilchrist. Retirement plan (deferred compensation and 401K Plan)
benefits available upon my retirement.
2. Indicate any investments, obligations, liabilities, or other
relationships with 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 Texas
Commissioner of Transportation, I visited with a number of Members of
Congress and testified before House and Senate Committees in connection
with the reauthorization of ISTEA.
5. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items. I am not aware of any actual or potential conflicts that
currently exist. In the event I encounter any conflict of interest, I
will promptly disclose it to the Amtrak office of general counsel, and
with their guidance promptly resolve the conflict to their
satisfaction. The nature of my response will depend on the nature of
the conflict and general counsel guidance.
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 complaint 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 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. Our law firm is
occasionally involved as a party in interest in civil litigation. I was
Chairman and President of the law firm from 1990 until early 2002, and
in that capacity, or in the capacity as a shareholder in the firm, I
have sometimes been named as a party in interest in litigation, along
with the firm and other officers or shareholders.
The Texas Department of Transportation and the Texas Transportation
Commission are regularly named as parties in interest in litigation. In
my capacity as Chairman of the Texas Transportation Commission, I was
routinely named as a party in interest in litigation brought against
TxDOT.
I was the principal shareholder and Chairman of the Board of a
company named Just Brakes Corporation and numerous operating
subsidiaries in the early 1990s. The company and its affiliates were
involved in the auto repair business. That company and certain of its
affiliates were occasionally involved as parties in interest in civil
litigation. The companies were ultimately liquidated and sold through
an insolvency proceeding. I was named in litigation brought against the
law firm and two of its shareholders (based on an alleged conflicts of
interest) brought by three ex-employees of the Company; the litigation
was dismissed on summary judgment.
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.
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 nay 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 experience as a lawyer (corporate and financial law), in
management and leadership positions with my law firm (managing partner,
1990-2002; management committee 1986-1990), in appointed state
government positions since 1989, specifically the Texas Finance
Commission, 1989-1995 (state charted bank and savings and loan
oversight) and Texas Transportation Commission 1995-2001 (including 5
years as Chairman, overseeing the Texas Department of Transportation),
and my familiarity with operational and financial risk management
issues (current Chair of the Audit Committee, Stanford University),
together with the skills developed through such experience, qualified
me 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.
3. Why do you wish to serve in the position for which you have been
nominated? I hope to bring a constructive voice and perspectiveto bear
in addressing the range of challenges currently confronting AMTRAK.
4. What goals have you established for your first 2 years in this
position, if confirmed? I do not have enough information regarding
AMTRAK or knowledge of the position to have established goals for my
first 2 years in the position.
5. Who are the stakeholders in the work of this agency? The
stakeholders are numerous. They include the administration, Congress,
taxpayers, states, cities, the traveling public (including businesses
whose employees commute via AMTRAK), mail and freight services,
employees and unions, the armed services, and various transportation
and rail product and service providers.
6. What is the proper relationship between your position, if
confirmed, and the stakeholders identified in questions No. 10? I view
my role, if confirmed, as a fiduciary whose charge is the oversight of
AMTRAK in a manner that best serves the long-term interests of AMTRAK,
its viability as a national rail passenger system, and its various
stakeholders.
7. Please describe your philosophy of supervisor/employee
relationships. Generally, what supervisory model do you follow? Have
any employee complaints been brought against you? My philosophy of
supervisor/employee relationships is one of mutual respect built upon
expectations of trust, reliability and performance. Performance
expectations should be high and must be reasonable. In my 11 years as
managing partner of my law firm, I was named in one employment
complaint brought against the firm (all Board members were named, of
which I was one).
8. Describe your working relationship, if any, with the Congress.
Does your professional experience include working with committees of
Congress? If yes, please describe. No currently active working
relationships. As Texas Commissioner of Transportation, I spoke with a
number of Members of Congress and testified before Senate and House
Committees in connection with the reauthorization of ISTEA.
9. 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. To assure
compliance with the spirit of the laws passed by Congress, I will rely
principally on my own.interpretations, as well as on the guidance and
staff and the AMTRAK office of general counsel.
10. In the areas under the board/commission jurisdiction, what
legislative action(s) should Congress consider as priorities? Please
state your personal views. In my view, the legislative priorities are
the development of a clearly defined national passenger rail policy
that provides not only for the preservation, but for a staged
redevelopment of AMTRAK as a financially sound and operationally
successful national rail passenger system.
11. 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. Particularly in the context of
challenges currently confronting AMTRAK, the views of the President and
his Administration and those of Congress in the development of
solutions are both of critical importance if we hope to preserve and
ultimately reinvigorate a national passenger rail system. Ultimately,
however, I envision the role of a voting member of an independent board
or commission to be one of independent analysis and judgment.
The Chairman. Thank you very much, both of you, for your
statements.
Let us start with Mr. Nober with regard to some of our
Surface Transportation Board issues. You are aware, Mr. Nober,
of the hearings we have had on this side with regard to
shippers and rail carriers and the untimeliness of the process
which shippers have to go through to make a case on being
captive shippers and the prices they have to pay.
I am delighted to have received a letter from the current
Chairman, Linda Morgan, saying that they have issued a proposed
rulemaking which would do two things. First, it would require
nonbinding mediation before a large rail case, complaint case
could be filed. Now, the proposal deals with discovery to try
to shorten the timeframe apparently, and then they have
proposals on the smaller rate cases, rail rate cases dealing
with the amount of the filing fee.
I understand the filing fees in the smaller cases could be
as high as $1,000. The proposal is to set it at $150. I had
suggested at the Committee that these cases that take these
long, long periods of time need to be somehow shortened. We
also need to consider arbitration or mediation as a process of
forcing the parties, if you will, to sit down and try to reach
an agreement on what is a fair and equitable charge for the
goods that they carry. This proposal, which I am sure you are
familiar with, seems to go a long way toward addressing some of
the concerns. I was wondering, could you give the Committee
your thoughts on the proposals?
Mr. Nober. Well, Senator, I saw the proposal yesterday, as
did you. I certainly support any efforts that the Board would
take to remove procedural barriers to large and small shippers
being able to reach resolutions on their concerns. While the
merits of the cases they bring need to be looked at on the one
hand, it seems the most common complaints--and I have had a
chance to read your hearing transcripts and attend part of that
last hearing--focused on the procedural problems that shippers
had undergone.
Now, the current Board looked at the issue and came up with
a number of good ideas. I would be reluctant to comment on
which specific ones I would support or not support, not being a
member of the Board yet, but I certainly support any efforts
which come up that would be accepted, and would help reduce
some of the procedural barriers to large and small shippers
being able to bring cases.
The Chairman. I think most of us in Congress would not
support the Congress, for instance, setting the rates. This is
something that we are not capable of doing, nor should we be
doing it. But in the absence of competition, many of these
captive shipper cases, it seems to me from what I heard at the
hearing, was that the rate of filing cases took so long it was
a mechanism used by the railroads to keep things in limbo for
such a long period of time that many of the shippers didn't
have the time, the effort, the money, the lawyers, to be able
to get a speedy resolution. The concept is, ``Look, we want you
all to sit down at the table and work it out,'' and give them
the authority to do that.
Can you comment on just the concept of arbitration? You
said you support the tools that would shorten the process. Do
you think arbitration could be one of those tools, or do you
have some problems with that as a concept?
Mr. Nober. Certainly I think in other contexts, in surface
transportation and in other industries, mandatory arbitration
has helped resolve disputes, especially those between companies
and organizations that have ongoing relationships with one
another. I think it has been an effective tool in other areas.
Now, whether or not I would expressly support mandating
arbitration in every circumstance, I certainly cannot say right
now. I would take a strong look at it. I believe alternative
dispute resolution has an important place in helping to
facilitate and resole these disputes. It is particularly
important for the small shippers who, as you have said, do not
have the time, the money, and the ability to hire lawyers and
spend many years bringing cases.
The Chairman. I am glad to hear you say that. I think we
had suggested, and again I had suggested, that the rail
carriers and some of the shipper groups actually try to get
together to work out a process in which they could agree. Then,
if necessary, it could be brought back to Congress to implement
it legislatively in order to give more authority to the Surface
Transportation Board to enact it. Do you think that is a
worthwhile effort?
I mean, we just say look, railroad, sit down with the
shipper organizations and see if you cannot reach an agreement,
otherwise we are going to be forced to jump into it, maybe with
the wrong solution to your problems. Otherwise, come up with
some answers for us.
Mr. Nober. Senator, I certainly think that the parties
being able to work out, among themselves, a procedure for
resolving disputes is by far the preferable way to do it. They
are the most intelligent about their businesses. They know the
problems that they face, and they know the solutions that would
best work for them. As a regulator, I would always hope that
having the parties work out their differences, rather than
bring them to a government agency, would be the way to resolve
things. Therefore, I certainly commend you for asking them that
they do that, and I understand that they are taking that charge
very seriously.
The Chairman. Well, I hope they are, because it was a very
sincere request, and we are going to be following up to see
what progress they are making. I am a big believer in
competition in all industries, but in order to have competition
you have to have competitors, and if you do not have
competitors, then you have regulation.
It seems that many are very concerned about the reduction
of competition over the years through consolidations and
mergers in the railroad industry. What role do you think you
will have as Chairman of the Surface Transportation Board to
guarantee to the American public that we have competition in
order to have a system that works in a free market atmosphere,
as opposed to having the government regulate the rail industry?
If we only have one telephone company, or we only end up
with one airline, or we only end up with one oil and gas
company, we are not going to have competition. Then you are
going to have government regulation. So what role do you think
the Board has in trying to preserve competition by preserving
the competitors who provide that competition?
Mr. Nober. Well, Senator, I think that the Board certainly
plays a central role in reviewing any consolidation in the rail
industry, and that was one of the primary reasons why Congress
decided to keep a Board in place at all.
Last year, the Board came out with new guidelines that it
would use to evaluate mergers, and I think that those lay out
some very difficult hurdles for any merger to beat, one of
which is not just that it would preserve competition, but the
merger would have to demonstrate the ways that it would enhance
competition.
The Chairman. Do you support those proposals by the Board?
Mr. Nober. They certainly are well settled, and appear to
be well accepted among all the parties to the rail industry, so
I certainly, while I am again reluctant to expressly take a
position on any one particular matter, I think the merger
guidelines have been an important step forward in the way that
the Board looks at mergers.
The Chairman. Would you think additional work in that area
needs to be done, or do you think that what is on the table now
is sufficient?
Mr. Nober. Senator, I would have to get to the Board and
see whether or not those guidelines were sufficient, or whether
or not any enhancements or modifications need to be made. They
were just issued last year, so I think that in general they
seem to capture a lot of the concerns that were out there. I
commend the Board for issuing those guidelines, and certainly
would take a close look at the standards by which mergers are
looked at and whether or not any changes need to be made.
The Chairman. I take it we have not had any consolidation
or mergers since those rules were adopted.
Mr. Nober. Senator, I am not sure. I thought there might
have been one small merger, but I am not 100 percent certain. I
would need to check on that.
The Chairman. Thank you very much, Mr. Nober.
Mr. Laney, I was just wondering whether you supported
President Bush or opposed him in order to get this nomination.
[Laughter.]
Mr. Laney. Can I get back to you on that, Senator?
The Chairman. I jokingly asked that question because of the
fact that this is not a cream-puff appointment. This is one
that is going to require a great deal of effort and time and
thought by the people on the Amtrak Board in order to resolve
what some would argue are irresolvable issues, and you have a
very divided political climate.
There are some Members of Congress that I suspect would
just as soon Amtrak go away. Others would take the opposite
position and say that whatever revenues they need to continue
to operate, the government would provide those revenues. So I
mean, you've got some very strongly held opinions which are
vastly different. You have got a system that is not working as
most people would like it to work by any standard of
measurement.
So I mean, you point out that you do not have any
experience in this area, and it may be that we need smart,
intelligent people who do not have preconceived notions about
what the answer is to come in and serve, to take a fresh
approach and a fresh look at it, and then come up with
recommendations.
I once told President Clinton that the next time he
appointed a commission, appoint really smart, intelligent
people who know nothing about the subject matter so they can
come to the table with an open mind and listen to the arguments
on various sides. I think that can be very helpful. But at the
same time, not knowing the history of this can also be
problematic as far as the learning curve.
Now, can you tell the Committee a little bit about how you
envision what your job is going to be, knowing that this is not
similar to what you have done in the past?
Mr. Laney. I will give it a shot, Senator. I do not think
it is that far away from our transportation experience. There
was some considerable, but nothing like what I'm about to step
into, experience in terms of the interrelationship between
highway, general aviation and rail, but principally freight
rail, not passenger rail. In terms of the role and the learning
curve, I realize there is a learning curve, and that frankly
does not intimidate me, and does not particularly concern me.
I do come with very little preconceived notion, and I think
that is an advantage. In terms of where we go from here, it
depends a lot on where we can go, and that sounds a little
circular. On the other hand, without some level of credibility
that has not existed, at least in recent years and in recent
months, then we are not going to have much of a partner in
Congress or in the Administration.
There have been a number of unfortunate mishaps of one sort
or another with respect to Amtrak recently, but there have been
some very positive steps taken, at least that is my impression
from a distance. One of those steps is the employment of David
Gunn, which I think is a very positive statement by the Board
and by Amtrak. I think, as leastso far, there is a fairly
significant step-up in credibility, or at least the potential
for credibility that might not have been there just a few
months ago. I think he has only been on the job 3 or 4 months.
We have got a long way to go. I do not know the dynamics of
the Board. I do not know what the Board's conception is of its
role. I think I bring to bear more corporate and private sector
experience with respect to the interrelationship between Board
and management. I do not know if this Board sees itself more in
an operating role or not, but I do not see myself in that role.
I do see myself as a critical analytical sounding Board for
management, and I think I can play a very positive,
constructive role with respect to the Board, its dynamics, and
with respect to the management and its dynamics.
I do understand the transportation industry relatively
well, and I understand the potential for the role that
passenger rail can play. We are a long way from that potential.
During my term, whatever the length of that term might be, we
at least have the opportunity to begin moving in a direction
that can ultimately prove very constructive. A direction that
may ultimately help close the gaps between those who oppose and
those who support Amtrak, perhaps to bring those groups a
little more closely together.
The Chairman. I have one final question. You are the
President's appointee. How free are you going to be to disagree
with the Administration's recommendations either made by the
President or by Secretary of Transportation Norm Mineta with
regard to Amtrak? For instance, they are recommending about
$521 million for Amtrak's operation for the next fiscal year. I
think Amtrak has stated that is probably less than half of what
they feel they really need. The question is, as a Board member
who has been appointed by the President, how free are you going
to be to make independent decisions and independent
recommendations which are contrary to the Administration?
Mr. Laney. I think my response is that the history that I
have had working for then-Governor Bush, as the Chairman of the
Department of Transportation in Texas, was such that I think he
and his team then, and I believe now, trust my judgment, trust
the direction that I believe a particular issue ought to go. If
they disagree, or if I disagree, I think they will respect the
position I take and hear me out, and I think oftentimes I can
be fairly persuasive, sometimes not.
I look at this Chairmanship as an independent position, and
I think they view it as an independent position. It will not be
long before I know more about Amtrak and the intricacies of the
operation than probably anybody in the Administration or the
Department of Transportation. Therefore, I think after a period
of time there will be a level of trust. No doubt there will be
disagreements, and how they are ultimately resolved I do not
know.
The Chairman. Well, I would hope you would take that
philosophy into your service on the Board and become a person
who really wants to find a way to help make it work, and not to
shut it down, as some perhaps would argue.
Senator Wyden.
Senator Wyden. Thank you, Mr. Chairman. I think your
questions were excellent, Mr. Chairman, and highlighted a
number of important issues.
Mr. Laney, to begin with you, are you familiar at all with
this General Accounting Office report?
Mr. Laney. No, sir, I am not.
Senator Wyden. Well, I would urge you, and I will make sure
you have a copy, to look at it, because it is really scathing
in terms of its criticism of how Amtrak goes about making
decisions. I will just read you a couple of sections of it.
They said with respect to the network growth strategy that
Amtrak was proceeding in a speculative way. They said, and I
quote here: ``There is no empirical basis for the revenue
estimates.'' They said again, and I will quote, ``Amtrak did
not obtain a full understanding of freight railroad concerns.''
The list just goes on and on in that kind of vein.
I would like to begin by seeing if you agree with my
judgment that it is time for a shift in Amtrak policy so that
decisions are based on objective criteria. We can have a debate
about what those objective criteria ought to be, and I think
that is an appropriate thing to discuss, but I want us to go
there as a public policy goal, to set out objective criteria.
Do you agree with that judgment?
Mr. Laney. What I bring to bear in this role, if confirmed,
is my experience in the private sector and in the public
sector. Objective performance criteria, and there is even some
room for flexibility with those criteria, are enormously
powerful in moving an organization from one point to another. I
trust them if they are carefully thought out, and I support
them if they are carefully thought out. I do not know what GAO
had in mind, but I have been a party to the development of
various performance criteria, and objective criteria, in
virtually every operation I have been involved in. To the
extent an organization can be moved forward, those types of
criteria can help a lot.
So generally speaking, yes. There are some situations where
they do not apply that well.
Senator Wyden. I think that is fair, and I am going to
interpret that as a yes, with exactly the kind of qualification
that is appropriate. I think that is a very reasonable
orientation, and something on which we ought to have a debate.
What I am concerned about is the politicizing of these
routes, as we have seen again and again. In our part of the
world there is enormous frustration. We have communities in
rural Oregon that have done everything except hold bake sales
in order to fund Amtrak service. They have agreed, for example,
to levy per capita assessments on their constituents, so they
understand that this is not the transportation policy of
yesteryear where we are just going to heave money every which
way and hope some of it works. I think that is a thoughtful
answer and a constructive one.
In the Amtrak markup that we considered earlier in the
year, I sponsored an amendment to require that Amtrak's Board
of Directors and top management comply with the same ethical
standards as federal officials and employees. My concern has
been that there has been a double standard, and particularly at
Amtrak, a kind of revolving door which favors the East Coast of
the United States, frankly, where people go back and forth on
various parts of the East Coast of the United States, and it
certainly gives the appearance, at a minimum, of having a bias
in favor of those East Coast routes.
I was able to get that into the markup of the Hollings-
Breaux legislation that we considered earlier this year. It
stands ready to come before the Senate floor, and I would be
interested in your position as to whether the same sort of
ethical standards that are required of federal officials and
employees ought to apply in the positions at Amtrak.
Mr. Laney. Senator, if you do not mind my asking for a
little clarification, this is a revolving door conflict of
interest?
Senator Wyden. Yes. I was concerned particularly that the
head of Amtrak essentially spent all of his time in New Jersey,
then went to the regional office, then went to the head of
Amtrak, and now is back in New Jersey. He certainly at the time
was making decisions that involved routing as it related to the
East Coast of the United States. As a result of that, I did a
review of the statutes in this area, and I found that there
were not the same ethical requirements for officials on these
Amtrak positions as there were for other federal officials.
So on a unanimous basis this Committee agreed to the
amendment that I have just described this afternoon, and that
is something I feel strongly about. It is only fair that you
have a chance to read it, but I would be interested in knowing
as a general principle whether you think the same ethical
strictures that apply to federal officials generally should
apply in positions like the one in which you are being
considered.
Mr. Laney. Well, frankly, I am surprised to hear that the
same ethical principles do not apply.
Senator Wyden. I was very surprised as well.
Mr. Laney. I assumed they did.
Now, when you talk about the movement of the head of
Amtrak, I presume you are talking about predecessors to David
Gunn. Regardless, most of the expertise in this area is a
product of the concentration of passenger rail in the
Northeast, no question about that. Therefore, I am not
surprised to see someone come to work for Amtrak and go back to
work in some of the Northeast quadrant's rail operations. That
does not surprise me. It does not particularly concern me,
either, because I think we are after the most effective
expertise, ultimately, that we can attract to Amtrak in moving
this forward.
I am surprised, and I do not have an answer for you other
than to say, generally speaking, I cannot conceive of a basis
for a difference in terms of ethical rules applicable to
government employees versus Amtrak officials. There may be some
reasons, but I am not aware of them.
Senator Wyden. I appreciate that, and I was pretty
flabbergasted when I reviewed the statutes as well. By getting
unanimous support for the amendment in the Committee, I made it
clear that I am not accusing anybody of any crimes or anything
of the sort. I have no quarrel with the proposition that there
is a lot of expertise in the Northeast part of the United
States. But when these routes are being made, people are
negotiating about aspects of routing that can affect their
future employment, certainly it gives the appearance of
impropriety. That is why the Commerce Committee adopted this
change that I proposed.
I appreciate your answers, and just a couple of questions
for you, if I might, Mr. Nober. I think Senator Breaux covered
very well the question of competition among railroads, and I
thought your answers were helpful there.
On the question of Class I carriers, and this touches
particularly on the short line railroad issue, what are your
thoughts regarding the appropriateness of Class I carriers
determining what the route of a short line carrier can offer
the customers through the methods that I essentially described
in my opening statement?
Mr. Nober. Well, Senator, I first would like to say that I
think short line railroads provide a very critical link in the
rail transportation network. They run routes that Class I
carriers do not want to run anymore, or have chosen not to
operate for whatever reason, and provide service to shippers
that otherwise would not have it. Consequently, anything we can
do to maintain a healthy and vibrant short line system I think
is very important, and is a very important job of the Board's.
People have said from time to time that when Class I
carriers have sold their short lines, they have included
conditions that have made it difficult for short lines to
operate in the most effective manner. That is the kind of
subject that, if I were on the Board, would need to be looked
at and determined on a case-by-case basis. The Board reviews
those sales on a case-by-case basis.
Senator Wyden. The other question I had is, the small
volume shippers are generally exasperated about the process.
They look at the existing rate complaint process and say,
it is complicated and almost too uncertain to be of any real
value. I gather that nobody has ever even filed a case, not
one, under the STB small rate case guidelines. I would be
interested in knowing whether you share some of these concerns,
and what you think you might be able to do to alleviate the
concern of the small shipper as it relates to resolving rail
disputes.
Mr. Nober. Well, Senator, certainly I think looking at the
process by which small shippers are able to file complaints at
the Board would be one of the highest priorities I would have
if I were confirmed and went down there. The Board has taken
some steps recently, just yesterday, to try to ease some of the
problems. They reduced the filing fees, and hope to reduce some
of the procedures.
As I said, I certainly support any steps that can be taken
that would be reasonable, and that would help reduce the
process. When I got down there, I certainly would look at the
steps they've taken and any others that could be found to try
to resolve this.
Senator Wyden. I appreciate that. Again, like the ethical
discussion I was having with Mr. Laney, I was pretty amazed
that nobody had ever filed a case under the STB small rate case
area because it seemed so complicated. I think we have just got
to do better than that.
Mr. Chairman, I share your view. I think these are two fine
people, and difficult policy issues. I will be supporting both
of you in the Committee and on the floor, and I hope both of
those actions will take place very quickly.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Wyden. I would just follow
up.
Mr. Laney, I notice you mentioned you look forward to
working and cooperating with management through Amtrak. Also, I
am sure you mean working with labor as well. It is management
and labor together, not just one side, but both sides. They are
both integral parts of it.
Another thing, Senator Wyden, I wanted to mention an area
we are both very interested in, which is seniors in this
country. One of our staff had an opportunity to take Amtrak
from the West Coast all the way to the East Coast as a fact-
finding mission, and one of the things that he reported back
was the extensive use of Amtrak by seniors, which is really
interesting.
They have a lot of disposable time on their hands because
of retirement, and they enjoy the ability to move around on the
train, as opposed to being confined on an airplane, and the
opportunity to sit down and have a meal.
I really think that perhaps that is something that Amtrak
can really consider in their marketing efforts. Amtrak can be
very attractive to the senior population, which is the fastest-
growing population in our country. The 77 million Baby Boomers
will soon to be retiring and are becoming older Americans. That
seems like a real opportunity for Amtrak to engage not just the
commuters on the East Coast corridor, but seniors throughout
this country who like the type of service that an Amtrak could
provide. I would just encourage you all to take a look at that.
Gentlemen, you have got a lot of support. We hopefully will
be able to bring your confirmation to the floor of the Senate
as quickly as possible before you leave, and good luck to both
of you. We look forward to working with you.
The hearing will stand adjourned.
[Whereupon, at 3:30 p.m., the hearing was adjourned.]
A P P E N D I X
Prepared Statement of Hon. Conrad Burns, U.S. Senator from Montana
Mr. Chairman, this Committee has spent a great deal of time talking
about rail competitiveness issues over the last several years, and
we've had frequent discussions with the current STB chairman and other
commissioners about how rail policy has been applied to the detriment
of rail-to-rail competition. Unfortunately, despite these discussions,
the STB still has done little to alleviate our concerns about the rail
industry's monopoly power and how that power is being abused.
In fact, recent decisions would indicate that the Board is instead
moving in a direction that would further weaken the ability of captive
rail customers to prevail in a rate case--which is about the only form
of relief currently available.
I have felt for some time that Congress must redirect federal
freight rail policy by legislatively requiring various forms of rail-
to-rail competition and providing for a more simplified and time
efficient dispute resolution process such as final offer arbitration.
That's why I introduced S. 2245, the Railroad Competition, Arbitration
and Service Act of 2002, and I am also a co-sponsor of S. 1103 the
Railroad Competition Act of 2001.
But while the legislative debate continues and is carried over into
the 108th Congress, I certainly hope that Mr. Nober--should he be
confirmed as the new Chairman of the STB--will pay more attention to
the needs of the rail customer community the STB is supposed to be
protecting than his predecessors have done. Frankly, if I had reason to
believe that he would not take a new approach, I would be tempted to
oppose his nomination.
However, since we have been hoping to install a new STB Chairman
for more than a year now, my constituents would not benefit were I to
simply use this nomination to make a point. So instead, I strongly
caution Mr. Nober to take a more aggressive stance in support of
bringing rail-to-rail competition to bear on the rail industry.
Although there may be some limitations on what the Board can do
independent of congressional action, most observers accept that the
competing tensions of the statute--the need to maximize competition
while maintaining revenue adequacy--leave a great deal of room for
discretion. For example, such discretion could be applied to things
such as the availability of segment, or ``bottleneck'' rates, or the
ability of a rail customer to gain competitive access through switching
in a terminal area.
The rail industry is no longer fragile and unable to stand
additional competition as it was in the late 1970s. According to the
fact books produced by the Association of American Railroads, the
average annual return on net investment in the railroad industry was
just: 2.3 percent in the 5 years prior to the Staggers Act (1976-1980)
compared to an annual average of approximately 7.5 percent 20 years
later (1996-2000), or nearly a threefold increase. Similarly, return on
equity increased nearly threefold, from an average annual figure of 3.5
percent during the 5-year period prior to Staggers, to 9.5 percent in
the 5-year period 20 years later.
Furthermore, evidence shows that competition among railroads
works--and does so without harming the industry's financial picture.
Here in the U.S., competitive access through trackage rights was
imposed over 4,000 miles of the UP/SP track, and both the UP and BNSF
have testified before Congress that they're working well. Shared asset
areas were adopted in a few terminal areas as part of the Conrail split
without negative consequences. And our neighbors to the north have
demonstrated that similar policies promoting competition can work well
without causing financial harm.
The future success of railroading must be based on meeting the
changing needs of a growing customer base. Yet without competition,
this future will not be realized.
Mr. Nober, upon confirmation, I urge you to use your position as
STB Chairman to help shape the railroad industry into one that offers
competitive services to all of its customers. I also encourage you to
modify the STB's regulatory approach to one that encourages
intermod'.al and intramodal competition while offering streamlined and
cost-effective relief to rail users that are not benefiting from such
competition.
Not only will such an approach be help shape the ultimate outcome
of the pro-competitive policy changes my colleagues and I are
supporting, but it also will prepare railroads for their evolution from
a monopoly into an increasingly competitive businesses.
Thank you, Mr. Chairman.
__________
Response to Written Questions Submitted by Hon. John McCain
to David McQueen Laney
Question 1. Mr. Laney, as a nominee to serve on the Amtrak Board,
how familiar are you with Amtrak's current financial and operational
situation? What do you see as Amtrak's fundamental problems and how do
you hope to address them?
Answer. My familiarity with Amtrak's current financial and
operational situation is cursory at best, principally a product of
newspaper reports. Amtrak's fundamental problems are credibility on the
one hand, and lack of any clearly defined position within the overall
framework of national transportation policy on the other. There are, of
course, fundamental organizational, management, labor, operational, and
financial problems as well.
Question 2. What do you consider to be the appropriate role of the
Amtrak Board of Directors? Do you see yourself as taking an active role
in determining the future of Amtrak? Who do you believe you represent
in your capacity as a Board member?
Answer. The roles of the Amtrak Board of Directors are numerous; in
general terms, they include hiring, firing and compensating the chief
executive officer, and providing oversight of the performance of
management an against established performance criteria, usually in the
form of a strategic business plan developed and adopted by the Board. I
do see myself as taking an active role in shaping the future of Amtrak.
There are a number of constituencies I view the Board as representing,
but the principal constituencies are Congress, the Administration and
current and potential passenger rail users.
Question 3. As you may be aware, since the current Board was
appointed in 1998, Amtrak's debt load has quadrupled to over $4
billion. Further, Amtrak's new President, David Gunn, has publicly
stated that Amtrak officials were not providing Congress or the
American taxpayers with factual information in regard to it being on
the so-called ``glidepath to self-sufficiency. It is my belief that the
Board has utterly failed in meeting its fiduciary responsibilities.''
Answer. I do not have information sufficient to conclude that the
``Board has utterly failed in meeting its fiduciary responsibilities.''
From a distance, the apparent lack of adequate financial information or
lack of adequate disclosure of such information, or both, is
troublesome.
Question 4. Given your considerable legal expertise, under what
circumstances do you consider it appropriate to demand that a board of
directors resign?
Answer. Malfeasance or criminal activity on the part of all Board
members could lead to a demand that an entire Board of directors
resign. Nonetheless, it is extraordinarily rare that the resignation of
an entire Board of Directors of any business would be in the best
interests of that business or any parties interested in the stability
and continuity of that business.
Question 5. What is your view of the Administration's proposal
announced by Secretary Mineta in June for reforming Amtrak ?
Answer. Regarding my view of the Administration's proposal
announced by Secretary Mineta, I should first say that without a more
detailed understanding of Amtrak organization, finances, and
operations, I am not in a position to judge with any real comfort. On
the other hand, I did find elements of the proposal--which I presume
mirrors the ARC proposal--to be intriguing possibilities.
Question 6. What do you believe is the appropriate role of the
states in intercity passenger rail service in terms of service
planning, oversight, and, perhaps most importantly, funding?
Answer. The role of the states in intercity passenger rail service
in terms of service planning, oversight and funding is evolving, and
almost certainly will, and should, become more actively participatory.
Principal issues relating to that evolution of the states' roles
include uniformity of approach and service quality from state to state,
coordination of state activity, and the pace, method and terms by which
state roles evolve. That process cannot begin effectively, in my
judgment, until Amtrak's core operations and relations among Amtrak,
Congress and the Administration are stabilized.
Question 7. I believe Amtrak operates three routes in Texas: the
Sunset Limited, the Texas Eagle and the Heartland Flyer. The Sunset
Limited lost $347 per passenger in fiscal year 2001 and the Texas Eagle
lost $258 per passenger. Do you think this kind of subsidy is
warranted? How do you believe decisions should be made to add, reduce
or eliminate train service?
Answer. I do not know what absolute level of subsidy is warranted;
but I do believe that some level of subsidy is probably unavoidable. I
am a bit wary of singling out and judging any route on a stand-alone
basis based solely upon its per passenger expense level. As for
decisions to add, reduce or eliminate train service, I do not know the
criteria currently utilized by Amtrak management, or the criteria that
should be considered. I don't know the rationale by which any
particular route has been added or eliminated, so I don't believe I am
in a position to speak to the appropriate criteria for Amtrak's route
selection.
Question 8. As you may be aware, earlier this summer Amtrak
threatened to shut down its entire system unless it received additional
and immediate assistance from the federal government. While I had no
doubts about the urgency of the financial situation, I question why Mr.
Gunn threatened to shut down commuter trains operated by Amtrak on a
contractual basis, and to shut down all operations on the Northeast
Corridor, including freight and commuter service. The threat of a halt
in service had commuter authorities scrambling and, to me, demonstrated
why Amtrak should not control the Northeast Corridor infrastructure.
At a minimum, shouldn't we expect Amtrak to have a contingency plan
in place to prevent this kind of calamitous situation from recurring?
Would you be willing to commit to working with Amtrak and the DOT
Secretary to develop such a plan?
Answer. I do not know all of the circumstances that led to Mr.
Gunn's ``shut down'' announcement, nor am I aware of all the effects
the threatened shut down had on commuter and freight operations
throughout the Northeast Corridor. I would like to think that approach
could be avoided in the future, and I would certainly be willing to
work with Amtrak and DOT to develop an alternative approach in dealing
with any comparable situation should it occur.
Question 9. In a normal business, the consequences of not meeting a
company's business plan include a lower stock price, cost-containment
measures, reductions in service, salary freezes, and the elimination of
bonuses. Amtrak has consistently failed to meet its business plan, but
the only real consequence has been to increase the financial burden on
the American taxpayers. What consequences should apply to Amtrak?
Wouldn't the introduction of competition help motivate Amtrak to
operate more efficiently and follow through on its business plan?
Answer. If Amtrak were a normal business, by now it would have
failed. Of course, it is not a normal business. But it is a business
that could use a realistic and viable business plan, and the greatest
discipline for virtually any business operation is competition or the
threat of competition.
Question 10. Amtrak (i.e., the taxpayers) funds most of the capital
costs of the Northeast Corridor even though most of the trains on the
corridor are commuter, not Amtrak trains. The current capital backlog
on the corridor is estimated to be about $5 billion and there is an
annual need for $1 billion in capital to maintain the corridor. Yet the
commuter authorities using the Corridor reimburse Amtrak only for their
incremental costs. In fiscal year 2001, this amounted to less than $100
million. Given Amtrak's financial problems, would you support a
reevaluation of the allocation of the capital costs on the Northeast
Corridor to more accurately reflect usage?
Answer. Deferred and current capital investment needs must be
credibly identified, prioritized and covered to preserve the value of
the NEC infrastructure asset for Amtrak, for any Amtrak successor(s),
and for reasons of current safety and service reliability. Recovering a
greater percentage of those costs currently borne by Amtrak seems
appropriate, even essential considering Amtrak's current circumstances.
I should add, however, that I do not know why Amtrak bears such a
seemingly disproportionate share of these costs, and what reasons there
might be to continue such an allocation. I am a bit uncomfortable in
making any absolute assertion without a more complete understanding of
how the current situation occurred.
Response to Written Questions Submitted by Hon. Ernest F. Hollings
to David McQueen Laney
Question 1. Amtrak has a number of challenges facing it as we
debate in Congress its future and the future of passenger rail in this
country. What tools do you feel Amtrak needs to address these
challenges and succeed in its mission to operate a ``national rail
passenger transportation system?''
Answer. First, passenger rail as a concept needs consensus support
as an essential element of our national transportation policy, whether
or not that concept is tied to Amtrak itself. Amtrak itself will have
to be the starting point for any revitalization of passenger rail as an
element of our national transportation policy, and it will need
adequate and predictable levels of funding, ideally from permanent,
dedicated sources. Such funding will likely not be available until
Amtrak itself reestablishes its own credibility with Congress and the
Administration, which in turn will require a viable and realistic
strategic plan by which Amtrak's progress and performance can be
measured.
Question 2. The Administration has proposed funding Amtrak with
$521 million for fiscal year 2003, which is less than half of what
Amtrak has stated it will need to continue operations. What do you
think about the Administration's proposal? Isn't this basically a
bankruptcy declaration for the railroad?
Answer. I do not believe that the Administration wants to see
Amtrak bankrupt. As I understand it, the $521 million is roughly the
level of actual funding Amtrak has received for years. Although I have
not spoken with Administration officials on this issue, I would like to
think that there could be flexibility in that number as long as
Amtrak's management develops a credible alternative budget proposal in
the context of an overall plan acceptable to the Administration by
which progress could be measured.
Question 3. In your experience as Chairman of the Texas
Transportation Commission, how much money do states like Texas have in
their transportation budgets for passenger rail service? Do you feel
federal funding is essential to maintain intercity passenger rail
service?
Answer. Texas had virtually no money in these transportation
budgets for passenger rail service; I am not familiar with other
states' transportation budgets. Assuming most states are similarly
situated in terms of their transportation budgets, federal funding is
essential to maintain intercity passenger rail service. I could
envision the states assuming a more participatory role over time.
Question 4. The state of Texas made a $5.6 million loan to Amtrak
in 1997 for the Texas Eagle; the loan was paid back early in full, but
only after, I understand, the state required every town along the route
to co-sign the loan. As Chairman of the Texas Transportation
Commission, what was your role in the loan transaction?
Answer. As Chairman of the Texas Transportation Commission, I
oversaw the development of the loan structure and terms, worked with
the state legislature and Governor's office, and ultimately approved
the loan.
Question 5. Are you familiar with S. 1991, the National Defense
Rail Act, which this Committee reported out earlier this year by a vote
of 20-3? If so, do you have any comments about the legislation, and how
important do you feel it is that Congress make passenger rail a
priority?
Answer. I have reviewed summaries of S. 1991, although I am not yet
intimately familiar with it or in a position to comment on the
substance of the legislation. I do believe that Amtrak is at a pivotal
juncture, which provides Congress with a unique opportunity to clarify
passenger rail as an important and permanent element of our national
transportation policy.
__________
Response to Written Questions Submitted by Hon. John McCain
to Roger P. Nober
Question 1. What do you consider to be the most important issue
facing the STB?
Answer. I believe that the most important and continuing challenge
for the Board is to continue to serve as a fair, impartial and
efficient forum to adjudicate the issues that Congress has vested with
it. While I do not believe that it would be appropriate for me to
discuss particular issues that may come before the Board, I do believe
there are several general areas that merit mention. For example, there
appears to be a significant divide between railroads and certain of
their customers with respect to rates and service issues, and there
also appears to be ongoing concern about the possibility of future rail
mergers.
Question 2. You have a unique perspective on the STB since you
helped formulate the legislation that created the Board. What do you
consider to have been the biggest accomplishments of the Board since it
was established and do you believe there are changes that should be
made--through either legislation or regulation--to improve its
effectiveness?
Answer. I am particularly pleased to have been nominated by the
President to this position because I helped formulate the legislation
that created the Board. It is an agency that has faced significant
challenges in the past and I look forward to the opportunity to help
guide it into the future.
I believe the biggest accomplishment for the Board has been its
handling of matters vested in it by Congress--successes which are
reflected in its work product, its favorable record in the reviewing
courts, and its encouragement of private-sector resolutions. Of course,
the Board must constantly review its processes to ensure that its law
is being administered appropriately and effectively and that they
reflect the ever-evolving surface transportation marketplace. If
confirmed, I would work to ensure that the Board continued to do so.
I believe it is important to work closely with Congress, and if I
confirmed I would work closely with Congress on any legislative changes
that it believes might be necessary or appropriate. And if Congress
should conclude that legislative changes are necessary or appropriate,
the Board should be prepared to implement the changes and administer
the revised law in an effective manner.
Question 3. What do you consider will be your primary role as
Chairman of the STB? Who do you believe you represent in this position?
Answer. The Chairman and the other Board members must implement the
law and represent the public interest, which embraces and must take
into account all those affected by the Board's actions. The Chairman
also has a significant management role as well, and I believe that a
primary role of the Chairman is to manage and lead the agency, as well
as to work to establish the overall agenda for the Board. The Chairman
should ensure that the Board's docket of cases is handled efficiently
and effectively in accordance with the statute.
Question 4. What is your view of the consolidation that has taken
place in the rail industry over the past 20 years? Have the recent
mergers produced their forecasted benefits?
Answer. I understand there is significant concern about the
increased consolidation in the rail industry over the past two decades.
This concern is similar to the concerns expressed about consolidation
in other transportation modes, as well. The STB has been vested with
the authority to review each merger in the railroad industry. Each
transaction must be looked at on its own merits and reviewed according
to the facts and the law.
Question 5a. As you know, the Board was directed to issue new
guidelines for small rate cases as part of the ICC Termination Act, and
it published simplified guidelines for use in small rate cases in 1996.
I understand that not a single case has been filed under the new
procedures. Why do you believe that is? After all, we often hear that
small shippers are dissatisfied with rail rates. Doesn't this indicate
to you that perhaps the guidelines need more work?
Answer. I understand that many small shippers remain dissatisfied
with the procedures for consideration of small rate cases at the Board.
If confirmed, one of my priorities would be to look very carefully at
this issue to determine the extent and merits of the problem and
whether there are any regulatory measures the Board could take to
address these concerns in a fair and equitable manner.
Question 5b. Is this an issue that Congress needs to address?
Answer. If these issues could not be addressed further through
regulatory action, then the Congress may wish to address it
statutorily.
Question 5c. If confirmed, what will you do to address this issue?
Answer. As I have indicated, if confirmed I would continue to see
if there is anything more that the Board could do in this area and
assist Congress as appropriate in any legislative examination of the
issue that it might wish to pursue.
Question 6. As you know, some shippers support open access to
create competition between railroads and force rates down. Do you think
the current statute and regulations with respect to maximum rates
sufficiently protect shippers from abusive rates?
Answer. I understand that this is an issue that some shippers would
like to see the Board take further action on. However, I also
understand that parties are seeking to clarify and refine the rate
standards and processes in several pending cases before the Board. I do
not believe that it would be appropriate for me to comment on the
issues raised in the pending cases. I can assure you, however, that I
would give those cases careful attention if I am confirmed.
Question 7. What is your view on the use of arbitration to settle
rate disputes? When do you think the use of arbitration is appropriate?
Answer. I am aware that alternative dispute resolution (ADR) has
been used in other areas with success and I believe that ADR should be
encouraged for settling rate disputes. If confirmed, I would look
carefully at the use of ADR for settling rate cases and work with all
of the parties to address the issues its expanded use raises.
Question 8. Legislation has been introduced in the House to give
the Board authority to order directed service in the event of an Amtrak
shut-down. The Board would be able to order continued maintenance,
signaling, and dispatching on the Northeast Corridor. It would also be
able to order the continuation of commuter services around the country.
What is your view of this proposal?
Answer. Since I have not yet been confirmed, I do not believe it
appropriate to comment in detail on legislative proposals pending in
Congress that affect the Board. However, I believe that the Board has
the expertise to handle these matters, if the Congress determines that
vesting the Board with such authority is necessary. But, of course,
cooperation among the parties would also be required.
__________
Response to Written Questions Submitted by Hon. Conrad R. Burns
to Roger P. Nober
Question 1. How does the Board's new segmented stand-alone cost
test help smaller shippers who already feel they have no regulatory
recourse?
Answer. Both of these questions relate to substantive issues
contained in the decision issued by the Board on August 20, 2002, in
STB Docket No. 42054, PPL Montana, LLC v. The Burlington Northern and
Santa Fe Railway Company. It is my understanding from the Board that
PPL Montana, the complainant in that case, has requested and received
from the Board an extension of time, until September 30, 2002, in which
to file a petition for Board reconsideration of that decision. Thus, it
appears that the Board will be called upon to reconsider its decision
and issue a ruling on that request for reconsideration.
Question 2. Is it appropriate for the STB to administratively
deregulate rail rates on branch lines, as the PPL Montana decision
appears to do?
Answer. I do not believe that it would be appropriate for me to
comment on any case that is currently before the Board or that is
likely to come before me if I am confirmed as a Board member.
Therefore, I do not believe it is appropriate for me to comment on the
aspects of these decisions that you have raised at this time.