The “Shell Game” Against the National Network–
The Role of Effective Rail Advocacy
Rail Provocateur (M.E. Singer)
A Dose of Reality
We cannot succeed to competently attack the root issues of how Amtrak’s collusion on the Potomac has created a “shell game” to keep us off balance and burning our limited resources reacting to every twitch, until we acknowledge how our voice currently has little impact and resiliency. Given the diversity in rail advocacy, in particular its countervailing interests, the lack of a focused approach to political power and community interests dooms rail advocacy to succumb to the Sisyphus effect of futility. A message lacking a coherent, focused, and direct approach; divided amongst the self-interest of so many chefs in the kitchen, is doomed to not have the desired impact.
When I conducted Government Relations on Capitol Hill for community cancer programs, I was quickly made aware of the problem I see confronting rail advocacy today. Members of Congress resented being besieged by so many requests for their time to hear the same message, but conveying a slightly different twist from professional clinical associations, hospitals, non profits, community cancer medical groups, insurance, and pharmaceutical firms. This resulted in a political decision for their time to be pre-occupied to listen to those carrying the largest checks for campaign funds–the pharmaceutical lobbyists. In the end, it did not matter that the message from the pharmaceutical industry was quite self-serving to distort the facts while maximizing their profits; completely opposite to and at the expense of the actual intended message of the providers of cancer care. Without adequate funding and guardrails on the ever increasing costs of drugs and declining coverage of insurance, I predicted to the congressional committee chair that community cancer programs would go the way of the passenger train; once closed, never to put the pieces back together.
Before rail advocacy persistently re-enacts Sisyphus by pushing the boulder up the hill, just to see it roll down again, until our voice is no longer viable, we need to agree to speak with one credible voice going forward. Although we live in a big tent, we need to look in perspective how private motivations mesh with the altruistic goal and not overreach for personal gain. Ignoring the Pharisees able to secure funding, but faltering in actually building anything, has the potential of being used against rail advocacy by opponents pointing out the self-serving nature of such characters.
To what extent are those promoting variations of high speed rail on a national or regional basis appropriate to divert the conversation from the reality of today’s issues, when there are no funds to increase current frequencies, let alone to build separate right-of-ways? Currently, only “Brightline” has successfully identified an unfilled gap and secured financing for higher speed passenger rail utilizing current freight right-of-way. Beyond editorial op-ed pieces, how credible has been the promotion of selling states re-habilitated equipment and assuming their Amtrak operations, when the marketplace has consistently, and repeatedly, rejected such a proposition devoid of acceptable financing, operational experience, ready-to-go equipment, and actual working relationships with Class 1s and Amtrak? As NARP licks its wounds from suffering a severe ignobility of deceit at the hands of Amtrak, it has been very late joining the chorus for the National Network; as such, only recently issued its own attack on the accounting mythology of Amtrak. Frankly, I do not believe the effectiveness of RailPAC should be subservient to the Potomac mentality of NARP, and its tendency to charge windmills.
In essence, rail advocacy must be credible and speak in terms of acknowledging the current issues; defining them in the context of what is measured–financially, politically, socially. With this understanding, we must have a common approach, what Humana used to refer to as, “to be sure we are all singing from the same hymnal.” Indeed, this requires minimizing grieving over the well known esoteric points of history, such as how the federal treasury interceded in the market to favor a class of competitors by building and subsidizing interstate highways and airline systems; pulled the profitable USPO off the trains; burdened railroads with excessive taxation in every jurisdiction and extensive state and federal regulations; how unions handicapped railroads with antiquated work rules. Instead, we must focus on the specific target–how such unfettered collusion between Amtrak’s Board and management team historically conspired to create the “shell game” we confront today.
Identifying the “Shell Game”/Exposing the Collusion
The backstory should begin with the double hit that Amtrak never recovered from–when the last real railroader served as CEO, David Gunn, who was pushed out by the Board–for doing his job. Almost in parallel, the initial Amtrak Reform Council (AFC) was allowed by the Board to be stripped of its intended effectiveness by the Bush Administration; the severely weakened secondary ARC produced positions that were anticipated; yet, not embraced or implemented.
Leading up to this monumental attack on any semblance of competent management, we see an uninformed, uninvolved Board agreeing to management’s recommendation to reject a cheaper, off-the-shelf proven concept for the Northeast Corridor (Gunn actually favored the Swedish X-2000), in favor of the expensive, unproven, issue related Acela product. As well, as the Board brought no relevance to its role, it ignored the lessons learned from Claytor; instead, tolerated the persistent destructive reduction of the long distance network in 1979,1993, and 1997; cutting revenues instead of costs. Yet, until Gunn arrived, the Board accepted overblown proformas for the mail/package services, the lack of internal controls that allowed for the construction of MHC cars now rusting on sidings, and pathetic passenger/MHC related schedules (e.g., Louisville, Janesville).
Despite Amtrak staving off disaster after Claytor from prior NJT administrators as CEOs, and distancing itself from the foolish proclamation of “Amtrak on a glide path towards solvency,” the Board devolved after the last CEO who could declare of the Board, “the emperor wears no clothes”–Mr. Gunn. Seeking to embrace a non-confrontational, uninformed non-railroad CEO from the politically acute Northeast, the Board settled on Joe Boardman to push its agenda over his eight year regime. Collusion degenerated into willful deceit to Congress and the media; the exacerbation of manipulating financial data to produce false outcomes to protect the failing NEC; the dual policy to retain a Praetorian Guard unquestionably loyal to serve the CEO and his Board, while conveniently designing buy-out programs and discharge for those managers too competent to subvert the truth. In this period, the corporate overhead at HQ only grew; yet, a safety culture continued to degenerate; union contract negotiations persisted as a myth, with the emphasis on buying labor peace at all costs.
Numerous examples exist of the collusion between management and the Board married up in their mutual contempt of the truth in order to push their agenda-favor the NEC at all costs; demote and devolve any thought of a viable inter-regional National Network, as evidenced in the following summary actions (requiring further expansion of details):
- A key congressional staff designer of PRIIA, Stephen Gardner, was retained at the executive management level of Amtrak to ensure how PRIIA would be implemented to subject state-operated corridors outside of the NEC to pay full allocation of costs according to Amtrak’s own false cost methodology. Such payments from states would be counted as revenues to subsidize and offset the growing infrastructure and operational losses incurred by the NEC.
- To this day, the power of the Northeast congressional political bloc that directly controls and manipulates the Northeast-focused Amtrak Board has insulated the states along the NEC from having to share the fate of all other states by not having to contribute to the NEC. As well, despite PRIIA, those same NEC states were tolerated from 2008-2015 from not paying any cost for operating their numerous commuter trains along the NEC, until finally mandated by Congress.
- Disavowing the critical congressional relations built by Claytor, under Boardman and the Board, they were only too happy to push the false story of high costs and low revenues derived by the long distance routes; particularly, the uncontrollable food/beverage operation. Rather than adhering to numerous GAO reports identifying the problems that stirred an irate Congress, Amtrak simply ignored the requests of Congress to control the theft and other costs, i.e., outsource; allowing the issue to persistently simmer in light of the false performance data of the long distance routes.
- Under both FRA Administrators appointed by Obama beholden to the Northeast congressional bloc, Szabo and especially the non-railroad experienced Feinberg, Amtrak avoided reconciling the obvious deterioration in its numbers. This maneuver was thanks to the ability of the PRIIA-mandated state contributions used to cover-up losses primarily derived from the NEC, and cover provided by the enhanced connection between Amtrak’s Board and Northeast congressional bloc.
- During this time, Amtrak maximized its collusion to secure from Congress in 2015 a separation of the NEC from the “troubled” National Network, apparently confident that the subsidies from the state-supported routes would never end. But how could the facts be denied of the overall dependency of the NEC upon the National Network?
From THE RECORD (in NJ) of 06/22/17 per Wick Moorman: “Eliminating the long distance routes will increase costs for those routes (NEC). That’s because Amtrak allocates costs for shared services such as reservations and the legal department among all its lines, and more of those costs would be shifted onto the Northeast Corridor without riders on the long-distance routes sharing the load.”
- Under Boardman, the long distance inter-regional National Network was squarely in the target sight of the Board and its kowtowing management team in their effort to deliberately collude to destroy the system outside of the NEC.
- Obvious to the persistent pummeling of any benefit of paying such extraordinary fares, the nomenclature of “first class” was finally eliminated; substituted was simply “sleeper class.”
- Dining services continued to deteriorate in product quality, menu selection, inventory PAR, properly staffed diners; to the extent of total removal from the “Silver Star.”
- Complete cleaning and maintenance of trains at end point yards continued to deteriorate without exception.
- No hurdle rate ever determined to justify producing a proforma to Congress requesting replacement/renewal of Superliner equipment; let alone to expand frequencies, new routes, provide seasonal services.
- No effort between Finance/IT to identify passenger numbers denied space and resultant lost revenues.
- Marketing totally withdrawn; no advertising of LD routes; no branding.
- Acceptance by the Board of lost revenue from failed operating/maintenance contracts of commuter rail agencies.
- Persistent failure to develop depot and other real estate holdings, e.g., Chicago Union Station, NYC Penn Station, etc.
By now, we should have come to the conclusion that Wick Moorman’s appointment as CEO was nothing more than a “head fake” by the Board for rail advocacy. It was bad enough Wick conferred his blessings on what we know as a corrupted accounting system to hide the flaws of mis-management; but what was the purpose of bringing onboard Richard Anderson, other than to be in the catbird seat to facilitate the Board’s actions to decimate and cut loose the National Network? To be certain, Anderson was selected to manage the decline of the National Network.
Already, Anderson, along with the holdovers from Boardman’s regime and new hires by Anderson, with the support of the recent additions to the Board lacking any commitment to passenger rail, have colluded to sharpen their persistent attacks against the LD trains, including:
- Further denigrating dining services; cutting diners on both the “Lake Shore Limited'” and “Capitol Limited.”
- Removing unique first class lounge, Pacific Parlour.
- Eliminating bus transfers when “Coast Starlight” route temporarily closed.
- Restricting tour group space requests.
- Cutting charter and special trains, including community programs, e.g., “Toys for Tots;” football specials.
- Illegally capturing the Chicago Union Station Company to prevent Metra from seizing the opportunity to provide O’Hare Express service; as well, to inhibit any private operator in competition or in lieu of Amtrak.
- The success of these actions has led to an overall level of confidence of “running the table” that no longer even requires persisting with the “shell game” tactics. This explains the bold attack against the “Southwest Chief,” including the willingness to go back on a legal agreement with states and BNSF to support the last TIGER grant; to even lie to Congress and its constituencies; to promote the preposterous thought of breaking the continuity of the route with a bus transfer.
What will be key for rail advocacy to succeed against the will of Amtrak and its grand plan to derail the long distance routes is to directly attack the vulnerability of Amtrak–its conflicted Board. We need to evidence how the Board has violated every concept (legal, moral, ethical) of the expectations of a Board to provide competent stewardship; to ensure accountability of its management; to be fully transparent in its deliberations and decisions.
On this basis, we need to enter the “lion’s den” to identify how Amtrak’s Board Chair, Anthony Coscia, secured his Board position and eventually as chair; who promoted his ascendancy from the Port Authority of New York/New Jersey (PANYNJ); what, if anything, he achieved at PANYNJ; how he built his political relationships with the powers of Congress, in particular, Senator Charles Schumer (D-NY), who holds the key to the senators and congressmen from New York, New Jersey, and Connecticut? What role does Hudson Yards play in this budding relationship between Coscia, Schumer, et al?
Frankly, as we can certainly predict, and even expect, Schumer has no problem killing the “Southwest Chief”, or, any other long distance route, for the sake of the NEC. However, what is the quid pro quo that assures Coscia of support through Schumer from the Senate? There is a reason why Coscia has stayed on Amtrak’s Board for so long; yet, we do not have the ability to wait and see where he goes after Amtrak, as he holds the cards to ensure Congress and U.S. DOT do not interfere with his grand plan to free the NEC from the National Network.
Given this situation, to cut-off any scheme to throttle the National Network, our mantra must definitively be “absolutely zero Gateway funding” without commensurate funding of the National Network. Frankly, our only hope is for Congress to intervene to dissolve the current Board and place Amtrak’s governance directly under the FRA; to require a comprehensive audit by an external firm to explicitly determine how costs, revenues, and funding are identified and allocated; to prevent Amtrak from initiating on its own volition any changes in its route structure.