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Unable to Explain the Plethora of Issues Creating Amtrak’s Raison d’être–to Fail

By M.E. Singer/Rail Provocateur 

As they say in the media, “staying on angle” here is the basic premise of J’Accuse Amtrak’s Board of Directors: What we should have concluded by now, absent competent corporate leadership as experienced under Claytor and Gunn, is the unredeemable fact that these Board members are simple proponents of circular reasoning, given the empirical evidence of how they adhere to “The Peter Principle”--and tolerate the effectiveness of that principle within their corporate, executive, and senior management ranks.

I fervently believe how Amtrak’s problems today can be laid directly at the feet of a Board so thoroughly conflicted due to their overt lack of experience, expertise, and appropriate focus. “Unmasking” the current Board evidences a lack of fidelity in their approach to the National Network by emulating the Luddites in their persistent attacks upon that network they continuously ignore, and starve for resources. This is due to the Board’s exclusive focus on developing real estate opportunities on the Northeast Corridor initiated by its long-term Chair, Anthony Coscia, as so not too obviously encouraged by Senator Schumer (D-NY). Given this self-serving environment, the only Board member with integrity left after but one term to preserve her integrity–Yvonne Brathwaite Burke (from California local and state politics; ex-congresswoman.)

Consequently, the credentials of the remaining current Board members is a testimony to the vapid vacuum plaguing Amtrak, including:

  • Anthony Coscia: NJ resident; appointed 2010 by President Obama; Chair of Amtrak Audit/Finance Committee since 2011; Board Chair since 2013; former Board Chair Port Authority New York New Jersey (PANYNJ); background in re-development finance; attorney.
  • Christopher Beall: NY resident; appointed 2013 by President Obama; background investment banking/finance; Koch Industries (historically anti-rail).
  • Thomas Carper: IL resident; appointed 2008 by President Bush; Board Chair 2008-2013; re-appointed to Board by President Obama 2013; ex-mayor of McComb, IL; small business owner (tavern).

Piling on top of these primarily Northeastern Board members, as they say in business, “the fish rots from the head,” as evidenced how the quality of Board members has continued to deteriorate over the years, until recently becoming nothing more than a parking zone to fill the obvious vacuum with political hacks, including two former congressmen who had voted several times against funding Amtrak. Frankly, does anybody think a major U.S. legacy airline would have Board nominees who had proposed any action inimical to that carrier, such as the re-regulation of the industry, extending take-off slot caps, or any other matter to the economic detriment of that for profit commercial airline? In comparison, this deterioration of Amtrak’s Board is now confirmed by the evidence of the current nominees before the Senate as proposed by President Trump, despite their lack of requisite credentials to to deploy their experience as effective stewards of Amtrak. These nominees include:

  • Lyn Westmoreland: ex-congressman from Georgia; voted against funding Amtrak twice.
  • Todd Rokita: ex-congressman from Indiana; voted against funding Amtrak.
  • Joseph Grueters: CPA from Florida; 2016 GOP election volunteer.
  • Rick Dearborn: career as Capitol Hill and White hOuse staffer from Oklahoma; congressional liaison for the Heritage Foundation (anti-Amtrak).

Why did Congress tolerate for so long the persistent deterioration of the credentials of Board nominees and appointees; today, so far from Amtrak’s enabling legislation that explicitly required appointees to evidence a high degree of competency and experience relevant to serve Amtrak? What Amtrak has consistently been deprived of in terms of relevant experience in a Board nominee/member has been in: rail operations, food/beverage service  human resources  labor relations; union negotiations/contracts; marketing/branding/positioning; strategy/strategic planning; accounting; customer experience; product development. Real estate development is not even in the top ten needs of Amtrak. These functional areas have never changed, and represent the essence of what Amtrak desperately required from its Board–to enjoy the benefits of successful stewardship; to ensure the legitimacy of transparency; to have the knowledge to insist upon full accountability. Instead, the dearth of requisite competency and qualifications of Amtrak’s Board has created a “perfect storm” against the National Network as best explained by Muhammed Ali: “What are the chances? Slim and none; and slim just left town.”

A panoply of non-fulfillment, flops, and negligence at Amtrak, particularly since the departure of CEO Claytor, is a direct result of an uninvolved  unknowledgeable, and totally politicized Board serving its own self interests, or, those its their political patrons. Recent examples include:

Real Estate-Endless Conflict-of Interest Issues:

Why is it tolerated that the singular focus of Board Chair Coscia is his interest (as a Northeastern real estate developer) to eagerly pursue the Hudson Yards and Sunnyside Yards development projects, with Senator Schumer in tow? Interestingly, notice how contrary to the active political and Board interest in such development opportunities on the Northeast Corridor, is how exasperatingly slow any development around Chicago Union Station has been (as it is obviously not a priority).

Indeed, the only “active” actions pertaining to real estate is a history of Amtrak’s illegal actions over the control of depots at the expense of the dominant local commuter lines. We factually know how in the middle of the night Amtrak has surreptitiously demanded exclusive control of Washington Union Station at the expense of Virginia Railway Express; now to manipulate long-standing contracts to achieve exclusive control over Chicago Union Station at the expense of METRA. For Philadelphia’s SEPTA commuter line, Amtrak has sought to strangle that operator over costs for electricity, access to infrastructure, and depots. This is quite relevant for the California JPAs in terms of what Amtrak could seek to manipulate.

“Southwest Chief”-A Three Dimensional Saga:

1) Infrastructure

When the BNSF notified Amtrak several years ago it would no longe maintain its own track infrastructure to passenger standards between Dodge City, KS-Albuquerque, NM, as #3 and #4 were the sole user, Amtrak’s Board Chair refused to make the necessary investment (perhaps too far from the NEC..?) With superb reaction on a timely basis by local rail groups in Kansas, Colorado, and New Mexico, agreement was achieved with these states and their municipalities to seek TIGER grants. Amtrak agreed to the formula; even BNSF contributed and promised to maintain the infrastructure to passenger standards for the next 20 years, as the states understood how the daily “Chief” was the lifeblood serving numerous multi-markets without any alternative transportation; a consistently acknowledged common thread of the long distance trains. However, Amtrak balked to purse an unforced error and walked from its commitment to the detriment of those states. Amtrak attempted to fog the issue by declaring a need for PTC on a route segment in New Mexico, despite the FRA providing a variance that deemed it unnecessary. Too bad the senators from the impacted states did not take immediate action to thwart funding of projects on the Northeast Corridor.

2) Bus Substitution:

Apparently, the Amtrak team of Anderson/Gardner blessed by Coscia, abrogated their financial commitment when they pulled out fo the shadows a proposal to substitute a bus along the route in question (Dodge City-Albuquerque), in total disregard of that being a much longer and very uncomfortable journey, let alone so hazardous during the six months of winter. This new model was based upon the Board acceptance of Amtrak’s persistent “smoke and mirrors” to massage numbers and data to perfect its intended GIGO approach (IT talk for “garbage in, garbage out”) to the long distance routes by falsely claiming massive deficits incurred by the “Chief.”

By studiously applying lessons from how the Southern Pacific (SP) infamously turned against its passenger trains in the 1960s, Amtrak’s Board took that lesson further to realize how a bus substitute would serve to fast track the killing of the“Chief.” If successful, such a template of willful self-destruction would be applied to the other “deplorable” long distance routes. Surely, the Board thought that rather than facing the wrath of Congress losing its sole train by simply discontinuing the route, instead, a slow bleeding to death with a bus would be preferable; certainly satisfy the cost concerns of Congress stoked by Senator Schumer. What the Board did not realize is how members of Congress form the three impacted states rose-up in protest, forcing Amtrak to (temporarily) back down. Apparently, Amtrak assumed from recent experience working the edges from the SP playbook by downgrading on-board food/beverage services on the “Silver Star, Capitol Limited, and Lake Shore Limited,” deliberate inventory stock-outs (’86”), etc. that no reaction from Congress could be interpreted to keep attacking the long distance routes.

3) Concomitantly Refusing to Fulfill Its Promise to Help Finance Infrastructure Repairs, Amtrak Encourages a Stub Train:

Despite these willful, deliberate actions to see how far Amtrak can go before Congress pulls on its reins, Amtrak has been working with the towns of LaJunta and Pueblo, and the state of Colorado, to determine the feasibility of serving Pueblo from LaJunta. In its current context, such a concept will never reach fruition. Nothing makes economic sense, including:

Amtrak doesn’t not have enough Superliners now to meet travel demand, let alone to run a coach and sleeper in the consists of the “Chief” to be switched off/on westbound/eastbound “Chiefs” for the short run to/from Pueblo from LaJunta. Amtrak does not even have a switch engine based at LaJunta; at what cost could it even procure one from BNSF; or, would Amtrak propose requiring the “Chief’s” T&E crew to uncouple/couple cars and power?

Of course, to date, neither the towns or media have acknowledged, nor indulged in discussing, the extraordinary high cost to set-up and run any piece of such a service, given the cost demands of PRIIA, built-up by Amtrak’s free hand to determine what full cost allocation would be.

Obviously, no Amtrak Board member has read a map and looked at the history of the proposed route to properly guide Colorado. The Santa Fe used to operate a “Little Chief” meeting from Chicago and Los Angeles both westbound/eastbound “Super Chief”/”El Capitan” at La Junta; running a separate stub train of coaches thru Pueblo and Colorado Springs to Denver. (I actually took this train in April, 1967 from Colorado Springs to Denver to meet the eastbound “California Zephyr”). Instead of a very uneconomical short route to Pueblo, the historic service all the way to Colorado Springs; preferably, Denver, is the only viable proposal.

In essence, Amtrak’s Board has consistently not been honest about the “Southwest Chief”, whether about fulfilling its commitment to invest towards infrastructure renewal, playing a “shell game” with bus substitutions along the same route, or, misleading Colorado towns over the viability of a short route from nowhere to nowhere.

A “False Flag” to Congress by the Board-Proposing Profitable State Corridors to Replace Deficit Long Distance Routes:

Ironically, the “Southwest Chief” issue plays right into the overall master plan of Amtrak. Although state treasurers and auditors still have to connect the dots to appreciate how PRIIA was enacted to subsidize the Northeast Corridor at the expense of those states not between Boston-Washington, what makes Amtrak so confident that any state would be eager to pay Amtrak at its full “rack rate” for any new route under 750 miles? What state would exchange its federally paid long distance route for bus substitutions?

Between signing off on the dissolution of the long distance routes by proposing short corridors, with a plan totally predicated on favorable relations with the Class 1s, what Kool-Aid did Amtrak’s Board drink? How knowledgeable is Amtrak’s Board on the advent of Precision Scheduled Railroading (PSR) that runs elongated freights with no sidings capable of holding them to allow passenger trains running at a different velocity to overcome at speed? Just look at what happened to VIA’s “The Canadian” operating in that new environment, where another 36+ hours have been added to the schedule  to no avail. But that’s not even the primary issue between Amtrak as a tenant on the privately-owned infrastructure of the Class 1s, given Amtrak’s persistence responding to a basic economic issue by taking a position of litigation, backed up by “Uncle Sam.” So much for the friendly tenant to fight over OTP while totally ignoring the equally aggrieved position of the Class 1s to recognize the market value today of track access and timely dispatching. Time for the FRA to mentor Amtrak to recognize much has changed from 1971.

Amazing how the Board allows Amtrak to project a new strategy to entangle itself with Congress, before even doing its homework, such as, how the significant labor severance/benefits will be funded; where the equipment pool will come from; how will the free-standing corridors thrive without benefit of connecting to a National Network.

Marketing-A Series of Dichotomies Approved By An Unknowledgeable Board:

What part of advertising trains to national parks does the Board not appreciate when it is concomitantly driving a single theme what money losers the long distance routes are, and as a result, requiring less than daily frequencies, discontinuances, or bus substitutions (see Amtrak ad below)?

Reply-To: promotions@amtrakvacations.com received 6.12.19

Even more pathetically evidencing the impact of a Board not tuned in or sensitive to revenue centers, but just marking time, is the third sale on sleeper space just since May, 2018 (see below). This latest sale Amtrak announced in early June, 2019, unbelievably indicates its intent of unloading already limited sleeper inventory (e.g., roomettes and bedrooms) during multiple peak seasons (e.g., Summer, Thanksgiving, Christmas/New Year’s, Spring).

What could be the rationale approved by the Board other than is the space no longer at a premium given Amtrak’s one successful marketing campaign to thrash the long distance trains, with the idea of taking this now upside down business model to Congress to indicate how the long distance routes are failing economically?

From: “Amtrak” <amtrak@e-mail.amtrak.com>
Subject: Ends today: Save on select sleeping accommodations. Date: June 10, 2019 at 10:48:51 AM CDT

What Strategy Is The Board Driving/What Is The End Game? Adios to “National Or Nothing”
Given the above examples, it is eminently obvious the object of Amtrak’s Board, led by Anthony Coscia since 2013 (a member since 2010), is a slow, but steady self-immolation of Amtrak, America’s former national passenger rail system. Under the Board’s direction, the federal funding for the National Network continues to be re-directed towards subsidizing the deficits of the Northeast Corridor; PRIIA was weaponized to layoff Northeast Corridor costs on state- supported routes, as well as to bury in the long distance sector accounting; Anderson was brought in as CEO to do the Board’s bidding, while management ranks of the few remaining experienced people thinned out through incessant lay-offs/buy-outs.

Clearly, the Board’s lack of focus and competency in directing Amtrak is evidenced by the emphasis on cost cutting as the basis for management bonus. What ever happened to building the business, increasing revenues and profitability? Also, why has Coscia remained silent on the outrageous appointments of the past four proposed Board members lacking any requisite experience, other than in his knowledge how he could easily control and direct them?

Where has the voice of Amtrak’s Board been given so many egregious examples of waste in the Essential Air Program, other than the fact that the biggest culprits are in Senator Schumer’s upstate towns of New York? This self-destruction model of governance continues to pass by a Congress mostly composed of wealthy attorneys who don’t question the obvious foibles of Amtrak, until the one daily train through their rural towns is threatened.

When we learn about the “Southwest Chief” case, the killing off of long distance routes, and the subordination of the National Network to the NEC, it shall be quite important for the FRA to determine why Amtrak elected not to charge and collect from the Northeastern commuter lines for their far heavier use of the Corridor from when it was legislated in PRIIA (2008). Why was this basic accounting not even implemented until finally being mandated by Congress in December, 2015? What was the rationale behind the free ride all those years in parallel to not charging those same states for Amtrak’s intercity services along the Corridor?

Where was the OIG and the external accounting agency failing in their curiosity not to identify this financial deficiency; how it obviously contributed to Amtrak’s re-directing more national system funding to subsidize the Corridor? Indeed, where was the Board and its own finance committee not to question and verify receipt of such payments; or, once aware, to take corrective action before being required by Congress? Interestingly, the current Board Chair was also chairman of the finance and audit committee since 2011. Also, did Amtrak ever collect those payments in arrears from 2008?

Contrary to Kay Bailey Hutchison (R-TX) staking out a position of “national or nothing,” we find Coscia and Schumer updating that philosophy to, “Northeast Corridor and nothing!” This explains the end game.