(The following story by Lori Nitschke appeared on the Omaha World-Herald website on November 13.)
WASHINGTON – For Union Pacific, the Omaha-based rail giant that has donated hundreds of thousands of dollars to Republican causes, it should be a heady time.
With George W. Bush about to begin his second term and Dick Cheney, the former Union Pacific board member, still vice president, the company should be celebrating its political fortunes.
Instead, the nation’s largest railroad faces a number of challenges in Washington.
Its ties to a federal regulator are under scrutiny. It is the subject of two government investigations into a series of accidents in Texas. And it could be affected by another investigation of railroad industry efforts to reduce accidents at rail crossings.
Many of the issues highlighted by the investigations have been chronicled in articles about the rail industry published in recent months by the New York Times.
The latest, published Sunday, focused on the longtime friendship between Union Pacific’s chief lobbyist, Mary McAuliffe, and the head of the National Railroad Administration, the industry’s main regulator, Betty Monro.
The story cited instances in which former administration staffers said Monro told them to ratchet down their oversight of Union Pacific. It also noted vacations that McAuliffe and Monro have taken together, often with other friends as well.
Union Pacific spokeswoman Kathryn Blackwell said the women’s friendship began 25 years ago, long before either held their current positions. “Allegations of us trying to use political influence to reduce our fines are absolutely not supported by fact,” Blackwell said.
Blackwell said Union Pacific has questioned federal rules only when it believed inspectors had reached improper conclusions.
“In some cases, Federal Railroad Administration citations were not in accordance with their own policies,” Blackwell said, adding that the company had urged regulators to focus on major safety concerns rather than “minutiae.”
The company also has cited its payment of $4.1 million in fines in 2003 as proof that it has not received preferential treatment.
In fact, Union Pacific has been inspected more than its three major competitors over the past five years, according to federal statistics. It was inspected less frequently in 2003 than one competitor, CSX, when accounting for Union Pacific’s greater size.
The fines levied annually against Union Pacific have represented about a third of all fines against U.S. railroad companies in recent years.
Union Pacific’s fines exceeded those of other companies even when accounting for its greater size. It has paid more fines per mile of track and per employee than any of its three biggest competitors – Burlington Northern Santa Fe, Norfolk Southern and CSX.
Monro’s relationship with McAuliffe and its effect on regulatory decisions is the subject of a Transportation Department investigation, Blackwell and three congressional aides said.
Two of the congressional aides said they had been notified by the Inspector General’s Office that a final report would be released in the next two weeks. All three aides spoke on condition of anonymity.
A spokesman for the Transportation Department’s inspector general would not confirm that any investigation is under way.
Because inspectors general often focus on making sure federal agencies rather than companies or private citizens function properly, Monro probably would suffer more from a critical report than would Union Pacific, several sources said.
Other ongoing investigations involving Union Pacific include two requested by U.S. Sen. Kay Bailey Hutchison, the Texas Republican who heads a subcommittee overseeing rail transportation.
She has asked the National Transportation Safety Board and the Federal Railroad Administration to investigate three Union Pacific accidents in the San Antonio area and whether fines should be levied against the railroad.
Since her request, three other Union Pacific accidents have occurred in the area, including a derailment Wednesday in which one person was killed.
The safety board investigates all accidents involving fatalities, including two of the accidents in the San Antonio area. Hutchison’s spokesman said the senator has asked the board to look into two other accidents as well.
Also pending is a Transportation Department investigation of the industry’s overall efforts to reduce deaths at railroad crossings. The Federal Railroad Administration’s reaction to crossing deaths is part of the investigation.
The Federal Railroad Administration has a dual role. One role is to make sure the rail industry follows safety rules and other regulations. The other is to promote the industry.
Some lobbyists and congressional aides say this has led to a cozy relationship between railroads and their regulator.
Edward Wytkind, president of the transportation trades department at the AFL-CIO, said, “It was not terribly newsworthy to us to find out the agency is too close to the employers they’re supposed to regulate.”
Steve Kulm, a spokesman for the Federal Railroad Administration, disputed that the agency has been lax on the railroads. Since 2000, he said, it has increased the number of inspectors and inspections and has collected 141 percent more in fines than in the past.
While most of the seven major railroads actively cultivate ties with politicians, Union Pacific has been the largest donor, giving about 80 percent of its donations to Republican candidates, according to the Center for Responsive Politics, a campaign watchdog.
The company’s political action committee gave at least $1.5 million to politicians and political groups in the 2003-2004 election cycle, according to the Federal Election Commission. Union Pacific Chairman Dick Davidson was listed as a Bush campaign “ranger,” someone who had raised $200,000 or more for the president’s re-election.
Union Pacific’s campaign contributions, Cheney’s experience with the company and Davidson’s decades of railroad work led to speculation four years ago that Davidson might be Bush’s nominee for transportation secretary.
Bush’s eventual choice was California Democratic Rep. Norman Mineta, but he is widely expected to step down this year due to poor health.
Lobbyists and congressional aides involved in transportation issues say they haven’t heard Davidson mentioned this year, but several say that is largely because other Cabinet members – including Health and Human Services Secretary Tommy Thompson and Labor Secretary Elaine Chao – may be actively pursuing the position.
Blackwell said Davidson, who will turn 63 in January, has not expressed an interest in the position and has a full plate in Omaha. “He’s very concerned about getting things turned around and operating as well as they were a couple of years ago,” she said.