July 10, 2000
To: The Honorable Trent Lott, Majority Leader, U.S. Senate
Dear Senator Lott:
With regard to my service as a member of the Amtrak Reform Council
(ARC), to which you appointed me, I have concluded with great regret
that the ARC is unable to effectively fulfill the oversight role that
Congress intended for it, and that there is no realistic prospect that
it will be able to do so in the foreseeable future. Thus, I am resigning
my position effective immediately.
By separating from the ARC I can speak more freely. Most urgently, I
urge Congress to take appropriate measures to dismiss the present
members of the Amtrak "Reform Board of Directors." In this letter I will
outline the board's negligence that warrants such action. I will also
make the case that the Treasury Secretary should replace the
Transportation Secretary as the federal government's ex-officio member
on the Amtrak board. I also want to focus public attention on Amtrak's
failure to bring modern, cost-effective rail passenger service to the
United States.
ARC'S MISSION
The ARC was created by the Amtrak Reform and Accountability Act of
1997 (ARAA) to independently evaluate Amtrak's performance, make
recommendations to Amtrak for cost containment and financial reforms,
and recommend to Congress changes in the law that are believed to be
necessary or appropriate. If the ARC finds that Amtrak isn't meeting its
mandated goal of operating self-sufficiency by the end of fiscal year
2002 (i.e., after September 30, 2002), the ARC must submit within 90
days to Congress a plan for a restructured and rationalized inter-city
rail passenger system. In that same period, Amtrak must prepare a plan
for its complete liquidation.
YOUR DIRECTION IN APPOINTING ME
When you appointed me on February 24, 1998, you said, "The ARC will
ensure that Amtrak spends the taxpayers' money wisely. The Council's
first loyalty will be to the American taxpayer - not to the nostalgic
sound of passenger trains going down the tracks." I responded in a
letter, saying, "I assure you that I will take very seriously the trust
that you have placed in me, and I'll work conscientiously to evaluate
Amtrak's feasibility into the next millennium."
For the following reasons, I am unable to fulfill that commitment.
- AMTRAK's LACK OF COOPERATION WITH ARC: Amtrak has resisted the ARC,
having failed to provide needed information. This has interfered with
the ARC's ability to carry out its legal obligations to Congress.
- "BACK DOOR" SUBSIDIES INCREASING: Taxpayer funding for Amtrak is
increasing. It is being hidden in numerous non-Amtrak accounts, making
it more difficult to determine just how much in public funds Amtrak
actually is receiving.
- AMTRAK DISGUISES LOSSES: Amtrak's operating losses are no longer fully
transparent, that is, the financial performance and condition of certain
Amtrak business units no longer are clearly reported and readily
understandable.
- SETTING THE STAGE FOR ANOTHER AMTRAK BAILOUT - THE BOND BILL: If
Congress passes the so-called High Speed Rail Investment Act, it will
set the stage for another Amtrak fiasco that will cost taxpayers
billions of dollars.
- COSTLY ACELA DELAYS AND QUESTIONABLE FUNDING: Amtrak is not
forthcoming about the fiscal consequences of the serious delays that
have occurred within its Acela high-speed Northeast Corridor program.
It's time that Congress gave higher regard to warnings by the General
Accounting Office (GAO) and Transportation Department Inspector General
(IG) about Acela-related revenue shortfalls. Moreover, Congress should
begin to look into previously undisclosed loans from Canada for the
Acela.
- ADDITIONAL POOR, COSTLY SERVICES ARE BEING PLANNED: Amtrak is not
using a significant portion of capital subsidies for the kinds of
high-priority, high-return investments that will help its bottom line.
Amtrak is adding trains that are slower than those of many decades ago,
including pork-barrel trains to the hometowns of Amtrak board members.
I will now elaborate on each of these issues.
AMTRAK's LACK OF COOPERATION WITH ARC
Amtrak refuses to disclose information required by the ARC. Governor
Tommy Thompson, Amtrak's board chairperson, assured me at a September
24, 1998, meeting that Amtrak would provide the ARC with what it needs
to meet statutory obligations. Because Amtrak was claiming "success"
with its freight program - but always citing only revenues, not costs -
I asked in that meeting for cost information to determine the extent of
freight’s contribution to Amtrak's bottom line. As of today, one year
and 9 months later, the questions remain unanswered.
Freight income/expenses is a major issue. Amtrak claims that carrying
freight can make it a profitable operation, but has provided no
substantiation of this to the ARC. Indeed, the ARC has urged a
transparent accounting of Amtrak's freight revenues and expenses, but
Amtrak has ignored its request. Yet, Amtrak spokespersons assert to the
news media that the railroad's express program is making a "positive
contribution" to the bottom line. If that's true, why cannot Amtrak
respond to the ARC by supplying the requested balance sheet? Amtrak's
action is indefensible, because the ARC has a statutory obligation to
examine which Amtrak programs are succeeding or failing.
For example, the new Kentucky Cardinal exists primarily to carry
United Parcel Service (UPS) package freight from Louisville to Chicago.
It's possible that this train is losing money, which would mean that
public funds intended for passenger travel are subsidizing UPS. When
rail advocates (and I was among them) worked to create Amtrak in 1970,
none of us had any intention of creating a government subsidy for a
private freight hauler.
Also, Amtrak has denied the ARC access to information regarding labor
productivity, failed to identify the revenue impact of delays in
starting Acela high-speed service, and has not volunteered information
about loans from Canada to help finance the Acela.
While all are serious matters, failure to respond to labor
productivity questions permits Congress to remain misinformed. Senator
Kay Bailey Hutchison, chair of the Surface Transportation subcommittee,
said on November 7, 1997, that Amtrak assured her that the pay raises
negotiated that year would be paid for by more efficient operations. It
appears that no data can be found to substantiate the efficiency claims.
"BACK DOOR" SUBSIDIES INCREASING
No one really knows the full public cost of running Amtrak. No entity
has yet quantified all of Amtrak's public costs for general scrutiny.
Excluded from Amtrak's accounting system, annual reports, and
congressional testimony are the costs of 10 public programs that help
finance Amtrak or artificially lower Amtrak’s costs by shifting expenses
to other agencies, as follows:
- Federal Railroad Administration (FRA) funding benefits Amtrak through
grants for train stations, historic building restorations, grade
crossing improvements, high-speed rail studies, and technology
development.
- Federal Transit Administration (FTA) Grants - two examples are a grant
of $18.7 million to Pennsylvania to purchase coaches for Amtrak and $3.5
million to Vermont to start a train to Rutland. FTA grants also help pay
for improvements at Amtrak stations.
- Other federal funds - some states like California rely on Congestion
Mitigation & Air Quality funds to support Amtrak.
- De facto federally guaranteed loans - in 1996, Amtrak borrowed $1
billion from an agency of the Canadian government, a sum that is still
outstanding. Because it is unlikely that Congress will precipitate an
international incident by allowing this loan to go into default, it will
ultimately be repaid by U.S. taxpayers.
- Special funding by states for cars, locomotives, track work, station
construction - California and New York alone have each spent about $1
billion on Amtrak.
- Federal job-training funds have benefited Amtrak in several locations,
such as a $500,000 grant to Amtrak to retain a reservations office in
Philadelphia.
- Local Government's Direct Subsidies: In California, counties purchased
and are upgrading the Los Angeles-San Diego rail line, while Amtrak
expects more local communities to build and maintain Amtrak stations
across the country.
- Local Bond Issues/Local Incentives: Amtrak benefits from bond issues
and incentive packages to keep jobs in cities like Chicago.
- Local Tax Exemptions: The ARAA exempted Amtrak from property taxes
levied in Beech Grove, Indiana, where its major maintenance shop is
located, and the community is losing about $5 million in tax revenue
over a five-year period.
- Internet-Style Tax Exemption - A controversy has developed about
Internet merchants not paying certain state or local taxes, but it's
little known that Amtrak enjoys the same benefit. According to the
Congressional Budget Office, Amtrak passengers are exempted from "most
state and local taxes, fees, and charges."
Most of these funds and tax forgiveness measures are not reflected in
Amtrak's books and are separated from the federal government's $24.1
billion in expenditures for Amtrak since its 1971 creation.
AMTRAK DISGUISES LOSSES
Amtrak repeatedly offers a glowing picture of its own' finances, yet
for the first two quarters of this fiscal year, its operating loss grew
from $248.8 million to $265.9 million, a $17.1 million increase. The
deficit is growing at the same time that Amtrak is boasting of major
ridership and revenue successes.
Congress is failing to put Amtrak's financial affairs to a simple
litmus test - do Amtrak's numbers fairly represent its condition to
taxpayers? Unfortunately, the answer is "no," and Amtrak's financial
hemorrhaging continues. Notably, the DOT Inspector General and the GAO
have found that Amtrak is unlikely to meet a legal requirement of zero
operating subsidies by the end of fiscal year 2002.
If a "Ripley's Believe it or Not" existed for accountants, Amtrak
would be featured. Consider the bogus methods now under way to make
Amtrak’s books look better:
- Amtrak now inflates income by counting many public subsidies as
"revenue," something it hasn't done through most of its history. The
amount last year from the states alone totaled $100 million.
- Amtrak has lowered operating losses by shifting almost a half a
billion dollars in maintenance costs to its capital account, according a
GAO study.
- Amtrak benefits from a unique taxpayer-sponsored bonanza. Although
Amtrak has never paid a penny in income taxes, Congress ordered the IRS
to give Amtrak a $2.2 billion "tax refund." Amtrak is using the funds in
two ways - partly to repay a portion of its $1.6 billion in debt to the
private capital markets and partly by investing the funds in high-yield,
interest-bearing accounts. Thus, the "tax refund" - money Amtrak did not
"earn" in the true business sense - is reducing Amtrak debt costs and
increasing interest income, a balance-sheet sweetener that masks the
extent of its poor financial condition.
The GAO reported last month that Amtrak "has had, and continues to
have, difficulty in controlling its costs" and that the railroad's' net
losses have remained high - about $900 million in fiscal 1999. And the
DOT IG reported last year an estimate that, over time, Amtrak will incur
$695 million more in cash losses than Amtrak estimates.
An airline using Amtrak's accounting methodologies would be slapped
hard by the Securities and Exchange Commission, shareholders would be
outraged, and the Chairman would be looking for a new job.
SETTING THE STAGE FOR ANOTHER AMTRAK BAILOUT - THE BOND BILL
No credible evidence exists that Amtrak will achieve its financial
goals. Amtrak will need additional billions in subsidies to keep
operating, as evidenced by the June GAO report, which states that Amtrak
continues to have difficulty in controlling costs, and that interest
costs are increasing as debt obligations grow. The new high-speed Acela
service, which is touted to generate $125 million in annual profits, is
again delayed on account of the Acela’s design deficiencies.
Amtrak has launched a new effort to obtain $10 billion more in
subsidies by arguing in favor of the High Speed Rail Investment Act (S.
1900 and H.R. 3700). The bill should be stopped dead in its tracks
because it is deceptive in its promise to Americans and contains
objectionable features. I say this because (1) the money will not
necessarily go to build high-speed rail systems, (2) the costs will be
higher than Amtrak claims, (3) taxpayers will be left liable for another
Amtrak bailout, and (4) the bill establishes a conflict-of interest
regarding the Secretary of Transportation. Taking these issues in order:
(1) Amtrak's "re-definition" of what constitutes a “high-speed” train is
a ploy to plow more funding into its conventional trains. As a
long-standing advocate of high-speed trains, I believe this legislation
ought to be called the "anti-high speed train bill." I say that because
if enacted the result will be Amtrak "high-speed" trains for the
Midwest, the South, and West Coast that in most cases will offer slower
travel times than travelers found in the 1950s and earlier. Amtrak will
also spend funds on routes that are so long (e.g., Washington, D.C. to
Macon, Georgia) that there is no way – not now, not ever that even the
fastest high-speed trains could compete with air travel. The bill is a
step backward because it institutionalizes Amtrak's second-rate planning
and inhibits development of the kind of fast corridor train service
America needs.
(2) The bill permits a future transfer of costs from Amtrak's books to
obscure ledgers buried in the Treasury Department, thus freeing Amtrak
to again issue inappropriate claims of financial "success." The bill
authorizes Amtrak to sell $10 billion in bonds, with the government
giving $2.3 billion in tax credits to bondholders in lieu of interest
payments. But tax credits are indirect tax expenditures with a cost to
the Treasury - the equivalent of spending. Another troublesome aspect is
that the analysis of the bill's costs end with the year 2010, yet
20-year bonds are permissible. It's likely that as late as 2010 Amtrak
could issue bonds that will expire in 2030. It's conservative to
estimate that the tax-credit cost to the Treasury will be at least
double the amount claimed by the bill's proponents. Thus, the bill
creates additional subsidies of unknown proportions to Amtrak that will
not be reflected in Amtrak's books.
(3) It's been asserted that the proposal is sound because funding will
be managed by an independent trustee and repayment assured by a
guaranteed investment contract. But these measures are deceptive because
they apply only to the 20 percent state share, not the 80 percent
federal share. Thus, the preponderance of the funds would remain at
risk. Does anyone really believe that Amtrak, which hasn't made a profit
on a single train when all costs are considered, will pay off these
bonds? The inescapable conclusion is that the bill sets the stage for
another bailout of Amtrak.
(4) The bill gives the Secretary of Transportation authority to
prescribe regulations about how certain bond-related transactions are
reported to the public even though the Secretary also sits on the Amtrak
Board of Directors - an obvious conflict of interest. This is alarming
because the current Secretary has demonstrated a gross lack of concern
for fiscal integrity in order to help Amtrak (as will be explained later
in the section entitled, "Permanently Remove Transportation Secretary
from Board").
Amtrak will be unable to pay off bond principal and interest, with the
result that Americans will be set up for still another multi-billion
dollar Amtrak bailout in future years.
Examine the record. Bailouts have happened before with Amtrak's
government-guaranteed loans. In submissions to Congress and in annual
reports, Amtrak fails to list funds received through guaranteed loans.
Amtrak never repaid $880 million in loans received between 1971 and
1975, and that obligation, plus more than a quarter of a billion dollars
in interest, were paid by the Federal Railroad Administration (FRA) on
Amtrak's behalf. For evidence of this continuing Amtrak-inspired
taxpayer obligation, we need to go back all the way to the 1983 Amtrak
annual report to find this disclosure:
"On September 30, 1983, Amtrak had borrowed under notes payable to the
Federal Financing Bank up to its maximum Federal guaranteed loan
authority of $880,000,000. On October 5, 1983, this obligation, plus
$239,635,000 in accrued interest, was paid on Amtrak's behalf by the
Federal Railroad Administration, and a new note in the amount of
$1,119,635,000 was executed as of that date between Amtrak and the U.S.
Government. The note matures on November 1, 2082, and will be renewed
for successive 99-year terms. Interest is payable only in the event of
prepayment or acceleration of the principal."
It is commonly known that Congress since 1971 has appropriated more
than $23 billion to Amtrak. But if this $1.1 billion is added (which is
never done because it wasn't an "appropriation"), the federal
government's expenditures and current obligations for Amtrak total at
least $24.1 billion. Add operating and capital subsidies from states and
it's possible to add at least another $1 billion for a total of at least
$25 billion in public funding. Senator Lott, when is "enough" ever
"enough" for Amtrak?
With a record like that, Amtrak cannot justify passage of the
so-called High Speed Rail Investment Act.
- COSTLY ACELA DELAYS AND QUESTIONABLE FUNDING
Amtrak has estimated that revenue will improve by about $125 million
in fiscal years 2000 and 2001, due primarily to the introduction of the
Acela high-speed trains in the Northeast. But the Acela program is
seriously troubled, and determining the extent of the revenue shortfall
is difficult. Amtrak tells the public that it will "make up" revenue
deficiencies, but has been unable to convince the DOT IG or the GAO that
such a feat is possible. Moreover, despite requests, Amtrak has failed
to provide the ARC with updated revenue forecasts for the Acela.
Questions now arise as to the degree to which Amtrak has disclosed
Acela costs to these three federal oversight bodies. It now appears that
Amtrak may have been unduly induced by an agency of the Canadian
government to select Acela equipment manufactured by the Canadian-based
Bombardier Corporation in preference to more proven technologies such as
the X2000, train which Amtrak had tested with great success in the early
1990s. According to an Ottawa Citizen story on March 18, 2000, "The
federal Export Development Corp. (EDC) secretly loaned $1-billion to the
deficit-plagued U.S. railroad agency Amtrak while the Chretien
government sharply cut passenger rail funding in Canada. The money
allowed the U.S. government-owned Amtrak to side-step a congressional
cap on capital grants . . . The loan package has been a closely guarded
secret. As of the end of 1998, the $1-billion was still owing. Officials
from Bombardier and Amtrak declined to disclose details about the deal.
Details of the EDC-Amtrak loans are not disclosed in EDC annual reports
or financial statements . . ..”
The secrecy only induces the sense that the Canadian government and
Amtrak have something to hide. I urge that a complete Congressional
investigation be undertaken to examine this transaction that potentially
has handed U.S. taxpayers a $1 billion liability to the Canadian
government - a liability that would still be secret were it not for an
enterprising Canadian newspaper.
For the record, to my knowledge, the ARC was never informed of a loan
from the Canadian government, the uses to which it was put, principal
amount owed, interest rate or other terms, repayment schedule, or its
effect on Amtrak's financial condition. Nor is the ARC aware of what
other secret loans Amtrak may have obtained from other foreign nations.
Although I'm a 30-year proponent of high-speed trains, and I've
testified before Congress many times for federal funding for the Acela,
I remain unconvinced by Amtrak's explanations for the Acela’s many
delays. When The Washington Post exposed Acela’s design flaws last year,
Amtrak announced a "six-month delay" in service startup. For the record,
as long ago as 1993, Amtrak promised that it would have the trains
running by 1997. Said Amtrak on November 3, 1993 (news release number
ATK-93-57): "Amtrak plans to award a contract by the middle of 1994 with
the first trains being delivered two years later. The new trainsets will
replace Amtrak's existing Metroliner fleet used on the Northeast
Corridor. With completion of the New York-Boston improvement program in
1997, Amtrak plans to operate 16 high-speed Metroliner [since re-named
Acela] service round-trips each business day between Boston, New York
and Washington, with trip time between Boston and New York reduced to
less than three hours." (Note: the latest Boston-New York travel time
estimate is three hours and 15 minutes.)
Hence, the record conclusively shows that Acela is three years behind
schedule, and that its performance goals have been compromised. Amtrak
has been developing the Acela for seven years, an absurdity compared
with the four years other nations take to build new high-speed trains
and start running them successfully. Amtrak should have simply purchased
an Americanized version of off-the-shelf technology, like the
Swedish-Swiss X2000, which would have been built in this country, and
Amtrak it could have had spectacular high- speed trains up and running
several years ago.
MORE POOR, COSTLY SERVICES PLANNED
Prospects for improved Amtrak service in most of the nation are even
gloomier. Amtrak's national expansion plans, supported by a so-called
Market Based Network Analysis, is doomed to failure. The plan violates
Amtrak's legal requirement to run modern rail passenger service. Amtrak
will add embarrassingly slow trains that won't serve vital markets.
Amtrak is simply stuffing more pork-barrel trains through as many
Congressional districts as possible to the detriment of areas that
really need better train service. For evidence, simply compare Amtrak
timetables with train schedules from decades ago.
For example, the Amtrak's new Kentucky Cardinal is inferior to the
equivalent service provided by the Pennsylvania Railroad even 70 years
ago. Amtrak's 12-hour Chicago-Jeffersonville, Ind., (near Louisville)
schedule is three hours longer than it took our great-grandparents to
ride a 1926 "milk run" on the same route, which was pulled by a steam
locomotive and served nearly every village along the way. This is why I
have called this Amtrak train - one of the slowest in the world - a
"Conestoga Wagon With Lights." This train is driven by Amtrak's desire
to carry UPS parcel freight, and the passenger accommodations are but a
fig leaf to provide Amtrak with legal cover behind which it expands
freight operations.
Expect more such nonsense. Amtrak is financing highly questionable new
trains in Governor Thompson's home state. On April 15, Amtrak began a
new passenger train between Chicago and Janesville, Wisconsin, the Lake
Country Limited, on a 2 hour, 50 minute schedule – an hour slower than
in the early 1950s. On many days the train runs nearly empty. Next,
Amtrak plans to add a train between Chicago and Fond du Lac, Wisconsin,
again on a schedule slower than in the early 1950s. Amtrak also is
looking for ways to add trains to Meridian, Mississippi, home to ARC
Chairman Gilbert Carmichael and Amtrak Board member John Robert Smith.
In Amtrak's expansion plan, trains on most new routes will be slow.
Amtrak's assertion that millions of new travelers will climb aboard such
trains is bogus. It is even probable that trains such as the Kentucky
Cardinal, Lake Country Limited and the proposed Fond du Lac and Meridian
services are illegal because they violate Amtrak's statutory mandate to
provide modern rail passenger service, 49 USC Sec. 24101 (a)(1), (b).
CONGRESS MUST OUST AMTRAK'S "REFORM BOARD OF DIRECTORS"
Amtrak's Reform Board of Directors must be held accountable for their
actions. On an urgent basis, I believe Congress should amend the Amtrak
law to require the removal of every current Amtrak board member and
require their replacements to be individuals who have succeeded in
turning around troubled businesses. I urge Congress to not give Amtrak a
penny more until a new board is seated. If we wait until their terms
expire in 2003, Amtrak will be in deeper fiscal trouble.
Current board members are:
- Tommy G. Thompson, Chairman - Governor of Wisconsin
- Michael S. Dukakis, Vice Chairman - former Governor of Massachusetts
- Linwood Holton - former Governor of Virginia
- Rodney Slater U.S. Secretary of Transportation
- John Robert Smith - Mayor of Meridian, Mississippi
- Sylvia de Leon
- Amy Rosen
- George D. Warrington, Amtrak President & CEO
A previous attempt to place new individuals on the Amtrak board was
made in the ARAA, which created a "Reform Board of Directors." But the
Clinton Administration blatantly ignored the provision by reappointing
many members of the old board. On February 11, 1998, Sen. John McCain
objected, saying, "Congress did not call for the formulation of a new
Board so that existing members could be reappointed. Congress called for
a new Board with a fresh approach in order to attain Amtrak's operating
and financial goals." Events have proven Senator McCain to be right.
It's time for Congress to replace the Amtrak board with people who have
bona-fide business turn-around credentials and the interest of the
taxpayers at heart.
PERMANENTLY REMOVE TRANSPORTATION SECRETARY FROM BOARD
Federal law for many years required Amtrak to issue preferred stock to
the federal government in exchange for federal operating and capital
grants subsidies. The Secretary of Transportation, on behalf of the
federal government, holds all preferred shares in Amtrak. This is the
historical reason for the Transportation Secretary serving as an
ex-officio member of the Amtrak Board of Directors.
Congress should place the preferred shares at the Treasury Department
and assign the ex-officio seat to the Secretary of the Treasury.
Presumably, this representative of the public trust will be better
equipped to halt Amtrak's inappropriate financial maneuvering and less
inclined to permit intolerable actions on Amtrak's behalf.
This issue has come to a head because DOT Secretary Slater has again
demonstrated a gross lack of concern for fiscal integrity in order to
help Amtrak. The most recent example involves DOT interference with a
legitimate contract negotiated in Boston. There, after a decade of
dissatisfaction with Amtrak's high costs for maintaining its equipment,
the Massachusetts Bay Transportation Authority (MBTA) conducted a
legitimate competitive bidding process and attempted to turn over the
equipment maintenance contract to a winning private operator named Bay
State Transit Service. The new company offered to provide the same
service as Amtrak for $175 million over five years - $116 million less
than Amtrak's bid. The efficiency benefits could help commuters if MBTA
were to use part of the $116 million to add trains on busy lines. Or,
the funds could have been returned to the taxpayers. But the Federal
Transit Administration (FTA) compelled MBTA to accept the absurd Amtrak
contract by freezing $70 million in federal funds for local transit
construction.
Secretary Slater oversees the FTA and is duty-bound to spend transit
funds in a prudent manner to help commuters. In fact, the FTA action
hurt Boston commuters. Mr. Slater also serves on the Amtrak board of
directors, and his acquiescence to FTA’s action only preserved an
overpriced Amtrak arrangement and perpetuated an MBTA-financed subsidy
for Amtrak. This is an example of a Cabinet member ignoring a conflict
of interest and outrageously fostering inefficiency in railroad
passenger services, both commuter and inter-city.
CONGRESSIONAL ACTION NEEDED
Luca Pacioli, an Italian mathematician who lived in the 1400s,
reportedly said, "If you cannot be a good accountant, you will grope
your way forward like a blind man and may meet great losses." Amtrak is
"meeting great losses" and is showing no signs of changing its ways. In
fact, one conclusion that ARC reached in its January report was that
Amtrak is spending capital funds in ways "that may not have any
beneficial effect on Amtrak's financial performance."
If alarm bells from the GAO, DOT Inspector General, and ARC aren't
enough to cause serious concerns, then consider the review conducted in
the midst of a threatened Amtrak bankruptcy. In June 1997, the Working
Group on Inter-City Rail, created by the House Transportation and
Infrastructure Committee, concluded in its report:
"Amtrak is awash in red ink, buffeted by conflicting missions and
ballooning debt. . . . Amtrak has missed its financial targets . . . .
Amtrak's capital and operating funding should be directed toward routes
with the market potential, which are primarily the higher density
inter-city corridors . . . . Amtrak is requiring large subsidies from
taxpayers and those subsidies are not directed to activities of maximum
benefit."
Senator Lott, little has changed since that report. For these reasons,
I believe Congress should take the following actions (listed in the
order in which the issues were raised in this letter):
NEEDED DIRECTIVES
- Determine from the ARC what inquiries Amtrak has ignored, and require
Amtrak to supply timely, forthright, accurate responses. In particular,
demand that Amtrak provide, within 30 days, a balance sheet regarding
its freight program, a document sufficiently clear as to shed light on
the program's financial performance.
- Require the GAO to prepare and issue a study on Amtrak's labor
productivity to help set a misleading record straight in the House and
Senate.
AMEND THE AMTRAK LAW
- Require Amtrak annual reports to the public and submissions to
Congress to clearly identify subsidies, the source of all public funds,
and interest costs paid by other agencies for Amtrak-incurred debt. The
objective should be simply to require publication of sensible reports
that forthrightly explains the true extent of Amtrak's revenues,
subsidies, costs, and losses.
- Replace the existing Amtrak board with executives who have business
turn-around expertise, innovative thinking, and a commitment to run
modern trains where they are justified by the marketplace.
- Seat the Treasury Secretary as the U.S. Government's ex-officio member
of Amtrak's board in place of the Transportation Secretary.
INVESTIGATE CANADIAN LOAN
- Probe Canada's $1 billion Acela loan to Amtrak for the purposes of
determining the uses to which it was put, the reasons for the secrecy,
and the potential liability to American taxpayers.
STOP NEW BAIL-OUT LEGISLATION
- Refuse to pass the so-called High Speed Rail Investment Act until a
new direction can be established for the effective planning of
high-speed train systems, a direction that includes market-sensitive
private businesses.
CONCLUSION
Senator Lott, passenger traffic growth will not save Amtrak. The ARC,
in its January report, issued an assessment that bears repeating:
"During a decade when the American economy and most of its
transportation system have expanded in an unprecedented manner, Amtrak's
ridership has remained virtually unchanged." This is accurate. Amtrak's
much-ballyhooed fiscal year 1999 ridership of 21.5 million passengers
was lower than the 22.2 million who boarded Amtrak back in
1990.
Senator Lott, you are a member of the Commerce Committee, which has
general oversight over Amtrak, and a member of the Finance Committee, to
which the new Amtrak bail-out legislation has been referred. I urge you
to use your influence on those committees to carry out a true reform of
Amtrak and to protect taxpayers from future liabilities that will total
billions of additional dollars.
I thank you for the trust you have shown in appointing me to the ARC.
I believe I am making a contribution on my last day of service by
bringing to your attention Amtrak's non-responsiveness to the ARC and
recent examples of Amtrak mismanagement and financial contrivance.
Respectfully yours,
Joseph Vranich
Copy: Gil Carmichael, Chairman, Amtrak Reform Council
His comments on "unknown" external subsidies seem to be reaching, and
holding Amtrak to a different standard than other private sector
programs. Plenty of private companies take advantage of Federal job
training, for example. Those program exists for specific public
purposes, not to benefit Amtrak.
As a taxpayer and traveller, I naturally want an efficient operation.
I expect that in all transport modes. However, based on the criticisms
Vranich complains about and this aggressive reach to find gripes, I
believe his conclusions are not sound and objective.
I know there were many who considered those people had
a "bad attitude," but in my experience those who had specifics
to talk about were some of the best employees and had many
valuable insights.
Wes Leatherock
wle...@sandbox.dynip.com
> John,
> What is with you? What will you do to earn a living if AMTRAK is
> shutdown? Are you depending on some Union/Featherbedding agreement to pay
> you not to work????? If I was any where near as disloyal and critical in
> public to my employer I would be in a soup line collecting unemployment so
> fast it would make your head spin! I am expected to be critical and vocal
> "behind closed doors" but Never in Front of Customers! If I was on the
> Amtrak board and read your comments in this forum I would make it my mission
> in life to retire you early! You are critical of every new project, won't
> learn new technology (Acela Express) refuse to move to a "new job"...... How
> do you get away with this? This is 2000 not 1900... According to Moore's law
> Technology changes every 18 months or so..... It is a fact of life.... If
> you are so inflexible then you probably need to retire.... Your perceived
> public disloyalty to your employer and co-workers amazes me! Not that you
> shouldn't get on them when on the job..... but in front of potential
> customers??????? Think about it!
Hold on a second. Although I disagree with almost every thing in the
Vranich letter, I appreciate John posting it. And it posting it, I didn't
see one word by John commenting on the letter one way or the other.
Your comments regarding John are completely uncalled for.
Thanks, John, for posting that for all of us to read. We can each make up
our own minds about what Vranich has to say.
Merritt
> Merritt, I don't think I was out of line.... If you look at this one posting
> by John then you are correct.... however, I attempted to place it in context
> with "all the other" John postings I could find and had read....
Hey Chuck, I'm with you on that. My opinion is also that John is overly
negative and pessimistic regarding Amtrak, and seems to be biting the hand
that feeds him. On the other hand, John is there on the job and knows, sees
and hears things that we amateurs (I consider John a professional) would
never be aware of, if it wasn't for someone like John pointing them out.
For that, I appreciate his postings. I can always overlook his negativism
and look for the underlying truth in his postings.
Anyway, I probably wouldn't have responded the way I did if your post had
been in response to one of John's postings badmouthing Amtrak. However, you
happened to pick a post in which John offered no opinion of his own, and was
performing what I thought was a valuable service by passing on an
interesting (although very negative and upsetting) paper by Vranich.
Merritt
Nope. I wouldn't be entitlted to one cent of that money. I'd go back
to the freight trains (I still have seniority with NS, CSX, and CR
Shared Assets, under existing agreements). I may even do that anyway, if
I get "squeezed out" of being able to hold a job in the territory I work
in right now.
By the way, I can be as critical of the UNION as I am of the
Corporation. At least the working guy expects the Company to act and
protect its own interests. But when the union that is supposed to
represent YOU won't do their job, that's damned discouraging.
<< If I was any where near as disloyal and critical in public to my
employer I would be in a soup line collecting unemployment so fast it
would make your head spin! I am expected to be critical and vocal
"behind closed doors" but Never in Front of Customers! If I was on the
Amtrak board and read your comments in this forum I would make it my
mission in life to retire you early! >>
Um, reminds me of Michael Corleone exploding at Fredo in "The
Godfather, Part II", NEVER to express disagreement with the "family" in
front of an outsider (grin).
The Vranich resignation letter was handed to me at work by a
co-worker. I hadn't seen it before and was interested in what Vranich
had to say. I tracked down the page the letter appeared on, cleaned up
the text, and posted it into this forum. I'm sure Mr. Vranich would hope
that his thoughts get as wide a forum as possible. Certainly, his
comments were germane to any discussion of Amtrak, it's current
mismanagement, and its possible future. Your post above seems a personal
diatribe at me, the messenger -- with nary a word regarding the message
itself.
I emailed a copy of my original posting of Vranich's letter to
co-workers for whom I had addresses. I also emailed a copy of your
comments above.
One guy -- another engineer with about 30 years of service -- simply
emailed back this one-line response:
"why do you get involved with these a--holes?" (expletive deleted)
Perhaps you'd like to have a friendly chat with him?
Actually, when I hear the way some of my colleagues talk, I think most
of my comments are downright restrained...
Cheers!
- John
So you admit that most of what is posted here is not fact
but just propaganda? You too?
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"George Conklin" <jep...@ntrnet.net> wrote in message
news:oIch5.2999$jh....@news-reader.ntrnet.net...
> What are you talking about????????
With George, "One never knows, do one." (My apologies, George, I couldn't
resist).
Merritt
> Wes.... I couldn't agree more. However, I am addressing John's constant
> negative comments in a public, non-internal forum...
I have seen very positive comments of him about Amtrak equipment.
hajo
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> If I was any where near as disloyal and critical in
> public to my employer I would be in a soup line collecting unemployment so
> fast it would make your head spin! I am expected to be critical and vocal
> "behind closed doors" but Never in Front of Customers! If I was on the
> Amtrak board and read your comments in this forum I would make it my mission
> in life to retire you early! You are critical of every new project, won't
> learn new technology (Acela Express) refuse to move to a "new job"...... How
> do you get away with this? This is 2000 not 1900... According to Moore's law
> Technology changes every 18 months or so..... It is a fact of life.... If
> you are so inflexible then you probably need to retire.... Your perceived
> public disloyalty to your employer and co-workers amazes me!
Mr. Honecker couldn't have stated it better.
That's what the East Germans were most amazed off: That there is _less_
freedom of speech in the West.
> Hans once again you misunderstand or didn't read the whole thread.... There
> are no rules saying John can't say what he wants to.... The polezi or
> Gestapo or whatever is not going to drag him off in the middle of the
> night....
No. Your statement was, that in many companies, he would get fired, and
that he deserves it.
And I added, that this was amazing to notice for East Germans. While they
had good reason to be quiet about their political leaders, it was no
problem for them to talk about the qualifications of their boss, in public.
Since most people have more reasons to talk about the qualification of
their boss, they had to notice, that in everyday life, the difference in
free speech was a little different than they had thought...
>And I added, that this was amazing to notice for East Germans. While they
>had good reason to be quiet about their political leaders, it was no
>problem for them to talk about the qualifications of their boss, in public.
>Since most people have more reasons to talk about the qualification of
>their boss, they had to notice, that in everyday life, the difference in
>free speech was a little different than they had thought...
The First Amendment is a restriction on Congress, not private employers.
In good ol' East Germany, if someone's boss obtained his position via
political connections, one would have problems discussing his abilities
in public. In the US, you might get fired, but the consequences could have been
more serious there.
> The First Amendment is a restriction on Congress, not private employers.
Yes.
That's free speech for lawyers.
> Adam.... Don't pay any attention to this guy! I am about to add him to my
> twit filter.... For some reason I don't understand he appears to be
> anti-American... I guess its just too bad we were on the winning side in
> world war 2 and helped rebuild their economy and have a very successful
> economy of our own...
Who's a twit now?
> Over the years I have observed a very small minority
> of Europeans (usually they are French but occasionally German) who
> constantly criticize the US....
Actually there are many more American whining about how they won all
the wars and should therefor get some respect and not constantly being
critized.
> In the ABPR group I once asked for a
> volunteer to translate the captions under some of the French Pix.... you
> should have seen the shit storm that generated because I as an American
> didn't speak French..... I long ago gave up trying to appease these
> people.....
:-) Well one bad experience set you out on a personal vendetta...
> I am proud of my country and refuse to apologize for it.....
Instead you insult other people and their country? Way to go.
> As
> a personal note I find it offensive when a German criticizes our society or
> form of government...... Something about "when you live in a glass house you
> shouldn't throw stones...." given their recent history....
Why is it OK to critize Grermany but not the US, my friend?
Homann
--
Magnus Homann, M.Sc. CS & E
d0a...@dtek.chalmers.se
You I guess.....
>
> > Over the years I have observed a very small minority
> > of Europeans (usually they are French but occasionally German) who
> > constantly criticize the US....
>
> Actually there are many more American whining about how they won all
> the wars and should therefor get some respect and not constantly being
> critized.
And your point is? Of course we should (grin)
>
> > In the ABPR group I once asked for a
> > volunteer to translate the captions under some of the French Pix.... you
> > should have seen the shit storm that generated because I as an American
> > didn't speak French..... I long ago gave up trying to appease these
> > people.....
>
> :-) Well one bad experience set you out on a personal vendetta...
>
No it goes back years..... When I was in the service (Navy) during the 60s
the French were rather famous for making fun of you if your French wasn't
exactly perfect... (I know I saw it....) or ignoring you if you didn't
speak French and it wasn't perfect.... I'll never forget being lost in
southern France and asking for directions (well trying to anyway with my
High School French<2 years> and a Belitz book) and being absolutely
ignored......
> > I am proud of my country and refuse to apologize for it.....
>
> Instead you insult other people and their country? Way to go.
Look I did not insult other people or their countries.... You came into this
thread a week after the fact.... and attacked me.... where is your comment
to your "landsman" who started the thread by critisizing me???? or are you
just prejudiced against Americans.... After all the entire thread is about
my comments that John Albert's perceived disloyalty to his employer was in
poor taste... and you will note that I got some support on that and also
John has toned down his rhetoric..... Your friend, Herr Zierke interjected
the comments about Herr Honecker.... I sure as hell didn't..... so why don't
you write to him.... or is it verboten?
>
> > As
> > a personal note I find it offensive when a German criticizes our society
or
> > form of government...... Something about "when you live in a glass house
you
> > shouldn't throw stones...." given their recent history....
>
> Why is it OK to critize Grermany but not the US, my friend?
Note: I did not critisize Germany.... Just some Germans..... remember your
guy started this..... until he jumped in it was on this side of the Atlantic
not yours....
> Adam.... Don't pay any attention to this guy! I am about to add him to my
> twit filter....
This is Usenet, not Fido.
> For some reason I don't understand he appears to be
> anti-American...
If somebody criticizes Chuck Schneider, he apears to be anti-American,
since Chuck Schneider is America.
> I guess its just too bad we were on the winning side in
> world war 2
Chuck Schneider, the heroe of Omaha Beach.
> and helped rebuild their economy
Chuck Schneider, the development aid worker, always on duty in Europe.
> and have a very successful
> economy of our own....
We talked about a free speech issue. Your answer is: Our economy is
successful. I don't think that the situation is as bad as your answer
implies, BTW.
> Over the years I have observed a very small minority
> of Europeans (usually they are French but occasionally German) who
> constantly criticize the US....
Lemme guess: They criticize Chuck Schneider, and Chuck Schneider is the US.
> As
> a personal note I find it offensive when a German criticizes our society or
> form of government......
Answer 1: I told about East Germans not finding the free speech that they
had expected. Since very few people from East Germany can afford holidays
in the US, simple logic could have told you, that I didn't talk about the
US society or form of government.
Answer 2: Bad luck, Chuck. But I understand now, why you have these
problems.
> > > I am proud of my country and refuse to apologize for it.....
> >
> > Instead you insult other people and their country? Way to go.
>
> Look I did not insult other people or their countries.... You came into this
> thread a week after the fact.... and attacked me.... where is your comment
> to your "landsman" who started the thread by critisizing me????
> Who might that be? or are you
> just prejudiced against Americans.... After all the entire thread is about
> my comments that John Albert's perceived disloyalty to his employer was in
> poor taste...
Yes? What wrong with commenting that. Free speech, you know, is not
something the US is the best at. Accept it and move on. Your ignorance
is showing through.
> > Why is it OK to critize Grermany but not the US, my friend?
>
> Note: I did not critisize Germany.... Just some Germans..... remember your
> guy started this..... until he jumped in it was on this side of the Atlantic
> not yours....
So if your posts so far was know critique against Germany and/or
germans in general, how can you even begin to think someone has
critized the US? You must be a very sensitive man, my friend...