You’ve heard the saying, “Politics Make Strange Bedfellows.” It’s a line from The Tempest, written by Shakespeare in the 17th Century. It means that politics can bring people together that don’t have anything else in common—or in the case of retired Surface Transportation Board Chair Martin J. Oberman and SMART-TD, shouldn’t be commiserating on political endorsements. “Free country, free speech” you might point out. Well … to a point.
A few days ago, SMART-TD posted this “message” from Oberman on its website. Whether he wrote it himself or someone wrote it for him is inconsequential. What’s disturbing is that he allowed this to be published at all:
“As the recently retired Chairman of the Surface Transportation Board, I’m writing to urge your participation in the 2024 election. My experience taught me that the protections of rail workers by the STB and by the FRA depends a lot on whether these important offices are filled by worker-oriented Administrations. A few key points show why this is true.
“Before I joined the STB more than five years ago, rail labor viewed the STB as indifferent to rail worker interests at best, and hostile at worst. Back then, the Class I’s were implementing PSR and dramatically cutting employment —ultimately eliminating nearly 45,000 good rail jobs. But under prior Republican-led STBs, these practices were allowed to flourish. That changed in my time as chair.
“For those that don’t know, the STB is an independent federal agency responsible for overseeing the economic regulation of different types of surface transportation, with a strong focus on freight rail. The STB uses its authority to address disputes and promote a transportation system that serves the needs of everyone involved, including SMART-TD members.
“While the STB cannot solve all the issues facing rail labor, I believe that the Board’s focus under the current Democratic leadership on improving rail service and, most important, on maintaining and growing a robust workforce has had a significant impact on holding the line against more massive rail layoffs.
“After President Biden appointed me as chair and the Board had a Democratic majority, the Board began to take action. In the spring of 2022, we held unprecedented hearings on the service problems of the industry that were the result of the mindless job cuts and senseless resource reductions by the Class I’s. Top executives of the Class I’s were called in and questioned by the Board.
“For the first time, rail labor leaders were invited to address the board in a formal hearing. After the hearings, and despite their objections, we ordered the Class I’s to provide monthly performance updates, with an emphasis on public reporting on employment—hiring, training, and, crucially, retention.
“Later in 2022, with UP effectively denying service to many customers, largely as a result of low numbers of employees, we held special public hearings on UP’s actions. As a result, the Class I‘s began to increase employment for the first time since the start of PSR, especially in the operating crafts.
“The Board was able to take other actions to protect workers. In approving the CSX-Pan Am transaction, we obtained a commitment by CSX to go beyond the standard protections and to ensure that any employee who lost a job would be offered one in a different craft or location. In the CP-KCS transaction, for the first time, the board imposed a condition that if the carriers proposed to combine territories where two agreements applied and sought to have only one agreement, the affected union, not the carrier, would get to pick the agreement (contrary to prior mergers where the carrier got to choose).
“With a Democratic majority, I was able to make sure that the Board added rail labor leaders to the Board’s most important industry advisory committees—where labor’s voices had been lacking for too long. The Board also coordinated with the FRA on issues related to service, safety, and employment. Indeed, the Biden FRA under Amit Bose has been the virtual opposite of the FRA under the prior Administration.
“Among other things, it issued a two-person crew rule, fulfilled a 17-year-old legislative directive for certification of signalmen and dispatchers, revived the Rail Safety Advisory Committee (that includes rail labor), and put the brakes on the near-automatic issuance of waivers of safety regulations under the prior Administrator.
“As you can see, who appoints leaders to these important railroad regulatory positions makes a huge difference to you and the quality of your work life. Had there not been a change in the White House, the STB and the FRA would have permitted the railroads’ corporate greed-driven operational models to remain unbridled. Thankfully, I was empowered and entrusted by President Biden to do the right thing and hold the Class I’s accountable.
“In order to make sure that the STB and FRA will continue to respect rail workers and that rail unions will have a place at the table and will be listened to, we will need an Administration that will appoint officials who care about rail workers and continue the aggressive oversight of the railroads by the current Democratic-led STB and FRA. Support for the Democratic ticket —both for President and for the Senate and House of Representatives —because my experience taught me that the protection of rail workers is quite realistically at stake.
“I strongly urge you to vote for Kamala Harris and Tim Walz to ensure that the STB and FRA will continue to provide the energetic oversight of the railroads which is essential for all of us to thrive and prosper, and to do so safely.”
Yikes. This is truly disturbing. Sickening. Nasty, backhanded smacks in the face to former FRA Administrator and career railroader Ron Batory aside, what is this man thinking—or not thinking? Clearly, Oberman si è tuffato nella tana dei topi politici.
First, for clarity’s sake, a few observations on Oberman, provided by Capitol Hill Contributing Editor Frank N. Wilner:
“Nominated to the STB in 2018 by President Trump, Oberman took office in January 2019 at age 73—the oldest rail regulator to have been sworn-in in the then-131-year history of the STB and its Interstate Commerce Commission predecessor. A House of Representatives Page at age 13, he attended a military academy prior to earning an undergraduate degree in psychology from Yale and a law degree from the University of Wisconsin. His pre-STB career was primarily that of a trial attorney but included political appointments as general counsel to the Illinois Racing Board and chairman of Chicago Metra, and three elected terms as a Chicago Alderman—a Democrat who frequently quarreled with other city-elected Democrats. Unlike his predecessors, he embraced decision-making transparency through public hearings, and deserves credit for reaching out to all stakeholders, including labor—with which, unfortunately, he became too cozy on behalf of the Biden Administration.
“Most concerning as his STB term neared its end in 2023 was his increasing rhetoric reflecting a distrust of free markets and lack of understanding that profits are not entitlements for shippers and labor—a failure often seen in those without experience in signing the front of paychecks or having dealt with bankers and investors ready to choke off capital investment when alternatives shine brighter.
“For all his bark, however, there was minimal bite. Lamented by captive shippers was his deafness to requests he support imposing a revenue adequacy constraint on rate increases where railroads are market dominant; voting to terminate, as a remedy for rail market power abuse, a reciprocal switching remedy (granting a second railroad access to another’s sole-served terminal); declining to support a remedy for unreasonable fuel surcharges; permitting Class I railroads to veto STB arbitration for rate reasonableness complaints; and not advancing a rulemaking to revoke previously granted commodity exemptions from regulation as justified by market-power abuse.”
Now, Oberman releases this political endorsement populated with twisted proclamations, exaggerations and questionable “facts.” What has he really accomplished besides damaging his own reputation along with that of the STB?
“Oberman sullied the independence of the STB by attempting to transform a statutorily independent economic regulatory agency into an Executive Branch sycophant to the political aims of President Biden,” Frank Wilner observes. “His successor, Robert Primus, has shamelessly followed his mentor, actually saying his purpose in office is to ‘serve’ rail labor—railroads and other stakeholders obviously be damned.
“It is one thing to seek out, listen to and consider the concerns of rail labor—equally along with other stakeholders—but quite another to arbitrarily and aggressively tilt the playing field for the benefit of any stakeholder and act as a union hiring hall. Decidedly and distressingly, the two have etched into granite for themselves troubling legacies.
“Oberman and Primus have pinned an exclamation point on the Supreme Court’s decision overturning decades-old case law (the Chevron Doctrine) that required courts to defer to federal agencies’ reasonable interpretations of ambiguous statutes. No longer can the STB be trusted to act as a neutral following the law. As for their self-appointments as arbitrators of rail labor/management relations, notable is that in 1963, when President John F. Kennedy proposed a collective bargaining dispute be arbitrated by STB predecessor Interstate Commerce Commission, Brotherhood of Locomotive Engineers President Roy Davidson said the agency ‘has no grasp of labor-management relationships.’ That fact has not changed, nor has the STB (or the ICC before it) statutory authority to be labor-partial any more than to be management-partial.”
NARS (National Association of Railroad Shippers) recently said Oberman “is considered by many to have been the most influential Chair in the Board’s history.”
Aside from his recent partisan labor display, suggesting Oberman a more effective Chair than the late, revered Linda Morgan is disingenuous. “Morgan saw the Board through its transition from the ICC, successfully implemented scores of directives of the ICC Termination Act, piloted the Board through the difficult mergers of Union Pacific and Southern Pacific and the Conrail split, and was at the helm for nine years, compared Oberman’s three,” Wilner points out.
Comments a shipper attorney:
“There were limits on Oberman’s desire for consensus, which I don’t fault, to a point, but one should not abandon the law or one’s principles to achieve it. He dissented in the Utah Seven County line certiorari decision where his opinion was upheld in the D.C. Circuit, but I think is likely to get smacked down in the Supreme Court (relying on its 2004 Public Citizen v. DOT decision, which was the premise of the certiorari petition). He, Patrick Fuchs and Anne Begeman couldn’t find a way to render a majority decision on fuel surcharges, which led the D.C. Circuit to throw up its hands rather than remand. I still scratch my head at that one, especially if there were five Board members by then. And he seemingly fell all over himself during two days of hearings on Reciprocal Switching to say the Board needed to do something to create more rail-to-rail competition, then terminated it without explanation. When asked him why at a transportation forum, he gave a rambling, 10-minute word-salad explanation and follow-up that didn’t really explain anything—and even included the statement that he might “un-terminate” it. I don’t recall him saying he followed rail labor’s desires on that subject, but now I wonder if that’s what it really was all about.
“Agencies have the fundamental obligation to say why they are taking final agency action. I wish someone had sought judicial review of the failure to explain, after 12 years, millions of dollars expended, and tens of thousands of hours by lawyers, clients and consultants devoted to the effort. I was offended by that, and still am.
“The most troubling thing, perhaps aside from the failure to explain the Reciprocal Switching termination, is that Oberman seemed and every other Board member still seems unwilling to touch the ‘third rail’ of the revenue-adequacy constraint. If the attitude is that shippers can file complaints based on revenue adequacy, and have it decided on a case-by-case basis (as in Consumers Energy vs. CSX), well, say so! If it is, instead, a fundamental disagreement with the standard (even though it was adopted 40 years in Coal Rate Guidelines, Nationwide), well, have the courage to say so! Without that standard, the Board’s rate-reasonableness methodologies don’t work. Fuchs’ comments at the Escalation Consultants seminar on Sept. 12 were sympathetic to that concern—he shares it, about SAC (Stand-Alone Cost), SSAC (Simplified Stand-Alone Cost) and 3-B (Three Benchmark)—and used a term such as ‘turning point’ or something similar to refer to where the Board is, after FORR (Final Offer Rate Review) was smacked down. However, I do not have a clue how he would fix the problem.”
As a private citizen, Martin J. Oberman certainly has a right to endorse whoever he wants for political office, be it President of the United States, Chicago Alderman or head of the City of Chicago Department of Streets & Sanitation. But his decision to position the STB as an agency partial to labor—which effectively negates his own definition of “an independent federal agency”—and to insult a long time colleague and friend—without the palle to say his name—is truly disturbing. But I suppose that when it comes to politics, decency, humility and professionalism don’t matter very much.
La prossima volta prova a pensare prima di aprire bocca.
