Carper Critical of Amtrak Board’s Closed-Door Decision to Split Off Northeast Corridor

WASHINGTON (Oct. 25, 2005) – Sen. Tom Carper, D-Del., today criticized the Amtrak Board for its recent closed-door decision to split off the Northeast Corridor and said the Board needs to be more forthcoming with the public and the Congress. In a letter to Board Chairman David Laney, Carper, a former Amtrak Board member himself, said: “Whatever the purpose or motivation for exploring the creation of a Northeast Corridor subsidiary, this is the first step in a major structural reform that should not be attempted without the involvement of stakeholders and policymakers. Certainly, it should not be something that those of us in Congress … first learn about from the press.” Carper also noted that the current make-up of the Board puts it in a “weakened position – one that makes Board outreach to policymakers more important for your own credibility and authority, particularly when attempting to restructure the Corporation.” Currently, only three of the seven full-time Board slots are filled, and two of those are recess appointments that never underwent Senate confirmation. Carper urged the board to make approved resolutions public and to share them with Congress. In addition, Carper was critical of the resolution itself, noting that the Board’s reasoning for splitting off the Northeast Corridor – notably to make it easier to clarify costs – may be an “unnecessarily drastic step.” According to the letter, “Amtrak should be able to craft a clear method of accounting for the cost of operating various lines and corridors without having to spin off an entirely separate company to manage each one.” The full text of the letter follows: October 26, 2005 Mr. David M. Laney, Esq. Chairman Amtrak Board of Directors 60 Massachusetts Ave., NE Washington, DC 20002 Dear Chairman Laney: I am writing to express my disappointment that the Amtrak Board of Directors chose to pass a resolution to separate the infrastructure in the Northeast Corridor from the rest of Amtrak in September without notifying Congress, particularly the authorizing committees. Whatever the purpose or motivation for exploring the creation of a Northeast Corridor subsidiary, this is the first step in a major structural reform that should not be attempted without the involvement of stakeholders and policymakers. Certainly, it should not be something that those of us in Congress – particularly leaders of the committees with jurisdiction over Amtrak – should first learn about from the press. The members of the Amtrak Board of Directors are tasked with leading our national passenger railroad. They are responsible for ensuring that substantial federal resources are spent well and that the needs of the corporation and the traveling public are met. As a former member of the Board of Directors, I understand first-hand the need for strong leadership from the Board to establish a clear direction for the corporation and provide proper oversight and accountability. Without this clear direction, investors and customers quickly lose confidence in the company and its ability to perform and grow. But clear leadership cannot be provided when major decisions are made quietly and are only made public through leaks to the media. The resolution itself is problematic. You have stated that your purpose in developing this resolution is to clarify the costs associated with operating the Northeast Corridor versus other corridors and long distance trains. However, the resolution does not clearly state this as one of the goals. Moreover, creating a subsidiary company seems to be an unnecessarily drastic step to produce a more transparent accounting system. Amtrak should be able to craft a clear method of accounting for the cost of operating various lines and corridors without having to spin off an entirely separate company to manage each one. It is not only the content of the resolution but also the way the Board of Directors handled the passage of this resolution that is troubling. It stands in stark contrast to the way you and Amtrak management unveiled your strategic reform initiative in April. Before the release of the report, you personally met with me to discuss what was being considered and Amtrak staff was in regular contact with my staff. Once the plan was released, you and David Gunn made a public announcement and came to Capitol Hill together to explain your proposals and answer questions. Even for those who did not support all or parts of the plan, the fact that it was developed with input from stakeholders and announced by the Board and management together showed confidence and strength, reassuring investors, riders and policymakers alike. In striking contrast, the Board’s passage of the resolution calling for the creation of a Northeast Corridor subsidiary – something anyone familiar with Amtrak would know would set off alarm bells – was done without discussing it first with interested parties outside of the Corporation and the Administration and was never affirmatively made public. This action is particularly disquieting due to the fact that your board is far from complete. Congress created the current seven-member Board with members appointed by the President and confirmed by the Senate so that the federal government would have some oversight over the management and direction of the Corporation. The current Board has only one Senate-confirmed member, two recess appointments that will expire at the end of this Congressional session and the Secretary of Transportation. The other three seats have remained vacant now for over two years. This puts this Board in a weakened position – one that makes Board outreach to policymakers more important for your own credibility and authority, particularly when attempting to restructure the Corporation. In the future, I strongly urge the Board to make approved resolutions public or, at the very least, share them with Congress. To that end, I would appreciate it if you would share with me and my staff the minutes and the adopted resolutions from the September and October Board meetings as well for future meetings. Particularly as the Amtrak reauthorization bill moves through the Senate, it is important that lines of communication between the Board and policymakers remain open so that we can enact the best possible legislation to create a stronger national passenger railroad. With best personal regards, I am Sincerely yours, Thomas R. Carper Cc: The Honorable Norman Y. Mineta, U.S. Secretary of Transportation Mr. Enrique Sosa, member, Amtrak Board of Directors Mr. Floyd Hall, member, Amtrak Board of Directors