Union Pacific RR

=<div class="byline environment" style="background-color: rgb(255, 255, 255);"><a href="http://www.desmogblog.com/" style="color: rgb(0, 0, 0);">DeSmogBlog</a> [1] / By <a href="http://www.alternet.org/authors/justin-mikulka-and-steve-horn" style="color: rgb(0, 0, 0);">Justin Mikulka and Steve Horn</a> [2]</div><div class="story_comments" style="background-color: rgb(255, 255, 255);"><img border="0" alt="comments_image" src="http://www.alternet.org/sites/all/themes/custom/alternet/images/talk_box_environment.jpg" style="border: 0px;" /></div><div class="headline" style="background-color: rgb(255, 255, 255);"><h1 property="dc:title" datatype="" class="node-title">White House Meeting Logs: Big Rail Lobbying Against "Bomb Train" Regulations It Publicly Touts</h1></div><div class="the_body body_environment clearfix" style="background-color: rgb(255, 255, 255);"><div class="big_story_tools_bottom_container"><div class="authors_signup" /><div class="talk_box"></div><div class="clear"> </div></div><div class="clear"> </div><div class="story_tools_bottom"><div class="text-size" /><div class="story_tools_email" /><div class="story_tools_print" /><div class="story_tools_share" /></div><div style="clear: left;" /><div class="story-date">June 23, 2014  |  </div><div>The Obama <a href="http://www.whitehouse.gov/omb/inforeg_default" target="blank" style="color: rgb(0, 0, 0);">White House Office of Information and Regulatory Affairs (OIRA)</a> [3] has held the majority of its <a href="http://www.desmogblog.com/2014/06/15/obama-white-house-agency-quietly-coddling-big-oil-bomb-trains-regulations" style="color: rgb(0, 0, 0);">meetings on the proposed federal oil-by-rail safety regulations</a> [4] with oil and gas industry lobbyists and representatives.But OIRA meeting logs reviewed by DeSmogBlog reveal that on June 10, the<a href="http://www.desmogblog.com/directory/vocabulary/14825" style="color: rgb(0, 0, 0);">American Association of Railroads (AAR)</a> [5] and many of <a href="https://www.aar.org/aboutus/Pages/Our-Members.aspx%23.U583MI1dVYA" target="blank" style="color: rgb(0, 0, 0);">its dues-paying members</a> [6] also <a href="http://www.reginfo.gov/public/do/viewEO12866Meeting?viewRule=false&rin=2137-AE91&meetingId=212&acronym=2137-DOT/PHMSA" target="blank" style="color: rgb(0, 0, 0);">had a chance to convene with OIRA</a> [7]. Big Rail has <a href="http://www.csx.com/index.cfm/customers/safety-security/" target="blank" style="color: rgb(0, 0, 0);">talked a big game to the public about</a> [8] its <a href="http://bismarcktribune.com/bakken/bnsf-says-safety-first/article_f1ff5cc6-e12e-11e3-9aee-001a4bcf887a.html" target="blank" style="color: rgb(0, 0, 0);">desire for increased safety measures</a> [9] for its trains carrying oil obtained via <a href="http://www.desmogblog.com/fracking-the-future/" style="color: rgb(0, 0, 0);">hydraulic fracturing (“fracking”)</a> [10] in the<a href="http://www.desmogblog.com/directory/vocabulary/7174" style="color: rgb(0, 0, 0);">Bakken Shale</a> [11]. What happens behind closed doors, the meeting logs show, tells another story. At the June 12-13 <a href="http://www.railwayage.com/index.php/conferences/crude_by_rail.html" target="blank" style="color: rgb(0, 0, 0);">Railway Age Oil-by-Rail Conference</a> [12], just two days after rail industry representatives met with OIRA, American Association of Railroads President <a href="http://www.du.edu/transportation/faculty-board/ed-hamberger.html" target="blank" style="color: rgb(0, 0, 0);">Edward Hamberg</a> [13], former assistant secretary for governmental affairs at the <a href="http://www.dot.gov/" target="blank" style="color: rgb(0, 0, 0);">U.S. Department of Transportation (DOT)</a> [14], made the case for safety. “Railroads believe that federal tank car standards should be raised to ensure crude oil and other flammable liquids are moving in the safest car possible based on the product they are moving,” <a href="http://www.rtands.com/index.php/freight/class-1/aars-hamberger-outlines-steps-taken-to-increase-safety-at-railway-ages-crude-by-rail-conference.html?channel=277" target="blank" style="color: rgb(0, 0, 0);">said Hamberg</a> [15].“The industry also wants the existing crude oil fleet upgraded through retrofits or older cars to be phased out as quickly as possible.”Yet despite public declarations along these lines, proactive safety measures were off the table for all four of Big Rail's presentations to OIRA.  Though private discussions, the documents made public from the meeting show one consistent message from the rail industry: safety costs big bucks. And these are bucks industry is going to fight against having to spend.Massive War Room<a href="http://www.reginfo.gov/public/do/viewEO12866Meeting?viewRule=false&rin=2137-AE91&meetingId=212&acronym=2137-DOT/PHMSA" target="blank" style="color: rgb(0, 0, 0);">Those present at the June 10 OIRA meeting</a> [7] included representatives from AAR, the American Short Line & Regional Railroad Association, <a href="http://www.desmogblog.com/directory/vocabulary/8265" style="color: rgb(0, 0, 0);">Union Pacific</a> [16], <a href="http://www.desmogblog.com/directory/vocabulary/8243" style="color: rgb(0, 0, 0);">Burlington Northern Santa Fe</a> [17] (<a href="http://www.desmogblog.com/directory/vocabulary/8244" style="color: rgb(0, 0, 0);">BNSF</a> [18]), <a href="http://www.desmogblog.com/directory/vocabulary/16160" style="color: rgb(0, 0, 0);">CSX Corporation</a>[19], <a href="http://www.desmogblog.com/directory/vocabulary/13324" style="color: rgb(0, 0, 0);">Norfolk Southern</a> [20] and the DOT.Akin to the gargantuan war room in the film “Dr. Strangelove,” 26 people took part in the session. Invitees included <a href="http://phmsa.dot.gov/portal/site/PHMSA/menuitem.6f23687cf7b00b0f22e4c6962d9c8789/?vgnextoid=6597df9cbd1a0110VgnVCM100000762c7798RCRD&vgnextchannel=816f143389d8c010VgnVCM1000008049a8c0RCRD&vgnextfmt=print" target="blank" style="color: rgb(0, 0, 0);">Meredith Kelsch</a> [21], senior attorney for DOT; <a href="http://www.linkedin.com/pub/orest-dachniwsky/10/666/296" target="blank" style="color: rgb(0, 0, 0);">Orest Dachniwsky</a> [22], associate general counsel for BNSF; <a href="http://www.linkedin.com/pub/robert-schmidt/70/443/a22" target="blank" style="color: rgb(0, 0, 0);">Robert Schmidt</a> [23], senior manager of operations and casualty analysis for Union Pacific; and <a href="http://www.linkedin.com/pub/richard-theroux/13/a/519" target="blank" style="color: rgb(0, 0, 0);">Richard Theroux</a> [24], who has worked at the <a href="http://www.whitehouse.gov/omb" target="_blank" style="color: rgb(0, 0, 0);">Office of Management and Budget</a> [25] — parent of OIRA — for nearly three decades.“19th Century Technology”The heading on the first slide of <a href="http://www.desmogblog.com/sites/beta.desmogblog.com/files/20140610135826983.pdf" style="color: rgb(0, 0, 0);">CSX’s presentation for OIRA</a> [26] stated, “ECP brakes are expensive and do not offer material safety advantages.”</div></div>

Donohue has served on the boards of several companies that are among the Chamber's most influential members, including Union Pacific railroad, which has given the Chamber $500,000 since 2006. Since 1998, Donohue has earned roughly $2 million in income and up to $2.2 million in stock and options from the railroad, which gets 40 percent of its business from hauling coal and staunchly opposes the Waxman-Markey climate bill. He's expected to abide by a company policy that prevents him from acting in a way that is "inconsistent with the company's best interests." The Chamber has no similar conflict-of-interest policy.

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The financial powers behind the Republican Party in 1860 were the Northern railroad barons, Northern manufacturers who wanted protectionist tariffs to protect them from competition, and Northern bankers and investors like Jay Cooke who wanted to use their political connections to make a killing financing a transcontinental railroad (among other schemes, such as central banking). They decided at the Chicago Republican National Convention of 1860 that Abraham Lincoln was the perfect political front man for their corrupt, mercantilist agenda.

The Great Railroad Lobbyist

From the time he entered politics in 1832, Abraham Lincoln aspired to such a position. That is why he became a Whig, the party of the moneyed elite. Lincoln was one of the most money- and power-hungry politicians in American history. (Indeed, this would seem to be a prerequisite for anyone who is capable of being elected president).

As soon as he entered the Illinois legislature he led his local delegation in a successful Whig Party effort to appropriate some $12 million in taxpayer subsidies for railroad and canal-building corporations. In his landmark book, <a href="http://www.amazon.com/exec/obidos/ASIN/0405138172/lewrockwell/">Lincoln and the Railroads</a>, first published in 1927 and reprinted in 1981 by Arno Press, John W. Starr, Jr. noted how one of Lincoln's colleagues in the legislature said "He seemed to be a born politician. We followed his lead . . . " And they followed Lincoln down a road that would nearly bankrupt the state of Illinois. The $12 million was squandered: Almost no projects were completed with it; much of the money was stolen; and the taxpayers of Illinois were put deep into debt for years to come.

Lincoln's "internal improvements" fiasco in Illinois promised to build "a railroad from Galena in the extreme northwestern part of the state." Above St. Louis, in Alton, "three [rail]roads were to radiate"; "There was also a road to run from Quincy . . . through Springfield"; another one "from Warsaw . . . to Peoria"; and yet another "from Pekin . . . to Bloomington" (Starr, pp. 25—26). The first road mentioned was to become the Illinois Central, which would later employ Lincoln for more than a decade as one its top lawyers.

Lincoln and the Whigs saw to it that "the Assembly also voted wildly and injudiciously in the matter of banking legislation," urging the legislature to print paper money to help finance what his personal secretaries, Nicolay and Hay, would later say was "a disaster to the state." Lincoln's law partner, William Herndon, described the whole debacle as "that sanguine epidemic of financial and industrial quackery which devastated the entire community" (p. 28). The whole scheme was eventually abandoned, and taxes were raised sharply on the hapless Illinois taxpayers to pay off the debt.

The 1837 internal improvements debacle in Illinois may have been a disaster for the public, but it helped catapult a young Abraham Lincoln into position as one of the top — if not the top — lawyer/lobbyists in the country for the railroad corporations.

By 1860 the Illinois Central Railroad was one of the largest corporations in the world. In a company history, J. G. Drennan noted that "Mr. Lincoln was continuously one of the attorneys for the Illinois Central Railroad Company from its organization [in 1849] until he was elected President" (Starr, p. 58). He was called on by the company's general counsel to litigate dozens of cases. He was such a railroad industry "insider" that he often rode in private cars and carried a free railroad pass, courtesy of the Illinois Central.

Lincoln successfully defended the Illinois Central against McLean County, Illinois, which wanted to tax the corporation, for which he was paid $5,000, an incredible sum for a single tax case in the 1850s. The man who paid him the fee was George B. McClellan, the vice president of the Illinois Central who in 1862 would become the commanding general of the Army of the Potomac and, later, Lincoln's opponent in the 1864 election. Starr explains the dishonest ruse that was apparently used by Lincoln and McClellan to trick the Illinois Central's New York City-based board of directors to go along with such an unprecedented fee to a "country lawyer" from Illinois.

McClellan would formally refuse to pay such a large fee, making his directors happy. Then Lincoln would sue the Illinois Central for the fee. But when Lincoln went to court over the fee (armed with depositions from other Illinois lawyers that such astronomical fees were perfectly appropriate!) no lawyers for the company showed up and he won by default. Proof that this was all a ruse lies in the fact that "Lincoln . . . continued to handle [the Illinois Central's] litigation afterwards, the same as he had done before" (p. 79).

By the late 1850s, writes Starr, it was widely known that "Lincoln's close relations with powerful industrial interests" are "always potent and present in political counsels" (p. 67). In today's language, he was the equivalent of a powerful, rich and politically influential "K Street lobbyist." He often traveled "with a party of officials of the Illinois Central company. He rode in a private car, on his own pass furnished him in his capacity as attorney for the company." This "greatly impressed some of the young Republican leaders . . ." This was the real Lincoln, and it is diametrically opposed to the image of the modest, backwoods "rail splitter" that the court historians have created.

In a masterpiece of understatement, Starr comments that "Lincoln's rise [in politics] was coincident with that of the railroads" (p. 80). In addition to working for the Illinois Central, Lincoln also represented the Chicago and Alton, Ohio and Mississippi, and Rock Island Railroad corporations. As soon as the Chicago and Mississippi Railroad was built, he was appointed as the local attorney for that company as well. By 1860 Lincoln was the most prominent attorney/lobbyist the railroad industry had. He was so prominent that the New York financier Erastus Corning offered him the job of general counsel of the New York Central Railroad at a salary of $10,000 a year, an incredible sum at the time. Lincoln turned down the offer after agonizing over it.

Lincoln also used his status as one of the top political insiders within the railroad industry to engage in some very lucrative real estate investments. On one of his trips in a private rail car accompanied by an entourage of Illinois Central executives Lincoln "decided to go to Council Bluffs, Iowa, where he had some real estate investments" (p. 152). "Shortly before his trip to Council Bluffs," writes Starr, "Abraham Lincoln had purchased several town lots from his fellow railroad attorney, Norman B. Judd, who had acquired them from the Chicago and Rock Island Railroad. Council Bluffs at this time was a frontier town, containing about fifteen hundred people" (p. 195). To this day, this land in Council Bluffs, Iowa is known as "Lincoln's Hill."

Why invest in real estate in Council Bluffs, Iowa, of all places? Why not Chicago or even Springfield, the state capital? Because Lincoln the political insider knew that there was a very high likelihood that 1) the federal government would eventually subsidize a transcontinental railroad; and 2) the starting point for that railroad could well be in the vicinity of Council Bluffs. If so, the value of his real estate holdings would be wildly inflated and he would make a killing.

Indeed, the 1860 Republican Party Platform contained a sixteenth plank that read: "That a railroad to the Pacific Ocean is imperatively demanded by the interests of the whole country; the Federal Government ought to render immediate and efficient aid in its construction . . ." As the party's nominee, Lincoln pledged his wholehearted support of this plank. In the interests of "the whole country," of course.

When he became president legislation was immediately proposed, in a special legislative session called by Lincoln in July of 1861, to create the taxpayer-subsidized Union Pacific Railroad. "There was no firmer friend of the Union Pacific bill than the President himself," writes Starr. (In contrast, most mainstream "Lincoln scholars" make the preposterous assertion that he had nothing to do with such legislation). The bill was passed in 1862 and it gave the president the power to appoint all the directors and commissioners and, more importantly, "to fix the point of commencement" of the Union Pacific Railroad. And guess where Lincoln chose to fix the point of commencement of the railroad. He "fixed the eastern terminus of the Union Pacific Railroad . . . at Council Bluffs, Iowa" (p. 202). His financial gains must have dwarfed Corning's $10,000 salary offer. During the Grant administrations dozens of prominent people would go to federal prison for such criminal self-dealing but Lincoln, the ringleader of the whole enterprise, has up to now escaped scrutiny.

In addition to lining his own pockets with this piece of legislation, proving to his well-heeled supporters that he was indeed "one of them," the legislation was essentially the Mother of all Political Payoffs. One hundred fifty-eight of the prominent Northern bankers, industrialists, and railroad barons who had supported Lincoln's political career were appointed as "commissioners." As Dee Brown wrote in <a href="http://www.amazon.com/exec/obidos/tg/detail/-/0805068929/lewrockwell/">Hear that Lonesome Whistle Blow: The Epic Story of the Transcontinental Railroads</a>, when Lincoln signed the bill creating the Union Pacific he "assured the fortunes of a dynasty of American families . . . Brewsters, Bushnells, Olcotts, Harkers, Harrisons, Trowbridges, Langworthys, Reids, Ogdens, Bradfords, Noyeses, Brooks, Cornells, and dozens of others . . ." (p. 49).

<a href="http://www.lewrockwell.com/dilorenzo/dilorenzo53.html">http://www.lewrockwell.com/dilorenzo/dilorenzo53.html</a>

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http://www.jstor.org/pss/40188045