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87–972 PDF 2003

S. HRG. 107–968

NOMINATIONS OF MR. DAVID MCQUEEN LANEY

TO BE A MEMBER OF THE REFORM BOARD

(AMTRAK) AND MR. ROGER P. NOBER TO BE

COMMISSIONER OF THE SURFACE

TRANSPORTATION BOARD

HEARING

BEFORE THE

COMMITTEE ON COMMERCE, 

SCIENCE, AND TRANSPORTATION 

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

SEPTEMBER 5, 2002

Printed for the use of the Committee on Commerce, Science, and Transportation

(

(II)

COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

ERNEST F. HOLLINGS, South Carolina, Chairman 

DANIEL K. INOUYE, Hawaii 

JOHN D. ROCKEFELLER IV, West Virginia 

JOHN F. KERRY, Massachusetts 

JOHN B. BREAUX, Louisiana 

BYRON L. DORGAN, North Dakota 

RON WYDEN, Oregon 

MAX CLELAND, Georgia 

BARBARA BOXER, California 

JOHN EDWARDS, North Carolina 

JEAN CARNAHAN, Missouri 

BILL NELSON, Florida 

JOHN McCAIN, Arizona, Ranking Republican 

TED STEVENS, Alaska 

CONRAD BURNS, Montana 

TRENT LOTT, Mississippi 

KAY BAILEY HUTCHISON, Texas 

OLYMPIA J. SNOWE, Maine 

SAM BROWNBACK, Kansas 

GORDON SMITH, Oregon 

PETER G. FITZGERALD, Illinois 

JOHN ENSIGN, Nevada 

GEORGE ALLEN, Virginia

KEVIN D. KAYES, Democratic Staff Director 

JEANNE BUMPUS, Republican Staff Director and General Counsel 

(III)

C O N T E N T S 

Page 

Hearing held on September 5, 2002 ....................................................................... 1 

Statement of Senator Breaux ................................................................................. 1 

Statement of Senator Dorgan ................................................................................. 4 

Statement of Senator Hutchison ............................................................................ 3 

Statement of Senator Wyden .................................................................................. 6 

WITNESSES

Baucus, Hon. Max, U.S. Senator from Montana ................................................... 2 

Nober, Roger P., Nominee to be Commissioner of the Surface Transportation 

Board ..................................................................................................................... 8 

Prepared statement .......................................................................................... 9 

Biographical information ................................................................................. 10 

Laney, David M., Nominee to be a Member of the Reform Board (Amtrak) ...... 16 

Prepared statement .......................................................................................... 17 

Biographical information ................................................................................. 17 

Petri, Hon. Tom, U.S. Representative from Wisconsin ......................................... 3 

Warner, John W., U.S. Senator from Virginia ...................................................... 2

APPENDIX

Burns, Hon. Conrad, U.S. Senator from Montana, prepared statement ............. 31 

Response to Written Questions Submitted by Hon. Ernest F. Hollings to: 

David McQueen Laney ..................................................................................... 34

Response to Written Questions Submitted by Hon. John McCain to: 

David McQueen Laney ..................................................................................... 32

Roger P. Nober .................................................................................................. 34

Response to Written Questions Submitted by Hon. Conrad Burns to: 

Roger P. Nober .................................................................................................. 36

(1)

NOMINATIONS OF MR. DAVID MCQUEEN 

LANEY TO BE A MEMBER OF THE REFORM 

BOARD (AMTRAK) AND MR. ROGER P. NOBER 

TO BE COMMISSIONER OF THE SURFACE 

TRANSPORTATION BOARD 

THURSDAY, SEPTEMBER 5, 2002

U.S. SENATE, 

COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, 

Washington, DC. 

The Committee met, pursuant to notice, at 2:30 p.m. in room 

SR–253, Russell Senate Office Building, Hon. John B. Breaux, presiding. 

OPENING STATEMENT OF HON. JOHN B. BREAUX,

U.S. SENATOR FROM LOUISIANA 

The CHAIRMAN. The hearing will come to order. 

This afternoon, the Commerce Committee will hear from two 

nominees to become board members of the Surface Transportation 

Board, as well as the Amtrak Reform Board. 

I will ask the candidates to please take their seats at the witness 

table, in which case we will do both of them consecutively. 

I am very pleased to welcome and also recommend Mr. Roger 

Nober and Mr. David Laney to our Committee. I think the two candidates present good credentials in transportation, law, education 

and politics. As a veteran of the House Transportation and Infrastructure Committee, Mr. Nober’s knowledge and background will 

serve him well as he moves through the confirmation process and 

into his new role as a Surface Transportation Board member. As 

former Chair of the Texas Transportation Commission, Mr. Laney 

is up to the task of serving on the Amtrak Reform Board as a member. 

We do not want to in any way downplay the host of challenges 

awaiting both of our nominees to these respective positions. We 

will talk about some of our concerns in a moment about both of 

these areas, both surface transportation and Amtrak, but I note 

that we have a number of our colleagues who are with us this 

afternoon to make comments about our nominees, and I am delighted to recognize them. 

One is the Chairman of the Finance Committee, my Chairman, 

so I will recognize him first, because you are Chairman of my Committee and your name starts with a ‘‘B’’, Max Baucus. Max, welcome. 

2

STATEMENT OF HON. MAX BAUCUS,

U.S. SENATOR FROM MONTANA 

Senator BAUCUS. Thank you, Mr. Chairman. Thank you. We are 

in strong support of the nominee. Mr. Chairman, I am honored to 

be here today to support someone for whom I have a tremendous 

respect. I have worked closely with the nominee for many, many 

years, particularly when he was over working for Bud Schuster, 

and I have to tell you, I have the highest regard for him. 

Last week, I sent a letter to the Committee urging the Committee to confirm Roger Nober as a member of the Surface Transportation Board, and I am very honored to be here with my colleague, who has a very deep interest in surface transportation 

issues, and I am just thrilled, frankly, that he will be named Chairman of that Commission by the President 

Now, why am I so pleased? Roger is from Massachusetts. I am 

from Montana. Roger is Republican. I am a Democrat. But in the 

transportation field, there is an old saying that there are no Republican bridges, there are no Democratic roads, or vice versa, and I 

think Roger is really proof of that. I work seamlessly with Roger’s 

boss, as I mentioned, Bud Schuster. Roger had a great working relationship, it could not have been better, in working with my office 

and my staff along with Senator Warner and Congressman Tom 

Petri and others who are interested in surface transportation 

issues. It is just first class. 

He has been a kindred spirit and is an outspoken defender of the 

Highway Trust Fund and a proponent of the importance of transportation in general. I might say, I am particularly interested because of our unique problems in Montana. We have a transportation situation that is similar to many other problems of many 

other states, and that is with respect to our grain growers and 

shippers who are having a tough time making ends meet and working out good deals with the railroads to get their products to market. Senator Burns, my colleague and a Member of this Committee, 

and I introduced a bill to try to deal with these problems. I know 

Roger is fairly sympathetic, and so I will not take any more of the 

Committee’s time. 

I commend the Committee to act very quickly and forthrightly on 

the nomination. I commend the President for his well-thought-out 

selection and, Mr. Chairman, it is with the highest regard that I 

support, along with my colleagues, and introduce to this Committee 

Roger Nober, because he is, I think, going to be a great credit, 

frankly, to this Nation. 

The CHAIRMAN. Thank you very much, Senator Baucus and, of 

course, I thank our colleagues, who would be excused if they so desire, after they make their comments. 

Next on Mr. Nober’s behalf, Senator Warner. 

STATEMENT OF HON. JOHN W. WARNER,

U.S. SENATOR FROM VIRGINIA 

Senator WARNER. I thank you, Mr. Chairman and Members of 

the Committee. That was a beautiful introduction, given by my 

long-time friend and fellow colleague in the world of transportation 

and other things, Max Baucus. Out of deference to you, I am not 

3

going to read my prepared statement, because I could not do any 

better, or make it any more heartfelt. 

This is an incredible individual here, because I at that time was 

Chairman of this Subcommittee on our Committee, and Senator 

Baucus, Senator Chafee and I, the three of us worked as a team 

with your former Chairman, and you, my good friend, and we put 

together one of the most historic pieces of legislation that I have 

been privileged to work on in my 24 years in the Senate. That was 

TEA-21, and Roger, you did a wonderful job. I think at this point 

maybe we ought to ask Roger to introduce his lovely family, who 

are right behind him. 

The CHAIRMAN. We will give him a chance just as soon as we 

hear from all of our colleagues. Then we will have him introduce 

his family. Thank you very much, Senator Warner. 

Senator WARNER. Thank you very much. 

The CHAIRMAN. Our friend and colleague from the other side, 

Tom Petri. Congressman. 

STATEMENT OF HON. TOM PETRI,

U.S. REPRESENTATIVE FROM WISCONSIN 

Mr. PETRI. Thank you. I would like to, on behalf of my colleagues, certainly in my own role as Chairman of the House Surface Transportation Subcommittee, support the candidacy of Roger 

Nober, who was our Subcommittee General Counsel, and then the 

Full Committee General Counsel, who has a distinguished academic and professional career. He is an outstanding family man 

and is a very bright individual with tremendous judgment. I think 

our country is fortunate to have a person of his caliber who is willing to serve as a member of the Board to which he is nominated, 

and so I would urge his thoughtful consideration. 

The CHAIRMAN. You all trained him well over there. 

Mr. PETRI. Yes. 

The CHAIRMAN. Thank you again, and our colleagues, if they 

have other things they need to attend to, they certainly would be 

excused. 

To introduce and present Mr. David Laney to be a member of the 

Amtrak Reform Board, our colleague on this Committee and from 

Texas, Senator Kay Bailey Hutchison. 

STATEMENT OF HON. KAY BAILEY HUTCHISON,

U.S. SENATOR FROM TEXAS 

Senator HUTCHISON. Thank you, Mr. Chairman. I appreciate 

your holding this hearing because I would like to see David Laney 

get through the Senate before the recess. We all know that Amtrak 

is facing many crises. It seems like every week we wake up to a 

new one, and I cannot think of anyone more qualified to sit on the 

Amtrak Board than David Laney. 

David graduated from Stanford University and received his law 

degree from SMU, Southern Methodist University. In Dallas, he 

has been a managing partner of Jenkins and Gilchrist, a very prestigious national law firm, and for 12 years he also served as a gubernatorial appointee in Texas. He was appointed to the Texas Finance Commission and later to the Texas Transportation Commission. 

4

As Chairman of the Texas Transportation Commission, he functioned basically as the CEO of the Texas Department of Transportation. That is a major state agency in Texas, with 14,000 employees and a $5 billion annual budget. As you might know, coming 

from Louisiana, we have great highways in Texas and we have 

more of them than any other state in America, so this really has 

given David Laney a lot of experience in managing a big agency. 

I cannot think of an agency that needs management more than 

Amtrak. 

Now, that is not to say he is going to replace the CEO, but certainly the CEO needs a lot of help from the Board and from experienced business people. I am a supporter of Amtrak and I have 

worked with Members of this Committee to support Amtrak, but 

we cannot keep putting Band-Aids on Amtrak. We need to recognize that Amtrak is a national passenger rail system that serves 

a vital function as one of our types of intermodal transportation. 

I hope that we will be able, through good people like David Gunn 

and like David Laney, to save Amtrak and put it on a course where 

it can succeed, grow, and attract the passengers that it would if it 

were on a solid financial footing. I think the important thing is 

looking for ways to assure solid financial footing in order to make 

it a strong national system. 

You know, after 9/11, a lot of people took Amtrak, and they were 

looking for alternative modes of transportation to air. I think now 

that almost a year has passed, we know that rail should be a permanent part of our intermodal transportation system in America, 

and I cannot think of anyone more qualified to be helpful in that 

regard than David Laney. So I recommend him to you, and I hope 

that you can swiftly confirm him. 

The CHAIRMAN. Thank you very much, Senator Hutchison, for 

your participation and assistance in these very important areas. 

Before we hear from our two nominees and give them a chance 

to make an opening statement and introduce their families or associates that are with them, I would like to recognize any of our 

Committee Members for any comments they may have. 

Senator Dorgan. 

STATEMENT OF HON. BYRON L. DORGAN,

U.S. SENATOR FROM NORTH DAKOTA 

Senator DORGAN. Mr. Chairman, thank you very much. Let me 

first say that I intend to support the nomination of Mr. Laney and 

Mr. Nober. I think they are good candidates. I want them to do 

well. I am going to be pleased to vote for their confirmation on the 

floor of the U.S. Senate. 

I want to say one other thing, just as a prelude. I would not put 

a hold on their nominations and will not do that. I believe that 

these positions are important. We need these people confirmed. We 

have, since last September, had an opening on the Democratic seat 

on the Federal Communications Commission, the FCC. There was 

a name advanced for that last November. That person is not yet 

confirmed, and I think it is an outrage. I say to those who hold 

these things up that we need that rural voice on the Federal Communications Commission, and we need it now, but I am not going 

to hold up other nominations because of it. I think it is unfair and 

5

would not do that. But I say to my colleagues who do hold up these 

nominations, we need that person on the FCC right now. Jonathan 

Adelstein has been nominated. His nomination is before the Senate. This thing has been open a year. It is an outrage and a shame. 

Mr. Chairman, I hope you will agree with me that—and this is not 

anything we have been involved in—we need to find our colleagues 

on the Senate who are holding these up, and say to them that we 

are not going to hold your nominations up; and we do not expect 

you to hold ours up. 

Now, having said all that, Mr. Laney, the Amtrak issue is a very 

important issue to me and to many Members of the U.S. Senate, 

and I am a strong believer in having a national rail passenger system. I want to be working with all the folks who are interested in 

that. The two of you would be on the board, as I understand it, so 

I am pleased to support your nomination. 

Mr. Nober, I want to make a comment to you, a couple of comments, because it is therapeutic for me, and I think it is important 

for you. Linda Morgan is the former Chairman of the Surface 

Transportation Board. You were one of the people instrumental in 

actually abolishing the ICC, an agency that I said was dead from 

the neck up for at least a decade, or perhaps more, in the creation 

of the Surface Transportation Board, which you now aspire to lead. 

Linda Morgan, I think I indicated this to her, the one action they 

took that symbolically and also substantively was very important, 

and took some guts was to establish a moratorium on mergers. 

They used some authority that some people question to do that, but 

we have a massive problem in rail transportation in a state like 

North Dakota. 

You and I had a long visit about this yesterday, but we have testimony from people who tell us about what is happening with rail 

rates, it is an outrage, and we need help from the Surface Transportation Board. I am going to vote for you. You have a great background. You have a reputation of working in a bipartisan way to 

solve problems. If you do not have authority to solve problems, I 

want you to come to us and tell us what authority you need and 

let us work with you to get you that authority. 

It is not fair for farmers in North Dakota or grain elevators in 

North Dakota to pay $2,400 to ship a carload of wheat that the 

same shippers over in Minneapolis will pay $1,000 to ship for the 

same distance from Minneapolis to Chicago versus Bismarck-Minneapolis. That is not fair. That is price fixing, and $100 million is 

taken out of the hides of my constituents by railroads that are fixing prices. That is according to our own Public Service Commission. 

That is not me, and I could go on and on. I went on and on with 

you yesterday. This is not your fault, but it is your charge to help 

us fix it, and I hope you aspire to this job to help us solve some 

problems. 

Railroads are fine. I like the railroads, I just do not like their 

pricing strategy. I do not think this notion of having free and fair 

and open competition, this system of capitalism of ours, is working. 

We do not have competition in most areas of North Dakota with 

respect to railroads, we have a monopoly. They say, ‘‘Here is our 

price and here is where we will stop. If you want to get on, get on 

6

at that point and put your products on. If you do not like it, tough 

luck, find some other avenue of transportation.’’ I am not willing, and neither are my colleagues, Senator Rockefeller and others, to sit idly by and say that is all right. It is not 

all right as far as I am concerned. It is not all right for our farmers, our Main Street business people, or our country grain elevators. 

Having said all that—and you need to hear that, because you 

will hear a lot from myself and others on this Subcommittee and 

Full Committee about it—I will be happy to support your nomination, and I expect that is your family behind you. I cannot stay for 

the entire proceeding today because of another commitment, but 

are those your two sons? 

Mr. NOBER. Yes, sir, and my wife, Jane. 

Senator DORGAN. I know the Chairman will ask you to introduce 

them more formally, but it is nice to see your family with you as 

well. Thank you very much, and Mr. Laney, thank you. 

The CHAIRMAN. Thank you. 

Senator Wyden. 

STATEMENT OF HON. RON WYDEN,

U.S. SENATOR FROM OREGON 

Senator WYDEN. Thank you, Senator Breaux. I appreciate your 

scheduling this in a timely way, and just a few comments for each 

of our nominees, because I, too, am only going to be able to be here 

briefly. 

Let me also say, I have only heard positive things about both of 

you individuals, and certainly it is my intent to support both of 

you, but let me just share briefly with you several concerns I have. 

Mr. Laney, last April I released a General Accounting Office report showing that Amtrak’s process for making route decisions is 

fundamentally flawed. I hope that you are familiar with the report, 

but I think what the New York Times said in summing it up is 

pretty clear. They said, and I will quote here: ‘‘Amtrak set out to 

make major changes in its trains without knowing what the 

changes would cost or how much business they would generate.’’

The General Accounting Office said not only did Amtrak make 

bad decisions, they simply did not do their homework. They did not 

get the essential information that is necessary to make informed 

choices, so as a result, a variety of their strategies have been derailed. Only 3 of 15 route decisions proposed in Amtrak network 

growth strategies have been implemented, and already one of those 

three routes has been abandoned. As I am sure you are aware, this 

is not the first time the General Accounting Office has been extremely critical of the way Amtrak goes about finding these routes. 

In 1997, the General Accounting Office found that when Amtrak 

cuts routes in an effort to save costs, it cut routes such as the Pioneer from Chicago to Portland that, in fact, had better financial 

performance than other routes that Amtrak maintained. You will 

hear me talk at some length about this when we have debates 

about Amtrak. 

I am prepared to make these calls on the merits, and if we want 

to say to the General Accounting Office, ‘‘You make calculated decisions with respect to the objective criteria for making route deciVerDate Apr 24 2002 13:50 Aug 06, 2003 Jkt 087972 PO 00000 Frm 00010 Fmt 6601 Sfmt 6601 S:\WPSHR\GPO\DOCS\87972.TXT SCOM1 PsN: CAROLT
7

sions.’’ I am for it; we will take the consequences in Oregon and 

everywhere else. What I am not willing to accept is the politicizing 

of the way these routes are made, and in the last 5 years Amtrak 

has basically jumped track enough times to make your head spin. 

First, they thought cutting routes would be their financial salvation. That is when they made the political choice that eliminated 

the Pioneer route. Then, 3 years later, they decided that expanding 

routes would make them self-sufficient. Now, they are back to cutting routes once again. It seems to me that what is especially damaging here is that there is no predictability, certainty, or consistency. So I am anxious to hear particularly your views on what you 

will do to get Amtrak decisions on routes made on the merits. We 

can have a debate about how to do that, and whether it ought to 

be assigned to the General Accounting Office or whoever. But I am 

going to do everything in my power as a Member of this Committee 

to get these calls made on the merits, because I think to do otherwise just flouts any effort at rational transportation policy. 

Mr. Nober, just a couple of comments. As you might gather, the 

wheat growers and the agricultural interests in our part of the 

world are very hard hit; it’s been a very difficult year. They have 

concerns about rail-to-rail competition, how it is limiting service options and raising rates, or in some cases driving them off the rails 

altogether. I think what we would like to get today, and in the days 

ahead, is a sense of how you would balance the use of our national 

transportation infrastructure and the appropriate role of competition among railroads for the future. 

You have got 19 short line railroads in our part of the world. 

Many short lines can physically interchange with both UP and 

BNSF, and they are prevented from determining which routing decisions are best for their customers by either economic or contractual conditions imposed by the companies, depending upon which 

of the Class I carriers originally sold off the branch line to the independent short lines. So in light of all the consolidation and the fact 

that short lines are the most immediate means by which some of 

the competition is brought to bear, I think we are going to be interested in knowing your views regarding the appropriateness of Class 

I carriers determining what route the short line carrier can offer 

to the customers through their methods. 

But again, I have heard only positive things about both of you. 

I am looking forward to supporting you in the Committee and on 

the floor, and suffice it to say, the jobs in which you are nominated 

to serve are not for the faint-hearted. You are going to be busy people, and these are important issues. 

I thank you, Mr. Chairman, for the chance to make some remarks. 

The CHAIRMAN. Thank you, Senator Wyden. You have heard 

from us. It is now time for us to hear from you. 

Mr. Nober, we would like to go with you first. Your family is 

waiting out there very patiently with two youngsters who have 

been behaving quite well, and having grandchildren about that age 

I know how difficult that is. We welcome you, and we will take 

your testimony first. 

8

STATEMENT OF ROGER P. NOBER, NOMINEE TO BE 

COMMISSIONER OF THE SURFACE TRANSPORTATION BOARD 

Mr. NOBER. Thank you, Senator Breaux, Members of the Committee. I very much appreciate your taking the time to hold this 

hearing today and hear from me. I would like to start by introducing my family, who seem to be sitting very well, which is always a struggle. My wife Jane is there. She is in her ninth month 

of pregnancy with our third child, and our other two children are 

here, William and Benjamin. William has the white shirt, and Benjamin the blue shirt, and my parents Linda and Harris Nober are 

also here. Thank you very much for holding this hearing today, 

early in September, because it allowed my family to be here. We 

were nervous as to when my wife might actually give birth. She is 

scheduled to give birth in the next 2 weeks. 

The CHAIRMAN. If she has to leave before we finish, please feel 

free to let her go. 

[Laughter.] 

Mr. NOBER. It will be a trick to get that to happen. 

I am pleased to appear before this Committee today as President 

Bush’s nominee to the Surface Transportation Board. I would like 

to make a very brief oral statement, and ask that my full remarks 

be included in the record. 

I would like to take a moment to thank Senators Warner and 

Baucus and Congressman Petri for the kind introductions, and for 

taking time out of their busy schedules to come and attend this 

hearing. I would also like to thank Transportation Secretary Mineta and Deputy Secretary Jackson for their support. They unfortunately could not be here today. 

I appear before this Committee today as President Bush’s nominee to the Surface Transportation Board. The President has indicated that if I am confirmed he will designate me as Chairman. 

The STB is an independent agency, and the President has nominated me to implement the portion of the national transportation 

policy under his jurisdiction effectively, impartially, and fairly. 

I am particularly pleased to be nominated to this position since, 

as a staff member in the House, I had the privilege to work on the 

legislation that created this agency back in 1995. Since then, I 

have continued to work closely with the Board, the Members of the 

House and Senate, and the Board’s stakeholders on the matters 

that it oversees. If confirmed, I will be able to continue my many 

years of public service in transportation policy. 

I was a staff member on the House Transportation and Infrastructure Committee for 8 years, ultimately serving as Chief Counsel. Since May of last year, I have been counselor to Deputy Secretary Jackson at DOT, where I advised him and Secretary Mineta. 

In performing my duties, I have always given the full consideration 

to the input of all parties. I have worked hard to reach consensus 

wherever possible in a fair and bipartisan manner, and if confirmed I would continue to do so as a member of the Board. 

The STB is an independent adjudicatory body and, if confirmed, 

you can be sure that I will give all the issues that come before it 

full, fair, and impartial consideration. I would not take office with 

any preconceived notions but, rather, would examine each issue on 

its merits and strive to make the best decision possible consistent 

9

with the facts, the law, and precedent. If I am confirmed, those 

who bring matters before the Board may not agree with every position that I take, but can be sure that I will give all matters 

thoughtful, fair, impartial and full consideration. 

If confirmed, I would work closely with Congress. I worked for 

this institution for many years, and have the utmost respect for the 

letter and spirit of the laws it passes. I believe it is important to 

be open and accessible to all Senators and Members of Congress 

and their staffs. Similarly, I believe it is important to be open and 

accessible to the agency’s stakeholders and, if confirmed, I would 

have an open door policy to the extent permitted. 

Finally, I would like to take a minute just to recognize the accomplishments of the current Chairman of the STB, Commissioner 

Linda Morgan. She has led the agency for the past 8 years, and her 

tenure has included some trying times for that organization. I hope 

that if I am confirmed and appointed Chairman, I will at least be 

partially as effective as she has been, and I look forward to the opportunity to serve with her and Commissioner Burks, both of whom 

were kind enough to be in attendance today. 

In closing, I hope you give me the opportunity to serve the public 

as a member of the STB, and I thank you for your consideration 

and look forward to answering any questions you might have. 

[The prepared statement of Mr. Nober follows:]

PREPARED STATEMENT OF ROGER P. NOBER, NOMINEE TO BE COMMISSIONER OF THE

SURFACE TRANSPORTATION BOARD

Thank you Chairman Breaux and Ranking Member Smith. I am pleased to appear before this Committee today as President Bush’s nominee to the Surface Transportation Board (STB). 

I want to thank Senators Warner and Baucus and Congressman Petri for their 

kind introductions. I have had the honor of working with them over the past 9 years 

and am deeply grateful to them for their kind words. I would also like to thank 

Transportation Secretary Mineta and Deputy Secretary Jackson. I have had the 

privilege of working for them over the past 15 months and I appreciate their support for my nomination. 

I would also like to express my appreciation to the Committee for holding this 

hearing early in September. My wife Jane is pregnant with our third child and due 

to deliver later this month. She is in the audience today and easy to find. By scheduling this hearing today the Committee has made it possible for her, my children, 

William and Benjamin, and my parents Linda and Harris Nober to all be here. 

I appear before this Committee today as President Bush’s nominee to the STB. 

The President has indicated that if I am confirmed, he would designate me as 

Chairman of the STB. The STB is an independent agency, and the President expects 

that if confirmed, I will implement the portion of the national transportation policy 

under its jurisdiction effectively, impartially and fairly. 

I am particularly pleased that the President has nominated me to serve as a 

member of the STB, since, as a staff member in the House, I had the privilege to 

work on the legislation that created it. As all of you know, the Interstate Commerce 

Commission Termination Act of 1995 eliminated the ICC and created the STB. I 

was the lead staff member of the House Committee on Transportation and Infrastructure with respect to trucking and pipeline issues on that bill. Since then, I have 

continued to work closely with the Members of the Board, the Members of this Committee and the Board’s stakeholders on matters under its jurisdiction. 

I am committed to public service, and if you confirm me as a Member of the STB, 

you will allow me to continue my many years of public service in transportation policy. I was a staff member for the House Committee on Transportation and Infrastructure for 8 years, ultimately serving as Chief Counsel of that Committee. Since 

May of 2001, I have served as Counselor to Deputy Secretary Michael Jackson at 

the Department of Transportation where I have advised him and Secretary Mineta, 

particularly on the broad range of policy issues facing the Department since the 

September 11 terrorist attacks. In these positions, I have been deeply involved in 

10

transportation policy matters of all types. In performing my Congressional duties, 

I always gave full consideration to the input of all parties on issues and worked 

hard to reach consensus wherever possible in a fair, bi-partisan manner. If anything, my time in the Executive Branch has reinforced the importance of the vital 

transportation policy issues facing the STB and the need to work on them in a fair, 

bipartisan manner. 

The STB is an independent, adjudicatory body, and its Members must be open 

minded, impartial and fair with respect to the decisions they make. If I am confirmed to be a Member of the STB, I will give all of the issues that come before 

it full, fair and impartial consideration. I would not take office with any preconceived notions about the outcome of any particular issue, but rather would examine each matter on its merits and strive to make the best decision possible consistent with the facts, the law and precedent. If I am confirmed, those who bring 

matters before the Board may be sure that I will give all matters thoughtful, fair, 

impartial and careful consideration. 

Finally, I would like to make clear that if confirmed, I would continue to work 

closely with the Congress and all stakeholders in the agency. I worked for the Congress for many years, and have the utmost respect for the letter and the spirit of 

the laws passed by this institution. I recognize the need to work closely with the 

Members of the House and Senate, and if I am confirmed, all Senators can be sure 

that I will be open and accessible to them and their staffs. 

Similarly, I believe it is important to be open and accessible to the agency’s stakeholders, and if confirmed, I would have an open door policy to the extent permitted. 

In closing, I hope I will have the opportunity to continue to serve the public as 

a Member of the STB. I thank you for your consideration and look forward to answering any questions you might have. 

A. BIOGRAPHICAL INFORMATION

1. Name: Roger P. Nober. 

2. Position to which nominated: Member, Surface Transportation Board. 

3. Date of nomination: July 18, 2002. 

4. Address: (Information not released to the public). 

5. Date and place of birth: September 19, 1964, Syracuse, NY. 

6. Marital status: Married, October 13, 1991 to Jane C. Nober. 

7. Names and ages of children: William H. Nober, 6; Benjamin E. Nober, 3; Child 

due September, 2002. 

8. Education: High School: Amherst Regional High School, Amherst, Massachusetts, Attended 9/79-6/82, Diploma awarded June, 1982; College: Haverford College, 

Haverford, PA, Attended 9/82-5/86, B.A. in Economics awarded May, 1986; Law 

School: Harvard Law School, Cambridge, MA, Attended 9/86-6/89, J.D. awarded 

June, 1989. 

9. Employment record: 5/O1-present: Counselor to the Deputy Secretary of Transportation, United States Department of Transportation, 400 Seventh Street, SW., 

Washington, DC. 20590; 7/93-5/01: Committee on Transportation and Infrastructure, 

U.S. House of Representatives, Washington, DC. 20515, Chief Counsel, 1/01-5/01, 

General Counsel, 1/97-12/00, Counsel, Subcommittee on Surface Transportation, 1/

95-12/96; Minority Counsel, Subcommittee on Surface Transportation, 7/93-12/94 11/

91-5/93, Skadden, Arps, Slate, Meagher & Flom 6/89-8/89, 4 Times Square; 6/88-8/

88 New York, NY 10036, Associate, 11/91-5/93 Summer Associate, 6/88-8/88; 6/89-

8/89 9/89-8/91, Law Clerk, Chambers of Judge David N. Edelstein (deceased), U.S. 

District Judge, United States District Court for the Southern District of New York, 

1/89-5/89; Sophomore Tutor in Economics; 1/88-5/88 Harvard University Department 

of Economics, Cambridge, MA, 5/87-8/87, Dunnells, Duvall, Bennett & Porter (now 

dissolved), Washington, DC., Summer Associate. 

10. Government experience: (beyond that in question 9). None. 

11. Business relationships: None. 

12. Memberships: Massachusetts Bar; New York Bar. 

13. Political affiliations and activities: (a) List all offices with a political party 

which you have held or any public office for which you have been a candidate. None. 

(b) List all memberships and offices held in and services rendered to all political 

parties or election committees during the last 10 years. Contributing Author, Republican Platform, Transportation Section, 2000; Transportation Committee, Dole for 

President Campaign, 1996. 

(c) Itemize all political contributions to any individual, campaign organization, political party, political action committee, or similar entity of $500 or more for the past 

10 years. None. 

11

14. Honors and awards: None. 

15. Published writings: Note: Federal Highways and Environmental Litigation: 

Toward a Theory of Public Choice and Administrative Reaction 27 Harv. J. on Legis. 

229 (1990). 

16. Speeches: All speeches I have given in the past 5 years have been in my capacity as an official representing the Committee on Transportation and Infrastructure or the U.S. Department of Transportation. I have always spoken from notes, 

not from a prepared text. 

17. Selection: (a) Do you know why you were chosen for this nomination by the 

President? I believe I was selected by the President to be a Board Member of the 

Surface Transportation Board (STB) for several reasons: that the President was confident I would make honest and fair decisions in the matters that come before the 

agency; that I share the President’s philosophy with respect to the matters that are 

expected to come before the STB; that the other Board Members, the Congress, the 

STB’s stakeholders and the public would share his confidence in my ability to do 

so; and my experience in surface transportation matters, particularly those under 

the jurisdiction of the STB. 

(b) What do you believe in your background or employment experience affirmatively qualifies you for this particular appointment? I am qualified to be a Member 

of the STB because of my background as a lawyer in the private sector and my experience in all three branches of government. 

Most pertinently, for the past 9 years I have been involved in setting and implementing surface transportation policy. My work during my 8 years of service on the 

House Transportation & Infrastructure Committee and the past year at the Department of Transportation has involved the STB and the matters that come before the 

agency. The STB was created by Congress on January 1, 1996 as part of the Interstate Commerce Commission Termination Act of 1995, which among its many provisions eliminated the ICC and created the STB as its successor agency. In 1995, I 

was the Counsel for the Subcommittee on Surface Transportation, and was the primary House staff person responsible for the motor carrier and pipeline portions of 

that bill. In working on that legislation, I gained an understanding of the STB’s jurisdiction, statutory framework, mission and administrative structure, as well as 

perspective on Congress’ intent in creating the agency. Since the passage of the legislation creating the STB, I have continued to work with stakeholders, the Congress 

and the STB on legal, policy and administrative matters within its jurisdiction. 

B. FUTURE EMPLOYMENT RELATIONSHIPS

1. Will you sever all connections with your present employers, business firms, 

business associations or business organizations if you are confirmed by the Senate? 

My present employer is the United States Department of Transportation. While 

decisionally independent, the Surface Transportation Board is administratively 

housed within the U.S. Department of Transportation and the Board Members are 

employees of the U.S. Department of Transportation. 

2. Do you have any plans, commitments or agreements to pursue outside employment, with or without compensation, during your service with the government? If 

so, explain. I have no such commitments. 

3. Do you have any plans, commitments or agreements after completing government service to resume employment, affiliation or practice with your previous employer, business firm, association or organization? I have no such plans, commitments or agreements. 

4. Has anybody made a commitment to employ your services in any capacity after 

you leave government service? No. 

5. If confirmed, do you expect to serve out your full term or until the next Presidential election, whichever is applicable? Yes. 

C. POTENTIAL CONFLICTS OF INTEREST

1. Describe all financial arrangements, deferred compensation agreements, and 

other continuing dealings with business associates, clients or customers. I have no 

such arrangements or dealings. 

2. Indicate any investments, obligations, liabilities, or other relationships which 

could involve potential conflicts of interest in the position to which you have been 

nominated. Please see the attached letter from the Designated Agency Ethics Officer 

of the STB. 

3. Describe any business relationship, dealing, or financial transaction which you 

have had during the last 10 years, whether for yourself, on behalf of a client, or 

acting as an agent, that could in any way constitute or result in a possible conflict 

12

of interest in the position to which you have been nominated. I have no such business relationships, dealings or financial transactions. 

4. Describe any activity during the past 10 years in which you have engaged for 

the purpose of directly or indirectly influencing the passage, defeat or modification 

of any legislation or affecting the administration and execution of law or public policy. In my positions with the Committee on Transportation and Infrastructure and 

at the Department of Transportation, I have been involved in the consideration of 

much of the transportation legislation that has been enacted since 1993. 

My express duties have been to advance the views of the Ranking Republican 

Member, the Chairman or the President and Secretary with respect to such legislation. 

5. Explain how you will resolve any potential conflict of interest, including any 

that may be disclosed by your responses to the above items. Please see the attached 

letter from the Designated Agency Ethics Officer of the STB. 

6. Do you agree to have written opinions provided to the Committee by the designated agency ethics officer of the agency to which you are nominated and by the 

Office of Government Ethics concerning potential conflicts of interest or any legal 

impediments to your serving in this position? Yes. 

D. LEGAL MATTERS

1. Have you ever been disciplined or cited for a breach of ethics for unprofessional 

conduct by, or been the subject of a compliant to any court, administrative agency, 

professional association, disciplinary committee, or other professional group? If so, 

provide details. No. 

2. Have you ever been investigated, arrested, charged or held by any federal, 

state, or other law enforcement authority for violation of any federal, state, county, 

or municipal law, regulation or ordinance, other than a minor traffic offense? If so, 

provide details. No. 

3. Have you or any business of which you are or were an officer ever been involved as a party in interest in an administrative agency proceeding or civil litigation? If so, provide details? In 1989, I was a party along with four others in a civil 

action in small claims court in Cambridge, Massachusetts regarding a security deposit on rental property. At that time, small claims court in Massachusetts had a 

jurisdictional limit of $1500. I was one of four renters of residential property who 

sublet the property to others during the summer of 1988. During the time that the 

property was occupied by the sublessors; water damage occurred to the kitchen 

floor. The Judge determined that while the sublessors had caused the damage, the 

security deposit had not been properly kept and thus I along with the four others 

ultimately paid the landlord for the damage. 

4. Have you ever been convicted (including pleas of guilty or nolo contendere) of 

any criminal violation other than a minor traffic offense? No. 

5. Please advise the Committee of any additional information, favorable or unfavorable, which you feel should be considered in connection with your nomination. 

In 1999, I was called by the Committee on Standards of Official Conduct of the U.S. 

House of Representatives to be a witness as part of its investigation into the activities of Congressman Bud Shuster. I was one of approximately 75 individuals, including several employees of the Committee on Transportation & Infrastructure, called 

before the Committee on Standards of Official Conduct. I was called because of my 

position as General Counsel to the Transportation and Infrastructure Committee, 

and the questions asked of me related to the Transportation and Infrastructure 

Committee’s consideration of certain legislative matters. No questions were raised 

about me personally or any of my actions. The Ethics Committee issued its Investigative Report in the matter involving Congressman Shuster on October 4, 2000. 

That Report is available on the website of the Committee on Standards of Official 

Conduct of the U.S. House of Representatives, www.house.gov/ethics. I am not referred to in the Report. 

E. RELATIONSHIP WITH COMMITTEE

1. Will you ensure that your department/agency complies with deadlines set by 

congressional committees for information? I will do so to the best of my ability. 

2. Will you ensure that your department/agency does whatever it can to protect 

congressional witnesses and whistle blowers from reprisal for their testimony and 

disclosures? I will do so to the best of my ability. 

3. Will you cooperate in providing the Committee with requested witnesses, to include technical experts and career employees with firsthand knowledge of matters 

of interest to the Committee? I will do so to the best of my ability. 

13

4. Please explain how you will review regulations issued by your department/

agency, and work closely with Congress, to ensure that such regulations comply 

with the spirit of the laws passed by Congress. 

As a former employee of the Congress who participated in drafting numerous 

bills, I believe that the executive branch has an obligation to follow both the letter 

and the spirit of the statutes passed by Congress when implementing and interpreting laws. If I am confirmed as a Member of the STB, I will to the best of my 

ability ensure that all regulations issued by the STB comply with both the letter 

and spirit of the laws passed by Congress. In cases where that intent is not clear, 

I would seek the guidance of the Congress. 

5. Describe your department/agency’s current mission, major programs, and major 

operational objectives. The STB was created as the successor agency to the Interstate Commerce Commission and was established on January 1, 1996. It was created as part of the Interstate Commerce Commission Termination Act of 1995 (ICC 

Termination Act). Congress intended that the STB be a decisionally independent 

body that was administratively housed within the U.S. Department of Transportation. 

The ICC Termination Act was one of a series of acts of Congress deregulating various segments of the surface transportation industry regulated by the ICC. These 

included deregulation of interstate trucking (1980, 1994 and 1995), intrastate trucking (1994), intercity busses (1982 and 1994) and railroads (1980 and 1995). As the 

modes within the jurisdiction of the ICC were deregulated, Congress began considering whether to continue the agency at all. In the ICC Termination Act, Congress 

reviewed each of the remaining functions of the ICC and determined that certain 

functions needed to be continued by a decisionally independent agency. Congress 

created the STB and vested it with these functions. 

With respect to railroads, the STB’s jurisdiction includes rate and service issues, 

mergers, line sales, revenue adequacy, line construction and abandonments, and certain labor matters pertaining to these rail matters. With respect to trucking, these 

include approval for certain collective activities including antitrust immunity, activities of the moving industry and movements by truck and over water to non-contiguous U.S. States and possessions, including Alaska, Hawaii and Puerto Rico. With 

respect to intercity busses, its jurisdiction includes structural, financial and operational matters. Finally, the STB also has jurisdiction over economic regulation of 

certain pipeline matters not covered by the Federal Energy Regulatory Commission. 

The major operational objective facing the STB is to continue its tradition of independence and excellence in decisionmaking. As an agency that has risen from the 

termination of another, it has adapted to best serve its customers and achieve its 

mission of making independent, fact-based decisions grounded in precedent. 

6. Are you willing to appear and testify before any duly constituted committee of 

the Congress on such occasions as you may be reasonably requested to do so? Yes. 

F. GENERAL QUALIFICATIONS AND VIEWS

1. How have your previous professional experience and education qualifies you for 

the position for which you have been nominated? My background as a lawyer who 

has worked in the private sector and all three branches of government has provided 

me with the substantive policy, political, administrative and management experience to qualify me for a position as a Member of the Surface Transportation Board. 

I graduated from Harvard Law School, where I wrote and taught about transportation policy. My experience in the Judicial Branch occurred following law school, 

where I was a law clerk on a busy trial court, the United States District Court for 

the Southern District of New York. I worked on the full range of criminal and civil 

cases, including one of the largest civil cases in the country. Following my clerkship, 

I was associated with a large law firm headquartered in New York, where I was 

part of the litigation department and had experience with commercial disputes. 

While at the Committee on Transportation and Infrastructure and at the Department of Transportation, I have focused on setting and implementing transportation 

policy and while at DOT, the management of transportation agencies. My duties at 

the Committee included responsibility for substantive policy expertise and developing legislation on all matters within the jurisdiction of the Committee, including 

railroad, motor carrier and pipeline matters. My duties entailed meeting with the 

agencies that administer the programs under the Committee’s jurisdiction and 

stakeholders in those programs, as well as communicating with Members of the 

Committee, the House of Representatives and the Senate. I also worked closely with 

Members and staff of both parties. 

Since joining DOT, I have worked extensively with the Secretary, the Deputy Secretary, and the White House, as well as the various operating agencies that comVerDate Apr 24 2002 13:50 Aug 06, 2003 Jkt 087972 PO 00000 Frm 00017 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\87972.TXT SCOM1 PsN: CAROLT
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prise DOT in developing and implementing policy. I have learned about the management challenges in large organizations and the circumstances which govern the development and execution of policy and the management of agencies in the Executive 

Branch. I have also gained experience with respect to the Department’s adjudicatory 

functions, a function often exercised by the STB. 

2. Why do you wish to serve in the position for which you have been nominated? 

I wish to serve on the STB for many reasons. First, I would like the opportunity 

to serve the President as a Member of the Board and represent his general philosophy on the matters that will come before it. Second, I look forward to continuing 

to use my policy expertise in surface transportation matters. Third, I would like the 

opportunity to further work with the current Board Members, the expert staff at 

the STB and the stakeholders in the matters under the jurisdiction of the STB. And 

finally, since I was involved in the creation of the STB and the termination of the 

ICC, I would like the opportunity to serve on the Board and help it continue its high 

level of independence and professionalism. 

3. What goals have you established for your first 2 years in this position, if confirmed? My major goal is to work with the existing Board Members to further the 

work done by them since the creation of the STB to establish and maintain its independence and excellence in decisionmaking. 

4. What skills do you believe you may be lacking which may be necessary to successfully carry out this position? What steps can be taken to obtain those skills? I 

will need to work to further develop my organizational management skills, and have 

been working here at DOT to become more involved in management, in addition to 

policy issues. 

5. Who are the stakeholders in the work of this agency? The primary work of the 

Board relates to railroads, and so the stakeholders in the rail area include large, 

medium and small (Class 1, 2 and 3) freight railroads, railroad workers, rail shippers, operators of passenger railroads and the communities dependent upon railroads. With respect to its motor carrier and pipeline functions, the stakeholders include trucking companies, household goods carriers, shippers using motor carriers, 

operators of bus lines, shippers, and operators of solid material pipelines. 

6. What is the proper relationship between your position, if confirmed, and the 

stakeholders identified in question No. 5? As a member of an adjudicatory body, a 

Board Member must remain independent from the influence of any particular stakeholder. However, I believe it is important to be accessible to stakeholders, and I 

would make being open and accessible to all parts of the stakeholder community a 

high priority. 

7. The Chief Financial Officers Act requires all government departments and 

agencies to develop sound financial management practices similar to those practiced 

in the private sector. (a) What do you believe are your responsibilities, if confirmed, 

to ensure that your agency has proper management and accounting controls? Since 

the STB is administratively housed within DOT and its budget functions are performed there, I would work with DOT’s Assistant Secretary for Budget and Chief 

Financial Officer to ensure that the STB’s management and accounting controls 

meet the standards set by the Congress in the Government Performance and Review 

Act (GPRA) and by the President’s Management Agenda. 

(b) What experience do you have in managing a large organization? For the past 

year, I have been the Counselor to the Deputy Secretary of Transportation, who is 

the Chief Operating Officer of DOT. In this position, I have worked with him and 

on his behalf on numerous management matters at the Department. 

8. The Government Performance and Results Act requires all government departments and agencies to identify measurable performance goals and to report to Congress on their success in achieving these goals. (a) Please discuss what you believe 

to be the benefits of identifying performance goals and reporting on your progress 

in achieving those goals. Government agencies, like all large organizations, should 

set identifiable performance goals so that the members of the agency, the rest of 

the Administration, the Congress, its customers and the public can measure the organization’s performance. Perhaps most importantly, GPRA’s requirements help ensure that an agency’s annual budget supports its identified performance goals, 

thereby helping ensure that resources are devoted to the agency’s most important 

missions. Properly constructed, performance goals help focus the organization on its 

core mission, as reflected by those goals. Regular reporting on goals and the 

progress made in achieving them helps keeps the organization focused on its priorities. 

(b) What steps should Congress consider taking when an agency fails to achieve 

its performance goals? Should these steps include the elimination, privatization, 

downsizing or consolidation of departments and/or programs? Congress, in its oversight capacity, must measure whether government organizations have achieved 

15

their goals. Congress has a range of options for improving the performance of agencies that consistently fail to meet their goals, including closer oversight over their 

budgets—such as erecting strict controls over spending authority or earmarking 

funds for specific purposes, passing reauthorization legislation to restructure the organization or eliminate obstacles to achieving performance goals, or calling for management changes and reforms. However, identifying measurable performance 

metrics can be difficult for government agencies, since the mission of such agencies 

cannot always be measured in the same manner as private sector companies. Thus 

measuring performance only on whether a set of performance metrics have been 

achieved may not fully reveal whether the organization is performing adequately. 

The STB itself is an example of the kinds of action Congress may take when it 

believes changes are needed in an agency. The STB is a new organization that was 

created when its predecessor agency, the ICC, was eliminated. In the course of the 

transition from the ICC to the STB, many of its programs and responsibilities were 

eliminated and others streamlined and reformed. Its staff was significantly 

downsized, and some functions previously performed by the ICC were transferred 

to DOT or privatized. 

(c) What performance goals do you believe should be applicable to your personal 

performance, if confirmed? I would look to ensure that the agency continues to resolve the matters before it in a fair and expeditious manner, that its rulemakings 

continue to be completed in a timely manner, and that the organization continues 

to perform in a professional manner. 

9. Please describe your philosophy of supervisor/employee relationships. Generally, what supervisory model do you follow? Have any employee complaints been 

brought against you? I believe that qualified, experienced employees should be trusted to perform their duties in a highly professional manner. I try to give latitude to 

employees to use their best professional judgment to perform their duties. No employee has ever brought any complaints against me. 

10. Describe your working relationship, if any, with the Congress. Does your professional experience include working with committees of Congress? If yes, please describe. As a former employee of Congress, I have a long and close working relationship with Congress and Congressional Committees. 

11. Please explain what you believe to be the proper relationship between yourself, if confirmed, and the Inspector General of your department/agency. As an administrative part of DOT, the STB has no Inspector General of its own and instead 

is overseen by the Inspector General of DOT. The proper relationship between the 

head of a part of DOT and the Department’s Inspector General is to work closely 

to monitor agency performance and evaluate its programs and personnel for waste, 

fraud or abuse. 

12. Please explain how you will work with this Committee and other stakeholders 

to ensure that regulations issued by your department/agency, comply with the spirit 

of the laws passed by Congress. As a former employee of the Congress who participated in drafting numerous bills, I feel strongly that the executive branch has an 

obligation to follow both the letter and the spirit of the statutes passed by Congress 

when implementing, and interpreting laws. If I am confirmed as a Member of the 

STB, that I will ensure to the best of my ability that all regulations issued by the 

STB comply with both the letter and spirit of the laws passed by Congress. In cases 

where that intent is not clear, I would seek the guidance; of the Congress. 

13. In the areas under the department/agency’s jurisdiction, what legislative action(s) should Congress consider as priorities? Please state your personal views. In 

my personal view, with respect to matters under the jurisdiction of the STB, the 

most, important matter for Congress to take up is the reauthorization of the STB. 

Its predecessor agency, the ICC, had a permanent authorization, which did not facilitate a regular review of its programs and laws. As a result, pressure built to 

make major changes and the agency was ultimately eliminated. One reform included in the ICC Termination Act was to set the authorization for the STB for a 

term of 3 years, to ensure that its programs and laws would receive regular oversight. The STB’s authorization expired at the end of fiscal year 1998, and it has continued unauthorized since then. 

14. Within your area of control, will you pledge to develop and implement a system that allocates discretionary spending based on national priorities determined in 

an open fashion on a set of established criteria? If not, please state why. If yes, 

please state what steps you intend to take and a timeframe for their implementation. Yes. I would work with DOT to submit annual budgets that reflect the need 

and workload of the STB.

The CHAIRMAN. Thank you, Mr. Nober, very much. 

Next, Mr. Laney, welcome. 

16

STATEMENT OF DAVID M. LANEY, NOMINEE TO BE A MEMBER 

OF THE REFORM BOARD (AMTRAK) 

Mr. LANEY. Thank you, Senator. Let me begin by introducing my 

wife, who has apparently been told not to sit in the first row, Eleanor Laney. She is four rows back in a probably more protected position with respect to Amtrak than I am. 

It is a pleasure to be here, Senator Breaux, and I appreciate the 

opportunity to appear, and my comments will be very brief. It is 

an honor to appear before you as President Bush’s nominee to the 

Amtrak Reform Board. Although I think at this point, after visiting 

with a number of transportation colleagues throughout the industry, many of them have concluded that I must have committed 

some punishable offense, but I do not think that I would be the one 

sitting here had you already ironed out all the challenges now facing Amtrak. I am delighted to step into the position that I am currently considered for, if in fact, I am confirmed. 

As you know, the challenges of Amtrak have mounted steadily 

during the last year, and even since my nomination in the spring. 

Those challenges are only partially passenger transportation challenges such as performance, reliability, levels of service, perceived 

safety issues, and competitiveness with other modes. To a much 

greater extent, those challenges are those endemic to virtually any 

faltering business, issues relating to organization, management, operations, financial management and performance, funding, and information management, internally and externally. 

Except in this context, those challenges are aggravated, as all of 

you well know, by a number of contractual and statutory constraints that limit Amtrak’s management maneuverability considerably. Despite my transportation expertise, it is those challenges 

that are most likely the reasons for my nomination, and the principal ingredients of my interest in serving as a member of the Amtrak Reform Board should this Committee approve and the Senate 

confirm my nomination. 

I should add with particular emphasis, however, that my perceptions and understanding of Amtrak, its operations, and its challenges are not the product of any information provided to me by 

Amtrak itself. To date, I have received no information from Amtrak. 

Aside from the challenges facing Amtrak, I am also here because 

I believe that there is an important role for intercity passenger rail 

within our overall transportation policy framework. I believe that 

it will become increasingly valuable to mobility and economic opportunity throughout our country in light of projected population 

growth and inevitable declines in highway and airport capacity and 

levels of service. 

Handled properly, your challenge, that of the Administration, 

and that of the Amtrak Reform Board, is to set the foundation from 

which we might begin to shape the pattern of redevelopment of 

intercity passenger rail in this country for decades. It is difficult to 

project with any certainty, at this point, the role that Amtrak 

might ultimately play in a staged revitalization of intercity passenger rail, but it has to be the point from which we begin. I look 

forward to your questions, and I would add again, though, that I 

have very little first-hand knowledge of Amtrak operations or AmVerDate Apr 24 2002 13:50 Aug 06, 2003 Jkt 087972 PO 00000 Frm 00020 Fmt 6601 Sfmt 6601 S:\WPSHR\GPO\DOCS\87972.TXT SCOM1 PsN: CAROLT
17

trak Board activities, other than what has appeared or is available 

through newspapers and public sources. 

I want to thank Senator Hutchison for her recommendation and 

her support as well as the current Administration, and particularly 

President Bush. Should the Committee approve and the Senate 

confirm my nomination, I look forward to serving and working with 

you closely and other Members of the Committee, and I will be 

happy now to answer any questions you might have. 

[The prepared statement of Mr. Laney follows:]

PREPARED STATEMENT OF DAVID M. LANEY, NOMINEE TO BE A MEMBER OF THE

REFORM BOARD (AMTRAK) 

Good afternoon, Mr. Chairman and Members of the Committee. I appreciate the 

opportunity to appear today, and my comments will be brief. 

It is an honor to appear before you as President Bush’s nominee to the Amtrak 

Reform Board. Although I am convinced that some of my colleagues throughout the 

transportation industry have no doubt concluded that I must have committed a punishable offense. On the contrary, had you and the Amtrak Board ironed away all 

the challenges now facing Amtrak, I doubt I would be the one sitting here before 

you today. 

As you know, the challenges of Amtrak have mounted steadily during the last 

year, and even since my nomination in the spring. Those challenges are only partially passenger transportation challenges, such as: performance reliability; levels of 

service; perceived safety; competitiveness with other modes. 

To a much greater extent, the challenges are those endemic to virtually any faltering business: issues relating to: organization; management; operations; financial 

management and performance; funding; information management, internally and 

externally. 

Except in this context, those challenges are aggravated, as you well know, by a 

number of contractual and statutory constraints that limit Amtrak’s management 

maneuverability. 

Despite my transportation experience, it is those challenges that are most likely 

the reasons for my nomination and principal ingredients of my interest in serving 

as a member of the Amtrak Reform Board, should this Committee approve and the 

Senate confirm my nomination. 

I should add, with particular emphasis, however, that my perceptions and understanding of Amtrak, its operations and its challenges are not the product of any information provided to me by Amtrak itself. To date, I have received no information 

from Amtrak. 

Aside from the challenges facing Amtrak, I am also here because I believe that 

there is an important role for inter-city passenger rail within our overall transportation policy framework. I believe that it will become increasingly valuable to mobility and economic opportunity throughout the United States in light of projected population growth and inevitable declines in highway and airport capacity and levels 

of service. Handled properly, your challenge, that of the administration, and that 

of the Amtrak Reform Board, is to set the foundation from which we might begin 

to shape the pattern of redevelopment of inter-city passenger rail in this country 

for decades. It is difficult to project with any certainty at this point the role that 

Amtrak might ultimately play in a staged revitalization of inter-city passenger rail, 

but it has to be the point from which we begin. 

I look forward to your questions, but please understand again that I have very 

little first-hand knowledge of Amtrak operations or Amtrak Board activities other 

than what has been available through newspapers. 

Thank you for the opportunity to make this statement. Should the Committee approve and the Senate confirm my nomination, Mr. Chairman, I look forward to serving, and to working with you and other members of the Committee. And I will be 

happy now to answer any questions you might have. 

A. BIOGRAPHICAL INFORMATION

1. Name: David M. Laney. 

2. Position to which nominated: Amtrak Reform Board, Member. 

3. Date of Nomination: April 30, 2002. 

4. Address: Office: 2445 Ross Avenue, Suite 3200 Dallas, Texas 75202. 

18

5. Date and place of birth: January 19, 1949, Dallas, Texas. 

6. Marital status: Married. Eleanor Watkins Laney. 

7. Names and ages of children: Margaret Preston Laney, 19; Virginia McQueen 

Laney, 16. 

8. Education: St. Marks School 1956–1967, high school diploma; Stanford University 1967–1971, A.B., Honors (1971); Brown University 1973–1974; SMU Law School 

1974–1977, J.D. (1977). 

9. Employment record: Texas Transportation Commission, Austin, Texas 1995– 2001, Chairman, Member; Jenkens & Gilchrist, Dallas, Texas 1977—Present, Lawyer; Strasburger & Price, Dallas, Texas 1976 (Summer), Law Clerk; Jenkens & Gilchrist, Dallas, Texas 1976 (Summer), Law Clerk; Judge Robert Porter, District 

Judge, Northern District, Dallas, Texas 1975 (Summer), Law Clerk; Judge Charles 

E. Long, State District Judge 134th District Court, Dallas, Texas 1974 (summer), 

Law Clerk; Volunteers in Asia, Staff—Palo Alto, California, Taichung, Taiwan 

1971–1973; Chung Hsing National University, Assistant Professor (Literature), 

Taichung, Taiwan 1972–1973; YMCA, Language Instructor, Taichung Taiwan 1971– 1972. 

10. Government experience: Finance Commission of Texas 1989–1995; Texas 

Transportation Commission 1995–2001. 

11. Business relationships: (Current Positions) Jenkens & Gilchrist, Shareholder; 

Stanford University, Trustee; Chair, Audit Committee; Laney Investments, Ltd., 

General Partner (family investments); L Management, LLC, Manager (general partner, Laney Investments, Ltd.); Moroney Farm, Ltd., General Partner (family investment); Southwest Medical Foundation, Trustee; Dallas Chamber of Commerce, 

Chairman, State Affairs Committee; SMU Law School Advisory Board, Member. 

12. Memberships: (Current Memberships; no offices held); American Bar Association; Texas Bar Association; Dallas Bar Association; Texas Bar Foundation; Dallas 

Bar Foundation; Crescent Club; Dallas Country Club; Dallas Assembly; Stanford 

Alumni Association; Dallas Committee on Foreign Relations. 

13. Political affiliations and activities: (a) None. (b) None. (c) See Schedule A–13, 

attached. 

14. Honors and awards: None. 

15. Published writings: None. 

16. Speeches: None (relevant to the position for which I have been nominated). 

17. Selection: (a) Although the reasons for my nomination by the President have 

not been expressly stated to me, I assume that the combination of my legal, management, leadership, government, and transportation experience, together with the 

confidence the President developed in my abilities during my performance as Texas 

Commissioner of Transportation (while he was Governor of Texas), contribute in 

combination to my nomination. (b) The experience and abilities referred to in 17(a) 

above qualify me for appointment. 

B. FUTURE EMPLOYMENT RELATIONSHIPS

1. Will you sever all connections with your present employers, business firms, 

business association or business organizations if you are confirmed by the. Senate? 

To the extent necessary to eliminate any conflict of interest, I will discontinue business relationships. I am not currently aware of any need to do so. 

2. Do you have any plans, commitments or agreements to pursue outside employment, with or without compensation, during your services with the government? If 

so, explain. I intend to continue my current position with Jenkens & Gilchrist; the 

position for which I have been nominated is part-time and non-compensatory. 

3. Do you have any plans, commitments or agreements after completing government service to resume employment, affiliation or practice with your previous employer, business firm, association or organization? Not applicable. 

4. Has anybody made a commitment to employ your services in any capacity after 

you leave government service? No. 

5. If confirmed, do you expect to serve out your full term or until the next Presidential election, whichever is applicable? Yes. 

C. POTENTIAL CONFLICTS OF INTEREST

1. Describe all financial arrangements, deferred compensation agreements, and 

other continuing dealings with business associates, clients or customers. Salaried 

shareholder in the law firm of Jenkens & Gilchrist. Retirement plan (deferred compensation and 401K Plan) benefits available upon my retirement. 

2. Indicate any investments, obligations, liabilities, or other relationships with 

could involve potential conflicts of interest in the position to which you have been 

nominated. None. 

19

3. Describe any business relationship, dealing, or financial transaction which you 

have had during the last 10 years, whether for yourself, on behalf of a client, or 

acting as an agent, that could in any way constitute or result in a possible conflict 

of interest in the position to which you have been nominated? None. 

4. Describe any activity during the past 10 years in which you have engaged for 

the purpose of directly or indirectly influencing the passage, defeat or modification 

of any legislation or affecting the administration and execution of law or public policy. As Texas Commissioner of Transportation, I visited with a number of Members 

of Congress and testified before House and Senate Committees in connection with 

the reauthorization of ISTEA. 

5. Explain how you will resolve any potential conflict of interest, including any 

that may be disclosed by your responses to the above items. I am not aware of any 

actual or potential conflicts that currently exist. In the event I encounter any conflict of interest, I will promptly disclose it to the Amtrak office of general counsel, 

and with their guidance promptly resolve the conflict to their satisfaction. The nature of my response will depend on the nature of the conflict and general counsel 

guidance. 

6. Do you agree to have written opinions provided to the Committee by the designated agency ethics officer of the agency to which you are nominated and by the 

Office of Government Ethics concerning potential conflicts of interest or any legal 

impediments to your serving in this position? Yes. 

D. LEGAL MATTERS

1. Have you ever been disciplined or cited for a breach of ethics for unprofessional 

conduct by, or been the subject of a complaint to any court, administrative agency, 

professional association, disciplinary committee, or other professional group? If so, 

provide details. No. 

2. Have you ever been investigated, arrested, charged or held by any federal, state 

or other law enforcement for violation of any federal, state, county, or municipal 

law, regulation or ordinance, other than a minor traffic offense? If so, provide details. No. 

3. Have you or any business of which you are or were an officer ever been involved as a party in interest in an administrative agency proceeding or civil litigation? If so, provide details. Our law firm is occasionally involved as a party in interest in civil litigation. I was Chairman and President of the law firm from 1990 until 

early 2002, and in that capacity, or in the capacity as a shareholder in the firm, 

I have sometimes been named as a party in interest in litigation, along with the 

firm and other officers or shareholders. 

The Texas Department of Transportation and the Texas Transportation Commission are regularly named as parties in interest in litigation. In my capacity as 

Chairman of the Texas Transportation Commission, I was routinely named as a 

party in interest in litigation brought against TxDOT. 

I was the principal shareholder and Chairman of the Board of a company named 

Just Brakes Corporation and numerous operating subsidiaries in the early 1990s. 

The company and its affiliates were involved in the auto repair business. That company and certain of its affiliates were occasionally involved as parties in interest in 

civil litigation. The companies were ultimately liquidated and sold through an insolvency proceeding. I was named in litigation brought against the law firm and two 

of its shareholders (based on an alleged conflicts of interest) brought by three exemployees of the Company; the litigation was dismissed on summary judgment. 

4. Have you ever been convicted (including pleas of guilty or nolo contendere) of 

any criminal violation other than a minor traffic offense? No. 

5. Please advise the Committee of any additional information, favorable or unfavorable, which you feel should be considered in connection with your nomination. 

None. 

E. RELATIONSHIP WITH COMMITTEE

1. Will you ensure that your department/agency complies with deadlines set by 

congressional committees for information? Yes. 

2. Will you ensure that your department/agency does whatever it can to protect 

congressional witnesses and whistle blowers from reprisal for their testimony and 

disclosures? Yes. 

3. Will you cooperate in providing the committee with requested witnesses, to include technical experts and career employees with firsthand knowledge of matters 

of interest to the committee? Yes. 

4. Are you willing to appear and testify before nay duly constituted committee of 

the Congress on such occasions as you may be reasonably requested to do so? Yes. 

20

F. GENERAL QUALIFICATIONS AND VIEWS

1. Please describe how your previous professional experience and education qualifies you for the position for which you have been nominated. My experience as a 

lawyer (corporate and financial law), in management and leadership positions with 

my law firm (managing partner, 1990–2002; management committee 1986–1990), in 

appointed state government positions since 1989, specifically the Texas Finance 

Commission, 1989–1995 (state charted bank and savings and loan oversight) and 

Texas Transportation Commission 1995–2001 (including 5 years as Chairman, overseeing the Texas Department of Transportation), and my familiarity with operational and financial risk management issues (current Chair of the Audit Committee, Stanford University), together with the skills developed through such experience, qualified me for the position for which I have been nominated. 

2. What skills do you believe you may be lacking which may be necessary to successfully carry out this position? What steps can be taken to obtain those skills? 

None. 

3. Why do you wish to serve in the position for which you have been nominated? 

I hope to bring a constructive voice and perspectiveto bear in addressing the range 

of challenges currently confronting AMTRAK. 

4. What goals have you established for your first 2 years in this position, if confirmed? I do not have enough information regarding AMTRAK or knowledge of the 

position to have established goals for my first 2 years in the position. 

5. Who are the stakeholders in the work of this agency? The stakeholders are numerous. They include the administration, Congress, taxpayers, states, cities, the 

traveling public (including businesses whose employees commute via AMTRAK), 

mail and freight services, employees and unions, the armed services, and various 

transportation and rail product and service providers. 

6. What is the proper relationship between your position, if confirmed, and the 

stakeholders identified in questions No. 10? I view my role, if confirmed, as a fiduciary whose charge is the oversight of AMTRAK in a manner that best serves the 

long-term interests of AMTRAK, its viability as a national rail passenger system, 

and its various stakeholders. 

7. Please describe your philosophy of supervisor/employee relationships. Generally, what supervisory model do you follow? Have any employee complaints been 

brought against you? My philosophy of supervisor/employee relationships is one of 

mutual respect built upon expectations of trust, reliability and performance. Performance expectations should be high and must be reasonable. In my 11 years as 

managing partner of my law firm, I was named in one employment complaint 

brought against the firm (all Board members were named, of which I was one). 

8. Describe your working relationship, if any, with the Congress. Does your professional experience include working with committees of Congress? If yes, please describe. No currently active working relationships. As Texas Commissioner of Transportation, I spoke with a number of Members of Congress and testified before Senate and House Committees in connection with the reauthorization of ISTEA. 

9. Please explain how you will work with this Committee and other stakeholders 

to ensure that regulations issued by your board/commission comply with the spirit 

of the laws passed by Congress. To assure compliance with the spirit of the laws 

passed by Congress, I will rely principally on my own.interpretations, as well as on 

the guidance and staff and the AMTRAK office of general counsel. 

10. In the areas under the board/commission jurisdiction, what legislative action(s) should Congress consider as priorities? Please state your personal views. In 

my view, the legislative priorities are the development of a clearly defined national 

passenger rail policy that provides not only for the preservation, but for a staged 

redevelopment of AMTRAK as a financially sound and operationally successful national rail passenger system. 

11. Please discuss your views on the appropriate relationship between a voting 

member of an independent board or commission and the wishes of a particular 

president. Particularly in the context of challenges currently confronting AMTRAK, 

the views of the President and his Administration and those of Congress in the development of solutions are both of critical importance if we hope to preserve and 

ultimately reinvigorate a national passenger rail system. Ultimately, however, I envision the role of a voting member of an independent board or commission to be one 

of independent analysis and judgment.

The CHAIRMAN. Thank you very much, both of you, for your 

statements. 

Let us start with Mr. Nober with regard to some of our Surface 

Transportation Board issues. You are aware, Mr. Nober, of the 

21

hearings we have had on this side with regard to shippers and rail 

carriers and the untimeliness of the process which shippers have 

to go through to make a case on being captive shippers and the 

prices they have to pay. 

I am delighted to have received a letter from the current Chairman, Linda Morgan, saying that they have issued a proposed rulemaking which would do two things. First, it would require nonbinding mediation before a large rail case, complaint case could be 

filed. Now, the proposal deals with discovery to try to shorten the 

timeframe apparently, and then they have proposals on the smaller 

rate cases, rail rate cases dealing with the amount of the filing fee. 

I understand the filing fees in the smaller cases could be as high as $1,000. The proposal is to set it at $150. I had suggested at the 

Committee that these cases that take these long, long periods of 

time need to be somehow shortened. We also need to consider arbitration or mediation as a process of forcing the parties, if you will, 

to sit down and try to reach an agreement on what is a fair and 

equitable charge for the goods that they carry. This proposal, which 

I am sure you are familiar with, seems to go a long way toward 

addressing some of the concerns. I was wondering, could you give 

the Committee your thoughts on the proposals? 

Mr. NOBER. Well, Senator, I saw the proposal yesterday, as did 

you. I certainly support any efforts that the Board would take to 

remove procedural barriers to large and small shippers being able 

to reach resolutions on their concerns. While the merits of the 

cases they bring need to be looked at on the one hand, it seems the 

most common complaints—and I have had a chance to read your 

hearing transcripts and attend part of that last hearing—focused 

on the procedural problems that shippers had undergone. 

Now, the current Board looked at the issue and came up with a 

number of good ideas. I would be reluctant to comment on which 

specific ones I would support or not support, not being a member 

of the Board yet, but I certainly support any efforts which come up 

that would be accepted, and would help reduce some of the procedural barriers to large and small shippers being able to bring 

cases. 

The CHAIRMAN. I think most of us in Congress would not support 

the Congress, for instance, setting the rates. This is something that 

we are not capable of doing, nor should we be doing it. But in the 

absence of competition, many of these captive shipper cases, it 

seems to me from what I heard at the hearing, was that the rate 

of filing cases took so long it was a mechanism used by the railroads to keep things in limbo for such a long period of time that 

many of the shippers didn’t have the time, the effort, the money, 

the lawyers, to be able to get a speedy resolution. The concept is, 

‘‘Look, we want you all to sit down at the table and work it out,’’ and give them the authority to do that. 

Can you comment on just the concept of arbitration? You said 

you support the tools that would shorten the process. Do you think 

arbitration could be one of those tools, or do you have some problems with that as a concept? 

Mr. NOBER. Certainly I think in other contexts, in surface transportation and in other industries, mandatory arbitration has 

helped resolve disputes, especially those between companies and 

22

organizations that have ongoing relationships with one another. I 

think it has been an effective tool in other areas. 

Now, whether or not I would expressly support mandating arbitration in every circumstance, I certainly cannot say right now. I 

would take a strong look at it. I believe alternative dispute resolution has an important place in helping to facilitate and resole these 

disputes. It is particularly important for the small shippers who, as 

you have said, do not have the time, the money, and the ability to 

hire lawyers and spend many years bringing cases. 

The CHAIRMAN. I am glad to hear you say that. I think we had 

suggested, and again I had suggested, that the rail carriers and 

some of the shipper groups actually try to get together to work out 

a process in which they could agree. Then, if necessary, it could be 

brought back to Congress to implement it legislatively in order to 

give more authority to the Surface Transportation Board to enact 

it. Do you think that is a worthwhile effort? 

I mean, we just say look, railroad, sit down with the shipper organizations and see if you cannot reach an agreement, otherwise 

we are going to be forced to jump into it, maybe with the wrong 

solution to your problems. Otherwise, come up with some answers 

for us. 

Mr. NOBER. Senator, I certainly think that the parties being able 

to work out, among themselves, a procedure for resolving disputes 

is by far the preferable way to do it. They are the most intelligent 

about their businesses. They know the problems that they face, and 

they know the solutions that would best work for them. As a regulator, I would always hope that having the parties work out their 

differences, rather than bring them to a government agency, would 

be the way to resolve things. Therefore, I certainly commend you 

for asking them that they do that, and I understand that they are 

taking that charge very seriously. 

The CHAIRMAN. Well, I hope they are, because it was a very sincere request, and we are going to be following up to see what 

progress they are making. I am a big believer in competition in all 

industries, but in order to have competition you have to have competitors, and if you do not have competitors, then you have regulation. 

It seems that many are very concerned about the reduction of 

competition over the years through consolidations and mergers in 

the railroad industry. What role do you think you will have as 

Chairman of the Surface Transportation Board to guarantee to the 

American public that we have competition in order to have a system that works in a free market atmosphere, as opposed to having 

the government regulate the rail industry? 

If we only have one telephone company, or we only end up with 

one airline, or we only end up with one oil and gas company, we 

are not going to have competition. Then you are going to have government regulation. So what role do you think the Board has in 

trying to preserve competition by preserving the competitors who 

provide that competition? 

Mr. NOBER. Well, Senator, I think that the Board certainly plays 

a central role in reviewing any consolidation in the rail industry, 

and that was one of the primary reasons why Congress decided to 

keep a Board in place at all. 

23

Last year, the Board came out with new guidelines that it would 

use to evaluate mergers, and I think that those lay out some very 

difficult hurdles for any merger to beat, one of which is not just 

that it would preserve competition, but the merger would have to 

demonstrate the ways that it would enhance competition. 

The CHAIRMAN. Do you support those proposals by the Board? 

Mr. NOBER. They certainly are well settled, and appear to be well 

accepted among all the parties to the rail industry, so I certainly, 

while I am again reluctant to expressly take a position on any one 

particular matter, I think the merger guidelines have been an important step forward in the way that the Board looks at mergers. 

The CHAIRMAN. Would you think additional work in that area 

needs to be done, or do you think that what is on the table now 

is sufficient? 

Mr. NOBER. Senator, I would have to get to the Board and see 

whether or not those guidelines were sufficient, or whether or not 

any enhancements or modifications need to be made. They were 

just issued last year, so I think that in general they seem to capture a lot of the concerns that were out there. I commend the 

Board for issuing those guidelines, and certainly would take a close 

look at the standards by which mergers are looked at and whether 

or not any changes need to be made. 

The CHAIRMAN. I take it we have not had any consolidation or 

mergers since those rules were adopted. 

Mr. NOBER. Senator, I am not sure. I thought there might have 

been one small merger, but I am not 100 percent certain. I would 

need to check on that. 

The CHAIRMAN. Thank you very much, Mr. Nober. 

Mr. Laney, I was just wondering whether you supported President Bush or opposed him in order to get this nomination. 

[Laughter.] 

Mr. LANEY. Can I get back to you on that, Senator? 

The CHAIRMAN. I jokingly asked that question because of the fact 

that this is not a cream-puff appointment. This is one that is going 

to require a great deal of effort and time and thought by the people 

on the Amtrak Board in order to resolve what some would argue 

are irresolvable issues, and you have a very divided political climate. 

There are some Members of Congress that I suspect would just 

as soon Amtrak go away. Others would take the opposite position 

and say that whatever revenues they need to continue to operate, 

the government would provide those revenues. So I mean, you’ve 

got some very strongly held opinions which are vastly different. 

You have got a system that is not working as most people would 

like it to work by any standard of measurement. 

So I mean, you point out that you do not have any experience 

in this area, and it may be that we need smart, intelligent people 

who do not have preconceived notions about what the answer is to 

come in and serve, to take a fresh approach and a fresh look at it, 

and then come up with recommendations. 

I once told President Clinton that the next time he appointed a 

commission, appoint really smart, intelligent people who know 

nothing about the subject matter so they can come to the table 

with an open mind and listen to the arguments on various sides. 

24

I think that can be very helpful. But at the same time, not knowing 

the history of this can also be problematic as far as the learning 

curve. 

Now, can you tell the Committee a little bit about how you envision what your job is going to be, knowing that this is not similar 

to what you have done in the past? 

Mr. LANEY. I will give it a shot, Senator. I do not think it is that 

far away from our transportation experience. There was some considerable, but nothing like what I’m about to step into, experience 

in terms of the interrelationship between highway, general aviation 

and rail, but principally freight rail, not passenger rail. In terms 

of the role and the learning curve, I realize there is a learning 

curve, and that frankly does not intimidate me, and does not particularly concern me. 

I do come with very little preconceived notion, and I think that 

is an advantage. In terms of where we go from here, it depends a 

lot on where we can go, and that sounds a little circular. On the 

other hand, without some level of credibility that has not existed, 

at least in recent years and in recent months, then we are not 

going to have much of a partner in Congress or in the Administration. 

There have been a number of unfortunate mishaps of one sort or 

another with respect to Amtrak recently, but there have been some 

very positive steps taken, at least that is my impression from a distance. One of those steps is the employment of David Gunn, which 

I think is a very positive statement by the Board and by Amtrak. 

I think, as leastso far, there is a fairly significant step-up in credibility, or at least the potential for credibility that might not have 

been there just a few months ago. I think he has only been on the 

job 3 or 4 months. 

We have got a long way to go. I do not know the dynamics of the 

Board. I do not know what the Board’s conception is of its role. I 

think I bring to bear more corporate and private sector experience 

with respect to the interrelationship between Board and management. I do not know if this Board sees itself more in an operating 

role or not, but I do not see myself in that role. 

I do see myself as a critical analytical sounding Board for management, and I think I can play a very positive, constructive role 

with respect to the Board, its dynamics, and with respect to the 

management and its dynamics. 

I do understand the transportation industry relatively well, and 

I understand the potential for the role that passenger rail can play. 

We are a long way from that potential. During my term, whatever 

the length of that term might be, we at least have the opportunity 

to begin moving in a direction that can ultimately prove very constructive. A direction that may ultimately help close the gaps between those who oppose and those who support Amtrak, perhaps 

to bring those groups a little more closely together. 

The CHAIRMAN. I have one final question. You are the President’s 

appointee. How free are you going to be to disagree with the Administration’s recommendations either made by the President or by 

Secretary of Transportation Norm Mineta with regard to Amtrak? 

For instance, they are recommending about $521 million for Amtrak’s operation for the next fiscal year. I think Amtrak has stated 

25

that is probably less than half of what they feel they really need. 

The question is, as a Board member who has been appointed by the 

President, how free are you going to be to make independent decisions and independent recommendations which are contrary to the 

Administration? 

Mr. LANEY. I think my response is that the history that I have 

had working for then-Governor Bush, as the Chairman of the Department of Transportation in Texas, was such that I think he and 

his team then, and I believe now, trust my judgment, trust the direction that I believe a particular issue ought to go. If they disagree, or if I disagree, I think they will respect the position I take 

and hear me out, and I think oftentimes I can be fairly persuasive, 

sometimes not. 

I look at this Chairmanship as an independent position, and I 

think they view it as an independent position. It will not be long 

before I know more about Amtrak and the intricacies of the operation than probably anybody in the Administration or the Department of Transportation. Therefore, I think after a period of time 

there will be a level of trust. No doubt there will be disagreements, 

and how they are ultimately resolved I do not know. 

The CHAIRMAN. Well, I would hope you would take that philosophy into your service on the Board and become a person who really wants to find a way to help make it work, and not to shut it 

down, as some perhaps would argue. 

Senator Wyden. 

Senator WYDEN. Thank you, Mr. Chairman. I think your questions were excellent, Mr. Chairman, and highlighted a number of 

important issues. 

Mr. Laney, to begin with you, are you familiar at all with this 

General Accounting Office report? 

Mr. LANEY. No, sir, I am not. 

Senator WYDEN. Well, I would urge you, and I will make sure 

you have a copy, to look at it, because it is really scathing in terms 

of its criticism of how Amtrak goes about making decisions. I will 

just read you a couple of sections of it. 

They said with respect to the network growth strategy that Amtrak was proceeding in a speculative way. They said, and I quote 

here: ‘‘There is no empirical basis for the revenue estimates.’’ They 

said again, and I will quote, ‘‘Amtrak did not obtain a full understanding of freight railroad concerns.’’ The list just goes on and on 

in that kind of vein. 

I would like to begin by seeing if you agree with my judgment 

that it is time for a shift in Amtrak policy so that decisions are 

based on objective criteria. We can have a debate about what those 

objective criteria ought to be, and I think that is an appropriate 

thing to discuss, but I want us to go there as a public policy goal, 

to set out objective criteria. Do you agree with that judgment? 

Mr. LANEY. What I bring to bear in this role, if confirmed, is my 

experience in the private sector and in the public sector. Objective 

performance criteria, and there is even some room for flexibility 

with those criteria, are enormously powerful in moving an organization from one point to another. I trust them if they are carefully 

thought out, and I support them if they are carefully thought out. 

I do not know what GAO had in mind, but I have been a party to 

26

the development of various performance criteria, and objective criteria, in virtually every operation I have been involved in. To the 

extent an organization can be moved forward, those types of criteria can help a lot. 

So generally speaking, yes. There are some situations where they 

do not apply that well. 

Senator WYDEN. I think that is fair, and I am going to interpret 

that as a yes, with exactly the kind of qualification that is appropriate. I think that is a very reasonable orientation, and something 

on which we ought to have a debate. 

What I am concerned about is the politicizing of these routes, as 

we have seen again and again. In our part of the world there is 

enormous frustration. We have communities in rural Oregon that 

have done everything except hold bake sales in order to fund Amtrak service. They have agreed, for example, to levy per capita assessments on their constituents, so they understand that this is not 

the transportation policy of yesteryear where we are just going to 

heave money every which way and hope some of it works. I think 

that is a thoughtful answer and a constructive one. 

In the Amtrak markup that we considered earlier in the year, I 

sponsored an amendment to require that Amtrak’s Board of Directors and top management comply with the same ethical standards 

as federal officials and employees. My concern has been that there 

has been a double standard, and particularly at Amtrak, a kind of 

revolving door which favors the East Coast of the United States, 

frankly, where people go back and forth on various parts of the 

East Coast of the United States, and it certainly gives the appearance, at a minimum, of having a bias in favor of those East Coast 

routes. 

I was able to get that into the markup of the Hollings-Breaux 

legislation that we considered earlier this year. It stands ready to 

come before the Senate floor, and I would be interested in your position as to whether the same sort of ethical standards that are required of federal officials and employees ought to apply in the positions at Amtrak. 

Mr. LANEY. Senator, if you do not mind my asking for a little 

clarification, this is a revolving door conflict of interest? 

Senator WYDEN. Yes. I was concerned particularly that the head 

of Amtrak essentially spent all of his time in New Jersey, then 

went to the regional office, then went to the head of Amtrak, and 

now is back in New Jersey. He certainly at the time was making 

decisions that involved routing as it related to the East Coast of 

the United States. As a result of that, I did a review of the statutes 

in this area, and I found that there were not the same ethical requirements for officials on these Amtrak positions as there were for 

other federal officials. 

So on a unanimous basis this Committee agreed to the amendment that I have just described this afternoon, and that is something I feel strongly about. It is only fair that you have a chance 

to read it, but I would be interested in knowing as a general principle whether you think the same ethical strictures that apply to 

federal officials generally should apply in positions like the one in 

which you are being considered. 

27

Mr. LANEY. Well, frankly, I am surprised to hear that the same 

ethical principles do not apply. 

Senator WYDEN. I was very surprised as well. 

Mr. LANEY. I assumed they did. 

Now, when you talk about the movement of the head of Amtrak, 

I presume you are talking about predecessors to David Gunn. Regardless, most of the expertise in this area is a product of the concentration of passenger rail in the Northeast, no question about 

that. Therefore, I am not surprised to see someone come to work 

for Amtrak and go back to work in some of the Northeast quadrant’s rail operations. That does not surprise me. It does not particularly concern me, either, because I think we are after the most 

effective expertise, ultimately, that we can attract to Amtrak in 

moving this forward. 

I am surprised, and I do not have an answer for you other than 

to say, generally speaking, I cannot conceive of a basis for a difference in terms of ethical rules applicable to government employees versus Amtrak officials. There may be some reasons, but I am 

not aware of them. 

Senator WYDEN. I appreciate that, and I was pretty flabbergasted when I reviewed the statutes as well. By getting unanimous support for the amendment in the Committee, I made it clear 

that I am not accusing anybody of any crimes or anything of the 

sort. I have no quarrel with the proposition that there is a lot of 

expertise in the Northeast part of the United States. But when 

these routes are being made, people are negotiating about aspects 

of routing that can affect their future employment, certainly it 

gives the appearance of impropriety. That is why the Commerce 

Committee adopted this change that I proposed. 

I appreciate your answers, and just a couple of questions for you, 

if I might, Mr. Nober. I think Senator Breaux covered very well the 

question of competition among railroads, and I thought your answers were helpful there. 

On the question of Class I carriers, and this touches particularly 

on the short line railroad issue, what are your thoughts regarding 

the appropriateness of Class I carriers determining what the route 

of a short line carrier can offer the customers through the methods 

that I essentially described in my opening statement? 

Mr. NOBER. Well, Senator, I first would like to say that I think 

short line railroads provide a very critical link in the rail transportation network. They run routes that Class I carriers do not want 

to run anymore, or have chosen not to operate for whatever reason, 

and provide service to shippers that otherwise would not have it. 

Consequently, anything we can do to maintain a healthy and vibrant short line system I think is very important, and is a very important job of the Board’s. 

People have said from time to time that when Class I carriers 

have sold their short lines, they have included conditions that have 

made it difficult for short lines to operate in the most effective 

manner. That is the kind of subject that, if I were on the Board, 

would need to be looked at and determined on a case-by-case basis. 

The Board reviews those sales on a case-by-case basis. 

Senator WYDEN. The other question I had is, the small volume 

shippers are generally exasperated about the process. 

28

They look at the existing rate complaint process and say, it is 

complicated and almost too uncertain to be of any real value. I 

gather that nobody has ever even filed a case, not one, under the 

STB small rate case guidelines. I would be interested in knowing 

whether you share some of these concerns, and what you think you 

might be able to do to alleviate the concern of the small shipper 

as it relates to resolving rail disputes. 

Mr. NOBER. Well, Senator, certainly I think looking at the process by which small shippers are able to file complaints at the Board 

would be one of the highest priorities I would have if I were confirmed and went down there. The Board has taken some steps recently, just yesterday, to try to ease some of the problems. They reduced the filing fees, and hope to reduce some of the procedures. 

As I said, I certainly support any steps that can be taken that 

would be reasonable, and that would help reduce the process. 

When I got down there, I certainly would look at the steps they’ve 

taken and any others that could be found to try to resolve this. 

Senator WYDEN. I appreciate that. Again, like the ethical discussion I was having with Mr. Laney, I was pretty amazed that nobody had ever filed a case under the STB small rate case area because it seemed so complicated. I think we have just got to do better than that. 

Mr. Chairman, I share your view. I think these are two fine people, and difficult policy issues. I will be supporting both of you in 

the Committee and on the floor, and I hope both of those actions 

will take place very quickly. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Wyden. I would just follow 

up. 

Mr. Laney, I notice you mentioned you look forward to working 

and cooperating with management through Amtrak. Also, I am 

sure you mean working with labor as well. It is management and 

labor together, not just one side, but both sides. They are both integral parts of it. 

Another thing, Senator Wyden, I wanted to mention an area we 

are both very interested in, which is seniors in this country. One 

of our staff had an opportunity to take Amtrak from the West 

Coast all the way to the East Coast as a fact-finding mission, and 

one of the things that he reported back was the extensive use of 

Amtrak by seniors, which is really interesting. 

They have a lot of disposable time on their hands because of retirement, and they enjoy the ability to move around on the train, 

as opposed to being confined on an airplane, and the opportunity 

to sit down and have a meal. 

I really think that perhaps that is something that Amtrak can 

really consider in their marketing efforts. Amtrak can be very attractive to the senior population, which is the fastest-growing population in our country. The 77 million Baby Boomers will soon to be 

retiring and are becoming older Americans. That seems like a real 

opportunity for Amtrak to engage not just the commuters on the 

East Coast corridor, but seniors throughout this country who like 

the type of service that an Amtrak could provide. I would just encourage you all to take a look at that. 

29

Gentlemen, you have got a lot of support. We hopefully will be 

able to bring your confirmation to the floor of the Senate as quickly 

as possible before you leave, and good luck to both of you. We look 

forward to working with you. 

The hearing will stand adjourned. 

[Whereupon, at 3:30 p.m., the hearing was adjourned.] 

(31)

A P P E N D I X

PREPARED STATEMENT OF HON. CONRAD BURNS, U.S. SENATOR FROM MONTANA

Mr. Chairman, this Committee has spent a great deal of time talking about rail 

competitiveness issues over the last several years, and we’ve had frequent discussions with the current STB chairman and other commissioners about how rail policy 

has been applied to the detriment of rail-to-rail competition. Unfortunately, despite 

these discussions, the STB still has done little to alleviate our concerns about the 

rail industry’s monopoly power and how that power is being abused. 

In fact, recent decisions would indicate that the Board is instead moving in a direction that would further weaken the ability of captive rail customers to prevail 

in a rate case—which is about the only form of relief currently available. 

I have felt for some time that Congress must redirect federal freight rail policy 

by legislatively requiring various forms of rail-to-rail competition and providing for 

a more simplified and time efficient dispute resolution process such as final offer 

arbitration. That’s why I introduced S. 2245, the Railroad Competition, Arbitration 

and Service Act of 2002, and I am also a co-sponsor of S. 1103 the Railroad Competition Act of 2001. 

But while the legislative debate continues and is carried over into the 108th Congress, I certainly hope that Mr. Nober—should he be confirmed as the new Chairman of the STB—will pay more attention to the needs of the rail customer community the STB is supposed to be protecting than his predecessors have done. Frankly, 

if I had reason to believe that he would not take a new approach, I would be tempted to oppose his nomination. 

However, since we have been hoping to install a new STB Chairman for more 

than a year now, my constituents would not benefit were I to simply use this nomination to make a point. So instead, I strongly caution Mr. Nober to take a more 

aggressive stance in support of bringing rail-to-rail competition to bear on the rail 

industry. 

Although there may be some limitations on what the Board can do independent 

of congressional action, most observers accept that the competing tensions of the 

statute—the need to maximize competition while maintaining revenue adequacy—

leave a great deal of room for discretion. For example, such discretion could be applied to things such as the availability of segment, or ‘‘bottleneck’’ rates, or the ability of a rail customer to gain competitive access through switching in a terminal 

area. 

The rail industry is no longer fragile and unable to stand additional competition 

as it was in the late 1970s. According to the fact books produced by the Association 

of American Railroads, the average annual return on net investment in the railroad 

industry was just: 2.3 percent in the 5 years prior to the Staggers Act (1976–1980) 

compared to an annual average of approximately 7.5 percent 20 years later (1996–

2000), or nearly a threefold increase. Similarly, return on equity increased nearly 

threefold, from an average annual figure of 3.5 percent during the 5-year period 

prior to Staggers, to 9.5 percent in the 5-year period 20 years later. 

Furthermore, evidence shows that competition among railroads works—and does 

so without harming the industry’s financial picture. Here in the U.S., competitive 

access through trackage rights was imposed over 4,000 miles of the UP/SP track, 

and both the UP and BNSF have testified before Congress that they’re working 

well. Shared asset areas were adopted in a few terminal areas as part of the Conrail 

split without negative consequences. And our neighbors to the north have demonstrated that similar policies promoting competition can work well without causing 

financial harm. 

The future success of railroading must be based on meeting the changing needs 

of a growing customer base. Yet without competition, this future will not be realized. 

32

Mr. Nober, upon confirmation, I urge you to use your position as STB Chairman 

to help shape the railroad industry into one that offers competitive services to all 

of its customers. I also encourage you to modify the STB’s regulatory approach to 

one that encourages intermod’.al and intramodal competition while offering streamlined and cost-effective relief to rail users that are not benefiting from such competition. 

Not only will such an approach be help shape the ultimate outcome of the procompetitive policy changes my colleagues and I are supporting, but it also will prepare railroads for their evolution from a monopoly into an increasingly competitive 

businesses. 

Thank you, Mr. Chairman. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN MCCAIN

TO DAVID MCQUEEN LANEY

Question 1. Mr. Laney, as a nominee to serve on the Amtrak Board, how familiar 

are you with Amtrak’s current financial and operational situation? What do you see 

as Amtrak’s fundamental problems and how do you hope to address them? 

Answer. My familiarity with Amtrak’s current financial and operational situation 

is cursory at best, principally a product of newspaper reports. Amtrak’s fundamental 

problems are credibility on the one hand, and lack of any clearly defined position 

within the overall framework of national transportation policy on the other. There 

are, of course, fundamental organizational, management, labor, operational, and financial problems as well. 

Question 2. What do you consider to be the appropriate role of the Amtrak Board 

of Directors? Do you see yourself as taking an active role in determining the future 

of Amtrak? Who do you believe you represent in your capacity as a Board member? 

Answer. The roles of the Amtrak Board of Directors are numerous; in general 

terms, they include hiring, firing and compensating the chief executive officer, and 

providing oversight of the performance of management an against established performance criteria, usually in the form of a strategic business plan developed and 

adopted by the Board. I do see myself as taking an active role in shaping the future 

of Amtrak. There are a number of constituencies I view the Board as representing, 

but the principal constituencies are Congress, the Administration and current and 

potential passenger rail users. 

Question 3. As you may be aware, since the current Board was appointed in 1998, 

Amtrak’s debt load has quadrupled to over $4 billion. Further, Amtrak’s new President, David Gunn, has publicly stated that Amtrak officials were not providing Congress or the American taxpayers with factual information in regard to it being on 

the so-called ‘‘glidepath to self-sufficiency. It is my belief that the Board has utterly 

failed in meeting its fiduciary responsibilities.’’

Answer. I do not have information sufficient to conclude that the ‘‘Board has utterly failed in meeting its fiduciary responsibilities.’’ From a distance, the apparent 

lack of adequate financial information or lack of adequate disclosure of such information, or both, is troublesome. 

Question 4. Given your considerable legal expertise, under what circumstances do 

you consider it appropriate to demand that a board of directors resign? 

Answer. Malfeasance or criminal activity on the part of all Board members could 

lead to a demand that an entire Board of directors resign. Nonetheless, it is extraordinarily rare that the resignation of an entire Board of Directors of any business 

would be in the best interests of that business or any parties interested in the stability and continuity of that business. 

Question 5. What is your view of the Administration’s proposal announced by Secretary Mineta in June for reforming Amtrak ? 

Answer. Regarding my view of the Administration’s proposal announced by Secretary Mineta, I should first say that without a more detailed understanding of Amtrak organization, finances, and operations, I am not in a position to judge with any 

real comfort. On the other hand, I did find elements of the proposal—which I presume mirrors the ARC proposal—to be intriguing possibilities. 

Question 6. What do you believe is the appropriate role of the states in intercity 

passenger rail service in terms of service planning, oversight, and, perhaps most importantly, funding? 

Answer. The role of the states in intercity passenger rail service in terms of service planning, oversight and funding is evolving, and almost certainly will, and 

should, become more actively participatory. Principal issues relating to that evolution of the states’ roles include uniformity of approach and service quality from 

state to state, coordination of state activity, and the pace, method and terms by 

33

which state roles evolve. That process cannot begin effectively, in my judgment, 

until Amtrak’s core operations and relations among Amtrak, Congress and the Administration are stabilized. 

Question 7. I believe Amtrak operates three routes in Texas: the Sunset Limited, 

the Texas Eagle and the Heartland Flyer. The Sunset Limited lost $347 per passenger in fiscal year 2001 and the Texas Eagle lost $258 per passenger. Do you 

think this kind of subsidy is warranted? How do you believe decisions should be 

made to add, reduce or eliminate train service? 

Answer. I do not know what absolute level of subsidy is warranted; but I do believe that some level of subsidy is probably unavoidable. I am a bit wary of singling 

out and judging any route on a stand-alone basis based solely upon its per passenger expense level. As for decisions to add, reduce or eliminate train service, I do 

not know the criteria currently utilized by Amtrak management, or the criteria that 

should be considered. I don’t know the rationale by which any particular route has 

been added or eliminated, so I don’t believe I am in a position to speak to the appropriate criteria for Amtrak’s route selection. 

Question 8. As you may be aware, earlier this summer Amtrak threatened to shut 

down its entire system unless it received additional and immediate assistance from 

the federal government. While I had no doubts about the urgency of the financial 

situation, I question why Mr. Gunn threatened to shut down commuter trains operated by Amtrak on a contractual basis, and to shut down all operations on the 

Northeast Corridor, including freight and commuter service. The threat of a halt in 

service had commuter authorities scrambling and, to me, demonstrated why Amtrak 

should not control the Northeast Corridor infrastructure. 

At a minimum, shouldn’t we expect Amtrak to have a contingency plan in place 

to prevent this kind of calamitous situation from recurring? Would you be willing 

to commit to working with Amtrak and the DOT Secretary to develop such a plan? 

Answer. I do not know all of the circumstances that led to Mr. Gunn’s ‘‘shut 

down’’ announcement, nor am I aware of all the effects the threatened shut down 

had on commuter and freight operations throughout the Northeast Corridor. I would 

like to think that approach could be avoided in the future, and I would certainly 

be willing to work with Amtrak and DOT to develop an alternative approach in 

dealing with any comparable situation should it occur. 

Question 9. In a normal business, the consequences of not meeting a company’s 

business plan include a lower stock price, cost-containment measures, reductions in 

service, salary freezes, and the elimination of bonuses. Amtrak has consistently 

failed to meet its business plan, but the only real consequence has been to increase 

the financial burden on the American taxpayers. What consequences should apply 

to Amtrak? Wouldn’t the introduction of competition help motivate Amtrak to operate more efficiently and follow through on its business plan? 

Answer. If Amtrak were a normal business, by now it would have failed. Of 

course, it is not a normal business. But it is a business that could use a realistic 

and viable business plan, and the greatest discipline for virtually any business operation is competition or the threat of competition. 

Question 10. Amtrak (i.e., the taxpayers) funds most of the capital costs of the 

Northeast Corridor even though most of the trains on the corridor are commuter, 

not Amtrak trains. The current capital backlog on the corridor is estimated to be 

about $5 billion and there is an annual need for $1 billion in capital to maintain 

the corridor. Yet the commuter authorities using the Corridor reimburse Amtrak 

only for their incremental costs. In fiscal year 2001, this amounted to less than $100 

million. Given Amtrak’s financial problems, would you support a reevaluation of the 

allocation of the capital costs on the Northeast Corridor to more accurately reflect 

usage? 

Answer. Deferred and current capital investment needs must be credibly identified, prioritized and covered to preserve the value of the NEC infrastructure asset 

for Amtrak, for any Amtrak successor(s), and for reasons of current safety and service reliability. Recovering a greater percentage of those costs currently borne by Amtrak seems appropriate, even essential considering Amtrak’s current circumstances. 

I should add, however, that I do not know why Amtrak bears such a seemingly disproportionate share of these costs, and what reasons there might be to continue 

such an allocation. I am a bit uncomfortable in making any absolute assertion without a more complete understanding of how the current situation occurred.

34

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. ERNEST F. HOLLINGS

TO DAVID MCQUEEN LANEY

Question 1. Amtrak has a number of challenges facing it as we debate in Congress 

its future and the future of passenger rail in this country. What tools do you feel 

Amtrak needs to address these challenges and succeed in its mission to operate a 

‘‘national rail passenger transportation system?’’ Answer. First, passenger rail as a concept needs consensus support as an essential element of our national transportation policy, whether or not that concept is tied 

to Amtrak itself. Amtrak itself will have to be the starting point for any revitalization of passenger rail as an element of our national transportation policy, and it will 

need adequate and predictable levels of funding, ideally from permanent, dedicated 

sources. Such funding will likely not be available until Amtrak itself reestablishes 

its own credibility with Congress and the Administration, which in turn will require 

a viable and realistic strategic plan by which Amtrak’s progress and performance 

can be measured. 

Question 2. The Administration has proposed funding Amtrak with $521 million 

for fiscal year 2003, which is less than half of what Amtrak has stated it will need 

to continue operations. What do you think about the Administration’s proposal? Isn’t 

this basically a bankruptcy declaration for the railroad? 

Answer. I do not believe that the Administration wants to see Amtrak bankrupt. As I understand it, the $521 million is roughly the level of actual funding Amtrak 

has received for years. Although I have not spoken with Administration officials on 

this issue, I would like to think that there could be flexibility in that number as 

long as Amtrak’s management develops a credible alternative budget proposal in the 

context of an overall plan acceptable to the Administration by which progress could 

be measured. 

Question 3. In your experience as Chairman of the Texas Transportation Commission, how much money do states like Texas have in their transportation budgets for 

passenger rail service? Do you feel federal funding is essential to maintain intercity 

passenger rail service? 

Answer. Texas had virtually no money in these transportation budgets for passenger rail service; I am not familiar with other states’ transportation budgets. Assuming most states are similarly situated in terms of their transportation budgets, 

federal funding is essential to maintain intercity passenger rail service. I could envision the states assuming a more participatory role over time. 

Question 4. The state of Texas made a $5.6 million loan to Amtrak in 1997 for 

the Texas Eagle; the loan was paid back early in full, but only after, I understand, 

the state required every town along the route to co-sign the loan. As Chairman of 

the Texas Transportation Commission, what was your role in the loan transaction? 

Answer. As Chairman of the Texas Transportation Commission, I oversaw the development of the loan structure and terms, worked with the state legislature and 

Governor’s office, and ultimately approved the loan. 

Question 5. Are you familiar with S. 1991, the National Defense Rail Act, which 

this Committee reported out earlier this year by a vote of 20-3? If so, do you have 

any comments about the legislation, and how important do you feel it is that Congress make passenger rail a priority? 

Answer. I have reviewed summaries of S. 1991, although I am not yet intimately 

familiar with it or in a position to comment on the substance of the legislation. I 

do believe that Amtrak is at a pivotal juncture, which provides Congress with a 

unique opportunity to clarify passenger rail as an important and permanent element 

of our national transportation policy. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN MCCAIN

TO ROGER P. NOBER

Question 1. What do you consider to be the most important issue facing the STB? 

Answer. I believe that the most important and continuing challenge for the Board 

is to continue to serve as a fair, impartial and efficient forum to adjudicate the 

issues that Congress has vested with it. While I do not believe that it would be appropriate for me to discuss particular issues that may come before the Board, I do 

believe there are several general areas that merit mention. For example, there appears to be a significant divide between railroads and certain of their customers 

with respect to rates and service issues, and there also appears to be ongoing concern about the possibility of future rail mergers. 

Question 2. You have a unique perspective on the STB since you helped formulate 

the legislation that created the Board. What do you consider to have been the biggest accomplishments of the Board since it was established and do you believe there 

35

are changes that should be made—through either legislation or regulation—to improve its effectiveness? 

Answer. I am particularly pleased to have been nominated by the President to 

this position because I helped formulate the legislation that created the Board. It 

is an agency that has faced significant challenges in the past and I look forward 

to the opportunity to help guide it into the future. 

I believe the biggest accomplishment for the Board has been its handling of matters vested in it by Congress—successes which are reflected in its work product, its 

favorable record in the reviewing courts, and its encouragement of private-sector 

resolutions. Of course, the Board must constantly review its processes to ensure that 

its law is being administered appropriately and effectively and that they reflect the 

ever-evolving surface transportation marketplace. If confirmed, I would work to ensure that the Board continued to do so. 

I believe it is important to work closely with Congress, and if I confirmed I would 

work closely with Congress on any legislative changes that it believes might be necessary or appropriate. And if Congress should conclude that legislative changes are 

necessary or appropriate, the Board should be prepared to implement the changes 

and administer the revised law in an effective manner. 

Question 3. What do you consider will be your primary role as Chairman of the 

STB? Who do you believe you represent in this position? 

Answer. The Chairman and the other Board members must implement the law 

and represent the public interest, which embraces and must take into account all 

those affected by the Board’s actions. The Chairman also has a significant management role as well, and I believe that a primary role of the Chairman is to manage 

and lead the agency, as well as to work to establish the overall agenda for the 

Board. The Chairman should ensure that the Board’s docket of cases is handled efficiently and effectively in accordance with the statute. 

Question 4. What is your view of the consolidation that has taken place in the 

rail industry over the past 20 years? Have the recent mergers produced their forecasted benefits? 

Answer. I understand there is significant concern about the increased consolidation in the rail industry over the past two decades. This concern is similar to the 

concerns expressed about consolidation in other transportation modes, as well. The 

STB has been vested with the authority to review each merger in the railroad industry. Each transaction must be looked at on its own merits and reviewed according to the facts and the law. 

Question 5a. As you know, the Board was directed to issue new guidelines for 

small rate cases as part of the ICC Termination Act, and it published simplified 

guidelines for use in small rate cases in 1996. I understand that not a single case 

has been filed under the new procedures. Why do you believe that is? After all, we 

often hear that small shippers are dissatisfied with rail rates. Doesn’t this indicate 

to you that perhaps the guidelines need more work? 

Answer. I understand that many small shippers remain dissatisfied with the procedures for consideration of small rate cases at the Board. If confirmed, one of my 

priorities would be to look very carefully at this issue to determine the extent and 

merits of the problem and whether there are any regulatory measures the Board 

could take to address these concerns in a fair and equitable manner. 

Question 5b. Is this an issue that Congress needs to address? 

Answer. If these issues could not be addressed further through regulatory action, 

then the Congress may wish to address it statutorily. 

Question 5c. If confirmed, what will you do to address this issue? 

Answer. As I have indicated, if confirmed I would continue to see if there is anything more that the Board could do in this area and assist Congress as appropriate 

in any legislative examination of the issue that it might wish to pursue. 

Question 6. As you know, some shippers support open access to create competition 

between railroads and force rates down. Do you think the current statute and regulations with respect to maximum rates sufficiently protect shippers from abusive 

rates? 

Answer. I understand that this is an issue that some shippers would like to see 

the Board take further action on. However, I also understand that parties are seeking to clarify and refine the rate standards and processes in several pending cases 

before the Board. I do not believe that it would be appropriate for me to comment 

on the issues raised in the pending cases. I can assure you, however, that I would 

give those cases careful attention if I am confirmed. 

Question 7. What is your view on the use of arbitration to settle rate disputes? 

When do you think the use of arbitration is appropriate? 

Answer. I am aware that alternative dispute resolution (ADR) has been used in 

other areas with success and I believe that ADR should be encouraged for settling 

36

rate disputes. If confirmed, I would look carefully at the use of ADR for settling rate 

cases and work with all of the parties to address the issues its expanded use raises. 

Question 8. Legislation has been introduced in the House to give the Board authority to order directed service in the event of an Amtrak shut-down. The Board 

would be able to order continued maintenance, signaling, and dispatching on the 

Northeast Corridor. It would also be able to order the continuation of commuter 

services around the country. What is your view of this proposal? 

Answer. Since I have not yet been confirmed, I do not believe it appropriate to 

comment in detail on legislative proposals pending in Congress that affect the 

Board. However, I believe that the Board has the expertise to handle these matters, 

if the Congress determines that vesting the Board with such authority is necessary. 

But, of course, cooperation among the parties would also be required. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. CONRAD R. BURNS

TO ROGER P. NOBER

Question 1. How does the Board’s new segmented stand-alone cost test help smaller shippers who already feel they have no regulatory recourse? 

Answer. Both of these questions relate to substantive issues contained in the decision issued by the Board on August 20, 2002, in STB Docket No. 42054, PPL Montana, LLC v. The Burlington Northern and Santa Fe Railway Company. It is my 

understanding from the Board that PPL Montana, the complainant in that case, has 

requested and received from the Board an extension of time, until September 30, 

2002, in which to file a petition for Board reconsideration of that decision. Thus, 

it appears that the Board will be called upon to reconsider its decision and issue 

a ruling on that request for reconsideration. 

Question 2. Is it appropriate for the STB to administratively deregulate rail rates 

on branch lines, as the PPL Montana decision appears to do? 

Answer. I do not believe that it would be appropriate for me to comment on any 

case that is currently before the Board or that is likely to come before me if I am 

confirmed as a Board member. Therefore, I do not believe it is appropriate for me 

to comment on the aspects of these decisions that you have raised at this time.

Æ