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95–176 PDF 2015

IS THE RAILROAD RETIREMENT BOARD DOING 

ENOUGH TO PROTECT AGAINST FRAUD? 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

GOVERNMENT OPERATIONS 

OF THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

MAY 1, 2015 

Serial No. 114–23 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://www.house.gov/reform 


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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

JASON CHAFFETZ, Utah, Chairman 

JOHN L. MICA, Florida 

MICHAEL R. TURNER, Ohio 

JOHN J. DUNCAN, JR., Tennessee 

JIM JORDAN, Ohio 

TIM WALBERG, Michigan 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

BLAKE FARENTHOLD, Texas 

CYNTHIA M. LUMMIS, Wyoming 

THOMAS MASSIE, Kentucky 

MARK MEADOWS, North Carolina 

RON DESANTIS, Florida 

MICK MULVANEY, South Carolina 

KEN BUCK, Colorado 

MARK WALKER, North Carolina 

ROD BLUM, Iowa 

JODY B. HICE, Georgia 

STEVE RUSSELL, Oklahoma 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

GLENN GROTHMAN, Wisconsin 

WILL HURD, Texas 

GARY J. PALMER, Alabama 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

MATT CARTWRIGHT, Pennsylvania 

TAMMY DUCKWORTH, Illinois 

ROBIN L. KELLY, Illinois 

BRENDA L. LAWRENCE, Michigan 

TED LIEU, California 

BONNIE WATSON COLEMAN, New Jersey 

STACEY E. PLASKETT, Virgin Islands 

MARK DeSAULNIER, California 

BRENDAN F. BOYLE, Pennsylvania 

PETER WELCH, Vermont 

MICHELLE LUJAN GRISHAM, New Mexico 

SEAN MCLAUGHLIN, Staff Director 

DAVID RAPALLO, Minority Staff Director 

ALEXA ARMSTRONG Professional Staff Member 

SARAH VANCE, Clerk 


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SUBCOMMITTEE ON GOVERNMENT OPERATIONS

MARK MEADOWS, North Carolina, Chairman 

JIM JORDAN, Ohio 

TIM WALBERG, Michigan, Vice Chair 

TREY GOWDY, South Carolina 

THOMAS MASSIE, Kentucky 

MICK MULVANEY, South Carolina 

KEN BUCK, Colorado 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

GLENN GROTHMAN, Wisconsin 

GERALD E. CONNOLLY, Virginia, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

WM. LACY CLAY, Missouri 

STACEY E. PLASKETT, Virgin Islands 

STEPHEN F. LYNCH, Massachusetts 


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C O N T E N T S 

Page 

Hearing held on May 1, 2015 ................................................................................. 1 

WITNESSES 

The Hon. Martin J. Dickman, Inspector General, Railroad Retirement Board 

Oral Statement ................................................................................................. 5 

Written Statement ............................................................................................ 7 

The Hon. Michael S. Schwartz, Chairman, Railroad Retirement Board 

Oral Statement ................................................................................................. 30 

Written Statement ............................................................................................ 32 

Mr. Daniel Bertoni, Director, Education, Workforce, and Income Security, 

Government Accountability Office 

Oral Statement ................................................................................................. 38 

Written Statement ............................................................................................ 40 

APPENDIX 

Questions from Chairman Meadows ...................................................................... 84 


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IS THE RAILROAD RETIREMENT BOARD 

DOING ENOUGH TO PROTECT AGAINST 

FRAUD? 

Friday, May 1, 2015 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON GOVERNMENT OPERATIONS, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 11:02 a.m., in room 

2154, Rayburn House Office Building, Hon. Mark Meadows (chairman of the subcommittee) presiding. 

Present: Representatives Meadows, Walberg, Mulvaney, Carter, 

Grothman, Connolly, and Maloney. 

Also present: Representatives Palmer and Mica. 

Mr. MEADOWS. The Subcommittee on Government Operations 

will come to order. 

Without objection, the chair is authorized to declare a recess at 

any time. 

I ask unanimous consent that our colleagues Mr. Mica and Mr. 

Palmer be allowed to fully participate in today’s hearing. 

Without objection, so ordered. 

I now recognize Mr. Connolly, the ranking member of the Subcommittee on Government Operations, for his opening Statement. 

I will let you go first, Mr. Connolly. 

Mr. CONNOLLY. Thank you, Mr. Chairman. 

And thanks for calling this hearing on a day when we’re out of 

session. 

For over a century, the railway industry has supported thousands of well-paying jobs across our Nation, including more than 

16,000 railroad workers and retirees in the Commonwealth of Virginia. We all ought to be proud of this American success story. 

The Railroad Retirement Board was created in the 1930’s to administer retirement, unemployment, sickness, and survivor benefit 

programs for railroad workers and their families. In that era, railroad workers had a well developed pension plan but sought to expand it to a national retirement system because Social Security 

was still in the planning stages. The results of those workers’ efforts and legislation is what we see today, one of the largest pension funds, worth more than $26 billion last year. The most impressive aspect of this retirement plan is that it is solely funded by fees 

collected from railroad workers and rail employees. In fact, railroad 

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checks to pay for their retirement than most individuals contribute 

to Social Security for theirs. 

The bottom line is that the RRB is responsible for administering 

a vital safety net that Is only funded by and only benefits America’s railroad workers and families who are not eligible to claim Social Security benefits. Today we’re here to discuss oversight of disability benefits programs provided by the railroad retirement system. Concerns have legitimately been raised about the vulnerability for fraud in those programs. This is an important discussion 

because it’s against the background of the Long Island Rail Road 

retiree fraud, in which the RRB and its inspector general initially 

failed to detect widespread false claims for occupational disability 

benefits. 

Fortunately, a team consisting of the Department of Justice and 

the OIG was eventually able to uncover the fraud and bring those 

responsible to justice. Let’s be clear, all stakeholders abhor and 

condemn in the strongest possible terms the massive fraud perpetrated by LIRR retirees, doctors, and disability facilitators. In 

fact, railroad workers and their families were likely the most outraged about it since it’s their money that solely funds the RRB-administered pension fund, and, ultimately, any theft from that fund 

comes out of their pockets. Indeed, no group in America has a 

greater incentive to enhance RRB’s ability to detect and prevent 

disability fraud than our Nation’s railroad workers since it’s their 

money, and theirs alone, which will rise to compensate for any 

theft from the fund. 

In 2014, GAO found that the RRB is at risk for making improper 

payments to individuals who did not qualify for occupational disability benefits because there’s no systematic way to evaluate potential fraudulent claims or prevent fraud. GAO also found that the 

RRB was not sufficiently committed to fraud awareness throughout 

the agency. GAO and the IG has produced several recommendations to improve the integrity of the disability programs. And it’s 

important to note the RRB is implementing a set of initiatives to 

strengthen fraud detection and prevention pursuant to GAO recommendations. 

For example, the RRB now requires independent medical exams 

for all disability applicants, as opposed to relying on medical evidence submitted by the applicant. The RRB is also expanding its 

fraud awareness training beyond its headquarters to apply to all 

staff. It’s important we bring balance to this hearing. The vast majority of dedicated and hard-working railroad retirees who participate in disability programs are honest and deserving recipients of 

the earned benefits that they and other railroad workers solely 

funded. 

Mr. Chairman, this is personal for me. My mother’s side of the 

family were all railroad men. My grandfather made very little, 

didn’t have much of a pension, and died prematurely because, 

frankly, of the toxic effects of the exhaust he was subjected to every 

day. My uncles and their uncles were all railroad men. And they 

were hard-working people who certainly didn’t cheat the system. 

And I think they were in great company. 

I just want to say that because I know from personal experience 

what working on the railroad can be like. And it’s hard work. And 


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it takes a lot out of the body over a number of years. And I hope 

we—I know you and I hope and certainly believe my colleagues will 

respect that fact. 

As with any program, there are always unscrupulous individuals 

who are dishonest and seek to perpetrate fraud. And it’s vital we 

uncover those individuals and bring them to justice. However, it 

would be deeply unfair to presume that the majority of participants 

are dishonest based on those few bad actors. Further, we must exercise caution in advancing solutions to ensure that we do not adversely impact the thousands of railroad retirees who work hard 

and played by the rules, like my grandfather and my uncles. For 

instance, while high approval rates for disability benefits may indicate a higher risk of fraud, it’s an imprecise indicator. Depending 

on the structure of a given plan, it’s also plausible that a program 

might feature high integrity and high approval rates. 

Moving forward, Congress should provide the RRB with a fair opportunity to implement the recommendations made by the GAO 

and the IG and gauge how well they are working. By doing so, we 

can avoid punishing the majority of railroad workers who have 

done nothing wrong because of the transgressions of a few; protect 

the National Railroad Retirement Investment Trust that is funded 

by our Nation’s hard-working railroad workers. 

I look toward to the testimony of our witnesses today. And I 

thank the chair for his courtesy. 

Mr. MEADOWS. I thank the gentleman from Virginia. 

And rarely do we share the same kind of background that we do 

today. Actually, my grandfather worked on the railroad for security 

in Pine Bluff, Arkansas. There was never a more honest individual 

or a hard-working individual. In addition, I have one of my dearest 

friends, Forrest Jarrett, who is a retired security gentleman from 

one of the rail industries. And he’s admonished me: Whatever you 

do, be good to the guys that work on the rail. 

And so it is with that in mind that not only do we hold this hearing but that we look to address some of the bad actors as the ranking member is talking about. We’re here really today to perform 

one of the committee’s core function, and that is protecting the taxpayer dollars from waste and fraud. And, in this case, we’re also 

trying to protect the wallets of every single railroad customer in 

the country. 

And the chain of events that brought us here today actually 

started in the late 1990’s when a group of doctors, RRB employees, 

and union officials, and railroad workers in the New York area conspired to defraud the Railroad Retirement Board—or its disability 

program. And this fraud scheme that they cooked up was fairly 

simple: Union officials and RRB employees connected some railroad 

employees with crooked doctors who sold phoney paperwork for 

cash in my opinion. And the railroad employees took phoney paperwork to the RRB to support their claims for disability payments. 

Now, unlike the gentleman to my right’s grandparents and relatives and my grandfather—we couldn’t imagine that happening 

from somebody in our family. And so that is what has brought us 

here today. By the time they were caught, the fraud ring resulted 

in the RRB awarding $1 billion worth of bogus disability claims. 


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As we’re going to hear from two of our witnesses today, the RRB 

remains at risk for similar scams still today. If we could start the 

video please. What we’re about to look at here is a Long Island Rail 

Road employee who was simultaneously earning a fifth degree 

black belt in jujitsu. Now, when this video was filmed, the man was 

collecting occupational disability benefits from the RRB. 

[Video shown.] 

Mr. MEADOWS. And, according to this man’s disability application, he suffered from severe pain in his shoulder, lower back, and 

neck. Maybe it’s because of all of this activity. He claimed the pain 

was so severe that he had a difficult time standing, sitting, walking, bathing, and dressing. And the RRB claim examiner determined that he was no longer capable of performing his job because 

of his physical condition. 

I would ask each one of you, what do you think? 

Had the RRB claims examiner had access to this video, I hope 

that things would have turned out differently. But, even still, without the video, there would have been other things that should have 

struck the examiner as odd. For example, in his last 17 months as 

a railroad employee, he worked about 1,500 hours of overtime, including the day before he retired with disability working overtime. 

He claimed that he had trouble doing the basic tasks, to manage 

the work, massive amount of overtime until the very last day of retiring. But the RRB claimed that examiners don’t ask those sort of 

questions. As the inspector general will tell us, they just rubber 

stamp it. 

Now, the man in the video was only one of many individuals involved in this fraud scheme. There were others who were observed 

by the investigators competing in golf tournaments, playing tennis, 

participating in a 400-mile bike ride, and even hiking Mount Kilimanjaro. The RRB’s disability benefits program is a crucial safety 

net for rail workers who are injured due to the demanding nature 

of the job. And we must protect it from fraud so that it can serve 

those who suffer from legitimate disabilities. 

Now, all of this came to light in 2008. And the IG began making 

immediate recommendations addressing the potential areas that 

undermine the disability application process. And the first of the 

IG’s recommendations was in 2008. And, since that time, the IG 

has issued nearly 70 other recommendations in response to the 

Long Island Rail Road fraud scheme. Yet, according to the IG, it 

appears that only 5, get that, 5 of 70 recommendations have been 

fully implemented. February of last year, the inspector general 

issued a 7-day letter. Now, a 7-day letter is kind of a last-resort 

tool that the inspector generals use. It’s kind of basically like the 

government’s equivalent of pulling a fire alarm, saying, Wait, we 

got a real problem here. 

So what’s the fire? Well, the national approval rate for disability 

applications remains just as high as it was when the LIRR fraud 

scheme was bilking the RRB out of billions of dollars. 

Sounds like not much has changed. And I look forward to hearing from Mr. Dickman and Mr. Bertoni about the problems that 

they have identified and about their recommendations to fix those 

problems. But what I real want to hear today will come from you, 

Mr. Schwartz. You can tell us why these problems still persist and 


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haven’t been fixed after all these years. More importantly, when 

can we expect to hear that the RRB is finally taking some meaningful actions to ensure that the program remains available for 

those that are truly in need? 

So I would like to thank all the witnesses here today for joining 

us. And I look forward to hearing your testimony. And, with that, 

I want to hold the record open for 5 legislative days for any members who would like to submit a written Statement. 

Mr. MEADOWS. We will now recognize the panel of witnesses. 

I’m pleased to welcome the Honorable Martin Dickman, inspector 

general of the Railroad Retirement Board. 

Welcome, Mr. Dickman. 

The Honorable Michael Schwartz, Chairman of the Railroad Retirement Board; and Mr. Daniel Bertoni—is that correct? Close 

enough? 

Mr. BERTONI. Close enough. 

Mr. MEADOWS. Okay. Bertoni, Director of Education, Workforce, 

and Income Security at the Government Accountability Office, also 

known as the GAO. 

Welcome to all of you. 

And, pursuant to committee rules, all witnesses will be sworn in 

before they testify. I’d ask that you please rise and raise your right 

hand. 

Do you solemnly swear or affirm that the testimony you are 

about to give will be the truth, the whole truth, and nothing but 

the truth? Let the record reflect that all witnesses answered in the 

affirmative. And, in order to allow time for discussion, I would ask 

that your oral testimony be limited to 5 minutes. Your entire written Statement will be made part of the record. 

I would like to go ahead and recognize our first witness, Mr. 

Dickman. 

WITNESS STATEMENTS 

STATEMENT OF THE HONORABLE MARTIN J. DICKMAN 

Mr. DICKMAN. Thank you, Chairman Meadows, Ranking Member 

Connolly and members of the committee, thank you for allowing 

me the opportunity to speak to you here today. As an inspector 

general of the Railroad Retirement Board, the basic function of an 

inspector general is to promote economy and efficiency; prevent and 

detect waste, fraud, and abuse of the parent agency. 

Pursuant to our 7-day letter and our continuing examination of 

the Railroad Retirement Board’s occupational disability program 

starting in 2007, it has been an ongoing educational process to us 

as far as the programs involved by the Railroad Retirement Board. 

And I go into much greater detail about the problems and some of 

the solutions that we have presented, many different types of solutions, all the way from eliminating the Railroad Retirement 

Board’s occupational disability program to limiting it to a 2-year 

program. And I would be happy to explain that later in the conference. 

Drilling down to the core issue, the core issue—and these are my 

views alone. They are not representative of the administration or 

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road Retirement Board, this culture of we’re here to pay, without 

looking at anything else, without even—and they acknowledge it— 

without even using and acceding to the regulations that are in 

place, as far as finding out the job description, as far as doing more 

of an in-depth analysis of the individual’s application process, and 

then we have also obviously made recommendations that require 

change in regulations or even some change by the legislature, by 

the Congress. But, basically, it goes to this feeling that, again, 

we’re here to pay. And unless that culture is changed, all of the 

money that’s going to be spent, the $3.3 million that’s proposed in 

the Fiscal Year 2016 budget for program integrity, in my opinion, 

would be a total waste of money. 

And, to us, the proof is in the 98 percent approval rate that continues. Other people may say 98 percent, you know, they’ve got— 

if you looked at the surface of what they have done and look at the 

various programs, you’d say the inspector general has to be, you 

know, he’s an idiot because look at what we’re doing here. We have 

these doctors that look at these people; we’ll review this; we’ll review that. It’s all superficial. The doctors look at somebody for 20 

minutes. The American Medical Association will say to do an indepth examination, a residual functional capacity exam takes 6 to 

8 hours to find out whether the person is lying or not. 

The other portion that really has to change is the structure of 

the Board. I realize and everyone else realizes it’s a function of collective bargaining between labor and the management. Those are 

the realities of the situation. The big-ticket items are decided by 

them. And, in my opinion, you know, forget about what the Chairman wants; forget about what Congress wants; it’s what they want 

to do. Because they are a very powerful force and because, you 

know, the basic function of the railway and how it is intertwined 

in our economy, that if occupational disability is somewhat 

changed, there would be a nationwide rail strike. And everybody 

knows that. 

But to give the Railroad Retirement Board an opportunity, a real 

opportunity for change, in my opinion, the Board structure has to 

be changed from this troika, where you have a rail member, management member, and a Chairman. And the Chairman is only 

Chairman in name only. He has no more power than anybody else. 

So the big ticket items are decided by rail and labor. And the 

Chairman just sits there, tries his best, in my opinion, is the most 

aggressive pushing for change. But the end result is, as I have 

said, we still have this 98 approval rate. 

So, unless something like that is done, then I don’t think that all 

this money that’s going to be spent is really going to make any difference down the road. We could come back here 2 years from now 

and we’ll still have a 98 percent approval rate. 

I thank you for the opportunity to speak this morning. And, 

again, I would like to thank my staff for doing all the heavy lifting 

in this program and also, as far as concerning the Long Island Rail 

Road case, the U.S. attorney, who took on a very difficult case, and 

the FBI, which also helped tremendously in this matter. Thank 

you. 

[Prepared Statement of Mr. Dickman follows:] 


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Mr. MEADOWS. Thank you, Mr. Dickman. 

I would be remiss, I appreciate not only your staff but your leadership on this. But I would be remiss if I didn’t say that we have 

got a great staff here, both on the majority and minority side. 

Mr. DICKMAN. I agree with that too. 

Mr. MEADOWS. So much of what we do is actually their hard 

work and certainly not as much ours. 

But we’ll go ahead and recognize Mr. Schwartz for 5 minutes. 

STATEMENT OF THE HONORABLE MICHAEL S. SCHWARTZ 

Mr. SCHWARTZ. Thank you. Chairman Meadows, Ranking Member Connolly, and members of the subcommittee, I’m Michael 

Schwartz, and I’m the Chairman of the U.S. Railroad Retirement 

Board. I want to thank you for this opportunity to appear today 

and discuss the railroad retirement disability programs. Walter 

Barrows, representing rail labor; Steven Anthony, representing rail 

employers; and I are responsible for the agency’s programs and operations. 

Let me begin by saying that my fellow Board members and I 

share in the outrage at the physician-assisted fraud perpetrated on 

the railroad retirement system by certain retirees at the Long Island Rail Road. We applaud the efforts of our inspector general and 

the U.S. Attorney’s Office for the Southern District of New York in 

investigating and prosecuting this fraud. 

The Long Island experience has helped us recognize a number of 

shortcomings in the disability benefit program. We have worked 

tirelessly to examine every step of our disability adjudication process and identify those areas that need improvement. Today, I’m 

pleased to report that we have made notable strides in strengthening the integrity of this program and better protecting our system from fraud. This experience has been a true catalyst for the 

change in the way we do business. And we are sincerely committed 

to effecting real and measurable improvements through the initiatives we have put in place and those we plan going forward. 

This morning, I will provide the subcommittee with the summary 

of the significant changes we are making. These changes were 

crafted after careful consideration of recommendations by our inspector general and the Government Accountability Office during 

their respective reviews of the Board’s programs. The quality and 

integrity of our benefit decisions are of the upmost importance to 

the Board and its stakeholders. The improvements we are making 

provide the foundation for a higher standard of disability determination. The process we are adopting is much different and more 

comprehensive than what was used when the Long Island Rail 

Road scheme surfaced. 

Independent medical examinations will be required for all disability applicants with limited exceptions. And each exam will be 

performed by physicians who specialize in the area of the claimed 

impairment. Contractual positions will now be onsite at our headquarters building at least two times a week in the Disability Benefits Division to provide medical advice and support to claims examiners. Physicians are also providing more extensive training to the 

examiners on medical conditions and the interpretation of medical 

evidence. The Board is creating a quality assurance unit to assess 


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the quality of medical evidence, accuracy in disability determinations, adherence to the established procedures, areas in need of improvement, and subject-matter appropriate for refresher training. 

We have enhanced our fraud training awareness. The Board will 

continue to procure antifraud training from outside sources and 

make such training mandatory for all agency personnel. We will 

employ contractual medical personnel to provide refresher training 

for those responsible for making or reviewing disability decisions, 

such as claims examiners, reconsideration specialists, hearing officers, and quality assurance specialists. There will be more frequent 

contact with fraud-risk populations through the expanded use of 

continuing disability reviews for all occupational cases and mandatory periodic recertification of disability. 

Senior claims examiners will review all initial disability determinations prior to the final rating. Treating physician information 

is already being tracked to identify any suspicious activities or patterns. And RRB forms, including a disability application, are being 

reviewed and revised to gather more relevant and accurate information. 

Along with these improvements, in December 2013, the Board 

created a fraud task force that assists in implementing disability 

reform measures, along with other benefit-related program integrity measures. The task force has approved a number of internal 

modifications to procedures and forms and is driving implementation of fraud prevention and detection initiatives, many of which 

were recommended by the GAO and our IG. The initiatives I have 

outlined for you today will substantially strengthen the overall integrity of the disability program and better protect our system from 

fraud. Whether it’s securing current vocational information and 

using the most accurate and specialized medical evidence and opinions when making disability determinations, providing ongoing 

fraud awareness training to agency employees, offering our claims 

examiners ready access to expert medical guidance, or establishing 

a much needed quality assurance unit, we are committed to real 

change that will ensure continued confidence in a program that has 

meant vital financial security to generations of our Nation’s railroad workers and their families. Thank you. 

[Prepared Statement of Mr. Schwartz follows:] 


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Mr. MEADOWS. Thank you, Mr. Schwartz. 

Mr. BERTONI. 

STATEMENT OF DANIEL BERTONI 

Mr. BERTONI. Chairman Meadows, Ranking Member Connolly, 

members of the subcommittee, good morning. I’m pleased to discuss 

the Railroad Retirement Board’s disability programs and the challenges that expose taxpayer dollars to fraud, abuse, and improper 

payments. As a steward of both the occupational and total and permanent disability programs, RRB is accountable for managing and 

overseeing the expenditure of billions of dollars annually. 

However, our work has identified internal control weaknesses 

and oversight gaps in these programs. Related audits by the 

Board’s inspector general and the Department of Justice investigation have also identified similar challenges. My Statement is based 

on our prior work and focuses on key vulnerabilities that threaten 

the integrity of RRB’s programs as well as actions that the Board 

has taken to address our recommendations. 

In summary, instances of past fraud and improper payments 

have highlighted gaps in the Board’s oversight, due in part to a 

manual, paper-based process and impedes the agency’s ability to 

systematically identify potential fraud patterns, such as a high concentration of claims from one source or boilerplate medical exam 

information submitted for multiple claims by the same doctor. To 

address this issue, the Board has taken some limited steps to compile and analyze electronic data, primarily for Long Island Rail 

Road claims. But more could be done, including mining such data 

for the other railroads it oversees in its total and permanent disability program. 

Our June 2014 report further highlighted fundamental shortcomings in RRB’s policies and procedures. First, we found that field 

staff rely on outdated information to verify claimants’ self-reported 

work and earnings activity although more timely data is available. 

And they risk paying benefits to ineligible individuals as a result. 

We recommended that RRB seek more timely earnings data, such 

the National Directory of New Hires data base. Agency officials 

agreed to work with OMB in exploring this option going forward. 

Second, we reported that the Board’s claims process fell short of 

basic internal control standards and that a single examiner could 

both review and approve a claim in many cases without any independent review by another third party. In fact, we found that up 

to one-third of all claims were approved by the same examiner who 

reviewed the application. And we noted that the absence of a second set of eyes on these claims could expose the agency to improper 

payments due to fraud or error by the claims examiner and recommended supervisory review of all claims. 

The Board subsequently revised its policy to strengthen such reviews effective September 2014. We also found an insufficient commitment to quality and integrity at RRB, as reflected in their quality assurance activities and performance metrics, which focus primarily on payment timeliness and accuracy and less on whether 

disability decisions were supported by the medical evidence and 

were, in fact, correct. While it’s important that claims be paid 

quickly, it’s equally important that benefit decisions be accurate. 


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Thus, we recommended that the Board shore up its quality assurance processes and establish more balanced performance metrics. 

While the agency agreed with our recommendations and is in the 

process of developing a new quality assurance plan, we have yet to 

receive it or review it. 

Last, we noted an insufficient commitment to fraud prevention 

throughout the agency, even after high-profile Long Island Rail 

Road incident. Our interviews with staff showed an inconsistent 

level of fraud awareness. And claims reps in four offices we contacted said they had not received any fraud-related training. Some 

other staff told us it was not their job to be on the lookout for 

fraud. We recommended that RRB take steps to elevate the importance of fraud prevention and detection agency-wide. The Board 

agreed and has begun to take steps to amend its procedures, training, and other program tools in this area. 

In conclusion, RRB’s disability programs remain vulnerable to 

fraud and overpayments due to various management and systemic 

weakness that warrant sustained attention going forward. Absent 

a more proactive stance by the Board to make substantial progress 

in movement away from a business-as-usual approach to claims 

processing, public confidence in these programs may be further undermined. At present, much work still needs to be done. And we 

look forward to working with this subcommittee, Board officials, 

and inspector general staff as the agency continues to implement 

our recommendations. 

Mr. Chairman, this concludes my Statement. I’d be happy to answer any questions that you or other members of the subcommittee 

may have. Thank you. 

[Prepared Statement of Mr. Bertoni follows:] 


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Mr. MEADOWS. Thank you so much. 

This is a, what we would normally call a fly out day. And so in 

the interest of being sympathetic to some of our members that may 

be flying out soon and that have a real interest in this, I’m going 

to recognize the vice chair of this subcommittee, the gentleman 

from Michigan, Mr. Walberg. 

Mr. CONNOLLY. I just want to say, Mr. Chairman, before Mr. 

Walberg, I have to fly to Fairfax at some point. 

Mr. WALBERG. Thank you, Mr. Chairman. It’s interesting talking 

about flying out when we’re dealing with railroads. So we’ll try to 

fly a little lower at this point. 

But thanks for having this hearing. Railroads are important to 

our economy. Railroads do carry things that we can’t do as efficiently otherwise. And there are plenty of dedicated people, some 

you’ve mentioned from your families, involved. But that requires 

that we be more effective in making sure that every system works 

and everyone is involved in doing it the proper way. 

Mr. Dickman, did the OIG recommend that the RRB attempt to 

recover the payments that were deemed improper after the Long 

Island Rail Road fraud? 

Mr. DICKMAN. Initially, when the Board was going to send out 

at our request termination letters for those individuals that saw 

Dr. Ajemian and Dr. Lesniewski, we told them not to request, that 

they would be looking at trying to recover any of that money because the U.S. Attorney’s Office, since, as a former prosecutor, the 

criminal matter always trumps any civil action. And they wanted 

time to make a determination as to what, if anything, they were 

going to do with the 700 people or up to 1,500 people that were involved in this. There was one other doctor, a third doctor, who is 

deceased, who was, obviously, never tried in this matter. 

So we sent a notice saying hold off on doing anything like that. 

We received a letter from the general counsel saying: At the 

present time, we will not do anything as far as seeking recovery 

of the prior benefits. Then, unbeknownst to us, later they sent 

out—when they sent out a notice to all these individuals, they 

State that we will not recover or seek to recover any more benefits, 

which took us by shock and we were shocked. And so was the U.S. 

Attorney’s Office shocked because now the Board is, obviously, not 

going to recover, seek any recovery. And the U.S. Attorney’s Office, 

which was considering civil actions, is now prevented from seeking 

any restitution from these individuals. 

So it’s really, it’s kind of mind-boggling to send out a termination 

notice saying the Board States to these people: You are involved in 

fraud, but now we’re going to let you reapply, and we’re not going 

to go after any of these prior benefits, these millions and millions 

of dollars that we’ve given you, and let you reapply. And when the 

people did reapply, they approved 94 percent of them. 

Mr. WALBERG. So your counsel was temporary, waiting for the 

process to develop? 

Mr. DICKMAN. We were waiting, right. We initially said hold off. 

And then—— 

Mr. WALBERG. Based upon determining the necessity for prosecution and the evidence. 


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Mr. DICKMAN. Correct. Based on the U.S. Attorney’s Office giving 

us direction on which way they were going. 

Mr. WALBERG. Then I would follow that up, Chairman Schwartz, 

why did the RRB choose to abandon the option to recover 275—as 

I understand it—$275 million in improper payments following exposure of the Long Island fraud ring? 

Mr. SCHWARTZ. When we received the information that Dr. 

Ajemian, the doctors involved pled guilty, we immediately started 

the process to open cases. And that process would be open cases, 

take a look at the information in the cases, and see if the person 

was legitimately disabled. In that process, we could have recovered 

payments. 

Mr. Dickman, at that time and rightfully so, said to us: You have 

to stop that process because you could interfere with prosecution, 

and we don’t want you to recover payments. 

So he, along with us, decided that what we would do would be 

to issue a Board order that would allow people to reapply. Now, 

these are not people who were accused of anything. These were not 

people that were, that anyone indicted, that anyone accused. These 

were people who did go to that doctor. But they were not, they did 

not come in and voluntarily disclose that they did something. 

Mr. WALBERG. Let me go back. 

Mr. Dickman, in looking at all of that information, what was just 

said, do you agree with that? 

Mr. DICKMAN. No. 

Mr. WALBERG. Why? 

Mr. DICKMAN. Because we said: Hold off because we’re waiting 

for direction from the U.S. attorney in how they’re going to proceed. 

And these individuals all went to Dr. Ajemian or Dr. Lesniewski. 

And then the Board sends out a termination letter, based upon our 

request, stating the termination that is in case you people have 

committed fraud against the Railroad Retirement Board. And then, 

subsequently, down the road, they issue a Board order, which 

States to these individuals that you can reapply, which we know 

they had the opportunity the to reapply, and States that we will 

not be seeking any recovery from you. 

Mr. WALBERG. Looks like a coverup? 

Mr. DICKMAN. I don’t know if you’d call it a coverup. But it was 

maybe disingenuous. But we were taken aback by it. 

Mr. SCHWARTZ. I would like to say something on that though. 

Our chief counsel says that there’s nothing that was in that letter 

that we have sent—and this is good news actually—on the termination that precludes us from recovering any money from someone 

who has committed fraud. And we thought, I can tell you, we 

thought we were working with the Inspector General’s Office every 

step of the way. We have worked with the Inspector General’s Office every step of the way. 

Mr. WALBERG. It doesn’t sound like it. When we see the type of 

fraud that went on and the percentage of people who were involved 

in that situation who were reinStated and have received the final, 

final verdict that they were worthy of receiving those retirement 

benefits and those disability benefits, that doesn’t seem like you’re 

working with it. 


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I know my time has expired. Hopefully, we will continue. And I 

yield back. 

Mr. MEADOWS. I thank the gentleman. 

The chair recognizes the ranking member, Mr. Connolly. 

Mr. CONNOLLY. Mr. Chairman, in the spirit of comity, if there 

are colleagues on your side who are pressed because of a flight, I 

will reserve my time and defer to them if anyone needs it. 

Mr. MEADOWS. I think we’re OK. Thank you. Thank you for your 

graciousness. 

Mr. CONNOLLY. Certainly. 

Mr. Dickman, in 2007, the IG, your IG office, not you personally, 

issued the following Statement with respect to the RRB: ‘‘The RRB 

has adequate controls to provide a reasonable assurance that disability applications are processed in compliance with applicable 

laws and regulations. There are sufficient edits and checks in the 

RRB computer system to provide assurance that the information on 

the disability application is correct and, therefore, the occupational 

disability decisions are based on correct information.’’ Do you recall 

that? 

Mr. DICKMAN. I sure do. 

Mr. CONNOLLY. OK. So, obviously, today, we would have to disavow that assessment. 

Mr. DICKMAN. Well, I take full responsibility for that audit. It 

was a very superficial audit. It was not one of our best efforts by 

any means. And it just, it looked—it didn’t go behind the whole 

process. It said, in effect, it was: Are all the boxes checked? Is it 

done within an efficient manner? 

And the auditors who did that were not aware of the Long Island 

case; it was just being developed then as a criminal matter that 

they wouldn’t know about it. So, yes, we did say superficially, 

based upon what we’ve seen, what they saw, it was correct. But 

some of the recommendations, two of the recommendations we 

made was, one of them was that there be, there can’t, that the individual who is reviewing the case cannot also make the determination, that there should be some secondary oversight. And they 

agreed to that. And that was in 2007. Yet, it’s still is going on. 

Mr. CONNOLLY. Right. I’m not trying to make the case to discredit the IG. I’m simply pointing out that we’ve learned a lot with 

that Statement. 

Mr. DICKMAN. Yes. 

Mr. CONNOLLY. Mr. Bertoni, prior to 2008, did the GAO make 

any adverse findings against the RRB? 

Mr. BERTONI. We had some work we did in the, I believe, late 

1980’s. And we actually took—you’re pulling on the memory strings 

here. I believe we took a sample of claims and we had some experts, external experts, maybe even SSA adjudicators to look at 

these claims to see if they were correctly adjudicated. And we had 

some real concerns with the action and reliability decisions. 

Mr. CONNOLLY. Mr. Schwartz? 

Mr. SCHWARTZ. Yes. 

Mr. CONNOLLY. There’s some confusion here. You went through 

a long laundry list of improvements based on both the IG and GAO 

reports. And yet Mr. Bertoni’s testimony is we haven’t seen a plan 

yet. In a sense, he’s saying everything you’re saying is all news to 


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him formally. He may have heard of it. But, in terms of a formal 

response, here’s an action plan—I mean, how many recommendations were there in the GAO report, Mr. Bertoni? 

Mr. BERTONI. I believe we had five. 

Mr. CONNOLLY. Five? How many have you implemented or are 

you planning to implement? And when do you intend to notify the 

GAO? 

Mr. SCHWARTZ. All five. 

Mr. CONNOLLY. All five? 

Mr. SCHWARTZ. We have told the GAO we’re planning to implement them. We have a plan. And I have to say that Mr. Bertoni’s 

and Mr. Dickman’s recommendations have really, really been a big 

part of the plan we put together. Mr. Dickman’s comments about 

changing the way we do business, he is right, spot on. He really 

is. 

Mr. CONNOLLY. So you agree with his Statement that part of the 

problem here is, ‘‘we’re here to pay,’’ culture? 

Mr. SCHWARTZ. I think that part of the issue that we have is that 

we cannot sacrifice accuracy for expediency. In other words, we 

want to pay, but we can’t sacrifice accuracy. That’s why we have 

a quality assurance area that we’ve put together, which Mr. 

Bertoni suggested, which Mr. Dickman, I hope, will agree with as 

well. I think many of the things that he wants is in that quality 

assurance unit, where we will be able to basically double check our 

work and make sure that our work is proper. 

So, in answer to your question about the plan, we do have an improvement plan. I think that Mr. Dickman and Mr. Bertoni both 

will get a copy of that very soon. And I think it’s also important 

when you say when will things be put together, we’ll have 

timelines on that plan too. And then Mr. Dickman and Mr. Bertoni 

can monitor that. 

Mr. CONNOLLY. OK. 

Mr. Dickman, you indicated that we still have a 98 percent approval rating of disability claims. And I assume, by citing that, you 

think that’s way too high and obviously allows for fraud? 

Mr. DICKMAN. Yes. 

Mr. CONNOLLY. What would be a number that you would be comfortable with? 

Mr. DICKMAN. When you get to, a statistician will tell you when 

you get to 98 percent, that’s 100 percent. So something has to be 

wrong with the system. And it’s either, you know, if railway labor 

and management want to continue this, then why not turn it into 

a entitlement? That’s basically what it is because there is no real 

screening going on. If you have 100 percent of the people applying 

receiving the benefit, the screening seems—is just—meaningful— 

it’s very superficial. 

Mr. CONNOLLY. I’m running out of time, unfortunately. But, Mr. 

Schwartz, I would like you to respond to that, 98 percent? 

I mean, Mr. Dickman is basically saying, by definition, you’ve got 

fraud going on when the number is that high. And one other thing 

I would like you to respond because, in Mr. Dickman’s testimony, 

he also called into question the medical examination process. It’s 

cursory and obviously some doctors are corrupt, as we learned in 

Long Island. So what are you doing to rotate doctors; to try to minVerDate Sep 11 2014 15:30 Oct 29, 2015 Jkt 000000 PO 00000 Frm 00063 Fmt 6633 Sfmt 6633 F:\95176.TXT APRIL

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imize fraud and corruption and collusion; and to have a more thorough examination so that the results are more credible? 

Mr. SCHWARTZ. When we get an application—— 

Mr. CONNOLLY. Start with the 98 percent first. 

Mr. SCHWARTZ. The 98 percent, I would say that when you start 

with that, you would say that the occupational disability law, actually—well, here’s the best way to put it, the person has to have 10 

years of rail experience or be 60 years old or have 20 years of rail 

experience and a current connection; then they can’t do their job. 

That’s it. It’s a very unique, unique law. That being said, we have 

to do better. We absolutely have to do better. We have doctors all 

the way through. In our plan, we actually have doctors at the beginning, the IMEs; we have consultative exams in the middle; and, 

at the end, we have doctors, we have a contract with a doctor to 

do assessment at the end to make sure we did our work properly. 

So we have doctors all the way through the process. 

As far as Mr. Dickman’s comment about how long an exam could 

last, I’ve not seen the contract on the exams that our IMEs are 

doing right now. So I would have to wait to comment on that. 

Mr. MEADOWS. Thank you, Mr. Schwartz. 

I thankthe ranking member. 

The chair recognizes the gentleman from South Carolina, Mr. 

Mulvaney. 

Mr. MULVANEY. Thank you, Mr. Chairman. 

Mr. Schwartz, you just mentioned the law and that part of the 

situation is contributed to by the fact that the law is unusual. And 

it sounds like if you meet the 10-year requirements and you cannot 

do your specific job, you qualify, is that what you’re saying? 

Mr. SCHWARTZ. If you meet the requirements, yes, the non-medical requirements and you can’t do your job, that’s correct. 

Mr. MULVANEY. Should we change the law? 

Mr. SCHWARTZ. That would be up to—if Congress would sit down 

with rail labor and management and discuss that, then we would 

administer anything that you—— 

Mr. MULVANEY. Would you support us changing the law? 

Mr. SCHWARTZ. What I would say is if you do change the law, 

we’ll administer it. 

Mr. MULVANEY. That’s not what I’m asking. I’m saying, look, I’ve 

got a disability policy. A lot of folks in this room probably do. And 

the language is different; you’re right. But what you just described, 

it sounds like it’s unusual, maybe not unique but unusual. And the 

disability policies I’m familiar with say I can’t do my job or something similar. What if we change the law to say that? In order to 

qualify for the RRB payments or the program, you would have to 

not only not be able to do your job but a similar job as well. Would 

you support that? 

Mr. SCHWARTZ. Yes, I mean, I think that would be something 

that you could, that rail labor and rail management would have to 

discuss. I think that it would be something—— 

Mr. MULVANEY. Do you think your Board would support it? 

Mr. SCHWARTZ. Do I think the—— 

Mr. MULVANEY. You’re a three-member board, right? 

Mr. SCHWARTZ. Yes. 

Mr. MULVANEY. Do you think they would support that? 


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Mr. SCHWARTZ. Changing the occupation—I think that if there’s 

changes that need to be made in the laws, I think that they 

would—— 

Mr. MULVANEY. I’m not asking you that. And you see where I’m 

getting on this. People like it the way it is, don’t they? 

Mr. SCHWARTZ. People like? 

Mr. MULVANEY. The people who can get the benefits. It’s a great 

system, isn’t it? 

Mr. SCHWARTZ. I think that occupational disability as a system 

needs to be improved. The way we administer occupational disability needs to be improved. 

Mr. MULVANEY. Come back to what Mr. Walberg was asking you 

about, toward the end of your questioning, you mentioned that your 

lawyers told you that the letters that you sent out to the people 

who had to re-qualify did not prevent you from subsequently seeking to collect payments from them, is that a true Statement? Is 

that accurate? 

Mr. SCHWARTZ. For fraud, yes. 

Mr. MULVANEY. For fraud. So why haven’t you done it yet? 

Mr. SCHWARTZ. These were people who, that, OK, we terminated 

their benefit because they had seen doctors that had plead guilty. 

Mr. MULVANEY. No, I understand that. 

Mr. SCHWARTZ. They were not indicted. They did not have any 

criminal charges brought against them. So what we decided to do 

is have them reapply with new medical evidence. 

Mr. MULVANEY. No, I get all that. But my point is the OIG, I think, has indicated that there might be as many as $275 million 

worth of payments that you could collect. You said you asked them 

to collect it earlier, and they said no because of the ongoing investigation. There’s no controversy there. But now there’s no ongoing 

controversy, and you could go get it. So the question is, why 

haven’t you done that? 

Mr. SCHWARTZ. I would have to see if we had a legal basis to do 

that. And I will. 

Mr. MULVANEY. No, you just said your lawyers told you you did 

have a legal basis to do it. 

Mr. SCHWARTZ. We have a legal basis to collect the money for 

fraud. What I would have to do is talk to my lawyers, and we 

would have to see if fraud can be proved. 

Mr. MULVANEY. That’s fine. I’ll grant that for sake of discussion. 

Why haven’t you talked to your lawyers yet? Your opening Statement was that you were working tirelessly on this. It’s an interesting word by the way. I’m not really sure what it means. You 

also said you were committed to real change. So, in this tireless 

work that you’ve been doing, why haven’t you called your lawyers 

about trying to get this money back? 

Mr. SCHWARTZ. In my opening Statement, I was referring to the 

changes that we’re making in the program. 

Mr. MULVANEY. OK. So you’re working tirelessly on fixing the 

stuff going forward but not tirelessly on collecting the money that 

might have been stolen already. 

Mr. SCHWARTZ. These were people who went to this doctor. 

Mr. MULVANEY. The history is fine. No one is disagreeing with 

you about the history. Why haven’t you done it yet? 


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Mr. SCHWARTZ. Why haven’t—— 

Mr. MULVANEY. Why haven’t you tried to get this money back 

yet? Why haven’t you talked to your lawyers about it? You’re 

spending all your time fixing things going forward, is that what 

you’re saying? There’s just not enough time in the day to fix things 

going forward and trying to gain redress for past wrongs? 

Mr. SCHWARTZ. These were people who reapplied and submitted 

new medical evidence. 

Mr. MULVANEY. Right. And that means what to you, Mr. 

Schwartz? 

Mr. SCHWARTZ. They reapplied. They submitted—— 

Mr. MULVANEY. Oh, I see what you’re saying, you’re saying Mr. 

Dickman is wrong and there really isn’t, you’ve done an investigation. And, because these folks have resubmitted their medical information, that you disagree with his determination that there might 

be up to $275 million worth of recoverable losses. 

Mr. SCHWARTZ. I think Mr. Dickman does a great job. I think his 

recommendations to us have been very, very helpful. 

Mr. MULVANEY. Do you think he’s wrong? 

Mr. SCHWARTZ. I would not say that Mr. Dickman is wrong. This 

is what I would say: I would say that back when Dr. Ajemian pled 

guilty, there were 1,500 applications that Mr. Dickman was looking 

at. When we went to terminate people, we asked for a list of people 

that went to Dr. Ajemian. He gave us back a list of 700—— 

Mr. MULVANEY. That’s fine. We’ve done the history. I’m over 

time. I apologize. I will close with this. Something miraculous happened in this building a couple weeks ago. In fact, I think it was 

in this room. We had somebody here in a similar position of authority within the government. And she gave answers that were almost 

as bizarre and indefensible as the ones you’ve given here, that 

we’ve heard about before today. Do you know what happened to 

her, Mr. Schwartz? Ms. Leonhart from the DEA? Are you familiar 

with that? I’m sorry, sir, is that a yes or a no? 

Mr. SCHWARTZ. No. 

Mr. MULVANEY. OK. She’s gone as the result of a bipartisan uproar over the way that administration was administered. In fact, 

I think before she left the room, there were 23 names on a letter 

to the President saying: This person is not capable of doing the job; 

please give us somebody else. 

This is real. We take this stuff real seriously. And the days of 

you being able to come in and just say what you want to say, completely contradict the GAO and the IG’s Office, and think that 

nothing is going to happen is, thankfully, coming to an end. 

Thank you, Mr. Chair. 

Mr. MEADOWS. I thank the gentleman. 

The chair recognizes the gentleman from Wisconsin, Mr. 

Grothman. 

Mr. GROTHMAN. Thank you for being here today. 

Just so I get it straight, the occupational disability program, 

what is the percent of people’s pay or how much do you determine 

we get every month if you become eligible for this? 

Mr. SCHWARTZ. Right now, it depends. I mean, it depends on, I 

mean, I’ve seen annual Statements that people get probably 


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around, I’d say right now somewhere between $2,700 and $2,900 

a month, depending on the year. 

Mr. GROTHMAN. OK. How about the total and permanent disability program, what do they get? 

Mr. SCHWARTZ. More like $1,700 or $1,800 a month. 

Mr. GROTHMAN. OK. 

Mr. SCHWARTZ. I don’t have the exact numbers in front of me, 

but something like that. 

Mr. GROTHMAN. Do you know percentage-wise every year how 

many people apply for these programs? 

Mr. SCHWARTZ. Yes. I mean, the percentage of people who apply 

for the programs has gone down tremendously. Ten years ago, basically there were, oh, probably, I mean, when you’re talking about 

for total and permanent disability, they were probably 30 percent 

of the applications. Now it’s down to 15. Occupational disability, 

probably 8 percent of the people applied; now it’s down to 3. So the 

percent of people who are applying for these has dropped tremendously in the past 10 years. 

Mr. GROTHMAN. Wait a minute, I must be missing something 

here. Thirty percent of what are applying? 

Mr. SCHWARTZ. OK, if you have like—let me give you an example. Last year, 12,400 people received new benefits. Of those, 

10,200 were age and service; in other words, those were benefits 

that weren’t disability. OK, so that left, oh, around 2,000, 2,100 

people that applied for benefits. Of those, 800 were total and permanent; 1,100 were Social Security equivalent; and 200 were occupational disability. So you had about 2 percent for that type of disability, pure occupational disability. 

Mr. GROTHMAN. So, every year, 2 percent of the employees say 

they are disabled? 

Mr. SCHWARTZ. Well, right now—well, what it comes down to 

is—well, there is—occupational disability as a pure disability that 

doesn’t get a Social Security equivalent—— 

Mr. GROTHMAN. Yep. 

Mr. BERTONI [continuing]. Are not an age and service. It is about 

2 percent. But there is a total and permanent program as well, and 

there is also a process for an occupational disability where they get 

a Social Security equivalent. 

Mr. GROTHMAN. Right. 

Mr. SCHWARTZ. So, last year, 18 percent of the people—18 percent total received some kind of disability. 

Mr. GROTHMAN. How many of the employees under this system 

every year percentage-wise, say, I am disabled? 

Mr. SCHWARTZ. Last year it was 18 percent. 

Mr. GROTHMAN. Eighteen percent of the people said they were 

disabled? I mean, could you compare that to other occupations out 

there in the world like the—both government and nongovernment 

like—— 

Mr. BERTONI. There is not a lot of evidence on occupational. 

There are not a lot of occupational programs. RRB is very unique 

in it being an occupational program. 

The Social Security Administration is going to look—sort of to 

your question, is it a five-step sequential process. One of the sequences is first to say, can this person do their prior work? If yes, 


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then that’s a different answer. If no, then they go to, can they do 

another job in a national economy? So that is all that you have. It 

is sort of an apples-and-oranges question. 

Mr. GROTHMAN. I am either asking the question wrong or something. That can’t be right. 

Mr. CONNOLLY. Would my friend—would my friend just yield for 

a clarification? 

Mr. GROTHMAN. Sure. 

Mr. CONNOLLY. I thank my friend. I’m not understanding your 

answer, Mr. Schwartz, to my friend from Wisconsin. Are you saying 

that 18 percent of the total awards, 18 percent of the total awards 

are for disability? Workforce? 

Mr. GROTHMAN. OK, that is not the question. I think you are 

missing the question. 

Mr. CONNOLLY. OK. 

Mr. GROTHMAN. Of all the people who would be eligible to be disabled, of your sea of people who are working under these programs, 

what percent of employees every year submit a claim of some nature for disability? That is the question. 

Mr. SCHWARTZ. Last year, as I said, we had 12,400 people get 

awards, 12,400 get awards. OK? Of those, 18 percent—18 percent 

of those people received an award for disability. 

Mr. GROTHMAN. OK, so we are looking at about, I guess what 

you told me, like 2,000—— 

Mr. SCHWARTZ. Yes. 

Mr. GROTHMAN. OK. OK, and how many people are in the program total who would be eligible? What I’m trying to get at here 

is, there are X number of railroad employees who could hypothetically become disabled. Every year a given percent say, I’m disabled. What is that percent? How many people—how many working employees do you have every year who could be covered by the 

system? Let’s see how we can work this through for you. 

Mr. SCHWARTZ. Well, right now, there’s about 250,000 people in 

the work force. 

Mr. GROTHMAN. OK, so then we are saying about 1 percent of the 

employees every year say they are disabled, is that what we are 

trying to say? 

Mr. SCHWARTZ. You could run the numbers that way. 

Mr. GROTHMAN. Well, I mean—— 

Mr. SCHWARTZ. Well, I mean, let me—— 

Mr. GROTHMAN. OK, the deal we are trying to get at—— 

Mr. SCHWARTZ. Yes, yes, just really, honestly, if you could let me 

know what you are getting at maybe I can understand better. 

Mr. MEADOWS. Mr. Schwartz, let me—if the gentleman would 

yield for just a second. How many are eligible to get benefits? 

What’s the total number? It’s not 200,000, is it? 

Mr. SCHWARTZ. Eligible to get benefits? 

Mr. MEADOWS. Qualify either 10 years or 20 years, the whole—— 

Mr. SCHWARTZ. I don’t have that number. 

Mr. MEADOWS . OK. It’s about 70,000—— 

Mr. BERTONI. How many are currently on the rolls? 

Mr. MEADOWS . Yes. 

Mr. BERTONI. Is that the question? How many are currently on 

the rolls? 


AKING-6430 with DISTILLER
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Mr. MEADOWS . Yes. I guess—— 

Mr. BERTONI. Occupational disability, 61,000; total and permanent, 21,000. 

Mr. MEADOWS. Thank you. 

Mr. SCHWARTZ. That’s on the rolls. 

Mr. MEADOWS. Thank you. 

Mr. SCHWARTZ. That’s on the rolls. 

Mr. GROTHMAN. There’s 61,000 people that are currently on some 

form of disability, railroad disability? No? 

Mr. SCHWARTZ. There’s 58,000 people currently that are labeled 

as occupationally disabled; 45,000 of those people have reached the 

age of 62; 5,000 of those people are—have the pure occupational 

disability where they aren’t able to get any other benefit. They 

aren’t able to get an age and service benefit. That would be a regular retirement. They aren’t able to get any kind of Social Security 

equivalent. There’s 58,000 people that are categorized as occupational disabled, as Mr. Bertoni said, 20,000 total and permanent. 

Mr. MULVANEY. Will the gentleman yield for a second? 

Mr. GROTHMAN. Sure. 

Mr. MULVANEY. Mr. Schwartz, you just—I don’t follow the significance of what you just said. You said a certain—there is a large 

number 60-some thousand. And how many of those are 62? 

Mr. SCHWARTZ. There’s 58,000 people labeled as occupationally 

disabled because their application originally came in as occupationally disabled. 

Mr. MULVANEY. OK. 

Mr. SCHWARTZ. All right, 45,000 of those people are 62 and over. 

Mr. MULVANEY. And let me stop you right there. What is the significance of that, of being over 62? 

Mr. MEADOWS. OK, the gentleman’s time is expired, but you can 

answer that question. 

Mr. SCHWARTZ. The significance of that is that they could be getting, if we didn’t exist, let’s say we didn’t exist, they could be getting some kind of benefit. 

Mr. MULVANEY. From whom? 

Mr. SCHWARTZ. Social Security. 

Mr. MULVANEY. Thank you. 

Mr. MEADOWS. I thank the gentleman from Wisconsin, and we 

are going to have another round so if you would like to sit around. 

The gentleman from Florida is going to have to leave so the chair 

recognizes the gentleman for 5 minutes. 

Mr. MICA. Thank you. 

Again, it is good to be here and also have been here because I 

remember I think it was back in 2008 when this was disclosed. 

And we had evidence of, at that time, it was over 90 percent were 

getting these disability approvals. Isn’t that the case? 

Mr. DICKMAN. Ninety-eight percent. 

Mr. MICA. Yes, OK. Basically, we were not, my side was not in 

charge when this came down. And I was told that those responsible 

would be prosecuted; this would be halted; and that those would 

be held accountable who have participated. Some of them have 

gone to jail. Some of them held accountable. 

Mr. DICKMAN. Yes. 


AKING-6430 with DISTILLER
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Mr. MICA. But when I saw—thank you, Mr. Chairman, and ranking member for holding this meeting—but when I saw the numbers, I just about fell off my chair. Is this 96.7 percent grant rate 

correct on these claims? 

Mr. DICKMAN. That’s national average, or is that the re-adjudication? 

Mr. MICA. There is disability applications, all applications filed 

during the period—filed during fiscal years 2013 to 2014 grant 

rate. What is this? 

Mr. DICKMAN. I believe that is—— 

Mr. MICA. Denial is 98, and then 2,839, the grant rate is 96.7. 

Mr. DICKMAN. Right. 

Mr. MICA. Is that correct? 

Mr. DICKMAN. Correct, yes. 

Mr. MICA. Well, again, we haven’t come very far from where we 

were. Now, there was fraud and abuse of the system before. Is that 

the case now, inspector general? 

Mr. DICKMAN. Well, I think it is the case, and more—— 

Mr. MICA. Is it fraud? Because before it was fraud and people 

were fraudulently approving these. There is a doctors’ ring, and 

then they were—OK, is that still the case? 

Mr. DICKMAN. Well, we are finding it’s still the case. Not to 

maybe the same extent because of the particular—— 

Mr. MICA. It is gamed a little bit differently? 

Mr. DICKMAN. Different because, in the Long Island case, they 

had a private pension plan that a person could retire. 

Mr. MICA. And then it is also abuse. 

Mr. DICKMAN. It is abuse because one of the problems is, the way 

they define you can’t do your regular railway occupation, is that, 

for some reason, they use—you can’t do one aspect of your job. And 

we found that that is not defined anywhere in any of the rules or 

regulations. So there is—— 

Mr. MICA. So the whole process is a sham. How many people do 

you have, Schwartz, operating this Board? Are there a couple of 

employees? How many employees are reviewing these claims, the 

whole thing? 

Mr. SCHWARTZ. Down in that section, there is around 30. 

Mr. MICA. And the whole Board that—operations are 30. 

Mr. SCHWARTZ. Who, well, no—— 

Mr. MICA . What are the 700 people doing that I am told—860 

total. 

Mr. SCHWARTZ. Well, the occupation disability is not all that we 

do. We have a lot of those people working the computer area that— 

we have other types of pension benefits? Occupation disability is 

not—— 

Mr. MICA. But, I mean, that section costs a lot of money to operate. You have got the Board. I mean, hell, you might just as well 

grant everybody disability and agree on something, close down, and 

save your administrative costs. That’s probably not the solution. 

You need a better process for processing these folks for approval. 

And the inspector general has talked about how it is gamed. That’s 

going to require a legislative fix, is that correct, or can it be done 

administratively? 


AKING-6430 with DISTILLER
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Mr. DICKMAN. I think, as far as what the definition of occupational disability, that can be done administratively; that the person 

cannot do their regular railroad occupation, not one aspect of it. I 

mean, you could—your job might entail doing 15 different things. 

If they say—and the claims examiners are told that the person 

can’t do 1 thing, 1 out of that 15, that means that they are occupationally disabled. 

Mr. MICA. The average benefit, I heard, was somewhere in the $400,000 once this is granted is what they receive, is that correct? 

Mr. DICKMAN. Down the road? 

Mr. MICA. Yes. 

Mr. DICKMAN. Well, it all—it depends on each—— 

Mr. MICA. It is an average. 

Mr. DICKMAN. Right. 

Mr. MICA. But I remember distinctly, there was a conductor who 

walked the aisles or something, and collected tickets, got approval 

for disability. 

Mr. DICKMAN. Sure. 

Mr. MICA. I think the New York Times reported he was playing 

golf in Florida, and which I have no problem with people retiring 

and playing golf in Florida, but to do it on a pension, a government 

pension, a disability provision that was not properly awarded, 

raises a lot of questions. I’m stunned, Mr. Chairman. We need to 

change the law if they won’t change the rules and get a handle on 

this. 

Thank you. I yield back. 

Mr. MEADOWS. I thank the gentleman from Florida for his leadership, not only on this issue many years ago but certainly for his 

leadership on other transportation issues. 

And the chair recognizes the gentleman from Alabama who has 

been involved in this particular circumstance for many months, if 

not longer. 

And Mr. Palmer, from Alabama. 

Mr. PALMER. Thank you, Mr. Chairman. 

Chairman Schwartz, on February 18 of this year, I sent you a 

letter, which contained 13 distinct groupings of questions. The 

Board responded on April 15, 2015. Do you believe that this April 

15 letter was fully responsive to all of my questions? 

Mr. SCHWARTZ. When we responded to your letter, we responded 

the best way we could. 

Mr. PALMER. I ask you, though, do you believe that it was fully 

responsive, fully responsive to all of my questions? 

Mr. SCHWARTZ. Is there something that you felt you still need an 

answer to? I apologize for that. I thought we did answer the questions, yes. 

Mr. PALMER. So you answered, yes, that you think you fully responded to my questions? 

Mr. SCHWARTZ. What I think has—when we received your letter, 

we put together answers that were the very best answers to your 

questions we could put together. Yes. 

Mr. PALMER. So your answer is yes. Thank you. 

I’m not sure that they were fully responsive. For instance, in 

question two, I asked—— 

Mr. SCHWARTZ. Sure. 


AKING-6430 with DISTILLER
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Mr. PALMER. If Congress were to enact legislation to limit occupational disability to a time certain, how long a period would you 

recommend? And you dodged that question. You said you needed 

time to consult with other stakeholders. After I sent the letter, you 

requested an extension to fully respond. I think you have had plenty of time to respond and discuss with the stakeholders. If Congress were to limit the time a person could draw benefits, how long 

would that be? 

Mr. SCHWARTZ. I would have to the say rail labor and rail management would have to be involved in those discussions. 

Mr. PALMER. OK, and question four, I asked: How many disability fraud referrals have been made to the inspector general? 

In your response, you provide the number 44. But it’s my understanding that 38 of those are unemployment cases. That would 

make, in my opinion, it would make your response inaccurate and 

perhaps misleading. Would you agree that an unemployment case 

is not the same as a disability case? 

Mr. SCHWARTZ. If you were talking about investigative disability 

cases, in other words, referring to the inspector general for an investigation, you are exactly right, it is different. 

Mr. PALMER. OK, and then that begs the question of why you answered the question the way you did. The question was: How many 

disability fraud referrals have been made to the inspector general? 

And you said 44; 38 of those were unemployment cases. If they 

were not disability cases, does that mean there were only six? But, 

yet, you answered 44. Can you respond to that? 

Mr. SCHWARTZ. No, I can’t. I can’t respond to that. I mean, when 

we worked with our people and asked them how many had been 

submitted, they said 44. And basically, it turns out, if it’s six, I 

apologize for the answer. 

Mr. PALMER. Mr. Dickman, do you have any idea of how many 

disability fraud claims were referred to the—to your office? 

Mr. DICKMAN. I think four. No, I think less than four. I think it 

might be two. 

Mr. PALMER. OK. On question seven, I note that the latest statistics for occupational disability approval rate is 98 percent. 

Mr. SCHWARTZ. Uh-huh. 

Mr. PALMER. And then I asked you for updated numbers. Did you 

provide updated numbers in your response? 

Mr. SCHWARTZ. It’s 98 percent. I think we just assume that 

throughout the letter, it was 98 percent, and apparently we did not 

put down 98 percent. It’s 98 percent. 

Mr. PALMER. I find that interesting, particularly in context of 

question five. It indicates that—in your answer to question five 

that indicated that examiners who were doing the disability exams 

were to consult with a medical professional and not that the disability applicant submit to—or that the disability—let me rephrase 

that. 

That they consult with a medical professional rather than have 

a disability applicant submit to an exam by a medical professional. 

And then you also say that you require a Social Security disability 

examiner and a Social Security Administration medical professional to review the case prior to the Railroad Retirement Board 


AKING-6430 with DISTILLER
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review and decision. How has this process impacted the RRB’s disability approval rate? 

Mr. SCHWARTZ. What happens is, there’s two types of disabilities. 

There is total and permanent, and there is occupational. About 33 

percent of our cases end up going to Social Security for review. The 

Social Security rate, Dan, is probably somewhere in the 70’s. 

Mr. BERTONI. Seventy-eight percent. 

Mr. SCHWARTZ. Yes, the Social Security rate is somewhere 

around 78 percent. What is happening is, we are just putting this 

plan in place. Basically, we are putting a plan in place that will 

have doctors involved, have exams by doctors. We will have a quality assurance unit. We will have training. 

Mr. PALMER. Let me interrupt you. You say you will have exams 

by doctors. Now, based on the response to the questions, you said 

that you would have a Social Security disability examiner and a 

medical professional review the case. In other words, the disability 

examination would be done by someone else, but you would have 

a medical professional associated with Social Security to review the 

case. That’s not the same as having a medical professional do the 

evaluation. 

Mr. SCHWARTZ. Every application in our plan that comes in will 

have an independent medical exam. 

Mr. PALMER. And it is also interesting—and you know, I will 

check my numbers. 

Mr. MEADOWS. Mr. Palmer, your time is expired. And we are 

going to have a second round so if you can hang around. If not, I 

will let you ask one last question. 

Mr. PALMER. One last question. The numbers that I have on Social Security approval rate is less than 40 percent before appeal, 

and 65 percent after appeal. But you say 78 percent? 

Mr. BERTONI. No, the total and permanent program is at 78 percent. Social Security Administration’s initial claims approval rate 

is about 30 percent. And that’s problematic for us because supposedly the Social Security Administration and the RRB are using 

the same criteria. So there is a pretty wide gulf between what is 

being approved at the Social Security level versus RRB. 

Mr. PALMER. Well, apparently. 

Thank you, Mr. Chairman. 

Mr. MEADOWS. I thank the gentleman. 

I thank the gentleman for his leadership on this particular issue. 

I’m going to ask a few questions. 

Mr. Dickman, what incentive is there to prevent fraud? I mean, 

when we really look at this in terms of is there any incentive to 

deny claims under the existing policy that Mr. Schwartz has had 

in place? 

Mr. DICKMAN. Well, again, in our view, there really isn’t as long 

as you have this culture of we are here to play, and the feeling is 

in the industry is that it’s our money. 

Mr. SCHWARTZ. Yes. 

Mr. MEADOWS. But culture is an ambiguous thing, and so I guess 

what I’m saying, is there any review process or anything that gives 

a rating to those that would deny a claim? I mean, are you aware 

of any matrix that is out there? 

Mr. DICKMAN. At the present time? 


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Mr. MEADOWS. At the present time. 

Mr. DICKMAN. No. 

Mr. MEADOWS. OK. Mr. Schwartz. 

Mr. SCHWARTZ. Yes. 

Mr. MEADOWS. Let me—you actually have a chairman and ranking member that has a great affinity for railroad employees and 

the union, which is—— 

Mr. SCHWARTZ. Yes, sir. 

Mr. MEADOWS [continuing]. Is rare to have this. You also have 

a ranking member and a chairman who loves railroad management. 

Mr. SCHWARTZ. Yes, sir. 

Mr. MEADOWS. That is unusual to find those two. And I think 

both the union, from what I understand, both the union and management hate fraud. 

Mr. SCHWARTZ. Correct. 

Mr. MEADOWS. Both the union and management wish we weren’t 

here today, you know, and so it’s unique to have that kind of group 

together. 

And I guess my question to you, Mr. Schwartz, we have got recommendation—70 recommendations. 

Mr. SCHWARTZ. Yes, sir. 

Mr. MEADOWS. And you implemented five. What happens to the 

other 65 recommendations? Do you just look the other way? 

Mr. SCHWARTZ. Well, I think that I would like to sit down with 

Mr. Dickman after this meeting and find out, you know, get our 

lists together. 

I think some of those, Mr. Dickman, were probably legislative. Is 

that correct, sir? 

Mr. DICKMAN. Some are, yes. 

Mr. SCHWARTZ. Some are legislative. And I think many of them— 

and I think that he might need that clarification as well—are in 

our plan. I think many of the things that he has recommended are 

in our plan. 

Mr. MEADOWS. Well, I appreciate you sharing that here at this 

hearing, Mr. Schwartz. My understanding is they sent you a list, 

and you never responded. Is that correct? 

Mr. SCHWARTZ. I don’t know exactly. 

Mr. MEADOWS. You are under oath, so I mean—— 

Mr. SCHWARTZ. I know that. Mr. Dickman, would you help me 

with that? 

Mr. DICKMAN. I don’t know what—we sent so many requests and 

so many alerts. 

Mr. MEADOWS. So is that, Mr. Schwartz is that your general 

counsel behind you? I mean, is your general counsel here today? 

You have got somebody behind you that is here helping you with 

this testimony? I guess the question is, do you want to turn around 

and ask them if you have gotten letters that you have not responded to with the IG because we have information that that’s the 

case. 

Mr. SCHWARTZ. Yes, I just—I don’t know which, you said that 

you received a letter. I—Mr. Chairman, I didn’t understand the 

question. You said you received a letter. I didn’t know which letter. 


AKING-6430 with DISTILLER
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But if you say ‘‘letters,’’ yes, we have received letters that we 

haven’t responded to. 

Mr. MEADOWS. OK, there’s 13 recommendations. So I will be specific; 13 recommendations that the IG has made to you that you 

just didn’t respond to. Does that mean that you don’t intend to respond to, that you haven’t had time, or you are just ignoring them 

because you thought it would go away? 

Mr. SCHWARTZ. Mr. Chairman, there is no way I would ignore 

the IG’s recommendations. There is no way. 

Mr. MEADOWS. Well, it’s hard for us to believe that when we 

have had 70 recommendations and only five implemented. And Mr. 

Bertoni was talking about—let me quote him—‘‘There’s only been 

limited progress,’’ I think was his words, in responding from you, 

Mr. Schwartz. And not just you, but the other members of the 

Board that are not here, and you know, you are catching the heat 

today, and perhaps we have to have another hearing to have all 

three of you if—but you are the Chairman, and so I—why would 

Mr. Bertoni say limited response, Mr. Dickman have 13 issues that 

were not responded to, and you in your testimony lay out a grand 

plan of how you have got this all under control. So is it is all under 

control? 

Mr. SCHWARTZ. Mr. Chairman, the GAO gave us five recommendations. We have agreed with all five recommendations and 

are implementing all five recommendations. 

Mr. MEADOWS. All right, when will they be—when will they be 

implemented? 

Mr. SCHWARTZ. I will give you a timeline. I will submit that for 

the record. 

Mr. MEADOWS. All right. And so what about Mr. Dickman’s recommendations, the 13 nonresponses? Are you going to respond to 

those 13? 

Mr. SCHWARTZ. Yes. 

Mr. MEADOWS. Even if it is that we reject—— 

Mr. SCHWARTZ. Yes, I will. 

Mr. MEADOWS. OK. That’s fair. So let me go on a little bit further 

because this is all about cooperation. 

Mr. SCHWARTZ. Yes. 

Mr. MEADOWS. I think most of us here believe, I can tell you, I 

can’t even imagine climbing Mount Kilimanjaro or a 400-mile bike 

ride, and I don’t get disability. So what, you know, you laid out a 

great plan in your opening testimony. But how much of that plan 

has just been derived for this hearing? Because my understanding 

is a lot of that hadn’t been communicated in terms of the new plan. 

When did you start working on that because you said 2013, but you 

just meant the task force was 2013, isn’t that correct? 

Mr. SCHWARTZ. We have been working on that plan for a long 

time. And I think that—— 

Mr. MEADOWS. How much of the plan has happened in this year? 

How much of your plan? If we were to ask for documents, how 

much of the plan actually happened since you were notified that 

there was going to be a hearing? 

Mr. SCHWARTZ. Oh, a lot of the plan happened before that, before 

we were notified we had a hearing. 

Mr. MEADOWS. How much? 


AKING-6430 with DISTILLER
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Mr. SCHWARTZ. Well, I would have to get that to you. Hang on 

a second. 

Mr. MEADOWS. How about after the 7-day letter? How much of 

it came after the 7-day fire alarm? 

Mr. SCHWARTZ. All of it. All of it. 

Mr. MEADOWS. So every bit. 

Mr. SCHWARTZ. Absolutely, I mean, Mr. Dickman’s 7-day letter 

had a great effect. There’s absolutely no—I won’t deny that. 

Mr. MEADOWS. So my question is, why would Mr. Dickman have 

to go through such extreme measures to pull the fire alarm, to say, 

Mr. Schwartz, to get rid of a guy who is getting jujitsu, why would 

he have to go through that to make you respond, Mr. Schwartz? 

Mr. SCHWARTZ. Mr. Chairman, the question was how much of 

this plan was after the 7-day letter. All of it was. Before that, we 

did do some things but we weren’t doing as good a job. It is absolutely true. 

Mr. MEADOWS. OK, I’m going to ask one last question. 

Mr. SCHWARTZ. Yes, sir. 

Mr. MEADOWS. And then allow the ranking member to ask a few 

questions before we recognize the others. I have a real concern—— 

Mr. SCHWARTZ. Yes. 

Mr. MEADOWS [continuing]. About your willingness to solve the 

problem and work with the GAO, and the IG. And you have got 

sympathetic guys up here that don’t want to hurt anybody. We 

want them to have that safety net. Yet, at the same time, when 

this committee asked you for particular documents, we have to review them in camera—or had to review them in camera, and you 

made it very difficult for us to get the documents for our review. 

Do I have your commitment today that that will change? 

Mr. SCHWARTZ. You have my commitment today that we will do 

everything we can to be cooperative. 

Mr. MEADOWS. That’s not the question. That’s a great answer to 

a question I didn’t ask. Do I have your commitment today that that 

will change? Because if not, Mr. Schwartz, let me assure you, you 

have enough people both on the Democrat and Republican side that 

we can do the research and it may be laborious for us, but we want 

to get this over with quickly; solve the problems so that your—the 

folks that depend on this safety net can depend on that money 

being there. 

Mr. SCHWARTZ. Absolutely. 

Mr. MEADOWS. And that we actually address this problem. But 

I’m not going to let this go on for a long time. So do I have your 

commitment that you are going to not make my staff have to go 

through all kinds of laborious, systematic ways to get information 

and that you and the other Board members will commit to being 

transparent, and give this committee what it needs? 

Mr. SCHWARTZ. Yes. 

Mr. MEADOWS. Thank you very much. I recognize the ranking 

member—oh, we have got the gentlewoman from New York, Mrs. 

Maloney, is here and so I would recognize her for a series of questions. 

Mrs. MALONEY. Let me—— 

Mr. MEADOWS. All right, I recognize the ranking member for a 

second. 


AKING-6430 with DISTILLER
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Mr. CONNOLLY. I thank the chair. 

Mr. Schwartz, you have got a 98 percent approval rating? 

Mr. SCHWARTZ. Yes. 

Mr. CONNOLLY. Do you think that is too high? 

Mr. SCHWARTZ. I think we have to make sure. The problem is we 

have to make sure that the people are getting the benefits they deserve. But we also have to make sure we are paying it properly. 

And I think we need to put our plan in place to ensure that everything is done properly. 

Mr. CONNOLLY. Yes, Mr. Schwartz, Mr. Dickman has just testified that when you get to 98 percent, it is virtually an entitlement 

program. It has gone far beyond what its original purpose was. Do 

you share that view, or do you think 98 percent is—I’m honestly 

asking because, in my opening Statement, I said in and of itself, 

a high rate of approval need not mean fraud. It could mean people 

are self-selecting when they apply, and it is corroborated. But 98 

percent to a layman and to Mr. Dickman, your IG, seems to be a 

warning sign flashing something is fundamentally, systemically 

wrong with the whole process of how we evaluate disability claims. 

I’m asking you, as Chairman of the RRB, do you share that concern? Would you agree? 

Mr. SCHWARTZ. Oh, I absolutely share that concern that there 

could be—that there could be an issue—that there is an issue that 

we have—that we have to fix. We have to change the way we do 

business. We really do. The things that Mr. Dickman brought up, 

the things that Mr. Bertoni brought up, are absolutely correct. We 

have to change the way we do business, and we have to make fundamental changes, and that’s what we are doing. 

Mr. CONNOLLY. Mr. Dickman and Mr. Bertoni, the Long Island 

Rail Road fraud, obviously, none of us were suspecting that was 

going on in earlier years, but in light of the fact that it did happen, 

and it was so stunning, do we believe that that was a bad apple 

but not characteristic of the system, or do we now believe that the 

LIRR case reveals systemic problems that won’t go away until and 

unless we reform the system? I mean, what is your—what lessons 

should we be learning from the Long Island case? 

Maybe, Mr. Bertoni, give you the chance to go first, and then 

Mr.—— 

Mr. BERTONI. I think part of this is, I mean, we don’t know if 

it is systemic. We do know that physician-assisted fraud happens. 

I just issued a report a couple of months back for the Social Security Administration. We know it is happening there. But if you are 

not looking for it, if you don’t have the tools in place, the data analytics and other tools to sort of look at the quality of the decision 

and what is going into the decision, you don’t know. 

I would just say, we know it is happening, there is collusion. It 

usually involves two to three parties, but to catch these things, it 

is usually chance and luck. Unless you have the appropriate tools 

in place, we are not going to know how big it is and whether it is 

systemic, but it is happening. 

Mr. MEADOWS. Mr. Dickman. 

Mr. DICKMAN. I believe it is a systemic problem. Obviously, the 

Long Island Rail Road case was very unique because of the private 

pension that they had there after they have changed it. It was 20 


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and 50. You could retire at age 50 with a full pension, full private 

pension. It is now 20 and 55. But, after that, I mean, we have cases 

throughout the whole United States involving, obviously, not to the 

great degree because there were obviously three doctors that were 

involved with the majority of those cases. But going back to what 

I said previously, that is systemic because of the way the Board 

looks at what an occupation—the definition of an occupational disability is; that it can be one aspect of the job and not the—not 

doing the job, all the duties of the job. They hang their hat on just 

one aspect, and I still believe that the culture is that we are here 

to pay. And that culture has to change. 

And, in defense of the Chairman, even though he is the Chairman, it is Chairman in name only. As I said before, the big ticket 

items and the things that are really done in the Board are—the big 

items—are done between labor and management and as a function, 

as I have said, of collective bargaining between those two units 

throughout for the whole United States. That’s fine. If that’s what 

it is, that’s what it is. But, you know, my job is to prevent and detect fraud, waste, and abuse. 

As I have said before, this system, this occupational disability 

program, has become an entitlement. Why not eliminate the facade 

of what an occupational disability is, make it an early retirement, 

as has been Stated, instead of going to this, you know, long, prolonged process of an individual being supposedly occupationally disabled. And the nature of business of work in the railroad industry, 

obviously, has changed dramatically from 1946 to the present. Previously, it was very labor intensive. It is not labor intensive anymore. 

Now, an individual who works on the railroad for—works for 30 

years can retire at age 60 with full benefits. Nobody else in the 

whole United States has that opportunity to retire at age 60 with 

full Social Security benefits. So that they do have unique, there are 

unique functions of it. That’s fine. But I think that this particular 

portion of it has morphed into something that was not intended by 

Congress at the time that it was enacted in 1946. 

Mr. CONNOLLY. Mr. Chairman, my time is up. 

And I thank you, Mr. Dickman, Mr. Bertoni. 

I guess what I’m not satisfied with, is, well, what are the lessons 

learned and how are we applying them to ensure that kind of 

fraud, systemic fraud, cannot recur? And I’m not getting, I don’t 

feel reassured—not your fault, but, I mean, I don’t feel reassured 

from the answers that we are headed in that direction. Thank you, 

Mr. Chairman. 

Mr. MEADOWS. I thank the gentleman. 

Mr. Schwartz, I’m going to recognize the gentlewoman from New 

York, Mrs. Maloney, but I want to say one thing is—I want to 

make it clear is—I don’t necessarily agree with all of the recommendations that Mr. Dickman made but, certainly, with a lot of 

them. But, for instance, you know, there’s some audit suggestions 

that he recommends that I don’t necessarily agree with. And so 

what I’m asking you is to get serious because we have got an obligation to Mr. Dickman as the IG, to Mr. Bertoni as the GAO. Both 

of them are paid to make sure that the American taxpayers are 

protected. And, right now, you just heard the ranking member, I 


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don’t know that there is that confidence there, and so I need the 

message that you take back is this is not going to go away. We expect this to be addressed in very short order, or we will have another hearing. And, as uncomfortable as this may be today, it can 

be a lot more uncomfortable. 

I mean, I think history and YouTube will show you that this is 

a fairly benign hearing compared to some that happen here. 

And, with that, I would recognize the gentlewoman from New 

York, Mrs. Maloney, for 5 minutes. 

Mrs. MALONEY. OK, first of all, I would like to apologize really 

to the ranking member and to the chair for not being here earlier, 

but I had to chair a Financial Services Committee for the Democrats and had a prior meeting earlier this morning, too, on income 

inequality, which is very disturbing. In the past couple years, the 

gap between the haves and have-nots is growing deeper and 

stronger. And it is not good for the rich or the poor, or the Black, 

the White, the Asian, or whatever. It is a very disturbing trend. 

And I want to go through some legislative changes that could reduce, possibly, disability fraud from the IG report. 

But I just want to preface it by saying that the world seems to 

be getting more unfair every day. Workers are being asked to give 

more and receive less in return, and some are equating the demise 

or the weakening of the labor movement to the reason that the gap 

is taking place in our—between our haves and have-nots. 

But I do say that it is rare for labor and management to have 

an equal stake in their working relationships. Usually it is not the 

case. And here, for once, the partnership between the Federal Government, the American worker, and the industry seems to be working OK. And I would like to get your remarks on it from all of the 

members here. 

But one of the recommendations that was a legislative recommendation—so I want to focus on the legislation recommendations since we are a legislative body—recommended that the threemember RRB structure be eliminated. 

So I would like to begin with the chairman of the RRB, Mr. 

Schwartz, on what do you consider to be the key strengths and 

weaknesses of this organizational structure, and do you agree with 

the IG recommendation that the structure be eliminated? 

Mr. SCHWARTZ. I think that the strengths of the structure are 

that this program, the trust fund as we have talked earlier, is 

funded by rail management and rail labor. They have a seat at the 

table. I think that’s the strength of it. I think the weakness of it 

is, at times, it can be unwieldy, you know, because there’s three, 

you know, there’s three different offices to deal with, but maybe 

that is by design. Maybe the unwieldiness is by design. Whoever 

set this up, set it up so there would be, at times, an acrimonious 

situation where people represent different constituencies. And so I 

would say that would be the minus. 

And as far as agreeing or not agreeing with it, I really can’t 

weigh into that. I think it would be something that management, 

labor, and Congress would have to talk about. 

Mrs. MALONEY. Well, how do you balance? You said basically 

that there is competing priorities or stakes from the three Board 


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members. How do you balance the competing priorities of the three 

Board members in the decisionmaking process? 

Mr. SCHWARTZ. Well, I think that what I meant by that is probably there is competing—with, you know, industry, they represent 

industry and labor. As far as the Board members are concerned, I 

think that they work well together, but the way I balance it is, 

sometimes I help with compromise. I mean, basically, there’s times 

where they may not be too far apart, and I’m able to help out 

there. 

Mrs. MALONEY. OK, Mr. Bertoni, you are representing the GAO, 

correct? 

Mr. BERTONI. Yes. 

Mrs. MALONEY. And does the GAO or you have any objections to 

the current RRB structure, or what are your comments on it? 

Mr. BERTONI. We haven’t done any analysis on the structure. So 

I really couldn’t weigh in on that. 

Mrs. MALONEY. And, Mr. Dickman, you recommended, I understand, that this be changed legislatively. 

Mr. DICKMAN. Yes. 

Mrs. MALONEY. And could you give me your reasons? 

Mr. DICKMAN. Well, again, I think the proof is in, you know, the 

way the plan is administered. And I think, as I have Stated before, 

if you are going to implement change, real change there, a troika 

is not the way to do it, and that you need to give the power to the 

Chairman or the individual that has the power of a Chairman, not 

just in name only, so that he can unilaterally make these decisions. 

People are pulled three different ways at the Railroad Retirement Board as far as what are they supposed to be doing? How are 

they supposed to be administering not only the occupational disability but other plans that are done by the Railroad Retirement 

Board? And I see no reason why there shouldn’t be a Chairman 

and have the advisory committee of an individual from railway 

labor and railway management. I mean, if they—you know, and as 

I Stated previously over and over again, the big ticket items are 

done by railway labor and management behind the scenes. And if 

that is the way it is then, you know, either eliminate the whole 

program or privatize the Railroad Retirement Board. And I know 

that is blasphemy for me as a, you know, inspector general to 

eliminate my own job. But it’s—you have a trust which is a private 

entity now, which is an anomaly in all of Federal Government because it is not an instrumentality of the Federal Government, yet 

it is—the money is considered part of the Federal Government. But 

until there is some really substantial change where you allow the 

Chairman to take full responsibility for his actions, I don’t think 

you are going to get any meaningful change, or unless Congress 

puts labor and management’s feet to the fire and say: Enough is 

enough; we have got to make some substantial change here. 

Mrs. MALONEY. And finally, if I could, Mr. Schwartz, can you discuss the potential merits or drawbacks of this recommendation, 

this basic change in the current RRB? 

Mr. MEADOWS. Mr. Schwartz, you can go ahead and answer that, 

but the gentlewoman’s time is expired. 

Mrs. MALONEY. And then my time is expired. 


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Mr. SCHWARTZ. All right, I think that the drawbacks would be 

that you would have an entity that is—well, you weren’t talking 

about—you were talking about the one person instead of the three 

is what you are talking about? OK. 

Mrs. MALONEY. Well, basically, I believe—I don’t want to paraphrase. 

Mr. SCHWARTZ. Sure. 

Mrs. MALONEY. But I believe Mr. Dickman recommended that 

you basically privatize it, or do away with it completely. 

Mr. SCHWARTZ. Oh, OK. Thanks. 

Mrs. MALONEY. And put one person in charge. Am I saying what 

you are saying? Isn’t that what you said? 

Mr. DICKMAN. Well, privatize was something totally different, 

but our recommendation as far as having just a Chairman and having a railway labor member, railway management member, just be 

part of an advisory committee to the Chairman. 

Mrs. MALONEY. And the Chairman would come from where? 

What’s your recommendation? 

Mr. DICKMAN. The Chairman would be as it is right now. They 

are all Presidential appointees. 

Mrs. MALONEY. Presidential appointees. OK. 

Mrs. MALONEY. But not the two other members. The labor member and the management member would drop down and just be advisors. 

Mrs. MALONEY. And then the President would appoint someone. 

I think this is important to hear Mr. Schwartz’ response to the recommendation. 

If we could have a little extra time, Mr. Chairman. 

Mr. MEADOWS. You can answer that. 

Mrs. MALONEY. And then my time is up. Thank you. Thank you 

very much. 

Mr. SCHWARTZ. I think that the drawback would be that industry 

and labor do—the trust fund is funded with industry and labor tax 

dollars, and I think that for them to have a seat at the table, I 

think you would end up with a system that there would be more 

commitment. I guess if you wanted to look at—if you want to look 

at just pure efficiency, it is sort of like the—what we were talking 

about on doing claims expediency instead of quality. 

I mean, if you want to look at sheer efficiency, things would go 

faster. There would be less consternation. And, well, there would 

be one decisionmaker, but also you wouldn’t have a check and balance. So, I mean, I think that’s—that’s the thing. You might have 

a quicker process, a process where one person would be doing it, 

but you wouldn’t have a check and balance over their funds. I 

think that would be the answer. 

Mr. MEADOWS. All right, I’m going to recognize the gentleman 

from South Carolina, but let me make sure I’m clear on your testimony. 

Mr. SCHWARTZ. Yes, sir. 

Mr. MEADOWS. Your testimony is that the three-member Board 

has provided a good check and balance up to this point? Is that 

your testimony? I mean, we have seen guys doing all kinds of 

things, so the three-member Board is a good check and balance 

based on what we have already seen? 


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Mr. SCHWARTZ. What I’m saying is, is the Railroad Retirement 

Board does a lot of things. I mean, and I can say—— 

Mr. MEADOWS. So it is a good check and balance in other areas? 

Mr. SCHWARTZ. What I’m saying is, is our business of the Railroad Retirement Board, we have rail labor and rail industry, that 

both have a stake in it. They are stakeholders. And I think that 

an answer to your question is, it is a check and balance. I think, 

as far as occupational disability is concerned, we can do better. 

Mr. MEADOWS. All right. The chair recognizes the gentleman 

from South Carolina. 

Mr. MULVANEY. Thank you very much. 

And as we draw this to a close and try and focus on some things 

we can do to improve it, as we see the situation going forward, Mr. 

Dickman, let me go back and ask you to clarify again something 

you mentioned before at the close of, I believe, Mr. Mica’s questioning, which was these rules, again, that we have talked about 

a little bit that seem stunningly unusual to me regarding this occupational disability, and I think you gave the example that, under 

the current system, if an employee has 15 duties, can establish 

that they cannot do 1 of them, they qualify for benefits. Is that—— 

Mr. DICKMAN. They can qualify for benefits. Yes. 

Mr. MULVANEY. Can qualify for benefits. 

Mr. DICKMAN. Yes, they can’t perform one aspect of their job. 

Mr. MULVANEY. OK, and Mr. Schwartz, I think I will ask you 

again. This is something I asked you the first time around, which 

is, do you think we should change that? 

Mr. SCHWARTZ. I think what we are doing right now is we are— 

labor and management are sitting down and they are talking about 

the vocational issues as far as job descriptions. What is happening 

is, we have outdated and very, very poor job descriptions. I mean, 

I think that is our first problem there. I think that it should be if 

they can’t do their job. 

Mr. MULVANEY. OK, and let me come back to you, Mr. Dickman, 

because I think you said earlier that that is not defined in the 

rules and regs. Did I hear that correctly? 

Mr. DICKMAN. Yes. 

Mr. MULVANEY. Say that again then, please. What’s not defined? 

Mr. DICKMAN. The one-aspect definition of occupational disability, that the individual can’t do one aspect of their job. We 

haven’t been able to find it anywhere in the rules and regulations. 

Mr. MULVANEY. Mr. Schwartz, should you have all come up with 

rules and regs on that by now? Is that one of the recommendations 

that anybody has made, or are you working on that on your own? 

Mr. SCHWARTZ. The recommendation would be to—what he was 

just talking about, no, there is not a recommendation for that, to 

have one aspect of the job be your job. No, there is no recommendation on that. 

Mr. MULVANEY. OK, well, maybe that’s something we could look 

at. Let me take the opportunity then with the couple of minutes 

I have left to do something we don’t do nearly enough here, which 

is to thank you two gentlemen on the ends for what you do. We 

call you in—we know you have got a tough job, and I don’t think 

we ever have enough time because we only have 5 minutes—it is 

rare for us to have two rounds of questioning—to say thank you for 


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doing it because we could not do our job if it weren’t for what you 

guys would do. 

And let me add to something that’s apparently unusual in this 

town, which is, you have something that not that many people in 

this town have at the GAO, and the IG’s Office. And that is you 

have a bipartisan group of supporters on Capitol Hill who like 

what you do and want to help you do what you do. Democrats and 

Republicans may have very different ideas about what government 

should do, but we both hate bad government. Good governance is 

something that actually binds the two parties, and I think we made 

some small progress on that in the last couple of months. 

So I say that to you because I want to say this: If you have difficulties going forward at the RRB, or at anybody that you happen 

to oversee and be involved with, let us know. You don’t have to sit 

there and toil in anonymity and just go home and complain that 

you can’t do anything at work. Call us and let us know because 

this is the type of thing that is getting more and more attention, 

and I think rightly so. 

The converse of that is that anybody who opposes you, slow-plays 

you, ignores you, doesn’t implement your recommendations in a 

timely fashion, has something that is just as rare, which is, they 

have a common—they have a bipartisan enemy on Capitol Hill. 

And I think the days of being able to ignore these folks, Mr. 

Schwartz, and this is not to you personally—OK, it is to you personally, but also to anybody else who has to deal with these folks— 

is the days of being able to ignore these folks are gone. And we intend to hold you and folks who have to deal with these folks accountable for when you ignore what they suggest. 

So, with that, I appreciate the opportunity for the hearing today, 

Mr. Chairman, and I yield back the balance of my time. 

Mr. MEADOWS. I thank the gentleman from South Carolina for 

remaining over and not going back to God’s country quickly so he 

could participate. 

The chair recognizes the gentleman from Wisconsin, Mr. 

Grothman. 

Mr. GROTHMAN. Yes, I’m going to followup on what I talked to 

you before about, Mr. Schwartz. 

Mr. SCHWARTZ. Yes. 

Mr. GROTHMAN. I mean, my concern is, is there a culture of disability developing within the railroad system. Okay? You know, 

and that is a problem you have all around our society in which people, you know, begin to look for the—look to say they are disabled 

when they aren’t. 

How long has this current system been in existence, Mr. 

Schwartz? 

Mr. SCHWARTZ. Since the 1940’s. 

Mr. GROTHMAN. The 1940’s, OK. Can you go back and tell us, 

say, 1960, 1970, 1980, the percent of people who were filing for disability every year compared to, say, 2005, 2010? 

Mr. SCHWARTZ. No, but I can go back to—like I said, if you even 

go back 10 years ago, you had 38 percent of the people getting disability awards. And, last year and in 2013, you had 18 percent getting disability. 


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Mr. GROTHMAN. It is a misleading total, though. What you are 

doing there is you are comparing disability awards. 

Mr. SCHWARTZ. Applying for—well, I would have to get the applications. But I can tell you that if you go back to 2000—well, that’s 

the only way to keep it is on awards. But—— 

Mr. GROTHMAN. No, no. What we are looking for is of the total 

people in the system, how many people are claiming they are disabled in any given year? 

Mr. SCHWARTZ. What I can do is, if you can—I can provide something for you for the record if I get the question exactly framed as 

you would like, we can get our actuary to give you numbers, whatever you want. 

Mr. GROTHMAN. I would hope you would have it, but OK. You 

have a given number of people who every year are part of the system, right, paying into the system, working in the railroad. OK, 

and every year, a given percentage of those people say: I am disabled; I am entitled to something. OK? 

And the question we are trying to get at, first of all, is, what is 

that percentage, say, in the year 2010, compared to the year 1990 

or 1980? The question is, are we developing a culture in which people are saying, ‘‘I’m disabled’’? That’s what we are trying to get. 

Mr. SCHWARTZ. OK, we can get that for you. 

Mr. GROTHMAN. OK, and I would also like to know if you can 

compare that to other occupations. OK? Disability compared to—I 

know they break these down by occupations by State, like maybe 

people working in a factory, you know, maybe policemen, whatever. 

So we can compare the number of people who are saying they are 

disabled in the railroad industry compared to other places. 

Mr. SCHWARTZ. I understand where you are going with that. 

Mr. GROTHMAN. That’s what we are trying to see here. OK? 

We also like to know, you look, when we talk about this high approval rate in which everybody says ‘‘I’m disabled,’’ you know, they 

wave you through; sure, you are disabled. If you could give us those 

numbers and maybe I would think yourself would want to compare 

not only the Social Security disability, but maybe people who say 

they are disabled in other occupations as well. You know, look at 

individual cities when they say maybe union disability, you know, 

police and fire, that way, percentage of people that you are approving compared to other groups. 

Mr. SCHWARTZ. We’re—OK, we will do the best we can on that. 

And if—and we can get ahold of you if we don’t have the exact 

question framed, and we will do the very best we can to get you 

those numbers, sir. 

Mr. GROTHMAN. And, see, it is an important thing because, you 

know, this money is coming from somewhere. OK, we are asked to 

do things like subsidize. I don’t know whether Amtrak is part of 

this, but, I mean, insofar as we are just bleeding money here, that’s 

a problem, and not to mention, it gets to the general overall decline 

of society in which people are able to say, ‘‘Guess what, I’m disabled,’’ and people are accepting it. 

And there are other areas of society that are going to have to 

look at Social Security disability. But, from the testimony I hear 

today, I am gathering there is that culture in the railroad industry 


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that says: You know, I’m going to say I’m disabled. And we want 

to see if that’s true. 

Mr. SCHWARTZ. I understand. 

Mr. MEADOWS. I thank the gentleman. 

The chair recognizes the gentleman from Alabama, Mr. Palmer. 

Mr. PALMER. Thank you, Mr. Chairman. 

And I’m going to thank the gentleman from Wisconsin for asking 

for the number of people added to the disability rolls each year, 

particularly since I asked that question in my letter. And you did 

not provide that. So I’m very pleased to know that you do have that 

information and that you will provide it at least to Mr. Grothman. 

Another thing that I wanted to bring up, in your response to me, 

you say it is rare for someone who has left the industry for an extended—for self-employment for them to become entitled to an occupational disability annuity, yet in the inspector general’s written 

testimony, it points to an example in the agency’s disability claims 

manual where an individual left the railroad employment for 16 

years but still retains their current connection with the railroad industry. That may be—even if that’s the only example, does it make 

sense an individual can be able to claim an occupational disability 

from a job they haven’t held for 16 years? 

Mr. SCHWARTZ. Well, current connection was put into place actually to prevent people—they wanted to make sure that people had 

a current connection to the railroad. That is—it’s very rare, and he 

did put an example in there that was in the manual. That’s exactly 

true. It is very rare that would happen. 

Mr. PALMER. Okay, I want to ask you something else in the context of my letter. I asked for copies of all of the correspondence, including emails, related to the RRB’s decision to utilize very specific 

language in their termination letters to the Long Island Rail Road 

occupational disability annuitants. You attached a February 1, 

2013, memo from Inspector General Dickman regarding this topic. 

Is this the only communication that exists—that exists regarding 

the subject matter? And if not, why didn’t you provide the information I requested? 

Mr. SCHWARTZ. I think you were referring to Mr. Dickman asking us not to go back and recover claims, and that was the correspondence we had for that, the letter that he had sent that said 

not to recover. Which question are you talking about? I have to 

look at the question here. 

Mr. PALMER. I asked for copies of all correspondence, including 

emails, relating to the decision to utilize very specific language in 

the termination letters. I’m going to ask you, again, to provide that 

information and provide it for the committee. 

Mr. SCHWARTZ. Okay. 

Mr. PALMER. I want to move on. 

The Board’s response indicated—and this is your response to my 

letter to question nine—that there was a recent meeting with Dr. 

Robert McLellan, the chief of the Occupational & Environmental 

Medical Section at Dartmouth-Hitchcock Medical Center, associate 

professor at the Geisel School of Medicine at Dartmouth. In June 

2014, the inspector general had forwarded you a lengthy list of 

poignant recommendations authored by Dr. McLellan. Why did it 

take the agency 9 months to contact him? 


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Mr. Chairman, if he is—— 

Mr. SCHWARTZ. I think that what it comes down to is, we were 

looking at all of the possibilities to improve our disability program. 

We want to enhance it. We want to make it better. We want to 

change the way we do things. Dr. McLellan is one of the people we 

thought we should talk to, as suggested by Mr. Dickman, to get his 

ideas on how to do that. 

Mr. PALMER. Well, the last thing that I want to ask is, what actions will the Board take regarding his recommendations? Because, 

as Mr. Connolly has said, and as Mr. Meadows has said, I think 

all of us here, our objective is good government. Our objective is to 

do what is best for the employees of the railroad, and I think, in 

that regard, implementing these recommendations—you have 

heard from Mr. Bertoni. You have heard from Mr. Dickman. I want 

to know if—what you intend to do? If you intend to implement 

these recommendations? And I have got one last question. 

Mr. SCHWARTZ. All five of Mr. Bertoni’s recommendations we intend to implement. Many of Mr. Dickman’s we intend to implement. And, as I said, Mr. Dickman and I will be sitting down and 

going through them and making sure he has a response to all of 

his recommendations. 

Mr. PALMER. I’m good with that. Thank you, Mr. Chairman. 

Mr. MEADOWS. I thank the gentleman for his insightful questions. 

And I would like to thank all of the witnesses for you taking the 

time today to answer these. 

I want to close with these very brief remarks. And that is, Mr. 

Bertoni, Mr. Dickman, we have had sworn testimony today that 

Mr. Schwartz—and I assume I’m speaking on behalf of the other 

two Board members that are not here, that they acknowledged that 

you are here representing the Board—has agreed to work with the 

two of you in terms of implementing those recommendations. 

So here is what I would ask of you, Mr. Schwartz. We want— 

we want real progress. 

Mr. SCHWARTZ. Yes. 

Mr. MEADOWS. That is made in very short order. A 9-month, 10- 

month delay is not good enough. Much of what you talked about 

in your opening testimony sounded great, but it gave very little incentives in terms of denying claims that are fraudulent. It gave 

very little in terms of going back to revisit those who are getting 

benefits that may have gotten benefits for something that was temporary in nature; i.e., a broken arm where they would have been 

awarded some kind of disability, and yet, from the documents we 

have, there is no revisit of them that that arm could heal. They 

could continue to receive benefits. 

And, with that in mind, Mr. Schwartz, what I don’t want to happen is for another New York Times reporter to be waiting for a tee 

time and find somebody teeing off ahead of them getting full retirement. And, under your scenario, wouldn’t you agree that today that 

some of the egregious things that would happen could still be happening. Wouldn’t you agree with that? 

Mr. SCHWARTZ. I would say, Mr. Chairman, that we need to 

change our culture absolutely. We need to change the way we do 

business, and the way things are right now today without these 


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extra things, without the quality assurance, without the extra doctors, and those things, something could be happening, yes. 

Mr. MEADOWS. So it could still be happening. 

Mr. SCHWARTZ. Yes. 

Mr. MEADOWS. So here is what I ask of you: In the next 120 days 

from this hearing, I want to make sure that there is correspondence with both the GAO and the inspector general and this committee. 

Mr. SCHWARTZ. OK. 

Mr. MEADOWS. And I want tangible—this is what we have implemented, and these are the results. And then, from there, we are 

going to revisit this entire thing. 

Mr. SCHWARTZ. I understand. 

Mr. MEADOWS. Another 90 days after that, assuming that we 

made real progress, we won’t have to have another hearing. Assuming that you continue to give the documents the way that Mr. 

Palmer has asked for, the committee has asked for, and you have 

assured me, we won’t have to have another hearing. I don’t want 

another hearing. All I want you to do is fix the problem and make 

sure that our railroad workers have the safety net that they want 

and need and deserve and have paid for, and yet, the bad actors 

are rooted out. 

From an employee standpoint, I am going to administer what I 

call the Forrest Jarrett test. He is a long—loves the rail, has retired, and it is his life. And so I’m going to look at it from his perspective from an employee standpoint. So I will have that balance. 

But I have your assurances, is that correct? 

Mr. SCHWARTZ. Yes. 

Mr. MEADOWS. All right. So, with that, if there is no further business, without objection, this subcommittee stands adjourned. 

[Whereupon, at 12:57 p.m., the subcommittee was adjourned.] 


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