Railroads - The Catbird SeatThe Catbird Seat

NESTS ON THE RAILS

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December 11, 2002

Nominee Snow stirs controversy

LOS ANGELES TIMES/ WASHINGTON POST NEWS SERVICE

WASHINGTON – CSX Corp., the railroad company headed by Treasury Secretary-designate John W. Snow, paid no federal income taxes during at least two of the past four years.

During the same period, CSX gave Snow $36 million in salary, bonuses, stock and options and forgave a $24 million loan.

CSX’s tax and compensation practices appear to be legal. However, these and other aspects of Snow’s career suggest the man President Bush has chosen to head his new economic team may have some explaining to do before confirmation.

Snow’s defenders dismiss most of the criticism as political cheap shots and express confidence he will convince Congress, and the nation, of his suitability.

Yet additional issues are sure to be raised on Capitol Hill. Among them: the cancellation of loans he received to buy company stock and his sale of CSX shares shortly before the disclosure of financial setbacks.

Snow’s private-sector resume bears a striking similarity to those of his potential bosses, Bush and Vice President Dick Cheney. Bush has been bedeviled by questions about his stock sales while serving on the board of Harken Energy Corp. Cheney has drawn fire for his actions as CEO of Halliburton Co., an oil services firm under investigation for its accounting practices.

Last night, Richmond, Va.-based CSX said Snow notified the board of his intention to retire if confirmed and said, “I will not accept any future compensation or benefits that were in my employment contract with CSX.”…

See also: CSX Transportation, Inc.

For more, GO TO > > > The Snow Birds

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From The Buying of the President 2000, by Charles Lewis and the Center for Public Integrity:

In March, 1999, John McCain made an appearance in Alexandria, Virginia, at the home of Mary McAuliffe, a lobbyist for Union Pacific Corporation.

Also there to greet him were John Angus, a lobbyist for CSX Transportation, Inc.; Pamela Garvie, a lobbyist for Burlington Northern Santa Fe Corporation; and Wayne Valis, a lobbyist for Norfolk Southern Corporation.

The guests all had at least two things in common: All work for companies that operate railroads, and all gave at least $500 to McCain’s presidential campaign.

Over the years, railroad interests have been kind to McCain, collectively providing him with more than $140,000 in campaign funds.

And vice versa: In the months after the Alexandria fund-raiser, McCain protected the industry from new regulations.

After Congress effectively deregulated the nation’s railroad industry in 1980, shipping rates fell, as did the number of rail accidents. But as railroad companies have merged, businesses that rely on rail transport have complained that they are increasingly at the mercy of regional monopolies. (Remember the ‘Railroads’ on the Monopoly gameboard? Check out the owners below.)

In 1980 there were sixty major rail carriers; today there are nine, and just four of them account for 90 percent of the industry’s freight revenue.

Union Pacific Railroad Company’s acquisition of Southern Pacific Transportation Company in 1997, which made Union Pacific the nation’s largest rail carrier, brought with it renewed calls for legislation to force competition on the industry.

In June 1999 several members of the Senate Commerce Committee, including John D. “Jay” Rockefeller IV of West Virginia and Kay Bailey Hutchinson of Texas, introduced legislation that would force railroad companies to let competitors use their tracks, thus giving shippers a choice of carrier. Lobbyists for the shipping and railroad industries tried to work out a compromise, but the railroad companies refused to budge. They didn’t have to: They had an ace in the hole.

Two months after he clinked glasses with railroad-industry lobbyists in Alexandria, McCain introduced legislation to reauthorize the Surface Transportation Board, the federal agency that oversees the railroad and trucking industries. His bill completely ignored the shippers’ concerns. It was going to be that, McCain let it be known, or, as a lobbyist for the shippers later recalled, “nothing at all.”

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June 12, 2001

Federal Regulators to Impose Higher Standards on Railroad Mergers

By Dan Piller, Fort Worth Star-Telegram

Federal regulators said Monday that they will impose higher standards on railroad mergers, including checks on carriers to avoid the kinds of service disruptions that tied up commercial traffic in Texas for months in 1997-98.

“We are highlighting a new category of merger harm — transitional service problems — that we will scrutinize carefully,” the U.S. Surface Transportation Board said in a long-awaited announcement from Washington, D.C. The board lifted a 16-month moratorium on new mergers that was imposed while it readied the new rules.

The board, which regulates railroads and trucks, said it will require merging carriers to come up with plans for avoiding service snafus of the kind that occurred beginning in mid-1997, when Union Pacific Railroad merged with Southern Pacific Railroad.

The board also reiterated its previously-stated stance that in the future, railroads applying for merger must prove that the combination will preserve, if not enhance, competition — a standard it admitted Monday would be difficult to attain.

“We anticipate, to gain our approval, it likely would be necessary for applicants to offer to offset a difficult-to-remedy loss of competition with competitive enhancements,” the board said.

Those “enhancements,” are likely to come in the form of trackage rights, in which one carrier allows another to run on its tracks without fees.

The UP-Southern Pacific merger resulted in a service fiasco, centered in Houston, that disrupted rail traffic in the western half of the United States for several months and cost the railroads and shippers hundreds of millions of dollars.

A second set of service problems occurred when CSX and Norfolk Southern Railroads each took parts of the former Conrail covering the eastern half of the United States beginning in 1999.

When Burlington Northern Santa Fe Railway of Fort Worth applied to merge with Canadian National Railway early last year, shipper groups and politicians demanded that regulators alter the policy of two decades in which railroad mergers were approved routinely.

The board originally imposed a one-year moratorium on mergers, which prompted BNSF to withdraw its merger request, and then prepared the new rules that it unveiled Monday.

The board’s yearlong study and new rules appear to have brought an end to a period in which the number of major, Class I railroads in the United States has been drastically reduced by mergers.

In the last 20 years, Burlington Northern has been enlarged by mergers first with the St. Louis-San Francisco and then the Santa Fe Railway, while Union Pacific has purchased first Missouri Pacific, Missouri-Kansas-Texas, Chicago & North Western and then Southern Pacific.

That period of freedom was brought about by congressional action in 1980 that deregulated the industry, itself a response to the troubled decade of the 1970s in which several major carriers went bankrupt. . . .

The group that was most aggrieved by the 1997-98 service tieups, the American Chemistry Council, which represents major chemical shippers, was not satisfied with the new rules, saying they didn’t go far enough to preserve competition and service.

The chemical shippers have openly lobbied Congress to return to the pre-1980 days, when railroad mergers were harder to achieve. The council said the new merger rules “allow the railroad to continue down the same track of providing unreliable service and unreasonable rates to captive (served by just a single railroad) customers.”

“Rail customers were hoping the STB would require the final round of rail mergers to enhance competition,” said Fred Webber, president and chief executive of the association.

Fort Worth railroad consultant Richard Schiefelbein, a former federal regulator, said “in general, the new rules will make it more difficult to get mergers approved.”

Schiefelbein said that, while the regulators had slightly softened the language of their competition provision from earlier drafts, the hurdle of competition will be high.

But Schiefelbein said that while regulators are making mergers more difficult, the industry still faces long-term issues that likely will bring about mergers.

“Railroads still face considerable cost pressures and aren’t earning their cost of capital,” Schiefelbein said. “In that sense, even though there are higher hurdles to clear, there still will be good reasons for mergers.” . . .

Burlington Northern Sante Fe Railroad – Top institutional investors (as of 03/31/01) include:

#1 – FIDELITY MGMT & RESEARCH CO – $1,344,038,510

#2 – ALLIANCE CAPITAL MGMT – $766,964,270

#3 – ALLEGHANY CORP – $627,712,380

#4 – CAPITAL RESEARCH & MGMT CO – $590,502,140

#5 – BARCLAYS GLOBAL INVESTORS INTL – $540,041,750

#6 – PUTNAM INVESTMENT MGMT (Marsh & McLennan) – $301,526,030

#7 – OPPENHEIMER CAPITAL – $281,275,930

#8 – STATE STREET GLOBAL ADVISORS – $250,629,170

#9 – BRINSON PARTNERS – $248,617,310

#10 – MORGAN STANLEY DEAN WITTER – $188,827,650

#11 – VANGUARD GROUP – $181,370,850

#12 – MORGAN (JP) INVESTMENT MGMT – $176,581,780

#13 – PPM AMERICA – $148,420,540

#14 – AMERICAN EXPRESS FINANCIAL – $141,285,350

#15 – GE ASSET MGMT – $132,466.43

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And One of the Top New Owners of Burlington Northern Sante Fe:

NOMURA SECURITIES INTERNATIONAL INC

– $49,035,480

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For more on Nomura Securities, GO TO > > > Wall Street

CSX Transportation, Inc. – According to the Center for Public Integrity, CSX Corporation was the 24^th largest patron to the Republican Party in the 1990’s, donating a total of $1,192,045. Judging from the following news articles, it would appear that the money might have been more wisely spent on the safety and welfare of its employees and public citizens:

May 15, 2001

THE TOXIC WORKPLACE

By James Bruggers, The Courier-Journal

Sick Workers Win Payments After Long, Difficult Battles – Settlements with CSX total about $35 million.

Attorneys F. Tucker Burge and James H. Wettermark in 1989 launched a high-stakes legal battle against a railroad giant.

The reverberations are still being felt. . . .

Over a decade, the lawyers battled CSX Transportation Inc in Georgia, Tennessee and Kentucky, winning settlements for roughly 300 workers diagnosed with toxic encephalopathy.

Along the way, the firm won key rulings that helped lawyers around the country secure scores of settlements in other railroad-solvent lawsuits.

They and the other attorneys and their expert medical witnesses helped shed light on what Wettermark calls a “disgraceful” period in railroad history.

CSX has acknowledged 466 solvent settlements totaling up to $35 million. . . .

Ten CSX cases have gone to jury trial, with six verdicts producing awards for the plaintiffs ranging from $40,000 to $10,000,000; the $10 million award was later settled on appeal for $1 million, according to CSX. . . .

At least 80 solvent cases are pending . . .

The latest big-money solvent victory for the railroaders came in late November, when attorney Roger Lane of Brunswick, Ga., won a $765,000 jury award for the widow of Roy Lee Berry Jr, a former CSX electrician from Hamlet, N.C.

Because of challenges and appeals, the case took eight years to reach a jury. Berry didn’t see it. He succumbed to pancreatic cancer in 1995.

Louisville attorney Edward H. Stopher, who has handled many of the solvent cases for CSX, said claims by workers of reckless, unsafe use of solvents are exaggerated and without merit. . . .

Joseph Kelly, senior director of risk management at CSX, blames the lawsuits on worker reaction to the company’s closing of facilities in Louisville and other corporate downsizing that resulted in the relocation of workers, beginning in 1987….

Attorney Larry W. Lockwood Jr, of Virginia Beach, Va, who won the $10 million verdict in 1997, said the workers’ injuries are not only valid but have carried with them a high cost in human suffering.

“You have divorces. You have suicides. You have criminal activity,” Lockwood said. . . .

SOLVENT SUITS – Corbin man’s case spurs other to file.

One of the first to file a claim was a 59-year-old electrician named Jasper Wages who worked in CSX’s Corbin, Ky, facility.

Wages filed against a subsidiary of CSX, Seaboard Systems in 1986, the year BEFORE several hundred Louisville workers were relocated from the city’s old South Louisville Shops, to such places as Corbin, Huntington, W. Va, and Waycross, Ga.

“I’m just like a bulldog when I get turned onto something,” said Wages, now 74, a former local chairman of the International Brotherhood of Electrical Workers.

Wages said he agreed in 1987 to a $450,000 settlement, which afer attorney fees and expenses yielded about $260,000.

As word spread, lawyers who specialized in Federal Employers Liability Act claims began hearing from workers and taking on cases….

Burge and Wettermark got involved in 1989 after receiving calls from three Corbin workers who believed they were made sick by the chemical solvents.

The two lawyers told them how the solvents had been used like water for many years, how they and others in Louisville sometimes had been overcome by fumes while using the industrial degreasers in pits underneath locomotives and in other close quarters.

Workers also said no one ever told them they must use respirators when applying solvents – at least not until late 1980s or early 1990s.

“What we found when we started investigating the cases was they had been using huge amounts of trichloroethylene (TCE), l,l,l-trichloroethane (TCA), and perchloroethylene (PCE),” Wettermark recalled.

Also being used at the shops was something called DowClene, or L&N No. 3. It was three-fourths TCA and one-fourth PCE.

The lawyers obtained material safety data sheets for the solvents. Chemical manufacturers prepare these papers to offer instructions on how to use the products safely. Required since the 1970s, employers have had to make them available to workers since 1985….

For example, the 1980 safety data sheets for DowClene contained this warning:

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“Possible organic injury from prolonged or repeated exposures; irritation, central nervous system depression. Avoid prolonged or frequent skin contact.

“Avoid breathing vapors. Vapors are heavier than air and collect in low areas, such as pits and other confined areas. Do not enter these areas where vapors are expected unless special breathing apparatus is used.”…

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MEDICAL WARNING: Railroad doctor called for non-toxic cleaners in ’67 memo.

A top railroad doctor warned more than three decades ago that some chlorinated hydrocarbon solvents were putting workers at risk of injury and that lawsuits were possible.

Baltimore & Ohio Railroad medical director Dr. I. Kaplan in 1967 distributed a memo to company officials identifying trichloroethylene as toxic and saying “lube rooms” had inadequate ventilation.

The doctor recommended the railroad find a non-toxic alternative for some degreasing operations.

“Even though it might be a little more expensive, it may ultimately save the company thousands of dollars in lawsuits,” Kaplan wrote.

The memo is among several internal documents that show some on the industry recognized decades ago that chlorinated solvents were dangerous . . .

The B&O Railroad later became part of CSX Transportation, Inc. . . .

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May 16, 2001

PAPA JOHN’S CARDINAL STADIUM:

Workers regularly pump contaminants from beneath football facility

By Sara Shipley, The Courier Journal

Quick construction was urged at site of old CSX shops.

Five times a week, a truck pulls up to Papa John’s Cardinal Stadium, and workers push a hose into a recovery well drilled into the ground.

Out comes a gush of diesel fuel, oil, solvents and other contaminants, the legacy of a nearly a century of chemical and solvent waste mismanagement at the railroad maintenance yard that once covered this 92-acre site.

The stadium where the University of Louisville football team carries out its autumn battles caps a stew of some 47 chemicals – including lead, arsenic, dioxin, solvents, PCBs and petroleum hydrocarbons – that were deliberately left in place during its construction from 1996 to ’98.

Kentucky’s biggest brown-field redevelopment is widely regarded as a success story in the industry and helped create interest in a voluntary cleanup bill passed by the state legislature this session.

It’s a far cry from the old approach to polluted sites popular before the mid-1980s, when state and federal agencies tried to make property owners restore the land completely, regardless of cost.

“I think it’s irresponsible to leave (the contamination) there,” said Tom FitzGerald, director of the Kentucky Resources Council.

“What we’ve done is narrow the land-use options for the next generation.”

The contamination must be monitored and controlled in perpetuity to make sure it doesn’t spread underground or come to the surface.

As manager of the Kentucky Department of Environmental Protection’s risk assessment branch, Albert G. Westerman signed off on plans to entomb contamination at the old rail yard under a cap of layered dirt, gravel or asphalt.

“It’s not that I like that approach, but it’s certainly something that’s been used a lot,” Westerman said. “…You put a cover over the pollutants and they stay where they are. And they’re toxic.” . . .

The University of Louisville acquired the stadium property from CSX through a 1996 land-swap deal in which the state handed over a $3 million property on Hurstbourne Lane. The university athletic association also promised to pay another $3.5 million over 20 years to complete the $6.5 million sale price.

CSX has paid $6.8 million for the cleanup thus far. That’s far less than the $40 million that a CSX contractor estimated for cleaning the site completely. …

The company might have done more, Watts said, but U of L athletic boosters wanted the facility ready as soon as possible. In order to accommodate tight construction demands, the stadium design was altered to create a shallower bowl, which required less soil excavation, Watts said.

“We just ran out of time,” she said. “By the time they raised the stadium funding, we had only two months before we had to start construction.”

U of L is responsible for keeping the cap intact. CSX does the cleanup.

The railroad also agreed to reimburse the university for any cost it incurs related to the contamination, such as monitoring and consulting fees. The railroad has not yet paid the $1.47 million tab the university submitted in Oct 1999, said Larry Owsley, vice president for administration and finance.

Owsley said CSX wanted more documentation of the expenses, and he expects the bill to be paid soon. . . .

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Some Common Ne$t$ Between the Tracks

As of 03/31/01, top institutional investors in CSX and Papa John’s included:

> Alliance Capital Management Company – the largest institutional investor in CSX Transportation with $873,043,250 invested; and $364,330 invested in Papa John’s Pizza.

> Capital Research & Management Company – the second largest institutional investor in CSX Transportation with $662,653,210 invested; and the number six investor in Papa John’s, with an investment of $18,811,880.

> Fidelity Management & Research – the third largest institutional investor in CSX Transportation with $518,336,400 invested; and the #1 institutional investor in Papa John’s, with an investment of $80,954,400.

> Barclays Global Investors (a British company and a key member of the Committee of 300) is the fifth largest institutional investor in CSX with $225,266,100 invested; and the eighth largest investor in Papa John’s, with an investment of $11,389,470.

For another corporation in which Alliance Capital Management was the #1 investor, GO TO > > > The Story of Enron

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May 16, 2001

Runaway Train Travels 70 Miles Carrying Hazardous Materials

By Charley Gillespie, Associated Press

Kenton, Ohio – A runaway freight train carrying hazardous materials rolled about 70 miles through Ohio with no one aboard yesterday before a railroad employee jumped onto the locomotive and brought it to a stop.

The train was being assembled at a CSX installation near Toledo when, for reasons that are unclear, it left the rail yard under its own power.

Patrol cars raced ahead of the train to block off traffic at crossings and sheriff’s deputies tried to peer inside the locomotive as the CSX train of 47 cars lumbered through cities and villages, reaching a speed of 46 miles an hour at one point.

“It would have been a disaster if it would’ve derailed in town,” said Sgt Major Blair of the Wood Country sheriff’s office . . .

At one point, police evacuated about 100 workers at a meat processing plant near the village of North Baltimore when authorities attempted to stop the train.

Authorities had tried to derail the train near Findlay, where it rolled past houses and factories, passed within 50 feet of some homes. There were no evacuations in the city of about 40,000 residents.

“We were prepared for it, but we didn’t need to,” Hancock County Chief Deputy Doug Wilcox said. . . .

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May 19, 2001

Former Workers Sue CSX, Want Health Monitored

From The Courier Journal

Solvent exposure cited . . .

Eighteen former railroad workers who say they were exposed to hazardous solvents but not diagnosed with brain damage or other illnesses linked to the chemicals filed a lawsuit yesterday against CSX Transportation, Inc.

The suit, filed in Marshall County, W. Va., asks that CSX be forced to set aside an undetermined amount of money in a trust to monitor the health of “several hundreds to as many as thousands” of former railroad workers so that illnesses can be detected and treated early, their lawyer said.

“The purpose of the court-supervised fund is so that … they (the former workers) are not just at the whim of whatever HMO they happen to be in,” said attorney Mark T. Coulter, who filed the suit.

Coulter has asked the court to certify it as a class action so that all exposed workers could be monitored. . . .

Gary Cease, a spokesman for CSX, said the company hadn’t seen the lawsuit and couldn’t comment on it.

The industry has denied any link between exposure to the solvents and brain damage and other illnesses.

The litigation was filed this week in part because of a series published in The Courier Journal May 13 to 16, Coulter said.

In its 10-month investigation, the newspaper found that more than 800 railroaders from Maryland to Kentucky to Montana, have been diagnosed with brain damage following their long-term exposure to toxic degreasing solvents.

The stories also reported that over the past 15 years, railroad companies, particularly CSK, have paid tens of millions of dollars to settle workers’ solvent lawsuits, while denying any link between exposure and brain damage….

The suit says that the World Health Organization has concluded that long-term exposure to organic solvents can cause memory impairment; difficulty in concentration and loss of initiative; sustained personality or mood change; impairment to intellectual function; and dementia….

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June 3, 2001

From The Courier-Journal, by James Bruggers:

CSX-BACKED RESEARCHERS INVESTIGATED

A federal watchdog agency is investigating ethics allegations against a University of Michigan Medical School research team that has provided a railroad company’s key defense against lawsuits claiming brain damage from solvent exposure.

The lawsuits have been filed on behalf of hundreds of CSX Transportation Inc. workers . . .

Critics of Dr. James Albers, a UM neurologist, allege he wrongly led a research study that used railroad workers without their permission. Stanley Berent, a UM neuropsychologist, and several others also participated in the research.

The Office of Human Research, a part of the U.S. Department of Health and Human Services, is investigating the allegations.

The study, paid for in part by the company the workers were suing – Florida-based CSX – concluded that other doctors falsely diagnosed dozens of railroad workers with a form of permanent brain damage called toxic encephalopathy. . . .

CSX, partly as a result of the Albers research, has denied a link between solvent exposure and brain damage among its workers. At the same time, it has paid nearly $35 million in settlements and jury awards over the last 15 years. . . .

Railroad workers’ attorney Larry Lockwood, Jr. of Virginia Beach, Va., said some of his clients “were incensed” to learn they were studied.

“They were taken advantage of when they were down,” said Lockwood, who asked 22 of the railroaders from such states as Kentucky, West Virginia, Ohio and Tennessee to write the Office of Human Research Protections and demand the investigation. . . .

The workers were compelled to see Albers as part of their lawsuits under the Federal Employers Liability Act – their version of workers’ compensation – according to a draft of the letter Lockwood suggested railroaders send to the OHRP.

UNIVERSITY OF MICHIGAN spokeswoman Kallie Michels said Thursday that the medical center’s Conflict of Interest Board reviewed the matter this spring and concluded all proper procedures had been followed….

Potential penalties for violating human research protection rules can range from a letter of reprimand to shutting down a university’s entire research system, Hall said….

At issue is whether the information gathered by the University of Michigan medical team was appropriately used in the research project.

Under rules for research by universities that accept federal funds, studies cannot be done on people without their permission unless the researchers first obtain a legitimate waiver from a special panel within the university called an Institutional Review Board.

According to OHRP guidelines, waivers may be granted if the research involves only a minimal risk to the subjects, doesn’t adversely affect their rights or welfare, could not practically be other wise carried out, and subjects are provided pertinent information after participation.

The UM review board granted the waiver. Albers, in an earlier interview, said the decision was appropriate because no one knew – not even himself – which specific workers were included in the study. Participants were randomly selected from a larger group, he added.

It’s also important to note, Albers said, that the study was done after the workers had been sent to him. These so-called “retrospective studies” often qualify for waivers, he said.

His position, and that of CSX, is that the chlorinated solvents formerly used by the railroad aren’t toxic to the brain and can only cause permanent damage if fumes are so thick they cause severe oxygen deprivation.

Louisville neuropsychologist Martine RoBards, who counts more than 90 railroaders among her patients and whose research supports the workers’ contentions, initiated UM’s internal review last winter. RoBards also complained in letters sent to the OHRB, detailing her objections.

Because the results of Albers’ research were later used by their funder, CSX, to fight the workers’ injury claims, RoBards asserted in a Feb. 26 letter to UM Medical School Associate Dean Steven Goldstein that the “very purpose of the ‘study’ was to harm the subjects themselves in the most direct way possible.”

She interprets from federal guidelines a requirement for consent from “potentially vulnerable subjects,” such as “prisoners, children, cognitively impaired individuals or people who are economically or educationally disadvantaged.”

The university’s guidelines say the following: “As a general rule, a comprehensive, written consent process applies to all research involving vulnerable subject populations, regardless of the magnitude of risk of harm.”

“This was a small and recently examined group of people whose consent could have, and should have, been sought for inclusion,” RoBards wrote in her letter to Goldstein….

“The vast majority – if not the entire group – not only was living, but was represented by legal counsel. They were capable of being reached to sign a consent form,” the letter said.

She disagreed with UM’s internal review, which cleared the faculty members.

“Basically they whitewashed it,” RoBards said Thursday.

“It’s a common thing in academic institutions where they circle the wagons to protect their own.”…

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July 20, 2001

CSX and Baltimore cope with Howard Street Tunnel derailment

by Bill Stephens

With a derailed train still burning inside the tight confines of the Howard Street Tunnel in Baltimore this evening, CSX faced an operational headache and public relations nightmare, as the area around the tunnel remained virtually shut down today.

Meanwhile, the railroad will have to contemplate life without the 1.7-mile tunnel for a while. The fire, heavy smoke, and high temperatures inside the tunnel have prevented inspectors from getting a good look at the damage caused by the wreck, blaze, and a subsequent water main break.

“We’re told some of the boxcars are actually glowing,” fire department spokesman Hector Torres said early this afternoon. “You’re talking about glowing metal. I’m guessing 1,000 or 1,500 degrees.” . . .

This evening, crews hoped to pull two more cars out of the tunnel, which will give them access to the tank car, which is leaking at a rate of 10 gallons per minute. . . .

Citing the difficulty in evaluating the wreckage deep inside the tunnel, which opened in May 1895, CSX had no estimate of how long the cleanup would take. . . .

The derailment of a train carrying hazardous materials through a heavily populated urban center ranks at the top of a railroad’s worst wreck scenarios. The northbound train was carrying eight hazmat loads, including hydrochloric acid, acetic acid, fluorosilicic acid, propylene glycol, tripropylene, and ethyl hexyl phthalate. . . .

Two firefighters received minor injuries. . . .

City officials urged people to stay away from downtown, if possible.

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July 27, 2001

Baltimore, CSX Wait To Hear Which Side Is Liable

BALTIMORE (AP) — City officials are worried about the possibility of paying for a train derailment, fire and chemical spill in a downtown tunnel a month after they raised taxes and laid off workers to balance their budget.

Federal investigators continued studying city records Thursday to learn whether the freight train derailed or a nearby water main broke first.

City officials have insisted the derailment caused the water main break, which probably would make train owner CSX Transportation Inc. liable for the accident.

But if problems with the water main caused the accident, the city could be held responsible for damage, cleanup and other losses.

“That’s a major cause for concern, without a doubt,” said Tony White, a spokesman for Mayor Martin O’Malley. “Should the city incur any financial expenditures from this incident, it would definitely be unfortunate for us because we’re so cash-strapped.”

CSX agreed earlier this week to cover overtime costs for firefighters, police and some public works crews who responded to the July 18 accident. Company spokesman Rob Gould stressed the payment was “in no way an acknowledgment of fault.”

White said Thursday that the city will ask CSX to pay $460,000 for overtime.

CSX officials declined comment until they had reviewed the request themselves.

“Once they communicate the numbers formally to us, we’ll sit and talk as we had discussed and move from there,” Gould said.

The city has estimated that containing the five-day fire and chemical spill cost $1.3 million. But the total cost of the accident will be far more than that.

Damage from the derailment and water main break must be repaired and nearby businesses have already sought compensation for accident-related losses….

City officials spent the spring looking for the $21 million needed to erase the red ink from their nearly $2.1 billion budget.

They laid off about 180 city workers, raised income taxes by 20 percent and worked out an agreement under which large nonprofits will pay the city $20 million over four years….

All eyes now are on the National Transportation Safety Board investigators working to find the cause of the accident. While the agency’s findings are not legally binding, they often influence liability decisions.

Spokesman Keith Holloway said the NTSB will release factual reports in coming months, but a final report will take closer to a year….

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December 24, 2001

Train derails and burns; 1 hurt

ROCHESTER, New York (CNN) — A freight train loaded with chemicals derailed Sunday afternoon and burst into flames, destroying one house, damaging another and causing one minor injury.

Five or six of the CSX train’s 27 cars left the tracks and ignited shortly after 3 p.m. EST, said Capt. Dan McBride of the Rochester Fire Department.

One of the cars, full of acetone, caused most of the fire, McBride said. Two other cars loaded with methylene chloride also ignited, he said.

Firefighters took about two hours to control the fire, McBride said.

One house was destroyed in the fire and another was seriously damaged after a railroad car struck it. Several boats and other vehicles were also destroyed, firefighters said.

The engineer, who reported a minor elbow injury and back pain, was taken to an area hospital.

The chemicals were en route to a Kodak film processing plant in Rochester when the train derailed on a straightaway near the spot where the Genessee River enters Lake Ontario….

“Fortunately, right immediately in the area of the fire, it was fairly open,” McBride said.

A nearby school was untouched. Though nearby residents were evacuated for a brief time, no one was affected by the fumes, McBride said.

“We were fortunate to come out of this with no serious injuries,” McBride said.

Officials from the National Transportation Safety Board and the Rochester Fire Department have begun an investigation, he said.

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< < < FLASHBACK < < <

From Public Citizen:

CSX DERAILS PASSENGER SAFETY

A report released October 16, 1997, by the Federal Railroad Administration (FRA) confirmed what the American public had long suspected: CSX is traveling down the wrong track on passenger safety.

Among the agency’s conclusions were: at CSX, “safety first” is not universally observed; employees who raise safety concerns are harassed and intimidated; and poor internal communications encourage safety hazards to exist. The roll call of CSX’s recent rail catastrophes makes this all too clear:

> > On October 9, 1997, 12 people were seriously injured when the Miami-bound Amtrak Silver Star derailed after slamming into 18-wheel tractor trailer stuck on a track crossing in Garden City, Georgia. Investigators learned that railroad dispatchers for CSX, which owned the tracks, were given 20 minutes’ warning that the truck was stalled at the crossing, yet failed to stop the Amtrak train in time. A dispatcher appears to have misunderstood the truck’s location and shut down the wrong rail line. It also was discovered that the trailer became stuck because the track’s crossing grade was too high for the truck bed.

> > On July 30, 1997, on the eve of the sixth anniversary of the train crash that left eight people dead and 78 injured, a Florida jury punished CSX for “violating the public trust.” On July 31, 1991, the Amtrak Silver Star passenger train jumped its tracks and crashed into several parked freight cars just outside Lugoff, South Carolina. Investigation revealed that this tragedy was caused by a rusted and broken switch pin on the CSX-owned tracks — a danger never uncovered because of company downsizing, overworked inspectors, falsified inspection records and an overall drop in emphasis on safety to boost the bottom line. CSX was subsequently cited by federal investigators for poor track maintenance and oversight. And the judge hearing this case called CSX’s misconduct “borderline criminal.”

> > On June 7, 1997, one engineer was killed and 250 residents evacuated when a CSX freight train carrying hazardous chemicals struck a coal train near St. Albans, West Virginia, sending toxic fumes into the air. The fleeing residents were forced to crawl under the burning wreckage in order to escape. The hazardous fire burned for five days. Preliminary investigation revealed that mechanical problems and brake failure on the CSX freight train were to blame for this explosion.

> > On June 5, 1997, the middle 34 cars of a 74-car CSX freight train derailed near Marianna, Florida, leaking hazardous materials and forcing the four-hour evacuation of families around the accident site.

> > On February 16, 1996, a Maryland Rail Commuter Service (MARC) train traveling on CSX rails plowed into an oncoming Amtrak train in Silver Spring, slicing open the MARC train and igniting a fireball that left 11 passengers dead and 24 injured. Troubling questions immediately surfaced about CSX’s conduct, including why weren’t the CSX-owned tracks equipped with automatic train stop systems, and why was a key warning signal nearest to the crash site removed by CSX during a 1993 overhaul, but never reinstalled?

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September 29, 1995 – US Dept of Justice Press Release:

CSX PAYS U.S. $5.9 MILLION TO SETTLE MISCHARGING CLAIMS

WASHINGTON, D.C. — CSX Transportation Inc. will pay the United States $5.9 million to settle claims the company overcharged the government millions of dollars for railroad crossing signals installed under a federal safety program, the Department of Justice announced today.

Assistant Attorney General Frank W. Hunger, in charge of the Civil Division, said the agreement settles claims that CSX Transportation inflated labor hours for wiring signal houses; failed to obtain the lowest price possible from third-party vendors for parts; and overcharged for certain parts by selling them at a profit to third-party vendors, then repurchased the parts and charged the United States the higher repurchase price. Funds for the railroad signal crossing equipment, which were installed primarily in southeastern states, were provided under the Rail Highways Crossing Program administered by the Federal-Aid Highway Program of the Department of Transportation.

The federal government provides 90 percent of the money for the program with the states providing 10 percent in matching funds.

Hunger said A. David Nelson, a former employee of CSX Transportation, brought the matter to the government’s attention in February 1993, then filed a qui tam suit March 17, 1994, in U.S. District Court in Jacksonville, Florida, under the False Claims Act, 31 U.S.C. 3729. A two-year investigation by the Department of Transportation’s Office of Inspector General and Florida Department of Transportation confirmed the allegations.

In April 1993, CSX Transportation voluntarily refunded $2.1 million to 18 states as an adjustment to amounts billed for the construction of signals at grade crossings and on January 11, 1995, CSX Transportation agreed to pay Florida and 11 of the 18 states $1.4 million for adjusted costs related to grade crossing signals. In addition to the money CSX Transportation has paid the United States and the states, the company also must absorb all of its expenses, including legal and accounting costs incurred in this matter.

The settlement resolves any potential claims by the United States against CSX Transportation under the False Claims Act for fraud and under common law concerning allegations of cost mischarging to the Rail Highways Crossing Program. Pursuant to the False Claims Act, Nelson will receive $1,180,000 of the settlement. . . .

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From the CSX website (Feb. 2001) ….

(NOTE THE ENRON CONNECTION!)

Nov. 14, 1978	CSX Corporation was incorporated in the Commonwealth of Virginia, for purposes of a merger of Seaboard Coast Line Industries Inc., headquartered in Jacksonville, Fla.; and Chessie System Inc., headquartered in Cleveland, Ohio. One of the criteria which led to the selection of Richmond was the historic association with both Chessie and Seaboard. The Chesapeake and Ohio Railway Company, part of the Chessie System Railroads, traced its corporate ancestry to the Louisa Railroad Company which was chartered in Richmond in 1836, and the C&O had its headquarters in that city for many years. One of Seaboard’s earliest predecessors was the Richmond and Petersburg, which was chartered in 1836 to run between those two cities. A predecessor of Seaboard Coast Line Railroad had general offices in Richmond since 1958.
Jan. 18, 1979	Seaboard Coast Line Industries Inc. and Chessie System Inc. filed a joint application with the Interstate Commerce Commission asking for approval of the proposed merger of the two holding companies. Shareholders approved the merger at separate special stockholders’ meetings on Feb. 13.
Nov. 1, 1980	Effective date of merger of Seaboard Coast Line Industries and Chessie System Inc. into CSX Corporation. Prime F. Osborn named chairman and co-CEO; Hays T. Watkins named president and co-CEO Due to this merger, certain non-rail assets became part of the new CSX Corporation. From the Seaboard side: Cybernetics & Systems Inc., Florida Publishing Company, Clay Video and Area Communications. From the Chessie side: Chessie Resources Inc., The New River Company, The Greenbrier and Beckett Aviation Corporation.
December 1981	CMX Trucking formed.
May 1, 1982	Prime Osborn retired; Hays Watkins named chairman and CEO; Paul Funkhouser named president
Aug. 16, 1982	Florida Publishing, Clay Video and Area Communications put up for sale.
Dec. 3, 1982	Sold Area Communications to Demetree.
June 7, 1983	Merger of Texas Gas Resources Corporation and CSX approved by respective boards. With this merger, CSX would also acquire American Commercial Lines.
June 10, 1983	ACL put in voting trust pending approval of CSX’s control by ICC.
July 1, 1983	Sold ferry to Michigan-Wisconsin Transportation Co.
Aug. 6, 1983	Acquired 72 percent of TXG.
Sept. 30, 1983	Texas Gas (TXG) merger completed.
Oct. 28, 1983	CSX stock split 3-for-1. (10/25/83 $75.25 close; 10/28/83 $25.0833).
Sept. 7, 1984	ACL merger approved by ICC.
Dec. 7, 1984	CSX listed on London Stock Exchange.
Jan. 24, 1985	Letter of intent to sell Beckett Aviation to Aero Services.
Aug. 30, 1985	Sale of Beckett Aviation to Aero completed.
Dec. 11, 1985	Announced realignment into four major areas: transportation, energy, technology and properties.
Dec. 16, 1985	John T. Collinson named vice chairman.
Jan. 9, 1986	Signed letters of intent to purchase Rockresorts from Laurance S. Rockefeller.
Feb. 4, 1986	Purchased 30 percent interest in Yukon Pacific Corporation.
April 10, 1986	Rockresorts purchase completed.
April 21, 1986	Announced proposal to acquire Sea-Land.
Dec. 2, 1986	Board approved B&O merger into C&O.
Dec. 31, 1986	Sold CSX Minerals to Quintana Minerals Corp. Sold New River Company to Quintana Minerals Corp.
Feb. 11, 1987	Sea-Land merger approved by ICC.
April 30, 1987	B&O merged into C&O.
July 20, 1987	Announced formation of CSX/Sea-Land Intermodal and Logistics.
Sept. 2, 1987	C&O merged into CSX Transportation Inc.
April 20, 1988	John Snow elected president & COO.
April 27, 1988	CSX Oil & Gas sold to Total Minatome.
July 12, 1988	Acquired majority interest in Yukon Pacific.
Sept. 19, 1988	CSX announced restructuring program; TXG and resort properties put up for sale.
Oct. 18, 1988	Self-tender Dutch auction completed, CSX buys 43,129,902 shares at $32 per share.
Nov. 11, 1988	CSX/Sea-Land Intermodal announced restructuring.
Dec. 20, 1988	Signed agreement to sell Rockresorts to VMS Realty Partners.
Dec. 23, 1988	Signed definitive agreement to sell Texas Gas Transmission to Transco Energy Company.
April 20, 1989	John W. Snow elected CEO.
July 11, 1989	Completed sale of Rockresorts to VMS. CSX retained management of Grand Teton Lodge and Carambola Beach Resort.
March 8, 1990	Sale of CSX Energy to Enron Corp.
Sept. 14, 1990	Virginia Retirement System and CSX jointly announced RF&P proposal.
Jan. 31, 1991	Hays T. Watkins retired.
Feb. 1, 1991	John W. Snow named chairman.
June 27, 1991	CSX announced agreement to sell one-third interest of Sea-Land Orient Terminals Ltd. (a Sea-Land Hong Kong terminal) to Ready City Ltd.
July 1, 1991	CSX Transportation combined three-unit rail structure into one.
July 29, 1991	ACL agreed in principle to acquire Hines Inc.
Sept. 12, 1991	Sea-Land and the Soviet Railways announce partnership to utilize Trans-Siberian Railway.
Sept. 30, 1991	Sea-Land announced organizational moves.
Oct. 9, 1991	CSX raised dividend to 38 cents.
Oct. 10, 1991	RF&P transaction consummated.
Oct. 17, 1991	Barnett Banks agreed in principle to acquire CSX Commercial Services.
Feb. 14, 1992	CSXT entered into negotiations to purchase P&LE’s railroad business.
April 23, 1992	Encompass – joint venture between AMR and CSX.
May 22, 1992	Valley Line sold to ACL and assets placed in voting trust.
June 12, 1992	ICC approved ACL’s acquisition of Valley Line.
June 23, 1992	Valley Line assets transferred from voting trust to ACL.
Aug. 6, 1992	Announced CSX/Sea-Land Logistics restructuring and new name of CSX Logistics.
Sept. 14, 1992	Three Rivers Railway, a subsidiary of CSXT, purchased remaining rail lines of P&LE (60 miles), already owned the other 50 percent.
Feb. 8, 1993	Acquisition of CTI (held an interest since 1988).
June 1993	Sea-Land applied to reflag 13 U.S.-flag ships.
Oct. 13, 1993	CSX raised dividend to 44 cents.
Feb. 14, 1995	Sea-Land received MARAD approval to reflag five U.S.-flag vessels under foreign registry of the Marshall Islands.
Feb. 21, 1995	Jeff B. Lowenfels named president and CEO of Yukon Pacific Corp.
Oct. 11, 1995	CSX raised dividend to 52 cents and announced 2-for-1 stock split.
Dec. 4, 1995	Effective date of stock split.
July 4, 1996	Netherlands Railway, Deutsche Bahn AG and CSX announce plans for joint venture – NDX.
Oct. 15, 1996	CSX and Conrail announce strategic merger.
April 8, 1997	CSX and NS agree on division of Conrail.
Nov. 4, 1997	John Andrews named Chief Information Officer of CSX.
Nov. 6, 1997	Les Passa named president and CEO of CSX Intermodal.
Jan. 19, 1998	CSX unveils Direct Stock Purchase Plan.
March 26, 1998	Sanga and CSX Technology announce intent to form a joint venture company to be exclusive channel for Sanga and CSX’s SCM Java Products.
June 16, 1998	Charles J.O. Wodehouse appointed president of CSX Technology after Andrews resigns.
June 30, 1998	Competed ACL transaction with Vectura; own 34 percent.
Aug. 6, 1998	Terminated joint venture with Sanga.
Oct. 1, 1998	CSX Integrated Services becomes BridgePoint.
Feb. 1999	CSX and Vail Resorts entered into a contract for Grand Teton Lodge Company.
March 16, 1999	Announced Sea-Land to be managed as three distinct businesses – global container shipping (John P. Clancey), international terminal operations (Robert J. Grassi), and domestic trade (Charles G. Raymond).
March 31, 1999	CSXT and UP reach historic interchange agreement directing traffic through major gateways connecting the two railroads.
June 1999	Vail’s acquisition of Grand Teton Lodge Company completed.
June 1, 1999	CSX begins operating new rail network to include Conrail.
July 14, 1999	Alvin R. (Pete) Carpenter named vice chairman of CSX.
July 14, 1999	Ronald J. Conway named president of CSXT.
July 22, 1999	Reached agreement to sell Sea-Land’s international liner business and related assets to A.P. Moller-Maersk Line for $800 million.
Nov. 16, 1999	CSX announces CSX Lines (domestic container-shipping). Charles G. Raymond, president and CEO.
Dec. 10, 1999	CSX completes Maersk/Sea-Land transaction.
Dec. 15, 1999	CSX launches CSX World Terminals. Robert J. Grassi, president and CEO.
April 11, 2000	John W. Snow becomes acting president of CSXT.
Sept. 22, 2000	Sale of CTI Logistx to TNT Post Group, N.V.
Nov. 29, 2000	Michael J. Ward named president of CSX Transportation Inc.
Feb. 15, 2001	CSX Vice Chairman Alvin R. (Pete) Carpenter retires.