At press time it appeared that there may be appeals by some shippers, some parts of rail labor and by some state agencies. The STB refused to apply protections beyond New York Dock, and reiterated its view that labor agreements made under the Railway Labor Act are subject to STB override. The STB stated that it neither approves or disapproves the specific labor changes described int he applicant's filings, leaving those matters to New York Dock arbitrators.

BMWE's preliminary analysis confirms our views formed at the point the STB completed its voting conference: The STB's position is a fig-leaf added to create the appearance that collectively bargained rights will be dealt with fairly. The pronouncement is without any real substance. Through both this Board and its predecessor ICC, the government has routinely overturned arbitration decisions that fail to grant the railroads' the changes that they have demanded in their implementing agreement notices.

The Conrail carve-up by NS and CSX was the brain child of STB Chairwoman Linda Morgan. Prior to the carve-up, CSX and Conrail were in the process of putting together a friendly merger of equals. In comments made to the Washington Post, Morgan implied the STB would look unfavorably on a CSX/Conrail merger and that the interests of NS must be considered. Subsequent to her comments, the CSX/Conrail merger fell apart and the Conrail carve-up (NS and CSX each purchasing parts of Conrail with certain areas of Conrail being controlled by both through a new Conrail) was proposed.

Although rail labor asked that she recuse herself from voting based on those comments, and despite harsh questioning and comments about her role in the merger by Senator Arlen Spector (R-PA), Morgan denied the request to recuse and eventually voted for the carve-up.

Morgan was appointed to the predecessor agency to the STB, the Interstate Commerce Commission (ICC) by President Clinton, but has never been appointed to the STB. When Congress created the STB, it included in the legislation that the then current members of the STB (Morgan, Owen and Jake Simmons) continue on the newly created STB. Many Constitutional scholars believe that it was a violation of the separation of powers clause of the U.S. Constitution for Congress to carry over the ICC Commissioners to the newly created executive agency, the STB.

The other member of the STB who voted in favor of the Conrail carve-up is Gus Owen. He is also a legislated carry over from the ICC. The term of the third legislated carry over, Jake Simmons, expired on December 31, 1996. However, he served as a holdover until December 31, 1997 and has yet to be replaced. Owen's term expired on December 31, 1997. In February 1998, the Congressional Accountability Project (CAP), a good government group found serious ethical violations committed by Owen in his capacity as an STB member. Prior to this, the BMWE and the AFL-CIO provided the Clinton Administration with a report which demonstrated that Owen had committed serious ethical violations while serving as an ICC Commissioner and an STB member. Despite this, President Clinton nominated Owen to another term on the STB.

CAP then provided its report to Senator John Mc Cain (R-AZ), who is Chairman of the Senate Commerce Committee, the Committee which will consider Owen's nomination. Senator Mc Cain did what the Clinton Administration should have done - he asked the Inspector General (IG) of the Department of Transportation (DOT) to investigate the CAP report. The IG issued a preliminary report which, according to articles in several publications, found that Owen has committed violations serious enough to warrant that he not be confirmed. The IG refused, however, to make the report public and Senator Mc Cain has also refused.

In effect, two arguably unconstitutionally seated STB members, one of whom has illegally prejudged the Conrail carve-up and the other with substantial ethical problems, voted to allow an ill-conceived transaction to occur which will injure the public, shippers and working people. This was encouraged by the Clinton/Gore Administration as well as the Senate Republican leadership. When Rail Labor and the AFL-CIO asked to meet with Vice President Gore over this and other issues where they are attacking labor, Gore refused to even give us an answer.

As has been pointed out in previous Journal articles, there is a long history of ICC Commissioners and key staff deciding issues in favor of the railroads while they sat on the ICC and then, upon leaving the ICC, obtaining lucrative positions with the railroads and their front groups.

It must also be pointed out that both Morgan and Owen voted to approve the catastrophic UP/SP merger and grant the new entity the right to abrogate collective bargaining agreements. Many experts believe that CSX went too far into debt in this transaction and obtained inferior lines and that this will cause long term, serious financial problems for CSX, just as the UP/SP merger caused UP's financial position to erode substantially. But the buyouts provided for those who put these mergers or carve-ups together--provided them with enough incentive to ignore the impact on the companies they create. If the past is any indicator, buyouts include future benefits for the government employees who support these mergers.