‘Very Left-of-Center’ RDP Targets Oberman for STB Chairmanship Ouster

The Revolving Door Project (RDP), which describes itself as an organization that “scrutinizes executive branch appointees to ensure they use their office to serve the broad public interest, rather than to entrench corporate power or seek personal advancement,” on May 17 sent a letter to President Joe Biden asking him to revoke Martin Oberman’s chairmanship of the Surface Transportation Board (STB) and elevate Robert Primus to the position. RootsAction and The Freedom BLOC co-authored the letter (downloadable below).

“We view Chairman Oberman’s vote to approve the merger between Canadian Pacific Railway and Kansas City Southern Railway as fundamentally anathema to the Administration’s revival of antitrust enforcement,” RDP said. “Pro-competition measures have been the backbone of Biden-era economic policy, with revitalized enforcement from the Consumer Financial Protection Bureau, Federal Trade Commission, Department of Justice, National Labor Relations Board, and more. Allowing greater consolidation in the rail industry, which was already highly noncompetitive with only seven significant companies, is a severe blow to the government-wide effort to unrig markets ushered in by President Biden’s Executive order on Competition.

“Indeed, Oberman and the STB approved the merger over objections from the Department of Justice Antitrust Division and a majority of the Federal Maritime Commission (and all but one of the other Class I railways). A whole-of-government economic agenda requires leadership devoted to rebuilding an economy that works in the public interest. As we explain in the letter, we believe Chairman Oberman has eschewed this responsibility and should no longer be trusted to lead vital oversight of the American rail industry.”

“One of the greatest accomplishments of Biden’s presidency is his Administration’s strong antitrust enforcement and pro-competition economic policy,” said RDP Executive Director Jeff Hauser.” In many ways, this economic shift away from hands-off neoliberal oversight has been the defining feature of his tenure to date. Oberman has undermined both the American economy and the President’s legacy. Allowing further consolidation in one of the most concentrated industries in our economy leaves little room for confidence in his intent to advance the administration’s vital economic revitalization.

“In 2021, President Biden issued his Executive Order on Promoting Competition in the American Economy, which directed the entire federal executive to protect competition in markets in the quest of rebuilding the economy from the middle out and bottom up. Consolidation of the railways is not only a prima facie violation of that initiative; it impairs the ability to build a workers’ economy. The rail industry plays a key role in our supply chains, a role that they have already been exploiting by price gouging and providing terrible service, in violation of their common-carrier obligations. Rather than take them to task, Oberman has rewarded shareholders who incentivize that bad behavior with a windfall merger.”

Railway Age Capitol Hill Contributing Editor Frank N. Wilner, a former STB chief of staff, author of the soon to be published Railroads & Economic Regulation that focuses, in one of its chapters, on the revolving door theory and how it relates to the STB and its Interstate Commerce Commission predecessor, comments:

“For sure, there has been a revolving door at the STB through which congressional staff moves into regulatory agency positions and then into senior positions among those they regulated. Oberman does not qualify, as he has no previous railroad ties other than serving a brief stint as chairperson of Chicago Metra, with the Chicago Tribune having credited Oberman ‘with helping repair the commuter railroad’s reputation after years of scandal.’

“Given Oberman’s age of 77, there is scant chance of his seeking a new career among the regulated when he departs the STB. In fact, if it were up to the railroads—given his aggressive advocacy of greater competition—he likely would be removed completely from the STB. If favoritism is to be found in his decisions, it would be toward captive shippers and rail labor.

“That said, there appears a significant mismatch between fact and the position of the Revolving Door Project. What we have here is a very left-of-center activist group—with strong policy and financial ties to organized labor—expressing a fit of pique over a rail merger that is arguably the least anti-competitive marriage of Class I railroads in generations. The STB decision fully followed the law in providing substantial income protection for all affected rail workers.

Tellingly, the Revolving Door Project is aligned with the Center for Economic Policy Research, which has distinguished itself by alleging the U.S. economy is “rigged” and in its support of Venezuela’s socialist regime, which has impoverished that nation.

“As for the allegation that the Justice Department’s Antitrust Division opposed the merger, that is patently false. DOJ observed that the merger has ‘potential to cause competitive harm’ and that the STB should ‘thoroughly examine the competition concerns raised by commentators.’ In fact, the merger applicants agreed with DOJ and encouraged such an examination, which the STB conducted in developing its factual record prior to approving the merger.”

Editor’s Note: In my opinion, what the Revolving Door Project seeks is non-sensical and, as Frank Wilner points out, has no basis in facts. Why RDP advocates replacing Oberman with Primus, and what Primus’ ties to that organization may be, is one for him to explain, and Railway Age invites his response. Of note: Oberman’s first term expires Dec. 31, but the statute allows him to remain an additional 12 months if the President does not nominate—and Senate confirm—a successor. There are indications Oberman would accept a second-term nomination, and he likely would find strong support from Senate Majority Whip Dick Durbin (D-Ill.). Primus, whose first term expired Dec. 31, 2022, was confirmed by the Senate in December 2022 for a second five-year term after renomination by Biden. STB chairpersons serve at the pleasure of the President and are selected by the President from among Senate-confirmed STB members. Were Oberman demoted from the chairmanship, he would continue to serve as an STB member. Go figure – William C. Vantuono

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