[Senate Hearing 107-968]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-968
 
                 NOMINATIONS OF MR. DAVID McQUEEN LANEY
                   TO BE A MEMBER OF THE REFORM BOARD
                 (AMTRAK) AND MR. ROGER P. NOBER TO BE
                      COMMISSIONER OF THE SURFACE
                          TRANSPORTATION BOARD
=======================================================================

                                HEARING

                               BEFORE THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 5, 2002

                               __________

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



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                            WASHINGTON : 2003
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           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

              ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona, Ranking 
JOHN D. ROCKEFELLER IV, West             Republican
    Virginia                         TED STEVENS, Alaska
JOHN F. KERRY, Massachusetts         CONRAD BURNS, Montana
JOHN B. BREAUX, Louisiana            TRENT LOTT, Mississippi
BYRON L. DORGAN, North Dakota        KAY BAILEY HUTCHISON, Texas
RON WYDEN, Oregon                    OLYMPIA J. SNOWE, Maine
MAX CLELAND, Georgia                 SAM BROWNBACK, Kansas
BARBARA BOXER, California            GORDON SMITH, Oregon
JOHN EDWARDS, North Carolina         PETER G. FITZGERALD, Illinois
JEAN CARNAHAN, Missouri              JOHN ENSIGN, Nevada
BILL NELSON, Florida                 GEORGE ALLEN, Virginia

               Kevin D. Kayes, Democratic Staff Director
      Jeanne Bumpus, Republican Staff Director and General Counsel















                            C O N T E N T S

                              ----------                              

                                                                   Page
Hearing held on September 5, 2002................................     1
Statement of Senator Breaux......................................     1
Statement of Senator Dorgan......................................     4
Statement of Senator Hutchison...................................     3
Statement of Senator Wyden.......................................     6

                               Witnesses

Baucus, Hon. Max, U.S. Senator from Montana......................     2
Nober, Roger P., Nominee to be Commissioner of the Surface 
  Transportation Board...........................................     8
    Prepared statement...........................................     9
    Biographical information.....................................    10
Laney, David M., Nominee to be a Member of the Reform Board 
  (Amtrak).......................................................    16
    Prepared statement...........................................    17
    Biographical information.....................................    17
Petri, Hon. Tom, U.S. Representative from Wisconsin..............     3
Warner, John W., U.S. Senator from Virginia......................     2

                                Appendix

Burns, Hon. Conrad, U.S. Senator from Montana, prepared statement    31
Response to Written Questions Submitted by Hon. Ernest F. 
  Hollings to:
    David McQueen Laney..........................................    34
Response to Written Questions Submitted by Hon. John McCain to:
    David McQueen Laney..........................................    32
    Roger P. Nober...............................................    34
Response to Written Questions Submitted by Hon. Conrad Burns to:
    Roger P. Nober...............................................    36















                    NOMINATIONS OF MR. DAVID McQUEEN
                   LANEY TO BE A MEMBER OF THE REFORM
                 BOARD (AMTRAK) AND MR. ROGER P. NOBER
                   TO BE COMMISSIONER OF THE SURFACE
                          TRANSPORTATION BOARD

                              ----------                              


                      THURSDAY, SEPTEMBER 5, 2002

                               U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:30 p.m. in room 
SR-253, Russell Senate Office Building, Hon. John B. Breaux, 
presiding.

           OPENING STATEMENT OF HON. JOHN B. BREAUX, 
                  U.S. SENATOR FROM LOUISIANA

    The Chairman. The hearing will come to order.
    This afternoon, the Commerce Committee will hear from two 
nominees to become board members of the Surface Transportation 
Board, as well as the Amtrak Reform Board.
    I will ask the candidates to please take their seats at the 
witness table, in which case we will do both of them 
consecutively.
    I am very pleased to welcome and also recommend Mr. Roger 
Nober and Mr. David Laney to our Committee. I think the two 
candidates present good credentials in transportation, law, 
education and politics. As a veteran of the House 
Transportation and Infrastructure Committee, Mr. Nober's 
knowledge and background will serve him well as he moves 
through the confirmation process and into his new role as a 
Surface Transportation Board member. As former Chair of the 
Texas Transportation Commission, Mr. Laney is up to the task of 
serving on the Amtrak Reform Board as a member.
    We do not want to in any way downplay the host of 
challenges awaiting both of our nominees to these respective 
positions. We will talk about some of our concerns in a moment 
about both of these areas, both surface transportation and 
Amtrak, but I note that we have a number of our colleagues who 
are with us this afternoon to make comments about our nominees, 
and I am delighted to recognize them.
    One is the Chairman of the Finance Committee, my Chairman, 
so I will recognize him first, because you are Chairman of my 
Committee and your name starts with a ``B'', Max Baucus. Max, 
welcome.

                 STATEMENT OF HON. MAX BAUCUS, 
                   U.S. SENATOR FROM MONTANA

    Senator Baucus. Thank you, Mr. Chairman. Thank you. We are 
in strong support of the nominee. Mr. Chairman, I am honored to 
be here today to support someone for whom I have a tremendous 
respect. I have worked closely with the nominee for many, many 
years, particularly when he was over working for Bud Schuster, 
and I have to tell you, I have the highest regard for him.
    Last week, I sent a letter to the Committee urging the 
Committee to confirm Roger Nober as a member of the Surface 
Transportation Board, and I am very honored to be here with my 
colleague, who has a very deep interest in surface 
transportation issues, and I am just thrilled, frankly, that he 
will be named Chairman of that Commission by the President
    Now, why am I so pleased? Roger is from Massachusetts. I am 
from Montana. Roger is Republican. I am a Democrat. But in the 
transportation field, there is an old saying that there are no 
Republican bridges, there are no Democratic roads, or vice 
versa, and I think Roger is really proof of that. I work 
seamlessly with Roger's boss, as I mentioned, Bud Schuster. 
Roger had a great working relationship, it could not have been 
better, in working with my office and my staff along with 
Senator Warner and Congressman Tom Petri and others who are 
interested in surface transportation issues. It is just first 
class.
    He has been a kindred spirit and is an outspoken defender 
of the Highway Trust Fund and a proponent of the importance of 
transportation in general. I might say, I am particularly 
interested because of our unique problems in Montana. We have a 
transportation situation that is similar to many other problems 
of many other states, and that is with respect to our grain 
growers and shippers who are having a tough time making ends 
meet and working out good deals with the railroads to get their 
products to market. Senator Burns, my colleague and a Member of 
this Committee, and I introduced a bill to try to deal with 
these problems. I know Roger is fairly sympathetic, and so I 
will not take any more of the Committee's time.
    I commend the Committee to act very quickly and 
forthrightly on the nomination. I commend the President for his 
well-thought-out selection and, Mr. Chairman, it is with the 
highest regard that I support, along with my colleagues, and 
introduce to this Committee Roger Nober, because he is, I 
think, going to be a great credit, frankly, to this Nation.
    The Chairman. Thank you very much, Senator Baucus and, of 
course, I thank our colleagues, who would be excused if they so 
desire, after they make their comments.
    Next on Mr. Nober's behalf, Senator Warner.

               STATEMENT OF HON. JOHN W. WARNER, 
                   U.S. SENATOR FROM VIRGINIA

    Senator Warner. I thank you, Mr. Chairman and Members of 
the Committee. That was a beautiful introduction, given by my 
long-time friend and fellow colleague in the world of 
transportation and other things, Max Baucus. Out of deference 
to you, I am not going to read my prepared statement, because I 
could not do any better, or make it any more heartfelt.
    This is an incredible individual here, because I at that 
time was Chairman of this Subcommittee on our Committee, and 
Senator Baucus, Senator Chafee and I, the three of us worked as 
a team with your former Chairman, and you, my good friend, and 
we put together one of the most historic pieces of legislation 
that I have been privileged to work on in my 24 years in the 
Senate. That was TEA-21, and Roger, you did a wonderful job. I 
think at this point maybe we ought to ask Roger to introduce 
his lovely family, who are right behind him.
    The Chairman. We will give him a chance just as soon as we 
hear from all of our colleagues. Then we will have him 
introduce his family. Thank you very much, Senator Warner.
    Senator Warner. Thank you very much.
    The Chairman. Our friend and colleague from the other side, 
Tom Petri. Congressman.

                 STATEMENT OF HON. TOM PETRI, 
               U.S. REPRESENTATIVE FROM WISCONSIN

    Mr. Petri. Thank you. I would like to, on behalf of my 
colleagues, certainly in my own role as Chairman of the House 
Surface Transportation Subcommittee, support the candidacy of 
Roger Nober, who was our Subcommittee General Counsel, and then 
the Full Committee General Counsel, who has a distinguished 
academic and professional career. He is an outstanding family 
man and is a very bright individual with tremendous judgment. I 
think our country is fortunate to have a person of his caliber 
who is willing to serve as a member of the Board to which he is 
nominated, and so I would urge his thoughtful consideration.
    The Chairman. You all trained him well over there.
    Mr. Petri. Yes.
    The Chairman. Thank you again, and our colleagues, if they 
have other things they need to attend to, they certainly would 
be excused.
    To introduce and present Mr. David Laney to be a member of 
the Amtrak Reform Board, our colleague on this Committee and 
from Texas, Senator Kay Bailey Hutchison.

            STATEMENT OF HON. KAY BAILEY HUTCHISON, 
                    U.S. SENATOR FROM TEXAS

    Senator Hutchison. Thank you, Mr. Chairman. I appreciate 
your holding this hearing because I would like to see David 
Laney get through the Senate before the recess. We all know 
that Amtrak is facing many crises. It seems like every week we 
wake up to a new one, and I cannot think of anyone more 
qualified to sit on the Amtrak Board than David Laney.
    David graduated from Stanford University and received his 
law degree from SMU, Southern Methodist University. In Dallas, 
he has been a managing partner of Jenkins and Gilchrist, a very 
prestigious national law firm, and for 12 years he also served 
as a gubernatorial appointee in Texas. He was appointed to the 
Texas Finance Commission and later to the Texas Transportation 
Commission.
    As Chairman of the Texas Transportation Commission, he 
functioned basically as the CEO of the Texas Department of 
Transportation. That is a major state agency in Texas, with 
14,000 employees and a $5 billion annual budget. As you might 
know, coming from Louisiana, we have great highways in Texas 
and we have more of them than any other state in America, so 
this really has given David Laney a lot of experience in 
managing a big agency. I cannot think of an agency that needs 
management more than Amtrak.
    Now, that is not to say he is going to replace the CEO, but 
certainly the CEO needs a lot of help from the Board and from 
experienced business people. I am a supporter of Amtrak and I 
have worked with Members of this Committee to support Amtrak, 
but we cannot keep putting Band-Aids on Amtrak. We need to 
recognize that Amtrak is a national passenger rail system that 
serves a vital function as one of our types of intermodal 
transportation. I hope that we will be able, through good 
people like David Gunn and like David Laney, to save Amtrak and 
put it on a course where it can succeed, grow, and attract the 
passengers that it would if it were on a solid financial 
footing. I think the important thing is looking for ways to 
assure solid financial footing in order to make it a strong 
national system.
    You know, after 9/11, a lot of people took Amtrak, and they 
were looking for alternative modes of transportation to air. I 
think now that almost a year has passed, we know that rail 
should be a permanent part of our intermodal transportation 
system in America, and I cannot think of anyone more qualified 
to be helpful in that regard than David Laney. So I recommend 
him to you, and I hope that you can swiftly confirm him.
    The Chairman. Thank you very much, Senator Hutchison, for 
your participation and assistance in these very important 
areas.
    Before we hear from our two nominees and give them a chance 
to make an opening statement and introduce their families or 
associates that are with them, I would like to recognize any of 
our Committee Members for any comments they may have.
    Senator Dorgan.

              STATEMENT OF HON. BYRON L. DORGAN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Dorgan. Mr. Chairman, thank you very much. Let me 
first say that I intend to support the nomination of Mr. Laney 
and Mr. Nober. I think they are good candidates. I want them to 
do well. I am going to be pleased to vote for their 
confirmation on the floor of the U.S. Senate.
    I want to say one other thing, just as a prelude. I would 
not put a hold on their nominations and will not do that. I 
believe that these positions are important. We need these 
people confirmed. We have, since last September, had an opening 
on the Democratic seat on the Federal Communications 
Commission, the FCC. There was a name advanced for that last 
November. That person is not yet confirmed, and I think it is 
an outrage. I say to those who hold these things up that we 
need that rural voice on the Federal Communications Commission, 
and we need it now, but I am not going to hold up other 
nominations because of it. I think it is unfair and would not 
do that. But I say to my colleagues who do hold up these 
nominations, we need that person on the FCC right now. Jonathan 
Adelstein has been nominated. His nomination is before the 
Senate. This thing has been open a year. It is an outrage and a 
shame. Mr. Chairman, I hope you will agree with me that--and 
this is not anything we have been involved in--we need to find 
our colleagues on the Senate who are holding these up, and say 
to them that we are not going to hold your nominations up; and 
we do not expect you to hold ours up.
    Now, having said all that, Mr. Laney, the Amtrak issue is a 
very important issue to me and to many Members of the U.S. 
Senate, and I am a strong believer in having a national rail 
passenger system. I want to be working with all the folks who 
are interested in that. The two of you would be on the board, 
as I understand it, so I am pleased to support your nomination.
    Mr. Nober, I want to make a comment to you, a couple of 
comments, because it is therapeutic for me, and I think it is 
important for you. Linda Morgan is the former Chairman of the 
Surface Transportation Board. You were one of the people 
instrumental in actually abolishing the ICC, an agency that I 
said was dead from the neck up for at least a decade, or 
perhaps more, in the creation of the Surface Transportation 
Board, which you now aspire to lead. Linda Morgan, I think I 
indicated this to her, the one action they took that 
symbolically and also substantively was very important, and 
took some guts was to establish a moratorium on mergers. They 
used some authority that some people question to do that, but 
we have a massive problem in rail transportation in a state 
like North Dakota.
    You and I had a long visit about this yesterday, but we 
have testimony from people who tell us about what is happening 
with rail rates, it is an outrage, and we need help from the 
Surface Transportation Board. I am going to vote for you. You 
have a great background. You have a reputation of working in a 
bipartisan way to solve problems. If you do not have authority 
to solve problems, I want you to come to us and tell us what 
authority you need and let us work with you to get you that 
authority.
    It is not fair for farmers in North Dakota or grain 
elevators in North Dakota to pay $2,400 to ship a carload of 
wheat that the same shippers over in Minneapolis will pay 
$1,000 to ship for the same distance from Minneapolis to 
Chicago versus Bismarck-Minneapolis. That is not fair. That is 
price fixing, and $100 million is taken out of the hides of my 
constituents by railroads that are fixing prices. That is 
according to our own Public Service Commission. That is not me, 
and I could go on and on. I went on and on with you yesterday. 
This is not your fault, but it is your charge to help us fix 
it, and I hope you aspire to this job to help us solve some 
problems.
    Railroads are fine. I like the railroads, I just do not 
like their pricing strategy. I do not think this notion of 
having free and fair and open competition, this system of 
capitalism of ours, is working. We do not have competition in 
most areas of North Dakota with respect to railroads, we have a 
monopoly. They say, ``Here is our price and here is where we 
will stop. If you want to get on, get on at that point and put 
your products on. If you do not like it, tough luck, find some 
other avenue of transportation.''
    I am not willing, and neither are my colleagues, Senator 
Rockefeller and others, to sit idly by and say that is all 
right. It is not all right as far as I am concerned. It is not 
all right for our farmers, our Main Street business people, or 
our country grain elevators.
    Having said all that--and you need to hear that, because 
you will hear a lot from myself and others on this Subcommittee 
and Full Committee about it--I will be happy to support your 
nomination, and I expect that is your family behind you. I 
cannot stay for the entire proceeding today because of another 
commitment, but are those your two sons?
    Mr. Nober. Yes, sir, and my wife, Jane.
    Senator Dorgan. I know the Chairman will ask you to 
introduce them more formally, but it is nice to see your family 
with you as well. Thank you very much, and Mr. Laney, thank 
you.
    The Chairman. Thank you.
    Senator Wyden.

                 STATEMENT OF HON. RON WYDEN, 
                    U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you, Senator Breaux. I appreciate your 
scheduling this in a timely way, and just a few comments for 
each of our nominees, because I, too, am only going to be able 
to be here briefly.
    Let me also say, I have only heard positive things about 
both of you individuals, and certainly it is my intent to 
support both of you, but let me just share briefly with you 
several concerns I have.
    Mr. Laney, last April I released a General Accounting 
Office report showing that Amtrak's process for making route 
decisions is fundamentally flawed. I hope that you are familiar 
with the report, but I think what the New York Times said in 
summing it up is pretty clear. They said, and I will quote 
here: ``Amtrak set out to make major changes in its trains 
without knowing what the changes would cost or how much 
business they would generate.''
    The General Accounting Office said not only did Amtrak make 
bad decisions, they simply did not do their homework. They did 
not get the essential information that is necessary to make 
informed choices, so as a result, a variety of their strategies 
have been derailed. Only 3 of 15 route decisions proposed in 
Amtrak network growth strategies have been implemented, and 
already one of those three routes has been abandoned. As I am 
sure you are aware, this is not the first time the General 
Accounting Office has been extremely critical of the way Amtrak 
goes about finding these routes.
    In 1997, the General Accounting Office found that when 
Amtrak cuts routes in an effort to save costs, it cut routes 
such as the Pioneer from Chicago to Portland that, in fact, had 
better financial performance than other routes that Amtrak 
maintained. You will hear me talk at some length about this 
when we have debates about Amtrak.
    I am prepared to make these calls on the merits, and if we 
want to say to the General Accounting Office, ``You make 
calculated decisions with respect to the objective criteria for 
making route decisions.'' I am for it; we will take the 
consequences in Oregon and everywhere else. What I am not 
willing to accept is the politicizing of the way these routes 
are made, and in the last 5 years Amtrak has basically jumped 
track enough times to make your head spin.
    First, they thought cutting routes would be their financial 
salvation. That is when they made the political choice that 
eliminated the Pioneer route. Then, 3 years later, they decided 
that expanding routes would make them self-sufficient. Now, 
they are back to cutting routes once again. It seems to me that 
what is especially damaging here is that there is no 
predictability, certainty, or consistency. So I am anxious to 
hear particularly your views on what you will do to get Amtrak 
decisions on routes made on the merits. We can have a debate 
about how to do that, and whether it ought to be assigned to 
the General Accounting Office or whoever. But I am going to do 
everything in my power as a Member of this Committee to get 
these calls made on the merits, because I think to do otherwise 
just flouts any effort at rational transportation policy.
    Mr. Nober, just a couple of comments. As you might gather, 
the wheat growers and the agricultural interests in our part of 
the world are very hard hit; it's been a very difficult year. 
They have concerns about rail-to-rail competition, how it is 
limiting service options and raising rates, or in some cases 
driving them off the rails altogether. I think what we would 
like to get today, and in the days ahead, is a sense of how you 
would balance the use of our national transportation 
infrastructure and the appropriate role of competition among 
railroads for the future.
    You have got 19 short line railroads in our part of the 
world. Many short lines can physically interchange with both UP 
and BNSF, and they are prevented from determining which routing 
decisions are best for their customers by either economic or 
contractual conditions imposed by the companies, depending upon 
which of the Class I carriers originally sold off the branch 
line to the independent short lines. So in light of all the 
consolidation and the fact that short lines are the most 
immediate means by which some of the competition is brought to 
bear, I think we are going to be interested in knowing your 
views regarding the appropriateness of Class I carriers 
determining what route the short line carrier can offer to the 
customers through their methods.
    But again, I have heard only positive things about both of 
you. I am looking forward to supporting you in the Committee 
and on the floor, and suffice it to say, the jobs in which you 
are nominated to serve are not for the faint-hearted. You are 
going to be busy people, and these are important issues.
    I thank you, Mr. Chairman, for the chance to make some 
remarks.
    The Chairman. Thank you, Senator Wyden. You have heard from 
us. It is now time for us to hear from you.
    Mr. Nober, we would like to go with you first. Your family 
is waiting out there very patiently with two youngsters who 
have been behaving quite well, and having grandchildren about 
that age I know how difficult that is. We welcome you, and we 
will take your testimony first.

STATEMENT OF ROGER P. NOBER, NOMINEE TO BE COMMISSIONER OF THE 
                  SURFACE TRANSPORTATION BOARD

    Mr. Nober. Thank you, Senator Breaux, Members of the 
Committee. I very much appreciate your taking the time to hold 
this hearing today and hear from me. I would like to start by 
introducing my family, who seem to be sitting very well, which 
is always a struggle. My wife Jane is there. She is in her 
ninth month of pregnancy with our third child, and our other 
two children are here, William and Benjamin. William has the 
white shirt, and Benjamin the blue shirt, and my parents Linda 
and Harris Nober are also here. Thank you very much for holding 
this hearing today, early in September, because it allowed my 
family to be here. We were nervous as to when my wife might 
actually give birth. She is scheduled to give birth in the next 
2 weeks.
    The Chairman. If she has to leave before we finish, please 
feel free to let her go.
    [Laughter.]
    Mr. Nober. It will be a trick to get that to happen.
    I am pleased to appear before this Committee today as 
President Bush's nominee to the Surface Transportation Board. I 
would like to make a very brief oral statement, and ask that my 
full remarks be included in the record.
    I would like to take a moment to thank Senators Warner and 
Baucus and Congressman Petri for the kind introductions, and 
for taking time out of their busy schedules to come and attend 
this hearing. I would also like to thank Transportation 
Secretary Mineta and Deputy Secretary Jackson for their 
support. They unfortunately could not be here today.
    I appear before this Committee today as President Bush's 
nominee to the Surface Transportation Board. The President has 
indicated that if I am confirmed he will designate me as 
Chairman. The STB is an independent agency, and the President 
has nominated me to implement the portion of the national 
transportation policy under his jurisdiction effectively, 
impartially, and fairly.
    I am particularly pleased to be nominated to this position 
since, as a staff member in the House, I had the privilege to 
work on the legislation that created this agency back in 1995. 
Since then, I have continued to work closely with the Board, 
the Members of the House and Senate, and the Board's 
stakeholders on the matters that it oversees. If confirmed, I 
will be able to continue my many years of public service in 
transportation policy.
    I was a staff member on the House Transportation and 
Infrastructure Committee for 8 years, ultimately serving as 
Chief Counsel. Since May of last year, I have been counselor to 
Deputy Secretary Jackson at DOT, where I advised him and 
Secretary Mineta. In performing my duties, I have always given 
the full consideration to the input of all parties. I have 
worked hard to reach consensus wherever possible in a fair and 
bipartisan manner, and if confirmed I would continue to do so 
as a member of the Board.
    The STB is an independent adjudicatory body and, if 
confirmed, you can be sure that I will give all the issues that 
come before it full, fair, and impartial consideration. I would 
not take office with any preconceived notions but, rather, 
would examine each issue on its merits and strive to make the 
best decision possible consistent with the facts, the law, and 
precedent. If I am confirmed, those who bring matters before 
the Board may not agree with every position that I take, but 
can be sure that I will give all matters thoughtful, fair, 
impartial and full consideration.
    If confirmed, I would work closely with Congress. I worked 
for this institution for many years, and have the utmost 
respect for the letter and spirit of the laws it passes. I 
believe it is important to be open and accessible to all 
Senators and Members of Congress and their staffs. Similarly, I 
believe it is important to be open and accessible to the 
agency's stakeholders and, if confirmed, I would have an open 
door policy to the extent permitted.
    Finally, I would like to take a minute just to recognize 
the accomplishments of the current Chairman of the STB, 
Commissioner Linda Morgan. She has led the agency for the past 
8 years, and her tenure has included some trying times for that 
organization. I hope that if I am confirmed and appointed 
Chairman, I will at least be partially as effective as she has 
been, and I look forward to the opportunity to serve with her 
and Commissioner Burks, both of whom were kind enough to be in 
attendance today.
    In closing, I hope you give me the opportunity to serve the 
public as a member of the STB, and I thank you for your 
consideration and look forward to answering any questions you 
might have.
    [The prepared statement of Mr. Nober follows:]

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

    Thank you Chairman Breaux and Ranking Member Smith. I am pleased to 
appear before this Committee today as President Bush's nominee to the 
Surface Transportation Board (STB).
    I want to thank Senators Warner and Baucus and Congressman Petri 
for their kind introductions. I have had the honor of working with them 
over the past 9 years and am deeply grateful to them for their kind 
words. I would also like to thank Transportation Secretary Mineta and 
Deputy Secretary Jackson. I have had the privilege of working for them 
over the past 15 months and I appreciate their support for my 
nomination.
    I would also like to express my appreciation to the Committee for 
holding this hearing early in September. My wife Jane is pregnant with 
our third child and due to deliver later this month. She is in the 
audience today and easy to find. By scheduling this hearing today the 
Committee has made it possible for her, my children, William and 
Benjamin, and my parents Linda and Harris Nober to all be here.
    I appear before this Committee today as President Bush's nominee to 
the STB. The President has indicated that if I am confirmed, he would 
designate me as Chairman of the STB. The STB is an independent agency, 
and the President expects that if confirmed, I will implement the 
portion of the national transportation policy under its jurisdiction 
effectively, impartially and fairly.
    I am particularly pleased that the President has nominated me to 
serve as a member of the STB, since, as a staff member in the House, I 
had the privilege to work on the legislation that created it. As all of 
you know, the Interstate Commerce Commission Termination Act of 1995 
eliminated the ICC and created the STB. I was the lead staff member of 
the House Committee on Transportation and Infrastructure with respect 
to trucking and pipeline issues on that bill. Since then, I have 
continued to work closely with the Members of the Board, the Members of 
this Committee and the Board's stakeholders on matters under its 
jurisdiction.
    I am committed to public service, and if you confirm me as a Member 
of the STB, you will allow me to continue my many years of public 
service in transportation policy. I was a staff member for the House 
Committee on Transportation and Infrastructure for 8 years, ultimately 
serving as Chief Counsel of that Committee. Since May of 2001, I have 
served as Counselor to Deputy Secretary Michael Jackson at the 
Department of Transportation where I have advised him and Secretary 
Mineta, particularly on the broad range of policy issues facing the 
Department since the September 11 terrorist attacks. In these 
positions, I have been deeply involved in transportation policy matters 
of all types. In performing my Congressional duties, I always gave full 
consideration to the input of all parties on issues and worked hard to 
reach consensus wherever possible in a fair, bi-partisan manner. If 
anything, my time in the Executive Branch has reinforced the importance 
of the vital transportation policy issues facing the STB and the need 
to work on them in a fair, bipartisan manner.
    The STB is an independent, adjudicatory body, and its Members must 
be open minded, impartial and fair with respect to the decisions they 
make. If I am confirmed to be a Member of the STB, I will give all of 
the issues that come before it full, fair and impartial consideration. 
I would not take office with any preconceived notions about the outcome 
of any particular issue, but rather would examine each matter on its 
merits and strive to make the best decision possible consistent with 
the facts, the law and precedent. If I am confirmed, those who bring 
matters before the Board may be sure that I will give all matters 
thoughtful, fair, impartial and careful consideration.
    Finally, I would like to make clear that if confirmed, I would 
continue to work closely with the Congress and all stakeholders in the 
agency. I worked for the Congress for many years, and have the utmost 
respect for the letter and the spirit of the laws passed by this 
institution. I recognize the need to work closely with the Members of 
the House and Senate, and if I am confirmed, all Senators can be sure 
that I will be open and accessible to them and their staffs.
    Similarly, I believe it is important to be open and accessible to 
the agency's stakeholders, and if confirmed, I would have an open door 
policy to the extent permitted.
    In closing, I hope I will have the opportunity to continue to serve 
the public as a Member of the STB. I thank you for your consideration 
and look forward to answering any questions you might have.
                                 ______
                                 
                      A. BIOGRAPHICAL INFORMATION

    1. Name: Roger P. Nober.
    2. Position to which nominated: Member, Surface Transportation 
Board.
    3. Date of nomination: July 18, 2002.
    4. Address: (Information not released to the public).
    5. Date and place of birth: September 19, 1964, Syracuse, NY.
    6. Marital status: Married, October 13, 1991 to Jane C. Nober.
    7. Names and ages of children: William H. Nober, 6; Benjamin E. 
Nober, 3; Child due September, 2002.
    8. Education: High School: Amherst Regional High School, Amherst, 
Massachusetts, Attended 9/79-6/82, Diploma awarded June, 1982; College: 
Haverford College, Haverford, PA, Attended 9/82-5/86, B.A. in Economics 
awarded May, 1986; Law School: Harvard Law School, Cambridge, MA, 
Attended 9/86-6/89, J.D. awarded June, 1989.
    9. Employment record: 5/O1-present: Counselor to the Deputy 
Secretary of Transportation, United States Department of 
Transportation, 400 Seventh Street, SW., Washington, DC. 20590; 7/93-5/
01: Committee on Transportation and Infrastructure, U.S. House of 
Representatives, Washington, DC. 20515, Chief Counsel, 1/01-5/01, 
General Counsel, 1/97-12/00, Counsel, Subcommittee on Surface 
Transportation, 1/95-12/96; Minority Counsel, Subcommittee on Surface 
Transportation, 7/93-12/94 11/91-5/93, Skadden, Arps, Slate, Meagher & 
Flom 6/89-8/89, 4 Times Square; 6/88-8/88 New York, NY 10036, 
Associate, 11/91-5/93 Summer Associate, 6/88-8/88; 6/89-8/89 9/89-8/91, 
Law Clerk, Chambers of Judge David N. Edelstein (deceased), U.S. 
District Judge, United States District Court for the Southern District 
of New York, 1/89-5/89; Sophomore Tutor in Economics; 1/88-5/88 Harvard 
University Department of Economics, Cambridge, MA, 5/87-8/87, Dunnells, 
Duvall, Bennett & Porter (now dissolved), Washington, DC., Summer 
Associate.
    10. Government experience: (beyond that in question 9). None.
    11. Business relationships: None.
    12. Memberships: Massachusetts Bar; New York Bar.
    13. Political affiliations and activities: (a) List all offices 
with a political party which you have held or any public office for 
which you have been a candidate. None.
    (b) List all memberships and offices held in and services rendered 
to all political parties or election committees during the last 10 
years. Contributing Author, Republican Platform, Transportation 
Section, 2000; Transportation Committee, Dole for President Campaign, 
1996.
    (c) Itemize all political contributions to any individual, campaign 
organization, political party, political action committee, or similar 
entity of $500 or more for the past 10 years. None.
    14. Honors and awards: None.
    15. Published writings: Note: Federal Highways and Environmental 
Litigation: Toward a Theory of Public Choice and Administrative 
Reaction 27 Harv. J. on Legis. 229 (1990).
    16. Speeches: All speeches I have given in the past 5 years have 
been in my capacity as an official representing the Committee on 
Transportation and Infrastructure or the U.S. Department of 
Transportation. I have always spoken from notes, not from a prepared 
text.
    17. Selection: (a) Do you know why you were chosen for this 
nomination by the President? I believe I was selected by the President 
to be a Board Member of the Surface Transportation Board (STB) for 
several reasons: that the President was confident I would make honest 
and fair decisions in the matters that come before the agency; that I 
share the President's philosophy with respect to the matters that are 
expected to come before the STB; that the other Board Members, the 
Congress, the STB's stakeholders and the public would share his 
confidence in my ability to do so; and my experience in surface 
transportation matters, particularly those under the jurisdiction of 
the STB.
    (b) What do you believe in your background or employment experience 
affirmatively qualifies you for this particular appointment? I am 
qualified to be a Member of the STB because of my background as a 
lawyer in the private sector and my experience in all three branches of 
government.
    Most pertinently, for the past 9 years I have been involved in 
setting and implementing surface transportation policy. My work during 
my 8 years of service on the House Transportation & Infrastructure 
Committee and the past year at the Department of Transportation has 
involved the STB and the matters that come before the agency. The STB 
was created by Congress on January 1, 1996 as part of the Interstate 
Commerce Commission Termination Act of 1995, which among its many 
provisions eliminated the ICC and created the STB as its successor 
agency. In 1995, I was the Counsel for the Subcommittee on Surface 
Transportation, and was the primary House staff person responsible for 
the motor carrier and pipeline portions of that bill. In working on 
that legislation, I gained an understanding of the STB's jurisdiction, 
statutory framework, mission and administrative structure, as well as 
perspective on Congress' intent in creating the agency. Since the 
passage of the legislation creating the STB, I have continued to work 
with stakeholders, the Congress and the STB on legal, policy and 
administrative matters within its jurisdiction.

                   B. FUTURE EMPLOYMENT RELATIONSHIPS

    1. Will you sever all connections with your present employers, 
business firms, business associations or business organizations if you 
are confirmed by the Senate? My present employer is the United States 
Department of Transportation. While decisionally independent, the 
Surface Transportation Board is administratively housed within the U.S. 
Department of Transportation and the Board Members are employees of the 
U.S. Department of Transportation.
    2. Do you have any plans, commitments or agreements to pursue 
outside employment, with or without compensation, during your service 
with the government? If so, explain. I have no such commitments.
    3. Do you have any plans, commitments or agreements after 
completing government service to resume employment, affiliation or 
practice with your previous employer, business firm, association or 
organization? I have no such plans, commitments or agreements.
    4. Has anybody made a commitment to employ your services in any 
capacity after you leave government service? No.
    5. If confirmed, do you expect to serve out your full term or until 
the next Presidential election, whichever is applicable? Yes.

                   C. POTENTIAL CONFLICTS OF INTEREST

    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing dealings with business associates, 
clients or customers. I have no such arrangements or dealings.
    2. Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated. Please see the attached 
letter from the Designated Agency Ethics Officer of the STB.
    3. Describe any business relationship, dealing, or financial 
transaction which you have had during the last 10 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated. I have no such business 
relationships, dealings or financial transactions.
    4. Describe any activity during the past 10 years in which you have 
engaged for the purpose of directly or indirectly influencing the 
passage, defeat or modification of any legislation or affecting the 
administration and execution of law or public policy. In my positions 
with the Committee on Transportation and Infrastructure and at the 
Department of Transportation, I have been involved in the consideration 
of much of the transportation legislation that has been enacted since 
1993.
    My express duties have been to advance the views of the Ranking 
Republican Member, the Chairman or the President and Secretary with 
respect to such legislation.
    5. Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items. Please see the attached letter from the Designated Agency Ethics 
Officer of the STB.
    6. Do you agree to have written opinions provided to the Committee 
by the designated agency ethics officer of the agency to which you are 
nominated and by the Office of Government Ethics concerning potential 
conflicts of interest or any legal impediments to your serving in this 
position? Yes.

                            D. LEGAL MATTERS

    1. Have you ever been disciplined or cited for a breach of ethics 
for unprofessional conduct by, or been the subject of a compliant to 
any court, administrative agency, professional association, 
disciplinary committee, or other professional group? If so, provide 
details. No.
    2. Have you ever been investigated, arrested, charged or held by 
any federal, state, or other law enforcement authority for violation of 
any federal, state, county, or municipal law, regulation or ordinance, 
other than a minor traffic offense? If so, provide details. No.
    3. Have you or any business of which you are or were an officer 
ever been involved as a party in interest in an administrative agency 
proceeding or civil litigation? If so, provide details? In 1989, I was 
a party along with four others in a civil action in small claims court 
in Cambridge, Massachusetts regarding a security deposit on rental 
property. At that time, small claims court in Massachusetts had a 
jurisdictional limit of $1500. I was one of four renters of residential 
property who sublet the property to others during the summer of 1988. 
During the time that the property was occupied by the sublessors; water 
damage occurred to the kitchen floor. The Judge determined that while 
the sublessors had caused the damage, the security deposit had not been 
properly kept and thus I along with the four others ultimately paid the 
landlord for the damage.
    4. Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense? No.
    5. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be considered in 
connection with your nomination. In 1999, I was called by the Committee 
on Standards of Official Conduct of the U.S. House of Representatives 
to be a witness as part of its investigation into the activities of 
Congressman Bud Shuster. I was one of approximately 75 individuals, 
including several employees of the Committee on Transportation & 
Infrastructure, called before the Committee on Standards of Official 
Conduct. I was called because of my position as General Counsel to the 
Transportation and Infrastructure Committee, and the questions asked of 
me related to the Transportation and Infrastructure Committee's 
consideration of certain legislative matters. No questions were raised 
about me personally or any of my actions. The Ethics Committee issued 
its Investigative Report in the matter involving Congressman Shuster on 
October 4, 2000. That Report is available on the website of the 
Committee on Standards of Official Conduct of the U.S. House of 
Representatives, www.house.gov/ethics. I am not referred to in the 
Report.

                     E. RELATIONSHIP WITH COMMITTEE

    1. Will you ensure that your department/agency complies with 
deadlines set by congressional committees for information? I will do so 
to the best of my ability.
    2. Will you ensure that your department/agency does whatever it can 
to protect congressional witnesses and whistle blowers from reprisal 
for their testimony and disclosures? I will do so to the best of my 
ability.
    3. Will you cooperate in providing the Committee with requested 
witnesses, to include technical experts and career employees with 
firsthand knowledge of matters of interest to the Committee? I will do 
so to the best of my ability.
    4. Please explain how you will review regulations issued by your 
department/agency, and work closely with Congress, to ensure that such 
regulations comply with the spirit of the laws passed by Congress.
    As a former employee of the Congress who participated in drafting 
numerous bills, I believe that the executive branch has an obligation 
to follow both the letter and the spirit of the statutes passed by 
Congress when implementing and interpreting laws. If I am confirmed as 
a Member of the STB, I will to the best of my ability ensure that all 
regulations issued by the STB comply with both the letter and spirit of 
the laws passed by Congress. In cases where that intent is not clear, I 
would seek the guidance of the Congress.
    5. Describe your department/agency's current mission, major 
programs, and major operational objectives. The STB was created as the 
successor agency to the Interstate Commerce Commission and was 
established on January 1, 1996. It was created as part of the 
Interstate Commerce Commission Termination Act of 1995 (ICC Termination 
Act). Congress intended that the STB be a decisionally independent body 
that was administratively housed within the U.S. Department of 
Transportation.
    The ICC Termination Act was one of a series of acts of Congress 
deregulating various segments of the surface transportation industry 
regulated by the ICC. These included deregulation of interstate 
trucking (1980, 1994 and 1995), intrastate trucking (1994), intercity 
busses (1982 and 1994) and railroads (1980 and 1995). As the modes 
within the jurisdiction of the ICC were deregulated, Congress began 
considering whether to continue the agency at all. In the ICC 
Termination Act, Congress reviewed each of the remaining functions of 
the ICC and determined that certain functions needed to be continued by 
a decisionally independent agency. Congress created the STB and vested 
it with these functions.
    With respect to railroads, the STB's jurisdiction includes rate and 
service issues, mergers, line sales, revenue adequacy, line 
construction and abandonments, and certain labor matters pertaining to 
these rail matters. With respect to trucking, these include approval 
for certain collective activities including antitrust immunity, 
activities of the moving industry and movements by truck and over water 
to non-contiguous U.S. States and possessions, including Alaska, Hawaii 
and Puerto Rico. With respect to intercity busses, its jurisdiction 
includes structural, financial and operational matters. Finally, the 
STB also has jurisdiction over economic regulation of certain pipeline 
matters not covered by the Federal Energy Regulatory Commission.
    The major operational objective facing the STB is to continue its 
tradition of independence and excellence in decisionmaking. As an 
agency that has risen from the termination of another, it has adapted 
to best serve its customers and achieve its mission of making 
independent, fact-based decisions grounded in precedent.
    6. Are you willing to appear and testify before any duly 
constituted committee of the Congress on such occasions as you may be 
reasonably requested to do so? Yes.

                  F. GENERAL QUALIFICATIONS AND VIEWS

    1. How have your previous professional experience and education 
qualifies you for the position for which you have been nominated? My 
background as a lawyer who has worked in the private sector and all 
three branches of government has provided me with the substantive 
policy, political, administrative and management experience to qualify 
me for a position as a Member of the Surface Transportation Board.
    I graduated from Harvard Law School, where I wrote and taught about 
transportation policy. My experience in the Judicial Branch occurred 
following law school, where I was a law clerk on a busy trial court, 
the United States District Court for the Southern District of New York. 
I worked on the full range of criminal and civil cases, including one 
of the largest civil cases in the country. Following my clerkship, I 
was associated with a large law firm headquartered in New York, where I 
was part of the litigation department and had experience with 
commercial disputes.
    While at the Committee on Transportation and Infrastructure and at 
the Department of Transportation, I have focused on setting and 
implementing transportation policy and while at DOT, the management of 
transportation agencies. My duties at the Committee included 
responsibility for substantive policy expertise and developing 
legislation on all matters within the jurisdiction of the Committee, 
including railroad, motor carrier and pipeline matters. My duties 
entailed meeting with the agencies that administer the programs under 
the Committee's jurisdiction and stakeholders in those programs, as 
well as communicating with Members of the Committee, the House of 
Representatives and the Senate. I also worked closely with Members and 
staff of both parties.
    Since joining DOT, I have worked extensively with the Secretary, 
the Deputy Secretary, and the White House, as well as the various 
operating agencies that comprise DOT in developing and implementing 
policy. I have learned about the management challenges in large 
organizations and the circumstances which govern the development and 
execution of policy and the management of agencies in the Executive 
Branch. I have also gained experience with respect to the Department's 
adjudicatory functions, a function often exercised by the STB.
    2. Why do you wish to serve in the position for which you have been 
nominated? I wish to serve on the STB for many reasons. First, I would 
like the opportunity to serve the President as a Member of the Board 
and represent his general philosophy on the matters that will come 
before it. Second, I look forward to continuing to use my policy 
expertise in surface transportation matters. Third, I would like the 
opportunity to further work with the current Board Members, the expert 
staff at the STB and the stakeholders in the matters under the 
jurisdiction of the STB. And finally, since I was involved in the 
creation of the STB and the termination of the ICC, I would like the 
opportunity to serve on the Board and help it continue its high level 
of independence and professionalism.
    3. What goals have you established for your first 2 years in this 
position, if confirmed? My major goal is to work with the existing 
Board Members to further the work done by them since the creation of 
the STB to establish and maintain its independence and excellence in 
decisionmaking.
    4. What skills do you believe you may be lacking which may be 
necessary to successfully carry out this position? What steps can be 
taken to obtain those skills? I will need to work to further develop my 
organizational management skills, and have been working here at DOT to 
become more involved in management, in addition to policy issues.
    5. Who are the stakeholders in the work of this agency? The primary 
work of the Board relates to railroads, and so the stakeholders in the 
rail area include large, medium and small (Class 1, 2 and 3) freight 
railroads, railroad workers, rail shippers, operators of passenger 
railroads and the communities dependent upon railroads. With respect to 
its motor carrier and pipeline functions, the stakeholders include 
trucking companies, household goods carriers, shippers using motor 
carriers, operators of bus lines, shippers, and operators of solid 
material pipelines.
    6. What is the proper relationship between your position, if 
confirmed, and the stakeholders identified in question No. 5? As a 
member of an adjudicatory body, a Board Member must remain independent 
from the influence of any particular stakeholder. However, I believe it 
is important to be accessible to stakeholders, and I would make being 
open and accessible to all parts of the stakeholder community a high 
priority.
    7. The Chief Financial Officers Act requires all government 
departments and agencies to develop sound financial management 
practices similar to those practiced in the private sector. (a) What do 
you believe are your responsibilities, if confirmed, to ensure that 
your agency has proper management and accounting controls? Since the 
STB is administratively housed within DOT and its budget functions are 
performed there, I would work with DOT's Assistant Secretary for Budget 
and Chief Financial Officer to ensure that the STB's management and 
accounting controls meet the standards set by the Congress in the 
Government Performance and Review Act (GPRA) and by the President's 
Management Agenda.
    (b) What experience do you have in managing a large organization? 
For the past year, I have been the Counselor to the Deputy Secretary of 
Transportation, who is the Chief Operating Officer of DOT. In this 
position, I have worked with him and on his behalf on numerous 
management matters at the Department.
    8. The Government Performance and Results Act requires all 
government departments and agencies to identify measurable performance 
goals and to report to Congress on their success in achieving these 
goals. (a) Please discuss what you believe to be the benefits of 
identifying performance goals and reporting on your progress in 
achieving those goals. Government agencies, like all large 
organizations, should set identifiable performance goals so that the 
members of the agency, the rest of the Administration, the Congress, 
its customers and the public can measure the organization's 
performance. Perhaps most importantly, GPRA's requirements help ensure 
that an agency's annual budget supports its identified performance 
goals, thereby helping ensure that resources are devoted to the 
agency's most important missions. Properly constructed, performance 
goals help focus the organization on its core mission, as reflected by 
those goals. Regular reporting on goals and the progress made in 
achieving them helps keeps the organization focused on its priorities.
    (b) What steps should Congress consider taking when an agency fails 
to achieve its performance goals? Should these steps include the 
elimination, privatization, downsizing or consolidation of departments 
and/or programs? Congress, in its oversight capacity, must measure 
whether government organizations have achieved their goals. Congress 
has a range of options for improving the performance of agencies that 
consistently fail to meet their goals, including closer oversight over 
their budgets--such as erecting strict controls over spending authority 
or earmarking funds for specific purposes, passing reauthorization 
legislation to restructure the organization or eliminate obstacles to 
achieving performance goals, or calling for management changes and 
reforms. However, identifying measurable performance metrics can be 
difficult for government agencies, since the mission of such agencies 
cannot always be measured in the same manner as private sector 
companies. Thus measuring performance only on whether a set of 
performance metrics have been achieved may not fully reveal whether the 
organization is performing adequately.
    The STB itself is an example of the kinds of action Congress may 
take when it believes changes are needed in an agency. The STB is a new 
organization that was created when its predecessor agency, the ICC, was 
eliminated. In the course of the transition from the ICC to the STB, 
many of its programs and responsibilities were eliminated and others 
streamlined and reformed. Its staff was significantly downsized, and 
some functions previously performed by the ICC were transferred to DOT 
or privatized.
    (c) What performance goals do you believe should be applicable to 
your personal performance, if confirmed? I would look to ensure that 
the agency continues to resolve the matters before it in a fair and 
expeditious manner, that its rulemakings continue to be completed in a 
timely manner, and that the organization continues to perform in a 
professional manner.
    9. Please describe your philosophy of supervisor/employee 
relationships. Generally, what supervisory model do you follow? Have 
any employee complaints been brought against you? I believe that 
qualified, experienced employees should be trusted to perform their 
duties in a highly professional manner. I try to give latitude to 
employees to use their best professional judgment to perform their 
duties. No employee has ever brought any complaints against me.
    10. Describe your working relationship, if any, with the Congress. 
Does your professional experience include working with committees of 
Congress? If yes, please describe. As a former employee of Congress, I 
have a long and close working relationship with Congress and 
Congressional Committees.
    11. Please explain what you believe to be the proper relationship 
between yourself, if confirmed, and the Inspector General of your 
department/agency. As an administrative part of DOT, the STB has no 
Inspector General of its own and instead is overseen by the Inspector 
General of DOT. The proper relationship between the head of a part of 
DOT and the Department's Inspector General is to work closely to 
monitor agency performance and evaluate its programs and personnel for 
waste, fraud or abuse.
    12. Please explain how you will work with this Committee and other 
stakeholders to ensure that regulations issued by your department/
agency, comply with the spirit of the laws passed by Congress. As a 
former employee of the Congress who participated in drafting numerous 
bills, I feel strongly that the executive branch has an obligation to 
follow both the letter and the spirit of the statutes passed by 
Congress when implementing, and interpreting laws. If I am confirmed as 
a Member of the STB, that I will ensure to the best of my ability that 
all regulations issued by the STB comply with both the letter and 
spirit of the laws passed by Congress. In cases where that intent is 
not clear, I would seek the guidance; of the Congress.
    13. In the areas under the department/agency's jurisdiction, what 
legislative action(s) should Congress consider as priorities? Please 
state your personal views. In my personal view, with respect to matters 
under the jurisdiction of the STB, the most, important matter for 
Congress to take up is the reauthorization of the STB. Its predecessor 
agency, the ICC, had a permanent authorization, which did not 
facilitate a regular review of its programs and laws. As a result, 
pressure built to make major changes and the agency was ultimately 
eliminated. One reform included in the ICC Termination Act was to set 
the authorization for the STB for a term of 3 years, to ensure that its 
programs and laws would receive regular oversight. The STB's 
authorization expired at the end of fiscal year 1998, and it has 
continued unauthorized since then.
    14. Within your area of control, will you pledge to develop and 
implement a system that allocates discretionary spending based on 
national priorities determined in an open fashion on a set of 
established criteria? If not, please state why. If yes, please state 
what steps you intend to take and a timeframe for their implementation. 
Yes. I would work with DOT to submit annual budgets that reflect the 
need and workload of the STB.

    The Chairman. Thank you, Mr. Nober, very much.
    Next, Mr. Laney, welcome.

  STATEMENT OF DAVID M. LANEY, NOMINEE TO BE A MEMBER OF THE 
                     REFORM BOARD (AMTRAK)

    Mr. Laney. Thank you, Senator. Let me begin by introducing 
my wife, who has apparently been told not to sit in the first 
row, Eleanor Laney. She is four rows back in a probably more 
protected position with respect to Amtrak than I am.
    It is a pleasure to be here, Senator Breaux, and I 
appreciate the opportunity to appear, and my comments will be 
very brief. It is an honor to appear before you as President 
Bush's nominee to the Amtrak Reform Board. Although I think at 
this point, after visiting with a number of transportation 
colleagues throughout the industry, many of them have concluded 
that I must have committed some punishable offense, but I do 
not think that I would be the one sitting here had you already 
ironed out all the challenges now facing Amtrak. I am delighted 
to step into the position that I am currently considered for, 
if in fact, I am confirmed.
    As you know, the challenges of Amtrak have mounted steadily 
during the last year, and even since my nomination in the 
spring. Those challenges are only partially passenger 
transportation challenges such as performance, reliability, 
levels of service, perceived safety issues, and competitiveness 
with other modes. To a much greater extent, those challenges 
are those endemic to virtually any faltering business, issues 
relating to organization, management, operations, financial 
management and performance, funding, and information 
management, internally and externally.
    Except in this context, those challenges are aggravated, as 
all of you well know, by a number of contractual and statutory 
constraints that limit Amtrak's management maneuverability 
considerably. Despite my transportation expertise, it is those 
challenges that are most likely the reasons for my nomination, 
and the principal ingredients of my interest in serving as a 
member of the Amtrak Reform Board should this Committee approve 
and the Senate confirm my nomination.
    I should add with particular emphasis, however, that my 
perceptions and understanding of Amtrak, its operations, and 
its challenges are not the product of any information provided 
to me by Amtrak itself. To date, I have received no information 
from Amtrak.
    Aside from the challenges facing Amtrak, I am also here 
because I believe that there is an important role for intercity 
passenger rail within our overall transportation policy 
framework. I believe that it will become increasingly valuable 
to mobility and economic opportunity throughout our country in 
light of projected population growth and inevitable declines in 
highway and airport capacity and levels of service.
    Handled properly, your challenge, that of the 
Administration, and that of the Amtrak Reform Board, is to set 
the foundation from which we might begin to shape the pattern 
of redevelopment of intercity passenger rail in this country 
for decades. It is difficult to project with any certainty, at 
this point, the role that Amtrak might ultimately play in a 
staged revitalization of intercity passenger rail, but it has 
to be the point from which we begin. I look forward to your 
questions, and I would add again, though, that I have very 
little first-hand knowledge of Amtrak operations or Amtrak 
Board activities, other than what has appeared or is available 
through newspapers and public sources.
    I want to thank Senator Hutchison for her recommendation 
and her support as well as the current Administration, and 
particularly President Bush. Should the Committee approve and 
the Senate confirm my nomination, I look forward to serving and 
working with you closely and other Members of the Committee, 
and I will be happy now to answer any questions you might have.
    [The prepared statement of Mr. Laney follows:]

  Prepared Statement of David M. Laney, Nominee to be a Member of the 
                         Reform Board (AMTRAK)

    Good afternoon, Mr. Chairman and Members of the Committee. I 
appreciate the opportunity to appear today, and my comments will be 
brief.
    It is an honor to appear before you as President Bush's nominee to 
the Amtrak Reform Board. Although I am convinced that some of my 
colleagues throughout the transportation industry have no doubt 
concluded that I must have committed a punishable offense. On the 
contrary, had you and the Amtrak Board ironed away all the challenges 
now facing Amtrak, I doubt I would be the one sitting here before you 
today.
    As you know, the challenges of Amtrak have mounted steadily during 
the last year, and even since my nomination in the spring. Those 
challenges are only partially passenger transportation challenges, such 
as: performance reliability; levels of service; perceived safety; 
competitiveness with other modes.
    To a much greater extent, the challenges are those endemic to 
virtually any faltering business: issues relating to: organization; 
management; operations; financial management and performance; funding; 
information management, internally and externally.
    Except in this context, those challenges are aggravated, as you 
well know, by a number of contractual and statutory constraints that 
limit Amtrak's management maneuverability.
    Despite my transportation experience, it is those challenges that 
are most likely the reasons for my nomination and principal ingredients 
of my interest in serving as a member of the Amtrak Reform Board, 
should this Committee approve and the Senate confirm my nomination.
    I should add, with particular emphasis, however, that my 
perceptions and understanding of Amtrak, its operations and its 
challenges are not the product of any information provided to me by 
Amtrak itself. To date, I have received no information from Amtrak.
    Aside from the challenges facing Amtrak, I am also here because I 
believe that there is an important role for inter-city passenger rail 
within our overall transportation policy framework. I believe that it 
will become increasingly valuable to mobility and economic opportunity 
throughout the United States in light of projected population growth 
and inevitable declines in highway and airport capacity and levels of 
service. Handled properly, your challenge, that of the administration, 
and that of the Amtrak Reform Board, is to set the foundation from 
which we might begin to shape the pattern of redevelopment of inter-
city passenger rail in this country for decades. It is difficult to 
project with any certainty at this point the role that Amtrak might 
ultimately play in a staged revitalization of inter-city passenger 
rail, but it has to be the point from which we begin.
    I look forward to your questions, but please understand again that 
I have very little first-hand knowledge of Amtrak operations or Amtrak 
Board activities other than what has been available through newspapers.
    Thank you for the opportunity to make this statement. Should the 
Committee approve and the Senate confirm my nomination, Mr. Chairman, I 
look forward to serving, and to working with you and other members of 
the Committee. And I will be happy now to answer any questions you 
might have.
                                 ______
                                 
                      A. BIOGRAPHICAL INFORMATION

    1. Name: David M. Laney.
    2. Position to which nominated: Amtrak Reform Board, Member.
    3. Date of Nomination: April 30, 2002.
    4. Address: Office: 2445 Ross Avenue, Suite 3200 Dallas, Texas 
75202.
    5. Date and place of birth: January 19, 1949, Dallas, Texas.
    6. Marital status: Married. Eleanor Watkins Laney.
    7. Names and ages of children: Margaret Preston Laney, 19; Virginia 
McQueen Laney, 16.
    8. Education: St. Marks School 1956-1967, high school diploma; 
Stanford University 1967-1971, A.B., Honors (1971); Brown University 
1973-1974; SMU Law School 1974-1977, J.D. (1977).
    9. Employment record: Texas Transportation Commission, Austin, 
Texas 1995-2001, Chairman, Member; Jenkens & Gilchrist, Dallas, Texas 
1977--Present, Lawyer; Strasburger & Price, Dallas, Texas 1976 
(Summer), Law Clerk; Jenkens & Gilchrist, Dallas, Texas 1976 (Summer), 
Law Clerk; Judge Robert Porter, District Judge, Northern District, 
Dallas, Texas 1975 (Summer), Law Clerk; Judge Charles E. Long, State 
District Judge 134th District Court, Dallas, Texas 1974 (summer), Law 
Clerk; Volunteers in Asia, Staff--Palo Alto, California, Taichung, 
Taiwan 1971-1973; Chung Hsing National University, Assistant Professor 
(Literature), Taichung, Taiwan 1972-1973; YMCA, Language Instructor, 
Taichung Taiwan 1971-1972.
    10. Government experience: Finance Commission of Texas 1989-1995; 
Texas Transportation Commission 1995-2001.
    11. Business relationships: (Current Positions) Jenkens & 
Gilchrist, Shareholder; Stanford University, Trustee; Chair, Audit 
Committee; Laney Investments, Ltd., General Partner (family 
investments); L Management, LLC, Manager (general partner, Laney 
Investments, Ltd.); Moroney Farm, Ltd., General Partner (family 
investment); Southwest Medical Foundation, Trustee; Dallas Chamber of 
Commerce, Chairman, State Affairs Committee; SMU Law School Advisory 
Board, Member.
    12. Memberships: (Current Memberships; no offices held); American 
Bar Association; Texas Bar Association; Dallas Bar Association; Texas 
Bar Foundation; Dallas Bar Foundation; Crescent Club; Dallas Country 
Club; Dallas Assembly; Stanford Alumni Association; Dallas Committee on 
Foreign Relations.
    13. Political affiliations and activities: (a) None. (b) None. (c) 
See Schedule A-13, attached.
    14. Honors and awards: None.
    15. Published writings: None.
    16. Speeches: None (relevant to the position for which I have been 
nominated).
    17. Selection: (a) Although the reasons for my nomination by the 
President have not been expressly stated to me, I assume that the 
combination of my legal, management, leadership, government, and 
transportation experience, together with the confidence the President 
developed in my abilities during my performance as Texas Commissioner 
of Transportation (while he was Governor of Texas), contribute in 
combination to my nomination. (b) The experience and abilities referred 
to in 17(a) above qualify me for appointment.

                   B. FUTURE EMPLOYMENT RELATIONSHIPS

    1. Will you sever all connections with your present employers, 
business firms, business association or business organizations if you 
are confirmed by the. Senate? To the extent necessary to eliminate any 
conflict of interest, I will discontinue business relationships. I am 
not currently aware of any need to do so.
    2. Do you have any plans, commitments or agreements to pursue 
outside employment, with or without compensation, during your services 
with the government? If so, explain. I intend to continue my current 
position with Jenkens & Gilchrist; the position for which I have been 
nominated is part-time and non-compensatory.
    3. Do you have any plans, commitments or agreements after 
completing government service to resume employment, affiliation or 
practice with your previous employer, business firm, association or 
organization? Not applicable.
    4. Has anybody made a commitment to employ your services in any 
capacity after you leave government service? No.
    5. If confirmed, do you expect to serve out your full term or until 
the next Presidential election, whichever is applicable? Yes.

                   C. POTENTIAL CONFLICTS OF INTEREST

    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing dealings with business associates, 
clients or customers. Salaried shareholder in the law firm of Jenkens & 
Gilchrist. Retirement plan (deferred compensation and 401K Plan) 
benefits available upon my retirement.
    2. Indicate any investments, obligations, liabilities, or other 
relationships with could involve potential conflicts of interest in the 
position to which you have been nominated. None.
    3. Describe any business relationship, dealing, or financial 
transaction which you have had during the last 10 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated? None.
    4. Describe any activity during the past 10 years in which you have 
engaged for the purpose of directly or indirectly influencing the 
passage, defeat or modification of any legislation or affecting the 
administration and execution of law or public policy. As Texas 
Commissioner of Transportation, I visited with a number of Members of 
Congress and testified before House and Senate Committees in connection 
with the reauthorization of ISTEA.
    5. Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items. I am not aware of any actual or potential conflicts that 
currently exist. In the event I encounter any conflict of interest, I 
will promptly disclose it to the Amtrak office of general counsel, and 
with their guidance promptly resolve the conflict to their 
satisfaction. The nature of my response will depend on the nature of 
the conflict and general counsel guidance.
    6. Do you agree to have written opinions provided to the Committee 
by the designated agency ethics officer of the agency to which you are 
nominated and by the Office of Government Ethics concerning potential 
conflicts of interest or any legal impediments to your serving in this 
position? Yes.

                            D. LEGAL MATTERS

    1. Have you ever been disciplined or cited for a breach of ethics 
for unprofessional conduct by, or been the subject of a complaint to 
any court, administrative agency, professional association, 
disciplinary committee, or other professional group? If so, provide 
details. No.
    2. Have you ever been investigated, arrested, charged or held by 
any federal, state or other law enforcement for violation of any 
federal, state, county, or municipal law, regulation or ordinance, 
other than a minor traffic offense? If so, provide details. No.
    3. Have you or any business of which you are or were an officer 
ever been involved as a party in interest in an administrative agency 
proceeding or civil litigation? If so, provide details. Our law firm is 
occasionally involved as a party in interest in civil litigation. I was 
Chairman and President of the law firm from 1990 until early 2002, and 
in that capacity, or in the capacity as a shareholder in the firm, I 
have sometimes been named as a party in interest in litigation, along 
with the firm and other officers or shareholders.
    The Texas Department of Transportation and the Texas Transportation 
Commission are regularly named as parties in interest in litigation. In 
my capacity as Chairman of the Texas Transportation Commission, I was 
routinely named as a party in interest in litigation brought against 
TxDOT.
    I was the principal shareholder and Chairman of the Board of a 
company named Just Brakes Corporation and numerous operating 
subsidiaries in the early 1990s. The company and its affiliates were 
involved in the auto repair business. That company and certain of its 
affiliates were occasionally involved as parties in interest in civil 
litigation. The companies were ultimately liquidated and sold through 
an insolvency proceeding. I was named in litigation brought against the 
law firm and two of its shareholders (based on an alleged conflicts of 
interest) brought by three ex-employees of the Company; the litigation 
was dismissed on summary judgment.
    4. Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense? No.
    5. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be considered in 
connection with your nomination. None.

                     E. RELATIONSHIP WITH COMMITTEE

    1. Will you ensure that your department/agency complies with 
deadlines set by congressional committees for information? Yes.
    2. Will you ensure that your department/agency does whatever it can 
to protect congressional witnesses and whistle blowers from reprisal 
for their testimony and disclosures? Yes.
    3. Will you cooperate in providing the committee with requested 
witnesses, to include technical experts and career employees with 
firsthand knowledge of matters of interest to the committee? Yes.
    4. Are you willing to appear and testify before nay duly 
constituted committee of the Congress on such occasions as you may be 
reasonably requested to do so? Yes.

                  F. GENERAL QUALIFICATIONS AND VIEWS

    1. Please describe how your previous professional experience and 
education qualifies you for the position for which you have been 
nominated. My experience as a lawyer (corporate and financial law), in 
management and leadership positions with my law firm (managing partner, 
1990-2002; management committee 1986-1990), in appointed state 
government positions since 1989, specifically the Texas Finance 
Commission, 1989-1995 (state charted bank and savings and loan 
oversight) and Texas Transportation Commission 1995-2001 (including 5 
years as Chairman, overseeing the Texas Department of Transportation), 
and my familiarity with operational and financial risk management 
issues (current Chair of the Audit Committee, Stanford University), 
together with the skills developed through such experience, qualified 
me for the position for which I have been nominated.
    2. What skills do you believe you may be lacking which may be 
necessary to successfully carry out this position? What steps can be 
taken to obtain those skills? None.
    3. Why do you wish to serve in the position for which you have been 
nominated? I hope to bring a constructive voice and perspectiveto bear 
in addressing the range of challenges currently confronting AMTRAK.
    4. What goals have you established for your first 2 years in this 
position, if confirmed? I do not have enough information regarding 
AMTRAK or knowledge of the position to have established goals for my 
first 2 years in the position.
    5. Who are the stakeholders in the work of this agency? The 
stakeholders are numerous. They include the administration, Congress, 
taxpayers, states, cities, the traveling public (including businesses 
whose employees commute via AMTRAK), mail and freight services, 
employees and unions, the armed services, and various transportation 
and rail product and service providers.
    6. What is the proper relationship between your position, if 
confirmed, and the stakeholders identified in questions No. 10? I view 
my role, if confirmed, as a fiduciary whose charge is the oversight of 
AMTRAK in a manner that best serves the long-term interests of AMTRAK, 
its viability as a national rail passenger system, and its various 
stakeholders.
    7. Please describe your philosophy of supervisor/employee 
relationships. Generally, what supervisory model do you follow? Have 
any employee complaints been brought against you? My philosophy of 
supervisor/employee relationships is one of mutual respect built upon 
expectations of trust, reliability and performance. Performance 
expectations should be high and must be reasonable. In my 11 years as 
managing partner of my law firm, I was named in one employment 
complaint brought against the firm (all Board members were named, of 
which I was one).
    8. Describe your working relationship, if any, with the Congress. 
Does your professional experience include working with committees of 
Congress? If yes, please describe. No currently active working 
relationships. As Texas Commissioner of Transportation, I spoke with a 
number of Members of Congress and testified before Senate and House 
Committees in connection with the reauthorization of ISTEA.
    9. Please explain how you will work with this Committee and other 
stakeholders to ensure that regulations issued by your board/commission 
comply with the spirit of the laws passed by Congress. To assure 
compliance with the spirit of the laws passed by Congress, I will rely 
principally on my own.interpretations, as well as on the guidance and 
staff and the AMTRAK office of general counsel.
    10. In the areas under the board/commission jurisdiction, what 
legislative action(s) should Congress consider as priorities? Please 
state your personal views. In my view, the legislative priorities are 
the development of a clearly defined national passenger rail policy 
that provides not only for the preservation, but for a staged 
redevelopment of AMTRAK as a financially sound and operationally 
successful national rail passenger system.
    11. Please discuss your views on the appropriate relationship 
between a voting member of an independent board or commission and the 
wishes of a particular president. Particularly in the context of 
challenges currently confronting AMTRAK, the views of the President and 
his Administration and those of Congress in the development of 
solutions are both of critical importance if we hope to preserve and 
ultimately reinvigorate a national passenger rail system. Ultimately, 
however, I envision the role of a voting member of an independent board 
or commission to be one of independent analysis and judgment.

    The Chairman. Thank you very much, both of you, for your 
statements.
    Let us start with Mr. Nober with regard to some of our 
Surface Transportation Board issues. You are aware, Mr. Nober, 
of the hearings we have had on this side with regard to 
shippers and rail carriers and the untimeliness of the process 
which shippers have to go through to make a case on being 
captive shippers and the prices they have to pay.
    I am delighted to have received a letter from the current 
Chairman, Linda Morgan, saying that they have issued a proposed 
rulemaking which would do two things. First, it would require 
nonbinding mediation before a large rail case, complaint case 
could be filed. Now, the proposal deals with discovery to try 
to shorten the timeframe apparently, and then they have 
proposals on the smaller rate cases, rail rate cases dealing 
with the amount of the filing fee.
    I understand the filing fees in the smaller cases could be 
as high as $1,000. The proposal is to set it at $150. I had 
suggested at the Committee that these cases that take these 
long, long periods of time need to be somehow shortened. We 
also need to consider arbitration or mediation as a process of 
forcing the parties, if you will, to sit down and try to reach 
an agreement on what is a fair and equitable charge for the 
goods that they carry. This proposal, which I am sure you are 
familiar with, seems to go a long way toward addressing some of 
the concerns. I was wondering, could you give the Committee 
your thoughts on the proposals?
    Mr. Nober. Well, Senator, I saw the proposal yesterday, as 
did you. I certainly support any efforts that the Board would 
take to remove procedural barriers to large and small shippers 
being able to reach resolutions on their concerns. While the 
merits of the cases they bring need to be looked at on the one 
hand, it seems the most common complaints--and I have had a 
chance to read your hearing transcripts and attend part of that 
last hearing--focused on the procedural problems that shippers 
had undergone.
    Now, the current Board looked at the issue and came up with 
a number of good ideas. I would be reluctant to comment on 
which specific ones I would support or not support, not being a 
member of the Board yet, but I certainly support any efforts 
which come up that would be accepted, and would help reduce 
some of the procedural barriers to large and small shippers 
being able to bring cases.
    The Chairman. I think most of us in Congress would not 
support the Congress, for instance, setting the rates. This is 
something that we are not capable of doing, nor should we be 
doing it. But in the absence of competition, many of these 
captive shipper cases, it seems to me from what I heard at the 
hearing, was that the rate of filing cases took so long it was 
a mechanism used by the railroads to keep things in limbo for 
such a long period of time that many of the shippers didn't 
have the time, the effort, the money, the lawyers, to be able 
to get a speedy resolution. The concept is, ``Look, we want you 
all to sit down at the table and work it out,'' and give them 
the authority to do that.
    Can you comment on just the concept of arbitration? You 
said you support the tools that would shorten the process. Do 
you think arbitration could be one of those tools, or do you 
have some problems with that as a concept?
    Mr. Nober. Certainly I think in other contexts, in surface 
transportation and in other industries, mandatory arbitration 
has helped resolve disputes, especially those between companies 
and organizations that have ongoing relationships with one 
another. I think it has been an effective tool in other areas.
    Now, whether or not I would expressly support mandating 
arbitration in every circumstance, I certainly cannot say right 
now. I would take a strong look at it. I believe alternative 
dispute resolution has an important place in helping to 
facilitate and resole these disputes. It is particularly 
important for the small shippers who, as you have said, do not 
have the time, the money, and the ability to hire lawyers and 
spend many years bringing cases.
    The Chairman. I am glad to hear you say that. I think we 
had suggested, and again I had suggested, that the rail 
carriers and some of the shipper groups actually try to get 
together to work out a process in which they could agree. Then, 
if necessary, it could be brought back to Congress to implement 
it legislatively in order to give more authority to the Surface 
Transportation Board to enact it. Do you think that is a 
worthwhile effort?
    I mean, we just say look, railroad, sit down with the 
shipper organizations and see if you cannot reach an agreement, 
otherwise we are going to be forced to jump into it, maybe with 
the wrong solution to your problems. Otherwise, come up with 
some answers for us.
    Mr. Nober. Senator, I certainly think that the parties 
being able to work out, among themselves, a procedure for 
resolving disputes is by far the preferable way to do it. They 
are the most intelligent about their businesses. They know the 
problems that they face, and they know the solutions that would 
best work for them. As a regulator, I would always hope that 
having the parties work out their differences, rather than 
bring them to a government agency, would be the way to resolve 
things. Therefore, I certainly commend you for asking them that 
they do that, and I understand that they are taking that charge 
very seriously.
    The Chairman. Well, I hope they are, because it was a very 
sincere request, and we are going to be following up to see 
what progress they are making. I am a big believer in 
competition in all industries, but in order to have competition 
you have to have competitors, and if you do not have 
competitors, then you have regulation.
    It seems that many are very concerned about the reduction 
of competition over the years through consolidations and 
mergers in the railroad industry. What role do you think you 
will have as Chairman of the Surface Transportation Board to 
guarantee to the American public that we have competition in 
order to have a system that works in a free market atmosphere, 
as opposed to having the government regulate the rail industry?
    If we only have one telephone company, or we only end up 
with one airline, or we only end up with one oil and gas 
company, we are not going to have competition. Then you are 
going to have government regulation. So what role do you think 
the Board has in trying to preserve competition by preserving 
the competitors who provide that competition?
    Mr. Nober. Well, Senator, I think that the Board certainly 
plays a central role in reviewing any consolidation in the rail 
industry, and that was one of the primary reasons why Congress 
decided to keep a Board in place at all.
    Last year, the Board came out with new guidelines that it 
would use to evaluate mergers, and I think that those lay out 
some very difficult hurdles for any merger to beat, one of 
which is not just that it would preserve competition, but the 
merger would have to demonstrate the ways that it would enhance 
competition.
    The Chairman. Do you support those proposals by the Board?
    Mr. Nober. They certainly are well settled, and appear to 
be well accepted among all the parties to the rail industry, so 
I certainly, while I am again reluctant to expressly take a 
position on any one particular matter, I think the merger 
guidelines have been an important step forward in the way that 
the Board looks at mergers.
    The Chairman. Would you think additional work in that area 
needs to be done, or do you think that what is on the table now 
is sufficient?
    Mr. Nober. Senator, I would have to get to the Board and 
see whether or not those guidelines were sufficient, or whether 
or not any enhancements or modifications need to be made. They 
were just issued last year, so I think that in general they 
seem to capture a lot of the concerns that were out there. I 
commend the Board for issuing those guidelines, and certainly 
would take a close look at the standards by which mergers are 
looked at and whether or not any changes need to be made.
    The Chairman. I take it we have not had any consolidation 
or mergers since those rules were adopted.
    Mr. Nober. Senator, I am not sure. I thought there might 
have been one small merger, but I am not 100 percent certain. I 
would need to check on that.
    The Chairman. Thank you very much, Mr. Nober.
    Mr. Laney, I was just wondering whether you supported 
President Bush or opposed him in order to get this nomination.
    [Laughter.]
    Mr. Laney. Can I get back to you on that, Senator?
    The Chairman. I jokingly asked that question because of the 
fact that this is not a cream-puff appointment. This is one 
that is going to require a great deal of effort and time and 
thought by the people on the Amtrak Board in order to resolve 
what some would argue are irresolvable issues, and you have a 
very divided political climate.
    There are some Members of Congress that I suspect would 
just as soon Amtrak go away. Others would take the opposite 
position and say that whatever revenues they need to continue 
to operate, the government would provide those revenues. So I 
mean, you've got some very strongly held opinions which are 
vastly different. You have got a system that is not working as 
most people would like it to work by any standard of 
measurement.
    So I mean, you point out that you do not have any 
experience in this area, and it may be that we need smart, 
intelligent people who do not have preconceived notions about 
what the answer is to come in and serve, to take a fresh 
approach and a fresh look at it, and then come up with 
recommendations.
    I once told President Clinton that the next time he 
appointed a commission, appoint really smart, intelligent 
people who know nothing about the subject matter so they can 
come to the table with an open mind and listen to the arguments 
on various sides. I think that can be very helpful. But at the 
same time, not knowing the history of this can also be 
problematic as far as the learning curve.
    Now, can you tell the Committee a little bit about how you 
envision what your job is going to be, knowing that this is not 
similar to what you have done in the past?
    Mr. Laney. I will give it a shot, Senator. I do not think 
it is that far away from our transportation experience. There 
was some considerable, but nothing like what I'm about to step 
into, experience in terms of the interrelationship between 
highway, general aviation and rail, but principally freight 
rail, not passenger rail. In terms of the role and the learning 
curve, I realize there is a learning curve, and that frankly 
does not intimidate me, and does not particularly concern me.
    I do come with very little preconceived notion, and I think 
that is an advantage. In terms of where we go from here, it 
depends a lot on where we can go, and that sounds a little 
circular. On the other hand, without some level of credibility 
that has not existed, at least in recent years and in recent 
months, then we are not going to have much of a partner in 
Congress or in the Administration.
    There have been a number of unfortunate mishaps of one sort 
or another with respect to Amtrak recently, but there have been 
some very positive steps taken, at least that is my impression 
from a distance. One of those steps is the employment of David 
Gunn, which I think is a very positive statement by the Board 
and by Amtrak. I think, as leastso far, there is a fairly 
significant step-up in credibility, or at least the potential 
for credibility that might not have been there just a few 
months ago. I think he has only been on the job 3 or 4 months.
    We have got a long way to go. I do not know the dynamics of 
the Board. I do not know what the Board's conception is of its 
role. I think I bring to bear more corporate and private sector 
experience with respect to the interrelationship between Board 
and management. I do not know if this Board sees itself more in 
an operating role or not, but I do not see myself in that role.
    I do see myself as a critical analytical sounding Board for 
management, and I think I can play a very positive, 
constructive role with respect to the Board, its dynamics, and 
with respect to the management and its dynamics.
    I do understand the transportation industry relatively 
well, and I understand the potential for the role that 
passenger rail can play. We are a long way from that potential. 
During my term, whatever the length of that term might be, we 
at least have the opportunity to begin moving in a direction 
that can ultimately prove very constructive. A direction that 
may ultimately help close the gaps between those who oppose and 
those who support Amtrak, perhaps to bring those groups a 
little more closely together.
    The Chairman. I have one final question. You are the 
President's appointee. How free are you going to be to disagree 
with the Administration's recommendations either made by the 
President or by Secretary of Transportation Norm Mineta with 
regard to Amtrak? For instance, they are recommending about 
$521 million for Amtrak's operation for the next fiscal year. I 
think Amtrak has stated that is probably less than half of what 
they feel they really need. The question is, as a Board member 
who has been appointed by the President, how free are you going 
to be to make independent decisions and independent 
recommendations which are contrary to the Administration?
    Mr. Laney. I think my response is that the history that I 
have had working for then-Governor Bush, as the Chairman of the 
Department of Transportation in Texas, was such that I think he 
and his team then, and I believe now, trust my judgment, trust 
the direction that I believe a particular issue ought to go. If 
they disagree, or if I disagree, I think they will respect the 
position I take and hear me out, and I think oftentimes I can 
be fairly persuasive, sometimes not.
    I look at this Chairmanship as an independent position, and 
I think they view it as an independent position. It will not be 
long before I know more about Amtrak and the intricacies of the 
operation than probably anybody in the Administration or the 
Department of Transportation. Therefore, I think after a period 
of time there will be a level of trust. No doubt there will be 
disagreements, and how they are ultimately resolved I do not 
know.
    The Chairman. Well, I would hope you would take that 
philosophy into your service on the Board and become a person 
who really wants to find a way to help make it work, and not to 
shut it down, as some perhaps would argue.
    Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman. I think your 
questions were excellent, Mr. Chairman, and highlighted a 
number of important issues.
    Mr. Laney, to begin with you, are you familiar at all with 
this General Accounting Office report?
    Mr. Laney. No, sir, I am not.
    Senator Wyden. Well, I would urge you, and I will make sure 
you have a copy, to look at it, because it is really scathing 
in terms of its criticism of how Amtrak goes about making 
decisions. I will just read you a couple of sections of it.
    They said with respect to the network growth strategy that 
Amtrak was proceeding in a speculative way. They said, and I 
quote here: ``There is no empirical basis for the revenue 
estimates.'' They said again, and I will quote, ``Amtrak did 
not obtain a full understanding of freight railroad concerns.'' 
The list just goes on and on in that kind of vein.
    I would like to begin by seeing if you agree with my 
judgment that it is time for a shift in Amtrak policy so that 
decisions are based on objective criteria. We can have a debate 
about what those objective criteria ought to be, and I think 
that is an appropriate thing to discuss, but I want us to go 
there as a public policy goal, to set out objective criteria. 
Do you agree with that judgment?
    Mr. Laney. What I bring to bear in this role, if confirmed, 
is my experience in the private sector and in the public 
sector. Objective performance criteria, and there is even some 
room for flexibility with those criteria, are enormously 
powerful in moving an organization from one point to another. I 
trust them if they are carefully thought out, and I support 
them if they are carefully thought out. I do not know what GAO 
had in mind, but I have been a party to the development of 
various performance criteria, and objective criteria, in 
virtually every operation I have been involved in. To the 
extent an organization can be moved forward, those types of 
criteria can help a lot.
    So generally speaking, yes. There are some situations where 
they do not apply that well.
    Senator Wyden. I think that is fair, and I am going to 
interpret that as a yes, with exactly the kind of qualification 
that is appropriate. I think that is a very reasonable 
orientation, and something on which we ought to have a debate.
    What I am concerned about is the politicizing of these 
routes, as we have seen again and again. In our part of the 
world there is enormous frustration. We have communities in 
rural Oregon that have done everything except hold bake sales 
in order to fund Amtrak service. They have agreed, for example, 
to levy per capita assessments on their constituents, so they 
understand that this is not the transportation policy of 
yesteryear where we are just going to heave money every which 
way and hope some of it works. I think that is a thoughtful 
answer and a constructive one.
    In the Amtrak markup that we considered earlier in the 
year, I sponsored an amendment to require that Amtrak's Board 
of Directors and top management comply with the same ethical 
standards as federal officials and employees. My concern has 
been that there has been a double standard, and particularly at 
Amtrak, a kind of revolving door which favors the East Coast of 
the United States, frankly, where people go back and forth on 
various parts of the East Coast of the United States, and it 
certainly gives the appearance, at a minimum, of having a bias 
in favor of those East Coast routes.
    I was able to get that into the markup of the Hollings-
Breaux legislation that we considered earlier this year. It 
stands ready to come before the Senate floor, and I would be 
interested in your position as to whether the same sort of 
ethical standards that are required of federal officials and 
employees ought to apply in the positions at Amtrak.
    Mr. Laney. Senator, if you do not mind my asking for a 
little clarification, this is a revolving door conflict of 
interest?
    Senator Wyden. Yes. I was concerned particularly that the 
head of Amtrak essentially spent all of his time in New Jersey, 
then went to the regional office, then went to the head of 
Amtrak, and now is back in New Jersey. He certainly at the time 
was making decisions that involved routing as it related to the 
East Coast of the United States. As a result of that, I did a 
review of the statutes in this area, and I found that there 
were not the same ethical requirements for officials on these 
Amtrak positions as there were for other federal officials.
    So on a unanimous basis this Committee agreed to the 
amendment that I have just described this afternoon, and that 
is something I feel strongly about. It is only fair that you 
have a chance to read it, but I would be interested in knowing 
as a general principle whether you think the same ethical 
strictures that apply to federal officials generally should 
apply in positions like the one in which you are being 
considered.
    Mr. Laney. Well, frankly, I am surprised to hear that the 
same ethical principles do not apply.
    Senator Wyden. I was very surprised as well.
    Mr. Laney. I assumed they did.
    Now, when you talk about the movement of the head of 
Amtrak, I presume you are talking about predecessors to David 
Gunn. Regardless, most of the expertise in this area is a 
product of the concentration of passenger rail in the 
Northeast, no question about that. Therefore, I am not 
surprised to see someone come to work for Amtrak and go back to 
work in some of the Northeast quadrant's rail operations. That 
does not surprise me. It does not particularly concern me, 
either, because I think we are after the most effective 
expertise, ultimately, that we can attract to Amtrak in moving 
this forward.
    I am surprised, and I do not have an answer for you other 
than to say, generally speaking, I cannot conceive of a basis 
for a difference in terms of ethical rules applicable to 
government employees versus Amtrak officials. There may be some 
reasons, but I am not aware of them.
    Senator Wyden. I appreciate that, and I was pretty 
flabbergasted when I reviewed the statutes as well. By getting 
unanimous support for the amendment in the Committee, I made it 
clear that I am not accusing anybody of any crimes or anything 
of the sort. I have no quarrel with the proposition that there 
is a lot of expertise in the Northeast part of the United 
States. But when these routes are being made, people are 
negotiating about aspects of routing that can affect their 
future employment, certainly it gives the appearance of 
impropriety. That is why the Commerce Committee adopted this 
change that I proposed.
    I appreciate your answers, and just a couple of questions 
for you, if I might, Mr. Nober. I think Senator Breaux covered 
very well the question of competition among railroads, and I 
thought your answers were helpful there.
    On the question of Class I carriers, and this touches 
particularly on the short line railroad issue, what are your 
thoughts regarding the appropriateness of Class I carriers 
determining what the route of a short line carrier can offer 
the customers through the methods that I essentially described 
in my opening statement?
    Mr. Nober. Well, Senator, I first would like to say that I 
think short line railroads provide a very critical link in the 
rail transportation network. They run routes that Class I 
carriers do not want to run anymore, or have chosen not to 
operate for whatever reason, and provide service to shippers 
that otherwise would not have it. Consequently, anything we can 
do to maintain a healthy and vibrant short line system I think 
is very important, and is a very important job of the Board's.
    People have said from time to time that when Class I 
carriers have sold their short lines, they have included 
conditions that have made it difficult for short lines to 
operate in the most effective manner. That is the kind of 
subject that, if I were on the Board, would need to be looked 
at and determined on a case-by-case basis. The Board reviews 
those sales on a case-by-case basis.
    Senator Wyden. The other question I had is, the small 
volume shippers are generally exasperated about the process.
    They look at the existing rate complaint process and say, 
it is complicated and almost too uncertain to be of any real 
value. I gather that nobody has ever even filed a case, not 
one, under the STB small rate case guidelines. I would be 
interested in knowing whether you share some of these concerns, 
and what you think you might be able to do to alleviate the 
concern of the small shipper as it relates to resolving rail 
disputes.
    Mr. Nober. Well, Senator, certainly I think looking at the 
process by which small shippers are able to file complaints at 
the Board would be one of the highest priorities I would have 
if I were confirmed and went down there. The Board has taken 
some steps recently, just yesterday, to try to ease some of the 
problems. They reduced the filing fees, and hope to reduce some 
of the procedures.
    As I said, I certainly support any steps that can be taken 
that would be reasonable, and that would help reduce the 
process. When I got down there, I certainly would look at the 
steps they've taken and any others that could be found to try 
to resolve this.
    Senator Wyden. I appreciate that. Again, like the ethical 
discussion I was having with Mr. Laney, I was pretty amazed 
that nobody had ever filed a case under the STB small rate case 
area because it seemed so complicated. I think we have just got 
to do better than that.
    Mr. Chairman, I share your view. I think these are two fine 
people, and difficult policy issues. I will be supporting both 
of you in the Committee and on the floor, and I hope both of 
those actions will take place very quickly.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Wyden. I would just follow 
up.
    Mr. Laney, I notice you mentioned you look forward to 
working and cooperating with management through Amtrak. Also, I 
am sure you mean working with labor as well. It is management 
and labor together, not just one side, but both sides. They are 
both integral parts of it.
    Another thing, Senator Wyden, I wanted to mention an area 
we are both very interested in, which is seniors in this 
country. One of our staff had an opportunity to take Amtrak 
from the West Coast all the way to the East Coast as a fact-
finding mission, and one of the things that he reported back 
was the extensive use of Amtrak by seniors, which is really 
interesting.
    They have a lot of disposable time on their hands because 
of retirement, and they enjoy the ability to move around on the 
train, as opposed to being confined on an airplane, and the 
opportunity to sit down and have a meal.
    I really think that perhaps that is something that Amtrak 
can really consider in their marketing efforts. Amtrak can be 
very attractive to the senior population, which is the fastest-
growing population in our country. The 77 million Baby Boomers 
will soon to be retiring and are becoming older Americans. That 
seems like a real opportunity for Amtrak to engage not just the 
commuters on the East Coast corridor, but seniors throughout 
this country who like the type of service that an Amtrak could 
provide. I would just encourage you all to take a look at that.
    Gentlemen, you have got a lot of support. We hopefully will 
be able to bring your confirmation to the floor of the Senate 
as quickly as possible before you leave, and good luck to both 
of you. We look forward to working with you.
    The hearing will stand adjourned.
    [Whereupon, at 3:30 p.m., the hearing was adjourned.]
     

                            A P P E N D I X

   Prepared Statement of Hon. Conrad Burns, U.S. Senator from Montana

    Mr. Chairman, this Committee has spent a great deal of time talking 
about rail competitiveness issues over the last several years, and 
we've had frequent discussions with the current STB chairman and other 
commissioners about how rail policy has been applied to the detriment 
of rail-to-rail competition. Unfortunately, despite these discussions, 
the STB still has done little to alleviate our concerns about the rail 
industry's monopoly power and how that power is being abused.
    In fact, recent decisions would indicate that the Board is instead 
moving in a direction that would further weaken the ability of captive 
rail customers to prevail in a rate case--which is about the only form 
of relief currently available.
    I have felt for some time that Congress must redirect federal 
freight rail policy by legislatively requiring various forms of rail-
to-rail competition and providing for a more simplified and time 
efficient dispute resolution process such as final offer arbitration. 
That's why I introduced S. 2245, the Railroad Competition, Arbitration 
and Service Act of 2002, and I am also a co-sponsor of S. 1103 the 
Railroad Competition Act of 2001.
    But while the legislative debate continues and is carried over into 
the 108th Congress, I certainly hope that Mr. Nober--should he be 
confirmed as the new Chairman of the STB--will pay more attention to 
the needs of the rail customer community the STB is supposed to be 
protecting than his predecessors have done. Frankly, if I had reason to 
believe that he would not take a new approach, I would be tempted to 
oppose his nomination.
    However, since we have been hoping to install a new STB Chairman 
for more than a year now, my constituents would not benefit were I to 
simply use this nomination to make a point. So instead, I strongly 
caution Mr. Nober to take a more aggressive stance in support of 
bringing rail-to-rail competition to bear on the rail industry.
    Although there may be some limitations on what the Board can do 
independent of congressional action, most observers accept that the 
competing tensions of the statute--the need to maximize competition 
while maintaining revenue adequacy--leave a great deal of room for 
discretion. For example, such discretion could be applied to things 
such as the availability of segment, or ``bottleneck'' rates, or the 
ability of a rail customer to gain competitive access through switching 
in a terminal area.
    The rail industry is no longer fragile and unable to stand 
additional competition as it was in the late 1970s. According to the 
fact books produced by the Association of American Railroads, the 
average annual return on net investment in the railroad industry was 
just: 2.3 percent in the 5 years prior to the Staggers Act (1976-1980) 
compared to an annual average of approximately 7.5 percent 20 years 
later (1996-2000), or nearly a threefold increase. Similarly, return on 
equity increased nearly threefold, from an average annual figure of 3.5 
percent during the 5-year period prior to Staggers, to 9.5 percent in 
the 5-year period 20 years later.
    Furthermore, evidence shows that competition among railroads 
works--and does so without harming the industry's financial picture. 
Here in the U.S., competitive access through trackage rights was 
imposed over 4,000 miles of the UP/SP track, and both the UP and BNSF 
have testified before Congress that they're working well. Shared asset 
areas were adopted in a few terminal areas as part of the Conrail split 
without negative consequences. And our neighbors to the north have 
demonstrated that similar policies promoting competition can work well 
without causing financial harm.
    The future success of railroading must be based on meeting the 
changing needs of a growing customer base. Yet without competition, 
this future will not be realized.
    Mr. Nober, upon confirmation, I urge you to use your position as 
STB Chairman to help shape the railroad industry into one that offers 
competitive services to all of its customers. I also encourage you to 
modify the STB's regulatory approach to one that encourages 
intermod'.al and intramodal competition while offering streamlined and 
cost-effective relief to rail users that are not benefiting from such 
competition.
    Not only will such an approach be help shape the ultimate outcome 
of the pro-competitive policy changes my colleagues and I are 
supporting, but it also will prepare railroads for their evolution from 
a monopoly into an increasingly competitive businesses.
    Thank you, Mr. Chairman.

                               __________
      Response to Written Questions Submitted by Hon. John McCain 
                         to David McQueen Laney

    Question 1. Mr. Laney, as a nominee to serve on the Amtrak Board, 
how familiar are you with Amtrak's current financial and operational 
situation? What do you see as Amtrak's fundamental problems and how do 
you hope to address them?
    Answer. My familiarity with Amtrak's current financial and 
operational situation is cursory at best, principally a product of 
newspaper reports. Amtrak's fundamental problems are credibility on the 
one hand, and lack of any clearly defined position within the overall 
framework of national transportation policy on the other. There are, of 
course, fundamental organizational, management, labor, operational, and 
financial problems as well.
    Question 2. What do you consider to be the appropriate role of the 
Amtrak Board of Directors? Do you see yourself as taking an active role 
in determining the future of Amtrak? Who do you believe you represent 
in your capacity as a Board member?
    Answer. The roles of the Amtrak Board of Directors are numerous; in 
general terms, they include hiring, firing and compensating the chief 
executive officer, and providing oversight of the performance of 
management an against established performance criteria, usually in the 
form of a strategic business plan developed and adopted by the Board. I 
do see myself as taking an active role in shaping the future of Amtrak. 
There are a number of constituencies I view the Board as representing, 
but the principal constituencies are Congress, the Administration and 
current and potential passenger rail users.
    Question 3. As you may be aware, since the current Board was 
appointed in 1998, Amtrak's debt load has quadrupled to over $4 
billion. Further, Amtrak's new President, David Gunn, has publicly 
stated that Amtrak officials were not providing Congress or the 
American taxpayers with factual information in regard to it being on 
the so-called ``glidepath to self-sufficiency. It is my belief that the 
Board has utterly failed in meeting its fiduciary responsibilities.''
    Answer. I do not have information sufficient to conclude that the 
``Board has utterly failed in meeting its fiduciary responsibilities.'' 
From a distance, the apparent lack of adequate financial information or 
lack of adequate disclosure of such information, or both, is 
troublesome.
    Question 4. Given your considerable legal expertise, under what 
circumstances do you consider it appropriate to demand that a board of 
directors resign?
    Answer. Malfeasance or criminal activity on the part of all Board 
members could lead to a demand that an entire Board of directors 
resign. Nonetheless, it is extraordinarily rare that the resignation of 
an entire Board of Directors of any business would be in the best 
interests of that business or any parties interested in the stability 
and continuity of that business.
    Question 5. What is your view of the Administration's proposal 
announced by Secretary Mineta in June for reforming Amtrak ?
    Answer. Regarding my view of the Administration's proposal 
announced by Secretary Mineta, I should first say that without a more 
detailed understanding of Amtrak organization, finances, and 
operations, I am not in a position to judge with any real comfort. On 
the other hand, I did find elements of the proposal--which I presume 
mirrors the ARC proposal--to be intriguing possibilities.
    Question 6. What do you believe is the appropriate role of the 
states in intercity passenger rail service in terms of service 
planning, oversight, and, perhaps most importantly, funding?
    Answer. The role of the states in intercity passenger rail service 
in terms of service planning, oversight and funding is evolving, and 
almost certainly will, and should, become more actively participatory. 
Principal issues relating to that evolution of the states' roles 
include uniformity of approach and service quality from state to state, 
coordination of state activity, and the pace, method and terms by which 
state roles evolve. That process cannot begin effectively, in my 
judgment, until Amtrak's core operations and relations among Amtrak, 
Congress and the Administration are stabilized.
    Question 7. I believe Amtrak operates three routes in Texas: the 
Sunset Limited, the Texas Eagle and the Heartland Flyer. The Sunset 
Limited lost $347 per passenger in fiscal year 2001 and the Texas Eagle 
lost $258 per passenger. Do you think this kind of subsidy is 
warranted? How do you believe decisions should be made to add, reduce 
or eliminate train service?
    Answer. I do not know what absolute level of subsidy is warranted; 
but I do believe that some level of subsidy is probably unavoidable. I 
am a bit wary of singling out and judging any route on a stand-alone 
basis based solely upon its per passenger expense level. As for 
decisions to add, reduce or eliminate train service, I do not know the 
criteria currently utilized by Amtrak management, or the criteria that 
should be considered. I don't know the rationale by which any 
particular route has been added or eliminated, so I don't believe I am 
in a position to speak to the appropriate criteria for Amtrak's route 
selection.
    Question 8. As you may be aware, earlier this summer Amtrak 
threatened to shut down its entire system unless it received additional 
and immediate assistance from the federal government. While I had no 
doubts about the urgency of the financial situation, I question why Mr. 
Gunn threatened to shut down commuter trains operated by Amtrak on a 
contractual basis, and to shut down all operations on the Northeast 
Corridor, including freight and commuter service. The threat of a halt 
in service had commuter authorities scrambling and, to me, demonstrated 
why Amtrak should not control the Northeast Corridor infrastructure.
    At a minimum, shouldn't we expect Amtrak to have a contingency plan 
in place to prevent this kind of calamitous situation from recurring? 
Would you be willing to commit to working with Amtrak and the DOT 
Secretary to develop such a plan?
    Answer. I do not know all of the circumstances that led to Mr. 
Gunn's ``shut down'' announcement, nor am I aware of all the effects 
the threatened shut down had on commuter and freight operations 
throughout the Northeast Corridor. I would like to think that approach 
could be avoided in the future, and I would certainly be willing to 
work with Amtrak and DOT to develop an alternative approach in dealing 
with any comparable situation should it occur.
    Question 9. In a normal business, the consequences of not meeting a 
company's business plan include a lower stock price, cost-containment 
measures, reductions in service, salary freezes, and the elimination of 
bonuses. Amtrak has consistently failed to meet its business plan, but 
the only real consequence has been to increase the financial burden on 
the American taxpayers. What consequences should apply to Amtrak? 
Wouldn't the introduction of competition help motivate Amtrak to 
operate more efficiently and follow through on its business plan?
    Answer. If Amtrak were a normal business, by now it would have 
failed. Of course, it is not a normal business. But it is a business 
that could use a realistic and viable business plan, and the greatest 
discipline for virtually any business operation is competition or the 
threat of competition.
    Question 10. Amtrak (i.e., the taxpayers) funds most of the capital 
costs of the Northeast Corridor even though most of the trains on the 
corridor are commuter, not Amtrak trains. The current capital backlog 
on the corridor is estimated to be about $5 billion and there is an 
annual need for $1 billion in capital to maintain the corridor. Yet the 
commuter authorities using the Corridor reimburse Amtrak only for their 
incremental costs. In fiscal year 2001, this amounted to less than $100 
million. Given Amtrak's financial problems, would you support a 
reevaluation of the allocation of the capital costs on the Northeast 
Corridor to more accurately reflect usage?
    Answer. Deferred and current capital investment needs must be 
credibly identified, prioritized and covered to preserve the value of 
the NEC infrastructure asset for Amtrak, for any Amtrak successor(s), 
and for reasons of current safety and service reliability. Recovering a 
greater percentage of those costs currently borne by Amtrak seems 
appropriate, even essential considering Amtrak's current circumstances. 
I should add, however, that I do not know why Amtrak bears such a 
seemingly disproportionate share of these costs, and what reasons there 
might be to continue such an allocation. I am a bit uncomfortable in 
making any absolute assertion without a more complete understanding of 
how the current situation occurred.

  Response to Written Questions Submitted by Hon. Ernest F. Hollings 
                         to David McQueen Laney

    Question 1. Amtrak has a number of challenges facing it as we 
debate in Congress its future and the future of passenger rail in this 
country. What tools do you feel Amtrak needs to address these 
challenges and succeed in its mission to operate a ``national rail 
passenger transportation system?''
    Answer. First, passenger rail as a concept needs consensus support 
as an essential element of our national transportation policy, whether 
or not that concept is tied to Amtrak itself. Amtrak itself will have 
to be the starting point for any revitalization of passenger rail as an 
element of our national transportation policy, and it will need 
adequate and predictable levels of funding, ideally from permanent, 
dedicated sources. Such funding will likely not be available until 
Amtrak itself reestablishes its own credibility with Congress and the 
Administration, which in turn will require a viable and realistic 
strategic plan by which Amtrak's progress and performance can be 
measured.
    Question 2. The Administration has proposed funding Amtrak with 
$521 million for fiscal year 2003, which is less than half of what 
Amtrak has stated it will need to continue operations. What do you 
think about the Administration's proposal? Isn't this basically a 
bankruptcy declaration for the railroad?
    Answer. I do not believe that the Administration wants to see 
Amtrak bankrupt. As I understand it, the $521 million is roughly the 
level of actual funding Amtrak has received for years. Although I have 
not spoken with Administration officials on this issue, I would like to 
think that there could be flexibility in that number as long as 
Amtrak's management develops a credible alternative budget proposal in 
the context of an overall plan acceptable to the Administration by 
which progress could be measured.
    Question 3. In your experience as Chairman of the Texas 
Transportation Commission, how much money do states like Texas have in 
their transportation budgets for passenger rail service? Do you feel 
federal funding is essential to maintain intercity passenger rail 
service?
    Answer. Texas had virtually no money in these transportation 
budgets for passenger rail service; I am not familiar with other 
states' transportation budgets. Assuming most states are similarly 
situated in terms of their transportation budgets, federal funding is 
essential to maintain intercity passenger rail service. I could 
envision the states assuming a more participatory role over time.
    Question 4. The state of Texas made a $5.6 million loan to Amtrak 
in 1997 for the Texas Eagle; the loan was paid back early in full, but 
only after, I understand, the state required every town along the route 
to co-sign the loan. As Chairman of the Texas Transportation 
Commission, what was your role in the loan transaction?
    Answer. As Chairman of the Texas Transportation Commission, I 
oversaw the development of the loan structure and terms, worked with 
the state legislature and Governor's office, and ultimately approved 
the loan.
    Question 5. Are you familiar with S. 1991, the National Defense 
Rail Act, which this Committee reported out earlier this year by a vote 
of 20-3? If so, do you have any comments about the legislation, and how 
important do you feel it is that Congress make passenger rail a 
priority?
    Answer. I have reviewed summaries of S. 1991, although I am not yet 
intimately familiar with it or in a position to comment on the 
substance of the legislation. I do believe that Amtrak is at a pivotal 
juncture, which provides Congress with a unique opportunity to clarify 
passenger rail as an important and permanent element of our national 
transportation policy.

                               __________
      Response to Written Questions Submitted by Hon. John McCain 
                           to Roger P. Nober

    Question 1. What do you consider to be the most important issue 
facing the STB?
    Answer. I believe that the most important and continuing challenge 
for the Board is to continue to serve as a fair, impartial and 
efficient forum to adjudicate the issues that Congress has vested with 
it. While I do not believe that it would be appropriate for me to 
discuss particular issues that may come before the Board, I do believe 
there are several general areas that merit mention. For example, there 
appears to be a significant divide between railroads and certain of 
their customers with respect to rates and service issues, and there 
also appears to be ongoing concern about the possibility of future rail 
mergers.
    Question 2. You have a unique perspective on the STB since you 
helped formulate the legislation that created the Board. What do you 
consider to have been the biggest accomplishments of the Board since it 
was established and do you believe there are changes that should be 
made--through either legislation or regulation--to improve its 
effectiveness?
    Answer. I am particularly pleased to have been nominated by the 
President to this position because I helped formulate the legislation 
that created the Board. It is an agency that has faced significant 
challenges in the past and I look forward to the opportunity to help 
guide it into the future.
    I believe the biggest accomplishment for the Board has been its 
handling of matters vested in it by Congress--successes which are 
reflected in its work product, its favorable record in the reviewing 
courts, and its encouragement of private-sector resolutions. Of course, 
the Board must constantly review its processes to ensure that its law 
is being administered appropriately and effectively and that they 
reflect the ever-evolving surface transportation marketplace. If 
confirmed, I would work to ensure that the Board continued to do so.
    I believe it is important to work closely with Congress, and if I 
confirmed I would work closely with Congress on any legislative changes 
that it believes might be necessary or appropriate. And if Congress 
should conclude that legislative changes are necessary or appropriate, 
the Board should be prepared to implement the changes and administer 
the revised law in an effective manner.
    Question 3. What do you consider will be your primary role as 
Chairman of the STB? Who do you believe you represent in this position?
    Answer. The Chairman and the other Board members must implement the 
law and represent the public interest, which embraces and must take 
into account all those affected by the Board's actions. The Chairman 
also has a significant management role as well, and I believe that a 
primary role of the Chairman is to manage and lead the agency, as well 
as to work to establish the overall agenda for the Board. The Chairman 
should ensure that the Board's docket of cases is handled efficiently 
and effectively in accordance with the statute.
    Question 4. What is your view of the consolidation that has taken 
place in the rail industry over the past 20 years? Have the recent 
mergers produced their forecasted benefits?
    Answer. I understand there is significant concern about the 
increased consolidation in the rail industry over the past two decades. 
This concern is similar to the concerns expressed about consolidation 
in other transportation modes, as well. The STB has been vested with 
the authority to review each merger in the railroad industry. Each 
transaction must be looked at on its own merits and reviewed according 
to the facts and the law.
    Question 5a. As you know, the Board was directed to issue new 
guidelines for small rate cases as part of the ICC Termination Act, and 
it published simplified guidelines for use in small rate cases in 1996. 
I understand that not a single case has been filed under the new 
procedures. Why do you believe that is? After all, we often hear that 
small shippers are dissatisfied with rail rates. Doesn't this indicate 
to you that perhaps the guidelines need more work?
    Answer. I understand that many small shippers remain dissatisfied 
with the procedures for consideration of small rate cases at the Board. 
If confirmed, one of my priorities would be to look very carefully at 
this issue to determine the extent and merits of the problem and 
whether there are any regulatory measures the Board could take to 
address these concerns in a fair and equitable manner.
    Question 5b. Is this an issue that Congress needs to address?
    Answer. If these issues could not be addressed further through 
regulatory action, then the Congress may wish to address it 
statutorily.
    Question 5c. If confirmed, what will you do to address this issue?
    Answer. As I have indicated, if confirmed I would continue to see 
if there is anything more that the Board could do in this area and 
assist Congress as appropriate in any legislative examination of the 
issue that it might wish to pursue.
    Question 6. As you know, some shippers support open access to 
create competition between railroads and force rates down. Do you think 
the current statute and regulations with respect to maximum rates 
sufficiently protect shippers from abusive rates?
    Answer. I understand that this is an issue that some shippers would 
like to see the Board take further action on. However, I also 
understand that parties are seeking to clarify and refine the rate 
standards and processes in several pending cases before the Board. I do 
not believe that it would be appropriate for me to comment on the 
issues raised in the pending cases. I can assure you, however, that I 
would give those cases careful attention if I am confirmed.
    Question 7. What is your view on the use of arbitration to settle 
rate disputes? When do you think the use of arbitration is appropriate?
    Answer. I am aware that alternative dispute resolution (ADR) has 
been used in other areas with success and I believe that ADR should be 
encouraged for settling rate disputes. If confirmed, I would look 
carefully at the use of ADR for settling rate cases and work with all 
of the parties to address the issues its expanded use raises.
    Question 8. Legislation has been introduced in the House to give 
the Board authority to order directed service in the event of an Amtrak 
shut-down. The Board would be able to order continued maintenance, 
signaling, and dispatching on the Northeast Corridor. It would also be 
able to order the continuation of commuter services around the country. 
What is your view of this proposal?
    Answer. Since I have not yet been confirmed, I do not believe it 
appropriate to comment in detail on legislative proposals pending in 
Congress that affect the Board. However, I believe that the Board has 
the expertise to handle these matters, if the Congress determines that 
vesting the Board with such authority is necessary. But, of course, 
cooperation among the parties would also be required.

                               __________
    Response to Written Questions Submitted by Hon. Conrad R. Burns 
                           to Roger P. Nober

    Question 1. How does the Board's new segmented stand-alone cost 
test help smaller shippers who already feel they have no regulatory 
recourse?
    Answer. Both of these questions relate to substantive issues 
contained in the decision issued by the Board on August 20, 2002, in 
STB Docket No. 42054, PPL Montana, LLC v. The Burlington Northern and 
Santa Fe Railway Company. It is my understanding from the Board that 
PPL Montana, the complainant in that case, has requested and received 
from the Board an extension of time, until September 30, 2002, in which 
to file a petition for Board reconsideration of that decision. Thus, it 
appears that the Board will be called upon to reconsider its decision 
and issue a ruling on that request for reconsideration.
    Question 2. Is it appropriate for the STB to administratively 
deregulate rail rates on branch lines, as the PPL Montana decision 
appears to do?
    Answer. I do not believe that it would be appropriate for me to 
comment on any case that is currently before the Board or that is 
likely to come before me if I am confirmed as a Board member. 
Therefore, I do not believe it is appropriate for me to comment on the 
aspects of these decisions that you have raised at this time.
  
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