[Senate Hearing 115-880]
[From the U.S. Government Publishing Office]
S. Hrg. 115-880
NOMINATION TO
THE FEDERAL TRADE COMMISSION AND
THE SURFACE TRANSPORTATION BOARD
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
APRIL 11, 2018
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available online: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
57-802 PDF WASHINGTON : 2025
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
JOHN THUNE, South Dakota, Chairman
ROGER WICKER, Mississippi BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri MARIA CANTWELL, Washington
TED CRUZ, Texas AMY KLOBUCHAR, Minnesota
DEB FISCHER, Nebraska RICHARD BLUMENTHAL, Connecticut
JERRY MORAN, Kansas BRIAN SCHATZ, Hawaii
DAN SULLIVAN, Alaska EDWARD MARKEY, Massachusetts
DEAN HELLER, Nevada TOM UDALL, New Mexico
JAMES INHOFE, Oklahoma GARY PETERS, Michigan
MIKE LEE, Utah TAMMY BALDWIN, Wisconsin
RON JOHNSON, Wisconsin TAMMY DUCKWORTH, Illinois
SHELLEY MOORE CAPITO, West Virginia MAGGIE HASSAN, New Hampshire
CORY GARDNER, Colorado CATHERINE CORTEZ MASTO, Nevada
TODD YOUNG, Indiana JON TESTER, Montana
Nick Rossi, Staff Director
Adrian Arnakis, Deputy Staff Director
Jason Van Beek, General Counsel
Kim Lipsky, Democratic Staff Director
Chris Day, Democratic Deputy Staff Director
Renae Black, Senior Counsel
C O N T E N T S
----------
Page
Hearing held on April 11, 2018................................... 1
Statement of Senator Thune....................................... 1
Support letter dated March 12, 2018 to Hon. John Thune, Hon.
Bill Nelson, Hon. Deb Fischer, and Hon. Gary Peters from 21
members of the fertilizer and agribusiness community....... 54
Support letter dated April 10, 2018 to Hon. John Thune and
Hon. Bill Nelson from agricultural producers and
agribusinesses............................................. 54
Support letter dated May 23, 2017 to Hon. Donald J. Trump
from Ann Warner, Executive Director, Freight Rail Customer
Alliance................................................... 56
Support letter dated March 26, 2018 to Senator John Thune and
Senator Bill Nelson from E. Michael O'Malley, President,
Railway Supply Institute................................... 57
Support letter dated April 10, 2018 to Chairman John Thune
from Chris Keuleman, Vice President, Global Government
Relations, International Paper............................. 58
Support letter dated April 11, 2018 to Hon. John Thune and
Hon. Bill Nelson from Tyler White, President, Kentucky Coal
Association................................................ 58
Statement of Senator Nelson...................................... 2
Prepared statement........................................... 2
Statement of Senator Wicker...................................... 37
Statement of Senator Cortez Masto................................ 39
Statement of Senator Cantwell.................................... 41
Statement of Senator Markey...................................... 43
Statement of Senator Inhofe...................................... 45
Statement of Senator Heller...................................... 47
Statement of Senator Peters...................................... 49
Statement of Senator Blunt....................................... 51
Witnesses
Hon. Charles Schumer, U.S. Senator from New York................. 4
Rebecca Joy Kelly Slaughter, Nominee to be a Commissioner,
Federal Trade Commission....................................... 7
Prepared statement........................................... 8
Biographical information..................................... 9
Michelle A. Schultz, Nominee to be a Member, Surface
Transportation Board........................................... 13
Prepared statement........................................... 14
Biographical information..................................... 15
Patrick J. Fuchs, Nominee to be a Member, Surface Transportation
Board.......................................................... 22
Prepared statement........................................... 24
Biographical information..................................... 25
Appendix
Response to written questions submitted to Rebecca Joy Kelly
Slaughter by:
Hon. John Thune.............................................. 61
Hon. Roy Blunt............................................... 61
Hon. Jerry Moran............................................. 62
Hon. Dan Sullivan............................................ 62
Hon. Amy Klobuchar........................................... 63
Hon. Richard Blumenthal...................................... 63
Hon. Brian Schatz............................................ 66
Hon. Tom Udall............................................... 68
Response to written question submitted to Michelle A. Schultz by:
Hon. Dan Sullivan............................................ 69
Hon. Dean Heller............................................. 69
Hon. Bill Nelson............................................. 70
Hon. Amy Klobuchar........................................... 71
Hon. Richard Blumenthal...................................... 71
Hon. Tammy Baldwin........................................... 71
Response to written question submitted to Patrick J. Fuchs by:
Hon. Dan Sullivan............................................ 72
Hon. Dean Heller............................................. 73
Hon. Bill Nelson............................................. 73
Hon. Amy Klobuchar........................................... 75
Hon. Richard Blumenthal...................................... 75
Hon. Tammy Baldwin........................................... 76
NOMINATION TO
THE FEDERAL TRADE COMMISSION AND
THE SURFACE TRANSPORTATION BOARD
----------
WEDNESDAY, APRIL 11, 2018
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 10 a.m. in room
SR-253, Russell Senate Office Building, Hon. John Thune,
Chairman of the Committee, presiding.
Present: Senators Thune [presiding], Inhofe, Wicker, Blunt,
Heller, Fischer, Gardner, Sullivan, Nelson, Cantwell, Tester,
Markey, Peters, Hassan, and Cortez Masto.
OPENING STATEMENT OF HON. JOHN THUNE,
U.S. SENATOR FROM SOUTH DAKOTA
The Chairman. Well, good morning. Today we welcome three
well-qualified nominees to testify before the Senate Commerce
Committee. The nominees before us today have been nominated to
two important independent agencies, Becca Slaughter, to be a
Commissioner at the Federal Trade Commission, and Michelle
Schultz and Patrick Fuchs, to be Members of the Surface
Transportation Board.
Thank you, Ms. Slaughter, Ms. Schultz, and Mr. Fuchs, for
your willingness to serve, and thank you to your families for
your presence here today.
I also want to congratulate Ms. Slaughter on the most
recent addition to her family, a little girl who was born only
last week.
The FTC oversees competition and consumer protection across
large segments of the U.S. economy. Congress originally created
the FTC as an independent agency in 1914 to address the problem
of monopolies and trusts, but its role has evolved to include
its modern-day consumer protection mission, a mission that will
likely continue to grow as new technologies emerge in the 21st
century marketplace.
Ms. Slaughter has been nominated to become a Commissioner
at the FTC. She is a graduate of Yale College as well as Yale
Law School, and the majority of her career has been right here
on Capitol Hill working for Senate Minority Leader Chuck
Schumer. Throughout her time on Capitol Hill, she has developed
a reputation as a talented staffer with an ability to work
across the aisle. This will serve her well at the FTC.
The STB is responsible for the regulatory oversight of our
Nation's freight rail network. In states like South Dakota,
where farmers and businesses depend on rail service to get
their products to market, the STB plays a critical role in
ensuring access to reliable and efficient rail service for
large and small shippers alike.
Ms. Schultz is an exceptionally well-qualified nominee for
the STB, having worked at the Southeastern Pennsylvania
Transportation Authority, or SEPTA, for the past 11 years. She
currently serves as Deputy General Counsel and, in that role,
is responsible for advising SEPTA on complex regulatory,
statutory, and administrative law matters at the local, State,
and Federal level. Relevant to this Committee, Ms. Schultz
provided guidance to the U.S. Senate on compliance issues
involving the Federal mandate for positive train control
implementation for public passenger transportation.
Finally, Patrick Fuchs has served on this in an invaluable
role as a senior professional staff member for me on this
Committee for the past 3 years. His extensive knowledge of the
transportation industry, especially with respect to rail
operations, as well as his insight into the legislative
process, has been instrumental to this Committee's work.
During his time serving this Committee, Patrick drafted and
played a critical role in the successful passage of the Surface
Transportation Board Reauthorization Act, the first
reauthorization of the Board since its creation. The bill
included important changes for agricultural producers and
businesses, establishing the STB as a fully independent agency,
directing the STB to set shorter timelines for reviewing rate
cases and providing the agency with the ability to proactively
resolve problems before they escalate into larger disputes by
conducting investigations on the agency's own initiative. The
Act also sought to promote collaboration among the Board
members by allowing them to discuss agency matters with one
another with proper disclosure.
Patrick was also instrumental in drafting many other
important pieces of legislation, including the FAST Act and the
first passenger rail reauthorization in over 7 years. Prior to
working on the Committee, Patrick served as a policy analyst on
transportation and security matters at the Office of Management
and Budget.
Those of us who have had the opportunity to work with
Patrick have seen firsthand how incredibly capable and talented
he is.
I am confident that the Surface Transportation Board will
be extremely well served by Patrick's experience, expertise,
and dedication, and while we will certainly miss his hard work
on the Commerce Committee, I know he is looking forward to
serving on the STB.
And we have our Chairman, Ann Begeman, here today, who is
anxious, I think, probably to get a full complement of folks to
work with her over there on the Board.
As I've noted, all three of these nominees are
exceptionally well qualified to serve the Nation in the
positions to which they've been nominated. They have all
demonstrated their dedication to working on the important
issues facing our country, and I look forward to their swift
confirmation.
Once again, I want to thank you all for testifying today,
for your willingness to fill these important positions, to your
families for being here, and for their willingness to support
you.
And I will now turn to our Ranking Member, Senator Nelson,
for any opening remarks.
STATEMENT OF HON. BILL NELSON,
U.S. SENATOR FROM FLORIDA
Senator Nelson. Mr. Chairman, since I'm filler until
Senator Schumer gets here, do you want to me kind of speak in a
slow southern draw?
[Laughter.]
The Chairman. That would be--that would be good.
Senator Nelson. Mr. Chairman, I also want to extend a warm
welcome to the three nominees. Last month, we had a hearing for
four of the nominees to the FTC, and I'm pleased that we
finally have the fifth nominee to the agency, Rebecca Kelly
Slaughter. Ms. Slaughter gave birth to a daughter, Pippa, just
about 9 days ago.
The FTC is a small agency with a critical mandate
protecting consumers from unfair or deceptive acts or
practices. They go after robocallers that harass consumers and
boiler room scams that try to rip off seniors. In addition,
they make sure that multibillion dollar tech companies protect
personal data and ensure that they follow their privacy
policies regarding the sharing of that data.
And, sadly, as we heard at yesterday's hearing with
Facebook, protecting privacy does not always happen, and the
consequences can be grave. And right now, under the law, the
FTC is, in fact, charged with that responsibility, and that
subject came up more than a couple of times in yesterday's
hearing.
Now, thankfully, we have a nominee here today that is up to
addressing this very important task. Ms. Slaughter currently
serves as Chief Counsel to Senator Schumer, to the minority
leader. Now, Ms. Slaughter, since he got an 800 on his SAT and
a perfect score on his LSAT, I want you to tell us what it's
like being Chief Counsel.
[Laughter.]
Senator Nelson. She has certainly served in that position
as trusted advisor on antitrust, technology, privacy, consumer
protection issues.
And, Senator Schumer, I started out purposely slowly
because I was the filler between this and you getting here, but
you're already here.
So I will insert the rest of my opening comments, Mr.
Chairman, and----
[The prepared statement of Senator Nelson follows:]
Prepared Statement of Hon. Bill Nelson, U.S. Senator from Florida
Mr. Chairman, let me also extend my warm welcome to the three
nominees we have here today for positions on two critical independent
agencies.
Last month, we had a hearing for four of the nominees to the
Federal Trade Commission, and I am pleased that we finally have the
fifth nominee to the agency--Rebecca Kelly Slaughter. Ms. Slaughter
gave birth to a daughter, Pippa, not nine days ago.
The FTC is a small agency with a critical mandate--protecting
consumers from ``unfair or deceptive acts or practices.''
They go after robocallers that harass consumers and boiler room
scams that try to rip off seniors.
In addition, they make sure that multi-billion-dollar tech
companies protect personal data and ensure that they follow their
privacy policies regarding the sharing of that data.
Sadly, as we heard at yesterday's hearing with Facebook, protecting
privacy does not always happen. And the consequences of that can be
grave.
Thankfully, we have a nominee here today that is up to addressing
this herculean task.
Ms. Slaughter currently serves as chief counsel to Minority Leader
Schumer. In that position, she has served as his trusted advisor on
antitrust, technology, privacy and consumer protection issues.
The Surface Transportation Board is also a vital independent agency
that helps ensure we have a strong and efficient rail network to move
freight throughout the United States.
This sixty billion industry dollar that generates more than two
hundred thousand jobs moves more freight than any other freight rail
system in the world.
As we know all too well in the state of Florida, the railroad
industry is an important part of our economy.
Without reliable and cost-effective rail service, my state and our
Nation would not be able to compete in the global market.
Our rail network also serves an important role by providing
passenger rail service. Such service requires good on-time performance
so that people can get to where they need to be when they need to be
there.
In Florida, we are striving to restore passenger service along the
Gulf Coast. Since Hurricane Katrina, there has been no passenger rail
service along the coast.
This critical service would improve accessibility for more than two
million residents between Louisiana and Florida that includes a growing
senior population.
It also would benefit tourism and the economy for towns and cities
along the Florida Panhandle.
At some point, the Surface Transportation Board may need to weigh
in on Gulf Coast passenger service, and I hope the witnesses today
recognize the importance of that rail service.
To both the nominees for the Surface Transportation Board, I
appreciate your willingness to serve in these critical transportation
positions.
I particularly want to thank Patrick Fuchs [FOEKS] for his work on
Chairman Thune's side of the Commerce Committee.
Mr. Fuchs has been an important partner in helping to establish
bipartisan freight and passenger rail legislation. His questionnaire
notes that his nickname is PACO.
His assistance during the FAST Act helped to establish the first
passenger rail reauthorization in a surface transportation bill.
And I now look forward to hearing from the witnesses and our
Minority Leader Chuck Schumer.
The Chairman. Thank you, Senator Nelson. And we're very--
want to welcome, glad to be joined this morning by the Democrat
leader in the U.S. Senate, Senator Chuck Schumer, from New
York, who is here to make an important introduction, and
probably talks a little differently than the Senator from
Florida.
Senator Schumer. A lot of my constituents speak just like--
--
[Laughter.]
The Chairman. Well, and a lot of your constituents are his
constituents for the winter months, too, so----
[Laughter.]
The Chairman. Senator Schumer, welcome. Thank you for being
here.
STATEMENT OF HON. CHARLES SCHUMER,
U.S. SENATOR FROM NEW YORK
Senator Schumer. Thank you. Thank you, Mr. Chairman. Thank
you, Senator Nelson, Senator Wicker, Senator Cortez Masto.
First, thank you for having this hearing the day after
yesterday's. I hope this hearing is a little shorter and a
little less controversial than the one you had yesterday, where
I thought you all did a good job, for whatever that's worth.
And let me also say it's my pleasure to introduce the next
nominee to be the FTC--to be a Federal Trade Commissioner,
Rebecca Kelly Slaughter.
As the Committee is no doubt aware, Rebecca has served on
my staff for nearly 10 years. She started out as Rebecca Kelly,
ended up as Rebecca Kelly Slaughter. One of my few regrets
about Rebecca is it was not one of these famous Schumer
marriages. She married somebody outside the staff.
[Laughter.]
Senator Schumer. But, anyway, but a very fine man, who is
here as well.
As the Committee is no doubt aware, she had been with me a
long time. Her first stint in my office came when she spent the
summer interning during law school. I doubt it was ever her
intention to stay 10 years that summer. Our Chief Counsel,
though, thought so highly of her that after her internship had
ended, he asked her if she was available to stay on to assist
in the nomination of a Supreme Court Justice. Rebecca could
have informed him she was at Yale Law School and a bit busy at
the moment, but, instead, she promptly took leave of absence
from school to assist our office.
After graduating from law school and a spell at a
prestigious law firm, she rejoined my staff, where she served
as Counsel and eventually as Chief Counsel. In that time, she
worked and made great progress on issues ranging from robocalls
to patent trolls, intellectual property, consumer protection.
As a member of my Judiciary Committee staff, she played an
integral role in the confirmation of judicial nominations,
including several Supreme Court Justices. The Federal bench in
Upstate New York, in particular, is more talented and more
diverse because of Rebecca's great work.
What stands out about Rebecca is her shining intellect and
ability to puzzle out solutions to the most complex of
problems. She has always worked on issues dominated by
competing interests, the great issues of privacy versus
security, which have wracked our Republic from its founding,
between freedom and commerce, and appropriate restraints to
protect consumers and defend against monopoly.
As I said, these questions are as old as the Republic
itself, and it was their messy intersection that Rebecca's
quality came to the fore, not only to understand the
intricacies of the law as it relates to complex subjects, but
to actually find a balance, bringing competing stakeholders
together to forge compromise. She works--would work so
diligently on issue after issue after issue, and every so often
I'd get a call at 10 p.m., ``I think I found a solution that
Cornyn's staff will go along with.''
[Laughter.]
Senator Schumer. Indeed, she has been able to work across
the aisle for years to make bipartisan progress. She would
rather build consensus than cross swords, and it's that
quality, in addition to her expertise and her intellect, that
makes her so qualified for the FTC, where consumer protection,
privacy, and antitrust issues demand finding a delicate balance
within the law, and between Commissioners from different
stations on the political spectrum.
Rebecca has proven time and time again that she's a tough
but fair negotiator who can get things done, which I know is
something this Committee cares a lot about in its own actions,
and she will take those skills to fight for American consumers.
Outside these walls, and it shows you her resilience, she's
the mother of three beautiful children. I love it when they
come visit the office. Her son Teddy--wave, Teddy.
[Laughter.]
Senator Schumer. Her daughter Eloise.
[Laughter.]
Senator Schumer. And her little new baby, Pippa, who Justin
has, who is 9 days old. So it shows you her strength and
resilience. Here she is with little Pippa. Her real name is
Philippa, Philippa Hope Slaughter. They're getting rid of the
``Kelly,'' not so good.
[Laughter.]
Senator Schumer. They're with her today. Now, I'm sure in a
few years, Pippa will join Teddy and Ellie in their love for
the song ``Hamilton,'' the soundtrack ``Hamilton.'' They love
it. They sang it to me.
[Laughter.]
Senator Schumer. Teddy and Ellie are particularly fond of
the song where Thomas Jefferson tells Alexander Hamilton, ``You
don't have the votes.''
[Laughter.]
Senator Schumer. I ask respectfully they hold off on
singing that one until their mother has cleared the Committee.
[Laughter.]
Senator Schumer. My esteemed colleagues, it's difficult for
anyone to reflect upon a decade of public service. I argue that
I shouldn't have to because this Committee should give Rebecca
the opportunity to continue to serve the American people on the
FTC. The great loss our office will feel in her absence will be
a great gain for her future colleagues on the FTC and the
citizens of this country, who she will so well serve.
I thank you for accommodating me and thank this Committee
for the timely hearing for Rebecca.
The Chairman. Thank you, Senator Schumer, for those great,
very personalized remarks. I look forward to having her come
forward.
Senator Nelson, if Senator Schumer got a perfect score on
the LSAT and an 800 on the SAT, does that make him smarter than
Zuckerberg?
[Laughter.]
The Chairman. So we like went from one----
Senator Schumer. I skipped my t-shirt today and wore a
suit.
[Laughter.]
Senator Schumer. I will tell you a story because lest the
audience think that I'm so smart. My first job was running a
mimeo machine. Now, we older people know what a mimeo machine
is; you younger people don't. But it was this clunky machine,
and you type out stencils, put them on a cranking thing, and
you crank it around, and a copy would come out. The ink smelled
great. If we still had mimeo machines, we might not have to
legalize marijuana.
[Laughter.]
Senator Schumer. But in any case, I ran the machine nights,
days, and weekends for a Madison High School teacher--I went to
James Madison High School--who was starting a new business. And
what was the new business he was starting? He had this
brilliant idea. He was preparing students for the SATs. What
was his name? He was then just a Madison High School teacher.
Kaplan. And it became a big business, which he sold to the
Washington Post years later.
But nights, weekends, and holidays, I would run the
machine. We got an electric machine the second year, and I read
the preparatory materials over and over and over again. And
that's the reason I got all these 800s. I'm the first person to
prove--it was a big debate then--that it is not aptitude, but
achievement. So it's not because I'm so smart, it's because I
had to work in that little grindy room for 3 years running a
mimeo machine.
[Laughter.]
The Chairman. OK. Bring back the mimeograph or whatever it
is.
[Laughter.]
The Chairman. Anyway, thank you, Senator Schumer.
Senator Schumer. Thank you.
The Chairman. We'll ask our nominees to come forward at
this point.
[Nominees coming forward.]
The Chairman. Great. And we'll proceed on my left, and your
right, starting with Ms. Slaughter, followed by Ms. Schultz,
and Mr. Fuchs. So we'll look forward to hearing from you.
Ms. Slaughter, please proceed.
STATEMENT OF REBECCA JOY KELLY SLAUGHTER, NOMINEE TO BE A
COMMISSIONER, FEDERAL TRADE COMMISSION
Ms. Slaughter. Thank you, Chairman Thune, Ranking Member
Nelson, and members of this Committee. It's funny for me to sit
on this side of the table, but I'm very excited to be here
today. It is my profound pleasure and privilege to be
considered to be a member of the Federal Trade Commission.
I want to particularly thank your staffs for their hard
work in processing paperwork to get my nomination onto today's
hearing at the last minute. And I would like to acknowledge my
fellow Commissioner nominees who are here in the audience
today. I saw Joe Simons, Noah Phillips, Christine Wilson, and
Rohit Chopra all here. I have very much enjoyed getting to know
them, and I really look forward to working with them if I'm
lucky enough to be confirmed.
And, finally, I want to thank my boss, Senator Schumer, for
his incredibly kind introduction, and humbling introduction,
for the faith he has placed in me as a member of his staff, and
especially in recommending me for this nomination.
I would like to briefly introduce some of my friends and
family who have joined me here today, without whose support I
would be both literally and figuratively lost. My parents, Peg
and Kevin Kelly, my Aunt Barbara Kummel, and my brother Matt
Kelly all traveled here from New York. And perhaps, as you have
heard, most conspicuously, my children are here. Teddy is five
and a half, Eloise is three and a half, and as you heard, they
are now happily joined by their brand-new baby sister, Pippa,
who is about nine and a half days old.
Balancing the joys of raising them and a challenging
professional career is possible for me only because of the
boundless love, support, and skill of my husband, Justin,
himself a Senate staff alum.
I also want to thank my many friends and colleagues who are
in the audience today. I really appreciate their support.
The Senate has been my professional home for nearly a
decade. Over that time, I have had the honor of working with
many members of this Committee and your staffs on a wide
variety of legislative and oversight endeavors. I have strived
to serve my boss and his constituents, the people of my home
state of New York, doing work I find meaningful and important.
And I've taken enormous pride and pleasure in being able to
find opportunities to reach across the aisle and forge
bipartisan consensus on challenging policy problems facing
consumers and markets.
The issues I have most enjoyed working on here in the
Senate, the protection of consumers and the promotion of free
and fair markets, are the ones at the heart of the mission of
the Federal Trade Commission. Those issues have been important
for the American people throughout the century the Commission
has been in existence, but perhaps never more so than now.
Today, technological innovations and rapidly changing
markets pose new and daunting challenges to enforcement in both
competition and consumer protection. I am humbled and honored
to be considered to help continue the Commission's storied
legacy of work for the American people, and I look forward to
answering your questions.
[The prepared statement and biographical information of Ms.
Slaughter follow:]
Prepared Statement of Rebecca Joy Kelly Slaughter, Nominee to be a
Commissioner, Federal Trade Commission
Chairman Thune, Ranking Member Nelson, and Members of this
Committee, it is my profound pleasure and privilege to be here today in
order for you to consider my nomination to be a member of the Federal
Trade Commission. I want to particularly thank your staffs for their
hard work in processing paperwork to get my nomination onto today's
hearing panel. And I would like to acknowledge my fellow Commissioner
nominees who are here in the audience. I have very much enjoyed getting
to know them and really look forward to working with them if I am lucky
enough to be confirmed. And finally, I want to thank my boss, Senator
Schumer, for the faith he has placed in me as a member of his staff and
especially in recommending me for this nomination.
I would like to briefly introduce some of my friends and family who
have joined me here today, without whose support I would be both
literally and figuratively lost. My parents, my Aunt Barbara Kummel,
and my brother Matt Kelly all traveled here from New York. And, perhaps
most conspicuously, my children are here. Teddy is five and a half,
Eloise is three and a half, and they are now happily joined by their
brand new baby sister Pippa who is about nine and a half days old.
Balancing the joys of raising them and a challenging professional
career is possible for me only because of the boundless love, support
and skill of my husband Justin--himself a Senate staff alum.
The Senate has been my professional home for nearly a decade; over
that time, I have had the honor of working with many of the members of
this Committee and your staffs on a wide variety of legislative and
oversight endeavors. I have strived to serve my boss and his
constituents--the people of my home state of New York--doing work I
find meaningful and important. And I have taken enormous pride and
pleasure in being able to find opportunities to reach across the aisle
and forge bipartisan consensus on challenging policy problems facing
consumers and markets.
The issues I have most enjoyed working on here in the Senate--the
protection of consumers and the promotion of free and fair markets--are
the ones at the heart of the mission of the Federal Trade Commission.
Those issues have been important for the American people throughout the
century the Commission has been in existence, but perhaps never more so
than now. Today, technological innovations in rapidly changing markets
pose new and daunting challenges to enforcement in both competition and
consumer protection. I am humbled and honored to be considered to help
continue the Commission's storied legacy of work for the American
people, and I look forward to answering your questions.
______
a. biographical information
1. Name (Include any former names or nicknames used):
Rebecca Joy Kelly Slaughter
Maiden name: Rebecca Joy Kelly
Nickname: Becca
2. Position to which nominated: Commissioner, Federal Trade
Commission.
3. Date of Nomination: April 9, 2018.
4. Address (List current place of residence and office addresses):
Residence: Information not released to the public.
Office: United States Capitol, Office of the Democratic Leader,
S-211, Washington, D.C. 20510
5. Date and Place of Birth: August 6, 1981; New York, NY.
6. Provide the name, position, and place of employment for your
spouse (if married) and the names and ages of your children (including
stepchildren and children by a previous marriage).
Spouse: Justin Slaughter, Partner (non-equity) at Mercury
Strategies LLC
7. List all college and graduate degrees. Provide year and school
attended.
B.A. Yale College 2003
J.D. Yale Law School 2008
8. List all post-undergraduate employment, and highlight all
management level jobs held and any non-managerial jobs that relate to
the position for which you are nominated.
Office of Senator Charles Schumer, Democratic Leader (2009 to
present, 2005-2006).
I have served several roles in Senator Schumer's
office, starting as a law clerk and then Professional
Staff Member (2005-2006), then returning as a counsel
(2009-2011), then becoming Senior Counsel (2011-2014)
and finally Chief Counsel (2014 to present). In this
capacity, I have managed a policy portfolio focusing on
legal, technology, and regulatory policy in the areas
of FTC jurisdiction, including antitrust, consumer
protection, privacy and technology. As Chief Counsel, I
have also managed our small team of attorneys handling
areas within the jurisdiction of the Judiciary
Committee.
Sidley Austin, Associate (2008-2009), Summer Associate (2007).
Davis Polk & Wardwell, Summer Associate (2006).
Manhattan District Attorney's Office, Appeals Bureau Paralegal
(2003-2004).
9. Attach a copy of your resume.
A copy is attached.
10. List any advisory, consultative, honorary, or other part-time
service or positions with Federal, State, or local governments, other
than those listed above, within the last ten years. None.
11. List all positions held as an officer, director, trustee,
partner, proprietor, agent, representative, or consultant of any
corporation, company, firm, partnership, or other business, enterprise,
educational, or other institution within the last ten years. None.
12. Please list each membership you have had during the past ten
years or currently hold with any civic, social, charitable,
educational, political, professional, fraternal, benevolent or
religious organization, private club; or other membership organization.
Include dates of membership and any positions you have held with any
organization. Please note whether any such club or organization
restricts membership on the basis of sex, race, color, religion,
national origin, age, or handicap.
NY State Bar Association--Member 2010-2011, currently
inactive
Carderock Springs Swim and Tennis Club--Member, Summer 2017.
Senate Employees Child Care Center (SECCC)--Member 2011 to
present.
Yale Law Journal, Board Member (The Pocket Part Committee,
2007-2008)
The Andrew Morehouse Trust--Regular Member 2004-present,
Board member 2004-2016.
None of these groups restrict membership on the basis of sex, race,
color religion, national origin, age, or handicap.
13. Have you ever been a candidate for and/or held a public office
(elected, non-elected, or appointed)? If so, indicate whether any
campaign has any outstanding debt, the amount, and whether you are
personally liable for that debt. No.
14. Itemize all political contributions to any individual, campaign
organization, political party, political action committee, or similar
entity of $500 or more for the past ten years. Also list all offices
you have held with, and services rendered to, a state or national
political party or election committee during the same period. None.
15. List all scholarships, fellowships, honorary degrees, honorary
society memberships, military medals, and any other special recognition
for outstanding service or achievements.
George A. Schrader, Jr. Prize for Excellence in the Humanities,
2003 Association of Yale Alumni Community Service Summer
Fellowship, 2000
16. Please list each book, article, column, or publication you have
authored, individually or with others. Also list any speeches that you
have given on topics relevant to the position for which you have been
nominated. Do not attach copies of these publications unless otherwise
instructed.
I have spoken several times--most recently in 2016--on panels
at the annual ChIPs Women in IP Conference on the topic of
emerging issues in law and technology policy.
I spoke on a panel titled Women in Politics at the Brearley
School's alumnae weekend in May 2017.
Note, Defensive Shootings and Error Risk: A Collateral Cost of
Changing Gun Laws?, 26 Yale L. & Pol'y Rev. 567 (2008).
17. Please identify each instance in which you have testified
orally or in writing before Congress in a governmental or non-
governmental capacity and specify the date and subject matter of each
testimony. None.
18. Given the current mission, major programs, and major
operational objectives of the department/agency to which you have been
nominated, what in your background or employment experience do you
believe affirmatively qualifies you for appointment to the position for
which you have been nominated, and why do you wish to serve in that
position?
I have spent most of the last decade working for Senator Schumer on
oversight of the Federal Trade Commission and policy matters within the
jurisdiction of the FTC, including antitrust and consumer protection
issues. In this capacity, I have become very familiar with the
responsibilities of the FTC and have worked closely with the
Commission.
I am honored to be considered for the position of FTC Commissioner,
because I believe firmly in its mission of protecting consumers and
promoting competition. The issues under the jurisdiction of the
Commission are critically important for American consumers and
businesses. I would welcome the opportunity. to work with the other
Commissioners, in both the majority and the minority, as well as the
talented staff at the agency and members of this Committee and this
body to help protect the American consumer and promote healthy and fair
competition in the markets.
19. What do you believe are your responsibilities, if confirmed, to
ensure that the department/agency has proper management and accounting
controls, and what experience do you have in managing a large
organization?
I believe every Commissioner has a duty to study carefully the
statutorily delegated responsibilities of the Commission and to ensure
that all actions the Commission undertakes are consistent with that
delegation and with the responsible stewardship of taxpayer dollars.
While I have not myself managed a large organization, I have been
involved in oversight of the management of large Federal agencies for
nearly ten years. That oversight work has included the Congressional
review of agency spending and agency budget requests, as well as
reports of management concerns at different agencies.
20. What do you believe to be the top three challenges facing the
department/agency, and why?
One challenge facing the Commission is ensuring that enforcement
efforts keep pace with emerging technologies. This challenge sounds
across the full range of the FTC's mission, from competition to
consumer protection. One specific example is in the area of unwanted
spam phone calls, where technological innovations have allowed scam
artists and unscrupulous businesses to evade the restrictions of the Do
Not Call list. Privacy and data security enforcement also pose new
technological challenges to the Commission. It is important for the
Commission to adapt enforcement efforts to these new technologies while
operating within the bounds of its statutorily mandated authority.
A second challenge facing the Commission is effectively
coordinating its enforcement efforts with other Federal agencies that
share jurisdiction for some of the issues within the Commission's
authority, including the CFPB, the FCC and the DOJ.
Finally, a third challenge for the Commission is ensuring consumers
know what FTC resources are available to them. Educating consumers and
businesses about the FTC's mission and its resources should remain a
top priority.
b. potential conflicts of interest
1. Describe all financial arrangements, deferred compensation
agreements, and other continuing dealings with business associates,
clients, or customers. Please include information related to retirement
accounts. None.
2. Do you have any commitments or agreements, formal or informal,
to maintain employment, affiliation, or practice with any business,
association or other organization during your appointment? If so,
please explain. No.
3. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated.
In connection with the nomination process, I have consulted with
the U.S. Office of Government Ethics and the Federal Trade Commission's
Designated Agency Ethics Official to identify potential conflicts of
interest. If confirmed, any potential conflicts of interest will be
resolved in accordance with the terms of the ethics agreement that I
have entered into with the Commission's Designated Agency Ethics
Official. I am not aware of any other potential conflicts of interest.
4. Describe any business relationship, dealing, or financial
transaction which you have had during the last ten 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.
In connection with the nomination process, I have consulted with
the U.S. Office of Government Ethics and the Federal Trade Commission's
Designated Agency Ethics Official to identify potential conflicts of
interest. If confirmed, any potential conflicts of interest will be
resolved in accordance with the terms of the ethics agreement that I
have entered into with the Commission's Designated Agency Ethics
Official. I am not aware of any other potential conflicts of interest.
5. Describe any activity during the past ten years in which you
have been 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 an employee of Senator Schumer, my professional responsibilities
have included work within the jurisdiction of the Judiciary and
Commerce Committees on the drafting, negotiating, and passage of
legislation, as well as oversight of Federal agencies.
6. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items.
In connection with the nomination process, I have consulted with
the U.S. Office of Government Ethics and the Federal Trade Commission's
Designated Agency Ethics Official to identify potential conflicts of
interest. If confirmed, any potential conflicts of interest will be
resolved in accordance with the terms of the ethics agreement that I
have entered into with the Commission's Designated Agency Ethics
Official. I am not aware of any other potential conflicts of interest.
c. legal matters
1. Have you ever been disciplined or cited for a breach of ethics,
professional misconduct, or retaliation by, or been the subject of a
complaint to, any court, administrative agency, the Office of Special
Counsel, professional association, disciplinary committee, or other
professional group? If yes:
a. Provide the name of agency, association, committee, or group;
b. Provide the date the citation, disciplinary action, complaint, or
personnel action was issued or initiated;.
c. Describe the citation, disciplinary action, complaint, or
personnel action;
d. Provide the results of the citation, disciplinary action,
complaint, or personnel action.
No.
2. Have you ever been investigated, arrested, charged, or held by
any Federal, State, or other law enforcement authority of any Federal,
State, county; or municipal entity, other than for a minor traffic
offense? If so, please explain. No.
3. Have you or any business or nonprofit of which you are or were
an officer ever been involved as a party in an administrative agency
proceeding, criminal proceeding, or civil litigation? If so, please
explain. No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? If so, please explain. No.
5. Have you ever been accused, formally or informally, of sexual
harassment or discrimination on the basis of sex, race, religion, or
any other basis? If so, please explain. No.
6. Please advise the Committee of any additional information,
favorable or unfavorable, which you feel should be disclosed in
connection with your nomination. None.
d. relationship with committee
1. Will you ensure that your department/agency complies with
deadlines for information set by congressional committees?
If confirmed, I would work diligently with my fellow Commissioners
to do so.
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?
If confirmed, I would work diligently with my fellow Commissioners
to do so.
3. Will you cooperate in providing the Committee with requested
witnesses, including 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 any duly
constituted committee of the Congress on such occasions as you may be
reasonably requested to do so? Yes.
______
Resume of Rebecca Joy Kelly Slaughter
Experience
Office of Senator Charles Schumer, Democratic Leader, Washington, D.C.
Chief Counsel June 2014 to present
Senior Counsel June 2011-June 2014
Counsel May 2009-June 2011
Professional Staff Member May 2005-May 2006
Provide strategic advice and directly engage on behalf of the
Democratic Leader with other Senators, as well companies, stakeholders
and constituents on portfolio of issues, including antitrust, privacy,
consumer affairs, intellectual property, telecommunications,
technology, national security, bankruptcy, nominations and oversight.
Assist Leader with caucus strategy and preparation of legislation,
statements, questions, and speeches on those topics, and coordinate
with relevant government agencies, including FTC, DOJ, FCC, and the
White House. Manage team of attorneys, clerks, and assistants.
Significant projects include: congressional reviews of mergers and
antitrust investigations, such as American Airlines merger with U.S.
Airways, AT&T attempts to acquire T-Mobile and Time Warner, Comcast
acquisition of NBCU, e-books litigation, and FTC investigation into
Google; elements of the ``Better Deal'' Democratic economic agenda,
including proposals on antitrust and broadband expansion; congressional
responses on net neutrality, broadband privacy, and other FCC
regulations; passage into law of the Moran-Schumer BOTS Act of 2016,
which provides FTC authority over deceptive ticket scalping techniques;
advocacy for FTC investigations of privacy policies for consumer
products such as smart TVs or home DNA kits; patent reform, ``including
the Schumer-Kyl business method patents provision in the America
Invents Act of 2011, and negotiation of a Schumer-Cornyn compromise
bill; PATRIOT Act and FISA Amendments Act reauthorizations;
confirmations of all Supreme Court Justices since 2005.
Sidley Austin, Washington, D.C.
Associate (Civil, Criminal, and Constitutional Litigation) September
2008-May 2009
Summer Associate Summer 2007
Conducted legal research, prepared memoranda, and assisted with witness
preparation and document review in connection with various litigation
matters, including regulatory investigation of a public accounting
firm. Wrote briefs and helped craft litigation strategy for an
international development organization. Researched and drafted article
on mass tort class action settlements.
Davis Polk & Wardwell, New York, N.Y. Summer 2006
Summer Associate. Researched legal issues in a variety of matters,
including post-verdict motions in a white collar criminal case, an
internal investigation of securities fraud, and a pro bono prisoner's
rights settlement.
Manhattan District Attorney's Office, New York, N.Y. May 2003-August
2004
Paralegal, Appeals Bureau. Provided support to Assistant District
Attorneys in case research as well as brief drafting and filing.
Coordinated Appeals Bureau Pro Bono Program.
Education
Yale Law School, New Haven, Connecticut. J.D. 2008.
Activities: Yale Law Journal, Editor (2006-2007), Board Member (The
Pocket Part Committee, 2007-2008)
Head Teaching Assistant for Professor Akhil Amar (Constitutional Law)
Yale College, New Haven, Connecticut. B.A. with distinction in
Anthropology, 2003.
Honors: magna cum laude; George A. Schrader, Jr. Prize for Excellence
in the Humanities
Skills/Interests
TS clearance. Studied French, Spanish and Kiswahili. Enjoy crossword
puzzles, travel; running and the outdoors.
The Chairman. Thank you, Ms. Slaughter.
Ms. Schultz.
STATEMENT OF MICHELLE A. SCHULTZ, NOMINEE TO BE A MEMBER,
SURFACE TRANSPORTATION BOARD
Ms. Schultz. Thank you, Chairman Thune, Ranking Member
Nelson, and distinguished members of the Commerce, Science, and
Transportation Committee. I am honored to appear before you
today as you consider my nomination as a Member of the Surface
Transportation Board. I am also grateful to President Trump for
his nomination.
For over 11 years, I have dedicated my career to serving
the public in various roles with the Southeastern Pennsylvania
Transportation Authority, or SEPTA, the Nation's sixth largest
provider of public transportation. While I currently serve as
deputy general counsel to SEPTA, I have also served in a
variety of roles touching on policy, legislation, and
regulations. This has given me the opportunity to have a broad-
based understanding of railroad operations and the importance
of the relationships the railroads share with their customers.
I have also handled compliance issues at the local, State, and
Federal levels pertaining to the construction of railroad lines
and issues pertaining to interoperability. These experiences
have given me a firm grasp of the challenges and opportunities
facing the industry and the stakeholders that rely on it. I am
very excited about the prospect of serving the public at the
Federal level, as transportation is so vital to our citizens
and the Nation's economy.
Prior to joining SEPTA, I was a law clerk for the Superior
Court of Pennsylvania and the United States Bankruptcy Court
for the Eastern District of Pennsylvania. Additionally, I was
an attorney at a large law firm in Philadelphia for
approximately 5 years. My practice focused on creditors' rights
and commercial litigation.
As you are well aware, the Board is the economic regulator
of the rail industry charged by Congress with resolving
railroad rate and service disputes as well as proposed railroad
mergers, among other issues. The efficiency of freight and
intercity passenger rail transportation is vital to the
Nation's mobility and economic competitiveness. While our
Nation's rail system generally performs well, challenges arise
due to numerous issues, including increased demand for service,
track sharing, the ongoing need to maintain existing
infrastructure, and the need for increased capacity.
Because freight rail and intercity passenger rail serve an
integral role in enhancing mobility within the United States,
it is incumbent upon the Board to approach matters brought
before it by conducting a thorough analysis of the facts and
adjudicating matters in an impartial manner within the bounds
of its jurisdiction and the law. If confirmed, I vow to utilize
my transportation policy, regulatory, and legal experience to
address the significant challenges presented to the Board in a
fair and impartial manner.
If confirmed, I look forward to furthering the Board's
mission by working closely with the Board's staff, my fellow
Board members, stakeholders, and members of this Committee to
address the many important issues that come before the Board.
Thank you for your time, and I look forward to answering
any questions you may have.
[The prepared statement and biographical information of Ms.
Schultz follow:]
Prepared Statement of Michelle A. Schultz, Nominee to be a Member,
Surface Transportation Board
Thank you Chairman Thune, Ranking Member Nelson, and distinguished
Members of the Commerce, Science, and Transportation Committee. I am
honored to appear before you today as you consider my nomination as a
Member of the Surface Transportation Board (``Board''). I am also
grateful to President Trump for his nomination.
For over eleven years, I have dedicated my career to serving the
public in various roles with the Southeastern Pennsylvania
Transportation Authority (``SEPTA''), the Nation's sixth largest
provider of public transportation. While I currently serve as Deputy
General Counsel to SEPTA, I have also served in a variety of roles
touching on policy, legislation and regulations. This has given me the
opportunity to have a broad based understanding of railroad operations
and the importance of the relationships the railroads share with their
customers. I have also handled compliance issues at the local, state
and Federal levels pertaining to the construction of railroad lines and
issues pertaining to interoperability. These experiences have given me
a firm grasp of the challenges and opportunities facing the industry
and the stakeholders that rely on it. I am very excited about the
prospect of serving the public at the Federal level, as transportation
is so vital to our citizens and the Nation's economy.
Prior to joining SEPTA, I was a law clerk for the Superior Court of
Pennsylvania and the United States Bankruptcy Court for the Eastern
District of Pennsylvania. Additionally, I was an attorney at a large
law firm in Philadelphia for approximately five years. My practice
focused on creditor's rights and commercial litigation.
As you are well aware, the Board is the economic regulator of the
rail industry charged by Congress with resolving railroad rate and
service disputes as well as proposed railroad mergers, among other
issues. The efficiency of freight and intercity passenger rail
transportation is vital to the Nation's mobility and economic
competitiveness. While our Nation's rail system generally performs
well, challenges arise due to numerous issues including increased
demand for service; track sharing; the ongoing need to maintain
existing infrastructure; and the need for increased capacity. Because
freight rail and intercity passenger rail serve an integral role in
enhancing mobility within the United States, it is incumbent upon the
Board to approach matters brought before it by conducting a thorough
analysis of the facts and adjudicating matters in an impartial manner
within the bounds of its jurisdiction and the law. If confirmed, I vow
to utilize my transportation policy, regulatory, and legal experience
to address the significant challenges presented to the Board in a fair
and impartial manner. If confirmed, I look forward to furthering the
Board's mission by working closely with the Board staff, my fellow
Board Members, stakeholders, and the Members of this Committee to
address the many important issues that come before the Board.
Thank you for your time and I look forward to answering any
questions that you may have.
______
a. biographical information
1. Name (Include any former names or nicknames used):
Michelle Albright Schultz (2003 to present)
Michelle Mummert Albright (1972 to 2003)
2. Position to which nominated: Member--Surface Transportation
Board.
3. Date of Nomination: March 2, 2018.
4. Address (List current place of residence and office addresses):
Residence: Information not released to the public.
Office: Southeastern Pennsylvania Transportation Authority,
1234 Market Street, 5th Floor, Philadelphia, PA 19107.
5. Date and Place of Birth: March 11, 1972; Hanover, Pennsylvania.
6. Provide the name, position, and place pf employment for your
spouse (if married) and the names and ages of your children (including
stepchlidren and children by a, previous marriage).
James D. Schultz (Spouse), Cozen O'Connor, Chair; Government
Law and Regulatory Affairs.
7. List all college and graduate degrees. Provide year and school
attended.
Pennsylvania State University, BA English--1994
Widener University School of Law, JD 1998
University of Pennsylvania, MGA--2008
8. List all post-undergraduate employment, and highlight all
management level jobs held and any non-managerial jobs that relate to
the position for which you are nominated.
Hanover Concrete Company--(8/98-12/99)
Superior Court of Pennsylvania--Law Clerk (1/00-6/00)
United States Bankruptcy Court--Law Clerk (7/00-1/02)
White and Williams LLP--Associate. (1/02-8/06)
Southeastern Pennsylvania Transportation Authority (8/06 to
present)
Manager Legislative Affairs
Director, Legislative Affairs
Deputy General Cotmsel
Management positions include serving as the Treasurer of
Gettysburg Concrete (1/96 12/99); Director of Legislative
Affairs (10/10-12/13); Deputy General Counsel (1/14 to
present).
9. Attach a copy of your resume.
A copy is attached.
10. List any advisory, consultative, honorary, or other part-time
service or positions with Federal, State, or local governments, other
than those listed above, within the last ten years.
Not applicable.
11. List all positions held as an officer, director, trustee,
partner, proprietor, agent, representative, or consultant of any
corporation, company, firm, partnership, or other business, enterprise,
educational, or other institution within the last ten years.
General Partner--Tamarack Four
Officer (Treasurer)--Gettysburg Concrete Company
12. Please list each membership you have had during the past ten
years or currently hold with any civic, social, charitable,
educational, political, professional, fraternal, benevolent or
religious organization, private club, or other membership organization.
Include dates of membership and any positions you have held with any
organization. Please note whether any such club or organization
restricts membership on the basis of sex, race, color, religion,
national origin, age, or handicap.
The Union League of Philadelphia. The club does not restrict
membership on the basis of sex, race, color, religion, national origin,
age or handicap.
13. Have you ever been a candidate for and/or held a public office
(elected, non-elected, or appointed)? If so, indicate whether any
campaign has any outstanding debt, the amount, and whether you are
personally liable for that debt. No.
14. Itemize all political contributions to any individual, campaign
organization, political party, political action committee, or similar
entity of $500 or more for the past ten years.
2008
Pennsylvania Future Fund ($1,000.00)
2009
Not applicable.
2010
Pennsylvania Future Fund $1,000.00 (February)
Friends of Tom Corbett $1,000.00 (June)
Friends of Tom Corbett $1,000.00 (July)
Friends of Tom Corbett $1,000.00 (October)
Friends of Jim Kernahan $500.00 (September)
2011
Pennsylvania Future Fund $1,000.00 (January)
2012
Not applicable.
2013
Not applicable.
2014
Not applicable.
2015
Pennsylvania Future Fund $1,000.00 (February)
Williams for Mayor $1,000.00 (March)
Keystone Alliance $1,000.00 (April)
Kevin Dougherty for Pennsylvania $1,000.00 (May)
Chris Christie for President $2,700.00 (December)
Friends of Pat Toomey $1,000.00 (January)
Friends of Bill Shuster $1,000.00 (April)
Keystone Alliance $1,000.00 (April)
Friends of Pat Toomey $1,000.00 (May)
Friends of Alex Charlton $1,000.00 (October)
Friends of Alex Charlton $1,000.00 (November)
Also list all offices you have held with, and services rendered to
a state or national political party or election committee during
threesome period.
Not applicable.
15. List all scholarships, fellowships, honorary degrees, honorary
society memberships, military medals, and any other special
recognition. for outstanding service or achievements.
In 2008 I was awarded the Stephen B. Sweeney Award, University of
Pennsylvania for commitment to local government and public service.
16. Please list each book, article, column, or publication you have
authored, individually or with others. Also list any speeches that you
have given on topics relevant to the position for which you have been
nominated. Do not attach copies of these publications unless otherwise
instructed.
I have not authored any hooks, articles, columns, or publications.
I have not given any speeches on any topics relevant to the
position for which I have been nominated.
17. Please identify each instance in which you have testified
orally or in writing before Congress in a governmental or non-
governmental capacity and specify the date and subject matter of each
testimony,
I have never testified before Congress.
18. Given the current mission, major programs, and major
operational objectives of the department/agency to which you have been
nominated, what in your background or employment experience do you
believe affirmatively qualifies you for appointment to the position for
which you have been nominated, and why do you wish to serve in that
position?
I have worked for the Southeastern Pennsylvania Transportation
Authority (``SEPTA''), the Nation's sixth largest public transportation
agency for over 11 years. During this time, I have become quite
familiar with how railroads operate; how they interact with each other;
and the relationships they have with their customers. lam also familiar
with the challenges that are associated with those interactions. During
my career with SEPTA, I have handled legislative, regulatory, and legal
issues. I have also handled compliance issues at the local, state, and
Federal level including issues pertaining to construction and
reconstruction of commuter rail lines.
Prior to joining SEPTA, I was a law clerk for the Superior Court of
Pennsylvania, the United States Bankruptcy Court for the Eastern
District of Pennsylvania. Additionally, I was an attorney at a law firm
in Philadelphia. My practice focused on creditor's rights and
commercial litigation.
I have spent most of my career serving the public in the area of
transportation policy, which is so vital to our citizens and our
economy. Serving on the Surface Transportation Board will the allow me
to continue my longstanding public service at the Federal level having
greater impact on our country, utilizing my regulatory, legal, and
transportation policy experience.
19. What do you believe are your responsibilities, if confirmed, to
ensure that the department/agency has proper management and accounting
controls, and what experience do you have in managing a large
organization?
As a member of the Surface Transportation Board, it will be
incumbent upon me and my colleagues to set the tone for efficiency and
decision making. I believe that my responsibilities would include
reviewing the financial and business management of the Surface
Transportation Board (``STB'') to ensure that it is in compliance with
all laws and to promote the goal of efficiency. The STB is annually
audited by an independent audit firm, subject to the Office of the
Inspector General's oversight and in accordance with the generally
accepted Government auditing standards. My responsibilities would also
include implementing recommendations made by the independent audit
firm.
Relevant management experience includes my work managing a ready
mixed concrete company; serving as the Director of Legislative Affairs
and as Deputy General Counsel to SEPTA. In my role as Deputy General
Counsel, I have handle compliance matters on behalf of the agency and
the Board as well as budget matters on behalf of the division.
20. What do you believe to be the top three challenges facing the
department/agency, and why?
The top three challenges facing the Surface Transportation Board
(``STB'') appear to be as follows:
Rate Reasonableness and SAC Alternatives
Since its predecessor agency, the Interstate Commerce Commission
was established over a century ago, one of the most significant issues
facing the STB is its review of railroad rates. The current process,
stand-alone cost (``SAC'') is considered by many within the industry to
be time consuming, complicated and costly. So important is this issue
that Congress directed the Board in the Surface Transportation Board
Reauthorization Act of 2015 to look at SAC alternatives, If confirmed,
I will dedicate significant energy to support this effort by the Board
to find manageable procedures that are fair to both railroads and
shippers.
Regulatory Reform
The Regulatory Reform Task Force was established to comply with
Executive Order 13,777. The goals of the Regulatory Reform Task Force
are to identify rules and practices that are burdensome, unnecessary,
or outdated, and to recommend how they should be addressed. In May
2017, the Regulatory Reform Task Force submitted its first status
report. In July 2017 the Board held a listening session and received
numerous comments. Upon the completion of the Regulatory Reform Task
Force's work, I believe the Board should give careful consideration to
the findings of both the Task Force and the comments by stakeholders to
improve STB processes.
Pending Rulemakings
The Board currently has on its docket pending rulemakings of
significant importance to the various stakeholders in the railroad
industry. These rulemakings include competitive switching, revenue
adequacy, and commodity exemptions--important issues which I have only
begun to study and which this Committee has been involved with for
years. While I am not in a position to weigh in on the merits, I
believe the stakeholders of the industry need finality on these
proceedings. I look forward to working with the STB staff and
stakeholders on these matters to help bring them to a conclusion.
b. potential conflicts of interest
1. Describe all financial arrangements, deferred compensation
agreements, and other continuing dealings with business associates,
clients, or customers. Please include information related to retirement
accounts.
General Partner in Tamarack Four. As stated in my GE Form 278e, and
my Ethics Agreement, upon confirmation, I will resign from my position
as a general partner of Tamarack Four and the entity will be reformed
as a limited liability company. I will not hold a position with the new
entity. For more detailed information please see both my OGE Form 278e
and my Ethics Agreement.
I own common stock in a closely held, family company (ready mix
concrete manufacturer)--Trenton Group Inc. and Gettysburg Concrete Inc.
I have a 457/401 II--Voya Fixed Account (Annuity Contract). For
more detailed information about each of the funds it contains, please
see my OGE Form 278e which is attached. I will continue to participate
in this defined contribution plan. The plan sponsor will not make
further contributions after my separation.
I am vested in SEPTA's defined benefit plan. I will continue to
participate in this defined benefit plan.
2. Do you have any commitments or agreements, formal or informal,
to maintain employment, affiliation, or practice with any business,
association or other organization during your appointment? If so,
please explain.
I own common stock in Trenton Group Inc. and Gettysburg Concrete
Company. Both companies are ready-mix concrete manufacturers and are
closely held family companies.
3. Indicate any investments, obligations, liabilities, or other
relationships, which could involve potential conflicts of interest in
the position to which you have been nominated.
I have been employed by the Southeastern Pennsylvania
Transportation Authority (``SEPTA'') since 2006. The Surface
Transportation Board performs certain oversight of passenger rail
operations, which may include SEPTA. Pursuant to my Ethics Agreement, I
will not participate personally and substantially in any particular
matter where SEPTA is a party for a period of one year after my
resignation from SEPTA.
As reflected in my Ethics Agreement with the STB, my spouse is
employed by the law firm of Cozen O'Connor and in which he is a
shareholder. For as long as my spouse continues to work for Cozen
O'Connor, I will not participate personally and substantially in any
particular matter involving specific parties in which I know my
spouse's employer or any client of my spouse is a party unless I am
first authorized to participate pursuant to 5 C.F.R. Sec. 2635.502 (d).
My spouse is a contractor with Cable News Network (CNN). As stated
in my Ethics Agreement, for as long as my spouse is a contractor with
CNN, I will not participate personally and substantially in any
particular matter involving specific parties in which I know CNN is a
party or represents a party, unless I am first authorized to
participate pursuant to 5 C.F.R. Sec. 2635.502(d).
While I am not aware of any potential conflicts of interest that
could involve my relationship with my spouse besides the ones
previously listed, my spouse was previously employed as a lawyer in the
White House Counsel's Office in 2017. Should I be confirmed, I will
comply with all applicable ethics laws and regulations and consult with
agency officials when appropriate.
4. Describe any business relationship, dealing, or financial
transaction which you have had during the last ten 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 not had any business relationship, dealing, or financial
transaction during the last ten years for myself or on behalf of a
client that could in any way constitute or result in a possible
conflict of interest in the position to which I have been nominated.
As previously stated, upon confirmation, I will resign from my
position with SEPTA and will not participate personally and
substantially in any particular matter involving specific parties in
which I know SEPTA is a party or represents a party, unless I am first
authorized to participate pursuant to 5 C.F.R. Sec. 26535.502(d).
As reflected in my Ethics Agreement with the STB, my spouse is
employed by the law firm of Cozen O'Connor and in which he is a
shareholder. For as long as my spouse continues to work for Cozen
O'Connor, I will not participate personally and substantially in any
particular matter involving specific parties in which I know my
spouse's employer or any client of my spouse is a party unless I am
first authorized to participate pursuant to 5 C.F.R. Sec. 2635.502 (d).
5. Describe any activity during the past ten years in which you
have been 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.
From 2006 through 2013 I served as both a Manager and Director of
Legislative Affairs for SEPTA. In this capacity, I advocated for
dedicated state and Federal funding for public transportation. I also
advocated for changes in legislative language to advance the interests
of SEPTA.
6. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items.
With regard to SEPTA, for a period of one year after my resignation
from SEPTA, I will not participate personally and substantially in any
matter which SEPTA is a party.
Upon confirmation, I will resign from my position as General
Partner of Tamarack Four and the entity will be reformed as a limited
liability company. I will not hold a position with the new entity. For
more detailed information, please see my Ethics Agreement.
For as long as my spouse continues to work for Cozen O'Connor, I
will not participate personally and substantially in any matter that to
my knowledge has a direct and predictable effect on my spouse's
financial interest in the firm, unless I first obtain a written waiver.
For as long as my spouse is a contractor with CNN, I will not
participate personally and substantially in any matter involving
specific parties in which I know CNN is a party or represents a party,
unless I am first authorized to participate pursuant to 5 C.F.R
Sec. 2635.502(d).
c. legal matters
1. Have you ever been disciplined or cited for a breach of ethics,
professional misconduct, or retaliation by, or been the subject of a
complaint to, any court, administrative agency, the Office of Special
Counsel, professional association, disciplinary committee, or other
professional group? No.
If yes:
a. Provide the name of agency, association, committee, or group;
b. Provide the date the citation, disciplinary action, complaint, or
personnel action was issued or initiated;
c. Describe the citation, disciplinary action, complaint, or
personnel action;
d. Provide the results of the citation, disciplinary action,
complaint, or personnel action.
2. Have you ever been investigated, arrested, charged, or held by
any Federal, State, or other law enforcement authority of any Federal,
State, county, or municipal entity, other than for a minor traffic
offense? If so, please explain. No.
3. Have you or any business or nonprofit of which you are or were
an officer ever been involved as a party in an administrative agency
proceeding, criminal proceeding, or civil litigation? If so, please
explain. No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? If so, please explain. No.
5. Have you ever been accused, formally or informally, of sexual
harassment or discrimination on the basis of sex, race, religion, or
any other basis? If so, please explain. No.
6. Please advise the Committee of any additional information,
favorable or unfavorable, which you feel should be disclosed in
connection with your nomination.
d. relationship with committee
1. Will you ensure that your department/agency complies with
deadlines for information set by congressional committees? 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, including 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 any duly
constituted committee of the Congress on such occasions as you may be
reasonably requested to do so? Yes.
______
Resume of Michelle A. Schultz
Senior Attorney--Corporate & Administrative Law
Accomplished attorney with a broad background that includes 10+ years
with a quasi-government entity and eight years in legal practice.
Committed to thoroughly researching issues and providing sound legal
advice to clients, often presenting creative, effective, and multiple
solutions to problems. Employs a collaborative approach to all client
and stakeholder interactions to achieve the best possible outcome.
Background includes 7 years in government affairs and public
policy, providing a solid basis for legal advice and the
ability to anticipate the political and/or public relations
impact of proposals.
Regularly address compliance issues including emission
standards, hours of service and fatigue management, ADA
compliance, procurement, ethics laws, state and federal grant
compliance, city ordinances, White House Executive Orders,
First Amendment issues, zoning and construction laws,
environmental issues and immunity.
Familiarity with corporate law matters that includes
drafting leases, right of entry agreements, construction
contracts, and non-disclosure agreements.
Provide advice and counsel on matters in anticipation of
litigation.
Professional Experience
Deputy General Counsel
Southeastern Pennsylvania Transportation Authority--2014-Present
Senior administrative law counsel responsible for advising the
Authority on all complex regulatory, statutory, and administrative law
matters at the local, state, and federal level. Interpret existing laws
and ordinances, formulate strategic plans, and propose solutions to
compliance issues. Draft compliant policies, legislative language that
promotes or defends the Authority, various contract provisions and
revisions, and requests for proposals (RFPs). Review and provide legal
analysis on proposed state and Federal regulations. Provided advice and
counsel on procurement issues pursuant to existing laws and state and
federal grant contract terms. Responsible for managing the legal
division expenditures. Responsible for handling negotiations with the
Federal Railroad Administration regarding safety citations. Represent
the Authority in matters before the Pennsylvania Public Utility
Commission.
Key Achievements
Selected to work with staffers from the Philadelphia City
Council to address zoning ordinances pertaining to signage on
or adjacent to city property. Drafted legislative language that
helped lead to an agreement.
Conducting ongoing research on the legality and possibility
of establishing certain risk management tools for self-insured
entities like SEPTA.
Drafted an RFP for a $80M-$100M capital construction
project.
Requested to address a variety of legal issues surrounding
the World Meeting of Families in Philadelphia.
Director, Legislative Affairs
Southeastern Pennsylvania Transportation Authority--2010-2013
Directed and coordinated advocacy outreach to attain dedicated state
and Federal funding for public transportation, including advocacy
efforts for MAP-21 of 2012 and Act 89 of 2013. Provide draft responses
to press inquiries regarding legislative, policy, and regulatory
issues. Drafted testimony for members of the Authority's executive
management for appearances before legislative committees and press
events. Served as the Authority's Board Member for the Pennsylvania
Public Transportation Association and representative to the Keystone
Transportation Funding Coalition. Maintain relationships with key
groups, including Greater Philadelphia Chamber of Commerce, American
Public Transportation Association, Metropolitan Rail Discussion Group,
Pennsylvania Public Transportation Association, and Keystone
Transportation Funding Coalition.
Key Achievements
Worked with all providers of public transportation in
Pennsylvania and drafted language on behalf of the industry to
exempt all types of communications systems used for public
transportation from driving distraction bills,
Partnered with members of the bus manufacturing industry to
develop a strategy for dealing with certain emissions standards
established by the State of California and adopted by
Pennsylvania.
Selected to resolve an air regulations issue involving two
conflicting local ordinances and state law. Developed an idling
operating policy that met all three mandates, negotiated
settlement of outstanding finds, and prevented future
citations.
Provided guidance on compliance issues for a $100M vehicle
procurement, identifying changes in state law that were
inconsistent with new vehicle design. Asked by Pennsylvania DOT
to draft the necessary legislative change, which was enacted by
the Pennsylvania General Assembly in 2013.
Commended for advocacy efforts in obtaining Act 89
Transportation Funding.
Provided guidance on compliance issues involving the Federal
mandate for public passenger transportation providers to
implement Positive Train Control, including being asked by U.S.
Senate staffers to draft a memo summarizing the implementation
issues for the industry.
Manager, Legislative Affairs
Southeastern Pennsylvania Transportation Authority--2006-2010
Retained to provide guidance on various compliance issues, monitor
regulatory changes, and assist with shaping government policy in
matters of corporate concern. Handled all state and Federal constituent
services on an interim basis. Monitored state and Federal legislation
and provided summaries to the Director of Legislative Affairs. Trained
newly hired constituent services personnel.
Key Achievements
Commended for advocacy efforts in obtaining Act 44
Transportation Funding.
Associate
White and Williams, LLP--2002-2006
Represented businesses from diverse industries with a focus on
financing matters, including Chapter 7 and 11 bankruptcy, commercial
litigation, and collection matters. Litigated motions and adversary
complaints for preference and fraudulent conveyance actions, Handled
matters on behalf of debtors, including preparation of bankruptcy
petitions, statements, and schedules, and prosecuting claims
objections.
Key Achievements
Addressed coverage issues for major insurance carriers in
bankruptcy cases resulting from mass tort litigation.
Career Development
Judicial Law Clerk
U.S. Bankruptcy Court for the Eastern District of Pennsvlvania--2000-
2002
Prepared draft opinions for all bankruptcy judges of the
Eastern District of Pennsylvania.
Conducted extensive legal research to assist the bench in
making decisions on a variety of bankruptcy issues.
Judicial Law Clerk
Superior Court of Pennsylvania, President Judge Emeritus Vincent A.
Cirillo--2000
Prepared draft Superior Court opinions and bench memoranda.
Conducted legal research on a variety of complex civil and
criminal issues and assisted the Judge in making decisions.
Education & Professional Development
Education
Master of Government Administration University of
Pennsylvania, Fels Institute of Government
Selected by faculty to be the Commencement Speaker.
Awarded the Stephen B. Sweeney Award for public
service.
Juris Doctor (JD) Widener University School of Law
Staff Writer, The Widener Law Forum
Vice President, Student Bar Association
Bachelor of Arts Pennsylvania State University--State
College
Semester Abroad, Manchester, England
Walt Disney World College Program and Management
Training Program
Admissions
Pennsylvania and New Jersey
Professional Memberships
Former Hearing Committee Member, The Disciplinary Board for
the Supreme Court of Pennsylvania
Member, Pennsylvania Bar Association, Philadelphia Bar
Association
The Chairman. Thank you, Ms. Schultz.
Mr. Fuchs.
STATEMENT OF PATRICK J. FUCHS, NOMINEE TO BE A MEMBER, SURFACE
TRANSPORTATION BOARD
Mr. Fuchs. Chairman Thune, Ranking Member Nelson,
distinguished members of the Committee, thank you for inviting
me to appear before you today as a nominee to serve on the
Surface Transportation Board. It is a tremendous honor to be
nominated to this position.
I'm grateful to you, Chairman Thune, for providing me the
greatest privilege of my professional life, the opportunity to
serve as a staff member for this Committee. I have been
exceedingly fortunate to work on rail issues for a Senator who
is a former state railroad director. I deeply admire your
service and accomplishments on behalf of the State of South
Dakota and the country.
If confirmed, I would take with me the lessons I have
learned from the principled leadership of this Committee,
including an immense appreciation for the importance of
cooperation, openness, and dedication in government service.
I am joined here today by my brilliant and creative wife,
Katherine, and my tireless and selfless parents, Joseph and
Jeanne. Thank you for your unwavering love and support. Thank
you to my four wonderful siblings for helping shape who I am.
And thank you to my in-laws and friends for all the support.
I am grateful to my incredible teammates on the Committee.
Your professionalism, intelligence, and friendship have been
some of the best parts of my job.
Today I will highlight values that, if confirmed, I would
strive to bring to my position on the Surface Transportation
Board.
First, I respect the statutory directives and authorities
provided by Congress. As a staff member for this Committee,
covering rail, hazardous materials, and maritime
transportation, I have spent significant time with the
challenging transportation issues facing the Nation and the
statutory frameworks that address those issues.
Under the Chairman's direction, I had the privilege to work
on the Surface Transportation Board Reauthorization Act of
2015. Introduced by Chairman Thune and co-sponsored by Ranking
Member Nelson, this bipartisan legislation was the first
reauthorization of the Board since its creation in 1996. It
sought to improve the Board's dispute resolution processes,
provide tools for proactive problem-solving, and reform the
Board's structure. The Board has made great progress with
implementation, and I am committed to fully executing the law
and fulfilling its objectives.
During my time with the Committee, I also had the
opportunity to work on the first passenger rail reauthorization
in over 7 years, led by Senators Wicker and Booker. This
bipartisan legislation included provisions important to the
Board's passenger rail oversight functions. If confirmed, I
would bring this firsthand experience and perspective to my
position on the Board.
Second, I recognize the importance of objective, data-
driven analysis in formulating regulatory policy. During my
time with this Committee and my previous employment with the
Office of Management and Budget, I have evaluated the design
and evidentiary underpinnings of rail and other transportation
rules, analyzed the effects of those rules, and sought and
weighed alternative approaches to improve outcomes. If
confirmed, I am committed to ensuring that my decisions are
supported by sound and objective analysis.
Third, I believe both in the importance of the Board's
responsibilities and in the power of market forces to achieve
efficiencies and drive innovation and investment. Our Nation's
freight rail system moves goods essential to Americans' well-
being, and it is predominantly private freight railroads that
invest in, maintain, and operate the 140,000-mile rail network
so integral to our economy. Few deny the transformational
effects of partial economic deregulation in 1980, with gains in
productivity and safety in the years that followed.
At the same time, codified in our Nation's rail
transportation policy are important consumer protections,
including to maintain reasonable rates in the absence of
effective competition and to avoid undue concentrations of
market power. The statutory framework governing the Board
therefore underscores both a need for regulation and a need for
that regulation to be reasonable. If confirmed, I would be
proud to advance the Board's mission and bring to my position
an understanding of the value of markets.
This is an exciting time for the Board. The Board has a
robust workload before it, strong leadership, and talented and
dedicated staff, and, if confirmed, it would be an honor to
work with them and this Committee to help ensure an efficient
and competitive rail system.
Thank you for your consideration. And I look forward to
your questions.
[The prepared statement and biographical information of Mr.
Fuchs follow:]
Prepared Statement of Patrick J. Fuchs, Nominee to be a Member,
Surface Transportation Board
Chairman Thune, Ranking Member Nelson, and distinguished Members of
the Committee, thank you for inviting me to appear before you today as
a nominee to serve on the Surface Transportation Board. It is a
tremendous honor to be nominated to this position.
I am grateful to you, Chairman Thune, for providing me with the
greatest privilege of my professional life--the opportunity to serve as
a staff member for this Committee. I have been exceedingly fortunate to
work on rail issues for a Senator who is a former state railroad
director. I deeply admire your service and accomplishments on behalf of
the State of South Dakota and the country.
If confirmed, I would take with me the lessons I have learned from
the principled leadership of this Committee, including an immense
appreciation for the importance of cooperation, openness, and
dedication in government service.
I am joined here today by my brilliant and creative wife,
Katherine, and my tireless and selfless parents, Joseph and Jeanne.
Thank you for your unwavering love and support. Thank you to my four
wonderful siblings for helping shape who I am, and thank you to my in-
laws and friends for all the support. I am grateful to my incredible
teammates on the Committee--your professionalism, intelligence, and
friendship have been some of the best parts of my job.
Today, I will highlight values that, if confirmed, I would strive
to bring to my position on the Surface Transportation Board.
First, I respect the statutory directives and authorities provided
by Congress. As a staff member for this Committee, covering rail,
hazardous materials, and maritime transportation, I have spent
significant time with the challenging transportation issues facing the
Nation and the statutory frameworks that address those issues.
Under the Chairman's direction, I had the privilege to work on the
Surface Transportation Board Reauthorization Act of 2015 (P.L. 114-
110). Introduced by Chairman Thune and co-sponsored by Ranking Member
Nelson, this bipartisan legislation was the first reauthorization of
the Board since its creation in 1996. It sought to improve the Board's
dispute resolution processes, provide tools for proactive problem-
solving, and reform the Board's structure. The Board has made great
progress with implementation, and I am committed to faithfully
executing the law and fulfilling its objectives.
During my time with the Committee, I also had the opportunity to
work on the first passenger rail reauthorization in over seven years,
led by Senators Wicker and Booker. This bipartisan legislation included
provisions important to the Board's passenger rail oversight functions.
If confirmed, I would bring this first-hand experience and perspective
to my position on the Board.
Second, I recognize the importance of objective, data-driven
analysis in formulating regulatory policy. During my time with this
Committee and my previous employment with the Office of Management and
Budget, I have evaluated the design and evidentiary underpinnings of
rail and other transportation rules, analyzed the effects of those
rules, and sought and weighed alternative approaches to improve
outcomes. If confirmed, I am committed to continuing to ensure that my
decisions are supported by sound and objective analysis.
Third, I believe both in the importance of the Board's
responsibilities and in the power of market forces to achieve
efficiencies and drive innovation and investment. Our nation's freight
rail system moves goods essential to Americans' well-being, and it is
predominately private freight railroads that invest in, maintain, and
operate the 140,000-mile rail network so integral to our economy. Few
deny the transformational effects of partial economic deregulation in
1980, with gains in productivity and safety in the years that followed.
At the same time, codified in our Nation's rail transportation
policy are important consumer protections, including to maintain
reasonable rates where there is an absence of effective competition and
to avoid undue concentrations of market power. The statutory framework
governing the Board therefore underscores both a need for regulation
and a need for that regulation to be reasonable. If confirmed, I would
be proud to advance the Board's mission and bring to my position an
understanding of the value of markets.
This is an exciting time for the Board. The Board has a robust
workload before it, strong leadership, and talented and dedicated
staff, and--if confirmed--it would be an honor work with them and this
Committee to help ensure an efficient and competitive rail system.
Thank you for your consideration. I look forward to answering your
questions.
______
a. biographical information
1. Name (Include any former names or nicknames used):
Patrick John Fuchs.
Nickname: ``Paco'' in place of Patrick (the nickname is used
among some family and friends)
2. Position to which nominated: Member, Surface Transportation
Board.
3. Date of Nomination: March 6, 2018.
4. Address (List current place of residence and office addresses):
Residence: Information not released to the public.
5. Date and Place of Birth: February 3, 1988; Milwaukee, Wisconsin.
6. Provide the name, position, and place of employment for your
spouse (if married) and the names and ages of your children (including
stepchildren and children by a previous marriage).
Katherine Den Boer, Director--Communications & Policy, CTIA
(spouse).
7. List all college and graduate degrees. Provide year and school
attended.
Master of Public Affairs, University of Wisconsin--Madison,
2011.
Bachelor of Arts, Economics (major), Political Science (major),
University of Wisconsin--Madison, 2010.
8. List all post-undergraduate employment, and highlight all
management-level jobs held and any non-managerial jobs that relate to
the position for which you are nominated.
Senior Professional Staff Member, United States Senate,
Committee on Commerce, Science, and Transportation, 2017 to
Present. (Professional Staff Member, 2015 to 2017).
Policy Analyst, Executive Office of the President, United
States Office of Management and Budget (0MB), Office of
Information and Regulatory Affairs, 2011 to 2015. (Presidential
Management Fellowship, 2011 to 2013).
Foreign Service Detail--Policy Analyst (Presidential Management
Fellowship), United States Department of State, United States
Embassy in The Hague, Netherlands, 2013.
Project Assistant, National Center for Freight and
Infrastructure Research and Education, University of
Wisconsin--Madison, 2009 to 2011.
Analyst Intern, United States Government Accountability Office,
Physical Infrastructure Division, 2010.
City Administration Intern, City of Middleton, Wisconsin, 2009.
Management: At the Commerce Committee, I serve as the lead
staffer on rail, hazardous materials, and merchant marine
issues and on certain infrastructure policy areas. In this
capacity, I oversee the research and legislative work of more
junior staff and detailees working on surface transportation
and maritime issues. At the 0MB, l managed regulatory and
information collection reviews, consisting of staff from
multiple Federal agencies, on rail, maritime, and other issues.
At the Department of State, I conducted in-depth economic
policy analysis and oversaw the work of locally-employed
economic staff.
9. Attach a copy of your resume.
A copy is attached.
10. List any advisory, consultative, honorary, or other part-time
service or positions with Federal, State, or local governments, other
than those listed above, within the last ten years.
Member, Financial Institutions Advisory Board, University of
Wisconsin--Madison, 2008 to 2009.
Policy Intern, Office of the Lieutenant Governor, State of
Wisconsin, 2008.
Office Assistant, University of Wisconsin--Madison, Department
of Population Health Sciences, 2007 to 2008.
11. List all positions held as an officer, director, trustee,
partner, proprietor, agent, representative, or consultant of any
corporation, company, firm, partnership, or other business, enterprise,
educational, or other institution within the last ten years.
Member, DTP Capital LILAC, 2014 to 2017. (I was a non-managing
member of this limited liability company, which invested in residential
real estate in Wisconsin. I sold my membership interest in October
2017.)
12. Please list each membership you have had during the past ten
years or currently hold with any civic, social, charitable,
educational, political, professional, fraternal, benevolent or
religious organization, private club, or other membership organization.
Include dates of membership and any positions you have held with any
organization. Please note whether any such club or organization
restricts membership on the basis of sex, race, color, religion,
national origin, age, or handicap.
Wisconsin City/County Manager Association, Member, 2009 to
2011.
Distinguished Lecture Series, Wisconsin Union Directorate,
Committee Member, 2007 to 2010.
Pi Alpha , Public Affairs Honor Society, President of
University of Wisconsin--Madison chapter, 2010 to 2011.
Pi Sigma Alpha, Political Science Honor Society, Member,
University of Wisconsin--Madison chapter, 2009 to 2010.
Member, Financial Institutions Advisory Board, University of
Wisconsin Madison, 2008 to 2009.
St. Joseph Catholic Church, Parishioner, 1989 to 2011.
I have also worked with the charitable organization Greater DC
Cares, now defunct, but this service did not involve formal
membership.
None of these organizations restricts membership on the basis
of sex, race, color, religion, national origin, age, or
handicap.
13. Have you ever been a candidate for and/or held a public office
(elected, non-elected, or appointed)? If so, indicate whether any
campaign has any outstanding debt, the amount, and whether you are
personally liable for that debt. No.
14. Itemize all political contributions to any individual, campaign
organization, political party, political action committee, or similar
entity of $500 or more for the past ten years. Also list all offices
you have held with, and services rendered to, a state or national
political party or election committee during the same period.
I have not made political contributions.
I have not held office with, or rendered services to, a state or
national political party.
15. List all scholarships, fellowships, honorary degrees, honorary
society memberships, military medals, and any other special recognition
for outstanding service or achievements.
Fellowships
Presidential Management Fellowship, United States Office of
Management and Budget, 2011 to 2013. As part of this
fellowship, I also served on detail with the United States
Department of State.
Special Recognition for Outstanding Service or Achievements
Special Achievement Award, United States Office of Management
and Budget, 2014, for ``tireless efforts and outstanding work
in improving regulatory outcomes as well as key and timely
contributions in areas outside of his normal areas of
responsibility.''
Meritorious Honor Award, United States Department of State,
2013, for ``extraordinary contributions to substantive economic
analysis and to Embassy outreach, visibility, and
credibility.'' Shared with Gilles Everts.
Special Achievement Award United States Office of Management
and Budget, 2013, for ``enthusiasm, imagination, and
effectiveness in improving regulatory outcomes and processes.''
Director's Achievement Award, University of Wisconsin--Madison,
Robert M. La Gillette School of Public Affairs, 2011 for an
``outstanding academic record'' and ``evidence of being an
outstanding public policy thinker and communicator.''
Other academic recognitions include: Distinction from College
of Letters and Science, University of Wisconsin--Madison, 2010
(Economics, Political Science); Distinction in the Major
(Political Science), University of Wisconsin--Madison, 2010;
and Dean's List, University of Wisconsin--Madison, 2007 to
2010.
Honor Society Memberships
Pi Alpha Alpha, Public Affairs Honor Society, 2010. I served as
President of the University of Wisconsin--Madison chapter.
Pi Sigma Alpha, Political Science Honor Society, 2010.
Scholarships
Project Assistantship, 2009 to 2011. I received full tuition
and a stipend for the 2010-11 academic year.
16. Please list each book, article, column, or publication you have
authored, individually or with others. Also list any speeches that you
have given on topics relevant to the position for which you have been
nominated. Do not attach copies of these publications unless otherwise
instructed.
Publications
Bittner, Fuchs, Baird, and Smith. (September 2011). WisDOT
Policy Research Program: Addressing Elderly Mobility Issues in
Wisconsin (Final Report No. 0092-10-19). Madison, WI: Wisconsin
Department of Transportation Research & Library Unit and
National Center for Freight & Infrastructure Research &
Education.
In addition, while at the OMB's Office of Information and
Regulatory Affairs, I was the staff member assigned to lead the
production of the Information Collection Budget of the United
States for Fiscal Years 2011, 2012, and 2013. I am listed as a
principal contributor for these publications.
Office of Management and Budget, Office of Information
and Regulatory Affairs. (September 2014). Information
Collection Budget of the United States Government,
Fiscal Year 2013. Washington: United States Office of
Management and Budget.
Office of Management and Budget, Office of Information
and Regulatory Affairs. (September 2014). Information
Collection Budget of the United States Government,
Fiscal Year 2012. Washington: United States Office of
Management and Budget.
Office of Management and Budget, Office of Information
and Regulatory Affairs. (January 2013). Information
Collection Budget of the United States Government,
Fiscal Year 2011. Washington: United States Office of
Management and Budget.
I was also listed as an OMB contributor to the President's
Budget for Fiscal Years 2013, 2014, and 2016. My role in these
budgets was minor, because my position primarily involved
regulatory and information collection issues.
Office of Management and Budget. (February 2015).
Budget of the United States Government, Fiscal Year
2016. Washington: United States Government Printing
Office.
Office of Management and Budget. (April 2013). Budget
of the United States Government, Fiscal Year 2014.
Washington: United States Government Printing Office.
Office of Management and Budget (February 2012). Budget
of the United States Government, Fiscal Year 2013.
Washington: United States Government Printing Office.
Finally, I participated in a 2011 Transportation Research Board
session: Gollnik, Wittwer, Kleinmaier, and Fuchs. (January
2011). Poster Session 611: Northwest Passage Corridor-wide
Commercial Vehicle Permitting. Madison, WI: National Center for
Freight & Infrastructure Research & Education. However, I run
not listed on the final publication.
Speeches
As part of my duties as a Senate staffer, I have regularly spoken
externally on panels and at conferences and meetings concerning topics
relevant to surface transportation. Most of the presentations did not
focus exclusively on Surface Transportation Board issues but instead
covered a range of freight and passenger rail issues. Relevant
presentations include:
Surface Transportation Board Rail-Shipper Transportation
Advisory Committee meetings (04/15, 11/15, 08/16, 02/17);
National Mediation Board annual meetings (01/16, 01/17);
Federal Railroad Administration Project Delivery conferences
(10/15, 11/17);
American Public Transportation Association conferences (03/
16, 02/17, 11/17);
Rail Customer Coalition meetings (01/16, 06/16; 11/16);
American Short Line and Railroad Association conference and
meeting (04/16, 03/17);
Association of American Railroads conferences (06/15, 01/
17);
American Association of State Highway and Transportation
Officials conferences (02/15, 02/16, 02/17, 04/17, 03/18);
National Association of Rail Passengers conference (04/16);
Agricultural Transportation Working Group meeting (05/17);
American Forest & Paper Association meeting (09/16);
Brotherhood of Maintenance of Way Employes State
Representative meeting (05/17);
Freight Rail Customer Alliance meeting (04/16);
National Association of Railroad Passengers conference (04/
16);
Eno Center for Transportation Fellows panel (06/17); and
Association of Transportation Law Professionals meeting (11/
16).
I have lectured students on various aspects of public policy and
government relations, with specific examples from surface
transportation policy. These lectures include:
Georgetown University, Nonmarket Strategies and Government
Arenas (09/17).
Leadership Institute, Managing Congressional Hearings (04/
17).
During my employment with the OMB, I also presented externally on
regulatory reform and design:
Organisation for Economic Co-operation and Development
(OECD), 8th Session of the Regulatory Policy Committee, 04/13.
17. Please identify each instance in which you have testified
orally or in writing before Congress in a governmental or non-
governmental capacity and specify the date and subject matter of each
testimony.
I have not testified orally or in writing before Congress.
18. Given the current mission, major programs, and major
operational objectives of the department/agency to which you have been
nominated, what in your background or employment experience do you
believe affirmatively qualifies you for appointment to the position for
which you have been nominated, and why do you wish to serve in that
position?
During my time with the Senate Commerce Committee, I developed,
drafted, and negotiated legislation to improve the Nation's
transportation network, and this experience has provided me with an in-
depth understanding of the issues facing the Surface Transportation
Board. For example, through my work on the Surface Transportation Board
Reauthorization Act of 2015 (S. 808), the first reauthorization of the
Board since its creation in 1996, I acquired a deep understanding of
the Board's dispute resolution processes, structure, and authorities.
Following enactment of the legislation, my work has also included close
oversight of the Board's implementation efforts. As another example,
through my work on the Fixing America's Surface Transportation (FAST)
Act (P.L. 114-94), which included the first passenger rail
reauthorization in over seven years and substantive permitting reforms,
I gained detailed knowledge of the effects of Federal policies on
railroad operations and investment decisions.
Further, during my time with the 0MB, I managed the regulatory
review of rail regulations of national importance from Executive
Agencies, as well as the review of all information collection requests
of the Surface Transportation Board. This experience provided me with a
strong foundation in economic and data analysis and their application
to the rail industry. My positions at both the Commerce Committee and
OMB included significant work on transportation issues outside of rail
policy, such as maritime, hazardous materials, and multimodal issues.
This work has prepared me for the Board's other responsibilities, such
as certain oversight functions for household goods carriers or non-
energy, non-water pipelines. My interest and experience in
transportation, particularly rail, extends back to research work with
the University of Wisconsin and analyst training with the Government
Accountability Office.
I wish to serve in this position because I believe the Board's
responsibilities are important; our Nation's rail system moves goods
essential to the well-being of the country, and the Board is charged
with helping ensure that system is sound, efficient, and competitive.
The Board also plays an important role in the oversight of the
passenger rail that carries people to medical appointments, family
visits, and vacation destinations. I appreciate the importance of fair,
timely, and analytically-driven decisions from the Board, and--through
objective and rigorous analysis--I hope to make a meaningful positive
impact on those decisions.
19. What do you believe are your responsibilities, if confirmed, to
ensure that the department/agency has proper management and accounting
controls, and what experience do you have in managing a large
organization?
Through my legislative and oversight work with the Commerce
Committee, I understand the Board's has had challenges with certain
management and accounting controls, and--if confirmed--I would be
committed to fixing any deficiencies, efficiently allocating resources,
and complying with applicable laws and regulations. Notably, recent
work of the Department of Transportation Inspector General (DOT IG)--as
part of its Federal Information Security Management Act of 2002 (FISMA)
audit--found that the Board's information security program is not
effective, and I believe it is the duty of all Board members to help
ensure the Board implements the DOT IG's recommendations as
appropriate. Moreover, the Surface Transportation Board Reauthorization
Act of 2015, which I helped draft, included new management transparency
measures concerning rate cases, regulatory proceedings, and complaints,
and it is important to ensure reports are highly informative and
accessible to the public.
The Board's Chairman legally holds foremost responsibility for the
administration of the agency, and all Board members help oversee
administrative functions. Since assuming her position, Chairman Begeman
has taken strong action to fix identified deficiencies, including
continuing to modernize and secure the Board's information technology
(IT) system and expanding the use of deadlines for Board proceedings. I
fully support these efforts, and--if confirmed--I would help drive and
reinforce improvements to the IT system and decision-making process. In
particular, given the sensitive information collected by the Board, I
would prioritize on-going work to ensure the Board protects its IT
system via timely software patch installation, adequate access and
training policies, and other risk management actions consistent with
the DOT IG's recommendations.
Chairman Begeman and Commissioner Miller, I have also recently
taken action to update the Board's ex parte communication rules,
permitting greater and more nimble information collection and exchange,
subject to certain disclosure and timing requirements. I support these
changes to acquire needed information and improve external
communication in a quicker and less resource intensive manner.
Through my work with Commerce Committee, I have conducted oversight
of the management of large agencies, and I frequently interface with
the relevant Inspectors General to advance management best practices.
During my time with the OMB, I gained experience managing interagency
regulatory review teams to help make appropriate resource allocation
decisions. Further, with the 0MB, I managed information collection
request reviews that involved consideration of privacy impacts, data
quality, and information technology. If confirmed, I would apply that
experience to help ensure the Board has proper management and
accounting controls.
20. What do you believe to be the top three challenges facing the
department/agency, and why?
1. Fully Implementing the Surface Transportation Board
Reauthorization Act of 2015. Amid concerns that rate cases were too
costly, complex, and time-consuming, the legislation aimed to improve
the rate case process at the Board, including by streamlining
administrative processes, expediting rate review timelines, and
expanding voluntary arbitration to offer an alternative to litigation.
The law also required the Board to look at simpler ways to conduct rate
reviews. Continuing that process, the Board has published an Advanced
Notice of Proposed Rulemaking (ANPRM) soliciting feedback on an
alternative rate review methodology for small cases, and it recently
established a Rate Reform Task Force. A key challenge facing the Board
is examining feedback on the ANPRM and managing the Rate Reform Task
Force to see if there are alternative methodologies that exist, or
could be developed, to address the complexity of large rate cases,
consistent with sound economic principles.
Moreover, the legislation aimed to increase proactive problem-
solving and accountability, such as by providing the Board with
authority to launch investigations based on its own initiative.
Consistent with the aim of the legislation, a key challenge for the
Board is deciding when and how to proactively address any major service
disruptions that arise.
2. Modernizing Information Collection, Processing, and Technology
Systems. These systems affect nearly everything the Board does, from
reviewing rates and service to interacting with the general public. In
recent years, the Board has increased its collection of data (e.g.,
requiring service metric reporting), revisited its processing of
certain data (e.g., evaluating its Uniform Railroad Costing System),
and initiated a modernization of its IT systems. As noted above, the
DOT IG has found that the Board's information security program is not
effective. I understand that the Board is currently working to secure
its IT system, replace its case management system, and upgrade its
public website. A key challenge for the Board is prioritizing and
managing these initiatives to ensure efficient resource allocation and
successful outcomes.
3. Making Timely, Sound Decisions on Pending Proceedings. The Board
has a large docket of existing proceedings, some of which have been on-
going for several years. Notably, in 2016, the Board proposed rules on
reciprocal switching and commodity exemptions, and--as noted above--it
has issued an ANPRM on rate case methodologies. Many of these
proceedings have large implications for the rail system, and both
railroads and shippers face uncertainty about their outcomes. A key
challenge for the Board is making timely decisions on outstanding
proceedings while ensuring that such decisions are based on good data
and rigorous analysis.
b. potential conflicts of interest
1. Describe all financial arrangements, deferred compensation
agreements, and other continuing dealings with business associates,
clients, or customers. Please include information related to retirement
accounts.
I hold a Thrift Savings Plan and a Federal Government retirement
account. I also participate in the Federal Employees Retirement System,
a defined benefit retirement plan.
2. Do you have any commitments or agreements, formal or informal,
to maintain employment, affiliation, or practice with any business,
association or other organization during your appointment? If so,
please explain. No.
3. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated.
I do not have any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which I have been nominated.
4. Describe any business relationship, dealing, or financial
transaction which you have had during the last ten 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 do not have any business relationship, dealing, or financial
transaction that could in any way constitute or result in a possible
conflict of interest in the position to which I have been nominated.
5. Describe any activity during the past ten years in which you
have been 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.
During my employment as a Senate staffer, an important part of my
job has involved activities that directly and indirectly influenced the
passage, defeat, or modification of legislation and that have affected
the administration and execution of law or public policy. For example,
I was heavily involved in developing, drafting, and negotiating aspects
of the Surface Transportation Board Reauthorization Act of 2015 (P.L.
114-110) and the FAST Act (P.L. 114-94), among other legislation, as
well as in advising Senate offices on related amendments. I have also
been involved in oversight efforts concerning issues within the
Commerce Committee's jurisdiction.
During my employment with the OMB, I provided objective analysis
and recommendations to senior Administration officials on proposed and
final regulations of national importance, including significant rules
governing transportation safety and housing programs. I also advised
senior policy officials on legislative proposals and reviewed
Congressional testimony.
During my employment with the U.S. Government Accountability Office
and National Center for Freight and Infrastructure Research and
Education, I was involved in reviews that covered, in part, the
execution of Federal transportation programs and policies. During my
work for the City of Middleton and Office of the Lieutenant Governor,
State of Wisconsin, I drafted memos for policy officials on state and
local government issues.
6. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items.
In connection with the nominations process, I have consulted with
the Office of Government Ethics and the Surface Transportation Board's
ethics official to identify conflicts of interest. Any potential
conflicts of interest will be resolved in accordance with the terms of
an ethics agreement that I have entered with the Board's ethics
official. A copy of the ethics agreement will be provided to this
Committee.
c. legal matters
1. Have you ever been disciplined or cited for a breach of ethics,
professional misconduct, or retaliation by, or been the subject of a
complaint to, any court, administrative agency, the Office of Special
Counsel, professional association, disciplinary committee, or other
professional group? If yes:
a. Provide the name of agency, association, committee, or group;
b. Provide the date the citation, disciplinary action, complaint, or
personnel action was issued or initiated;
c. Describe the citation, disciplinary action, complaint, or
perso1U1el action;
d. Provide the results of the citation, disciplinary action,
complaint, or personnel action.
No.
2. Have you ever been investigated, arrested, charged, or held by
any Federal, State, or other law enforcement authority of any Federal,
State, county, or municipal entity, other than for a minor traffic
offense? If so, please explain.
Yes. In April 2007, at the age of 19, I received a civil charge
(non-criminal) for an ordinance violation for possession of marijuana.
The charge was issued by the University Police of the State of
Wisconsin. I pleaded no contest to an amended charge of a non-traffic
ordinance violation for miscellaneous conduct on UW lands. This case
resulted in no fine and $105.00 in court costs.
3. Have you or any business or nonprofit of which you are or were
an officer ever been involved as a party in an administrative agency
proceeding, criminal proceeding, or civil litigation? If so, please
explain. No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? If so, please explain. No.
5. Have you ever been accused, formally or informally, of sexual
harassment or discrimination on the basis of sex, race, religion, or
any other basis? If so, please explain. No.
6. Please advise the Committee of any additional information,
favorable or unfavorable, which you feel should be disclosed in
connection with your nomination. None.
d. relationship with committee
1. Will you ensure that your department/agency complies with
deadlines for information set by congressional committees? 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, including 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 any duly
constituted committee of the Congress on such occasions as you may be
reasonably requested to do so? Yes.
______
Resume of Patrick Fuchs
Professional Experience
U.S. Senate, Committee on Commerce, Science, and Transportation--01/15-
Present
Senior Professional Staff Member, Surface Transportation and Merchant
Marine
Advances the policies and priorities of Chairman Thune and Committee
Majority members by developing, drafting, and negotiating legislation
to improve the Nation's transportation network, including major rail
reauthorization bills. Represented the Senate on rail and hazardous
materials issues during the successful conference committee of the FAST
Act (P.L. 114-94). Manages full and subcommittee hearings on surface
transportation regulation, passenger rail policy, maritime security,
among other issues. Conducts oversight of agencies within the
Committee's jurisdiction, including the STB, FRA, and PHMSA. Advises
Senate Majority offices on amendment votes, Collaborates with the
Committee's communications team and conducts stakeholder outreach to
build support for legislation. Served as Professional Staff Member from
2015 to 2017. Key work includes:
Surface Transportation Board Reauthorization Act of 2015 (S.
808), the first reauthorization of the Board since its creation
in 1996, improved the agency's dispute resolution processes,
enabled more proactive problem-solving, and reformed its
structure to increase efficiency and transparency (P.O. 114-
110);
Railroad Reform, Enhancement, and Efficiency Act (S. 1626),
the first passenger rail reauthorization in over seven years,
instituted reforms to improve Amtrak's performance, introduce
passenger rail competition, and increase safety (part of P.O.
114-94).
Railroad Safety and Positive Train Control Extension Act (S.
650) avoided a significant disruption to rail transportation by
extending an unrealistic statutory deadline for positive train
control implementation and setting new accountability measures
(part of P.O. 114-73).
Track, Railroad, and Infrastructure Network Act (S. 769)
streamlined historic and environmental permitting requirements
to facilitate accelerated rail project delivery (part of P.L.
114-94).
Railroad Infrastructure Financing Improvement Act (S. 797)
reformed an inefficient railroad loan program to reduce review
times, increase flexibility, and add taxpayer protections (part
of P.L. 114-94).
Hazardous Materials Transportation Safety Improvement Act
of2015 (Title VII of the FAST Act) increased safety,
streamlined grant programs, and reduced unnecessary regulatory
burden (part of P.L. 114-94).
Executive Office of the President, Office of Management and Budget--06/
11-01/15
Policy Analyst; Transportation and Security
Led government-wide reviews to provide objective analysis and
recommendations to senior Administration officials on proposed and
final regulations of national importance, including significant rules
governing transportation safety and housing programs. Analyzed complex
economic and financial data to help ensure Federal agencies, including
DOT, accurately assessed the costs and benefits of regulations and
selected the most cost-effective alternatives. Built excellent
relationships with senior career staff to achieve policy improvements.
Advised senior policy officials on legislative proposals, reviewed
Congressional testimony, and drafted reports to Congress on government-
wide management initiatives.
Improved over 40 proposed and final regulations, over 70 surveys and
program evaluations with statistical methods, and a Presidential
management initiative, Highlights include:
Advised senior OMB leaders and advanced major changes to
proposed regulations for crude oil and ethanol transportation
by rail, saving over $1 billion in unnecessary costs from the
original proposals.
Led the review of proposed and final regulations amending
overly burdensome train technology requirements, resulting in
estimated cost savings of over $1 billion.
Managed a government-wide paperwork burden reduction
initiative, including changes that led to paperwork time
savings of about $2 billion per year.
Received a Special Achievement Award in 2014 from OMB for
``tireless efforts and outstanding work in improving regulatory
outcomes as well as key and timely contributions in areas
outside of his normal areas of responsibility.''
Received a Special Achievement Award in 2013 from OMB for
``enthusiasm, imagination, and effectiveness in improving
regulatory outcomes and processes.''
U.S. Department of State, U.S. Embassy in The Hague, Netherlands--02/
13-06/13
Policy Analyst (Foreign Service Detail), Economic Section
Developed complex economic and financial analyses on budget, labor, and
banking issues for senior officials at the Department of State, the
Department of the Treasury, and National Security Council. Supervised
Embassy-employed economic staff with responsibilities for analyzing
Dutch government reports and economic data. Coordinated and
collaborated with senior diplomats in Brussels and The Hague to ensure
consistent economic reporting. Built relationships with foreign
government officials, businesses, academics, and policy stakeholders to
gain insight into critical economic issues for U.S. strategic
interests.
Received a Meritorious Honor Award from the Department of
State for ``extraordinary contributions to substantive economic
analysis and to Embassy outreach, visibility, and
credibility.''
National Center for Freight and Infrastructure Research and Education,
Madison, WI--09/09-06/11
Project Assistant, Transportation Research Projects
Assessed Wisconsin's public and specialized transportation programs and
developed statistical, economic, and geospatial analyses of statewide
elderly mobility data. Oversaw the development of the literature
review, identification of best practices, and policy recommendations
for the final research study. Designed a statewide transportation
survey, with an emphasis on safety for older persons, and coordinated
with over 50 local governments and non-profit organizations to garner
informative public responses.
Co-authored final elderly mobility research study for the
Wisconsin DOT and presented findings at National Academies'
Transportation Research Board conference.
U.S. Government Accountability Office, Washington D.C.--05/10-08/10
Analyst Intern, Physical Infrastructure Division
Analyzed the effects of the freight hours of service policies in the
Rail Safety Improvement Act of 2008. Gathered economic data on freight
railroads, conducted research on fatigue assessment tools, and helped
develop statistical analysis of railroad accident/incident and
inspection data.
Other Leadership
OECD Regulatory Policy Committee, Paris, France, Presenter--04/13
Transportation Research Board, Washington, D.C., Published Co-Author--
11/10-0l/12
Pi Alpha Alpha Public Affairs Honors Society, Madison, WI, President--
12/10-05/11
Distinguished Lecture Series, Madison, WI, Committee Member--09/07-09/
10
Select Invited Remarks: STB RSTAC meetings (04/15, 11/15, 08/16, 02/
17); FRA Project Delivery conferences (10/15, 11/17); ASLRRA
conferences (04/16, 03/17); AAR conferences (06/15, 01/17); Rail
Customer Coalition meetings (01/16, 06/16; 11/16); AASHTO conferences
(02/15, 02/16, 02/17, 04/17, 03/18); APTA conferences (03/16, 02/17,
11/17); NARP conference (04/16); and Ag Transportation Working Group
meeting (05/17).
Education
University of Wisconsin
Master of Public Affairs. La Follette School of Public Affairs (05/11)
Received Director's Award to recognize an outstanding
academic record in the graduate school class
Awarded Presidential Management Fellowship upon graduation
Bachelor of Arts, Economics; Bachelor of Arts, Political Science (05/
10)
International Academic Program at National University of Singapore (06/
09)
Awarded Distinction in the Major, Political Science
Awarded Distinction from the College of Letters and Science,
Economics, Political Science
The Chairman. Thank you, Mr. Fuchs. This Committee's loss
will be the STB's gain.
Mr. Fuchs. I appreciate it, sir.
The Chairman. You've taken a lot of expertise with you, and
we look forward to continue to work on issues that are
important to rail service in this country.
I know you all appreciate the importance of cooperation
between the FTC, the STB, and Congress. Nevertheless, these
nomination hearings give us an opportunity to underscore that
point. A simple question: If confirmed, will you pledge to work
collaboratively with this Committee and its members and to
provide thorough and timely responses to our requests for
information?
Mr. Fuchs. Yes, Mr. Chairman.
Ms. Schultz. Yes.
Ms. Slaughter. Yes.
The Chairman. All right. This is an STB-related question.
As I mentioned earlier, the Surface Transportation
Reauthorization Act provided STB with the authority to conduct
investigations on its own initiative to allow it to more
proactively resolve service issues and other problems before
they escalate into larger disputes. To date, STB has not
conducted any investigations under this provision.
And so this would be for our STB ``noms'': If confirmed,
would you be willing to use STB's investigative authority? And
if so, how would you envision it being used?
Ms. Schultz or Mr. Fuchs, whoever wants to go first.
Mr. Fuchs. Yes, Mr. Chairman. And I agree it's an important
aspect of your reauthorization legislation, that I think it
really advances the goal of proactive problem-solving. So, if
confirmed, I would envision using the authority on issues of
national or regional significance for an alleged violation. In
making a scope determination, I would consider the impacts on
traffic and customers and other entities.
I would also look at the geographic scope of an issue. Any
determination would be fact-specific. And at the same time, I
would certainly respect due process protocols and adhere to the
timing of the legislation and certainly would use the authority
judiciously.
So certainly, I think this is an important tool in the
Board's toolbox, and I would use it if it were appropriate to
do so.
The Chairman. Thank you, Mr. Fuchs.
Ms. Schultz.
Ms. Schultz. I would concur with Patrick's statement. The
only thing that I would add is, is that I'm aware that the
Board currently has a number of things that it does to work to
address service challenges, including ongoing dialogues with
all the stakeholders. And in addition to, of course, supporting
the use of investigatory authority, I would also just add that
what I would encourage to pursue first would be to further the
current actions of what the Board takes, which is to try to
address any types of challenges very quickly and efficiently by
having ongoing conversations.
The Chairman. Ms. Slaughter, with the growth of e-commerce
and social media in recent years, I'd like to just get a
response from you regarding the state of competition in the
American tech sector. While some argue that big tech should be
subject to more antitrust scrutiny, the applicable law would
seem to require a more nuanced analysis, one that is not based
on size alone.
So could you kind of describe for us what your views are
regarding antitrust concerns with respect to large technology
firms, such as Facebook and Google?
Ms. Slaughter. Thank you, Mr. Chairman for the question. I
am well aware of the active debate that's happening in the
public and in this Committee about large companies in many
industries, but especially in the tech industry.
And I agree strongly with what Mr. Simons and some of the
other nominees said at their confirmation hearing. Big isn't
necessarily bad on its own, but where you have extreme market
concentration, you have more opportunity for abuse of that
market power. I think it's incumbent upon the Commission to
monitor carefully for any abuses in any sector, including the
tech sector.
The Chairman. One other question, and this is back to STB,
there have been recently, and then, of course, going back in my
home state of South Dakota in 2013 and 2014, some serious
service disruptions, fluidity issues affecting shippers. So I'm
wondering if you could maybe just talk a little bit about what
you see as the Board's role in responding to rail service
issues. And if confirmed, what long-term actions do you believe
STB should take to prevent or mitigate future service delays?
Ms. Schultz, and then Mr. Fuchs.
Ms. Schultz. Sure. I think that the role of the Board is to
determine how best to quickly address the service issues that
are happening in the moment. As I previously discussed, the
Board has a number of ways to address service issues, including
the dialogue of the current rail customer program that's in
place, which, again, works with both shippers and railroads to
obtain metrics and to try to assess what's going on.
The Board has a few other options as well, which is to hold
hearings and ultimately to initiate orders to address service
issues. And if confirmed, I would pledge that I would take the
issue of service disruptions very seriously, work with the very
qualified staff at the Board, as well as my fellow Board
members and the stakeholders of the industry to address service
issues as quickly as possible.
The Chairman. Thank you, Ms. Schultz.
Mr. Fuchs.
Mr. Fuchs. Thank you, Mr. Chairman. I would agree with what
Michelle said. I think the Board plays an important role in the
oversight of rail service, and I think that the rail service
metrics that you advocated for were helpful for better
informing the Board's decisionmaking. I think, you know, one of
the first steps is always to shine a light: letters, calls,
requests for additional information, listening sessions.
The Board has other tools at its disposal. We've talked
about the investigative authority. The Board is hosting
informal meetings right now to look at the adequacy of its
directed service regulations. If confirmed, I would certainly
approach the job with an understanding of the importance of
strong rail service to the country and to the country's
economy, and I would also stay mindful of the fact that Board
actions can have broader effects on the network.
The Chairman. OK. Thank you.
Senator Nelson.
Senator Nelson. Ms. Slaughter, yesterday in the hearing
with Mr. Zuckerberg, I asked him if he had notified the 87
million people that their data was stolen as a result of the
Cambridge Analytica scandal that you know about, and he did not
answer directly that question. So he talked about how that they
had withdrawn, said it was a mistake, and so forth, but did not
answer the question about notification of the 87 million that
their data has been stolen. So then I asked him, ``Did you
notify the FTC?'' and he said, ``No.''
The FTC is the lead Federal agency protecting consumers by
bringing enforcement actions against companies that encounter
data breaches, and in this case, due to being asleep at the
switch, in their words, in Zuckerberg's words, that they
trusted, and they should not have trusted, Cambridge Analytica.
Do you agree that the FTC should continue bringing such
data security enforcement actions?
Ms. Slaughter. Thank you, Senator, for the question. I am
very acutely aware of this Committee and the American public's
interest in the Facebook matter specifically. I want to be very
careful because I'm also aware that the Commission has
confirmed an open investigation into Facebook, and I don't want
to say anything to prejudice that particular investigation in
any way. But as a general matter, I will say that, yes, I think
the Commission can and should and must continue to monitor data
breach issues carefully and bring enforcement cases wherever
appropriate.
Senator Nelson. Right. And from that, I assume, and you
tell me if my assumption is correct, therefore, to protect the
privacy of the American public and protect their consumer data.
Ms. Slaughter. Yes, that's correct, Senator.
Senator Nelson. OK. Mr. Fuchs, your first name is Patrick,
but your fellow staff members tell me that your name is Paco.
[Laughter.]
Senator Nelson. Please explain.
[Laughter.]
Mr. Fuchs. One of my older brothers is just a couple years
older than me, and my parents said ``Paco'' instead of
``Patrick'' to make it easier on his pronunciation. And I went
to kindergarten, my kindergarten teacher loved it, and I went
to the same school for 10 years, and it stuck.
Senator Nelson. OK.
[Laughter.]
Senator Nelson. So----
Senator Wicker. [Off microphone.]
[Laughter.]
Senator Nelson. Just a little entertainment, Senator
Wicker.
[Laughter.]
Senator Nelson. All right. So we've got an Amtrak, and
there are some folks that want to shut down Amtrak because they
don't think that the ridership is there. There are certain
segments of the service, such as the Gulf Coast, Senator Wicker
included, that used to run from New Orleans all the way to
Orlando, and after Katrina, the tracks were blown apart, and
they did not reinstate the service. Do you have any opinion
about this?
Mr. Fuchs. Thank you for the question, Senator. I know it's
an important issue for folks in the Gulf Coast, and there's a
lot of passion in the area about it. As a result of your
efforts and the efforts of Senators Wicker and Cochran, there
were significant additional resources in the last two
appropriation bills for the restoration or initiation of rail
service, and I know advocates for the route found those
resources and will find those resources to be very helpful.
Currently, there is not a filing on the matter before the
Board, and the role of the Board would be to set reasonable
terms and compensation if the host railroad and Amtrak couldn't
agree on the matter through one-on-one dialogues. So if there
was a filing, the Board certainly has an important role to
play.
Senator Nelson. OK. I'd like you also to think about the
future of high-speed rail. Unfortunately, when we had $2.5
billion sitting on the table for the first high-speed rail in
America, and it would have been the first because it ran right
down the middle of Interstate 4, of which the right-of-way was
already there, the state of Florida and the Governor chose to
ignore that by putting it together, and, therefore, we don't
have high-speed rail in America, and we are decades and decades
behind the rest of the world, particularly Europe and Asia.
But one thing, that people in America would choose to fly
or to drive because the passenger trains don't run on time.
Now, fortunately, Acela seems to be doing a pretty good job,
and I can tell you that now when I go or come from New York, I
certainly prefer to take the Acela instead of going through the
hassle of going through La Guardia.
What can you all do, as the Transportation Board, what can
you do to try to tune them up where they will actually be on
time?
Ms. Schultz. Thank you for the question, Senator. And first
I would like to say that I couldn't agree more with you
regarding the policy and advocacy for high-speed rail here in
the United States. In terms of what--I believe your question
was, What was the Board's role to tune them up as it pertains
to service challenges----
Senator Nelson. So that you have reliable service and on-
time service.
Ms. Schultz. Sure. So, again, on-time service impacts the
economic vitality of the entire rail network. Recognize--I
think the first step would be to recognize the importance of
service challenges and to address them as expeditiously as
possible. The way to do that, I believe, is to further the
current actions of the Board, which is to partner with
stakeholders, obtaining current metrics, and working with them
to try to quickly analyze what is causing the service
challenge. And so what I could say today is, is that I would
commit to furthering the work of the Board and to recognize the
importance of addressing service issues in a very timely
fashion.
Senator Nelson. Thanks.
The Chairman. Thank you, Senator Nelson.
Senator Wicker.
STATEMENT OF HON. ROGER F. WICKER,
U.S. SENATOR FROM MISSISSIPPI
Senator Wicker. OK. Let's just pick up on that.
Mr. Fuchs, there is a problem with timeliness, and I agree
with Senator Nelson, that passengers will use the service if
it's on time and reliable. And amen about the Acela. I have to
go to New York every now and then, and it's a whole lot easier
on me just to walk right in there.
Amtrak, the law says Amtrak has preference over freight
transportation using rail--in using a rail line.
Now, Mr. Fuchs, you talked about statutory directives. You
agree that's a statutory directive, do you not?
Mr. Fuchs. Yes, Senator, preference is in statute.
Senator Wicker. Yes, OK. So in reality, freight railroads
have consistently denied such preference to Amtrak. In fact,
only 47 percent of long-distance trains were on time at
stations in Fiscal Year 2017. And this is largely attributable
to freights refusing to provide preference to passenger rail.
For the routes that travel through my home state of
Mississippi, it's even worse.
Based on this reality, do you feel that host railroads are
on average following the law? The law states if Amtrak and a
freight railroad cannot agree on terms, of an agreement for
Amtrak to assess freight railroads' rail lines, the Surface
Transportation Board, quote, shall prescribe reasonable terms
and conditions for that access.
So, Ms. Schultz, it's more than a partnership. There is
statutory directive there.
So, Mr. Fuchs, can you tell me what you think the
reasonable terms and conditions are with respect to Amtrak, and
given Amtrak's recent on-time performance report card, what do
you believe--why do you believe some railroads are performing
better than others?
Mr. Fuchs. Thank you for the question, Senator. On the
first element of the question, I think that reasonable terms
and compensation are case specific. In fact, there is a case
pending before the Board that's been adjudicated for a number
of years on that exact point. So, the reasonable terms and
compensation are dependent on the particular route.
As a general note on on-time performance, it's linked to a
Board investigations under the statute. And the STB attempted
to regulate on-time performance, and that rule was actually
vacated by the Eighth Circuit. And the FRA-Amtrak joint rule is
currently pending before the D.C. Circuit, and depending on the
decision there, I think the Board would assess what action to
take. And whatever action the Board took wouldn't be
necessarily categorical for the rail system, but it would be
based on a complaint for an individual line. So I would be
hesitant to make a sweeping statement, and I would evaluate any
case that came before the Board from a fair and open
perspective.
Senator Wicker. OK. Well, I think you know where at least
two members of the Committee are on that.
And then following up also on the Gulf Coast rail line, are
you saying, Mr. Fuchs, that the role of the STB is going to be
limited to whether a fouling takes place with regard to this
Gulf Coast rail service?
Mr. Fuchs. Yes, Senator.
Senator Wicker. OK.
Mr. Fuchs. If the host railroad and Amtrak could not agree
on mutual conditions for the restoration or initiation of
service, then a party could come before the Board, petition the
Board, and ask the Board to prescribe, as you mentioned,
reasonable terms and conditions. It's based on those filings
and the evidence that is submitted by both parties that the
Board would make its decision.
Senator Wicker. OK. Well, you've been very helpful at the
Committee level, and I won't prejudice your decision after
you're confirmed.
One other thing, the STB's primary function is to serve as
an arbiter when there is no effective rail competition. In
several recent decisions from the STB, Board members have
commented that the Board's principal method for resolving
disputes, the standalone cost method, is not effective and
needs to be reformed. You're familiar with this, aren't you,
Mr. Fuchs? [No audible response.]
Senator Wicker. We passed legislation more than 2 years ago
requesting the Board find new methods for rate disputes, and
yet we have not seen any meaningful reforms. So what about
this? And can each of you commit to make it a priority to
actually follow through on the legislation that we pass to find
a better method of determining the costs?
And I'll start with you, Mr. Fuchs.
Mr. Fuchs. Yes, Senator. And I agree with you that
improving dispute resolution processes was a significant
component of the STB Reauthorization Act of 2015. I see kind of
three different actions that the Board should be thinking about
here. First is that the STB launched an Advance Notice of
Proposed Rulemaking, taking a look at whether or not there were
alternative methodologies for small shippers. Second, the Board
convened an internal rate reform task force trying to take an
expansive view of the lay of the land about all possible
alternative methodologies. And, third, the Board has been
working on whether or not they can elevate and improve their
alternatives dispute resolution processes, and alternative to
litigation. So certainly, if confirmed, I would collaborate
with other Board members and work hard to see if there's a
better way of doing business on rate cases consistent with the
Board's statutory authorities and sound principles of
economics.
Senator Wicker. Do I have time for Ms. Schultz?
The Chairman. Sure.
Senator Wicker. Yes, sir.
Ms. Schultz.
Ms. Schultz. Yes, Senator. I recognize the importance of
the pending regulations before the Board. And I'm also aware
that some of them have been outstanding for a fairly long
period of time. I'm also very much still learning about some of
these very complex and challenging economic principles.
Senator Wicker. Right.
Ms. Schultz. And what I do know is that we do have an
internal task force that has been assigned to work on some of
these issues. And I very much look forward to working with them
as well as obtaining much more information about these very
important issues from stakeholders and addressing and
ultimately resolving some of these issues.
Senator Wicker. OK. Well, just be aware, both of you, after
your confirmation, that the law, signed into law by the
President, directs the Board to find new methods of rate
disputes. Thank you.
And thank you for your indulgence, Mr. Chairman.
The Chairman. Thank you, Senator Wicker.
Senator Cortez Masto.
STATEMENT OF HON. CATHERINE CORTEZ MASTO,
U.S. SENATOR FROM NEVADA
Senator Cortez Masto. Welcome to all three of you.
Congratulations on your nominations.
Mr. Fuchs and Ms. Schultz, let me start with you. As I'm
sure you're aware, we have a major concern regarding an ill-
conceived proposal to move and store nuclear waste at Yucca
Mountain in my home State of Nevada. Specifically, the State
takes exception to the science and safety of the site and the
transportation of this waste product. This project would
require the shipment of waste from 76 sites in 9,500 rail casks
within 2,800 trains and 2,650 trucks hauling one case each to
Yucca Mountain for over 50 years. Millions of Americans and a
majority of congressional districts in the country would be
impacted by shipments to Yucca Mountain. And 300 miles of new
railroad would be required, which brings in the STB.
As a member of the Surface Transportation Board, can I get
a commitment from each of you that during your term on the
Board you will be transparent, consider safety concerns, and
work to include, when appropriate, my office as you consider
any matters related to this flawed concept?
Ms. Schultz. Yes, Senator, I can commit to that.
Mr. Fuchs. Yes, Senator.
Senator Cortez Masto. Are either of you aware that DOE has
an application for a certificate of public convenience and
necessity pending before STB on this very project, which is
involving the buildout of railroad from Caliente to Yucca
Mountain?
Mr. Fuchs. Yes, Senator, I'm aware there's a pending
construction application.
Ms. Schultz. I am as well.
Senator Cortez Masto. Have either of you formed an opinion
about the DOE application?
Ms. Schultz. No, I have not.
Mr. Fuchs. No, Senator.
Senator Cortez Masto. Is there any reason that you should
be recused from making a decision on this particular
application?
Ms. Schultz. No.
Mr. Fuchs. No, Senator.
Senator Cortez Masto. OK. Thank you. I also want to raise
an additional--an issue of concern, particularly to our rural
communities, and I think this is something you'll hear from my
other colleagues as well, and I've heard a little bit about it.
But the California Zephyr Amtrak line is a vital link in our
communities, specifically some of our rural communities, Elko,
Winnemucca, and Reno. These are places that depend on the
reliable rail service to bring travelers in and out of their
communities, including the annual average of about 84,000
Nevada riders who travel on the line.
And just to give you a sense of the impact, I recently
received a letter from the Mayor of Winnemucca, who stated that
rural Nevada needs help. The Amtrak train service is an
important part of the economic vitality and social fabric of my
community. Many of our veterans and seniors use Amtrak to
access medical services in Reno and other areas, and there's
concern that the rail service will be eliminated.
And so, again, hereto can I get your commitment to bear
these kinds of concerns in mind and stay in contact with my
office as you're involved in cases of rail access and reliable
services between the freight and passenger rail sectors in
Nevada and the rest of the country?
Mr. Fuchs. Yes, Senator.
Ms. Schultz. Yes, Senator.
Senator Cortez Masto. Thank you.
Ms. Slaughter, can I get your commitment to be an active
consumer protection agency, including on marketing practices
and data security and privacy?
Ms. Slaughter. Yes, Senator, I'm happy to make that
commitment.
Senator Cortez Masto. Thank you. And in your opinion, what
is the FTC's role in handling the broader consumer protections
of this Internet age, which include the Internet of Things?
Have you thought about this in the role that you will--the
agency should be playing as we build out the Internet of Things
and the conversation that this Committee constantly has on this
new world?
Ms. Slaughter. Yes, Senator. Thank you for the question. I
think that's a very important issue and one of those emerging
technological innovations that I spoke about a little bit in my
opening. The Internet of Things makes all sorts of connectivity
possible, and it makes possible exciting new developments, but
that also opens consumers and their data up to substantial risk
in some cases. I think it's the Commission's responsibility,
and if I am confirmed, I would make it my priority to actively
monitor the Internet of Things, to ensure companies are being
responsible stewards of data and not engaging in the unfair and
deceptive practices that are prohibited by the FTC Act.
Senator Cortez Masto. Thank you. And then back to Ms.
Schultz and Mr. Fuchs, again, with this new technology, are you
aware that in Nevada we are actually testing Hyperloop One?
Mr. Fuchs. Yes, Senator.
Ms. Schultz. Yes.
Senator Cortez Masto. And knowing that, is this something
that you think would be on your radar as well, this new
technology and a new passenger kind of--I don't know what you
would really call it. It's kind of freight, but not really,
and--thoughts on and your involvement and oversight of that, if
any.
Ms. Schultz. Just should an issue pertaining to the Board's
jurisdiction come before us, I would commit to learning much
more about it as well as presumably addressing, you know, a
case of first impression, if you will, regarding this new
technology.
Mr. Fuchs. I completely agree. As I understand it right
now, it's of an unsettled matter of law because it's such a new
and innovative technology, in terms of how it corresponds with
the Board's definition of ``rail carrier.'' So I think Michelle
is absolutely right, it would be a case of first impression,
and if confirmed, we would convene the Board's legal staff and
come to a determination on it.
Senator Cortez Masto. Thank you. I notice my time is up.
Thank you very much.
Thank you.
The Chairman. Thank you, Senator Cortez Masto.
Senator Cantwell.
STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
Senator Cantwell. Thank you, Mr. Chairman.
And again congratulations to all the nominees.
Ms. Schultz and Mr. Fuchs, agricultural growers in the
Pacific Northwest, and really across the Nation, continue to
see challenges in getting their products to market due to rail
congestion and rail system issues writ large. And while we've
seen some improvements in that, you could say different
dynamics and changing with the product mix of what's being
moved, that is, changes in transport on the fossil fuel side,
but we still have many steps that need to be taken to help us
on this issue. What are your suggestions?
Ms. Schultz. Again, I know that the Board has an internal
task force that currently works to address the challenges
between shippers and rail, railroads. Recently, the Board has
required additional reporting of metrics, and the result of
that requirement has been an ability for the Board and for
stakeholders to more quickly address challenge issues and work
toward a resolution.
Mr. Fuchs. Thank you, Senator. I've read recent letters
from the National Grain and Feed Association and the Fertilizer
Institute pointing to some of those challenges. And as I
mentioned, I think the first step is always to shine a light:
collect more data, listening sessions, letters, calls. And I
think another tool in the Board's toolbox is their
investigative authority and they are also hosting informal
meetings on directed service regulations.
And then, more broadly, anytime that you can kind of
informally resolve issues without getting to litigation or
formal Board action, I think that can be a really positive
step. And the Board maintains a rail customer and public
assistance program that actually processed about 130 service-
related disputes and facilitated prompt responses. So
certainly, if confirmed, I would try and emphasize and elevate
that program and make sure that agricultural shippers
nationwide know of the potential services and can benefit if
needed.
Senator Cantwell. Well, I guess mark me down for I want new
congestion strategies that don't include pricing agriculture
off of rails, which has I think been the traditional response
by the agency, is, ``We'll just raise the price and see who can
pay it,'' and then the consequence is a lot of shippers don't
get to ship when the real issue is just congestion. We have an
energy report on energy commodities that show this, even energy
products themselves competing with each other to the degree of
knocking ability for utilities to even serve because they can't
get the product to them.
So we have a rail congestion issue, and we, in the
Northwest, know very well when you try to plan for
alternatives, what happened when we tried to use an alternative
route sooner maybe than it should have been used, and then we
had a horrific accident. So this issue isn't going away. Well,
maybe I'll put a little caveat. If the President keeps
persistent on his tariff idea, maybe we'll have a problem, we
won't have a problem. But I'm hoping he won't and that our
agricultural commodities will continue to grow with great
ability in our foreign markets.
If that continues, like I think it will, because we have a
rising middle class around the world, and I think America knows
how to grow great product, I want it to be able to get to
market. And so I hope that you guys will make this a priority,
of thinking of new strategies beyond just congestion pricing
that helps keep agriculture getting to its marketplace.
Mr. Fuchs. Absolutely.
Senator Cantwell. Thank you.
Ms. Slaughter, we had a chance yesterday with Mr.
Zuckerberg, he said something when I asked him about the
European rules on privacy, he said, ``well, we might have a
different sensibility here in the U.S.'' What are your
sensibilities on privacy?
Ms. Slaughter. Thank you, Senator, for the question. I
think that the implementation of the GDPR in Europe is
something that we should monitor closely and watch carefully to
see if it has any instructive lessons for the U.S. I think
privacy is an important value for our citizens and our country,
and it's one that if I am lucky enough to be confirmed as a
Commissioner is one that I will take seriously and making sure
that our laws are enforced as robustly as possible to protect
privacy.
Senator Cantwell. So do you have any thoughts on their
current draft, on their moving forward?
Ms. Slaughter. On the GDPR?
Senator Cantwell. Yes. Mm-hmm.
Ms. Slaughter. I think it's in the early stages of
implementation at this point. So I think it's an innovative
approach that they're taking and one that we should watch
carefully. And I look forward to, if I am confirmed, working
with the expert staff at the FTC and my fellow Commissioners to
figure out how what's working there might work here or not.
Senator Cantwell. Well, I think one thing is clear: we had
a Consent Decree from the FTC that wasn't followed. So I
think--I hope you will take that into consideration when you're
thinking about your sensibilities on this issue. But clearly we
have to do more unless we want consumers to just vote with
their feet.
So thank you.
The Chairman. Thank you, Senator Cantwell.
Senator Markey.
STATEMENT OF HON. EDWARD MARKEY,
U.S. SENATOR FROM MASSACHUSETTS
Senator Markey. Great. Thank you, Mr. Chairman, very much.
And we thank all of the candidates here today. And it's good to
see you, Becca, and I see Justin out there in the audience, and
we congratulate you on your nomination and your service to our
country.
So let me--I'm just going to follow up a little bit here on
the line which Senator Cantwell was going down, but move over
to another question. Federal Trade Commissioner McSweeny wrote,
``Scrapping the FCC's net neutrality rules will harm consumers
and content creators, and the Federal Trade Commission isn't
going to be able to stop it. The Federal Trade Commission does
not have specialized expertise in telecommunications. We don't
have engineers with technical experience and data network
management practices. These are very real and significant
limits to the effectiveness of our tools and ensuring that
networks are open and free of harmful discrimination.''
Would you agree with Commissioner McSweeny, that the FTC
has limited tools for preventing blocking, throttling, and paid
prioritization of ISPs?
Ms. Slaughter. Thank you, Senator, for the question. And
first let me say it's really been a pleasure and a privilege
for me to work with your staff, for my husband, who formerly
served on your staff, on these issues and others.
Senator Markey. Her husband was my counsel.
Ms. Slaughter. Yes.
[Laughter.]
Senator Markey. Yes.
Ms. Slaughter. For many years. And I very much respect your
leadership on the issue of net neutrality.
Senator Markey. Thank you.
Ms. Slaughter. As you well know, your CRA is currently
pending in the Senate. And I think Commissioner McSweeny raised
some important points about the limitations of the FTC's
jurisdiction. If I am lucky enough to be confirmed as a
Commissioner, what I will commit to you is that I am interested
in enforcing the law to its fullest extent. I am interested in
working with my fellow Commissioners and the staff at the
agency to point out areas where I think the law might need to
be improved to better protect consumers.
Senator Markey. OK, good. Thank you.
And there's a growing body of evidence from child
development experts--I touched on this yesterday with Mark
Zuckerberg--that technologies are being purposely made to be
addictive, and here's the goal, to eventually generate revenue
from digital advertising, put more simply, hook the young
enough on these devices so that they're just--they're just
completely unable to ever disconnect.
Under the Commission's COPPA, Children's Online Privacy
Protection Act mandate, what will you do to ensure that child-
directed applications and the parent consent process are
fashioned in ways that really protect privacy and ensure that
parents can make informed decisions about their children?
Ms. Slaughter. Thank you for the question, Senator.
Senator Markey. And I know you just had a baby 2 weeks ago.
Ms. Slaughter. I did. I did.
Senator Markey. So thank you--thank you for being here in
such good form.
Ms. Slaughter. Well, on behalf of my baby and my other
children, as a parent, this is an issue that's really important
to me. You know, my 5-year-old learned to use a tablet very
early, so early that when he would go to a TV screen, he would
try to swipe across it to get it to turn on. And that's great
in some ways, he's gotten important skills and learned
important things. But I do very much share the concern about
addictive technology and making sure that children, in
particular, are protected. And so I think COPPA provides the
Commission with very important tools that should be enforced to
their fullest extent so that children who don't really have the
ability to look out for themselves are appropriately protected.
Senator Markey. Great. And, you know, the hearing yesterday
with Mark Zuckerberg really is triggered by the Consent Decree
by Facebook with the Federal Trade Commission in 2011. And that
Consent Decree really put Facebook on privacy probation, you
know, for the last 7 years. And they were violative of that
Consent Decree.
So the Federal Trade Commission plays a big, big role in
protecting privacy. And so, from my perspective, I'm just
wondering how you feel about the need to put stronger
protections on the books, not just for adults, but for kids as
well?
Ms. Slaughter. Thank you, Senator. I want to, as I said
earlier, be very careful talking about the Facebook case in
particular because, as you've noted, there was a Consent
Decree, and the Commission has confirmed an open investigation
into it and into Facebook. I don't want to prejudice that
investigation or the results of that investigation in any way.
I will just say, as a general matter, it is important for the
Commission to enforce privacy commitments and privacy rules
vigorously.
Senator Markey. Great.
OK. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Markey.
And the Senator from Massachusetts and I have a different,
slightly different, view about how to deal with the issue of
net neutrality, and I believe the only way is for--ultimately,
to settle the issue of net neutrality is for Congress to come
up with a bipartisan legislative solution. And so just as a
follow-up to his line of questioning, would you work with us?
Do you agree that Congress should work to reach a bipartisan
legislative solution on this issue?
Ms. Slaughter. Thank you, Senator, for the question. I have
had the privilege for many years of trying to work on
bipartisan legislative solutions here in Congress. I think if
I'm lucky enough to be confirmed to the FTC, my role would be
slightly different. I respect the role of Congress in
developing consensus where it exists and passing new statutes.
At the Commission, my role would really be to enforce the law
as it's written today and to work with my fellow Commissioners
and the staff at the agency to come back to you with
recommendations for how the law might be changed. So you have
my commitment to do that.
The Chairman. OK. Well, I think the ambiguity in the law
and the courts and everywhere else and the agency, it really
points the need for Congress to set clear rules of the road on
this issue.
But Senator Inhofe is up next.
STATEMENT OF HON. JIM INHOFE,
U.S. SENATOR FROM OKLAHOMA
Senator Inhofe. Thank you, Mr. Chairman.
So that the--I think our witnesses all realize that we have
a little bit of a problem, it seems to be a problem every week,
and that is that we have this Committee and the Environment and
Public Works Committee with nine members in common, and they
always meet at the same time. So that's the reason you don't
have a full house now, but I can assure you that they are
paying attention.
And by the way, I enjoyed our visit, Ms. Slaughter. I'm
just--I'm so proud of you being here with that little tiny
baby. Hold that little baby up.
[Laughter.]
Senator Inhofe. Isn't that--oh, we can't see the pink
ribbon.
[Laughter.]
Senator Inhofe. There it is. That's good. That's good. Yes.
I told Ms. Slaughter that my wife and I have been married
58 years, and we have 28 kids and grandkids, and you now have
three children. You need to start now and have a fourth child
because the math doesn't work unless you start with four.
[Laughter.]
Senator Inhofe. All right. Let me just say something about
the witnesses who are here, or the nominees, who are here
today. I'm going to support all three of you, and I think that
there's a--for a different reason than maybe some of the
others, and that is I like to see them coming from different
perspectives.
Now, Patrick, you know everything there is to know on this
issue because of the background that you have and the time that
you've spent.
And, of course, Ms. Schultz, you come from the private
sector. You know some of the problems you get from the
bureaucracy, and you can address those.
And, of course, Ms. Slaughter, you have extensive
background, of course, with Chuck Schumer and the others.
So I will look forward to supporting all three of you. Let
me just real quickly run over some questions and then go back
to the other committee meeting.
Patrick, as a member of the Board, how would you facilitate
collaboration with other Board members to expedite
decisionmaking in these types of cases? And you've been around
that for a long time. What are your ideas?
Mr. Fuchs. Thank you for the question, Senator Inhofe. I
think the Chairman's legislation had authority for a majority
of Board members to meet on pending matters subject to
appropriate disclosure rules, and I think that authority is
really helpful for Board members coming together and
collaborating. I think generally on the theme of making
decisions expeditiously, the Board recently changed their ex
parte rules to take in information more quickly and more
comprehensively from stakeholders, and I think taking in that
information and then using that Section 5 authority, that
meeting authority, to collaborate with Board members would be
really helpful for building consensus and coming to resolution
on issues.
Senator Inhofe. Uh-huh. That's good.
And, Ms. Schultz, with your private sector experience
dealing with sometimes competing regulations, how would you
bring that experience to your work as a member of the Surface
Transportation Board?
Ms. Schultz. Sure. So in my role at SEPTA, I'm currently in
the Corporate Division and tasked with a number of construction
projects, including the rebuilding of a railroad line from
Elwyn to Wawa that's about 3.5 miles. And part of what I've
been working on with that project is compliance with local,
State, and Federal laws, including, you know, stormwater as
well as working with the Pennsylvania Public Utility Commission
for grade crossings.
So I am very much familiar with the overlap between local,
State, and Federal laws. And I think the perspective that I
would bring to the Board are the challenges that working within
all those different laws sometimes presents to construction
projects.
Senator Inhofe. Yes. Yes, and I agree with that. Good.
Good.
Ms. Slaughter, you're fully familiar with all of the tools
that are available to you, as a Federal Trade Commissioner. And
is there anything you could talk about in how you can better
use the tools to promote fair competition? Because the tools
have been there. There is some criticism as to, have they
really been utilized properly? Do you have any ideas on that?
Ms. Slaughter. Thank you, Senator, for the question. And
thank you for your guidance about family life, too. I'm very,
very lucky to have such a supportive husband and wonderful
father in Justin over there with the baby, so he deserves a lot
of credit.
In response to your question, I am particularly interested
in merger retrospectives, an idea Mr. Simons has talked about.
I want to take a look at what has been done before and how the
Commission has processed mergers in the past so that we can
learn lessons about what might be done differently going
forward. I think that would be a very valuable tool.
Senator Inhofe. Yes. Well, that's good.
Well, I appreciate it very much, and I look forward to
working with all three of you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Inhofe.
Senator Heller.
STATEMENT OF HON. DEAN HELLER,
U.S. SENATOR FROM NEVADA
Senator Heller. Mr. Chairman, thank you.
And to the witnesses that are here, congratulations to all
three of you.
And to Ms. Slaughter, I'll probably be asking most of my
questions to the other two, so you can enjoy yourself for a few
minutes, but I do want to congratulate you and welcome you to
the cause.
But I do want to talk to those who are looking at the
Surface Transportation Board nominees, and I want to piggyback
a little bit on what my colleague from Nevada said on the other
side of the aisle when it comes to railroads and freeways.
We have a new designated monument in the state of Nevada.
Are you familiar with the laws and regulations that would allow
you or not allow you to build a new freeway or railroad through
a monument?
Mr. Fuchs. Thank you, Senator. I'm generally familiar with
the environmental laws applicable to the Board.
Senator Heller. So the question, the follow-up question,
would be, Can you build a railroad or a freeway through a newly
designated monument?
Mr. Fuchs. Senator, whenever there is a rail construction
application pending before the Board, depending on who is the
lead agency or if the Board is a cooperating agency, the Board
has to thoroughly consider the impacts on the human and natural
environment, and it has very wide authority to impose
mitigation conditions as well as to disapprove applications if
anything is inconsistent with applicable law.
Senator Heller. So are you saying that there is a chance
that you could build a railroad or a freeway through a
monument?
Mr. Fuchs. I think such an alignment would have a very
difficult time in an Environmental Impact Statement.
Senator Heller. Do you agree, Ms. Schultz?
Ms. Schultz. Senator, I'm not quite as familiar with the
law surrounding a historical monument. What I can say here
today is that I would promise to become much more familiar with
those laws and review them and adjudicate them in a fair and
impartial manner.
Senator Heller. According to my colleague on the other
side, I think you both answered affirmative that you're
familiar with the proposed rail alignment and the application
for this particular railroad for the purpose of hauling nuclear
waste?
Mr. Fuchs. Yes, Senator, I'm familiar with the application
for the Caliente line.
Senator Heller. I'm looking at the new proposal now that
goes around the proposed monument. I have a comment and a quote
here from a gentleman by the name of Bob Halstead. He is the
Executive Director for the State of Nevada in the Office of
Nuclear Projects, and this is what he says: The recent
designation of the Basin and Range National Monument shown in
this attached map, which I'm happy to share with you, and the
related conservation easement for the area around what's quoted
as the city land sculpture installed in Garden Valley would
make future considerations of the Caliente route extremely
difficult. Ranchers would likely file legal challenges against
the Caliente route, adverse impacts on grazing allotments, and
water resources.
So in the process of taking a look at these proposed rail
alignments, do you take into consideration or anticipate that
you would take into consideration States' concerns for that
designation?
Mr. Fuchs. Absolutely, Senator. The Board's environmental
review process has extensive public participation protocols.
When the Board was initially considering the application in the
2008 to 2010 range, I think it actually went out to Nevada to
host a public hearing. So I would expect a robust public
participation opportunity.
Ms. Schultz. I concur with Patrick's statement, Senator. I
would--certainly, the input from folks within the region as
well as stakeholders would be something that the Board would
certainly have to take under consideration in rendering its
decision.
Senator Heller. On the proposed application, in 2017, the
President put in his budget, the application to renew the
license for Yucca Mountain, and in 2017 I took that out of the
budget. In 2018, the President put it back in his budget, and
this year I took it back out. I'm going to guess, Mr. Chairman,
in 2019, he puts it back in, and in 2019, I take it out.
At what point do you move forward with a proposed
application like this if the licensing agreement is not
available or proposed for Yucca Mountain?
Mr. Fuchs. Thank you for the question, Senator. I agree
with you. I think the broader issue is the DOE application
before the Nuclear Regulatory Commission, and the Caliente line
is just one part of that, which is why the Board was a
cooperating agency, whereas DOE was the lead agency on the
Environmental Impact Statement. So I would say that it's just
one aspect of the proposal. And typically, as I understand it,
it's not the Board's practice to get out in front of a broader
issue where it's not the lead agency.
Senator Heller. And that's the question and the answer that
you gave me yesterday when you were in the office, and I do
appreciate that because I do want to make sure that the Board
does not get in front of this application process because I
anticipate, as long as I'm here, that we will slow that
application process down or, in fact, continue to remove it
from the budget.
Ms. Schultz, do you agree?
Ms. Schultz. Senator, what I--what I can say right now is
that I would review the license application in a fair and
impartial manner should it--should it come before--be revisited
before the Board again.
Senator Heller. OK.
Mr. Chairman.
The Chairman. Thank you, Senator Heller.
Senator Peters.
STATEMENT OF HON. GARY PETERS,
U.S. SENATOR FROM MICHIGAN
Senator Peters. Thank you, Mr. Chairman.
And to the three witnesses, welcome, welcome to the
Committee.
The first question is to Mr. Fuchs and Ms. Schultz. In
March, the Alliance for Automotive Manufacturers sent a letter
to the Surface Transportation Board about a very serious
service issue impacting the transportation of finished
vehicles.
According to the alliance, manufacturers continue to
experience a very serious problem with rail service that is
attributable to a slowdown in the rail network. The service
problem means that there are substantial delays in getting
vehicles to consumers. It also means that manufacturers have
incurred significant costs to transport and to store those
vehicles. There is even some concern that some assembly plants
may have to temporarily shut down as a result of the service
issues. The Auto Alliance believes that the railroads really
haven't come up with an adequate plan.
So my question to each of you is, What role can the STB
play to help resolve these service issues that are having a
significant impact on the auto industry? And would you be
committed to working on this issue?
Ms. Schultz, we'll start with you.
Ms. Schultz. Thank you for the question, Senator. Yes.
First I would like to take a moment to recognize that service
delays have a significant economic impact on the folks that are
relying upon railroads to carry those goods. I can say today
that I would commit my attention to these very important
matters and to work very closely with the Board's staff that
partners with stakeholders to address these issues.
Senator Peters. Thank you.
Mr. Fuchs.
Mr. Fuchs. Thank you, Senator Peters. I read the Auto
Alliance letter, and I certainly saw their concerns about the
serious shortage of bi-level and tri-level cars and missed car
orders and service delays. I think the first step for the Board
is always to shine a light, which is why I think the Board has
requested responses from the railroads about locomotive power
and other issues. It's important to analyze and scrutinize that
data. And the Board has other tools at its disposal including
investigative authority, and it's launching informal meetings
on its directed service regulations to see whether or not those
are adequate for addressing service issues.
And so certainly, if confirmed, I would approach the
position with an understanding of the importance of strong rail
service to the economy, and I would also stay mindful of the
fact that Board actions can have broader effects on the
network.
Senator Peters. And another question to both of you as
well. Earlier this year, a rate case before the Surface
Transportation Board found in favor of a Michigan-based
company, Consumers Energy. This is the first time--my
understanding at least, it's the first time in many years that
the Board had actually found in favor of a shipper in a rate
case. And in order to address whether the shipper was facing
unreasonably high rates, the Board goes through, as you're well
aware, a very elaborate cost and time-intensive test, and this
can be extremely challenging for many, many shippers. And while
Consumers Energy prevailed in this case, there are other
shippers that face really some significant challenges to bring
these cases forward despite the impact that it's having on
their business.
So my question to the two of you, Do you think this is an
issue that the Board should address? And what are some ways
that the Board can simplify this process for shippers that have
these kinds of concerns?
We'll start with Mr. Fuchs this time, we'll go the other
way.
Mr. Fuchs. Thank you, Senator. And I think that there are
ongoing concerns, among many, that the current rate case
processes available to shippers are unduly costly and complex.
And I think that's the reason why the Board has issued an
Advance Notice of Proposed Rulemaking on taking a look at
whether or not they can make modifications to their existing
alternative methodologies for very small shippers. They have
convened an internal rate reform task force to take an
expansive look at alternative methodologies and bring in some
of the Board's expert legal and economic staff. And I think
they're always evaluating whether or not there are alternative
dispute mechanisms, whether it's arbitration or another means,
that can be emphasized and used without the need for costly
litigation.
So certainly, if confirmed, I would collaborate with other
Board members and work hard to see if there's a better way to
review rates consistent with sound principles of economics and
the Board's statutory authorities.
Senator Peters. I appreciate that.
Ms. Schultz.
Ms. Schultz. I concur with Patrick's statements. I'm aware
that these cases are very time-consuming and very costly and
they're challenging. And I know, to Patrick's point, the Board
does have an internal task force that's looking into these
important issues, and I look forward to addressing them in a
timely fashion if confirmed.
Senator Peters. Great. I appreciate both of your commitment
to both of these issues. Thank you so much.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Peters.
Senator Blunt.
STATEMENT OF HON. ROY BLUNT,
U.S. SENATOR FROM MISSOURI
Senator Blunt. Thank you, Mr. Chairman.
Thank all three of you for being willing to serve. And I
appreciate what can happen and needs to happen on both of these
jobs.
Ms. Slaughter, yesterday, we had a joint hearing with the
Judiciary on Facebook, which turned into a little bigger
discussion than that about generally Facebook and its
competitors and similar organizations. There seemed to be a
number of FTC discussions and one or two guidelines set out,
but my impression is that there hasn't been a lot of follow up
from FTC or the Congress on whether those guidelines were being
viewed seriously. I wonder if you have any comments to make
about the FTC role in both consumers understanding what happens
when they sign up for a free service like that and
organizations like that paying attention to what the FCC says
they should be paying attention to?
Ms. Slaughter. Thank you, Senator, for the question. I want
to be very careful in what I say about Facebook specifically
because, as I'm sure you're aware, the Commission has confirmed
an open investigation into Facebook, and I don't want to
prejudice that investigation in any way.
As a general matter, without speaking specifically about
any particular company, I think the Commission has a very
important role to play in policing allegations of either
anticompetitive conduct or unfair and deceptive trade
practices. That's a role, an obligation, that I take very
seriously. If I'm confirmed, I would commit to you that I would
continue to make that a priority.
Senator Blunt. Well, I did notice in one of the questions
to Mr. Zuckerberg about whether he had a monopoly or not, he
said it didn't feel like a monopoly. But as these things--these
organizations have grown in such an incredible way of things
like Facebook and Amazon, and I'm sure they didn't set out
intending to have the market power they have even in probably
their greatest anticipation of what could possibly happen. And
it's an issue that I think we need to be sure that we're paying
attention to, and that's going to be an important part, I
think, of the next--the short-term future at least at FTC. And
who knows during the whole time you're there where, what
direction, that might take us?
Surface transportation, obviously an area where when I
spoke to the Missouri General Assembly when we were on break
last week--and, you know, Missouri is right in the middle of
the country and where lots of things come together--and I said,
you know, location is really one of our great advantages, and
that would be true for our state, but it's also true for the
country. You know, Churchill once said, ``there is no country
more fortunately located than the United States of America,''
and our opportunities all over the world benefit from that. But
whether we make the most of that or don't is largely going to
be up to things like the regulatory environment at Surface
Transportation.
Mr. Fuchs, you've been particularly helpful on this
Committee of trying to find ways that we could expedite those
things that needed to be expedited and still continue to
protect those things that need to be protected, you know, the
things like you're going to put a railroad bridge right back
where a railroad bridge was, that should be a different process
than what you might go through otherwise. And I wonder if you
have any comments on what you've seen happen in our Committee
as we try to establish some principles that would be important
principles for surface transportation?
Mr. Fuchs. Thank you for the question, Senator. I think
that your TRAIN Act, which was included in the FAST Act, made
several important changes for helping expedite the deployment
of railroad infrastructure while staying cognizant of the
important protections. And so, there's an ongoing Section 106
exemption process that FRA and the Advisory Council on Historic
Preservation are working on. It had provisions for the Federal
Railroad Administration to streamline the NEPA process, and it
had a number of exemptions for 4(f) historic preservation
requirements while staying mindful of the fact of things that
are truly historic, protecting them.
But for the example that you cited, some of the routine
construction activities, providing a little bit more freedom to
improve railroad infrastructure, which has its own benefits for
safety and the economy, while staying cognizant of the broader
environmental framework. So I think that's very helpful, and
certainly it's kind of an experience and some lessons that I
would take with me to the Board, if confirmed.
Senator Blunt. Well, thank you.
And, Ms. Schultz, thank you again for being willing to
serve.
I may have more questions, Mr. Chairman, for the record,
but that's all I have today.
The Chairman. Thank you, Senator Blunt.
I just have a couple of wrap-up questions here. I
understand we may have one member on the way.
Just as a sort of again general question, but--and this
would go to our STB ``noms,'' but another important aspect of
the STB Reauthorization Act was to further promote
collaboration among Board members by allowing them to talk with
one another about official business matters with proper
disclosure of such discussions. So I'll direct this to both of
you: If confirmed, do you commit to promoting collaboration
among the Board members?
Ms. Schultz. Yes, Senator.
Mr. Fuchs. Yes, Senator.
The Chairman. And then I want to ask the question, Ms.
Slaughter, that has to do with these are kind of, I mean,
difficult issues, but some have criticized the FTC for
challenging practices as unfair under the FTC Act where the
consumer injury seems speculative or otherwise not truly
substantial, particularly in the context of privacy and data
security. What factors do you think the FTC should consider in
determining whether an act or practice causes or is likely to
cause substantial injury, injury to consumers?
Ms. Slaughter. Thank you, Senator, for the question. This
is a difficult issue, particularly in the area, as you know, of
data privacy and security, where if one's data is stolen, for
example, one can know that it has been used to perpetrate
identity fraud or identity theft, but one might not know that
it hasn't been used to do that. I think the interest of this
Committee and the American people in recent data breaches and
issues shows that the American people really perceive data
theft and data breach as a strong violation of their personal
data. So I think that's an important thing to consider.
The Commission needs to work carefully, I believe, to make
sure, that when we're looking at injury, there is substantial
injury and that the harm isn't outweighed by any countervailing
benefits. That's sort of been the principle of the Commission
for a long time. And so, if confirmed, those are the principles
I would continue to look at.
The Chairman. Do you have any concerns about the FTC's case
selection and enforcement priorities in this area?
Ms. Slaughter. Sitting here today, I don't. However, if I
am lucky enough to be confirmed, I would want to work with the
staff and my fellow Commissioners to make sure we're bringing
all the appropriate cases that we can within the bounds of the
law as written today.
The Chairman. And do you think the FTC ought to provide
more detailed guidance regarding its interpretation of the FTC
Act?
Ms. Slaughter. I think as a general matter, guidance to
markets and to consumers is always a good thing. Transparency
is generally helpful. I don't have a view at this moment of
specific areas where that should be done and hasn't been done,
but it's a principle that I support as a general matter.
The Chairman. Yes.
Is anybody coming?
Voice. Huh-uh.
The Chairman. Oh, good. All right.
Well, look, I appreciate again all of you being here. And
we're grateful for your service. I do have some--unanimous
consent--I want to include in the record several letters. We
have a letter from the fertilizer and agribusiness community
signed by 21 organizations in support of both Patrick Fuchs and
Michelle Schultz's nominations, a letter from 22 additional
organizations in support of both Patrick Fuchs and Michelle
Schultz's nominations, a letter of support from the Freight
Rail Customer Alliance in support of Patrick Fuchs' nomination,
a letter from the Rail Supply Institute in support of Patrick
Fuchs' nomination, a letter from International Paper in support
of both Patrick Fuchs' and Michelle Schultz's nominations.
[The information referred to follows:]
March 12, 2018
Hon. John Thune,
Chairman,
Committee on Commerce, Science, and Transportation,
Washington, DC.
Hon. Deb Fischer,
Chair,
Subcommittee on Surface Transportation,
Washington, DC.
Hon. Bill Nelson,
Ranking Member,
Committee on Commerce, Science, and Transportation,
Washington, DC.
Hon. Gary Peters,
Ranking Member,
Subcommittee on Surface Transportation,
Washington, DC.
Re: Surface Transportation Board (STB) Nominees; support for Mr.
Patrick Fuchs and Ms. Michelle Schultz
Dear Chairman Thune, Ranking Member Nelson, Subcommittee Chair Fischer
and Ranking Member Peters:
On behalf of our members in the fertilizer and agribusiness
community, we write to express our strong support for the nominations
of Mr. Patrick Fuchs and Ms. Michelle Schultz to be Members of the
Surface Transportation Board (STB).
The STB provides critical rail marketplace oversight for shippers
in the agriculture sector, many of which are dependent upon a single
railroad for service. STB's current Commissioners have made great
progress implementing the STB Reauthorization Act of 2015 (Public Law
No. 114-110). This law and their efforts are helping the agency better
reflect the modern day rail marketplace. STB modernization, including
but not limited to the STB Reauthorization Act of 2015, will help
farmers, agribusinesses, and manufacturers be more competitive in the
global marketplace.
Both nominees have the knowledge and expertise to serve as Board
Members and to lead and advance efforts to modernize the Agency, which
is critical to railroads, shippers, and the American economy. It has
been too long since the STB was fully staffed. We urge you to move as
quickly as possible to confirm Mr. Fuchs and Ms. Schultz.
Thank you for your consideration of our views. We look forward to
working with you in support of the agriculture community and our great
nation. Should you need further information, please contact Justin
Louchheim at The Fertilizer Institute at 202-515-2718 or
[email protected] or Richard Gupton at the Agricultural Retailers
Association at 202-595-1699 or [email protected].
Sincerely,
The Fertilizer Institute Agricultural Retailers Association
Agribusiness Council of Indiana Alabama Agribusiness Council
Far West Agribusiness Association Ohio AgriBusiness Association
Florida Fertilizer & Agrichemical Illinois Fertilizer and Chemical
Association Association
Michigan Agri-Business Association Michigan Bean Shippers
Minnesota Crop Production Retailers Nebraska Agri-Business Association
New York State Agribusiness North Dakota Agricultural
Association Association
Oklahoma Grain and Feed Association Rocky Mountain Agribusiness
Association
South Dakota Agri-Business Texas Ag Industries Association
Association
Western Plant Health Association Wyoming Ag-Business Association
Wyoming Wheat Marketing Commission
Cc: Members of the Senate Committee on Commerce, Science, and
Transportation
______
April 10, 2018
Hon. John Thune,
Chairman,
Commerce, Science, and Transportation Committee,
U.S. Senate
Washington, DC.
Hon. Bill Nelson,
Ranking Member,
Commerce, Science, and Transportation Committee,
U.S. Senate
Washington, DC.
Dear Chairman Thune and Ranking Member Nelson:
The undersigned groups, whose members consist of diverse range of
agricultural producers and agribusinesses, strongly support and
respectfully urge the Committee on Commerce, Science and Transportation
to recommend to the U.S. Senate the confirmation of Patrick J. Fuchs
and Michelle A. Schulz to serve as members of the Surface
Transportation Board (STB).
America's transportation infrastructure--and the motor carriers,
barges and railroads that operate on it--is a critical element of U.S.
agriculture's world-class productivity and competitiveness, which
contribute substantially to U.S. job creation and economic growth.
Farmers, ranchers and agribusinesses depend on these transportation
providers to move agricultural products from geographically diverse
sources of production to domestic and export markets, as well as to
provide critical farm inputs such as fertilizer, seed and agricultural
chemicals to producers. Freight railroads account for about 24 percent
of agricultural commodity shipment volumes.
The STB serves a vital role, given its charge to provide fair,
objective and fact-based regulatory oversight of a freight rail
industry that is exempt from U.S. antitrust law and now consists of
only seven major Class I railroads--with two dominant in the West and
two in the East. The STB is charged with taking a balanced approach--as
it is required to do under existing law--in weighing the need for
effective competition in the rail marketplace, with appropriate
regulation where effective competition does not exist, while allowing
railroads to earn sufficient revenues to maintain their infrastructure
and a national rail system.
Unfortunately, the STB currently is hamstrung in its ability to act
on several important proceedings given the lack of a full complement of
commissioners. That is why we particularly appreciate the Committee
scheduling a hearing on April 11 to consider these two nominees, and
urge their speedy confirmation by the full Senate.
Mr. Fuchs, whose nomination we strongly recommended earlier to
President Trump, is superbly qualified to serve as a member of the STB,
particularly given his background as senior professional staff member
for surface transportation and merchant marine for the Senate Commerce,
Science and Transportation Committee. As you know, he was instrumental
in working with the Committee in helping draft and coordinating
enactment of the first reauthorization bill since the STB's
establishment in 1996 as the successor to the Interstate Commerce
Commission. He also represented the Senate on rail and hazardous
materials issues during the successful 2015 enactment of the Fixing
America's Surface Transportation (FAST) Act, the five-year, $305
billion surface transportation bill. He also helped draft and
successfully negotiate enactment of legislation to avoid a disruption
of the Nation's freight rail network by setting a new, realistic and
achievable deadline for major carriers to install positive train
control safety technology.
Mr. Fuchs has impeccable credentials for this key position. He has
a keen intellect and a well-deserved reputation for integrity,
thoroughness, objectivity and impartiality. He also has a passion for
freight rail policy, and for bringing facts and well-grounded analysis
to bear on regulatory policymaking. Those qualities served him well
while previously serving as an analyst and Presidential Management
Fellow for rail, maritime and housing issues at the White House Office
of Management and Budget. While at OMB, he led government-wide reviews
and initiatives that resulted in more than $5 billion in cost savings
through reductions in unnecessary paperwork requirements for truck
drivers, amending overly burdensome train regulations and advancing
more cost-effective alternatives for crude oil and ethanol
transportation safety.
Mr. Fuchs also has served as an economic analyst on foreign service
assignments at the U.S. Embassy in The Hague, and in research and
analysis positions with the U.S. Government Accountability Office and
the National Center for Freight and Infrastructure Research and
Education.
While we are less familiar with Ms. Schultz, we are impressed by
her credentials and work as deputy general counsel at the Southeastern
Pennsylvania Transportation Authority (SEPTA), the Nation's sixth
largest public transit agency in terms of ridership. In her current
role, she has focused on procurement, major capital projects and
commuter-rail regulation, and previously served as SEPTA's director of
legislative affairs. She, too, has an impressive background, having
clerked for the Superior Court of Pennsylvania and the U.S. Bankruptcy
Court for the Eastern District of Pennsylvania. She received an
undergraduate degree in English from Penn State University, and a law
degree from the Widener University School of Law in Chester, Pa., and a
master of governmental administration from the University of
Pennsylvania.
We greatly appreciate your consideration of these two nominees to
serve as members of the STB.
Sincerely,
Agricultural Retailers Association
Agriculture Transportation Coalition
American Farm Bureau Federation
Corn Refiners Association
Growth Energy
Institute of Shortening and Edible Oils
Meat Import Council of America
National Association of Wheat Growers
National Cattlemen's Beef Association
National Corn Growers Association
National Cotton Council
National Council of Farmer Cooperatives
National Grain and Feed Association
National Milk Producers Federation
National Oilseed Processors Association
National Pasta Association
North American Meat Institute
North American Millers' Association
Pet Food Institute
The Fertilizer Institute
U.S. Hide, Skin and Leather Association
cc: Honorable Sen. Mitch McConnell, Senate Majority Leader
Honorable Sen. Deb Fischer, Chairman, Subcommittee on Surface
Transportation and Merchant Marine Infrastructure, Safety and Security;
Senate Committee on Commerce, Science, and Transportation
The Honorable Cory Booker, Ranking Member, Subcommittee on Surface
Transportation and Merchant Marine Infrastructure, Safety and Security;
Senate Committee on Commerce, Science, and Transportation
______
Freight Rail Customer Alliance
May 23, 2017
Hon. Donald J. Trump,
The White House,
Washington, DC.
Dear President Trump:
The Freight Rail Customer Alliance (FRCA)--an umbrella organization
including trade associations representing more than 3,500
manufacturing, agriculture and alternative fuels companies, electric
utilities, and their customers--strongly supports the nomination of Mr.
Patrick Fuchs from Wisconsin to serve as a Member of the Surface
Transportation Board (STB or Board).
The STB Reauthorization Act of 2015 (Act), P.L. 114-110, was signed
into law in December 2015 after passing the U.S. Senate by Unanimous
Consent and clearing the U.S. House of Representatives with strong bi-
partisan support.
The Act marks the first time since 1998 that the Board was
reauthorized. The reauthorizing law: (1) provides much-needed reforms
to the Board's process to address numerous historical shortcomings
experienced by the Board and industry stakeholders; (2) improves the
Board's transparency; (3) helps the Board to operate more expeditiously
and efficiently; and (4) better enables the Board to strike a more
equitable balance among the interests of its diverse stakeholders. The
Act also expands the size of the Board from three Members to five
Members to allow the agency to become more functional and
collaborative. The Act specifies that no more than three Members may be
of the same political party. As the Board currently has two Democratic
Members and only one Republican, your Administration has the
opportunity to fill both vacant seats with Republicans.
Selecting the right Republican nominees to serve in your
Administration, including these two Board Members, is an important
decision. Our country's ever-growing reliance on freight rail commands
the Board to provide necessary and effective oversight, especially
considering only four Class I railroads control 90 percent of our
Nation's freight rail traffic. Freight rail is a vital component of our
Nation's economy. Farmers rely on rail both for fertilizer to grow
their crops and to deliver those crops to market, and coal-burning
utilities and propane suppliers rely on rail to receive the fuel they
need to serve their customers. Freight rail also enhances the growth of
our economy and our global competitiveness.
Mr. Fuchs is uniquely qualified to be nominated to serve as a
Member of the Board. He was intimately involved with the crafting and
passage of the Act in his role as a key committee staff member to
Senator John Thune (R-SD), Chairman of the Senate Commerce, Science and
Transportation Committee. He helped to achieve the consensus support
among diverse stakeholders, and he has the knowledge, background, and
experience to see that the law is successfully implemented.
Along with implementing the Act, there are several major pending
proceedings at the Board--some going back decades--that involve the
most substantive issues of great importance to the Board, shippers,
railroads, and the general public. These matters require resolution to
reflect today's market conditions and freight rail demands.
Mr. Fuchs's noteworthy service on Capitol Hill is further
complimented by his prior experience as an analyst with the White House
Office of Management and Budget (OMB). There, Mr. Fuchs was recognized
with the Special Achievement Award in 2014 for ``tireless efforts and
outstanding work in improving regulatory outcomes as well as key and
timely contributions in areas outside of his normal areas of
responsibility'' and in 2013 for ``imagination and effectiveness in
improving regulatory outcomes and processes.'' His skills and
achievements demonstrated at the OMB promise to serve your
Administration and the Board well in helping to ensure government
oversight is equitable and effective for all affected stakeholders.
The matters before the Board are technical, complex, and
challenging. Mr. Fuchs's notable research assistantships and
internships at the Federal and local government levels--the
Governmental Accountability Office, National Center for Freight and
Infrastructure Research and Education, and the City of Middleton WI--
provided him with valuable insights and perspectives that will be
helpful in this regard if serving in your Administration as a Board
Member.
Again, FRCA strongly views Mr. Fuchs as the appropriate Republican
nominee for STB Member to promote the national interest in preserving
an efficient and fair freight rail system. Our experience working with
Mr. Fuchs has been above par, and we believe that he will excel at
being impartial and fair with the ultimate goal of enhancing our
Nation's transportation system.
Thank you for your consideration.
Sincerely,
Ann Warner,
Executive Director.
About FRCA
An umbrella membership organization, the Freight Rail Customer
Alliance (FRCA) includes large trade associations representing more
than 3,500 electric utility, agriculture, and alternative fuel
companies and their consumers. Through a growing coalition of
industries and associations, the mission of FRCA is to obtain changes
in Federal law and policy that will provide all freight shippers with
reliable rail service at competitive prices. www.railvoices.org
______
Railway Supply Institute
Washington, DC, March 26, 2018
Via e-mail
Senator John Thune,
Chairman,
Senate Commerce, Science, and Transportation Committee.
Senator Bill Nelson,
Ranking Member,
Senate Commerce, Science, and Transportation Committee.
Re: Surface Transportation Board Nominees and in support of Mr. Patrick
Fuchs
Dear Mr. Chairman and Mr. Ranking Member,
On behalf of our members at the Railway Supply Institute (RSI), I
write to strongly support the President's nomination of Senate Commerce
Committee senior professional staff member Patrick Fuchs to the Surface
Transportation Board (STB). The STB serves a vital role for the entire
$28 billion a year rail supply industry and the agency has historically
provided a balanced regulatory environment. We believe Mr. Fuchs will
continue to uphold these standards at the highest level.
Mr. Fuchs has unmatched expertise in rail transportation matters in
both the regulatory and legislative spheres. His work in the Office of
Management and Budget's Office of Information and Regulatory Affairs
and as the rail subject policy lead for Senator Thune provided him with
the detailed knowledge of the rail and shipping industry that will
serve him very well in this new role. In addition to his subject matter
expertise, we have found that Mr. Fuchs possess outstanding integrity
and impartiality that will make him an excellent board member.
Finally, we also support the President's nomination to make Acting
Chairman Ann Begeman permanent Chairman of the STB.
Thank you for your consideration of our views. We look forward to
working with you in pursuit of policies that support the rail supply
community and our great nation. Should you need further information,
please contact Nicole Brewin, Vice President of Government Affairs at,
[email protected] or at, (202) 347-4664.
Sincerely,
E. Michael O'Malley,
President,
CC: Members of the Senate Commerce, Science and Transportation
Committee
______
International Paper
Washington, DC, April 10, 2018
Chairman John Thune,
Senate Commerce, Science, and Transportation Committee,
Washington, DC.
Dear Chairman Thune,
International Paper is proud to support U.S. Surface Transportation
Board nominees Patrick Fuchs and Michelle Shultz that will receive
consideration by the Senate's Commerce, Science and Transportation
Committee on April 11, 2018. International Paper spends $2 billion
annually on U.S. freight transportation and we are the largest shipper
of railroad boxcars in the Nation. As you would expect, ensuring the
safe, reliable and efficient movement of our products to customers in
the U.S. and around the world is a top priority.
A vibrant freight railroad network that supports a robust U.S.
manufacturing industry is a critical tool to grow the economy.
Railroads are a strategic supplier to manufacturers like International
Paper and we are committed to working with them. However, the railroad
market has changed significantly since the 1980 Staggers Act and
maintaining a fully staffed Surface Transportation Board is critical to
ensuring that businesses have access to a fair arbiter when challenges
arise.
We have long advocated for STB nominees that understand the
significant changes to the transportation marketplace in the past few
decades so they can make fair decisions based on current market
realities. International Paper strongly supports the nominations of Mr.
Fuchs and Ms. Shultz because we believe they will take a balanced view
of the rail marketplace in their critical decision-making work at the
agency.
We urge the Senate Commerce Committee and the full Senate to act
quickly and advance these Surface Transportation Board nominees so the
agency can get back to its important work, which has slowed while it
awaits more Board members. Please contact me or Julie Alsup at
[email protected] with any questions.
Sincerely,
Chris Keuleman,
Vice President, Global Government Relations.
______
Kentucky Coal Association
Lexington, KY, April 11, 2018
Hon. John Thune,
Chairman,
Committee on Commerce, Science, and Transportation,
United States Senate,
Washington, DC.
Hon. Bill Nelson,
Ranking Member,
Committee on Commerce, Science, and Transportation,
United States Senate,
Washington, DC.
RE: Confirmation of Surface Transportation Board Nominations
Dear Chairman Thune and Ranking Member Nelson:
The Kentucky Coal Association strongly supports President Trump's
nominations of Patrick Fuchs and Michelle Schultz to serve as members
of the Surface Transportation Board (STB), as well as the selection of
Ann Begeman to serve as STB Chairman. We urge the Senate Committee on
Commerce, Science, and Transportation to confirm the nominees as
quickly as possible.
KCA represents companies that mine over 80 percent of the coal
produced in Kentucky and also represents more than 120 additional
companies that support Kentucky's coal mining industry. Coal is vital
to the economy of Kentucky and the Nation and our industry relies
heavily on railroads to deliver reliable and affordable service in
order to remain competitive in a global market.
The coal industry in Kentucky was devastated under policies set
forth by the previous administration where coal production fell from
121 million tons of coal in 2008 to 42 million tons in 2017 . Other
compounding factors such as increasing rail costs and service
interruptions, especially in Eastern Kentucky, highlight the need of a
fully staffed STB committed to enacting reforms that will increase
access to competitive rail services. We believe this will also help
streamline overly-bureaucratic procedures and improve the overall
effectiveness of the Board.
The Kentucky Coal Association greatly appreciates your efforts in
the confirmation of Mr. Fuchs and Ms. Shultz and the designation of Ms.
Begeman as the Chairman.
Sincerely,
Tyler White,
President,
Kentucky Coal Association.
The Chairman. So we want to try and process your
nominations as quickly as possible, and so to the degree that
you can get responses to written questions submitted so we can
get them incorporated in the record as quickly as possible,
that would be helpful. We would like to, during this work
period, move forward and try and get these reported to the
floor so we can get some of these important positions which
have been vacant for way too long filled.
So thank you again for being here, and to your families.
And with that, we will adjourn this hearing.
[Whereupon, at 11:35 a.m., the hearing was adjourned.]
A P P E N D I X
Response to Written Questions Submitted by Hon. John Thune to
Rebecca Joy Kelly Slaughter
Question 1. Do you believe the current FTC-DOJ Merger Guidelines
are sufficiently stringent to protect against anticompetitive mergers?
If not, what specifically would you change?
Answer. There has been bipartisan concern raised in recent years
about increasing concentration in a variety of markets. As you note,
the Better Deal agenda represents the Congressional Democrats' proposal
for legislative changes to antitrust law. If confirmed to the FTC, my
role will be to enforce the laws as they are written today based on
fact-specific inquiries in particular cases. The nominee to be the
Chair of the FTC, Mr. Simons, has proposed merger retrospectives that
will analyze whether the Commission's past actions in merger review
have had their intended effects on the promotion of competition. I
strongly support Mr. Simons's approach as a good first step in
analyzing whether there are any changes that need to be made to how the
FTC, in partnership with DOJ, approaches merger analysis.
Question 2. In the ``A Better Deal'' platform, Congressional
Democrats mention specific industries for careful scrutiny and
enforcement: airlines, telecom, beer, agriculture, and eyeglass
industries. The resume you submitted to the Committee indicates that
you contributed to the antitrust elements of the platform. Why did
Congressional Democrats decide not to mention the tech sector as an
industry in need of careful scrutiny and enforcement in its antitrust
agenda when discussing industry-specific impacts?
Answer. In my capacity as a Senate staff member, I provided
substantive and technical advice on the Better Deal platform, which
represents the Congressional Democrats' proposal for legislative
changes to antitrust law. If confirmed, my role as an FTC Commissioner
will be to enforce the laws as they are written today based on fact-
specific inquiries in particular cases. Our antitrust laws are not
industry specific; they do not exempt or excuse technology companies
from enforcement. I believe the law must be applied fairly and without
fear or favor to all industries within the FTC's jurisdiction. As I
noted in my testimony before the Committee, there are several areas
within the broad universe of technology where markets are particularly
concentrated, and sectors with high levels of concentration merit
scrutiny because they are where anticompetitive conduct and effects may
be more likely to occur. If confirmed, I will work with my fellow
Commissioners and the expert staff at the agency to closely monitor
heavily concentrated markets within our jurisdiction, including in the
technology industry, and to investigate and enforce the law.
______
Response to Written Questions Submitted by Hon. Roy Blunt to
Rebecca Joy Kelly Slaughter
Question 1. Over the past few decades, access to increasingly large
amounts of information has enabled growth in industry in just about
every sector. Data has become a commodity, but I do not believe that
American citizens understand the volume of data that is harvested from
the digital ecosphere, or how valuable of a commodity their data has
become. For this reason, some of the current industry data collection
efforts concern me, including those efforts related to cross-device
tracking.
In January 2017, the FTC issued a staff report which outlined
benefits and concerns specific to cross-device tracking. If confirmed,
will you direct the FTC to continue committing resources to analyze
industry data collection methods?
Answer. Yes. Control over data, and related control over online
advertising markets, may be an important factor in considering
competition and consumer protection issues, because citizens (and their
data) are often the product rather than the consumers. If confirmed, I
will work with my fellow Commissioners and the expert staff at the
Commission to ensure that our competition as well as our consumer
protection efforts keep pace with technological innovations, including
data issues, in rapidly changing markets.
Question 2. The Network Advertising Initiative (NAI) and Digital
Advertising Alliance (DAA) are self-regulatory bodies that establish
privacy practices across the digital advertising industry. In the past,
the FTC has worked with these bodies to help provide transparency and
privacy for consumers.
If confirmed, will you continue to work with the DAA and NAI to
ensure that intra-industry guidance meets consumers' best interests?
Answer. Yes. I believe that constructive engagement and partnership
with industry self-regulatory bodies can be an effective complement to
the FTC's enforcement authority, helping to ensure best practices are
adopted across industries.
______
Response to Written Questions Submitted by Hon. Jerry Moran to
Rebecca Joy Kelly Slaughter
Question 1. In 2016, Congress enacted the Better Online Ticket
Sales (BOTS) Act to empower the FTC and state attorneys general to go
after people who use computer programs--called ``bots''--to seize up
large portions of ticket inventories for live events, and re-sell them
on the secondary market. Your work in Senator Schumer's office was
critical to the development and progress of this law, and I appreciated
your leadership on this issue. As you know, this committee voted
unanimously to advance that legislation, to help our constituents
access quality tickets at face value. However, laws are not effective
unless they are enforced. We have provided the FTC with a tool, which
we believe should be used rigorously to protect consumers. Should you
be confirmed, will you commit to using this enforcement tool that
Congress provided?
Answer. Yes, absolutely. Working on this issue with your office as
a Senate staffer was both a privilege and a pleasure, and as a result
of that work I am particularly invested in seeing the law enforced as
intended. If confirmed, I look forward to continuing to work with you
and your staff to ensure consumers are adequately protected from
manipulation by bots.
Question 2. I am also a member of the Senate Appropriations
Subcommittee that is responsible for the discretionary funding of the
FTC. As you are likely aware, the White House's FY 2019 budget included
$309.7 million for the FTC, which is about $3 million more than the
enacted level for FY 2018. As Congress attempts to appropriate the
necessary resources to the agency for the following Fiscal Year, do you
have any recommendations for this committee and appropriators related
to resources necessary to complete the agency's mission, including
staff support?
Answer. At this point, I do not have any particular
recommendations. However, if I am confirmed, I am committed to working
with my fellow Commissioners and the expert staff at the agency to
steward our allocated resources responsibly and to communicate where
and how those resources could be enhanced or better tailored.
Question 3. This committee held a joint hearing with the Senate
Judiciary Committee to discuss Facebook's data collection practices and
how the company did or did not comply with a consent order that it
reached with the FTC in 2011. While I understand that you will not be
able to comment on an ongoing investigation, how do FTC enforcement
actions that challenge the data security practices of companies impact
the commission's ability to protect consumers?
Answer. Without commenting on any particular case, I will note that
enforcement actions are a key tool for the Commission in carrying out
its obligations to protect consumers.
______
Response to Written Question Submitted by Hon. Dan Sullivan to
Rebecca Joy Kelly Slaughter
Question. Anticompetitive consolidation has been a hot topic
recently, especially in regards to the enormous market capitalization
of tech companies. Recent calculations value the four largest tech
companies' capitalization at $2.8 trillion dollars, which is a
staggering 24 percent of the S&P 500 Top 50, close to the value of
every stock traded on the Nasdaq in 2001, and to give a different
perspective, approximately the same amount as France's current GDP.
Press reports have also noted allegations of increased anti-competitive
behavior by some of these companies. Is there a point at which these
companies are simply too big from an antitrust standpoint?
Answer. Our law does not treat size alone as a basis for antitrust
enforcement. However, size is often correlated with market share.
Companies that acquire or maintain their size and market share through
anticompetitive conduct are and must be subject to the scrutiny of our
antitrust laws and enforcement agencies. If confirmed, I will work
closely with my fellow Commissioners and the expert staff at the agency
to ensure that we are carefully monitoring allegations of
anticompetitive conduct and robustly enforcing our laws.
______
Response to Written Questions Submitted by Hon. Amy Klobuchar to
Rebecca Joy Kelly Slaughter
Question 1. Recent data breaches at Facebook, Equifax, Uber and
Yahoo have exposed the personal information of millions of Americans.
While some companies have taken steps to improve their privacy
practices, it is clear more must be done. These incidents raise
important questions about protections for consumers and the long-term
consequences of having personal information exposed online.
Ms. Slaughter, what tools does the Federal Trade Commission have to
address breaches and could additional authority help protect consumers'
information online?
Answer. Repeated, high-profile incidents of large scale data
breaches are very concerning to me, both as a consumer and as a
prospective Commissioner. When the same problem recurs again and again,
it is clear that more must be done to deter future breaches. The
agency's toolkit includes investigations and enforcement actions,
engagement with consumers and industry stakeholders, and partnership
with sister agencies in the Federal and state governments. If
confirmed, I intend to work with my fellow Commissioners as well as the
expert staff at the FTC to ensure that the Commission is doing all it
can to protect consumers and to examine whether a request to Congress
for additional tools is appropriate.
Question 2. Some pharmaceutical companies prevent generic drug
companies from obtaining branded samples needed for testing generic
equivalents. Some branded companies refuse to negotiate, or delay
negotiations, with a generic company to reach Food and Drug
Administration-mandated safety protocols. These tactics can delay the
introduction of affordable generic drugs for years. That is why I,
along with Senators Grassley, Leahy, and Lee, introduced the Creating
and Restoring Equal Access to Equivalent Samples (CREATES) Act to
provide a targeted solution to this problem.
Ms. Slaughter, do you believe that branded pharmaceutical companies
withholding testing samples from generic drug companies can lead to
consumer harm?
Answer. Access to affordable medications is critical to many
Americans. I share your concern about practices that prevent or
restrict affordable generic alternatives from entering the market,
thereby harming consumers. I am familiar with your legislation, and, if
confirmed, I look forward to working with my fellow Commissioners and
the expert staff at the agency to identify areas where the Commission
can appropriately act while Congress considers legislative changes.
______
Response to Written Questions Submitted by Hon. Richard Blumenthal to
Rebecca Joy Kelly Slaughter
Question 1. What experience do you have working with State
Attorneys General? What are your views regarding the Commission working
with state law enforcement?
Answer. In my time at the Senate, I have found State Attorneys
General to be an invaluable resource to both policy makers and
enforcement agencies; they not only provide insight into troubling
anticonsumer and anticompetitive practices they are seeing in their
states, but they also serve as essential partners in law enforcement
actions to address these practices. I firmly believe that the
Commission needs to continue to work closely with State Attorneys
General.
Question 2. In the Dodd-Frank Act of 2010, Congress gave the FTC
extensive authority over the sale, servicing, and leasing of
automobiles--charging it to protect consumers from abusive auto lending
practices and granting it exclusive authority to draft rules governing
unfair or deceptive acts or practices by automobile dealers.
Would you support the FTC using its rulemaking authority to rein in
unfair or deceptive acts or practices by automobile dealers?
Answer. Yes, I believe the FTC should make full use of its
authorities to rein in unfair or deceptive acts or practices by
automobile dealers. If confirmed, I would support a careful review of
current complaints and industry practices to determine what specific
rules might be appropriate to protect consumers.
Question 3. More than 17 million Americans are the victims of
identity theft every year. This problem seems to increase year over
year as identity theft scams seem to get more sophisticated.
Three years ago, the FTC established IdentityTheft.gov. This site
is supposed to be a one-stop shop for victims of identity theft where
they can easily freeze credit across the big three credit reporting
agencies, and recover their stolen identities.
This website's functionality is limited, however, because of what
appears to be a lack of engagement by the credit bureaus to make the
site what it should be.
How would you engage with credit bureaus to ensure
IdentityTheft.gov has a comprehensive suite of easy to use tools
allowing victims of identity theft to recover as quickly as possible,
with as little stress as possible? What are your expectations with
respect to the role the credit reporting agencies should play in making
IdentityTheft.gov an effective one-stop shop for identity theft
victims?
Answer. The idea of having a one-stop shop for victims of identity
theft is an important one; the inability to figure out how to fix and
address identity theft only adds insult to the injury identity theft
victims have already suffered. However, a one-stop shop is only useful
if it provides meaningful, effective, and comprehensive tools and
information. I believe CRAs can and should engage and partner with the
FTC to ensure the functionality of IdentityTheft.gov, and, if
confirmed, I look forward to working with my fellow Commissioners and
the expert staff at the agency to ensure they do so.
Question 4. Would you support FTC's jurisdiction be expanded to
include non-profits and charities so that it can act more swiftly to
prevent and stop illegal conduct in the nonprofit sector?
Answer. Abusive practices by charities and non-profits--which are
granted special tax treatment because they are supposed to be dedicated
to the public good--are particularly noxious. While of course the
statutory reach of the FTC is a question for Congress to determine, I
am generally supportive of ensuring that the Commission has the ability
to go after bad actors masquerading as public interest organizations.
If confirmed, I would be happy to work with my fellow Commissioners and
with Congress to explore this issue further.
Question 5. Other Federal agencies charged with consumer protection
make an array of data available on consumer complaints received. The
FTC releases relatively very little data on companies receiving
significant levels of complaints. Do you think the FTC should be more
transparent about the complaints it receives?
Answer. As a general matter, I think more transparency is a good
thing, provided the confidentiality of non-public investigations is not
jeopardized, which could in turn hinder the Commission's important
enforcement efforts.
Question 6. The Consumer Financial Protection Bureau was created in
response to the 2008 financial crisis and Great Recession after it
became clear that our financial sector needed far more oversight to
prevent a disaster of that magnitude from happening ever again. The
current Administration seems intent on gutting this agency that serves
a critical role in protecting Americans from irresponsible financial
institutions. Of course, the CFPB and the FTC complement each other in
their protection of consumers. How do you envision the FTC's role in
holding financial institutions accountable?
Answer. The FTC can and should partner with its sister agencies
across the Federal government to ensure robust, coordinated,
complementary enforcement of our Federal law. The FTC shares
jurisdiction with the CFPB, but maintains an obligation to enforce
matters within its purview to the fullest extent of the law.
Question 7. Other consumer protection agencies appear to be
reducing the vigor of their enforcement work. In what way should this
impact the priorities of the FTC?
Answer. I believe the FTC should prioritize work that will maximize
its limited resources to return the most value for the American people.
If there are areas of the Commission's jurisdiction that are being
under-enforced by other agencies, the FTC should step in to fill the
gaps where it can do so effectively.
Question 8. In the past, the FTC has cracked down on for-profit
colleges and vocational programs with strong enforcement actions.
However, we're seeing these institutions continue to defraud Americans.
A study conducted by The Century Foundation found that 98 percent of
complaints asking for student loan forgiveness alleging fraud by
colleges were from students attending for-profit institutions. If
confirmed, how will you protect Americans from being scammed by such
institutions?
Answer. Institutions that take advantage of vulnerable students
deserve heightened scrutiny. If confirmed, I would like to look into
this issue further and ensure that the Commission's resources are being
effectively used not only to punish wrongdoers but to deter others from
taking their place.
Question 9. More than two of every three American households own a
pet. The FTC has estimated they will spend $10.2 billion on medications
this year, of which more than $5 billion require a prescription. It has
been estimated that pet owners who can get a copy of their pet's
prescription and shop around, could save 20 to 30 percent on branded
medications and 50 percent when they purchase generics. This suggests
that prescription portability can save pet owners billions of dollars
every year--in addition to the savings in time and transportation if
they can get those prescriptions filled while they are at the grocery
store or pharmacy or delivered from an online pharmacy. Unlike with
human medications, with our pets, the prescriber also dispenses the
medication prescribed--setting up a conflict of interest whereby the
prescriber is both a health care provider and a retailer.
In testimony in 2016, the FTC stated that ``we believe that the
greater prescription portability likely would enhance competition for
the sale of pet medications and that consumers would benefit from this
competition in the form of lower prices.'' Do you agree with this
conclusion?
Answer. As the owner of two aging dogs, I personally understand how
important and expensive pet medications can be. I am very sympathetic
to the notion that prescription portability could improve competition
in the marketplace. If confirmed, I would like to look into the issue
further and work with your office to identify specific improvements to
competition in the pet medicine market that could be made.
Question 10. The prescribing and dispensing of human medications
has long been separated. With eyeglasses and contact lenses, where
prescribers also sell the products they prescribe, Federal law grants
consumers the right to their prescriptions. Why should it be any
different for pet owners with regards to medications for their pets?
Answer. As a general matter, I am sympathetic to the idea that
prescription portability--for people and for pets--can provide
competitive benefits. If confirmed, I would like to study this issue
further to understand what, if any, justification could exist for
treating pet medications differently.
Question 11. Manufacturers of pet medications can, and do offer
inducements to veterinary clinics to prescribe and sell their
medications.
Do you think the public, and pet owners who spend billions of
dollars annually on prescription pet medications have a right to know
whether their vet clinic is receiving payments from the manufacturers
of drugs that clinic prescribes?
Answer. Generally speaking, I am supportive of providing more
information to patients and consumers to allow them to make meaningful
choices about how to spend their healthcare dollars; that is true for
both people and pets. Although I do not have enough familiarity at this
time with the pet medication marketplace and supply chain to comment on
this particular issue, if confirmed I will work with my fellow
Commissioners and the expert staff at the FTC to study it further.
Question 12. In 2003, Congress passed the Fairness to Contact Lens
Consumers Act (``FCLCA'') to grant the 40 million Americans who wear
contact lens wearers the right to copies of their prescriptions. The
law also established a process for consumers to have their
prescriptions verified when they purchase their lenses from a retailer
other than the prescriber.
On September 3, 2015, the FTC launched its ten-year review of the
Contact Lens Rule. The comment period closed on October 26, 2015, after
the Commission received over 660 comments from a wide variety of
stakeholders including optometrists, ophthalmologists, consumers,
contact lens manufacturers and third-party contact lens sellers such as
big box stores and online retailers.
On December 7, 2016, the Commission issued a Notice of Proposed
Rulemaking (``NPRM'') concluding that ``compliance with the automatic
prescription release provision could be substantially improved.'' This
is consistent with the comments of 20 State Attorneys General who
reported to the Commission that: ``[t]he States are aware, from their
enforcement efforts and collective experience, that not all patients
receive their prescription in writing as a matter of course.'' The NPRM
also proposed the common sense solutions of having consumers sign an
acknowledgement that they have received their prescriptions and
clarifying the right of consumers and their chosen retailers to receive
additional copies of those prescriptions.
If confirmed, will you prioritize finalizing this proposed rule, to
help ensure all consumers will receive copies of their prescriptions,
as Congress intended? Considering FTC's limited resources, and the
significant resources that would be required to take action against
individual prescribers who are not in compliance with this requirement
under the current rule, do you agree that the FTC's proposed rule is an
efficient means of promoting compliance?
Answer. I believe studies have shown that over half of Americans
have problems with their vision that require corrective treatment,
whether eyeglasses or contact lenses (or both)--including me. And
vision correction can be extremely expensive. My understanding is that
the Commission is currently reviewing comments on the proposed changes
to the Contact Lens Rule, and last month conducted a workshop to
further discuss and address questions and concerns. If confirmed, I
will work with my fellow Commissioners and the expert staff at the
agency to ensure that any updates coming out of the rule review are
clear, effective, fair, and published in a timely manner.
Question 13. The FTC has not pursued any enforcement activity under
the Military Lending Act, despite having the authority to enforce this
important protection. If confirmed, would you support vigorous
enforcement of the MLA?
Answer. Yes.
______
Response to Written Questions Submitted by Hon. Brian Schatz to
Rebecca Joy Kelly Slaughter
Question 1. As an FTC commissioner, would you make it a priority to
assess whether consumer reporting agencies (CRAs) are complying with
the Fair Credit Reporting Act (FCRA) to ensure that credit reports are
accurate, that consumers have control over their data, and are able to
find and fix errors that may appear on their credit report?
Answer. Yes. CRAs have enormous power over consumers, while
consumers have minimal leverage over CRAs. Exacting Federal regulatory
oversight is therefore necessary to ensure consumers have access to
their reports and the ability to fix errors.
Question 2. Do you think consumers have a meaningful choice when it
comes to choosing which consumer reporting agencies collect and report
data about them?
Answer. As the system is currently structured, I don't believe
consumers have any choice at all about which CRAs collect and report
data about them.
Question 3. Does the lack of consumer choice increase the risks for
consumers because they are unable to control which companies collect
and report data about them?
Answer. Yes. I believe the asymmetry in power between the CRAs and
consumers amplifies the risks to consumers that their data may be
inaccurately or inappropriately collected and shared.
Question 4. In February 2013, the Federal Trade Commission
published a report that found that five percent of consumers had errors
on their credit reports that could result in less favorable terms for
loans.
Do you think this study raises concerns that CRAs are not in
compliance with the FCRA's requirement to ``follow reasonable
procedures to assure maximum possible accuracy'' of credit reports? (15
USC 1681e(b))
Answer. Yes, I believe the study raises serious concerns that
should continue to be monitored and addressed by the Commission.
Question 4a. Do you think the FTC should conduct a follow up study
to see if error rates have improved?
Answer. I do believe this is an area that should be the focus of
continued attention by the Commission. If confirmed, I would like to
consult with the expert staff at the agency to understand what follow-
up has been done so far and whether a follow-up study would be the most
effective next step to reduce error rates, or whether resources would
be better dedicated to enforcement.
Question 4b. If error rates continue to impact millions of
Americans, what actions should the FTC take to enforce compliance with
the FCRA?
Answer. If confirmed, I would like to consult with the expert staff
at the agency to determine what would be the most effective ways to
ensure compliance with the FCRA. The FTC has a variety of tools,
including enforcement actions, industry-wide studies, stakeholder
engagement, and the power to call public attention to an ongoing
problem. I want to better understand the actions the Commission has
undertaken thus far--both public and non-public--in order to properly
evaluate how compliance can best be ensured going forward.
Question 5. Do you think the FTC should reexamine whether the
policies and practices of CRAs to handle consumer disputes are in
compliance with the FCRA?
Answer. I believe the Commission has an ongoing obligation to
ensure compliance with the Federal laws within its jurisdiction,
including the FCRA. I am very concerned about the resolution of
consumer disputes, and, if confirmed, I would support careful
monitoring of the industry.
Question 6. In 2015, the New York Attorney General reached a
groundbreaking settlement with the three national consumer reporting
agencies--Experian, Equifax, and TransUnion. The terms of the
settlement require the CRAs to do more to ensure maximum possible
accuracy of credit reports and to improve the dispute resolution
process for consumers.
Do you think the FTC should coordinate with the NY attorney general
to assess the implementation of the settlement and its impact on
improving accuracy?
Answer. Yes, I believe the FTC should always coordinate as much as
possible with State Attorneys General.
Question 6a. If the terms of the settlement have improved accuracy,
do you think there is a case to be made that the settlement terms
should be considered as best practices for compliance with the FCRA to
ensure maximum possible accuracy?
Answer. One of the benefits of close partnership with State
Attorneys General is that their enforcement actions can provide
valuable instruction for the FTC and its Federal partners. If
confirmed, I would support the Commission closely studying the New York
settlement and its implementation to determine what lessons could be
extrapolated and explored at the Federal level.
Question 7. What are your views on the inclusion of medical debt in
credit reports? How would you, as a commissioner, determine whether it
is appropriate for CRAs to include medical debt in credit reports?
Answer. I have not studied the law surrounding this particular
issue in depth, and, if confirmed, I would hope to learn more about it.
As a general matter, however, I will note that I think there are
compelling reasons to treat medical debt differently from other types
of consumer debt, because medical expenses are not generally incurred
voluntarily and consumers often do not have the ability to shop around
for lower-cost health care when they are facing the prospect of life-
threatening and expensive treatment. In addition, there may be privacy
concerns with the inclusion of medical debt on a credit report, as that
could reveal sensitive health information about the subject of the
report.
Question 8. Consumers have the right to inspect their credit
reports every year. Do you think they should also have the right to
inspect their credit score?
Answer. Because credit scores, often as much as the underlying
reports, are used to make important decisions about a consumer's
credit-worthiness, I believe it would be sound public policy for
consumers to have access to their scores as well as their reports.
Question 9. Do you think the FTC has the right expertise and
capacity to investigate and evaluate algorithms for unfair, deceptive,
fraudulent consumer practices in the marketplace?
Answer. The issues you raise about the use of algorithms in
potentially unfair, deceptive, and fraudulent consumer practices are
important ones, and I believe it is critical that the FTC have both the
expertise and the resources to address them. If confirmed, I will work
with my fellow Commissioners and the expert staff at the agency to
explore whether any changes might be necessary to the Commission's
resourcing in this area.
Question 10. Will you prioritize bringing in additional technical
talent to strengthen FTC's mission in the digital domain?
Answer. Yes. In my Committee questionnaire, I identified keeping up
with technological innovations in rapidly changing markets as the top
challenge facing the Commission. One important way to meet this
challenge is with the best and brightest technical talent to ensure
complex technological issues are being appropriately understood and
addressed by the Commission.
Question 11. What are your views of the FTC's ability to ensure
adequate oversight of online privacy?
Please discuss your views on the FTC's expertise in this area and
the adequacy of the regulatory tools available to it.
What specific actions would you propose the FTC undertake to
improve online privacy?
Answer. The FTC has authority under Section 5 of the FTC Act to
prohibit unfair or deceptive acts or practices, and it has used this
authority to enforce against violations of privacy in the digital
space. If confirmed, I would strongly support robust continued
enforcement in this area. I would also want to work with my fellow
Commissioners, agency staff, and stakeholders to identify whether any
additional actions can be taken or whether additional tools or
resources are needed to further protect online privacy.
Question 12. What is your view of the propriety of the FTC imposing
conditions on proposed mergers as compared with suing to block a deal?
How would you evaluate when to use one or the other?
Answer. I believe that, generally speaking, any merger under
consideration must be considered on its own terms with the facts
specific to the case and the markets at issue. In some cases,
behavioral remedies and conditions such as divestiture may be adequate
to ameliorate any potential competitive harm. Where no agreement on
conditions can be reached that satisfies the Commission's concerns,
litigation to block the consummation of the merger is not only
appropriate, but necessary. If confirmed, I would analyze the specific
facts of the case and potential proposed conditions to determine if my
own concerns are satisfied. In addition, I would note that Mr. Simons
has proposed undertaking retrospective analysis of the Commission's
past merger work; I strongly supported this undertaking when I
testified before the Committee, and I continue to believe it can
provide valuable instruction as to whether and when merger conditions
have been effective in the past.
______
Response to Written Questions Submitted by Hon. Tom Udall to
Rebecca Joy Kelly Slaughter
Question 1. What are your ideas on how to promote consumer
protection in an increasingly online--and connected--world?
Answer. In my Committee questionnaire, I highlighted as a key
challenge for the Commission the need to ensure our enforcement
strategies keep pace with emerging technologies in rapidly changing
markets. That is particularly true as more and more of our lives occur
in internet-enabled spaces. If confirmed, I will work with my fellow
Commissioners and the expert staff at the agency to ensure that
consumers are adequately informed of their rights, that wrongdoers are
effectively pursued, and that the Commission is appropriately
monitoring these important issues.
Question 2. Do you believe that the current FTC enforcement
principles are sufficient to protect consumers? And do you believe the
FTC has the resources necessary to protect consumers given the
significant amount of work on the docket for the agency?
Answer. I believe the FTC has an obligation to engage in robust
enforcement of the law to protect consumers and promote competition. If
confirmed, I will work with my fellow Commissioners and with the expert
staff at the agency to ensure that the Commission's authorities and
resources are being used as effectively as possible, and I will commit
to reporting back to you if I believe additional tools or resources
would be helpful to the Commission.
Question 3. In December, I wrote to the FTC, along with Senators
Schumer and Blumenthal, asking for a workshop to discuss the increased
use of ``bots'' to purchase large quantities of in-demand toys and
items, particularly at Christmas. The FTC has confirmed that it will
engage with key stakeholders to determine if a workshop is necessary.
Will you commit to reviewing the record on this issue and to working
with my office to determine next steps, including the possibility of
legislation?
Answer. Yes.
Question 4. Last week, an article in TechCrunch showed how Facebook
uses data from Onavo Protect, a subsidiary app, to gather data on its
competitors; how Google uses its search rankings to demote alternate
competitive sites; and Amazon's aggressive low pricing undercuts book
publishers. Under your respective leadership, how will the FTC enforce
the principles of unfair methods of competition against tech giants
like Facebook, Google and Amazon to promote consumer welfare?
Answer. Our antitrust laws do not exempt or excuse technology
companies from enforcement; I believe the law must be applied fairly
and without fear or favor to all industries within the FTC's
jurisdiction. If confirmed, I will work with my fellow Commissioners
and the expert staff at the agency to closely monitor heavily
concentrated industries, including the technology industry, and to
investigate and enforce against anticompetitive practices.
Question 5. Following the FTC's approval of the Google/DoubleClick
acquisition in 2007, then Commissioner Pamela Jones Harbor released a
dissent detailing the need for the commission to ``evaluate the
implication of this kind of data merger from a competition as well as a
consumer protection perspective.'' Since 2007, data has only become
more important in the world of machine learning and ad targeting. When
evaluating mergers and acquisitions in the technology industry, how
will you evaluate the impact of data on competition as well as a
consumer protection perspective?
Answer. Control over data, and related control over online
advertising markets, may be an important factor in considering
consolidation in online industries, where citizens (and their data) are
often the product rather than the consumers. If confirmed, I will work
with my fellow Commissioners and the expert staff at the Commission to
ensure that our competition as well as our consumer protection efforts
keep pace with technological innovations, including data issues, in
rapidly changing markets.
Question 6. Recently a group of over 20 advocacy groups filed a
complaint to the FTC about how YouTube \1\ uses behavioral targeted
advertising with children on their main application/website. How do you
think about enforcing the Children's Online Privacy Protection Rule
(COPPA) on applications like YouTube who have a large number of users
under 13 and use behavioral targeting on those customers?
---------------------------------------------------------------------------
\1\ Maheshwari, Sapna, 9 April 2018. New York Times. https://
www.nytimes.com/2018/04/09/business/media/youtube-kids-ftc-
complaint.htm
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Answer. I do not want to prejudge any particular complaint or
investigation. However, as a general matter, I will note that the FTC
has very important enforcement obligations under COPPA. As the parent
of three young children, I am especially sensitive to the
responsibility I would have, if confirmed, to ensure that COPPA is
robustly enforced.
Question 7. I have a long history of working with the Federal Trade
Commission on false labeling of sports equipment. The FTC has done some
good work--specifically it sent letters to retailers and manufacturers
calling out certain deceptive practices. However, it is important that
the FTC continue to monitor for future misleading labeling. Will you
commit to me to continue to monitor the marketplace, including both
traditional and online retailers, and use the enforcement authority of
the FTC for any marketer or manufacturer repeatedly making false
claims?
Answer. Yes.
______
Response to Written Question Submitted by Hon. Dan Sullivan to
Michelle A. Schultz
Question. Alaska is one of about 5 states where all freight rail
service is provided by regional and shortline railroads, also known as
Class 2 and Class 3 railroads. Many of these small railroads are in
rural areas and were created from lines that would have been abandoned
by the large Class 1 railroads, although in Alaska our railroad was
previously owned by the Federal government.
Regional and shortline railroads face the same types of challenges
as other small businesses, because they are small businesses. Could you
please give me your perspective on these small railroads and how you
see the role of the STB in helping to preserve rail service in rural
areas by these small railroads?
Answer. For certain areas across the country, short line and
regional railroads are the only way shippers can access the national
freight rail network. Shortline railroads serve a vital role to the
U.S. freight rail network. As the economic regulator of the rail
industry, the Surface Transportation Board has discretion to tailor its
regulatory activities to meet the Nation's changing transportation
needs. This discretion would include taking into account the integral
role that shortline railroads play in the national freight network.
______
Response to Written Questions Submitted by Hon. Dean Heller to
Michelle A. Schultz
Question 1. As you both know, the Department of Energy has an
application before the Surface Transportation Board for a certificate
of public convenience and necessity to build the Caliente railroad to
Yucca Mountain. Given Congress' repeated refusal to fund the Yucca
Mountain project, I do not believe the Surface Transportation Board
should act on this application knowing that the project is not funded
and that it is not going to be funded.
Ms. Schultz, during questioning, you would only commit to a ``fair
and impartial'' review of the Department of Energy's application, so I
will ask you once again: Do you or do you not believe the Surface
Transportation Board should act on this application regardless of
whether Yucca Mountain has been funded?
Answer. Although I do not want to prejudge a pending STB
proceeding, I would not expect the Board would rule upon an application
that was filed approximately ten years ago and which neither of the
interested parties, including the Department of Energy has sought
further action upon.
Question 2. Ms. Schultz, if confirmed, will you commit to
continuing the Surface Transportation Board's practice of not getting
out in front of other agencies when it is not the lead agency?
Answer. I believe the current policy of the STB as you described it
is appropriate.
Question 3. Under the Nuclear Waste Policy Act, the Federal
government is looking at shipping 9,495 rail casks in 2,800 trains and
2,650 trucks hauling one cask each to Yucca Mountain over 50 years.
These shipments would use 22,000 miles of railways and 7,000 miles of
highways and cross over 44 states. Under previous questioning from me
at this Committee, Federal Railroad Administrator Ronald Batory and
Pipeline and Hazardous Materials Safety Administrator Howard Elliott
confirmed that a transportation accident with an ensuing radiological
release was possible.
Ms. Schultz, given the significant number of proposed shipments,
the sheer distance to be traveled, and the 50-year duration of these
shipments, do you agree with Mr. Batory and Mr. Elliott that there is a
real risk of at least one transportation accident with an ensuing
radiological release occurring?
Answer. Based upon the information as it has been presented here, I
would have no reason to disagree with the opinions of the safety
experts.
______
Response to Written Questions Submitted by Hon. Bill Nelson to
Michelle A. Schultz
Gulf Coast Rail Service. As you know, restoration of Amtrak
passenger service along the Gulf Coast will help the region meet its
transportation needs and boost tourism and local economies.
Question 1. In your view, do you think restoring rail service on
the Gulf Coast is an important project?
Answer. The Gulf Coast project is an important issue.
Question 2. What steps should be taken to help restore Gulf Coast
passenger rail service?
Answer. I am aware of the ongoing negotiations regarding the Gulf
Coast service. If the parties are not able to reach an agreement, the
law gives the Surface Transportation Board the ability to resolve these
issues. If confirmed, and if this case should come before the Board, I
would adjudicate this matter in a fair and balanced way. In the
meantime, before any dispute arises, I would also like to speak with
stakeholders as well as members of your staff to learn more about the
issues surrounding the Gulf Coast Service.
Passenger Service. On-time performance continues to be a challenge
for many passenger rail lines. Without reliable service, many
passengers may choose to not take the train and instead drive or take
the bus, which adds to congestion and wear and tear on our highways.
Question 3. In your view, what can be done to improve on-time rail
service so that people can get to where they need to be when they need
to be there?
Answer. As a current employee of a multi-modal public
transportation authority, I recognize both the value of on time
performance and the challenges that it presents. As you are aware, when
Congress enacted the Passenger Rail Investment and Improvement Act of
2008 (``PRIIA''), it delegated to the Federal Railroad Administration
and Amtrak the joint regulatory authority to promulgate metrics and
standards for measuring on-time performance of passenger trains.
Because the FRA/Amtrak regulations were blocked in court, in 2016,
the Surface Transportation Board promulgated its own regulations
defining what constitutes ``on time performance'' when Amtrak operates
over lines owned and controlled by freight railroads. These regulations
were challenged in 2017 before the U.S. Court of Appeals for the Eighth
Circuit, which held that ``Congress likely did not give the FRA/Amtrak
and the Board separate authority to develop two potentially conflicting
on-time performance rules.'' See Union Pacific Railroad Company v.
Surface Transportation Board, 863 F.3d 816, 826 (8th Cir. 2017). The
Court also held that ``on-time performance'' means on-time performance
as developed by the FRA and Amtrak under Sec. 207(a) of PRIIA.'' Id.
Accordingly, the outcome of the litigation over the FRA/Amtrak rules,
which is still pending in the United States Court of Appeals for the
District of Columbia, will be an important factor in determining how
the Board will carry out its statutory responsibilities. If confirmed,
I will follow the law and apply the appropriate on time performance
standards in a fair and impartial manner.
Freight Railroad Investments. Service issues faced by railroads
highlight the need for ongoing investment by railroads in
infrastructure and resources--such as locomotives and employees. The
ever-increasing demand to move freight will only further the need for
more investment.
Question 4. If confirmed, what will you do to make sure that the
STB's policies do everything possible to promote private infrastructure
investment?
Answer. I will support the STB's statutory mandate to promote a
safe and efficient rail transportation system by allowing rail carriers
to earn adequate revenue. This means that carriers should be able to
earn enough revenue to maintain the rail system, reinvest in
infrastructure and attract capital.
______
Response to Written Question Submitted by Hon. Amy Klobuchar to
Michelle A. Schultz
Question. In many rural parts of the country, shippers are served
by only one railroad, so called ``captive shippers.'' These shippers
can face increased costs in getting their products to market. Whether
they are shipping grain, coal or paper, the increased costs get passed
on to the consumer.
If confirmed what steps would you take to ensure captive shippers
have access to competitive shipping rates?
Answer. There are a few issues pending before the STB which pertain
to shipping rates. These issues include reciprocal switching; the
exploration of alternatives or modifications to the stand-alone-cost
test; and the railroad revenue adequacy test. I am aware that these are
important issues for captive shippers who are looking for other ways to
address their concerns about rail rates. I am also aware that it is
important to assess the consequences on the industry that any of these
changes may impact. If confirmed, I look forward to participating in ex
parte meetings with STB staff, Board Members and stakeholders to better
understand the metrics that are currently in place as well as the
impact that any changes to the existing standards could cause.
______
Response to Written Question Submitted by Hon. Richard Blumenthal to
Michelle A. Schultz
Question. The goal of the STB in many respects is consumer
protection. For shippers of commodities, coal, chemicals, agricultural
products, automobiles and some other goods, the shippers--if you will--
are the consumers of rail. And if those shippers encounter unfair costs
in shipping goods to market, then those high costs can ultimately be
passed on down to consumers at the retail level.
Protecting consumers is critical to me and a key focus of my work
in the Senate. How would you articulate the STB's work as a consumer
protection organization?
Answer. The U.S. freight rail network enables connectivity between
both buyers and sellers. Without an efficient freight network many
industries would incur higher costs and those costs would most likely
be reflected in the prices of consumer goods. The STB is charged by
Congress with resolving railroad rate and service disputes and serves
as the economic regulator of the freight rail industry. If confirmed, I
would review all matters in fair and impartial manner and would
recognize that decisions rendered by the STB have significant impacts
on all the stakeholders, including consumers.
______
Response to Written Questions Submitted by Hon. Tammy Baldwin to
Michelle A. Schultz
Question 1. The Surface Transportation Board (STB) is examining
existing class exemptions for certain commodities that would allow
exempt commodities like steel and cement to be on the same playing
field as nonexempt commodities. Currently, there is limited recourse
for exempt commodities at the STB.
The forest products industry is pursuing a revocation of their
exemption. The exemptions for forest and paper products were approved
in a series of decisions in the late 1980s and early 1990s, before
major rail mergers that drastically consolidated the railroad market
and has allowed the railroads to exert market power over shippers.
The exemptions for forest and paper products are antiquated and
were justified by a substantially different rail transportation
marketplace and regulatory structure that no longer exist. Today, the
exemptions hinder business and competition. Companies that ship paper
and forest products are disadvantaged by commodity exemptions because
they lack access to STB procedures that are available to non-exempt
shippers to address rail rate and service concerns.
If confirmed, will you give fair consideration to the case the
forest products industry has made for the revocation of their exemption
and move to finalize the rulemaking?
Answer. Yes. If confirmed, I will give fair consideration to case
the forest products industry has made for the revocation of their
exemption and would work toward resolving this issue.
Question 2. Fuel surcharges should not be used by railroads as a
cost recovery mechanism, and the STB has ruled that it is unreasonable
for railroads to compute fuel surcharges in a manner that does not
follow actual fuel costs for rail shipments. However, safe harbor rules
can ensure that railroads are immune from challenges that they over-
recover actual changes in fuel costs. The STB is considering, but has
delayed, rulemaking on rail fuel surcharges.
Do you believe fuel surcharges imposed by rail carriers should be
directly accounted for by changes to the carrier's actual fuel prices?
If confirmed, will you move forward with rulemaking that would
modify or remove the safe harbor provision to ensure fuel surcharge
programs implemented by rail carriers are reasonable?
Answer. I recognize the challenges to shippers who believe they are
being charged in excess of current fuel rates. If confirmed, I would
commit to working with STB staff and Board Members to reach a
reasonable resolution of the rulemaking that is currently pending
before the Board.
Question 3. Section 16 of the STB Reauthorization Act (P.L. 114-
110) included a technical clarification making clear that Congress did
not intend to require any change to how the STB determines revenue
adequacy. How do you interpret Section 16 of the bill?
Answer. The legislative history provides that ``[T]his section
would not require any change to how the STB determines railroad revenue
adequacy.'' See S. Rept. 114-52--Surface Transportation Board
Reauthorization Act of 2015.
Question 4. The STB is exploring its methodology for determining
railroad revenue adequacy, as well as the revenue adequacy component
used to judge reasonableness of rail rates. What further action do you
believe the STB should take to ensure revenue adequacy tests work for
all stakeholders and reflect economic realities, including the health
of the rail industry and individual carriers?
Answer. The STB currently has a rate reform task force to address
these issues. The STB will be doing outreach with stakeholders in
groups and one and one to discuss rate reform. The STB has committed to
looking into these issues and I look forward to being a part of that
process and learning more about it.
______
Response to Written Question Submitted by Hon. Dan Sullivan to
Patrick J. Fuchs
Question. Alaska is one of about 5 states where all freight rail
service is provided by regional and shortline railroads, also known as
Class 2 and Class 3 railroads. Many of these small railroads are in
rural areas and were created from lines that would have been abandoned
by the large Class 1 railroads, although in Alaska our railroad was
previously owned by the Federal government.
Regional and shortline railroads face the same types of challenges
as other small businesses, because they are small businesses. Could you
please give me your perspective on these small railroads and how you
see the role of the STB in helping to preserve rail service in rural
areas by these small railroads?
Answer. I greatly appreciate the importance of small railroads to
our Nation's rail transportation system. These railroads provide
critical rail service to rural and other areas and often serve as
crucial first and last mile connections throughout the Nation.
The statutory provisions governing the Surface Transportation Board
recognize the importance of continued rail service to rural areas. The
abandonment provisions of section 10903 of title 49, United States
Code, require that, in reviewing rail carrier requests for abandonment,
the Board consider the impacts on rural and community development. The
Offer of Financial Assistance provisions of section 10904, which give
interested financially responsible persons the opportunity to purchase
or subsidize a line subject to abandonment, provide a role for the
Board in potentially facilitating continued service. If confirmed, I
would approach the position with an understanding of the Board's
statutory authorities and an appreciation for the importance of small
railroads and rail service to rural areas.
______
Response to Written Questions Submitted by Hon. Dean Heller to
Patrick J. Fuchs
Question 1. As you both know, the Department of Energy has an
application before the Surface Transportation Board for a certificate
of public convenience and necessity to build the Caliente railroad to
Yucca Mountain. Given Congress' repeated refusal to fund the Yucca
Mountain project, I do not believe the Surface Transportation Board
should act on this application knowing that the project is not funded
and that it is not going to be funded.
Mr. Fuchs, during questioning, you indicated that you agreed with
me, and you said that your understanding was that ``it's not the
Board's practice to get out in front of a broader issue where it's not
the lead agency.''
Mr. Fuchs, if confirmed, will you commit to continuing the Surface
Transportation Board's practice of not getting out in front of other
agencies when it is not the lead agency?
Answer. Recognizing that the construction and operation application
for the Caliente Line is pending before the Board, and any decision
would be based on the agency record, as a general matter I can say that
the Board has a long history of cooperating with other agencies in
cases involving environmental and safety issues. If confirmed, I intend
to uphold the Board's practice of not getting ahead of an agency that
is the lead in a particular matter.
Question 2. Under the Nuclear Waste Policy Act, the Federal
government is looking at shipping 9,495 rail casks in 2,800 trains and
2,650 trucks hauling one cask each to Yucca Mountain over 50 years.
These shipments would use 22,000 miles of railways and 7,000 miles of
highways and cross over 44 states. Under previous questioning from me
at this Committee, Federal Railroad Administrator Ronald Batory and
Pipeline and Hazardous Materials Safety Administrator Howard Elliott
confirmed that a transportation accident with an ensuing radiological
release was possible.
Mr. Fuchs, given the significant number of proposed shipments, the
sheer distance to be traveled, and the 50-year duration of these
shipments, do you agree with Mr. Batory and Mr. Elliott that there is a
real risk of at least one transportation accident with an ensuing
radiological release occurring?
Answer. Understanding the construction and operation application
for the Caliente Line is pending before the Board, and any decision
would be based on the agency record, as a general matter I note that
the Federal Railroad Administration and Pipeline and Hazardous
Materials Safety Administration have primary responsibility for, and
are the principal Federal government experts on, the safety of spent
nuclear fuel transportation by rail. I respect their subject matter
expertise, and I have no reason to disagree with their judgement on the
possibility of a release.
______
Response to Written Questions Submitted by Hon. Bill Nelson to
Patrick J. Fuchs
Gulf Coast Rail Service. As you know, restoration of Amtrak
passenger service along the Gulf Coast will help the region meet its
transportation needs and boost tourism and local economies.
Question 1. In your view, do you think restoring rail service on
the Gulf Coast is an important project?
Answer. In my view, the actions of Congress and the enthusiasm
shown in Gulf Coast communities indicate the importance placed on this
potential service.
As you know, in the Fixing America's Surface Transportation (FAST)
Act (P.L. 114-94), Congress established a working group to evaluate the
restoration of intercity rail passenger service in the Gulf Coast
region between New Orleans, Louisiana, and Orlando, Florida, and
Congress also authorized funds for the restoration or initiation of
passenger rail service. In recent appropriations bills, as a result of
your efforts and the efforts of Senators Wicker and Cochran, Congress
has provided significant funding, via the authorized programs in the
FAST Act, for the restoration or initiation of passenger rail service.
In addition, I am aware that in, 2016, Amtrak--in partnership with
the Southern Rail Commission--ran an inspection train touring a
potential Gulf Coast passenger rail route, and the train generated
significant crowds and enthusiasm in places such as Pensacola,
Tallahassee, and Live Oak.
If confirmed, I would approach the position with an understanding
of recent Congressional actions and Gulf Coast events, and I would
consider any issue related to this service from a fair and open
perspective.
Question 2. What steps should be taken to help restore Gulf Coast
passenger rail service?
Answer. A critical step would be for Amtrak and the host railroad
to reach an agreement on the use of facilities and provision of
services for the route. In many cases, a mutually beneficial, voluntary
agreement leads to successful outcomes without the need for costly
litigation.
Under section 24308(a) of title 49, United States Code, if the
parties cannot agree and if the Surface Transportation Board finds it
necessary, the Board is responsible for ordering that facilities be
made available, and services be provided, to Amtrak. The Board is also
responsible for prescribing reasonable terms and compensation for such
facilities and services.
While there is not currently a case pending before the Board
concerning this particular service, if the parties cannot agree,
Congress has provided the Board with an important responsibility for
resolving such a dispute.
Passenger Service. On-time performance continues to be a challenge
for many passenger rail lines. Without reliable service, many
passengers may choose to not take the train and instead drive or take
the bus, which adds to congestion and wear and tear on our highways.
Question 3. In your view, what can be done to improve on-time rail
service so that people can get to where they need to be when they need
to be there?
Answer. I am aware of the significant concerns with the on-time
performance of Amtrak, and I understand how frustrating it is when
passengers cannot rely on timely intercity passenger rail service to
take them to business meetings, family visits, medical appointments, or
other important destinations.
The Surface Transportation Board issued a rule regarding on-time
performance, citing authority in section 24308(f) of title 49, United
States Code. However, the U.S. Court of Appeals for the Eighth Circuit
vacated the Board's rule, finding that Congress instead delegated power
only to FRA and Amtrak to establish on-time performance rules.
The constitutionality of the joint rule issued by FRA and Amtrak--
covering on-time performance--is currently pending before the U.S.
Court of Appeals for the District of Columbia Circuit (``D.C.
Circuit''). The rule was not upheld in earlier court decisions. The
outcome of this case will have implications for the Board. Under
section 24308(f), the Board has authority to investigate issues with
on-time performance in certain situations and to award damages and
other relief depending on its findings. The determination on the
constitutionality of the FRA and Amtrak joint rule will be critical to
the Board's authority to conduct an investigation pursuant to section
24308(f).
Given the importance of the D.C. Circuit decision for the
authorities of the Board, I would assess and determine what further
action, if any, is needed to fulfill the Board's statutory
responsibilities following such decision.
Freight Railroad Investments. Service issues faced by railroads
highlight the need for ongoing investment by railroads in
infrastructure and resources--such as locomotives and employees. The
ever-increasing demand to move freight will only further the need for
more investment.
Question 4. If confirmed, what will you do to make sure that the
STB's policies do everything possible to promote private infrastructure
investment?
One of the most important responsibilities of the Board is to
promote a safe and efficient rail transportation system by allowing
rail carriers to earn adequate revenues, as determined by the Board.
This responsibility is codified in our Nation's rail transportation
policy in section 10101(3) of title 49, United States Code. Carriers
that earn adequate revenues can reinvest those revenues in and--where
necessary--expand the approximately 140,000-mile rail network. Through
such investments, rail carriers are able to relieve congestion and
facilitate the efficient flow of goods from production to destination,
including ports, intermodal facilities, and factories.
Oftentimes, regulatory policy affects private investment. If
confirmed, I would carefully consider the effects of any new regulation
on the rail system, including the effects on private infrastructure
investment. I also would consider evidence submitted during the course
of proceedings and would employ sound and objective analysis, using
relevant data, to fulfill the important responsibilities of the Board.
______
Response to Written Question Submitted by Hon. Amy Klobuchar to
Patrick J. Fuchs
Question. In many rural parts of the country, shippers are served
by only one railroad, so called ``captive shippers.'' These shippers
can face increased costs in getting their products to market. Whether
they are shipping grain, coal or paper, the increased costs get passed
on to the consumer.
If confirmed what steps would you take to ensure captive shippers
have access to competitive shipping rates?
Answer. One of the Board's core responsibilities is to maintain
reasonable rates where there is an absence of effective competition, as
codified in our Nation's rail transportation policy in section 10101(6)
of title 49, United States Code. I understand concerns among many
shippers that the current rate review processes are unduly costly and
complex or otherwise not sufficiently accessible.
If confirmed, I would focus on three initiatives relevant to this
issue. First, in 2016, the Board issued an Advance Notice of Proposed
Rulemaking to solicit comments on a new rate review process for small
shippers. Public comments filed in this proceeding have presented
valuable information for the Board to consider in evaluating its
existing rate review processes. Second, in January 2018, the Board
established an internal Rate Reform Task Force, staffed by expert
lawyers and economists, to develop recommendations to reform the rate
review methodology for large cases and improve options for small cases.
I understand the Task Force plans to conduct extensive stakeholder
outreach as it works to develop its recommendations. Third, pursuant to
the Surface Transportation Board Reauthorization Act of 2015 (P.L. 114-
110), the Board reformed its arbitration process and certain mediation
processes, and it remains open to ideas to improve alternative dispute
resolution processes to mitigate the need for costly litigation.
If confirmed, I would prioritize these initiatives, collaborate
with other Board Members as appropriate, and work hard to see if there
is a better way of ensuring rate reasonableness, consistent with
applicable law and sound principles of economics.
______
Response to Written Question Submitted by Hon. Richard Blumenthal to
Patrick J. Fuchs
Question. The goal of the STB in many respects is consumer
protection. For shippers of commodities, coal, chemicals, agricultural
products, automobiles and some other goods, the shippers--if you will--
are the consumers of rail. And if those shippers encounter unfair costs
in shipping goods to market, then those high costs can ultimately be
passed on down to consumers at the retail level.
Protecting consumers is critical to me and a key focus of my work
in the Senate. How would you articulate the STB's work as a consumer
protection organization?
Answer. The Surface Transportation Board has important consumer
protection responsibilities, including--as codified in our Nation's
rail transportation policy--to maintain reasonable rates where there is
an absence of effective competition and to avoid undue concentrations
of market power.
In advancing the policy to maintain reasonable rates where there is
an absence of effective competition, rail shippers served by market
dominant rail carriers may file for a rate review before the Board. The
Board has authority to provide reparations and relief to shippers whose
rates are found to be unreasonable, protecting against potentially
unfair costs in shipping goods to market.
In advancing the policy to avoid undue concentrations of market
power, the Board reviews mergers based on a public interest standard.
In 2001, the Board set new rules concerning the merger of Class I
railroads, and--using the Board's statutory public interest standard--
those rules require a demonstration that the transaction would enhance
competition where necessary to offset negative effects. Given potential
risks to consumers posed by undue concentrations of market power, the
Board's statutory review and approval authority for mergers is another
significant protection.
The Board's consumer protection authority is not limited to these
two examples. As other examples, the Board has authority to enforce the
common carrier obligation, whereby a rail carrier must provide
transportation to consumers upon reasonable request. And the Board
generally adopts a pro-competition perspective in the evaluation of
market entry applications, facilitating greater options for consumers.
If confirmed, I would value the Board's consumer protection
authorities, and I would work diligently to see if the Board could
improve their use.
______
Response to Written Questions Submitted by Hon. Tammy Baldwin to
Patrick J. Fuchs
Question 1. The Surface Transportation Board (STB) is examining
existing class exemptions for certain commodities that would allow
exempt commodities like steel and cement to be on the same playing
field as nonexempt commodities. Currently, there is limited recourse
for exempt commodities at the STB.
The forest products industry is pursuing a revocation of their
exemption. The exemptions for forest and paper products were approved
in a series of decisions in the late 1980s and early 1990s, before
major rail mergers that drastically consolidated the railroad market
and has allowed the railroads to exert market power over shippers.
The exemptions for forest and paper products are antiquated and
were justified by a substantially different rail transportation
marketplace and regulatory structure that no longer exist. Today, the
exemptions hinder business and competition. Companies that ship paper
and forest products are disadvantaged by commodity exemptions because
they lack access to STB procedures that are available to non-exempt
shippers to address rail rate and service concerns.
If confirmed, will you give fair consideration to the case the
forest products industry has made for the revocation of their exemption
and move to finalize the rulemaking?
Answer. As you point out, the review of commodity exemptions is an
important on-going proceeding, with implications for the ability of
certain shippers to bring rate and other complaints before the Board.
While I cannot prejudge specific outcomes, I will give fair
consideration to the case the forest products industry has made for the
revocation of their exemption.
As a general matter, I believe that, in these sorts of revocation
proceedings, data-driven analysis--including examining empirical
evidence concerning market conditions for specific individual
commodities--would be especially helpful for guiding regulatory
decision-making. If confirmed, I would collaborate with other Board
Members as appropriate and the Board's expert staff to conduct such
analysis and move this proceeding to conclusion.
Question 2. Fuel surcharges should not be used by railroads as a
cost recovery mechanism, and the STB has ruled that it is unreasonable
for railroads to compute fuel surcharges in a manner that does not
follow actual fuel costs for rail shipments. However, safe harbor rules
can ensure that railroads are immune from challenges that they over-
recover actual changes in fuel costs. The STB is considering, but has
delayed, rulemaking on rail fuel surcharges.
Do you believe fuel surcharges imposed by rail carriers should be
directly accounted for by changes to the carrier's actual fuel prices?
Answer. I understand the concerns that have been raised regarding
rail fuel surcharges and the ``safe harbor'' standard, which allows
rail carriers to use a Board-approved fuel index to measure changes in
fuel prices for the purposes of rail carriers' fuel surcharge programs.
As you indicate, the Board issued an Advance Notice of Proposed
Rulemaking in 2014. Given that this is a pending proceeding before the
Board, I cannot prejudge specific outcomes. However, as a general
matter, if confirmed, I would value the Board's role in ensuring that
such surcharges are appropriate, and I would thoroughly examine the
adequacy of the Board's current approach.
Question 2a. If confirmed, will you move forward with rulemaking
that would modify or remove the safe harbor provision to ensure fuel
surcharge programs implemented by rail carriers are reasonable?
Answer. If confirmed, I would carefully consider the concerns
raised in public comments in this proceeding and evaluate the issue
from a fair and open perspective. Working with other Board Members as
appropriate and the Board's expert staff, I would diligently analyze
the potential effects of proposals to modify or remove the safe harbor
provision based on available information and decide on next steps based
on that analysis.
Question 3. Section 16 of the STB Reauthorization Act (P.L. 114-
110) included a technical clarification making clear that Congress did
not intend to require any change to how the STB determines revenue
adequacy. How do you interpret Section 16 of the bill?
I am certainly aware that Senate Report 114-52, which accompanied
the Surface Transportation Board Reauthorization Act of 2015 (P.L. 114-
110), stated that Section 16 does not require any change to how the
Surface Transportation Board determines revenue adequacy. I am also
aware of congressional correspondence with the Board supporting this
interpretation.
Because revenue adequacy is an open docket before the Board, I
cannot prejudge a specific outcome. As a general matter, if confirmed,
I would respect the statutory directives and authorities provided by
Congress, and I would work closely with the Board's legal staff to
ensure my interpretations and decisions were based on sound legal
analysis.
Question 4. The STB is exploring its methodology for determining
railroad revenue adequacy, as well as the revenue adequacy component
used to judge reasonableness of rail rates. What further action do you
believe the STB should take to ensure revenue adequacy tests work for
all stakeholders and reflect economic realities, including the health
of the rail industry and individual carriers?
Answer. Revenue adequacy is one of the most significant issues
facing the Board. As you note, revenue adequacy is an open docket, and
the Board solicited comments in 2014 and held a hearing in 2015 to
examine the issue. I understand concerns among shippers that the
current rate review processes are unduly costly and complex or
otherwise not sufficiently accessible.
In January 2018, the Board established an internal Rate Reform Task
Force, staffed by expert lawyers and economists, to develop
recommendations on rate review methodologies. I understand that the
Task Force plans to conduct extensive stakeholder outreach. As part of
this effort, the Board recently clarified that the prohibition on ex
parte communications is not applicable at this stage of the revenue
adequacy proceeding, thereby facilitating greater stakeholder input.
I believe important further action for the Board would be to ensure
the Task Force conducts broad outreach and searches expansively for
better ways to review rates, consistent with applicable law and sound
principles of economics. If confirmed, I would make the Task Force's
work a top priority.
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