Amtrak Pays Millions for Others' Fatal Errors By WALT BOGDANICH October 15, 2004 It is no mystery why, one spring day two years ago, an Amtrak passenger train jumped the tracks near Crescent City, Fla., and skidded to a stop on its side, killing 4 people and injuring 142. Investigators concluded that the track, owned by the big freight railroad CSX, had not been properly stabilized and that management's oversight of maintenance had been lax. But when millions of dollars in damage claims arose from the crash, it was not CSX, a multibillion-dollar corporation, that paid them. It was Amtrak, the perennial money loser that survives only with regular infusions of cash from American taxpayers. Three months later, it happened again. Poor track maintenance by CSX caused an Amtrak train to derail in Maryland, investigators said, injuring nearly 100 people. Again, Amtrak covered claims against CSX. In accident after accident, in derailments and grade-crossing collisions, CSX and other major freight railroads have used Amtrak to shield themselves from tens of millions of dollars in liability, an examination by The New York Times has found. For three decades, Amtrak has been paying these liability claims, regardless of fault, as a condition for using the freight lines' tracks. Not only do these payments shift the burden of paying for negligence from profitable corporations to taxpayers, they remove an incentive for railroads to keep their tracks safe. There has never been a full accounting of these payments. Even Amtrak officials could not say how much the arrangement, known as indemnification, has cost the railroad, which needed $1.2 billion in government subsidies this year to stay afloat. But an analysis by The Times of records obtained through the federal Freedom of Information Act found that Amtrak has paid more than $186 million since 1984 for accidents blamed entirely or mostly on others. In each instance, freight railroads were accused of playing the major or a contributing role in causing those accidents, which killed 53 people and injured nearly 1,300, according to court records, government investigators and lawyers for crash victims. Most of those accidents were not covered by Amtrak's insurance, an Amtrak spokesman said. And the $186 million reflects only part of Amtrak's costs stemming from accidents. The figure does not include payments made before 1984, outstanding claims from recent accidents, settlements of less than $100,000, the cost of repairing damaged Amtrak equipment and legal bills for defending the freight railroads in court. These indemnity agreements represent another way in which some of the nation's freight railroads side-step responsibility in accidents. In July, The Times reported that railroads had destroyed, mishandled or simply lost evidence in grade-crossing accidents and had also failed to properly report hundreds of accidents to federal authorities. Freight railroads have long had the political muscle to insist that Amtrak, which is beholden to Congress for its survival, indemnify them for accident claims. In 1997, after a federal judge questioned the legality of granting railroads blanket immunity, Congress rose to the defense of the freight railroads, passing a bill that, among other things, reaffirmed Amtrak's legal right to indemnify the freight lines. Two years later, Amtrak officials said they had no choice but to cover $63.8 million in punitive damages, including interest, after CSX was found to have caused a fatal Amtrak crash in Lugoff, S.C. A judge called CSX's negligence "borderline criminal." "It's a bitter pill to swallow," said an Amtrak spokesman, Cliff Black. "It hurts our bottom line. It hurts our treasury." Amtrak says it has received about $8 billion in government support over the last decade, and last year alone paid about $100 million to use their tracks. The freight railroads say indemnification merely protects them from risks they would not face if Congress had not insisted that Amtrak, which owns little track of its own, use their rails. Congress, CSX said in a statement, "balanced that demand on private property by calling upon passenger railroads to bear the costs of insuring against potential liabilities." The freight lines also pointed out that indemnity agreements are common in the rail industry, since companies sometimes run their trains on another's tracks. And they dismiss the idea that such agreements discourage attention to safety. "We suffer great economic harm when our freight trains have accidents, and we go to great lengths to prevent accidents of all types," said Kathryn Blackwell, a spokeswoman for Union Pacific. But those arguments do not sway Angelica Palank, who received the $63.8 million payment after her husband, Paul, a police officer, was among eight people killed in the South Carolina crash in 1991. A faulty CSX track switch caused the accident. Ms. Palank said she gave eight years of her life to legal warfare against CSX. After raising her two children alone, suffering depression and enrolling in law school so she could better understand the case, she believed that justice had finally been done after the judge in her case upheld the jury verdict, calling CSX's carelessness and greed "the functional equivalent of manslaughter." She believed that CSX, chastened, might not misbehave in the future. But several weeks ago, a Times reporter told her, for the first time, that the money she received by wire transfer had not come from CSX, but rather from Amtrak. First came disbelief, then anger, and finally tears. "I'm mortified," she said. "Everything I've been living under is a lie. I was feeling on a personal level at least I did my part, and now I find out I didn't." Origins of an Obligation Amtrak's obligation to pay for the mistakes of others dates back to its first days. Created by Congress in 1970, Amtrak preserved passenger travel by allowing railroads to unload this money-losing service - which the railroads had been threatening to drop - onto a semipublic corporation. But Amtrak still had to negotiate the terms for using tracks it did not own. The American Association of Railroads, the freight lines' trade group, made it clear that its members wanted no liability for passenger deaths and injuries even if they caused them. Amtrak, on the other hand, worried that such an agreement might be fiscally unsound and potentially unsafe for passengers, records show. It wanted liability assigned on the basis of fault. Neither side appeared willing to budge. Then, just before the matter was to be turned over to arbitration, Amtrak tried negotiating with just one railroad, Burlington Northern, rather than the association, records show. Soon, Amtrak relented and signed an indemnity agreement that became a model for the industry. Amtrak backed down, records show, after Burlington Northern argued that its tracks were safe and that disputes over fault might inflate the cost of settling claims. Ultimately, Amtrak agreed to cover accident claims from its own passengers and employees. The freight railroads were responsible for their own employees should they be injured by an Amtrak train. How vigorously Amtrak pressed its case is open to question. Records show that when negotiations began, Burlington Northern was in a position to exert influence over Amtrak's affairs. Not only did its chairman, Louis W. Menk, sit on Amtrak's board, along with two executives from other freight railroads, but Burlington Northern also owned about 3.3 million shares of Amtrak's common stock, which it obtained in exchange for giving Amtrak rail equipment. Other railroads were also given shares. Although the government owned the controlling shares in the corporation, the railroads did initially have a say in picking three of Amtrak's directors, with the government picking most of them. "Was the fox in the hen house?'' said Thomas M. Downs, who served as Amtrak's chief executive two decades later, from 1993 to December 1997. "Of course." The negotiations over indemnity, Mr. Downs said he believed, were not conducted at arms-length among equals. "There was barely a railroad to negotiate with on the Amtrak side," he said, adding that Amtrak was dependent on the freight railroads to keep its passenger trains on schedule. "Freight railroads had all the marbles." At the time, Mr. Black said some members of Congress believed that Amtrak would merely be a stepping stone to getting rid of passenger service. "Many observers thought it would just go away," he said. But it did not, and indemnity agreements has haunted Amtrak for years, said Mr. Downs, who now runs the Eno Transportation Foundation, which seeks to improve different modes of transportation. "It was one of the things that always gave me heartburn in my dealings with the freight railroads, because there was no accountability." Questions of Costs Amtrak's indemnity payments stemmed not just from derailments but also from accidents at grade crossings. Such was the case on Sept. 26, 1999, when an Amtrak train came barreling through tiny McLean, Ill. Two high school honor students, Stuart A. Curtis and C. Dannen Latherow, did not realize a train was approaching because an employee for Union Pacific, which owned the tracks, had accidentally disconnected the warning lights and gates, according to an investigation by the National Transportation Safety Board. Both boys were killed. Amtrak paid $4 million to their families. Amtrak paid considerably more - $32 million - after a jury concluded that Union Pacific bore prime responsibility for an August 1997 grade-crossing accident in Missouri. The jury said Amtrak played a minor role in that accident. Local residents had complained about the difficulty in seeing approaching trains, partly because of overgrown vegetation. A state judge concluded that Union Pacific knew or should have known that the crossing was dangerous. In fact, another Amtrak train had killed a motorist there just four months earlier. And Amtrak paid for that accident, too - $1.7 million. Mr. Downs said he had been concerned enough about having to pay for the mistakes of others that he called Union Pacific's chairman, Dick Davidson. As Mr. Downs recalls the conversation, "He said, 'That's not our job, that's yours. That's the price for carrying passengers on our railroad.' " A spokeswoman for Union Pacific said that Mr. Davidson did not recall that conversation, and that it "would be inaccurate to quote him in this manner." Last year, Amtrak paid the freight lines about $100 million for using their tracks. That figure is so low, according to the Association of American Railroads, that its members should be upset with Amtrak, not the other way around. The association sent The Times a copy of its own study for 2001 that said that the freight railroads actually gave Amtrak about $243 million in indirect subsidies by discounting the cost of using their tracks. But Harvey Levine, a former economist for the railroad association - who now testifies on behalf of accident victims - said the association study ignored the fact that Amtrak was already shouldering nearly $1 billion in losses each year, losses that the railroads themselves would have faced had Amtrak not stepped in and assumed the burden of carrying passengers. An Amtrak official said it was "completely bogus" for the association to suggest that Amtrak was not paying its fair and agreed-upon share. If the freight railroads could prove Amtrak was underpaying them, the official said, they would make an issue of it. But they have not, he added. In fact, the inspector general for Amtrak, Fred E. Weiderhold Jr., said that over the last 10 years he had questioned about $54 million in billings that the freight railroads submitted to Amtrak. Those billings relating to track use were either unjustified or unsupported by records, Mr. Weiderhold said. Amtrak, he added, negotiated settlements with the railroads for about 30 percent to 40 percent of the disputed amount. Most of Amtrak's accidents are not covered by insurance. Since 1995, Amtrak itself has had to pay all claims of up to $10 million for a single accident; before that, its deductible was $25 million for collisions and derailments, an Amtrak spokesman said. Told of the size of some of Amtrak's indemnification payments, Frank Clemente, who runs the consumer group Public Citizens Congress Watch, said, "I think if the public knew this it would be up in arms." Questions of Safety Government officials in recent years have expressed concern about the safety of America's 200,000 miles of railroad track. Federal statistics show that in 2003 there were slightly more derailments than a decade ago, though train accidents over all have been dropping. The effect on Amtrak has been a particular concern. In October 2002, worried about CSX's track-related accidents, particularly those involving passenger trains, an official of the federal Department of Transportation wrote a memorandum urging regulators to form a special task force to monitor CSX's track-safety programs, records show. That memorandum, from the department's inspector general's office, cited repeated attempts by the Federal Railroad Administration, dating back to the mid 1990's, to bring CSX's tracks up to standard. In its statement, CSX said it had "invested more than $5 billion in track, signals, training and inspection programs over the last five years to make a safe railroad even safer." At the same time, CSX said that "it is not only false, it defies logic" to suggest any relationship between indemnity and CSX's, or the entire industry's, attention to safety. "The industry has dramatically improved safety since the type of Amtrak agreements you question were put in place in the 1970's," the statement said. Still, the question of such a relationship was at the center of the most serious challenge to Amtrak's indemnity agreements. On Jan. 4, 1987, an Amtrak train crashed into a Conrail train in Chase, Md. Sixteen people were killed and more than 174 were injured. Just before the crash, the Conrail engineer had used marijuana and had intentionally disabled an audible warning device in his cab. The engineer later pleaded guilty to manslaughter and was sent to jail. Amtrak argued in federal court that Conrail's wrongdoing was so egregious that any indemnity payments would violate public policy. The judge, Oliver Gasch of Federal District Court in Washington, agreed - in part. He wrote that Amtrak officials who negotiated the original indemnity agreement "were deeply concerned about the maintenance of safety" and did not intend for the agreement to "deprive the traveling public of its reasonable expectation" that Conrail would operate safely. To insulate Conrail from punitive damages, he concluded, "would render meaningless" the obligation of Conrail to meet safety standards. Even so, Amtrak ended up paying compensatory damages of $9.3 million. Judge Gasch's decision caused considerable unease among the freight railroads, said government officials. Concerned that their liability protection was being chipped away, the freight railroads turned to Congress for help. In 1996 and 1997 alone, records show, the freight railroads spent $35 million lobbying Congress on different issues, including indemnity. And eventually, Congress put its weight behind the indemnity agreements, passing the Amtrak Reform and Accountability Act of 1997. Biggest Payout Yet Two years after enactment of the 1997 law, CSX used the indemnity agreement as a shield against the biggest payout yet - the $63.8 million in punitive damages, including interest, paid to Mrs. Palank. Arthur J. Franza, the judge in her case, was harshly critical of CSX for eliminating too many maintenance workers. "Although cost-cutting measures may have saved defendant over $2 billion, society paid the cost with eight human lives," Judge Franza said. Mrs. Palank said she had pursued the punitive damages with the understanding that CSX, not Amtrak, would pay it. And for years, she said, she believed that CSX indeed had. For good reason, according to one of her lawyers, F. Gregory Barnhart, who said records show that Mrs. Palank's money was sent to her by CSX. Her other lawyer, Christian D. Searcy, said he had even asked Amtrak officials to state in writing whether they had reimbursed CSX. "They said no letter will be forthcoming," Mr. Searcy said. Mrs. Palank said the jury was never told that CSX would escape the sting of its verdict. "It's so secretive, so manipulative," she said. "Someone in the federal government needs to answer for this, because there was no legal justification for them to be paying for somebody else's wrongdoing." Mark Geistfeld, a law professor at New York University, said indemnification, a form of insurance, has its limits. "Certainly, you cannot get insurance for criminal fines, for example," Professor Geistfeld said. "It's against public policy. No court would enforce it." But, whether Amtrak should have paid in this case depends on what kind of behavior you are talking about, he added. Mr. Downs, the former Amtrak chief, said that after the railroad's lawyers told him Amtrak could not escape paying the punitive verdict, he called John Snow, then CSX's chief executive, to complain. Mr. Snow, now President Bush's treasury secretary, said in essence that a deal was a deal, Mr. Downs recalls. Mr. Snow declined to discuss the conversation or the case. CSX also declined to comment specifically on Amtrak's payment of punitive damages. Amtrak's obligation did not end with the $63.8 million payment to Mrs. Palank, though. It was also responsible for $24 million in compensatory damages to her and other crash victims, for a total of $88 million. For causing the accident, CSX paid the Federal Railroad Administration the maximum fine - $20,000. "It's very difficult to convince railroads that the carrying of people has a higher standard of operating discipline and safety than, say, coal," Mr. Downs said. "And the reason I think that is, is that they are immune from any cost." At about the same time that the Palank case was working its way through the courts, in fact, CSX was working on a different front to soften its litigation costs. It played a prominent role in a business coalition that helped persuade the Florida Legislature in 1999 to change liability laws in the state, imposing limits on punitive damages, for example. "We, like many other companies across the country, support a civil justice system that is fair and balanced," said Adam Hollingsworth, a CSX spokesman. CSX, said Mr. Hollingsworth, who has since left the company, wants to make sure "that those responsible for injury pay their portion of fault." Claire Hoffman, Eric Koli and Jenny Nordberg contributed reporting for this article. Copyright 2004 The New York Times Company ------------------------------------------------------------------- For Railroads and the Safety Overseer, Close Ties By WALT BOGDANICH November 7, 2004 Federal inspectors were clearly troubled by what they had been seeing in recent years at Union Pacific. According to their written accounts, track defects repeatedly went uncorrected; passenger trains were sent down defective tracks at speeds more than four times faster than were deemed safe; and engines and rail cars were dispatched in substandard condition. Soon, the inspectors from the Federal Railroad Administration began talking tough: bigger fines and more of them. But as they began to crack down on the railroad, they found themselves under fire from an unexpected quarter: their boss, the agency's deputy administrator, Betty Monro. Ms. Monro demanded to know why agency officials had not pursued the less punitive "partnership" approach that she favored, according to a July 2002 memo from her and the agency's chief at the time, Allan Rutter. A year later, in a senior staff meeting, Ms. Monro rebuked her subordinates as being "overly aggressive" toward Union Pacific, according to one person present. Ms. Monro, who now runs the railroad agency, was in a position to know just how unhappy her inspectors were making officials at Union Pacific. She and the railroad's chief Washington lobbyist, Mary E. McAuliffe, are longtime friends and have vacationed together on Nantucket several times since Ms. Monro joined the agency in 2001. The railroad industry and its federal overseer have long been closely intertwined. And increasingly, like many other federal regulators, the Federal Railroad Administration has emphasized partnership as the best, quickest way to identify, and fix, safety problems from the roots up. But the story of its recent oversight of Union Pacific - spelled out in a series of internal memorandums from agency officials and inspectors - raises questions about whether this closeness has actually served to dull the agency's enforcement edge. Critics of the agency say that it has, over the years, bred an attitude of tolerance toward safety problems, and that fines are too rare, too small and too slowly collected. Those concerns have been underscored recently by a number of major Union Pacific derailments in Texas and California, including one in which the release of poisonous chlorine gas killed a woman and her daughter in their home near San Antonio. The ties between industry and regulator are many-layered. Another big railroad company, CSX, offered the agency's chief safety official a job potentially worth $324,000 a year, with bonuses and stock options, while he was visiting railroad headquarters to discuss safety problems. After the official, James T. Schultz, accepted the job several days later, a federal watchdog asked that agency officials be instructed on the ethics of discussing job offers. The agency promotes the rail industry on its Web site, calling it "safe, fuel efficient, environmentally friendly." It has lent millions of dollars to struggling railroads and has helped finance the industry's nonprofit educational campaign, which emphasizes the responsibility of motorists - and not the railroads - in avoiding grade-crossing accidents. The industry is a rich source of campaign contributions, mostly to the Republicans, with Union Pacific as the biggest giver. Its corporate political action committee was among the top 10 donors to Republican candidates for this election cycle, and Ms. McAuliffe is the treasurer of the company's PAC. The railroad's chairman, Dick Davidson, is identified by the Bush campaign as a "Ranger," having raised more than $200,000 for the president. Until he became Mr. Bush's running mate in 2000, Dick Cheney was a member of the Union Pacific board. George Gavalla, who was the F.R.A.'s associate administrator for safety at the time of the efforts to crack down on Union Pacific, said in an interview in August that at times he felt pressured by his superiors to go easier on the railroad - something Mr. Gavalla said he refused to do. "Every time we do some significant enforcement, particularly on Union Pacific, I would be called in and asked why," said Mr. Gavalla, who has since left the agency. The F.R.A., asked about why Mr. Gavalla left, would only say that he resigned this fall. The agency also vigorously denies that it tried to get Mr. Gavalla, or anyone else, to let up on Union Pacific. In separate statements, the agency and Union Pacific say the railroad has worked diligently to improve its safety record. And any accusation of favorable treatment, the F.R.A. said, is disproved by the fact that over the last four years Union Pacific "has been inspected more times, has received more violations and has paid more in fines than any other railroad." Union Pacific says it paid $4.1 million in fines last year. The F.R.A. declined through a spokesman to make Ms. Monro available for an interview, but her former boss, Mr. Rutter, defended her vacations with Ms. McAuliffe, saying they were not only proper but beneficial to regulators. "Frankly, the business intelligence that we could gather helped us in understanding how our enforcement method was being perceived," said Mr. Rutter, now deputy executive director of the North Texas Tollway Authority. But Charles Lewis, who runs the Center for Public Integrity, a nonprofit watchdog group in Washington, said the vacations merely underscored "the level of incestuousness between the railroad industry and the regulator." And the recent derailments have caused some government officials to question the F.R.A.'s oversight of Union Pacific. After five derailments in five months near San Antonio, Senator Kay Bailey Hutchison, Republican of Texas, asked for a federal investigation into the company's operations in the area. Two of those derailments occurred near a high school; in another case, two engines plunged into a creek, spilling diesel fuel. "People are asking now, 'What's going on?' " said Mayor Edward D. Garza of San Antonio. In California last month, a Union Pacific train derailed east of Los Angeles, damaging two houses, spilling fuel, cutting off electricity to 100 houses, and forcing the evacuation of 24 homes. A little more than a year earlier, in the same county, a runaway train raced through residential neighborhoods at speeds up to 95 miles per hour before derailing, injuring 13 people and damaging or destroying 8 houses. Kathryn Blackwell, a spokeswoman for Union Pacific, said the most recent derailments were still under investigation but added that derailments had been declining since 2001. "We have a lot more at stake in preventing derailments and accidents than does the F.R.A.," Ms. Blackwell said. The Federal Railroad Administration began to emphasize its partnership approach in 1995. "We start with the assumption that railroads and their employees want to promote safety for their own benefit, not just because a law or regulation requires it," the F.R.A. would later explain. Supporters of this approach, called the Safety Assurance and Compliance Program, say it has sharply reduced accidents by focusing on big-picture problems, rather than minor rule infractions. But, according to longtime critics of the F.R.A., the industry and its overseers have sometimes taken the concept of cooperation too far. In October 1997, the F.R.A.'s associate administrator for safety, James T. Schultz, visited CSX's corporate headquarters in Jacksonville, Fla., to discuss serious safety problems at the railroad. During his visit, CSX officials on three successive days discussed employment possibilities with Mr. Schultz, according to an inspector general report. Several days later, Mr. Schultz accepted CSX's offer to be the railroad's vice president and chief safety officer. The federal watchdog found "no evidence that Schultz violated any criminal conflict of interest statute." A CSX spokesman said Mr. Schultz, who has since left the company, helped to make the railroad safer. Some rail-safety advocates say the agency suffers from a reluctance to impose punishment, which has made it less willing to investigate problems. The agency acknowledges that it levies fines for roughly 2 percent of all violations that it finds. The New York Times recently reported that the F.R.A. last year investigated fully just 4 of about 3,000 grade crossing accidents and that the agency had failed to enforce its own rules requiring that railroads promptly report grade crossing fatalities. "There are a lot of really good people in the F.R.A. who are concerned about safety, but they unfortunately are not making the command decisions," said Paul F. Byrnes, who worked as a lawyer with the agency from 1998 to 2001 and now consults for a law firm that sues railroads. The agency's leadership, Mr. Byrnes said, had for a time referred to the railroads "as our customers." In April 2002, after reviewing the F.R.A.'s effort to improve the safety of one railroad company's tracks, the inspector general reminded the agency that on occasion it "will need to act more as a regulator and less as a partner." Mr. Gavalla, who replaced Mr. Schultz as the agency's safety chief, said he supported the partnership approach. But when it failed to work at Union Pacific, Mr. Gavalla said, he and his staff began a multi-region crackdown on the railroad, with more inspections and more fines. Mr. Rutter and Ms. Monro, he said, were not pleased. In a July 2002 memo, for example, they asked Mr. Gavalla to justify the crackdown. While they said they accepted Mr. Gavalla's decision, Mr. Rutter and Ms. Monro wrote that it "raises questions about whether our newer enforcement philosophy could have been applied in this particular situation." In the minds of some F.R.A. inspectors, a tougher approach was necessary. A series of internal agency memorandums obtained by The Times showed that agency inspectors were worried that Union Pacific management had not been doing enough to keep their trains and tracks safe. In one F.R.A. memo, dated May 1, 2002, an inspector said he found 400 track problems near O'Hare International Airport in Chicago. He warned that an accident could cause the release of hazardous materials, and added, "Consider the mass evacuation, chaos, injury and maybe death that could result from such a catastrophe." The inspector wrote that he believed Union Pacific was "either ignoring the conditions at this facility'' or "not conducting thorough inspections." In another memo, from November 2002, F.R.A. inspectors said that because Union Pacific had done a poor job of fixing track defects near Shreveport, La., trains should not have been allowed to go faster than 10 to 15 miles per hour. Even so, the inspector said, the railroad raised the speed of the track back up to 75 m.p.h. for passenger trains and 70 m.p.h. for freight trains. But the findings that most troubled the inspectors occurred in Union Pacific's North Little Rock service area in Arkansas. In a July 2003 memo, F.R.A. officials said Union Pacific's own inspectors had told them that railroad managers "had interfered with their ability to perform inspections." According to that memo, the agency had found conditions "so egregious that it was apparent that the railroad inspectors were not identifying defects in the track, and were doing so with their managers' tacit approval." The officials further charged that some violations had been "willful," according to the July memo. That same month, Mr. Gavalla said he and his senior staff visited Union Pacific headquarters in Omaha to discuss safety issues. But just before the meeting, Mr. Gavalla said, Betty Monro told the F.R.A. staff that over dinner the previous night, Union Pacific officials had angrily complained that the agency had been picking on them. Mr. Gavalla said he recalled Ms. Monro saying that that conduct was not going to be tolerated. Later, Mr. Gavalla said Ms. Monro gave him an e-mail message from Ms. McAuliffe. "The nature and degree of these fines call into question the credibility of F.R.A. senior management who have expressed a desire to work with the railroads and Union Pacific in a performance-based partnership," Ms. McAuliffe wrote. Though the F.R.A. would not comment on the friendship between Ms. Monro and Ms. McAuliffe, the Union Pacific spokeswoman, Ms. Blackwell, said the two women had been friends for more than 25 years, "long before either of them was involved with railroads." Ms. Blackwell said each woman paid her own expenses during the five vacations they took together - sometimes with other people - after Ms. Monro joined the F.R.A. in 2001. "Ms. McAuliffe and Ms. Monro were aware that this friendship would put them under scrutiny by some people who may question the appropriateness of the relationship. That is why they chose to continue the friendship in an open and honest way." The F.R.A. and Union Pacific said the friendship did not affect how the agency dealt with the railroad. Said Ms. Blackwell, "To suggest that U.P. received preferential treatment due to this friendship - or due to political contributions - would be dead wrong." Jenny Nordberg contributed reporting for this article. Copyright 2004 The New York Times Company ----------------------------------------------- DEATH ON THE TRACKS Questions Raised on Signals at Rail Crossings By WALT BOGDANICH December 30, 2004 It was late afternoon on July 14, 2002, when Amtrak train No. 391 pulled out of Union Station in Chicago, bound for Southern Illinois. Several hours later, the train began to run a gantlet of hazardous highway crossings where gates and warning lights malfunctioned, endangering both passengers and motorists. The first problem arose at a crossing in Cumberland County. Eight miles down the track, it happened at another crossing. Then another. And another. By the time Amtrak 391 reached the small town of Odin, signals at seven crossings had failed to give drivers proper warning of at least 20 seconds, according to federal records. And on the same day in the same general area, northbound Amtrak train No. 392 encountered "short warnings" at another four crossings. Two days later, the trains ran through a total of seven more short signals. No one was injured on either day. But three years earlier, on the same track north of these crossings, 11 Amtrak passengers were killed and 89 injured when a train slammed into a truck loaded with steel at a crossing in the town of Bourbonnais. Federal investigators blamed the truck driver for ignoring a proper warning signal, but the state police, witnesses and most recently a judge concluded that a short warning was a factor in the crash. The railroad industry and its overseer, the Federal Railroad Administration, have long maintained that signal malfunctions pose little danger and that accidents caused by them are "extremely rare." But last week, after The New York Times began asking questions about signal problems, federal regulators disclosed that since a fatal accident in Michigan in the spring, they have been investigating whether a "type of Amtrak train" might be failing to trigger warning signals properly. And an examination of reported signal malfunctions indicates that they may constitute a wider problem, also involving freight trains. A Times computer analysis of government records found that from 1999 through 2003, there were at least 400 grade-crossing accidents in which signals either did not activate or were alleged to have malfunctioned. At least 45 people were killed and 130 injured in those accidents, according to the records, although in most cases the role of signal malfunctions was unclear. Federal rules require that railroads maintain signals on tracks they own. The accident reports, all prepared by the railroads, also raise questions in many cases about whether unsafe behavior by drivers contributed to the accidents. In addition, since 2000, railroads filed about 2,300 reports of the most serious types of signal malfunctions: short signals or no signals at all. Most of these malfunctions did not involve accidents. "My concern is that this is just the tip of the iceberg," said James E. Hall, a former chairman of the National Transportation Safety Board. "If we had that type of record in aviation, it would be unacceptable." In February, after a husband and wife were killed near Rochester, at a crossing where the signal had been disabled for maintenance, the Federal Railroad Administration inspected 199 area rail crossings maintained by the railroad company CSX. The agency found that nearly half had defects. Though most of the defects were deemed "relatively minor," they were found to be serious at 12 crossings, the agency said. CSX has since made major repairs to crossings in the area. The railroad administration's investigation of Amtrak began after a woman and her 15-year-old daughter were killed by a train in Charlotte, Mich., in April when, the police say, a warning signal activated too late. The same railroad that owned the Illinois tracks in the 2002 incidents - Canadian National Railway - also owned the tracks in Charlotte and was responsible for maintaining the signals in both areas. Canadian National said in a statement to The Times that it did not believe that the short signals in Illinois showed "a significant or persistent problem, or otherwise reflected systemic issues regarding CN signal performance, inspection, maintenance, or repair." The railroad declined to comment on the Charlotte fatalities until the railroad administration completed its investigation. Warning signals are triggered when an approaching train causes an electrical current to pass from one rail to the other. Last week, the railroad administration said its preliminary investigation of the Charlotte crash had concluded that the warning signal malfunctioned, possibly because Amtrak's braking equipment and practices, along with accumulated material on the tracks, had impeded the electrical current. The agency said there was no connection between the short signals in Illinois and the Charlotte accident, though both appear to have involved a buildup of different substances on the tracks. "Passenger locomotives are generally lighter than freight locomotives and use different types of braking equipment," a government official involved in the Michigan investigation said. He added that the problem was "very intermittent" and had been detected only "regionally." In a statement, an Amtrak spokesman, William Schulz, said that all of its locomotives and most of its cars had the same kind of brakes, and that there have been "no instances" where Amtrak trains have been found to cause short signals. But with an "abundance of caution in mind," Mr. Schulz said, the passenger service changed some braking equipment and procedures on the Michigan line after the Charlotte accident. The frequency of signal malfunctions is difficult to assess, because railroads do not have to report all malfunctions and because proving that an error occurred is often difficult after an incident. According to government data, some 9,500 calls about signals were lodged in 2003 in Texas, which has the only statewide government hot line for problems at grade crossings. Several Texas crossings have been the subject of scores of complaints in recent years. Some callers were reporting the same problem. Chronic signal malfunctions are not only hazardous, but also burdensome for police departments, especially smaller ones, because they must often send officers to safeguard motorists at problem crossings. Peggy Wilhide, a spokeswoman for the Association of American Railroads, played down the significance of signal malfunctions, saying a recent federal report found that the great majority of crossing accidents were caused by unsafe drivers. Ms. Wilhide also emphasized that most of the reports of signal malfunctions could not be confirmed. "I would put our safety record up against any industry," she said. A spokesman for the Federal Railroad Administration, Steven W. Kulm, said his agency's efforts had "contributed to the dramatic decrease in the loss of life and injury at highway-rail grade crossings." The federal authorities "aggressively review" all reports of signal failures, Mr. Kulm said, adding, "More than 9 of every 10 accidents occurred when the grade crossing warning system was functioning properly." Federal rules define signal malfunctions as those that give drivers a warning of less than 20 seconds, or that activate when no train is approaching. The latter, called a false activation, is potentially dangerous because drivers may be led to ignore signals that they believe are not working. False activations are the most common signal problem, officials say. "Americans are impatient, they are only going to sit for so long," said George Gavalla, a former top safety official with the railroad administration. "They will say the gates or lights are not functioning, and they are just going to go." For that reason, Mr. Gavalla said, after accidents the agency requires railroads to report any possible or confirmed signal that lasts more than 60 seconds without a train entering the crossing. "That's outside what is considered to be a reasonable time frame," Mr. Gavalla said. Mike Stead, who oversees rail safety for the Illinois Commerce Commission, said he was unaware of any warning system in his state that was designed to operate longer than 60 seconds with no train present. Warning signals can fail for various reasons, experts say. Salt, dirt, heavy rain and other substances can interfere with electrical conductivity and wiring. Poor maintenance by the railroads contributes to the problem. So does aging equipment, said Tom Woll of the railroad administration. In some cases, records show, railroad workers have accidentally disconnected the warning system, or disabled signals during maintenance without providing alternate ways to warn drivers, like flagging them at the crossing. The latter issue was the subject of a 2002 agency advisory. Even so, the problems have continued. In the crash near Rochester this year, CSX disabled a signal while trying to learn why it was malfunctioning. With no warning signal, trains were supposed to stop at the crossing, then have crews flag motorists, but on the morning of Feb. 3, a CSX train failed to stop, striking the car of John O'Connor and his wife, Jean, killing them. Of the grade-crossing accidents in the Times analysis, roughly 17 percent involved rail maintenance or inspection equipment that, according to the rail industry, is not designed to activate the warning signals. Most of this equipment, the railroad administration said, weighs too little and has too few wheels to trigger the warning signal. Nearly 30 people were injured in these collisions from 1999 through 2003, government records show. Proving that a signal malfunctioned can be difficult. In the more than 400 accidents in the Times analysis, 30 percent of the signal problems were listed as confirmed. The rest were listed as "alleged," meaning that a technician checked the signal later and found no problem, said Ms. Wilhide, the spokeswoman for the Association of American Railroads. But determining what happened at the time of an accident is possible only at those signals equipped with devices to record when a warning is activated and the position of the gates when the crash occurred. Most signals lack such devices. More often, the determination comes down to what witnesses say, and their accounts may differ. Even when no accident occurs, the Federal Railroad Administration requires railroads to report to a separate database when signals fail to give drivers a sufficient warning. The required 20 seconds are necessary because gates do not descend instantly. They typically begin to lower four to five seconds after signal activation and take about five seconds to be fully deployed. The reports in this federal database, however, often provide few or no details on the signal malfunctions. This database does not reflect every signal that fails to operate properly. The most common problems, false activations, are not included. Also, according to the rail industry, if a malfunctioning signal is taken out of service so it can be worked on, it does not have to be reported separately to the signal problem database - even if an accident occurs - because the signal did not technically fail; it was simply out of service. In the summer of 2002, 27 short signals on the Canadian National tracks in Illinois were reported to the federal database. Some signals were short by only a second or two, but most reports did not specify the length of time. Records show that after the malfunctions were discovered, Canadian National temporarily lowered the allowable train speed for all railroads using the affected tracks. The railroad administration said the problems "were primarily related to deposits from freight spillage that caused a buildup of material on the rail surface." Since then, it said, steps have been taken to improve the sealing of railroad cars that carry grain. An Amtrak spokesman said he was unaware of the Illinois short signals until The Times asked about them. The passenger service, he added, does not keep records of signal malfunctions that involve its trains. Amtrak's president, David L. Gunn, said in an interview that he believed that freight railroads tried their best to maintain warning signals. Even so, Mr. Gunn said he found the apparent breakdown in Illinois troublesome. "Absolutely," he said. "Any failure like that will put somebody in danger." In the Michigan crash last April, that danger proved fatal to Melanie Pouch and her daughter, Meghann, according to witness accounts. Ten people said the train had entered the crossing when the warning gates began to descend. About a month later, the police officially concluded that the signal malfunctioned. Nonetheless, Canadian National's accident report still states that the signal is only alleged - but not proved - to have malfunctioned. "It's clearly inappropriate of the railroad to call this an alleged malfunction," said Bryan J. Waldman, a lawyer representing Mrs. Pouch's estate. "Corporations speak about how injured people need to take responsibility for their own actions, and corporations need to take responsibility for their actions." In several fatal accidents, signal problems were reported before and after the accidents. For example, at the Bourbonnais crossing where 11 Amtrak passengers died, four false activations were confirmed in the year before the crash and two short signals occurred within a month afterward, records show. (Canadian National Railway did not, at the time, own that track, so it had no maintenance responsibility for that signal.) The Rochester-area crossing where two people were killed had also been the subject of repeated complaints. And in the month after the Michigan crash, the police received two reports of Amtrak trains going through the crossing without the gates being properly lowered, records show. In that same period, two other crossings with signals on the Amtrak line in the area were reported to have malfunctioned. A Canadian National spokesman denied that those malfunctions occurred. Jenny Nordberg, Jo Craven McGinty and Tom Torok contributed reporting for this article. Copyright 2004 The New York Times Company ------------------------------------------------------------ U.S. Audit Faults Federal Regulators on Rail Safety By WALT BOGDANICH February 10, 2005 America's four biggest railroads suffer from substantial and systemic safety problems, according to a new federal audit that raises questions about how well federal regulators are overseeing the rail industry. Citing a series of serious accidents in recent months, the Transportation Department's inspector general said he was concerned that the Federal Railroad Administration's approach to regulation, which stresses "partnership" over punishment, might be failing to fix the most persistent safety problems. He asked the agency to prepare a comprehensive plan to improve its inspection of railroads and enforcement of federal safety rules. The report also criticized the railroad agency's former acting chief, Betty Monro, saying she had failed to recognize the ethical problem of vacationing on four occasions with a Union Pacific lobbyist. The inspector general, Kenneth M. Mead, said in the report, dated Dec. 10 and obtained through the federal Freedom of Information Act, that it was wrong for Ms. Monro to have shared a house on Nantucket, Mass., with the Union Pacific lobbyist "at the same time the agency you represent is, among other things, proposing and settling millions of dollars in fines against that railroad." Mr. Mead said he found no evidence that Ms. Monro, a longtime friend of the lobbyist, showed any favoritism toward Union Pacific. But he did note that Union Pacific had "the highest average number of train accidents" of the four major railroads from 1998 through 2003, yet it was inspected "proportionally less, ranking third." "These data, compounded by Union Pacific's recent spate of accidents, raise questions as to the adequacy of the extent of F.R.A. inspections and whether F.R.A.'s regulatory oversight process is sufficient," Mr. Mead said. At the railroad administration, a central element of the oversight process has been the partnership approach, which stresses cooperation with the rail industry as the quickest way to identify, and fix, safety problems. The regulatory agency, Mr. Mead said, must recognize when this approach "has gone far enough and traditional enforcement," imposing fines, is more appropriate. Ms. Monro could not be reached for comment on the report; she retired at the end of last year. But before she left the agency, she said in a message to her staff that the inspector general's report emphasized that she never let her friendship with the Union Pacific lobbyist "influence my professional actions." In a statement, a railroad administration spokesman, Steven W. Kulm, said the investigation found that the agency had actually conducted more inspections and enforcement actions over the last four years. The report comes at a time of growing concern about railroad safety in Congress and across the nation, spurred by a number of high profile crashes. Regulators have been unable to reduce the overall accident rate among most of the biggest railroads, and after declining for a number of years, grade-crossing accidents were up sharply in 2004. Mr. Mead's report focused mainly on Union Pacific, though he said "substantial safety and inspection" issues also exist for the other three big railroads, CSX, Burlington Northern and Santa Fe, and Norfolk Southern. Since May, there have been nine derailments or accidents involving Union Pacific in the San Antonio area, one in which poisonous gas was released. Four people died in those accidents. The railroad administration has since said that it will send 10 additional inspectors to the San Antonio region. Kathryn Blackwell, a Union Pacific spokeswoman, said her company had made "great and rapid strides" by working with the railroad administration to fix its safety record in the San Antonio area. Some of the changes that Union Pacific made in Texas, Ms. Blackwell said, have been applied to other parts of the company. "We continue to invest heavily in our infrastructure to ensure our railroad is safe." The three other big railroads declined to comment on the inspector general's report. But the Association of American Railroads, an industry group, said in a statement that "we are reluctant to comment on the inspector general's report, because it has not yet been made available to us or the public." It added that "railroads are by far and away the safest form of ground transportation. All aspects of railroad safety have improved dramatically over the years." In addition to accident rates, the report also examined safety defects uncovered during inspections and found that "defect ratios" at three of the four top railroads rose. In both categories, Union Pacific had the worst record among the four railroads, even though it had paid relatively more money in fines. The railroad administration's enforcement record was the subject of an article last fall in The New York Times, which first reported Ms. Monro's links to the lobbyist and raised questions about whether the agency's longstanding closeness to the industry had dulled its enforcement edge. In his report, the inspector general said there was a "compelling need" for the railroad administration to make better use of its enforcement and safety data. "With fewer than 450 inspectors responsible for overseeing the nation's vast network of 230,000 miles of rail, it is critical that F.R.A.'s inspection and enforcement efforts be carefully targeted to address those safety problems that are most likely to result in accidents and injuries," the report said. Mr. Mead specifically faulted some aspects of the railroad administration's Safety Assurance and Compliance Program, which tries to fix safety problems through committees of union representatives and railroad managers. Even the railroad administration acknowledged that this process was time-consuming and "resulted in little meaningful change." As a result, the report stated, the railroad administration also started a partnership program involving the highest levels of F.R.A. and railroad management. Mr. Mead asked the agency to come up with a new regulatory strategy within 90 days. The railroad administration said in a statement that it would follow through on the inspector general's recommendations. Copyright 2005 The New York Times Company -------------------------------------------------------------- Railroad to Pay Over Violations at Crossings By WALT BOGDANICH March 8, 2005 ALBANY, March 7 - Calling federal regulation of the railroad industry "an abject failure," New York's attorney general, Eliot Spitzer, said on Monday that the railroad giant CSX Transportation Inc. had agreed to pay $1 million to settle state charges that it violated safety laws by failing to report and promptly fix hundreds of warning-signal malfunctions at grade crossings across the state. As part of the settlement, one of the largest enforcement actions against a railroad, CSX also agreed to improve the way it reports, inspects and repairs broken warning signals, some of which it had taken up to five months to fix, Mr. Spitzer said. CSX will also set aside up to $500,000 to pay for sending local police officers to direct traffic at crossings with broken signals. The Federal Railroad Administration is the nation's primary overseer of rail safety, and it is highly unusual for a state government to take such sweeping action against a railroad. But Mr. Spitzer, who forged a national reputation with his investigations of Wall Street's business practices, said he had been motivated to begin a state inquiry of CSX after the death of an elderly couple last year at a Rochester-area crossing with a broken signal. Even when the railroad found signals to be malfunctioning or broken, Mr. Spitzer said, CSX did not always inform the police so they could help protect motorists at those crossings. "Where has the F.R.A. been?" Mr. Spitzer asked. "Why has it failed to look at issues of critical importance to the safety of the public?" On Monday night, the agency issued a statement through the federal Department of Transportation, saying that it could not comment on the details of the investigations, since Mr. Spitzer had not previously shared his findings with the F.R.A. "We hope Mr. Spitzer will elect to share with us those details in the interests of improving rail safety," the statement said. Mr. Spitzer's investigation found that on 321 occasions from January 2002 to March 2004, CSX took more than one day to fix signal problems. On 24 of those occasions, state figures show, CSX took a month or more to fix the problems, a length of time that Mr. Spitzer said he found "astonishing." The attorney general said federal rules specify only that signal problems should be fixed without undue delay, but in Mr. Spitzer's view, 24 hours is sufficient time to fix the problem or to at least inform the local police of the danger. A spokesman for CSX, one of the nation's four largest freight railroads, declined to answer questions about the findings. But the company said in a statement on Monday that the attorney general had been a "valuable partner" in its effort to fix rail safety problems in New York. CSX "will continue to work to restore the confidence of the citizens of New York," the statement added. Mr. Spitzer praised CSX for agreeing to make changes, though he said his office would continue to monitor how well the railroad complied. "We are not done with this," he said, adding that his office would periodically monitor CSX's compliance with the terms of the accord. The New York Times reported last year that CSX had repeatedly failed to properly report grade crossing accidents, that federal regulators were closely entwined with the rail industry and that warning-signal malfunctions were more common than federal regulators had acknowledged. In recent weeks, signal problems have continued at CSX. On Feb. 11, a woman was killed when a CSX train struck her car in Fonda, N.Y. The police found that a CSX employee had manually raised the gates in error. And last Wednesday, a 37-year-old man died instantly when his truck was hit by an Amtrak train at a CSX crossing in Pompano Beach, Fla., according to the Broward County sheriff. "We do know for a fact that the gates weren't down when the accident happened," said J. M. Kersey, a detective with the sheriff's office. Steven W. Kulm, a spokesman for the federal rail agency, said those two fatalities did not appear to involve mechanical malfunctions of the signal. In both cases, Mr. Kulm said, a second locomotive was near the rail crossing, and the regulators are "looking at how that may have interacted with the functioning of the signals." A bipartisan bill in Washington was introduced last month by Senators Charles E. Schumer, Democrat of New York, and Lindsey Graham, Republican of South Carolina, that would require for the first time that the federal rail agency investigate each fatal grade-crossing accident. It would also raise fines and increase the number of federal regulators assigned specifically to grade crossings. Mr. Schumer praised the attorney general for helping "to plug holes" in rail safety in New York, adding, "Because railroad safety is an interstate commerce problem, we need a tough national response." Mr. Spitzer said the federal rail agency could have fined the company as much as $26 million for grade-crossing safety problems his office uncovered, but the federal agency chose a less punitive approach. Last month, the agency fined CSX $298,000 for grade-crossing safety violations at three crossings near Rochester, including the one where the elderly couple died last year. The fine followed an F.R.A. inspection of 199 CSX rail crossings that found defects in almost half of them. Though most of the defects were deemed to be minor, 12 crossings were found to have significant safety hazards. CSX, in its statement, said that in the last year it had performed signal or track maintenance work at 143 crossings, "as well as the complete rebuilding of some of those crossings." State figures supplied by Mr. Spitzer's office show that of the 321 instances in which repairs took longer than a day, 95 of the affected signals had been taken out of service because of problems. Signal breakdowns, state records show, also occurred frequently at the same crossing. Benjamin A. Bruce, an assistant attorney general in New York, said his office had originally asked CSX to voluntarily provide its internal signal records. When the records were not all forthcoming after six months, he said, they were subpoenaed. Jenny Nordberg, in New York, contributed reporting for this article. Copyright 2005 The New York Times Company