(The following appeared on the North Platte Bulletin website on December 1.)
NORTH PLATTE, Neb. Washington lawmakers have called on Congressional leaders to protect consumers, farmers and rural communities from railroad monopoly abuses as part of any economic stimulus package, the North Platte Bulletin reports.
House Judiciary Committee Chairman Rep. John Conyers and Judiciary Committee member Rep. Tammy Baldwin recently sent a letter to Speaker Nancy Pelosi that said consumers are paying higher prices for energy and other goods because of unrestrained railroad monopoly pricing power.
They urged the speaker to include legislation in the economic stimulus package that would place the railroads under the same antitrust laws as all other U.S. companies, from which they are now largely exempt.
This legislation, the Railroad Antitrust Enforcement Act, was passed by both the House and Senate Judiciary Committees this year on bipartisan voice votes, with no opposition, and was reported to the floors of both chambers with the recommendation of both committees that this legislation be adopted, but the bill has not be considered yet on the floor.
Last week the North Platte Bulletin reported that more than two dozen customers of Union Pacific Railroad and the next four largest U.S. railroad companies claimed in a lawsuit the railroads made billions of dollars by illegally fixing prices on fuel surcharges.
But lawyers for UP, Burlington Northern Santa Fe Corp., Kansas City Southern Railway Co., CSX Corp. and Norfolk Southern Corp. say the case should be thrown out for a lack of evidence.
They say the railroads did not break any laws in creating a price index to pass on surging fuel costs to customers.
The collective decision by the companies to create the index was lawful behavior, according to Kent Gardiner, lead lawyer for the railroads, at a hearing last week in Washington.
The plaintiffs don't allege a restraint of trade associated with the index, he said.
But the plaintiffs -- direct purchasers of rail services and customers who contracted through intermediaries for shipping -- say the companies colluded at an industry meeting in 2003 to fix surcharge tied to overall transportation costs rather than to actual fuel prices over a 3-1/2 year period.
Some of the plaintiffs include Archer Daniels Midland Co.; US Magnesium, a Salt Lake City-based producer of magnesium; Zinifex Taylor Chemicals Inc. of Clarksville, Tenn.; Dakota Granite Co.; West Alabama Sand and Gravel; and Strates Shows Inc., a traveling carnival based in Orlando, Fla.
Archer Daniels Midland also brought a lawsuit but dismissed it recently following a new tolling agreement with Norfolk Southern.
The railroad operators could pay billions of dollars in damages should a judge find they fixed fuel surcharges, according to counsel for the class-action suit.
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Following is the text of the letter from Reps. Conyers and Baldwin to Pelosi:
We are writing to encourage you to include legislation in the upcoming stimulus package that will help restrain the cost of energy and other goods during this period of extreme financial difficulty for American families.
Our national rail system is dominated by four major railroads that are exempt from some of the most important aspects of the nations antitrust laws.
The result is a lack of competition in freight rail transportation that is adversely affecting American consumers, as well as our nations agricultural and manufacturing sectors. As our nations economy falters and American households try desperately to make ends meet, these four railroads announced record third quarter profits that are all at least 30 percent above the same period last year.
These significant profits were earned even as the railroads reported that they are moving less freight than a year ago.
Wall Street analysts have attributed these substantial increases in profits to railroad pricing power.
As an example, last week, Seminole Electric, a rural electric cooperative in Florida that generates electricity from coal, reported that its electricity costs will increase $100 million per year due to the doubling of its coal haulage bill from the only railroad available to move its coal.
This railroad reported third quarter profits this year that are 40 percent above the profits for the same period last year. More troubling is the fact that the $100 million annual cost increase will be paid by 1.7 million electricity customers in Florida, who are already suffering under economic strain.
An important first step in protecting American consumers, agriculture and manufacturers from these steep rail freight increases is to enact the Railroad Antitrust Enforcement Act of 2007, H.R.1650, as part of the economic stimulus package. This legislation has been reported by a voice vote of the House Judiciary Committee, without opposition.
Companion legislation, S.772, was reported last year by the Senate Judiciary Committee, again by voice vote and without opposition.
Madam Speaker, as Congress continues to address the problems created in part by a lack of regulation and oversight in the largest financial institutions in America, we think the time is right to ensure antitrust compliance by our nations railroads.
Their current unrestrained pricing power over Americas consumers is hurting our economy and our country, and must be addressed.
Thank you for your consideration. We look forward to working with you.
Sincerely, Tammy Baldwin, Member of Congress, and John Conyers, Jr., Chairman, House Judiciary Committee.
Good, I want the Feds to be on top of these bastards as much as possible, especially since the whores have no trouble going to the Fed to get money for their projects.
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I started ophph with nuthin, and I can safely say I have most of it left.... <img
