Newspaper article The Florida Times Union

CSX Spending Big on Lobbyists; ANTITRUST Railroads Enjoy Protections That Are Now under Review

Newspaper article The Florida Times Union

CSX Spending Big on Lobbyists; ANTITRUST Railroads Enjoy Protections That Are Now under Review

Article excerpt


Jacksonville-based rail carrier CSX Transportation has poured millions into lobbying against a bill that would end railroad industry antitrust exemptions, and another - seen as a watered-down compromise - that would bolster the federal agency that regulates the industry.

The fight against tougher regulations comes at a time when Tampa-based Seminole Electric Cooperative Inc. is challenging what it calls an unfair increase in CSX freight rates affecting shipments of coal to its Palatka generating station. The rate increases upped the companies' costs by $80 million in 2009, a Seminole spokesman said. Overall, the company had $1.2 billion in operating expenses in 2009, according to its annual report.

The two bills opposed by CSX - and the rest of the industry - would not directly affect the ability to set rates. Observers, however, say that the industry's push-back against the closure of antitrust exemptions, coupled with big rate increases that the few remaining private rail carriers can impose, helps pull the curtain back on an influential industry that has been exempt from portions of federal antitrust laws since the 1920s.

"They are one of the biggest lobbying players out there," said Bob Szabo, executive director of Consumers United for Rail Equity, a coalition of rail customers that itself spent $700,000 lobbying Congress in 2009. "Railroads are very powerful political players."

The industry spent $46.5 million lobbying Congress in 2009, a 90 percent increase over 2000 levels, according to the Center for Responsive Politics.


CSX's efforts against the two bills has upped the company's overall spending on lobbyists to record levels, eclipsing $5 million in 2009 (a nearly $1 million increase over 2008), and has CSX on pace to spend $5.6 million in 2010, according to the company's first-quarter lobbying reports.

Of the $5 million spent in 2009, more than $3.3 million was related to the fight against the antitrust bill, according to lobbying reports. CSX ranks third out of the 90 companies that filed reports lobbying for or against the bill. Ahead of them on the list are rail carriers Norfolk Southern and Union Pacific.

The first bill, HR233/S146, would place all railroad company mergers, acquisitions and rail-line sales - many of which are currently exempt - under federal antitrust laws administered by the Department of Justice. The bill would also ensure that private parties could use antitrust laws to get remedies for anti-competitive harm caused by railroads.

The antitrust exemptions were given by Congress in the 1920s at a time when the rail industry faced stiffer government regulation. In the 1970s regulation on the industry began to ease, but the exemptions remained in place. Opponents of the exemptions argue they are outdated.

"Railroads today benefit from several antitrust exemptions and immunities which are legacies of a bygone era," said M. Howard Morse, of the American Bar Association, in testimony about the bill before Congress in 2009.

The railroad industry, proponents of the exemptions say, are already subject to most antitrust laws, and in areas they are exempt are overseen by the Surface Transportation Board (STB).

"Railroads cannot, under law, collectively agree to set rates, take other rate-related actions, or allocate markets," said Gary Sease, a CSX spokesman.


The House version of the bill has been bogged down in committee, and the Senate version has been pulled by sponsor Herb Kohl, D-Wis. …

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