High Time for Sunshine at STB
It took Congress 63 years to get the message—until 1976, when it passed the Government in the Sunshine Act requiring that all multi-member federal agencies conduct their business in public, such as through open voting conferences, public hearings and oral arguments that allow regulators to interact with the regulated.
Yet more than four decades since passage of the Government in the Sunshine Act, the Surface Transportation Board (STB)—following the lead of its predecessor Interstate Commerce Commission (ICC)—remains largely in ostrich mode with its head buried deeply in the sand. Rather than being a transparent agency, most Board business—with few exceptions—is conducted behind closed doors among Board members and key staff, through an administrative device called “notation voting.”
Notation voting is an exchange of comments in writing—an informal circulation process by which Board members individually make comments and edits on draft decisions originating with the chairperson. While notation voting has not been found violative of the Government in the Sunshine Act, it certainly does not honor the law’s purpose of greater government transparency. Nor does the posting on the STB website of summary statements following member/key staff closed-door discussions on pending matters.
Former ICC Commissioner Charles Webb proved a lonesome dove back in 1987 when he wrote it “a pity” that only Commission members and select staff “are privy” to what transpires prior to voting, suggesting open voting conferences would “reflect a keener sense of … motivation than we find prudent to disclose in a report.” Indeed.
Regulating, as is lawmaking, can be as messy and unappetizing as sausage making. Yet the democratic process surely benefits from open congressional committee hearings where viewpoints are exchanged bare knuckles. Polite niceties may have been tossed windward—but not transparency—when House Commerce Committee Chairperson John Dingell (D-Mich.) in 1986 accused the ICC of being “brain dead,” or in 2003 when Sen. Jay Rockefeller (D-W.Va.) observed of railroad treatment of captive shippers, “My great-grandfather [oil baron John D. Rockefeller] would have loved what your industry is doing. I’m grateful for what he did for me, but I’m not grateful for what you’re doing to this country.”
The public was poorly served in 1988 when ICC Chairperson Heather Gradison abruptly canceled a rare open voting conference, fearing unflattering optics. Described by the Journal of Commerce as “obviously angry,” she cited as the reason a last-minute difference of opinion with fellow ICC member Jake Simmons. “My mistake was letting her know what I was going to do during a chat in the anteroom before the hearing began,” Simmons said.
Open voting conferences effectively prevent regulators from hiding behind a written decision typically drafted by Board-member staff, reformulated in bureaucratese, further scrubbed by a coterie of attorneys, economists and others, and served on the public fully absent of each Board member’s pre-decision thought process.
While written dissents can be helpful, they also are scrubbed, lack the candor of stream-of-consciousness expression, and are but a Cliff Notes version of the minority’s thought process—and not necessarily of all who dissented, as even truncated written dissents are not always offered.
This subject is especially timely, given that there is in the works an attempt to redraw the nation’s rail map—yet another step toward a two-railroad North America. Whether CN or Canadian Pacific formally applies to marry Kansas City Southern, it will be the first STB-decided merger application of Class I railroads in more than two decades. The public, which will suffer from any temporary or longer-lasting post-merger service disruption, and predictable rate increases driven by acquisition premiums, has a legitimate interest in greater decision-making transparency.
A recent decision regarding a pre-merger-application voting trust supplied no insight into how and why individual STB members interpreted still untested “New Merger Rules” adopted by the STB in 2001.
Although the statute provides that the STB give “substantial weight” to Justice Department viewpoints, it is the STB that has sole authority to approve—or not—a rail merger application. But unlike the Justice Department’s Antitrust Division, or the Federal Trade Commission, each chock-a-block with expertise and experience in mergers and acquisitions, decision-making at the STB rests with five individuals possessing varying backgrounds and skill sets—and none has participated previously in a major merger transaction.
Although former STB Chairperson Linda Morgan said that open voting conferences “can be wasteful government” while notation voting “is a prime example of efficiency and good government,” her successor Roger Nober was more embracing of transparency—saying in 2003, “I am confident that the [agency] and the stakeholders will find that there is a benefit to it because it will give the [members] an opportunity to comment on the cases and explain their thinking on them.”
Martin Oberman, named by President Biden earlier this year as permanent STB chairperson, told the STB’s bar association following his January 2019 Senate confirmation as an STB member that as a former trial attorney, he was mystified how the STB could reach final determinations without holding hearings in proceedings in which facts are in dispute.
If Oberman is to preserve—from his time with the Illinois Racing Commission, Chicago City Council and Chicago Metra—a reputation for no-nonsense full transparency, he should announce that henceforth, when the Board considers merger applications and policy-oriented matters (such as reciprocal switching/competitive access, revenue adequacy, ratemaking standards and processes), there will be more public hearings, oral arguments and open voting conferences.
There is no valid reason to keep the regulated in the dark as to each Board member’s thought process in reaching decisions.
It is high time for sunshine at the STB.
Frank N. Wilner is Railway Age Capitol Hill Contributing Editor. His new book, “Railroads and Economic Regulation,” will be published in late summer by Simmons-Boardman Books. For two decades, Wilner was the principal drafter of rail industry policy positions and congressional testimony at the Association of American Railroads, and later held a White House appointment as a chief of staff at the STB. He is the author of seven books on railroad economics and labor relations, and is a former president of the Association for Transportation Law, Logistics and Policy. He earned undergraduate and graduate degrees in economics and labor relations at Virginia Tech.