STB Nominee Suffering as a Political Pawn

Hedlund has become a political pawn of the Utah congressional delegation that supports a public-private partnership (P3) seeking to construct a new 85-mile intrastate railroad in Utah. The Uinta Basin Railway—a P3 of seven Utah counties, Drexel Hamilton Infrastructure Partners, and short line holding company Rio Grande Pacific—seeks to haul primarily crude oil extracted via fracking from the Uinta Basin to a Union Pacific Railroad connection at Kyune, some 60 miles southeast of Provo. Because the new rail line will connect with the national rail network, an STB certificate of public convenience and necessity must be issued before construction begins.

Hedlund’s problem is her relationship with STB Chairman Martin J. Oberman—to be explained shortly. Oberman has expressed concern as to the “financial viability” of the project and its “significant environmental impacts.” Because of that relationship, Hedlund’s Senate confirmation to the STB worries the project’s backers—and, hence, the supportive Utah congressional delegation—as Hedlund could potentially adopt similar views as Oberman. 

STB Chairman Martin J. Oberman

Oberman does not currently oppose the project, but rather wants the STB to “seek additional information … in order to provide clarity on the uncertainties surrounding” its financial viability and environmental impact. In a January 2021 STB decision by Begeman (whom Hedlund would succeed) and Patrick J. Fuchs, in which both Republicans voted that the project meets a statutory standard for fast-track approval, Democrat Oberman dissented. At the time, there were two vacant seats now occupied by Democrat Robert M. Primus and Republican Michelle A. Schultz—neither of whom has had opportunity to cast a vote. 

A date for the Board to finalize the project’s fate is not publicly known. Understandably, project backers would like to see Begeman, whose preliminary vote, as explained, favors the project, remain on the STB, although it is not known if she will continue in support. Upon Hedlund’s Senate confirmation, Begeman, whose second and final term has expired, must depart—or no later than Dec. 31. 

The genesis of the Utah congressional delegation’s indigestion is that Oberman, when a Chicago alderman, represented then-Chicago resident Hedlund; and when Oberman was chairman of Chicago Metra, Hedlund, then in private law practice, represented clients in matters involving Metra. They developed a mutual professional respect for each other. Moreover, Oberman was instrumental in Hedlund’s nomination by President Biden, working through Illinois Sen. Dick Durbin, who holds the second-highest Senate Democratic leadership post and who promoted Oberman’s nomination to the STB.

At the Aug. 4 Senate Commerce Committee confirmation hearing on Hedlund’s nomination, committee member Sen. Mike Lee (R-Utah) was the lone negative vote on the majority’s recommendation that the entire Senate confirm her. That Senate floor vote could occur before the Senate recesses this weekend, and Hedlund could be sworn in next week to succeed Begeman. 

Sen. Mike Lee (R-Utah)

But if Lee, or Utah’s other Republican senator, Mitt Romney, places a “hold” on the Hedlund nomination, her confirmation could be delayed indefinitely—such as until the STB issues its final vote on the Uinta Basin Railway project, although a date for that action is not known. A hold is a parliamentary procedure allowing a senator to prevent a motion from reaching a vote on the Senate floor.

Previously, Senators Lee and Romney, and Utah congressmen Rob Bishop, John Curtis and Chris Stewart—also Republicans—wrote the STB in favor of the project’s approval.

It would be inappropriate and unethical for nominees facing a Senate committee considering their qualifications and whether to recommend them for confirmation to express an opinion on matters pending before the agency to which they are nominated. Hedlund did not nor has she previously. Had she indicated a predisposition, she rightfully could be asked to recuse herself from the vote if confirmed. Senators know that, but they also know they must indulge their constituency. A vote against Hedlund by Lee was showmanship. He knew the committee was going to recommend that her nomination proceed to the Senate floor for a vote. 

But were Senators Lee or Romney now to place a “hold” on the Hedlund nomination—so as to engineer Begeman’s sticking around to vote on the Utah project—it would be jack-booted thuggery and an unfortunate and unprovoked dagger aimed at Hedlund’s future. Yet it would not be the first time a nominee became a political pawn.

In 2015, Sen. Tammy Baldwin (D-Wisc.) placed a “hold” on the second-term nomination to the STB of Democrat Daniel R. Elliott III, writing then-Senate Majority Leader Mitch McConnell (R-Ky.) that “Wisconsin manufacturers, utility companies, the agriculture industry and countless small businesses” were unhappy with the STB’s handling of their complaints, while Elliott, in his first term, was STB chairman. Baldwin removed her “hold” following a meeting with Elliott—the substance of which was not revealed—and Elliott was then confirmed to a second term. There is neither suggestion nor evidence that Elliott improperly made any promises to Baldwin. 

And in 1988, a “hold” was placed by Sen. Robert Stafford (R-Vt.) on the nomination of Karen B. Phillips to STB predecessor Interstate Commerce Commission (ICC). Stafford sought to delay Phillips’ confirmation to succeed Malcolm M.B. Sterrett, fearing her ICC vote on a condemnation project involving Amtrak in his state might be different than what he expected of Sterrett (although neither Sterrett nor Phillips had revealed intent). Once the Sterrett vote was cast—going as Stafford hoped—Stafford removed his “hold” on Phillips and she was confirmed.

This latest Senate mischief, now involving Hedlund, brings back in question just how independent is the STB. As I have written previously, former Sen. George A. Smathers (D-Fla.) observed in 1957 that an independent regulatory agency “is independent of everybody, except the President, the Congress, the courts, the Civil Service Commission, the Bureau of the Budget, and public opinion.” 

In practice, it is up to individual regulatory agency members to preserve their agency’s independence and the confidence of stakeholders in a non-rigged outcome. Independent regulatory agency members, however, cannot always avoid autocratic tendencies of lawmakers, especially when seeking Senate confirmation. 

There are consequences, however. As one does not write bad checks to the IRS, or insult family members of Mafia bosses, senators should think twice of annoying, through heavy-handed schemes, already sitting and future Board members. Justice may and should be blind, but judges are human, and there are 50 shades or more of grey areas in decision-making.

The Uinta Basin Railway proceeding is docketed before the STB as FD 36284, Seven County Infrastructure Coalition—Construction and Operation.

Hedlund is a former deputy administrator and chief counsel at the Federal Railroad Administration, a former chief counsel at the Federal Highway Administration, and, more recently, Vice President and National Strategy Adviser at WSP USA.

Frank N. Wilner is author of the soon-to-be-published “Railroads and Economic Regulation,” available from Simmons-Boardman Books, a Railway Age sister company. He earned undergraduate degrees in economics and labor relations from Virginia Tech and held a White House appointment as a chief of staff at the Surface Transportation Board. He is a career railroader, among whose positions was Assistant Vice President for Policy at the Association of American Railroads. He was an elected president of the Association of Transportation Law Professionals and a long-time editor of their publications.

The post STB Nominee Suffering as a Political Pawn appeared first on Railway Age.